sullivan. joe is off today. the major averages are trying to avoid back to back weekly losses. so far, it is looking pretty good for the bulls. the dow and the s&p are both on five-day winning streaks. and listen to this. today it's quadruple witching friday. i was waiting for the sound effect. it is the expiration day for stock index futures and options. single stock options and futures. maybe we'll see more volatility today. check out the u.s. equity futures at this hour. barely budging at this point, but the dow looks like it would open up by about 7.5, 8 points. s&p futures up by less than a point and the nasdaq up just over 1.5. gold posting its biggest one day percentage gain in nine months yesterday. look, it's back above $1300 at 1,311.50 an houns. right now, gold is on track to post its best weekly gain in three months. brian, welcome. it's great to have you here. >> thank you very much.

back to your point before we hit the headlines, it's been a heck of a month for stocks. 43 s&p 500 stocks are up more than 5%. just in june. and -- >> i'm telling you, if you sold in may and went away, you lost out on just about all the gains for the year. >> to your point on oil, williams, new field exploration and others, they're leading some of the gains. oil has actually led us higher. >> that's the down side on those things is oil helps out until it starts to act as a tax on the consumer. >> and you don't know what the he end of the summer is going to bring. >> yeah. >> one thing i would say, we don't care about oil prices, can he care about gas prices. >> we had a guy on from bp yesterday who was talking about their global study that they look over lee years. and the good news is oil prices are more stable than they've been at any point the 1970 witness stand that means they've

closed above $100 for three years straight for the first time ever. yeah. crude oil has been higher than where we are right now. carl icahn is asking family dollar to put itself up for sale right now. but the sale has has not begun. the activist investor is threatening a proxy board. icahn says he'll go to shareholders if the company does not act immediately. shares of fdo have been red hot lately. twitter is splitting the role of its recently departed chief operating officer. one executive will be in charge of revenue and partnerships. another will be responsible for marketing and media. twitter co-founder stone telling cnbc he does have faith in the current board. >> and the so-called high valuations you're seeing or the -- you know, the sticker shock you may have is nothing compared to that fist shakeout. i mean, we were talking about

hundreds of billions of dollars in the dotcom bust. and now we're talking about tens object just $11 billion. >> shares of twitter so far this net. 19% for that in june. a judge has ruled the justice department lawsuit against bank of america can move forward. the doj suit accuses the financial giant of civil fraud. mortgage securities went back during the global financial crisis. in the meantime, reuters reporting that bank of america boss brian moynihan may be trying to take a play out of jamie dimon's book. remember, back in september of last year, jamie dame by effort

to droig a previous issue. >> traditionally, if you are -- and i'm not suggesting anyone is a criminal, but if there is a criminal probe, somebody like that does not often meet with you. they don't usually take that meeting. so this is an interesting play. >> but it's a difference of perspective. there are many people who think this is just a shakedown. >> i don't disagree. >> and if eats to find a deal, why wouldn't you go the two together to find out why can we come to an agreement on it? >> the argument against taking the meeting is that it appears to the public -- whether it's a shakedown or not, i'm not going to go there. i made the argument in the jpmorgan case i felt that it was. but if you have an organization

where the head of the justice department is -- >> i'm shocked that you're suggesting there's a relationship between wall street and washington vis-a-vis money. >> is it too early for that kind of sarcasm and cynicism? i expect it might be. but wall street and washington, as my daughter would call it, pinky swear. they've been linked like this for years and it's only gotten bigger. >> and that would be the argument against it. sprint reportedly close to financing its acquisition of t-mobile. the debt package reportedly exceeds $40 billion. it includes a on o joe kernen,

have you seen that? he tweeted joe and offered a seven-night stand. you can use it for a week and return it. so he was offering joe a tuntd at that. anyway -- >> are you trying to generate some mail, mark? why do you do that? >> thank you. i'm not sure. >> i love what t-mobile is doing. i love the concept. there's a down side risk here, though, if people don't get the service that 24th expect. >> yes. and i'm wondered about the business model. by agreeing to buy out contracts, is that a sustainable business model or is this just a way to create a lot of pain for your competitors and have someone buy you out? >> i can the margin is huge. >> is it good service or not? >> i think the criticism people

have of this-mobile and in allus relationship. >> and you're -- i will leave my comments to myself. things may have changed. >> and that review is going yelp. in the fight for alstom, siemens and mitsubishi raising their bid, challenging the bid from general electric which improved its bid yesterday. alstom has a board meeting set for monday. >> a decision is expected soon, but we'll see. right now to the latest on the situation in iraq. president obama is sending up to 300 military advisers to the country. michelle caruso cabrera joins us on the ground.

what helps are the military advisers expected to offer? >> well, if you're going to do precise and targeted military operations, becky, then you've got to have a team on the ground who can tell you when i've got information that allows you to do a precise and targeted military operation. so we assume there's going to be al of technical sxirt, foe foes, they can figure out where the targets are and then decide whether they're going to go after those targets. whether that means air strikes, whether or not they hand that information over to iraqi special forces. but the 300 military advisers, you have to have them if you're going to do any kind of targeted military operation. we are getting word that secretary kerry will head to iraq sometime soon. that's the guidance that we're getting. uk newspapers are rt roed specifically that he will go to barth. we don't have any specific time

frame. i want to tell you what the state television's response is to president obama have been. iraqi state television, which is redundant, basically, reported that president obama asked the prime minister of iraq nuri al maliki to step down and that maliki has refused. additionally kurdistan has change. now they're saying we are not going to kill independent people on behalf of nuri al maliki. clearly they've heard a change in tone or believe they've heard a change in tone from the president. the "new york times" reporting now twice that achmed chalabi told the bush at administration

that the u.s. would welcome the united states. guys, i always like to show you the newspaper. i haven't had a lot of time over the last week, but i mentioned to you how in the kurdish newspapers, they have redrawn the map of iraq. they cut and paste them from somewhere so luckily they're in english so it's very, very clear. they call tilt new iraq and they draw kurdistan here at the top bigger than it is officially. they take over a lot more provinces. another one here, similar. and baghdad is kind of left out in the cold. they're telling graphics just to give you a sense of the attitude here. >> i wonder how the situation is in kurdistan. i know you talked to us earlier

in the week. when we spoke with richard engle in baghdad, he points out even though baghdad is going to be safe from a full frontal assault, what the terrorists end up doing a lot of times is sending in suicide bombers as a result. does that happen in kurdistan, too? >> the security here is so intense. and they have worked against that for the so long and the peshmerga, the kurd stan military, are consider iing mor. we've seen seven in bag aloern. the militants get to go baghdad? probably unlikely. there's not enough of them. getting to boss bosra, probably not.

that's where all the oil facilities are deep down south. could they still disrupt the oil fatalities if they were managing to infiltrate. that's the big concern, do we go back to the time of the ieds that we saw so often from 2005, 2006. >> michelle, good morning. i'm glad you're safe. you're talking about going back to the time of the ieds. some folks i've talked to that spend time there for work suggest that iraq is going to go back to the times of 100 years ago when it was numerous separate nations, separate regions. you would have the kurds up north, the sunnis, you'd have the see na and that iraq was maybe never meant to be one nation. do you get the question from talking to the people -- >> that's absolutely the dominant opinion here. many, many predictions.

we just hired contributor david philips, who has a great piece on cnbc.com, which basically says iraq as we know it is over. kurdistan is going to be independent. what we have going on is a dance between kurdistan and baghdad. but at some point, kurdistan is going to declare independence. right now, they're waiting for a moment of leverage because they want to sell their own oil, they have to have a lot more autonomy. how it's going to go down is the basic we know request. rehe suggests a deep federalism. you give so much autonomy to the shia area, the sunni area and the kurd area where they can make their own laws. right now in kirkuk, he still has to follow all of the law necessary baghdad from under saddam husain.

the country has to be deindustrialized. if you give autonomy, maybe that holds the country together. >> yeah, but the big question is going to be who gets the oil? >> right. the sunnis would be left out because kurdistan has taken over the oil in the north. the sheen yas have oil in the south. the sunnis would be left out. that tide may be turning because they are very, very tired of being purse cute bid the shia government which, by the way, didn't control iraq for more than a thousand years, right? so it's only been in the last ten years that the sunnis haven't been in power. >> thanks for checking in. in the meantime, house republicans voting for a new majority leader after eric cantor lost his primary. kevin mccarthy winning the leadership position.

meantime, representative steve scalise will assume the house majority whip. >> john, tell us what the transition to kevin mccarthy means and how we should feel about it. >> nothing much. he is a slightly -- considered a slightly more moderate flavor of conservatism than eric cantor, but he is very hard to dissect the differences. he has a more affable personality. just a few terms from california. and he also reflects a preference for stability. with eric cantor guesting ousted, you had the potential for the caucus being torn apart, given the conflict that they've

had internally. what you had was john boehner remains the speaker. they moved the number three up to number to. in the whip race, steve ska lease represents a conservative in leadership from a red state. that was a knock against peter roskam. you've got john boehner from ohio and kevin mccarthy from california which is very democratic, some of the conservatives and a party based in the south said hey, we want someone from a red state. steve scalise is that person. we'll see whether they will competently do their business for the rest of the year. everything else is lining up favorably for them in the midterm elections. is there any chance that as a result of this we can have real any kind of meaningful change or pass along washington?

>> unlikely. it is a smooth transition for republicans that you might not have expected nine days ago. you're swapping out eric cantor, who, you know, really wasn't as popular guy who had taken on a lot of baggage and some would say was the glass chin of the childrens. kevin mccarthy is a popular guy more of a silicone valley guy than a wall street guy. you have a new look for the party. you've incorporated conservati e conservatives more. i do think steve scalise will have to basically incorporate into this leadership team which is still a continuity message, more central to navigate a lot of issues. so scalise will have to get on board and be a liaison for that 70% of the caucus which he used to lead in the republican study

group. but i think all in all, the other thing is, republicans get about -- this new leadership team, the new members get about five, six months to transition and get a little on-the-job training. and then they'll have to run again. i don't think that there are any issues that are really going to come to a head, that are going to cause a testing, so to speak, of the term that will hurt wall street. as john may have mentioned earlier, the highway funding issue is one that could be a challenge because they need an offset of about $10 billion to $15 billion. >> john, does -- ing. >> can i just point out one other thing? >> yes. >> kevin mccarthy is a former small businessman. started a deli in california before he went into politics. so he's got -- he can talk to business people fairley effectively from experience. >> john, totally off topic, scott walker, what's going to

happen here? >> it doesn't sound to me like the case against him is especially strong. prosecutors have made some allegations, but i would not expect that this would -- i think this would ding scott walker, the release of what prosecutors say happened, but i don't expect him to be in serious legal jeopardy. >> does this matter at all in terms of grandly to the republican party? >> that one of the best candidates for 2016 is having some legal issues now? yes. >> no. 2016 is a whole nother set of problems. by the way, i'd add that kevin mccarthy's county is the biggest oil pricing county in america, so he speaks oil. and scalise is actually obviously from louisiana, he speaks energy a lot and opposes the ethanol mandate.

>> let's leave it there. chuck, john. coming up, we're going to talk about apple and whether a watch is really on the way. we keep saying it is, but maybe it's not true. i don't know. are the rumors true inspect hopefully we'll have an answer. the timer on that story is your day's executive edge. also, the latest edition of talking "squawk box." it is now officially out. go to squawk.cnbc.com to read about joe oiling on "the daily show," becky losing her breath on live tv and andrew's nightly cocktail hour schedule. i don't remember the nightly cocktail hour schedule. >> i think that was a late add to the script. >> i don't know about that. plus, we put joe's face on larry fink's body. you don't want to miss it. 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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welcome back, everybody. right now, it's time for the executive edge. apple's first smart watch will start in july. apple followers have dubbed it the iwatch. the commercial launch will come as early as october. what do you think? >> i don't know. it's going to be 2 1/2 inches across. that's big. that is like the samsung watch.

>> wide? >> that's a big watch. so i -- my two questions are does anybody want to wear a watch that sooidz size? the other question is i have my jawbone on right over here. do they go out of business if these guys win the game? i assume that everything that's in the watch is -- >> because you can have it all if one thing and you agree to wear it. you're right, i need to see it first. i need to see what it can do and how big it is. >> i'm going to have supposedly wireless charging. but that could be the winner of the game. >> charging everything is -- i don't know. do you guys wonder if we're getting to a point, and maybe this is just me, of tech fatigue? you know, you're always attached, you're always charging, you're always plugging everything in. for me personally, i almost want to pull back a little bit as opposed to -- >> i think it's a steady march. >> it's just you. >> i don't know. i know a lot of people feel the same way i do.

and to have something that's literally physically attached to your body that's deeping, buzzing, you're at dinner with your family, daddy, why don't you pay attention to me any more. >> i'm not necessarily saying i want a watch, but i'm not giving up my phone anytime soon. >> let me tell you guys, also, a u.s. judge says she has concerned about approving a $325 million hiring settlement involving apple, google and two other technology companies. the lawsuit accused those companies of conspireing to avoid poaching each other's workers. the interesting thing is, the judge has concerns because she's worried it may not be enough money to take care of everyone who is part of this claim. >> so i happen to agree with the judge. i thought this was pretty egregious, the evidence was pretty egregious against the -- >> i had actual e-mails. >> the e-mails were not good. there was nothing good about this situation. however, traditionally, when a settlement is reached, it's very

hard for the judge to then say the settlement itself was unfair. we just saw this happen with raykov. in new york, whose decision, he tried to block the citigroup settlement and the appeal escort said you can't do that. you can't get involved in -- the settlement is effectively a contract between two parties and, therefore, this becomes very complicated. >> silicone valley operates differently than the rest of the america. can you imagine if this was two airlines talking about their pilots. silicone valley just kind of does what it wants. you know that old saying? it's better to beg for forgiveness than ask permission. the rest of the planet does its thing and then silicone valley does what it wants and apologize is later. >> what was great piece jim stewart wrote saying if steve jobs was still alive today, would he be in jail?

>> would he be wearing an iwatch in jail? >> the concept is a lot of things these companies have done have invariably gone at least up to the line if not over the line in their great pursuit of innovation for what it's worth. >> i guess great innovators tend to be rule breakers, too. >> the whole point is to break the rules. >> follow the rules, you can't win. let me tell you also, a federal judge rejecting lance armstrong's bid to reject a whistleblower lawsuit. >> this is related to the post office. >> yes. because the post office was a sponsor of the team. >> but the reason that this suit is even allowed to happen on behalf of taxpayers is because the post office -- >> taxpayer money. >> correct. >> if it wasn't taxpayer money, i don't know how this suit would or could be pursued.

>> i would wonder. listen, again, like many, i was a huge lance armstrong fan. i still in many ways remain so. >> i do, too. >> it's sad the way it shook down. you wonder if the legal bills for this case are going to be larger than any sum of money that the post office outlaid to the armstrong team. the little bells will be -- i'm making the mope up, $50 million to fight a $10 million case. >> do we know how much money he has left? >> no idea. >> and will he ever come back? >> come back to what? >> will this country reembrace him? >> i think there are people that never left him. whatever he did, he -- you know -- >> i used to watch him religiously. some people don't think it's sad. they really hate him. when we come back, the bulls on the loose. big streaks for the dow and the s&p 500. but will it be a summer of love

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good morning and welcome to "squawk box." right here on cnbc, it is friday. we're talking about babies on planes. we'll talk more about that because i have an ally, finally. >> you have an ally in some respects here. aim andrew ross sorkin. becky quick is here. brian sullivan is with us this morning. joe is off today. i'll tell you quickly about some headlines. oracle's quarterly results falling short of expectations. shares falling, though, in extended hours, in extended trading, rather. take a look at that, down about 6% after the market closed. also in washington news, the house ways and means committee will be holding an irs hearing today featuring the agency's commissioner. last week, the irs acknowledged it can't produce those e-mails expected to the tea party investigation. there are mysteries about

computer crashes. apparently the hard drives crashed and then they decided if it would blow them away, anyway, legislators want to know how this could happen. a lot of people want to know how this can happen. >> and forget about the political issue. if you complain about it, you're just supporting the gop. forget that. every e-mail you send on gmail is saved forever and has been for years, right? hotmail came out in, what, 1998? cloud-based e-mail service. who is -- this makes me nervous. as a citizen, is this where all of our irs data is is stored on, what, some old dell? who uses hard drives any more? everything is on the cloudy thought. i don't know. >> do they use exchange servers? >> that's what i'm saying. triple backup. so you're not on wall street physically, but you guys save everything now. the rules are, every e-mail is saved across a billion servers

to the end of time. >> i was trying to think, the treasury department, i used to send what do you call it -- >> taxes? >> no. for freedom of interest requests. foir requests. >> you keep stuff for a very long time. >> the question is whether they are really in this trying not to -- >> i'm wondering about technology and why the technology seems to be so antiquated. >> good question. we are going to get to babies on a plane, but in the meantime, the dow and the s&p 500 both closing at record levels again yesterday. should investors expect the bulls just to march higher all summer long? joining us on set right now is mark, pimco's deputy chief investment officer. mark, what do you think? we watch stocks continue to march on like this, does it make you nervous? do you think there's good reason for stocks to be at these

levels? >> i think there's good reason for stocks to be at these levels. you've got a healing private sector, several growth engines kicking in across the country. and you've got central banks around the world going all in to support this healing process. and valuations aren't overvalued. i think it's natural we're going to continue to see equities do okay as well as real estate and corporate bonds. >> how much of that is because of what central banks are doing around the globe right now? >> i think a lot of it is central banks. and the fact is that we don't have broad based inflation and because of that, interest rates are going to stay lower for longer. and that is going to revalue equities in real estate to higher levels. >> and if central banks were to start raising rates, obviously, the message this week from yellen was that is not coming any time soon, but if the data continues to show improvement, if inflation continues to pick up, if unemployment continues to drop, and they change their minds rel itchly quickly, what

happens to the inflation market? >> that's the risk. it could lead to higher interest rates and asterisk assets, as well. we don't see that happening, by the way. we look at a lot of companies around the world. we don't see broad based wage inflation. we think it will be quite often into the future before that happens. >> that's bill gross's call. low volatility is here for quite some time. how big of a bet has the firm made on that? >> we think bonds are a good place to put that money. the economy is growing at 2% real or 4% nominal. we've tried to focus our investments on the companies that have the growing, the pricing power and the asset quality. that's where we're putting our money in the corporate bond market. >> how quickly would the firms on a decision like that, what would be kind of the canary in the coal mine that would tell you, we have to look out, volatility is on the way. >> well, i think you watch the

unemployment rate, you watch to see if people are coming back into the labor force or not. watch wages. i think wages will be your number one signal. >> some of your top sectors including energy. >> yeah. >> people have talked about that litly. is that the higher oil prices or is it the increased production we see here in the united states? >> it's really the increased production. so we're producing a million more barrels now than we were a year ago. what's happening is that energy is growing about 8% across the country, but certain companies, specifically in midstream energy are growing 15%, 20%, like target resources, highland partners, mark west energy. we like the midstream assets. that's where we've been adding a lot of exposure. >> what about gaining? i think you like wen, is that correct? >> we like wen and impl. >> who is that? >> it's basically a company from australia and also from -- stanley host's son is the chairman. so melcore basically has 100% of

its ebitda coming from -- this is pure plan macau. >> is this the company trying to build that giant multibillion dollar casino in kairns? >> here is the thing about macau. macau you have 24,000 room. in vegas, you have 100,000. so you have four times the amount of rooms in vegan than macau. but macau has seven times the amount of revenue than vegas does. many of these companies like wynn can grow at 20%. the value equities are trading around a 10 to 11 multiple. i don't know about you, but i'm willing to buy an equity at 10 or 11 multiple growing 15% or 20%. what's happening is housing now is we're going to phase two of the cycle. housing price ves moved up and

now there's huge incentive to remodel. so basically, as housing prices go up and people are no longer under water, you basically have 11% of the homes under water today. a year ago, it was 22%. so you're in a situation now where people have more incentive to remodel that house. that's going to favor usg, nasco, all the building materials companies. >> at the risk of opening up a conversation, you like airlines, as well. risk of opening up a conversation -- >> i know what conversation you're trying to open up. where do you stand on babies on planes? not babies on all planes -- >> how about snake owes a plane? >> if you were doing after joan night flight and you're in the front of the bus, what's your view? >> my view is i would hope it would be quiet, but i would get some good ear phones. >> thank you. thank you, mark. jerks. >> whoa. >> whoa. >> what in the world? >> i told him when he brought this up, you're going to walk into a buzz saw on this. as a mother who has taken a baby

on a plane and tried to keep them very quiet, andrew doesn't want you anywhere near him. >> but don't lump me into the sorkin anti-child camp. >> no, no -- >> i have a -- >> i think there is a place, like restaurants, i want to be perfectly clear in my views here, that there are places where sometimes a 1-year-old may not go. now, it all depends on the time. that was my key. timing. maybe after 9:00 p.m. -- >> so if you only get stuck with 1-year-olds who are crying if you can't afford to pay for first class? >> no, no. i'm talking about restaurants. i would say i would frequent restaurants that would say after 8:00 -- >> go out for a nice meal. >> i was on impressions that overnight flights, red eye flights, first class, that children may not be appropriate. >> listen, i avoid red eyes as much as i can. >> he can back pedalling. >> no, no. listen, you know what this is right here? this is rpp, baby.

rich people problems. we're moaning and groaning about -- we were having a theoretical discussion. a few years ago for work, about 17 children crying the entire way to egypt. you go there, you go on with your life. these are not real problems. >> oh, the nanny was late and the mercedes broke down again. >> mark, you like delta. why delta? >> delta has been much better as controlling their costs. >> and controlling the babies. >> they have done a very good job. we're all paying more to fly. that's a big change from two years ago. >> definitely good for shareholders. mark, thank you very much for joining us today. it's great seeing you. okay. when we return -- >> he is right, though, about pricing power. if you've flown recently, right? >> and the cpi that came out this week, airline prices were

up 5.8%. they are rapidly moving higher. >> i'm going to houston next thursday night for pleasure, not for work, so i'm on the cheapest seat i can find and it was pricey. i was shocked. >> okay. when we return, j.k.rowling is climbing the charts. and it has nothing to do with harry potter this time. spokesperson: the volkswagen passat is heads above the competition,

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welcome back to "squawk box" this morning. it is quadruple witching in the markets. u.s. futures at this hour, everything looks marginally down. it will be off almost half a point, almost nothing. making headlines, proof of the power of amazon and the impact of a fight between ebook retailer and book publishers. j.k. rowling's latest novel is quickly climbing up the detective list. the silk worm is now available for purchase on amazon. she wrote it under the pen name robert baldwin. the online retailer and rowling's pitcher are arguing over ebook terms. this is i believe the second book she's done under this assumed name. she had originally done this

without anyone knowing it was her. she was so worried after the harry potter series that if she was going to write another book, she had all of these high expectati expectati expectations. under a pen name when nobody knew who she was, the book did fine. it was a great book. got some nice reviewes. >> after the nice reviews, she said, okay, i can let somebody know who i am? >> somebody figured it out and then it came out. it was about a year or two ago and then, of course, it climbed. >> it took people years to figure out that i wrote eprey love. >> wow, that was you. >> yeah. it was about "squawk box." >> what? >> lovely. lovely. >> while you were naked on your bicycle? >> all right. that's my read. coming up, more on google's latest mission to double the number of girls studying computer science.

>> you are elizabeth gilbert. >> it involves cold, hard cash. the program, coming up. is stick around. chocolate is very individual. white chocolate lovers don't like dark chocolate. milk chocolate lovers don't necessarily like dark or white. before we couldn't really allow the consumer to customize their preferred chocolate.

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welcome back. 6:52 in the east. they've got a mission. they want to double the number of high school girls studying computer science across america and they are using cold, hard cash to help the cause. joining us now zack simms co-founder and ceo of cohn

academy. let's go to the root of the problem. if you had to take 100 coders, high school coders, what percentage is boys, what percentage is girls? >> 19% of students who take the computer science test are females in the u.s. >> roughly eight out of ten are male. how do we elevate that number? >> you provide the right role models. you make education accessible. and then you provide incentives in the system for people to become interested and people who provide instances for opportunities. >> what you have recognized, obviously, i think with your plan, is that necessarily telling people to do something won't be enough. you're offering literally a cold, hard cash incentive. $125 at the completion of a course. how exactly does it work? >> so teachers and students sign up with us, and they take a course and when they finish they get $125 in donor's choose credits. they're able to purchase things for a classroom. it's not just $125. >> so no here's six 20s and a 5.

all right. you use that for some other cause, okay? >> absolutely. you can only use it to purchase things for a classroom. we think we're increasing access to education and increasing the materials in classroom. >> how long are the classes? >> somewhere between 10 and 20 hours. >> what could you learn that we should take -- what could you learn in 20 hours of code academy? what could i do as a guy that can't code anything right now? what would i be able to do after 20 hours? >> build basic websites. you can build animations online. it's really about learning the frameworks and basics. >> what you really want to do is inspire them, teach them, show them how they can get into this and open up the potential for down the road. >> absolutely. it's merely a introduction. >> how many hours would it take to actually become proficient enough that somebody would actually want to hire me? >> i think probably for the skills that i could learn on your site. >> hundreds of hours. >> hundreds of hours. >> to get good at anything you have to put the time in like that. >> what percentage of people start the program, and stop?

>> so we have a really episodic courses where you can go on the site and learn just how to make a website for instance. so we have people that majority of people complete the courses that they start. >> really? >> yeah. >> so i wouldn't have thought part of this is this is self-motivation thing, it's self-selecting people going on to begin with. i also would have thought that at some people that people are lazy, or they think they can do it and then they can't. >> it definitely happens sometimes. but usually it's coming in for a short bit of education, and then finishing that short bit. and sometimes people string them to the to create a much longer program too. >> is that google and now yahoo! have kind of fessed up and talked about how few women they have in their ranks, how little diversity. do you think that this is a problem that can be changed over the next ten years? or is there something that's really fundamentally happening at lower levels to make it so that women aren't going into these jobs? >> i definitely think it's a problem we can solve over the next ten years. we're not doing this alone. we're doing this with google.

they've pledged over $50 million to making sure there's equal opportunity in learning computer science and becoming involved in technology. i think we're starting to really see a tide shift. >> it was a real pleasure to have you on. >> check it out. codeacademy.com. >> zack simms. >> look who is here. >> coming up all the way from china, no less. >> speaking of the changing of the guard on capitol hill. kevin mccarthy will now become a house major leader. but is this pick okay with wall street? we have politico's ben white joining us on set to talk about the power shift, the crisis in iraq, and all the weird food he eight while he was in china. >> do you have an eight foot tapeworm?

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welcome back to "squawk box," everybody. i'm becky quick along with andrew ross sorkin and brian sullivan. joe is off today. our guest host this morning is ben white, chief economic correspondent for politico, also a cnbc contributor. take a look at the futures. right now things have barely budged. but we've started out a lot of mornings this way, and the dow and the s&p have been up for five sessions straight at this point closing at another record yesterday. if you take a look at what's been happening with the ten-year. right now, yielding 2.62%. so it has been pushing a little higher yesterday we were looking at a yield below 2.6%. and check out gold. it pushed above 1300 finally for the first time in quite awhile. this morning back down by $3.9. $1,310.20. we are now watching shares of family dollar stores. carl icahn coming along because,

also looking at rivals as well. carl icahn now demanding that family dollar put itself up for sale already. immediately he says. he says immediately, if you do not do this right this moment i going to launch a proxy battle on you. the company responded by saying it is open to all ideas. but not putting itself up for sale right this minute, immediately. british shire is rejecting a takeover bid from abbvie. >> part of abbott labs. >> saying it undervalues the company. >> the bid is worth about $46 billion but says talks between the two are no longer taking place. also sprint said to have lined up a lot of bs, at $40 billion. they lined up more than $40 billion in its effort to buy rival t-mobile. reuters reporting jpmorgan, goldman sachs, deutsche bank, bank of america, merrill lynch and citigroup, they are involved

in financing the deal and taking a nice little piece of the pie to do it. >> big washington story this morning. kevin mccarthy elected as the new gop house majority leader. let's bring in our guest host for the remainder of the show. ben white the chief economic correspondent for politico, also a cnbc contributor and joining us from washington we have brian gardner who is director of washington reseven at kbw. ben, what do you think? this was a shocker to have cantor leave. now you have mccarthy stepping in. how does this change the gop leadership? >> it's going to push it a little bit to the right. the whole loss of cantor to a tea party candidate but i don't think it changes it all that much. kevin mccarthy is a dealmaker. he's more of a moderate than a right winger. he wants to get stuff done. i don't think this shifts the leadership itself hard to the right. steve scalise certainly comes from the tea party wing but for the most part this should be heartening to business because you've got boehner staying as

speaker. he's very apt to avoid fiscal confrontation, meltdowns, doesn't want any of that. mccarthy probably the same way. people were shocked that cantor lost but this is going to be a big win for the tea party, move the caucus to the right. to a degree that's true. you probably don't get immigration reform, a couple of other things business would like to see. but in terms of bomb throwers taking over and forcing debt limit crisis and government shutdowns that's not going to happen. overall it's kind of a win for the establishment republicans. >> brian, you say there are actually some winners when it comes to business. energy and technology can come out of this? >> yeah, agreeing a lot with what ben said. when you look on a industry basis, so mccarthy's district is central california. bakersfield. where energy is a big player. and scalise represents a district in the mississippi delta, the north shore of lake pontchartrain in louisiana. obviously energy very big there. and where republicans have struggled for several years are the relationships with the tech

world, with silicon valley. mccarthy has particularly good ties to that industry. much better than other republicans do. so i think those are winners. looking on the energy side, republicans have always been, you know, pro-energy, and, you know, pro-natural gas, pro-oil exploration. so it's not a huge shift. but these guys being in the leadership, i think that is a minor plus for those industries. >> all right. if you're talking about silicon valley having close relationships to them, one of the biggest issues is immigration. ben was just saying immigration is dead. that has certainly been the conventional wisdom on this. but do you think there's a chance that technology leaders might actually be able to bend his ear to listen to their concerns about the immigration policy here? >> i think for 2014, it's a real, tough haul. but getting beyond 2015, if nothing else, it keeps the conversation going. and it -- you know, immigration reform, i think eventually is going to pass in some form or another. i think it's a multiyear project. and the fact that they have a,

you know, somebody that they can talk to in the republican leadership, i think is a plus for them. you know, if i was advising silicon valley i'd say it's not a 2014 issue and it's going to be a tough lift for 2015, 2016 going into the presidential elections. but you know, on these political issues and policy matters you always have to think longer-term. >> why not now, ben? you even have rupert murdoch come out with an op-ed piece yesterday in "the wall street journal" saying we need to have immigration reform. why is this such an impossible issue? >> well, the elites in the republican party are for it. wall street weighing of the republican party is for it. people like rupert murdoch are for it. let's first note that cantor didn't lose because of his support for immigration reform or some form of immigration reform. polls show that's not the case. he lost because he didn't show up in his district -- >> i'm glad to hear you say that. >> that's not the reason he lost. but the message taken away from that loss is still going to be don't do anything that can really rile up the tea party base. don't alienate conservatives in

the party. and that means, to a lot of people, don't touch immigration reform. >> we did not elect these people to do nothing. >> we didn't elect them to do nothing. >> immigration policy right now and you are looking at people who are completely confused. as a result you're looking at the borders being overrun at this point. we have nothing, we haven't figured out how to handle any of this. >> right. it's a disastrous situation to be in. you've got 11 million people who don't know their status, whether they're going back, stay here, it's a terrible policy we have in place now. unfortunately the politics of it are such that before the 2014 mid terms you're not going to see any reform. i think brian's right it could be a 2016 issue. you're going to need a republican presidential candidate who can somehow explain to the broader party that we need to have a significant are form that's not amnesty. >> does it have to be led by a republican? do you think you need a republican president -- >> not necessarily. on that point i think there is no issue that shows the dysfunction, the current dysfunction of washington as immigration. because, it simply boils down to a lot of republicans not

trusting the administration. you know, we can go through the laundry list of why and different issues on which they do not trust them. when you get beyond the obama administration, whether it's another democrat, depending on who it is or it's a republican you're going to have a lot of tea party guys who question and oppose immigration no matter who it is. but i think there is a good chunk of house republicans and not republicans that would go along with the administration in which they have more confidence. and today that confidence, and that trust, is completely absent in washington. >> so it could be a democratic administration, other than the obama administration that gets it done. but i do think it's probably easier for republican administration to build a trust within republicans in the house, assuming after 2016 you still have a gop house majority. you have a republican president who could sell them on immigration reform. >> although as soon as this happened with cantor's district, ben, the speculation was jeb bush might not even run because he has been so, on the forefront of trying to push for immigration.

and if his party would reject that, i mean have you heard anything else? i know you've interviewed him. >> i don't think this changes his calculus all that much. it might if he decides to go. it might make his task harder to try to explain to people why he doesn't favor immigration reform. but he's a smart guy. he knows that eric cantor didn't lose because of immigration reform. he knew he lost for a variety of other reasons, going to davos. showing up in d.c. fund raisers too much at steak houses, not going back to the district. i don't think this knocks him off course for, if he wants to run, making the case, both for national education standards, immigration reform, stuff that is anathema to a lot of the conservative base of the party that he believes is good for the future of the country. i think he might still do it. i don't think cantor losing is the factor. >> i think jeb bush has the potential to turn this into a positive. because i don't think he's somebody that gets bullied into abandoning positions very easily. and i think if he can go out and explain it to republicans and win over some conservatives within the party, within the

primary, you know, he looks like a principled and strong leader. and there's an opportunity to make political hay out of that. >> i think he may not go but this is not the reason why. >> why do you think he may not go? >> more family considerations for him. getting the family on board. it's a huge undertaking obviously. there's his mother who said we don't want to see any more bushes in the white house. his wife is not very -- doesn't enjoy the spotlight. doesn't like politics. you know, he's got other family concerns. and he really has got to be all in if he's going to go. he's a guy that could turn on a dime and put all his efforts into running for president but he's going to do it 100% if he does it. does he have that energy and commitment and sort of the fire in the belly? i don't think he's even decided that. i think he'll decide it later this summer and if he does -- >> handicap it? >> i'd say 60-40 yes which is probably higher than most people would go. >> i'd agree with that. >> they'd probably go 40/60 against. >> i'll even go higher than that, ben. i think it's more like 70/30 or

75/25. i think he's in. >> i think he really wants to be in. >> if you think about it. the last two or three years, even though he's not running for president, so many people think he is that living the life of almost is actually pretty appealing. >> sure. oh, yeah. >> because the second you give up the almost >> your bookings go down. >> the dynamics go down. >> and he spent a lot of time, how many people are interested -- >> we have to say he spent a lot of time building up family money and doing a lot of business stuff. because he didn't have a lot of money. people think he's from the bush family, he must be super wealthy, not the case. but he's worked a lot on that recently. that's harder to do when you're not a viable presidential candidate. >> brian, let me ask you. it sounds like both of you have kind of gotten to the point where you don't think anything else is going to happen in 2014. do you think that cantor's loss pushes the 2016 republican candidacies, do you think it pushes all those candidates much further to the right or not? >> i think some will try and go

there but again that actually creates an opportunity for somebody like jeb bush, who can run as a mainstream pragmatic conservative, while other -- while the rest of the party tries to dive very up the rights. so it actually creates an opportunity -- another opportunity for him. you know just by the way on talking about things that are going to get done, not get done, i think what the cantor loss, and really the entire midterm election cycle is doing, is pushing a number of issues that are important for business. from the import thing to tria to the highway bill. you know, you may get a short-term extension of the highway trust fund into a lame duck session but the other matters are all going to be decided in november and december, which is further complicated by the midterm elections because control of the senate may not be decided until december if mary landrieu's re-election in louisiana goes into a runoff. it could be a very chaotic

november and december with a debt ceiling fight after the new year. it's going to be a really interesting couple of months ago. >> all right. brian, thank you for joining us today. of course ben's going to be with us. >> thanks guys, always great to be with you. >> feels better about politics today. >> why? >> because mccarthy and corker, democrat and republican, actually had the cajon es to push for a higher gas tax. bipartisan, unpopular but to your point, becky, excellent point. they made an unpopular statement. something that's hard -- >> you want to hear somebody -- you want to hear somebody -- >> when we return we have more records falling on wall street. are the bulls getting ready for a big summer? we've got that next and will prices at the pump, talk about the issue that brian's just referring to, keep moving higher, thanks to the crisis in iraq? that's coming up at 7:30 a.m. eastern time. we return with that and a lot more in just a moment.

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coming up this week, make sure you catch "on the money." we're taking a look at the apollo theater. everybody from ella fitzgerald to michael jackson took their turns performing on this stage. we got a chance to talk to dick parsons about reviving the theater, saving it from bankruptcy, and keeping the apollo current to today. >> everyone knows the apollo. where stars are born and legends

are made. what we have to do is create a new future. that's the part that is still a work in process. but i think we're more than halfway there. we rebuilt the board. >> you have ron perlman and quincy jones. how did you bring those people onto the board? >> well we asked them. >> was it arm twisting? >> it wasn't arm twisting. >> you can catch us on sunday night, 7:30 eastern time on cnbc or check your local listings. darden restaurants taking profits. 84 cents per share for the latest quarter, a dime below the consensus. revenue essentially in line. darden is class fieg red lobster's results as discontinued operations. remember they're spinning that off. but these numbers soon to be sold since the chain is coming out really analysts were basing their estimates on the consensus. either way, guys, with or without red lobster darden is a company that's been struggling for awhile.

>> investors lose their appetite for darden. >> what's the name on the season's -- 52 seasons -- seasons 52? >> that's one of their higher end. that's one of their concepts that's growing a little bit. i think they have bahama breeze. now darden is essentially olive garden. that's where a majority of the revenue is now. red lobster -- >> i thought it was supposed to be a real estate play. >> starboard value is arguing against the spinoff because they said the value of the real estate was so much higher. what are you doing? you're an idiot. it's amazing this company darden which is a sleepy restaurant company, it's kind of like jcpenney in the restaurant sector. so much fighting over a company that people really hadn't thought that much about prior. >> i don't think about olive garden. >> the s&p closing at another record yesterday. meantime the nasdaq is at a 14-year high. joining us to talk about the momentum in the market is chief equity strategist at federated also david kelly chief global strategist for jpmorgan funds.

we've said it several times already this morning. i think we say it every day now, if you sold in may and went away, you would be unhappy. the question is whether you will be unhappy come september. >> we're sticking to our guns that we think 2100 on the s&p is the right number. we think $120 in earnings, multiples which ended the year at 17 times last year will end this year a little higher. 17.5. so we'll still got some upside. could we hit an air pocket over the summer? absolutely. in our view that becomes a buying opportunity. >> david, where are you? >> we're still cautiously over u.s. equities are. i think the issue we in the market morse than the equity markets where i think interest rates are seriously mispriced and i think the biggest risk to the equity market is interest rates move up a little bit more rapidly than people think. >> anybody here surprised that given all the turmoil in the middle east and iraq that we have not had a real shock to the market in any real way? >> from equities to --

>> you could argue all those points. >> so your chief investment officer put a piece on the website this week where he talked about the fact that here we've got all this turmoil in iraq and the vix is sitting at a seven year cycle low. so sort of scratching your head. so the market is just sort of ignoring what's going on in the middle east, and saying, stocks are going higher. >> so that quick -- >> quickly, sorry to follow up, david, just a second, phil. the vix, and i've heard this argument, did the vix, what it used to be. i've heard some people suggest the vix is no longer a good gauge of volatility and fear. like it had been for the better part of 20 years, that the vix does not represent any more the true -- >> why? >> just the way people trade now. differences in etfs and options, and -- just different methods, and sort of mathematics behind the way we trade. >> what we're trying to do a study on that now. we don't have the answer to that. >> but you will. >> well, we're -- it's one of our suppositions is maybe the vix is just not measuring volatility as well as it did at various points in the cycle

before this. >> david, jump in. i interrupted you. >> i think if you look at volatility first of all in the bond market i think that the federal reserve's uber dovish policies are helping control volatility and fixed income. then on the equity market i think the problem is that markets tend to rise carefully, and fold much more sharply. because there's no reason not to be putting money into the equity market given where rates are, i think we're going to see less volatility. just because of a slow rise in the markets. but as i said, you know, i think the biggest danger here is the, you know, the bond market looks missurprised. i think the fed's forecast in the economy is wrong. i think their policy is too dovish even based on those forecasts. and i think the bond market unbelievably is even more dovish than the federal reserve itself and that combination i think does set up some risk for the market. >> let me ask you guys this because i saw a note, ian shepherdson was here yesterday echoing some of these comments, just that the fed could have misspoken or missed an opportunity to actually key into

the markets to tell them that, look, we are watching inflation or at least say something along those lines. the worry is that a fed will lose the market confidence. do you think about that at all? >> that's a huge concern. we just had our macro policy meeting on wednesday. the bond guys were counting on that. you look at the key metrics, pce, cpi, et cetera over the last three or four months you've seen a serious bubbling up of inflationary concerns. the bond guys are concerned about when will the bond vigilantes wake up to this. so we are sitting at a 240 benchmark tens just a month ago. our guys think we could be looking at a 3.5% ten-year yield. so this year, we agree with david's point that the bond market is mispriced. we've got an 85% duration target on freshries and we think we're going to see a similar move that we saw last year that made through september moves where yields went from 160 to 3% we

could see a 2.40 to 3.5% move over the second half of the year. >> i was just going to ask. the fed said the markets are too accomplicent. at the same time it seems like the fed is creating that complacency. is that a conundrum that couldn't be undone? >> it is. you look at where we think growth is going to be. the inflationary pressures that we think we see and yet dr. yellen seems to be telling us that yes we're going to be raising rates, the fund rate is going to be moving up eventually over time but we're probably going to keep it below where normalization should be. the fed is telling us they're going to stay on toward the dovish side. >> okay. bill, david, thank you guys. >> thank you. >> coming up, still this morning ear going to talk about not so happy meals. mcdonald's keeping a streak alive. a streak that it probably wishes would die. fast food customer satisfaction results right after this. and scott adams on the silicon valley pivot. he says the success in the start-up space is mostly due to

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the red eye. my argument was the red eye. we've got to do a mcdonald's story, becky. stop picking on me. not so golden arches. a new customer satisfaction index mcdonald's comes in dead last out of 12 major fast food chains. ouch. this is the 20th year in a row mcdonald's found itself at the bottom of the list. papa john's and pizza hut tied for first place. one bit of good news, satisfaction up nearly 13% from when the annual survey first began. mcdonald's by far were the biggest. >> when you're the biggest, you

got to -- >> their variables. >> i was thinking the same thing. >> great minds think alike. except about this baby on a plane thing. gas prices -- >> you're kidding. >> we're fighting later. gas prices nearly always rise in the summer. with iraq going on how much more are they expected to rise this summer? we're going to talk more about that coming up. we're going to continue our intercommercial break argument on about children on the front of planes. everything is happy. what are you doing? uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. it means you'll be able t post from the breakroom. great! did it hurt? when you fell from heaven (awkward laugh) ...a little.. (laughs) im sorry, i have to go. at&t is building you a better network. i research. i dig. and dig some (trader more. search.

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welcome back to skw"squawk box." i'm brian sullivan in for joe this morning. shares of oracle down this hour. analysts say the results raise questions about the company's progress in cloud computing. also watch ak steel today. the ticker aks warning second quarter results will be hurt by lower production at blast furnaces. something that keeps me up at night. ice coverage on the great lakes delayed the shipping season and it reduced the iron ore supply. and kraft is recalling 260 cases of velveeta from walmart stores in as many as 12 states.

mostly in the midwest. company says the cheese product lacks the proper amount of preservatives, which could cause velveeta to spoil prematurely or cause foodborne illnesses. >> there's nothing good with that. >> first recall in the history of food where the problem was not enough preservatives. wow. >> it's all preservatives. >> that's what i thought, too. >> we've got to get to iraq but just the cheese, just -- is that happens to a lot of preservatives, too? >> i've never been a big fan. >> velveeta burritos is my favorite thing. >> velveeta burrito? >> oh, yeah. >> warning this product could become cheese. >> now let's get to iraq. michelle caruso-cabrera joins us from the northern part of that country, with more. and michelle, it's great to see you again. >> hey, good to see you, becky. want to let you know that secretary of state john kerry will be traveling to iraq sometime soon. we don't have a timetable. united kingdom newspapers are specifically reporting that he will go to baghdad. no confirmation so far here in

the united states on that point. but he will be traveling in the wake of president obama's announcement yesterday about his decision or willingness to do precise and targeted military action under certain conditions. we want to tell you what the iraqi reaction to that was. at least the official reaction was the iraqi state television reported based on the speech that president obama had asked the prime minister of iraq, nuri al maliki, to step down, and that maliki had refused. kurdish -- remember kurdistan in the northeast region of iraq, the kurdish media tonality changed before president obama's announcement. they were describing the isis group in the west as terrorists, and now they're saying that they will not kill innocent people to defend the maliki government. so they changed as a result of the president's announcement. want to give you an upday on the baiji refinery which is there is no update. it appears to be a stalemate of some sort. the associated press released photos yesterday showing smoke rising from one area.

and then also militants in control of a humvee and perhaps checkpoints. because that refinery is shut down, the gasoline lines have gotten even longer here in kurdistan. we counted several hundred, and we're showing you some video now, probably, of just how bad it's getting. remember it's 109 degrees. and becky, you brought up an interesting point last hour so i wanted to build a full screen. are the militants going to be able to get to baghdad? are they going to get to basra where all the oil production is in the south? probably not the bigger threat is terrorist attacks, car bombs, et cetera. so barclays has circulated a report that's getting a lot of commentary. they quote the institute of war where they point out last year 2013, 11% of the militants attacks occurred in the south, 130 assassinations, 125 car bombs, and 375 improvised explosive devices. and that's really the big concern when it comes to the oil production facilities in the country. can they be attacked in some way, and be disrupted like we're

seeing with the baiji refinery and that, of course, would have a big impact on global oil prices beyond the rise that we've seen just based on anxiety alone. remember iraq right now produces more than 3.5 million barrels of oil per day. the vast majority from the south. back to you. >> michelle, you've talked about how this is a big dance at this point, a kabuki dance you called it. i understand why the kurds would look at the official iraqi statement, and change their tone hearing that the president -- president obama isn't supporting maliki. what i don't understand is why the iraqi official television would put out that statement saying that president obama asked maliki to step down and he denied it. what's their -- what are they expect to gain by that because it looks like they lost credibility as a result? >> well, it's maybe to try to make it look like he is not a president -- not a puppet of the united states. and trying to raise this issue that you and i have talked about, right, about whether or

not it's going to look like the u.s. is imposing their will on the country. >> michelle, if i could ask you a question. obviously the u.s. would like to see maliki gone. not somebody who is conducive to this unified iraq that everybody wants to see. what is the feeling on the ground in terms of the likelihood that we could get a change in the presidency there, that the administration hopes for another leader of iraq could actually come to fruition? >> it's pretty tough. everybody kind of raises their hand, and doesn't know who. i mean, consider one of the names that's come up ahmed chalabi, who is in the iraqi parliament now, and many americans will know him very well. he was in exile for a very long time, deep influence on the bush administration. said that iraqis would welcome the united states during the invasion, with flowers, provided evidence, quote/unquote of weapons of mass destruction. which didn't turn out to be true, as we all know. his name has come forward. so, you can see what the choices are, and they're going to be

controversial in the united states, likely. >> michelle. thank you very much again. and we will check in with you a little later this morning. all right. brent crude hitting a nine-month high amid the turmoil in iraq and wti crude here of more than 3% just this month. that is naturally going to raise gasoline prices. in fact new york harbor traded gasoline sort of the benchmark futures contract is up more than 5% so far in june. so, folks, you can expect gas prices to go up. there's generally a lag between the futures and what you pay. joining us now, joe petrosky, vice president of the society of gasoline marketers of america and former ceo of gulf oil. joe, how high do you see gasoline prices going this summer? >> well, obviously it's very dependent on what happens between the shia sunni civil war but i see at least 50, 60 cents under most scenarios. you can't have the two largest oil producers, among the two largest oil producers in the

world, be the benefactors to this insane civil war, represents about 10 million barrels a day. or almost a quarter of a quad measured in quadrillion btus in energy and not have a price effect. now, if the -- >> well, joe, let me back it up a second. because there is this -- there is a different way to look at this. let's say the terrorists, insurgents, whatever they are, take over another refinery, too, and you say okay that production is coming offline. iraq is now at 3.4 million barrels a day, up actually about triple from where they were five or ten years ago. so we've actually seen a iraqi production go up, so if it comes back down a little bit, wouldn't we still be higher than we were five years ago? which is a good thing? >> well, but i think the market's got to factor in the shia population. the minorities in the rest in the gulf states, saudi arabia, who is backing the sunni dog in this fight.

and the fact that we'll partition iraq most likely we're going to petition lebanon, also. i mean it's a civil war still in a region of the world where we get too much of energy supplies. now there is good news to keep us from really spiking to what i call '08 levels. the energy effect is mostly in the transport sector. and demographics, technology, and frankly some smart government regulation, and occasionally there is, we have used -- we have decreased the amount of transport fuels the last few years. i mean the population aging over 50 years, the amount of driving going on, other technologies have really decreased the amount of fuel. so the u.s. today, and natural gas production, to put it in perspective, we were getting close to being energy

independent. we -- we produced about 81 quads of all energy factors. whereas 69 is our consumption. and 20 of that is natural gas. which we have the ability, with again the right policies, to double natural gas production. it hasn't penetrated the transport sector as much as i would like. but i see really nice things on the horizon, at c&g and l&n. >> some good opportunities there in the american energy. joe petrowski, it's a real pleasure, sir. thank you for coming on the program. guys one more thing just quickly. you don't want to raise an alarm but you talk to people in business. i spent yesterday talking to a number of companies that have operations in iraq about what their employees are doing, et cetera. some said we don't comment. other said we got our employees out. others said business as usual. the one thing you've got to watch is saudi arabia. iraq and iran they'll have issues. we don't buy iranian oil. iraq oil tends to be low

quality, high sulfur, mostly used for diesel. not a good oil like wti or nigerian oil. but the oil feel in the far eastern side of saudi arabia, it's the biggest oil in the field by twice, the second biggest is in mexico. it's in a shia area of sunni nation. we know what isis has said they would like to do basically stir up sectarian violence wherever it may be. so just, there's nothing going on. but if just something to watch. we had a few years ago, saudi arabia put some tanks out. strategic areas to make sure. so that's something, if you're interested in oil and gas, and who isn't, watch that. guara is the name of the field. g-w-a-h-r. >> that's a whole separate issue. >> based on -- >> less cars. >> wouldn't uber increase fuel consumption? >> i think his consumption was it's going to reduce fuel consumption because ultimately people are going to have less cars, more of these cars will be

used more efficiently. >> more people take uber instead of the subway. you know who took uber yesterday? >> you. >> no, dale earnhardt jr. the nascar star in san francisco. tweeted out a picture. nascar driver sitting in the back of an uber. can i drive it? coming up when we come back, transforming your twitter stream into actional wards. databuyer dotcom ceo is going to join us next. then what ben white took away from his big trip to china. what he ate. what he thinks of the economy. first check out shares of carmax. that company's earnings beating the street by nine cents. revenue also topping expectations. huh...fifteen minutes could save you fifteen percent or more on car insurance. mmmhmmm...everybody knows that. well, did you know that old macdonald was a really bad speller? your word is...cow.

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as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year?

in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. welcome back. this week we've been unveiling the cnbc disruptor 50 list of companies challenging the establishment and shaking up the status quo. today we're sitting down with the ceo of dataminr. cnbc's julia boorstin joins us now to explain what this business is all about. >> andrew, dataminr slotted in at number 13 on the disruptor 50 as we see a surge of data

churching start-ups. finished just ahead of skybox imaging, which gets its data from high resolution satellite imagery and announced it was being sold to google just days before we launched the list. dataminr gets its data from twitter. the company has a strategic partnership with twitter to access the whole twitter firehose of all public tweets and twim them into actionable alerts. the company uses algorithms to identifying news and events and give realtime information to more than 50 financial firms as well as clients in the public sector and pretty soon it will be serving many more news organizations with dataminr for news which will be available later this year. dataminr's software can also identify patterns and tweets to make sure they're reading out any fake news. andrew? >> okay. so thank you for being here. explain what this really is. i've looked at it. and what i can't figure out is how you actually can really see a trend, that's not reported,

and somehow identify it, and then also weed out the fake stuff. what have you been able to weed out -- remember when they said there was a bomb for example i think at the white house or something. would have you been able to figure out that that was not true? >> that's a great question. i think that one of the greatest things about twitter data is that not only can it sense the world around it, and find information first, but there's so many small dots that you can actually contextualize and verify information via twitter, as well. the algorithms really play on both sides of that equation. both detecting information around the world when ultimately it first emerges via twitter. and being able to cluster together messages that are similar and give context, and then ultimately say, you know, systematically, well, this ap hoax which you're referring to does not have a signature on twitter that looks anything like normal things of that nature. whereas it's a very distinct pattern that we can spot when something like that, especially

in a densely populated area, like washington, d.c., does occur. >> my question is, what's to keep twitter from doing it themselves? they sell you the data, the firehose of data, they obviously have a partnership with you to provide that data. couldn't they make a lot of money if they bought you, or provided their services like this themselves? >> dataminr tackles a really specific challenge. it tries to bring actionable information into the very complex work flows of a financial professional. the public sector. and at the end of the day, the business that needs to take that on is very different. so ultimately, we're part of the twitter ecosystem. they're incredibly supportive of their ecosystem. and you know, i think that we're a very natural, independent -- why should i not think you're a competitor? and why is what you're doing any better than what everybody -- if i had a subscription to cnbc pro, for example, to plug something, or "the new york

times" or dow jones or bloomberg, dare i say or reuters or what have you and i had that stream coming at me, why would that not be quicker, and more accurate, than what you're providing? >> well, andrew, what you're talking about is news. and what i'm talking about really is an information signal. so, you know, if you think about what we do, it's essentially big data meets realtime information. people generated data. >> give us an example. >> so, for example, you guys were talking about the iraq crisis, which is front and center on everyone's mind on wall street. the actual disruption and siege on iraq's largest oil refinery actually was first on twitter six hours ahead of any mainstream news coverage and all the sources that you talked about. so we were able to detect that and alert our clients on wall street to that conflict, and its potential disruption in global stability. over six hours ahead of any single other source that they had access to. >> if i'm a journalist, you're going to roll this out to news

organizations, and i'm trying to get a handle on all the twitter feed that's flying at me constantly, what are you going to provide to me? i'm a reporter, i'm at my desk working through my story, i want to know what's happening, what's real, what's fake, what i should follow up on, what does dataminr provide to me? >> the critical thing is to integrate these very few alerts into your work flow. there are 500 million tweets shrinking that down to just the things that are specifically relevant and actionable to you, and only you, and actually not requiring you to search or use an application, but actually pushing that out into your work flow is how we can bridge that mass of information with you in your product. >> can you identify when a news story is wrong? i mean, if tmz -- >> that's not huge. that goes -- sorry to interrupt. i was just thinking, i love the product. i get it. but what if i'm -- what if i'm long oil, right, and it trades up on my way, i start putting out stuff oh, about hearing the

burj refinery is up in flames. >> we've seen -- >> and all of a sudden you -- because the benefits -- >> and a couple people retweet that. >> your organizations may be slower yes because we vet it. >> right. >> that's why -- andrew, becky, go anywhere he wants. >> well, i think it's a misconception to think that we're competitive with news. because at the end of the day, we are a warning. for a journalist we're providing them a tip so they can start their process. we're not saying this is verified. we're saying there's an on-the-ground source here, there's a pattern. we have algorithms that ascertained that it's likely to be real which is something that you do by looking at a cluster of tweets, not an individual tweet itself. the sources, how the pattern all shapes together. and that's how you can give someone more of a discreet physical picture and you ultimately start the process. not be the divefinitive thing. >> so you va lot of clients in financial services. >> yes. >> you're making this big move into news. >> yes. >> what's the potential market for this kind of -- >> they're getting -- >> tmz will tell but the news.

>> they'll tell you about the next -- >> looking for the dirt on you. i mean, that's -- >> are you? >> that's an expensive app. >> and there's a lot of it. you're going to have to work through -- >> i think the opportunity is about as large as is, you know, the use of information in business. so if you think about other markets, from risk to health care, to pr, to advertising, there are many markets which face that similar challenge of how do i find that needle in a hay stack? we have ambitions to go that broadly. >> ted bailey thank you for being with you. >> we'll see you in just a little bit. >> when we return should investors be worried about china? for the first time in two years home prices there have fallen. is this a sign that collapse like the one in the u.s. is coming? or are those fears overblown? our guest host ben white will give us his assessment of the economy in just a bit. plus the latest edition of the talking "squawk" blog is out. go to squawk.cnbc.com about joe

appearing on the daily show, me losing my breath on live tv and andrew's nightly cocktail hour schedule which i still don't -- >> we still don't know what that means. >> check it all out at squawk.cnbc.com. .

welcome back, everybody. our guest host ben white just got back from a trip reporting in china and you said your big takeaway is that the chinese are fed up with the united states. >> yeah. they're pretty upset with us,

particularly on the cyber hacking allegations. you know, we've indicted a number of people we say are part of the chinese government spying on u.s. companies. in a number of meetings with communist party officials they got very angry with me when i would bring it up and say look you're hypocrites. you look at snowden and his revelations, the nsa is spying on our companies just as much as anything that we do, and there's not enough evidence showing what we do. and they basically argue that there's no distinction in their minds between the government spying for normal intelligence -- >> and corporate espionage, where you're stealing corporate secrets. >> they don't see a difference between those two things. essentially in china there's not that huge of a distinction between the state and the corporations. they're separate. they have this emerging capitalist economy. but the state is still very much in charge of everything. and you know, i was there right of the tiananmen anniversary, and they were very sensitive about anybody bringing up tiananmen. they would say look what you did in iraq and all the people who died in the iraq war. and we cannot allow all these

protests to happen because ultimately it would be too destabilizing. >> just from these conversations you would suggest that tensions are rising. >> yes. >> and relationships are deteriorating? >> everybody we talk to said that relations between the u.s. and china are at a low point over the territorialties in the south and east china sea, over cyber hacking, over a number of other issues. what we also found was there are not a lot of high level contacts between the u.s. government and china. everybody brings up henry kissinger as like the great connection between west and china. and the guy's 90 years old. we had an icbc executive say it's crazy that the most venerated american in china is still henry kissinger. >> i think it's hank paulson. >> paulson was essential, there's not that relationship now, high levels in the obama administration that really upset that max bachus was sent at the ambassador. they say this is a guy that doesn't have history of relationships with china, doesn't get china, why are you sending max bachus. >> bottom line, did you like it? >> that's a complicated question. i found it incredibly interesting.

i would not want to live there. certainly not in a second tier city like we visited which is incredibly small -- >> how is the air? >> terrible. beijing we got lucky was okay. wuxan, industrial city, awful. they have terrible smog problems but it's a miss. >> we're going to show pictures about what you ate. thank you very much. all right coming up, dilbert creator and co-founder, scott adams. i spent my entire childhood seeing the world in reverse, and i loved every minute of it. but then you grow up and there's no going back. but it's okay, it's just a new kind of adventure. and really, who wants to look backwards

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welcome back to "squawk box," everybody. here on cnbc. first in business worldwide. i'm becky quick along with andrew ross sorkin. brian sullivan is in for joe this morning. cnbc contributor and politico's chief economic correspondent ben white joins us this morning, as well. we'll be hearing from him in just a little bit. first brian has a look at this morning's head lines. >> carl icahn has a message for family dollar. put yourself up for sale, or face a proxy war to replace the entire board. icahn says he will go to shareholders if the company does not act right now. in other deal news other twist in the fight for allsa.

they're challenging a bid from general electric which improved its offer yesterday. alstom has a meeting set for yesterday. owens corning cutting its forecast. if you're interested in housing, owens corning cutting its forecast. >> we should tell you by the way, there's a must-read op-ed this morning in "the wall street journal," it is titled "the asset rich income poor economy" and it's about an issue we talk about literally every single day on this program arguing the fed's balance sheet recovery hasn't boosted business investment. they say the fed's extraordinary tools are far more potent in losing balance sheet wealth than spurring real income growth. goes on to say that all of what the fed's doing provides little solace for families and small businesses that rely on their income statements to pay their bills. you've heard some of this before. and half of american households do not own any stocks and more than one-third don't own a

residence, never mind retirees straining to make the most of their golden years on bond returns. this goes to the inequality issue that people talk about. >> do they suggest an alternative? i understand the argument that the fed's interventions have boosted, you know, income poor shareholders and bond holders. and all the other investment income. but i mean what should they have done in the light of -- >> there are no shortcuts through fed engineered balance sheet wealth creation. the sooner and more predictably the fed exits extraordinary monetary accommodations the sooner business can get back to business, and labor can get back to work. >> well, there is an interesting -- >> i don't think so, ben. there's an interesting case here for that. listen i loved your guy's statement. i was champing at the bit to bombard the set. his point really is if you're only asset is the value of your labor, you're in trouble. right? like if that's all you have is what you can charge for you doing a job, you're doing it. in the current environment, which is a dire thing to think

about, but, i love the point, right? because if the best use of capital is putting it into the stock market right now. and it has been. then it doesn't go some place else that might create a job. i love the stock market. i think it's the greatest wealth creator in the history of the world. at least the last 100 years has proven to be so. better than cold and real estate and bonds. but that said, if i feel like i can get a huge return in the stock market, i won't maybe open up a business that i -- >> you'll use the money. >> i'm guessing -- >> business investment has not been spurred by this. what's interesting is we had larry fink here yesterday. he says that recently this year in the last few months he has seen business investment pick up substantially. obviously blackrock's huge stake is a largest shareholder in a lot of the major companies out there and he says just watching some of those things he has seen business investment pick up. that's a big question though, why haven't we seen capital expenditures --

>> we haven't seen them go any place else because "a" you've got to get a return on the capital. and the best place to get that return on capital is to invest it. i'm not saying the fed should bring down the stock market. the stock market should be free on its own. and the fed has -- i think artificially induced people to invest. it just -- >> if steve liesman were here -- >> hold on in the commercial break two breaks ago i gave you guys a set. i said how many s&p 500 companies have a dividend upon 3%. and becky you guessed 40. 94. so nearly 150 s&p 500 is yielding more than 3%. the ten-year bond is at 2.5%. why wouldn't you put your money in the stock market? >> at&t fielding 5. %. i'm stunned. >> at&t. listen capital risk is there. the stock could go down. but my time line is 20 years, at&t will be higher in 20 years than it is today. and it's zero -- what liesman would say is if you didn't do what the fed is doing, we'd be worse. that's -- so -- >> bernanke's point the whole

time is that you can't save main street without saving wall street first. >> it's unintentional consequence. and i don't think the reason for the lack of business investment is because of what the fed is doing. it's lack of confidence in washington. it's lack of confidence in economic growth. it's lack of confidence in a lot of stuff. it's not necessarily because the fed has been failing. >> i'm not saying the fed shouldn't have done it. believe me i want to be on the record with that. i'msy ply saying this is going to be that artificial by-product perhaps. >> should say that kevin warsh and kevin druckenmiller said they should have done everything they did post-crisis. just now it's a different issue. the good news we're going to be able to have a conversation not just among ourselves about this piece but with kevin warsh is going to be our guest host coming next thursday morning. and then stanley druckenmiller is going to be taking part in cnbc's alpha conference next month. for more information on that go to delivering alpha.com. let's get more reaction to republicans hot race on the hill. kevin mccarthy winning the house majority leader position and he's, of course, going to be

taking over from eric cantor. joining us now to talk about it joe watkins, former white house aide to president george w. bush. and across the aisle jimmy williams, from review.com and an msnbc contributor. still with us ben white from politico. i'm curious and anyone could take this on. the relationship that cantor had with wall street, actually, and how that's going to change now that he is out. >> well, certainly wall street wasn't happy to see him go, and that they had relationships with him. there's a whole industry of lobbyists in washington, financial services lobbyists who base their cachet on the fact that they now eric cantor had access to leadership. they don't have that anymore. the macro picture isn't that bad. mccarthy is a moderate, as well. but personal access they had to cantor they don't have anymore. >> mr. watkins, the -- when tanner lost all of a sudden there was a view up now the conservative party i'm sorry the republican party is going to

become even more conservative. there was an argument by you this morning that now it may be less conservative. it actually becomes more moderate. was that you on that? >> yes. >> where do you stand on that issue, joe? >> well, i think that we'll see the republican party stay the course. because the first item on the agenda is to win the midterm elections. so you don't want to do anything if you're smart to mess that up. we would not only keep the house but increase our numbers in the house. if we want to win back the senate, of course, so we don't want to do anything that would hurt that. >> hat does that mean not hurt it? which -- which way does that mean the wind is blowing? >> well, what it means is that you don't fight among yourselves publicly. if you have disagreements, you keep them in-house you hash things out before you go before the tv cameras, so you don't fight publicly. it means that you stick to the course. you stick to the script which is a stagnant economy and a failed health care ad. that's what you do. >> jimmy you want to take that? you can fight. >> too early in the morning to

fight. >> this is simple. i think joe is exactly right. i hope the republicans do exactly what he said which is stay on course. because that plane is going to be like the malaysia plane, we're not going to be able to find the republican party if they keep staying on this course. there's a digger problem in the republican party here. it is that they are controlled 1,000% by a small percentage of their caucus. which is the quote tea party. which by the way, i've said time and time again, and i'm going to continue to say it, there is no such thing as the tea party. if someone can find me the tea party headquarters, i would like to go visit them and see them. they don't exist. they're republicans. they should be who they are. the republicans have an agenda which is to do anything barack obama won't like. they want to oppose everything he has. staying the course is passing nothing between now and the elections, except -- >> we want a better economy. >> wait, where's the jobs go? and what about -- look at the affordable care act. >> no, no, i asked a question. where did the jobs go?

they're in session -- no they're out of session today. they come back in next week. where's the jobs bill? is there a jobs bill on the floor next week? >> they've had a ton of jobs bills. >> why shoulded federal government have a jobs bill? >> let me ask -- >> is the federal government creating small business jobs? >> no. >> it's funny, when joe is here jimmy modulates. he's all fired up. one quick question you say the tea party is in total control of the republican party dominates it. why is the house gop leadership led by mccarthy and boehner who are not exactly tea party darlings? i don't think it's actually true that even the house gop which is the most conservative wing of the party is tea party dominated. >> i would suggest to you that when they went into that caucus and made their pitches kantor and all the rest of them, every single one of them said i am -- remember when mitt romney said i'm severely conservative. i can guarantee you they said i am severely conservative. i am so conservative that i'm

going to make sure that we oppose everything that barack obama does. so, one can say in california as kevin mccarthy does that he's a moderate. that he wants to get things done. guess what? the tea party faction of the republican party doesn't want anything done. they don't. >> joe, speak to what's going to happen on immigration. inside your party. >> what's going to happen on immigration is nothing really. at the end of the day i don't think the party is going to take any chances. at least not this year. not at the midterm election -- >> you say you've got to speak with one voice. there is no one voice on that particular issue. isn't that a key issue? >> there's still work to be done. some people would argue that cantor should be hitting his district because of the immigration ish a. i don't think that's solely the case. there's still a lot of work that needs to be done on it. i wouldn't expect to see anything happen. >> the polling that came out of eric cantor's district post election 6% said they voted against eric cantor because of

immigration. 6%. that is not a remarkable number. this has nothing to do with immigration for all intents and purposes. republican party that has a brain in its head will do something on immigration but joe's right. they're not going to do anything on immigration. because then you rile up a larger number of the quote silent tea partiers who are just so turned off because they hate that idea. they've got to pass something on immigration at some point but they're not going to do it until after the elections. >> jimmy was so fired up, joe you want the last word i'll give it to you out of respect. >> thanks, guys. >> you're so nice, andrew. we're going to take the midterm elections, and watch what we do. >> gentlemen, thank you. ben's going to stick around. we appreciate it. great conversation this morning. >> thanks, guys. >> all right. all that jive about java. coffee futures one of this year's top gainers. who would have ever predicted that? despite a recent slip in futures find out if investors still have time to get their caffeine fix. as we head to break check out owens corning. shares down sharply. the company lowering its outlook

citing volumes. if you thought home building was getting better maybe owens corning is telling a different story. "squawk box" on a friday. being able to pay as we go is crucial for a start up. having to fork out a lot of money up front was risky. we can launch a feature really quick, and if the feature doesn't work, we haven't lost anything, and we can have something up and running in days. and this would not be possible without the cloud. we are now supporting over 25 million users each month. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro.

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welcome back, coffee

drinkers take notice. the price of a cup of joe may be coming down but for investors, it may also be a good buying opportunity. jane wells joins us now with that. but first, what's the real deal apparently with starbucks emp y employees college education. there's a lot of confusion about what's happening. >> andrew, starbucks just doesn't want to sell coffee. it wants to change lives. but who's paying? well this week it released a compelling video about its own employees who have had to put college on hold and offered them a chance at a bachelor' degree through arizona state's online program. some wondered if there was a catch. ceo howard schultz would only say he expected things would not necessarily go perfectly. this is perhaps one of the most, if not the most important announcement we've made in our history. we're going to have to make some changes in order to administer it properly. i don't know exactly what that's going to be. i'm quite certain we're going to make some mistakes.

i'm quite person people are going to feel as if we don't have our stuff together. >> well, some are suggesting the company isn't quite as generous as it appears. the ap reports starbucks isn't providing money to cover tuition. instead asu is discounting tuition for starbucks employees and the rest of their costs will probably be covered by financial aid because of their income level. so it's not about starbucks putting up money. more about asu cutting fees in exchange for a whole lot of publicity. the ap says starbucks will reimburse juniors and seniors for out-of-pocket costs. it's really win, win, win. asu benefits from more students, more aid, starbucks employees get a chance at a degree, and starbucks helps them without spending much. and speaking of not spending much back to your first story, andrew. starbucks can also rejoice in this, over caffeinated coffee prices are coming down. off their highs from earlier this spring as the drought in brazil may not be so bad. princeton security says a duncan executive believes future price

increases at the customer level may now be modest. by the way, look i want to before we go show you guys one more thing i stumbled upon this week. it is a spiced root beer. again it's not just about coffee. i got a sample of one of the three carbonated beverages starbucks is rolling out starting next week. they're in their fizzio line. they have spiced root beer, a lemon fizz, and ginger ale. hello? >> is it any good, jane? >> yeah, it was. it's very fresh. has a little taste of cinnamon. and you can ask what level of bubbles you want. you can be like light, regular, or i don't know, and you can also apparently starting next week you can have bubbles added to other drinks. i'm wondering if anybody's ever tried a carbonated coffee. >> yuck. >> i'm calling b.s. on jane wells. i grew up, and i know deep down

inside you are a winchells woman. >> i saw a winchells doughnuts the other day. >> it's time to make the doughnuts. >> was that -- >> whatever. you remember the winchells ad. if you don't know it's like the dunkin' donuts of southern california. >> well it was. >> east coast. >> but i know, i know. just the sad reality though. >> it's the remanders of your youth. your father takes you to winchells, you're 8 years old. >> i remember the first time i had doughnut holes was at winchells. what a fantastic idea. they take the middle of the doughnut. >> they recycle. the first truly green initiative in the food business. >> i want to go back to what you were talking about with starbucks getting the deal from arizona state university and getting you know a lower tuition price. they're getting a discount from them. didn't this go hand in hand with starbucks cutting the program where it was paying for something else? >> yes. >> so star bucks is kind of cutting back on the benefits it's offering in terms of what

it's paying for. >> it was transitioning them out. they paid a total of $6.5 million for the program which they would give you $1,000 a year if you were studying at a specific school. >> how much are they paying this time? >> well, we don't know. it's going to be what the out-of-pocket costs are. could end up being about the same. that was my big question on monday because if you're taking a full load, arizona state online averages about $500 a credit. so if you were taking 16 credits a year -- a semester, over a year that's $16,000. and you save $10,000 -- that would be $160 million. that's crazy. so now we get a better idea. >> and student loans for the government stepping up. i still don't understand that and that's really good -- i guess we'll see what happens in the first year. >> starbucks, just to bring back my china trip, they're everywhere now in china. they were having a lot of trouble getting the chinese to switch from tea to coffee.

i saw huge lines. they're starting to make that transition. chinese are ordering coffee drinks instead of tea and they've got a huge potential market there. there's going to be a lot of profits. >> the upside to what starbucks is doing, too. does validate increasingly the online education model. the online degree is the same. arizona state, why arizona state? i'd love to know more about why that was -- >> i bet they proposed 40 degree programs and they probably offered the best deal. this story is more about arizona state pushing its online program. >> right. >> which is in the top ten in u.s. news and world report, than it is about starbucks. >> i want to see jane interview the sun devils. >> never. >> as a trojan. >> only if tommy trojan comes with me. >> okay, jane. tommy trojan will come with you. >> thank you very, very much. enjoy the coffee, teas and other beverages. by the way, very sad factoid. you were saying time to make the doughnuts? you know they don't make the doughnuts at each dunkin' donuts anymore. they're frozen and flash baked. and all of that.

>> that's terrible. >> you remember you used to think they baked them there. >> i feel bad about the commercials. i will pay my penance next time i go to l.a. >> we all run on dunkin. coming up the creator of dilbert. he's picked up a new buzz word. it's the pivot. scott adams talks start-up trends and much more. [ male announcer ] don't just visit hawaii. [ squeaking ] [ water dripping ] visit tripadvisor hawaii. [ whistling ]

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welcome back, everybody. twitter is splitting the roles of its recently departed chief pop rating officer. one executive will be in charge of revenue and partnerships. another marketing and media. this morning, they were defe defending the site's business model. >> i don't think they're missing anything. i think -- i think what's going on is that maybe we're not measuring the right things. you know, i don't think you need to be able to code a web page in order to use the internet. similarly i don't think you necessarily need to register with twitter in order to be considered a happy user of twitter. you can see tweets everywhere.

you see hash tags on tv. you see tweets on tv. you see tweets anywhere you look. and so, maybe we should be measure i measuring twitter more, as you say, as sort of a broadcast mechanism. >> shares of twitter so far this year, well right now trading around 38.82 above the lows of the year but well off the highs of 74.73. he's right twitter has a massive floouns. you see it all over the place. the question is can you translate and turn that in to revenue. and that's still the question. and that's what people want to see at this point. >> i think there's a revenue issue and also ease of use and whether you're going to continue to grow the user base. i think it's still -- we're all using it. but, once you get out of a certain -- >> but we're different. >> we are different >> no, no, this is our business -- self-promotion. >> we're different. >> we're weirdies. i mean this is our business is self-promotion. i mean, i'll fully admit that. you know.

and so we're -- twitter is like people in a room yelling. we just have a megaphone. and i know a lot -- >> really big mouths. >> like to hear ourselves talk. >> i know a lot of friends of mine that are not in the media. they're like, eh, twitter. >> the argument that you can grow revenue without growing user base. that's their big question. i don't know the answer. >> it's interesting, too, because the tech mantra is always innovate, innovate. there's a great piece that twitter needs to not innovate. what made it great was -- >> the bare bones. >> and this whole thing. add video, add this. the new home feed is turning people off. maybe they don't -- maybe the company doesn't always need to innovate. >> that's an interesting -- i didn't see the piece. i hate when they change stuff. >> i think this only works, in a huge base of users you need to continue growing that plus you need to be able to -- >> can't expect more than $100 million users. >> just has to happen. >> and they're not doing that. >> i think you have to do it.

unfortunately for becky you do have to change to some degree. >> not really working. >> right. >> i mean look, it's a great business unto itself. not working to support evaluation -- >> i do love articles critical of twitter on twitter. >> coming up, "squawk" market master scott black will give us a couple of names that are catching his attention. big interview, scott black, he's coming up. at humana, we believe if healthcare changes, if it becomes simpler... if frustration and paperwork decrease... if grandparents get to live at home instead of in a home... the gap begins to close. so let's simplify things. let's close the gap between people and care. ♪ let's close the gap seeing the world in reverse, and i loved every minute of it. but then you grow up and there's no going back.

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"squawk box" take a couple looks at stocks to watch this morning. we've been talking about darden restaurants. they reported profit of 84 cents per share for the latest quarter, 10 cents short of estimates. those numbers include the results of red lobster now classifying as a quote discontinued operation. analysts calculated their estimates, including the soon-to-be sold red lobster. i do go to red lobster. we talked about that here before. carmax reported profit of 76 cents per share. nine cents above estimates. brian looked like he didn't believe i go to red lobster. >> there's no red lobster in manhattan. >> not true. corner of 41st and seventh avenue. next to "the new york times" building. >> oh, that's true.

>> i am a -- >> the apollo theater, too. >> a giant subway stop. >> i just saw it the other day. >> the one that's in times square. >> underneath the target ads. >> i would love to go. >> what do you order when you're there? >> if i'm being bad the fried shrimp. if i'm being good like a lobster. like a lobster. >> tastesy, real lobsters? >> it is. lobster's not good for you? >> if you dip it in butter. it depends how good i'm being. >> andrew and we're going -- you and i. not today but we will go soon to red lobster. >> we should take a camera and make it a thing. >> red lobster will say -- >> tweet it out. >> it would help the sales. >> car max reported profit of 76 cents. revenue also beat forecasts chalking up record sales during the courter. we should tell you about british drugmaker shire they rejected a takeover proposal from u.s. based abbvie.

saying it's underoffered by the company values at about $46 billion. but it says the two sides are no longer in talks. and oracle reported fourth quarter profit of 92 cents per share. that excludes certain items missing estimates by three cents. revenue also came in below forecasts. disappointing investors who had expected more progress in oracle's cloud computing. >> our next guest may be bullish on the overall economy but it doesn't mean that all stocks are ripe for the taking. here with his outlooks and picks, just always a pleasure to welcome in scott black, president of delphi management. scott thank you very much for getting up so early for us on a friday morning. we appreciate it. you know before we get into your picks, there was an op-ed that we were discussing about 10 or 15 minutes ago from kevin warsh and stanley druckenmiller about how it's time for the fed to pull back because what they've done is they've raised asset prices, which if you own stocks, it's great but if you're a working class guy in america, who probably does not own stocks, it's done squat for you. do you agree?

should the fed pull back because asset prices are attracting undue amounts of capital? >> i don't think so. i think they still have to be accommodative. because if you actually look at the total public debt now, they're higher than gdp for the first time since 1948. so let's do the math. if you've got 17.5 trillion worth of debt, we're not talking about tapering but drawing liquidity. one percent increase across the board in interest rates is $175 billion in incremental interest expense. a 2% rise would be $350 billion. our fiscal policy to begin with is terrible. we really can't afford to add another $350 billion to our deficit just on interest costs. so i think you have to take a slow, cautious approach. and the other thing is, the economy really is weak. we know real gdp was minus 1% in the first quarter. it's really only going to be 2.2, 2.5 for the whole year. this is not like a robust economy. and whereas quantitative easing

really hasn't had significant impact the last couple of years, you certainly don't want to fighten credit and push us off the cliff into a recession. >> okay, ran a screener earlier today, 94 of the s&p 500 are yielding above 3% over 100 are yielding more than a 10-year note. are stocks still a no-brainer? >> it's not about a no brainer. if you look at the s&p as a proxy, 1959, we're using $116 in estimates. that's about 16.9 times by historical measurements. it's slightly overvalued because it was a 16 median p/e. but given that nominal interest rates are around 2.5% that doesn't offer much of an alternative. i still think stocks on the whole are a good equity class. but you have to be a stock picker at this point. you just don't go out there and buy the high fliers like the teslas or the pandoras. you don't buy consumer staples companies, p&gs, coca-colas with no top line growth at 18 to 20 times earnings.

i think you have to be very selective because the market is well picked over. >> interesting names you brought for us. methanex and advet. what are you doing investing in a methanol producer? >> they're based out of canada, only at two-thirds capacity which is 7 million tons a year and they're relocating a couple of their facilities from chile to louisiana because they don't have a good supply of natural gas. so the earnings are taking off over the next two years. even on this year's estimate it's about an 11 multiple. they earn 27% on book. and even though they have a lot of cap-ex behind them the net debt equity ratio is still only 0.22. they're generated 100 to 150 million this year in free cash and we think next year the earnings will grow at double digits, so it's selling really at 10.5 times next year's earnings. if you know about methanol it's a building block. it's a fuel additive in places like asia, but it's used as an intermediate chemical throughout the world.

whether it's plastics, fibers, laminates or glass. it's a diversified type of use. worldwide demand is growing, mid single digits, and capacity is not coming on that much. and overall methanex has a 13% world share of capacity. i think it's a reasonable play at around 11 times earnings. >> we've got to low. your last pick is adnet. electronics distributor, up 31% over the past 12 months. scott black of delphi management. real pleasure. have a great weekend, okay? >> thank you very much for inviting me. >> take care. all right up next, the creator of dilbert. spending some time in silicon valley. he will join us for some interesting observations about technology start-ups. scott adams will join us next to discuss the pivot.

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welcome back, everybody. the pivot is the buzz word of the valley. this is a strategy of quickly switching from one product or business model to another. that used to be the exception. now it seems to be the norm. should start-ups be pivoting away from setting finite goals or instead move towards a system oriented approach? joining us is scott adams, the creator of dilbert. he's the co-founder of calendar tree and the author of how to fail at almost everything and still win big kind of the story of my life. thank you so much for joining us. it's great to see you again. >> thanks for having me. >> so you've been spending some time in silicon valley because of your start-up calendar tree. you've made some observations.

you say that the pivot used to be the exception but now it's the storm. so why do you think that is? >> i think it probably started out as anecdote. people heard about companies that were one thing and turned into another. those are the famous stories. you don't really hear the stories about the things that didn't work. so they become big in our mind. i think what's different now, at least what i observed, is that people are assuming the pivot when they start. so small teams are forming. and they say we've got this idea today. but chances are that's going to change. so they actually go in to it with a thought that they're probably going to pivot once, twice, maybe three or four times. >> you know, you think about how fast things change in technology, how quickly things are moving. do you think that that's the result of, or because of what's happening here? with things changing so quickly you have to be willing to be flexible, too? >> i think it's really the equivalent of diversifying your portfolio, and the investing

world. if you look at a start-up they've got the ability now because the tools are so good to build software, test it. you can find out how the customers are responding in realtime. you can very quickly change it. relatively low cost. what's really different is how quickly you can change and how inexpensive you can change. so it's feasible for a start-up to tear through three or four ideas in the same time and expense it might have taken in the past. >> it's a great observation. i just wonder, i didn't hear any judgment one way or another. you think this is a good thing or a bad thing? >> i think it replaces a bad thing. the bad thing it replaces is the illusion that anybody could pick a winner early on in a company's, you know, early stages. and i think people have realized that, like it's very difficult to pick individual stocks. it's almost impossible to pick a winner among the start-up community early on.

in fact most of the investors that i talk to, all the angels, venture capital folks, they're not looking for the idea. they're looking for the one that's already working. so you have the option now, if you're a small start-up to build something, do what's called growth hacking. which is another buzz word from the valley. which is how to get users on the cheap and if you can demonstrate growth then the money people are interested. >> scott, i have a question about another word that's in the valley all the time. we use it on our set disrupt and disruptors. i don't know if you saw this pare down of a piece in the new yorker magazine about clay christianson who wrote the innovators dilemma and talked about disrupters and basically said that the entire phrase and the way you look at disrupting is sort of a false way to think about the world. >> yeah, you know, i haven't heard anybody talking about disrupting. i hear people saying i'm going to try this, if that doesn't

work i'm going to try something else. so there's more of a somewhat of an acceptance that you don't know what you're doing now is going to change the world. but you do know that you get a little bit smarter every time you try something. so it is true that the iq of your start-up grows every time you try a new iteration. every time you learn something. so your odds of success are improving. but whether or not you're going to disrupt the world, that's kind of hard to predict. >> is pivot, by the way, a valley word or is that a d.c. word? >> d.c. word. >> the hard pivot to jobs, the obama administration pivot to asia. it's a very political word. i guess the valley has taken it from inside the beltway, right? >> i would say the big difference is it went from something that happens once in awhile, to something that's kind of institutionalized, and assumed will happen for any start-up these days. >> i always thought of start-ups as almost being like wildcats or trying to hit the lottery but it sounds like the pivot is a way of increasing your odds in hitting it rich in that lottery.

>> so what you can do is just decrease the time it takes to move from one idea to the other. so that's what's really different. there are tools like google analytics or optimizely, where you can make a change and you can immediately in realtime see that if you've moved for example this button from the top of your screen to the bottom of your screen, turned it from green to orange, you find that your clicks go up 13%. which is an actual thing we did recently. and when you've got that kind of analytics, you can really churn through a lot of ideas quickly. >> i was going to ask, i mean, in d.c. parlance the pivot often is you're moving to something because you failed at something else, and the pivot is kind of a fake thing. like the pivot to asia maybe hasn't worked so well for the administration. is it ever used in the valley sense like we have no idea what we're doing, we failed at this, but look we're pivoting to something else but really you're basically clueless about what you're doing? >> i always see it as a positive thing. when you go to the valley you're

talking some of the smartest, most analytical people the world has ever produced. so when they look at what their business is, i think they understand that the guessing part of the business isn't very good. but they do lots of things and then study it, watch very precisely what customers are reacting to, and doing more of that. it's a pretty good system. so they've gone from a goal oriented approach, where maybe you said this is my one product, and i'm going to die making this thing work, to a system where you're iterating through lots of things fairly inexpensively. >> another one of your observations is that the internet is no longer a technology, it's also a psychology. what do you mean by that? >> so it used to be the technology was the hard part. but it's gotten to the point where at least here in the valley, it's pretty easy to attract the talents of the money that you need, the connections, so the actual building of a product, if it's software based, and if it's running on servers at let's say amazon or somewhere

else, is fairly easy to do. and it's not easy for me to do. but it's easy for people who know how to do that stuff. but now, that makes the problem a psychology problem. because you don't know what the customer is going to react to. so, for example, calendar tree we're looking at changing our name, perhaps, because we saw that people reacted to it and said oh, it's kind of a calendar product instead of a product to move big schedules onto a calendar, where they don't have to retype all the data. so, you don't find that out until you put something out there and you see how people respond and then you change. it's a big psychologist experiment. >> scott, huge fan of dilbert, this has nothing to do with the interview ever. i've got you here, it's a rafr opportunity. do you think e-mail has increased opportunity or destroyed our souls? >> i can only speak for myself. i'm pretty sure it's destroyed my soul. but it was a very tiny soul to begin with. there wasn't much there. >> at least you had one. that's a positive, scott. >> you know what i mean though.

e-mail was designed to enhance productivity and everybody i know now e-mail seems to be their job. >> returning e-mails, responding to e-mails. >> hundreds of them. >> i don't know if anybody has a solution to that. >> do you have a -- do you have an etiquette, would you just ignore? do you have a way of saying no nicely? >> i am really good at saying no. it's a skill i had to learn a long time ago when dilbert started getting big. i have 100 ways to say no. it's kind of like eskimos with their words for snow. i can turn you down more ways than you could ever imagine. >> and the other person have a smile on their face during? i mean that's the trick, right? >> well, sometimes, yes. sometimes no. >> like, who cares. >> producers have 100 ways to yell wrap in your ear. >> they're yelling right now. >> it's a great interview. >> it is. >> they're done. scott, just back to that point of the internet being psychology. i mean i guess we're watching that play out with amazon right now, too. for so long jeff bezos has only

been concerned about the customer experience. but now j.k. rowling's book is out and he can't get it on amazon because of the fight that they have going on with the publisher here in the united states. >> yeah, so i'm not sure if that's a psychologist or a business problem. >> well, maybe just testing to see what the customer will accept and won't? >> oh, yes. and that's the whole game now. because you can build anything, but what you don't know is what people respond to. >> right. see what happens with that. we should mention dilbert. i've noticed that your time in silicon valley is working its way into the dilbert cartoon, too. today is about dilbert showing up looking all disheveled with glasses, strangers keep beating me up for wearing our new glasses product with a camera. the boss says have you tried acting less creepy and defenseless? no is the answer. are you using this for new ideas for dilbert? >> it's kind of nice to have a day job again. dilbert was born when i was working in the big company environment. and that was a fertile ground

for material. >> tech bell. >> and before that a big bank. but now the startup culture is just full of incredible material. so, i don't want to say i'm doing it for the material. but that's certainly a side benefit. >> all right. >> you know he's also working on something else? >> what's that? >> "squawk box." he's a watcher. he's a viewer. you want to see one of the best cartoons you've ever seen? >> yes. >> can we show, scott? >> sure. >> the cartoon on the screen? >> sure. >> producers. can we show -- >> do you have dilbert? >> i was told we had it up on the screen. >> -- he drew a car -- >> there it is. >> there's joe. >> joe kernen. >> looking very -- >> dilbertesque. >> doesn't look anywhere near that good in real life. >> becky looking -- >> with my tie. >> with your tie on. >> and -- >> andrew. >> sorkin. >> there you go. >> it's awesome. >> i thought that was like -- >> i put that up on my wall. do you have a copy of that you

can frame and put it on your office brag wall? >> scott, anything you have done differently since spending this time in the valley? anything you've changed in just your own personal habits or how you go about life, how you see things? >> youthings? >> this is part of my larger philosophy of absorbing as much knowledge as i can in unrelated and even related fields, so it's really about getting smarter. every time i have a meeting, i walk away with a nugget. every time you bump somebody in silicon valley, you end up exchanging knowledge, and you get smarter, so that part has been really fun and surprising, actually. i didn't think i would learn as much as i have. >> actually, the most popular dilbert of all time goes to the income inequality debate, right? i want a 10% raise, and the boss says there's no money in the budget for a raise. i have an offer for 15% more at another company, and the boss

says i'll give you 20% more. that defines it well. >> that's the big company experience. i have the startup version of the joke in the pipeline, but i'm not going to tell you what it is. there's another -- >> good tease. >> did you stop wearing ties when you moved to the valley, or did you not wear them before either? showing up in flip-flops and shorts? >> not only have i not worn a tie in a very long time, but my last meeting of calendar tree was in my garage because it feels like a good place to do that sort of thing. >> like apple starts up. i have to get out there. >> scott, thank you so much for joining us. hope to see you again soon. >> thank you. when we come back, jim cramer tells us what to watch next week. ♪ [ male announcer ] if you can't stand the heat, get off the test track.

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welcome back. let's get down to the new york stock exchange where jim cramer joins us now. what do you think of the family dollar situation? we had earnings, and would you ever buy american apparel given this whole weird story about its ceo leaving and who knows what's going on? >> penny stock. no. don't really care to wear their

stuff, lasts for at least two washes. both of these are really two sides of the same coin. they are both really poorly run companies, and i think that icahn is right. look, you have two under performers, and management seems to say the same no matter what, and you have to wonder, like, why? dollar tree and dollar general are better than family dollar, and every restaurant chain is better. mcdonald's, satisfaction index, but after awhile, why don't the boards say, let's give someone else a try. let's give someone else a try. i couldn't agree more. >> okay. jim cramer, we'll see you on "squawk on the street" in a couple minutes. >> thank you. coming up, jim cramer, right, and jim stuart as well joining jim cramer and the gang in a few minutes. that should be a good interview as well.

also, a programming note, becky. be sure to catch "on the money" this weekend. you're going to look at the apolo theater. >> right, 80 years old. >> are you going to sing? >> well, no, we have been there, interviewed them, they turned the company around, michael jackson performed on the stage. we talked to the board and the ceo about reviving the theater from bankruptcy and keeping the brand current today. >> everyone knows the apolo, where stars were born and legends made. what we have to do is create a new future, and that's the part that is still a work in process, but i think we're more than halfway there, and we rebuilt the board. >> you have ron pearlman, how did you bring the people on to the board? >> we asked to join. >> arm twisting, or was it easy? >> no, it was not arm twisting. believe me, i had to twist some arms. >> catch us on sunday at 7:00

p.m. eastern time or check your local listings as well." squawk box" will be right back. over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening, they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide that immersive digital capability.

our guest host today, ben white, just back from china, dining on the finer things in life. let's take a look at a picture

of fried scorpion. seriously? >> tastes like chicken, ate bull frog, pig tongue, they eat everything in china. look at the whole animal, the face, and eat it all. >> ben, thank you for being here, brian, thank you. have a great weekend, everybody. right now, it's time for "squawk on the street." good friday morning. welcome to "squawk on the street," i'm with jim cramer at the new york stock exchange, favor is off today, dow jones industrials going for the sixth straight win today, something it's not done all yearlong. futures are encouraging after yesterday's record s&p close. ten-year crept up, ye yields now 264, gold had a good day in months, and mild action in asia overnight. we have a disappointing quarter for oracle. earnings and