tv Squawk Box CNBC July 1, 2014 6:00am-9:01am EDT
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>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. today marks the first trading day of the second half. here is the scorecard for 2014 so far. the dow is up about 1.5%. but the s&p rising more than 6% here today is now up six quarters in a row. that is the longest quarterly winning streak since 1998. the nasdaq closed yesterday at a 14-year high and the russell 2000 has had eight positive quarters in a row for the first time in its history. ism manufacturing, we've got construction spending and auto sales. but as we've discussed, the real market focus continues to be thursday's monthly employment report. we'll talk more about the markets in the economy in just a moment. first, though, andrew has some of this morning's top corporate stories. andr
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andrew, welcome back. >> thank you, becky. it is now official, we've been talking about it for weeks if not months, but bnp paribas has pleaded guilty to charges and paid ads 9 billion fine to resolve violations. $9 billion i think is the most any bank has ever paid in a case like this. the bank is banned for a year from conducting certain dollar transactions. that's key and it's important because it's a key part of bnp's international business and will cost them and hit their bottom line. fbi director jim comey yesterday with a message to all shareholders, not just those with a stake in bnp. >> the $9 billion that's walking out the door today is your money. we do these cases over and over again and shareholders' money walks out the door. until shareholders demand from their boards that those boards choose leaders who understand what it means to create a healthy culture of compliance, the money will keep walking out the door, we'll have to keep doing this work.
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>> and the penalties against bnp are significantly bigger than those against credit suisse. it's absolutely true. if you remember with jpmorgan, when they paid those fines, the shares went up, not down. so created this sort of per verse sense in all of this. does sudan field a soccer team, do you know? >> i don't know. >> they did not qualify for the world cup, which is today. from 1998 to 2014 they didn't qualify. but in the past, they would be like -- yeah, i don't know. bnp paribas was the sponsor. no, probably not. they didn't enter the world cup from 1930 to 1954. three different times it takes from '58 to '66 withdrew due to war. '78el, withdrew to war. to '94, withdrew due to war.
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everyone at some point fields a team and sends it. >> with the olympics, we do things like -- with the new york papers, if the mets win two games in a row, they're on the cover. so when you've got the whole country, it's almost like the olympics. there's a lot of excitement about this. the only thing, this knockout run, because no one ever scores in soccer, they have to do this stuff at the end, which is weird, the penalty, penalty time, penalty kick -- i think it's better. i don't want to do a tie any more pop. >> but one guy misses, the goalie anticipates correctly where you're going to kick it and you're out and you go home. >> this is football. >> oh, you're talking about the other football. >> that the americans play? >> yeah.
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and that's dependent on one quick, either it works or it doesn't. i'm not against that. we have to talk autos real quick. shouldn't be quick, we should take a time with this. becky mentioned june auto sales. investors will pay close attention and they're worth two more late. chrysler expanded its ignition switch recall. the company says it's adding vehicles, the fact that it's doing that is being done, quote, out of an abundance of caution. in the meantime, it gets worse every single day. general motors announcing the recall of more than 8.2 million. now gm has recalled officially 29 million vehicles. >> you wonder, how many did they produce in that period of time?
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>> what percentage of cars did they -- >> how many did they produce compared to what's been recalled. >> i do not know those numbers. >> i can't understand for the life of me, if you knew there was even prospects of doing this. ken feinberg came out yesterday with his new plan. i don't know if you found ittic whitble or not. >> it's hard to judge without knowing all the details, knowing how many cases are going to come through on this. feinberg is a guy who knows his way around settles like this. >> and it's going to be very difficult. he talked about it yesterday. the idea so many of these accidents happened five and ten years ago, to have the documentation you need to prove your case and what they're going to do to try and help you in that regard -- >> although we had a lawyer on yesterday who is representing a
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family who is not going to be allowed to participate in this because they settled in the past. they settled in the past, but it was based on incorrect information that gm provided saying that they had never changed the ignition, according to attorneys. >> they can still bring another case, though. the one thing that is good and interesting about how they're approaching this this time around is you can seek money from gm. in this case, go and find out if you're eligible, find out exactly how much gm is willing to pay you or not and then you either accept the money and if you accept the money, you give up your right to sue. that is more equitable. >> a lot has been dribbling out. the day the government sold their stock and then things started dribbling out. i don't know who is the stock
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picker in the obama administration or the stock picker, but somebody had good timing. >> the obama administration is gsh. >> well, they're good at helping rich people. >> when i say that, he has to take the other side. >> china manufacturing grows for the fist time in six months. do you believe this inspect. >> i want to believe. >> a new survey shows the expansion was weak, but we'll take it. meantime, in japan, companies there plan to increase spending more than expected this year. the bank of japan's tankan survey shows its poise improved in the coming months. in europe, data this morning
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showing manufacturing activity in the eurozone slid to a seven-month low in june. we know why. the central bank has gotten rates where they are there which means our rates expensive almost. the latest sign that the region's recovery is losing momentum and when the loss of the belsantine starts ripping you through -- >> go with the trash talk. >> but that doesn't work with you. >> i think it might. >> people think they saw this happen with germany and we didn't do that great against germany. the euro teams, they think that we don't know how to play. >> italy went home early. >> we may show up for belgium. that would be good. larry summers is arguing that the economy could accelerate substantially over the next several quarteres.
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he's worried about rapid economic growth could lead to a market bubble. >> i think we have a real challenge, which is that it's not clear, given the way the economy is structured, what the long-term normal level of interest rates is going to be. and my suspicion is that it's going to need to be lower going forward than it has been in the past and, obviously, when you have lower rates, that creates more capacity for people to overstretch themselves, for people to reach for yields. >> meantime, summers says he thinks there's need to be more demand in the economy to create incentives for business. did you recognize that shot? >> i recognized that shot. i was just there yesterday. >> it looked like colorado. the weather was gorgeous. >> always. >> in the summer, it's windy. >> it's a great place. >> it is. >> what am i doing? >> no, it just sounded like
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the -- yeah. >> but great, no humidity, sunshine. >> all your friends were out there. larry was out there. hillary was out there. >> hillary was there? >> al. >> how can you afford the prices in aspen? you know, i could use guests here all the time that would laugh at my jokes. dal is laughing. kronk is laughing. so what is the lead out there? what did you liberals decide you needed to do? >> climb a change, vacation, do all sorts of different topics. >> is there any talk of actually rushing the supreme court with pitch forks? >> no, but we are going to talk about birth control on this show today, are we not? >> we better. >> yes.
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>> i saw the huffington post, the operatives. they have the five judges. now, can you take back saint hood? >> they might. >> now they've got stars on him and he's got a moustache and he looks like -- you know. >> i wasn't in -- i still wasn't in action. >> still not ready to answer the "new york times" criticism, are you? >> i don't know what the criticism is because we haven't seen what they had to say yet. >> all i looked at today was the sorkin column. and it's awesome. >> thank you. >> on inversion, right? >> right there. >> it's about walgreens today. >> walgreens has been thinking about it for a while. >> yes. >> your name looks good, it's almost iconic the way the times puts it there. >> thank you. they're very kind about that.
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i appreciate that. in the meantime, the cars recall, yesterday -- or as for 2013, gm told 2.7 million vehicles. so you're looking at under 6 million vehicles just for the past couple of years. it was a recall of how many? >> 8.4 million. >> 29 million in -- >> possibly older cars, but you're talking about massive numbers. >> how many cars have they told in total? >> just out of the box. let's talk about the markets again. the s&p now has its longest streak of quarterly gainses in about 16 years. what do we have to look forward to to the second half of the year? joining us now, morgan krong and jonathan golles, chief u.s. market strategist from sbc
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global markets. when you hear winning streaks like this, a lot of people are worried about whether they're getting in this way. >> we see that for investors right now. i was talking to him about how do you invest in a low growth environment? you've got low credit spreads, low risk premiums and you've got extremely low volatility, right? so it's really hard for investors right now to understand what risk premiums that you want to either continue owning or buy in this kind of environment. >> would you recommend the sell right now or would you recommend they put additional money in? >> no, i think the bond market is getting challenging across all segments of it. when you look at risk premiums in equities, they still make sense. they're not at historic values right now. they're not terribly expensive or terribly cheap.
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they're finding value right now in international developed equity markets. so places like europe, japan, when you look at u.s. equities relative to trade equities, they're trading at almost a 1% deviation which has only happened three times in history. on a relative basis, internationally developed equity res cheaper today than the u.s. equity markets are. >> that's an interesting point. jonathan, how about you, do you like the u.s. equity markets? >> yeah. the slower and weaker environment, i think what's going to happen is we're going to have an extended cycle. i think it's more of a five and a ten or 15-year cycle. a year from now, we may be talking about is it too late to get into equities?
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>> i feel like we've been having this conversation for years. >> and there is a reason why. larry saying we need a keynesian response. but we are going to be in appear environment with lower to normal equity rates. and we're not there yet. if that's the case, then stocks are going to keep going up until we get there. >> there was no rush to do what we said to do. i mean, and we did have a deficit problem and he said we need to do it now. i mean, they're even lower than they were when you wanted to do the -- it was like two years ago, wasn't it? so there were terms of -- and did you say the s&p? 6%. >> yes. >> this was working exactly as we planned. all this up and back and all that, we finished six months, up six. perfect.
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>> i think we have another to go. >> once you plan, it's working. it's perfect. it's just what we talked about, isn't it? >> it is just what we talk about, but i can't tell you how many people come up to me and say forget it, i feel too nervous about it. >> you get nervous and anxious about it all year long. 6%. >> you know the whole go away in may things? >> you would have been in trouble if you did that. >> but there have been a number of times where actually in june and july it looked up and then you've gotten slaughtered in august. i was looking at some of the -- >> so sell in july and go away? >> no. i've seen some order of -- the measure when people say sell in may go away, it's made it to timbers that you have to focus on. >> that is a distraction. if you look at the 6% this year, it's earnings. last year was all about valuations. when you're talking about should people get it or not? if you look out a year whether they get in to may, june july our august, the question is, is
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this an investable story? and i think it's a -- you know, this has been all about earnings this year. >> i know you like the international markets a little better, but that doesn't mean you don't like u.s. stocks, right? >> no. the valuations are fair. q2 earnings are looking at somewhere around give or take a 5%, 6% growth number, which is solid. and the revenue estimates are for 2.5% to 3% revenue growth. so that's solid, as well. what i think is interesting from a perspective, and granted it's looking way back in the rearview mirror, but if you talk to investors coming into this year, right, into summer last year and said q1 from a gdp standpoint is going to disappoint by 5%. we contracted by 3%. i wonder if risk complacency would be as much as it is today, right? >> we've gotten through the first quarter and a lot of people think that's backwards looking. >> it is. but you have to take it into
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account, right? so a lot of macro economists have been looking at 3% plus gdp growth for all of 2014. mathematically, it's very hard to get to 3% growth when you ink a first rt kwaer at negative three. >> jonathan, we can feel great about 6% that the s&p has gained for the first half of the year. nasdaq is looking pretty good, up 5.5%. if you're looking at the dow, it's only up 1%. why is the dow lagging? >> they waited by the price of the security, which does it really make any sense? so you have to look. whether it be the wilshire 5,000 or russell 1 is,000 or something that's broad, you have a better return in the dow. so it's its own strength store. but the bow was talking a second ago about the first quarter gdp. it was inventories and some weird things related to trade which were really a reversal of the stronger than expected fourth quarter on the same issues. >> well, it was weather, too.
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>> but if you simply took out the inventories and the trade stuff, you were about -- you had a positive print on the first quarter. and then when you considered the weather, it really wasn't the disaster you think. and corporate revenues were totally out of line with gdp prints that would have been that weak. they were really telling you that the economy expanded in the first quarter. so, you know, we could see something goofy on the second quarter gdp that it could just be make up for the first and also this weird health care thing. >> agreements that bonds are a little nerve-racking? i know darrel said that. do you agree with that? >> i'm at a caveat that you've gotten over 5% on corporate bonds this year because credit spreads have been coming down over the last year more than treasury yields that have caused problems. so i don't think it's as bad or as concerning as perhaps people think if they're in a corporate bond portfolio.
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>> everybody seems to like credit. credit spreads have a little left to come in. so those are a little bit of a mismatch, right? if anybody loves credit yet they don't believe credit spreads are going to contract further, i'm not sure where that spread is going to come through. >> they're playing us out. thank you both for coming in. coming up, morgan stanley allowing brokers to open up on twitter. that story is next. >> danger, will rogers. >> i don't -- they try to come on here and represent the firm. and we let them on. they're not even allowed to tweet. and germany, surviving a scare at the world cup. we have some sports business to attend to at 6:30 eastern time. p by taking it to an expert ford technician.
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time now for the executive edge. morgan stanley is allowing its proeker to put self-authored content on firm approved twitter accounts. until now, employees were limited on preparing scripted comments. but there are still rules. brokers have to take a 20-minute online social media training course and they have to have at least 15 followers. >> how do you get -- >> everybody has -- >> everyone has 15 friends? >> you've got 15 family members.
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>> even some of the worst -- you know that is in the next two years, we're going to be reading stories about -- >> you know what it's about. >> brokers, who have made mistakes on twitter. >> it's about these people manage money and make investment decisions for people. you can lose money, so if it's on -- you know, it's widespread recommendation that doesn't turn out right or turns out to be a company that was a -- >> a lipstick on a pig? >> or even worse, a criminal enterprise or something and a guy pushed it and had thousands of shares, it is -- >> it's sad that up to this point they're tweeting and it's like they're giving them -- wow, check out the new morgan -- you know, they're just totally tweeting what the company tells them. but it highlights -- >> we get that sometimes. >> ju houft dangerous -- and those are the good ones to use. you have to think long and hard about why you're putting in
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print. it's going to be all about what not to say. don't say this, you can't do this, you can't do that. that's what the 20 minutes is. >> but are they going to be pushing stocks? >> no. that's one of the don'ts. >> you have to be careful what you think about, just writing your personal thoughts and your feelings about the market at any point or your feelings about the economy. it's all evidence now. >> probably not good to say something like, oh, that great success reeling in the widows and or fans with this baby. check out this sales pitch. then close them by saying -- you know, that's probably not a good idea. >> it's hard -- you know, about taking them out to dinner and other things? >> no. >> no. >> yes, if you take your client out -- >> that stopped happening long ago. >> are you sure? >> yeah. it became the whole boom boom room mentality.
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>> not boom boom room. >> scores? >> yeah. they take people out to different things in the evening. isn't that what happens? >> this squad-ward moment has been brought to you by antd rue. >> my broker doesn't take me out. >> okay. that's why i watch the wolf of wall street. >> that's exactly why it happens, because you watch this new jersey -- where did that movie go? it went nowhere. it was a long island bucket shot. i can't believe anyone would make a movie about statton oakmont. leonardo dicaprio has no idea about the business world. you liked the movie. >> i it was a great movie. i mean, at least -- >> i guess the guy who is posting his speaking times is
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now following him on twitter. >> did you see houbl believers there are on twitter? >> just yb bieber? >> yes. 52 million followers. i think that's pretty cool. >> that's phenomenal. i will say i follow anthony weiner just to see what he's going to do next. >> anthony -- >> weiner. >> anthony -- >> weier. >> and the audio room. >> we have this guy in there like this. there you go. very good. we were trying to find it. we haven't used it in a while. >> too late. >> you are a tough audience. so coming -- are we done? >> we have. >> world up favor has gripped the united states. do we like the chances? do we like the chances? >> yes. >> yes. >> for us u.s. team versus belgium, that's next. and later, new jersey governor chris christy has so much to talk about. that's at 7:30 a.m. eastern
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good morning and welcome. you call australia europe. back to -- welcome back to "squawk box" here on cnbc. >> we're doing geography. >> he's a sports guy. we're in the united states -- >> i think you have a geography problem, joe. >> i'm joe kernen along with becky quick and andrew ross sorkin. futures are morning, after the s&p was up 6% in the first -- i am going to ride that and -- >> but most of it came.
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if you sold in may, you missed out. >> you're absolutely right. but after 30% last year, we're styling, aren't we, andrew? >> not so bad, right? >> no. it's good. >> mutual funds. >> i know. >> in global news, let's say what's going on this morning. >> what was the island? >> there's a new place. >> nobody goes to this island except you put your money in there. what was that eyeland? it's impossible to get -- you don't get at it. >> not the cayman eye legions. i don't want to give the name on the air. >> exactly. russian shares lower today after ukraine's president said he would renew offensive operations against pro refreshan rebels. russia could face more sanctions
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from the u.s. and european union unless pro russian rebels wind down the crisis. in corporate news, gambling revenue in macau fell by nearly 4% in june. that's the first decline in four years. analysts say the world cup diverted gamblers and their hefty betts away from the casinoes. speaking of the world cup, the usa is in the knockout round. joining us for a preview of the matchup is dave griggs. >> and geography expert. >> yeah, right. a week ago, if it's tuesday, it must be belgium. i used that movie, song. >> very nice. >> did you use that yesterday yet? >> no. >> are you going to be on today? >> i'm going to be on. >> where? nbc? >> nbc sports at noon. so i will use that. should i credit you? >> no. >> okay.
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>> you don't have to. >> look, i think we've got a shot, though. it is a better team, belgium, than us, defensively, attacking, better golly. >> not as good as germany, though. >> no. >> and we beat them pretty well. >> absolutely. if bradley can show up -- he has not showed up in this world cup. we thought he would be the u.s.'s most valuable player in this cup, but he hasn't done a thing thus far. if he shows up, if you're hearing him name constantly, we've got a shot. >> for the tie, but we outplayed them. >> absolutely outplayed them. but algeria outplayed germany most of that game. >> you know they talk about how there's so much going on with soccer. all the teams have all won examine they do the weird stuff at the end. >> well -- >> i mean, bra zell, they do some weird stuff, supposedly. there's an undercounter that the right teams -- >> are you suggesting fixing?
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>> no. >> there is actually a story, cameroon may have fixed a match in this world cup. >> really? >> der spiegel has a story, a guy says there are seven bad apples on this team. he predicted the exact score and the exact red card that happened. this is a red, white examine blue body suit. it's called a morph suit. andrew, i think you should wear that today. >> on the commercial break, try that on. >> i'm going to put it on right now. can i ask a serious question? >> these are all privilege husband questions we've been asking? >> why in the world cup is it not knockouts from day one? >> wow, you're going deep on this. i thought it was going to be joe's arguing penalty kicks.
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you don't like the group stage of the world cup? >> no, i don't. >> i want it to be like every other -- >> i'll tell you what, did you hear what dennis miller said, ending these games in this round the way they're winning, it's like taking a winner of the masters with a windmill hole, a putt putt hole -- arguably, the defining moment of the sochi olympics was what? hockey purists hated it, but the rest of the world loved it. same thing goes with soccer. the penalty shoot-out res fantastic. that's always been the way. >> but the goalie jumps one way and the ball goes the other way. >> i think you put it on backwards? >> oh, is it backwards? >> because the zipper goes in the back. >> that's okay. put it on this way because you're never getting that thing off. >> wow, this was not done well. >> are you supposed to have -- >> the u.s. has a legitimate
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shot? are they allowed drinking there or something? i think those are -- >> it could come down to penalty kicks. would you like that? >> this is very tight. >> it's a body suit, my friend. there's a head, too. but it's going to look a little weird backwards. but that's a great look for you. >> that's right. >> i think it is right because the hood comes on the other side, right? >> no, this is backwards. you don't want the zipper facing out. >> the hood is on the other side. >> and now the zipper would now go down his face if i were to -- >> oh, i see. there's eyes on the other side? >> you can see through this thing. >> do you see how that is backwards? >> i don't think he knows front from back. >> i don't think he does because the zipper has -- >> is it inside out? >> no. >> can we get the full shot of
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this? >> you don't even have a face. it's like spider-man. >> i see into the mirror. it's the end of the reel already. >> wow. such a good thing for your career. you have no idea. you're really going to take off now. aren't you a "new york times" columnist? >> rather than a million followers, you might have two million now. >> i think so? >> can i zip it? >> no. >> that looks lick a woody allen full body u.s. condom is what that looks like. >> full body condom. >> it does? i feel very -- >> you can have any kind of sex now and be totally safe and patriotic. >> is anybody uncomfortable? a sports guy on a sports network. >> i would have walked on the set with it if i thought we could be allowed. >> why didn't you -- >> i think we were wearing this. didn't you take a picture of yourself wearing something like this? >> i'd love to tell you that it was a different one, but it was that same one. and i was the full monte.
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. >> the full monty. >> from the side, it looks like a cat in the hat. >> you're not bothered by that. >> it's a tough shot anywhere, andrew. that's what you find. >> did you -- you're not -- with retalking about the -- >> you're not going to lead at all with the reds? >> no. >> you saw they had won five or six straight. >> that's fantastic and they will not catch the milwaukee brewers. >> you got oakland, but the reds have come around. >> they've come around, but they've got two -- they've got the cardinals and the brewers playing along with them. that's a difficult -- to top. >> why do we bringing you on? >> because i bring body suits. >> where we going to get a score -- >> in his defense, he did not mess up your -- >> i'm going to go 1-0. belgium has only had one goal so far in the tournament. but they have the best goalie in
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the whole tournament. if we're going to score, we might get 1-0. 1-0 u.s. and we go to the quarters for the first time. >> have you looked at -- i have the fifa application on my iphone. and if you hit the match, every single possession is written out and what happened. so i realize there are things happening throughout the entire game. it looks to me like there are people running around trying to kick the ball. but there's a lot of great plays going on. >> but do you go to a -- >> i'm trying to get better. no, i won't go to a watch bar, but i'm definitely watching. >> i still don't have the extra time and -- >> the extra time is a problem a lot of people have with it because no one knows how much it is except for the refs and they won't stop a game if the action is going on. >> i know i have a swim meet tonight -- not me, but my kids do. i know it will be over at 6:00. you know.
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because it's the -- >> that's a good thing. you have a two-hour game. >> but no commercials, right? which is bad for us, but it's good for viewers. >> most people don't know how to watch it, but it's an incredible television product. you have children into this chanting usa. probably the most watched game in u.s. soccer history today at 4:00. >> are you going to wear that at the watch party? >> you had it on naked. >> you can bring it to the key party. >> are we even -- >> so you're not going to keep it on for the game tonight? >> are we going to broadcast closing bell tonight? >> chris christie would love to see you in this. >> maybe we can have chris christie wear it. >> hmmm. >> that comment is just hanging out there. >> you don't need to repeat where everything everyone just stops. thanks for coming in. when we return, we will introduce you to a disrupter
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trying to be the unioner of home cleaning and handy men. plus, gm and chrysler are spec'd to roll out monthly sales. but will they exceed the strong numbers from may? and managing the garden state. the governor signing a budget. we will talk about that. and bigger ishs for the economy thank you daddy. . thankful for many things, the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life.
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welcome back, everybody. we've been watching the u.s. equity futures and you're going to see this morning that there are some green arrows. we saw some advances yesterday in the markets. this morning, you see the dow futures up about i 42 points above fair value, the s&p up by 4 points. this comes after the end of what
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we've seen so far with the first half. at this point, it looks like we are up about 6% for the s&p. dow only up by about 1% year-to-date. nasdaq up by about 55.5%. employers remain frugal about increasing office space according to the "wall street journal." datapharam reports we open about 50% of the 142 million square feet that went vacant during that downtime. coming up, southwest airlines is about to take a major step outside of the united states. but before we do that, a disr t disrupter that could be called the uber disrupter of handy men and housekeepers. he services yor vehicle needs. so prepare your car for any road trip by taking it to an expert ford technician. because no matter your destination good maintenance helps you save at the pump.
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welcome back to "squawk box." we're continuing our disruptors series with a start-up pegged as the uber of housecleaning and handymen. joining us is the co-founder and coo of handybook. they set you up with on-demand cleaning services as well as mounting a tv, painting, moving and even plumbing. do you do electronics? >> we don't yet. >> i could use like someone -- >> sometimes you want the stereo to hook up with the tv or whatever and i think that's a market for you. >> oh, for sure. we'll definitely go there. >> so you started this business when? >> started about two years ago. >> how many people now do you have using the service.
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>> well we're doing over 10,000 bookings in an average week. across 28 cities with 3,000 plus service professionals. >> and where do you find the service professionals? >> we have had at this point over 300,000 people apply to join the platform of service pros. they come from everything from online classified to -- i mean referrals are huge for us now. so many cleaners and handymen know other great cleaners and handymen. >> one of the things about using a service like this is you are letting a stranger into your home. i mean there's an element of that. and so how do you monitor or, what is your threshold in terms of deciding who you're putting on the platform? >> this is all about trust. this is all about building a great consumer brand. this is all about putting the very best people. for us that means thinks like providing a couple million dollars in insurance, providing 24/7 customer care here in new york. and for us it's going out and finding the very best service -- >> but do you do background checks? >> we do all that stuff. background checks, reference
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checks, social security checks. the end-to-end conversion from people that apply to actually get on board is less than about 3%. so it's like the very best cleaners. >> if they get a lot of bad complaints would they get kicked off? >> oh, if there's any sort of bad reviews of course we review it and move people that don't generate incredible ratings. the average rating on a cleaning job is 9 out of 10. >> is it like uber in that traditionally they will only keep drivers who are getting 4s and 5s. if you get a couple of stars below that? >> we want to deliver the best consumer experience. if people aren't delivering a great consumer experience we've got to remove them from the platform. >> we talk a lot about the sharing economy and uber and air b&b and sort of what that could do to the economy broadly. how many of the people who are coming on to your service are unemployed? or are they coming from bigger services? >> look, i think it's all across the board. we don't survey, you know, people join the platforms as to whether they're unemployed or come from existing services but they all have paid cleaning experience before or paid handyman or plumbing experience before they joined handybook.
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it's not like we're taking people who are, you know, not doing this before. we're only taking professionals on. >> what does it cost? what's a traditional rate if i need a handyman to come in and fix a toilet, for example? >> if you're looking for a handyman for two hours it will be about $90 here in new york. >> i assume the prices are different depending on the region? >> prices are different depending on the region and different depending on the service you require. >> do you tell me the price up front or do i find out after the fact? that's always the catch with the handyman. you think he's going to be there for an hour. he ends up for three, you don't know what he's doing or not doing and you get hit with this bill. >> come to the handybook website or mobile app, say i need a handyman for this time for this many hours and it will confirm the price. if the job is going to take longer he'll tell you at the beginning. 95% of the jobs run the exact time it tells you on the website so you know in advance most of the time. >> do you need additional funding to expand? >> we just raised about $30 million in capital, that will take us, you know, through to
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some more of the cities we're in. we're in 28 cities in the u.s. and candy. as we decide to do more cities we'll raise additional capital. >> are you profitable yet? >> i think this is a space where as you grow and as you develop the consumer experience in the market, it's -- >> are you competing -- i'm going to assume the answer to that is no. we're not profitable yet. but when you think -- who are you competing against in terms of are there direct competitors? i understand there's obviously the sort of traditional folks that you, you know, traditional handyman that you wouldn't necessarily get on an app. are there other apps out there trying to do what you're doing? do you look at task rabbit where you can ask someone to do something for you. >> i think what we've done is we've said we're only going to find professionals and we're going to let you make the booking instantly. what we're competing with is everything from traditional classified to yellow pages to, you know, the referral from a friend. >> how quickly do they show up? >> when we started it, it was about two days away. you could make a booking about two days away.
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we've seen that come down to one day and we're seeing that come down to about six hours and in some cities it is 3 hours. >> if there's a true emergency and you pay more if you're trying to get somebody right this moment? >> at the moment we don't differentiate that. obviously as we move to 60 minute or 90 minute coverage we'll change the prices for that. >> thanks so much for coming in. >> thank you. >> i may need -- >> why did you come up with toilet? >> because toilets are just like -- what year is it, 2014? >> yeah. >> they're always messed up. either the little thing on the inside it gets caught up so that the thing is up a little and it's running and you got to take it off and like undo. constantly the little thing down there that covers it. >> the technology -- >> the plug does it and you request hear it seeping through. constant problems with the toilets. >> are you making a new toilet start-up? >> i'm thinking if i were to get into -- seriously why can't they make a toilet that never breaks? it just works. and it's strong! it's strong!
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>> ben kauffman the entrepreneur and innovator on. we should talk about a new toilet. call id a kernen. >> i don't need like a car wash mechanism down there that, you know, sprays or something, just something that flushes, and you flush it once and it's gone. out of your life. coming up, new jersey governor chris christie. signing the state's $32 billion budget while vetoing a package of tax hikes. now he's joining us on set here at 7:30 a.m. eastern to talk fiscal policy, presidential politics and more. and joining us on set right after this break, former new hampshire governor and senator judd gray. he didn't even leave after that rant. we're going to talk about the state of the gop, and some energy matters. "squawk" will return in just a moment. if you have moderate to severe rheumatoid arthritis, like me, and you're talking to your rheumatologist about a biologic... this is humira. this is humira helping to relieve my pain. this is humira helping me lay the groundwork. this is humira helping to protect my joints
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welcome back to "squawk box." time to kick off the second half. and auto sales are on the way. should the markets expect more heat from the big three? summertime in the garden state. the beaches. the boardwalks. the budget. "squawk" newsmaker new jersey governor chris christie joins the "squawk" gang on set talking taxes, jobs, presidential politics, and more. secret lives of the superrich. when jets, yachts and sports cars are not enough, it might be time for your own submarine. that's right. we go under the sea in style. down periscope, get ready to dive. the second hour of "squawk box" begins right now.
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good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching the futures and we have seen a lot of green arrows. dow futures look like they're up above 40 minutes. s&p futures up by 4 and the nasdaq up by 11. the ten year note looks like it is yielding 2.552%. still below 2.6%. in our head lines the nation's automakers will be out with the june sales numbers throughout the morning. the trend slightly lower largely because of the fact that there were two fewer sales days in june than in the same month last year. however, analysts will be looking especially closely at general motors because of all the significantly expanded recalls. the automaker adding more than 8 million vehicles on monday. bnp paribas will pay nearly $9 billion in penalties after pleading guilty to two u.s. criminal charges. it had been accused of violating u.s. sanctions against a number of countries. france's largest bank has also been banned for one year from
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conducting certain u.s. dollar transactions. that stock, though, is up by about 3.8% today. this is another one of those -- >> it's what the prosecutors didn't want. you know, when comey said yesterday the money is coming out of the pocket of the shareholders and this goes to the whole issue. just from a perception. >> this was a sell on the rumor, buy on the news. >> the federal trade commission has approved the acquisition of drugmaker forest labs by active us. they'll have to give up the right of four generic drugs as part of the approval. the deal has been approved by shareholders of both companies and we'll continue to watch that. southwest, airlines is going international today. phil lebeau joins us with the details. that's big. >> yes, joe, we're here in baltimore. we're a little bit early. they're still setting up the steel drums here. they're going to the caribbean and everything. that's part of the festivities that are down here. this is all part of southwest
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airlines beginning what will take place over the next decade, a very major expansion to more than 50 cities outside of the lower 48. take a look at what this expansion is at least initially here. three routes today, they're going to be flying from here in baltimore, also out of atlanta, also out of orlando, a flight here is going to be going to aruba. they also have another one going to montego bay and more routes in the coming months. number of people are saying why is southwest expanding internationally? isn't there a lot of competition in the caribbean? yes, there is a lot of competition there. but gary kelly believes there's room for growth there. he also says with the fleet expanding to more long haul 737s, that can go greater distances, this is a prime opportunity for southwest to look for growth beyond the lower 48 u.s. states. >> we've committed to build a five gate international terminal in fort lauderdale. we'll look across the united states and look at our positions of strength, whether it's denver, whether it's chicago,
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where we're flying international from orange county. and we'll be able to do things that nobody else can. and we think we have a wonderful opportunity for international growth. >> shares of southwest airlines over the last year, they have more than doubled. they certainly have performed well along with the rest of the airline stocks over the last year. guys, this expansion is not just about these quick hops down to certain destinations of the caribbean. eventually, look for southwest to fly into the northern part of south america. that's probably the farthest they'll go. but this is the beginning of southwest gradually adding more routes and more destinations overseas. >> phil, i guess we want to talk auto sales quickly. and that number, from gm, and then we looked at how many cars they sell every year. >> total, right? >> they're going to have to get with it if they don't start selling some more cars, they're going to run out of cars to recall. because they only sell about 3 million a year and they are recalling 8 million.
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>> right. right. but remember, these recalls are going back in some cases to the late '90s. so you got to look at all of the -- and some of these are models that have been recalled three or four times. so a number of recalls for one particular model. >> do we know what percentage -- was it 29 million now total vehicles? represents over the last -- is it a deck eight and a half? what are we talking about in terms of total time period? phil? >> i'm confused by your question, andrew. you're looking for? >> do we know how many vehicles have been sold over the period over which all these recalls have been done? and the question becomes what percentage are being recalled of their total fleet? >> i didn't realize some of the recalls were -- >> we're trying to figure that out. my guess is from talking with people, because it's really hard to run these numbers, especially when you're talking about global sales, my guess is somewhere in the range of probably 22, 23% of all the gm vehicles that have been sold. let's say over the last 10 to 12 years. but that's a guesstimate because you have to look at each of
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these models and say, okay, was it named in this recall? and it was also named in another recall. so while the number may be more than 25 million, which it is, it's 25.7 million here in the u.s., and almost 29 million worldwide, a number of those models are named on several of the recalls. so it's a little bit like looking at apples and oranges here but it is a substantial percentage. >> all right. phil, thank you. and we will talk to you again very soon. >> okay. >> in the meantime let's bring in our guest host judd gregg former republican senator and governor of new hampshire. also the co-chair of the bipartisan nuclear matters campaign, and judd it's always great to have you here. thank you for coming in. >> thank you for having me. i was very impressed with the suit that andrew put on. >> live free or die. it's a very patriotic state. are you willing to don the suit, or andrew's already stretched it out so you won't? >> you know, no. no. >> if you were still a politician, if it could get you a few votes would you?
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>> yeah, a few votes. but you know it looked to me like he'd escaped from a dr. seuss book. >> kids are going to like it. >> you would sacrifice yourself for the show. you did there when you admitted michael jackson changed your life. i was thinking with that suit you should have cut off one of the 2k3w4r06s and had one glove. >> one glove. >> one white glove. >> with sparkles on it. >> yeah. but the discussion on the toilets was also excellent. so, i figure i'm -- >> you agree with me on that as you're a grandparent now, and -- >> you know, absolutely. >> we can put a man on the moon -- >> i think the kernen toilet is probably the future for america. >> maybe the world. >> and you know in europe, as you said, trying to save water, you end up flushing it six times. how does that save water? >> this is san excellent point. you should discuss this, maybe we could have a g-6 -- >> don't think you're above this judd, you've been on many, many times. >> let me ask you, what the president did yesterday, where he moved on immigration and said that if the republicans won't give him a plan, he will take
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matters into his own hands, and use executive orders to do as much as possible. what does this tell us about what we can expect over the next three years? >> well, what you're seeing is a president who is basically abandoned the legislative process and decided that he's going to act through regulatory process, and so i do think there's some opportunity for legislative action. especially if the senate goes republican because then the republicans will control half the government, will have to govern. and so the president and hopefully the congress would come together to try to govern on a few major issues, such as tax reform and -- >> corporate tax reform? >> well you've got to do them both together in my opinion. because if you get too much separation between the individual rate and the corporate rate, then you end up with the whole system being skewed by people incorporating in order to avoid taxes. basically you have to do major tax reform. i think it's a possibility because, once the congress is dominated by one party in the presence of another party for either side to get something done and accomplish something, they have to come together. and they have to govern.
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so that's a possibility. but this action by the president reflects what is clearly his course of the moment. which is, let's do everything through regulation. and he's populated these regulatory agencies with extremely activist people. >> well, now they -- >> they've been neutered a bit. >> but judd -- >> these are all friends of andrew's -- >> but every time the president says, you know, i'm going to do this, i'm going to take this upon myself he doesn't say that in a shy way, and he's not tarnished by that. his base, that's a badge of honor. every time he says i have to do this, because this no-good, do-nothing republican controlled house won't let me do anything. he loves saying that. the more he says it, the more his base goes, yeah, you're justified, mr. president. keep going. keep going. republicans don't seem to understand that. they keep saying that he's going around them, but you know, that earns him points with the people he's trying to cater to. >> yeah, but in the end, we're seeing a fundamental breakdown in the way we do governance of
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this country. this country was not set up as a parliamentary system where one party dominates. it was set up with checks and balances. and to be successful, and to bring the american people along on the issues, you've got to have -- >> you're reading long-term on what's right and constitutional. nobody cares about that. >> i'm -- i'm not trying to get too much into the constitution here, because that's too subjective. >> political expediency. it's fine. >> but the issue is whether or not anything he does regulatory survives. if the next president is a republican it's gone. so he really needs to legislate and to legislate he's got to be willing to come to the congress and work agreement. >> in some ways this is almost like business 101. you don't deo a deal where the other guy gets completely hosed. >> that's a good way to describe it. you cannot bring the american people along on big issues, especially -- >> that's what happened with obamacare. >> not one republican vote. not one republican vote. >> can we ask judd about cont
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contraceptives and the supreme court. do you have a view? >> whether they use them? >> no. do you -- what do you think the implications of the supreme court ruling are going to be? >> i think it's narrow. >> you actually do think it's narrow? >> it's narrow because it's saying to people of religious views, and they had to be tightly knit groups -- >> closely held companies. >> or closely held companies that if they have deeply religious views on the issue of contraception then they have the right not to participate. >> you saw that they -- >> both sides -- >> with the political type for the left on this. it's a war against women, andrew. >> so the question becomes, do you think that congress is going to try to find some end run around this to still provide that contraception? >> no. >> through some form of the obamacare insurance program? >> no. >> or something else i don't know about. >> one of the issues that congress really doesn't want to step into is the whole issue of contraception and abortion. there are members who do, but the majority does not. but it knows that it's a no-win
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issue which creates huge intensity of confrontation, and you accomplish virtually nothing in the end. >> would you serve as contraception czar if asked? >> well, he just put on the suit. >> that looked like a full body condom, which would work. >> thank you. >> thank you very little. >> it's a complicated question. i've gone round and round with this. because i think people who have instant answers on this one haven't thought it through. because there's -- you're not just talking about birth control pills. you're talking about iuds and morning after pills and if you believe life begins at conception that's a complicated -- >> if you did read the dissent the suggestion is this could open up a whole other can of worms and you could use religious views for all sorts of things. >> like discriminating on who you hire against, if it could be stretched to those levels. >> i don't think they did. i think it was a pretty narrow opinion directed at a very small group of folks. i mean, if you know i mean arguably you could say take the
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mormon church for example as a classic example of a group that feels very strongly about a specific issue. is the supreme court going to find in favor of the church doing something? unilaterally? probably. i mean, if it -- if it violates their religious views. and religion is protected in the first amendment in a very unique way. >> right. >> those amendments are overrated. first one, the second one, the third one. we'll see about those. >> judd gregg is our guest host. he will be with us through the rest of the show. >> coming up, when we come back, the "squawk" newsmaker of the morning, new jersey governor chris christie. he's going to be our special guest. he's going to join us on the set right here at 7:30 a.m. eastern. fresh from signing a new $32.5 billion budget for the garden state. we're going to talk to him a lot about that, but first coming up right now, oppenheimer funds is under new management. art steinmetz begins his job as ceo today and he's going to be talking to us about the current market environment ahead of the jobs report when we return in just a moment.
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welcome back to "squawk box." checking the futures right now. look good. good start to the second half of the year after a 6% gain in the s&p for the first half. making head lines, morgan stanley is reportedly considering compensation cuts for financial advisers. and they got, i think depending on how you measure it they have
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more than anyone. about 16,000 or so. reuters says the firm is thinking of reducing pay for workers who generate the least revenue. >> what happens if they tweet a lot. >> this has been something that the bigger producers also get a bigger percentage of what they bring in, too. >> some guys just leave the business. >> you've got a lot of tweet followers. >> and cutting money. >> they changed the policies. >> that sets aside -- you have to really explain it, and it takes a long time. >> probably not. >> we did in the 6:00 hour for the viewers who don't know. there's a new twitter policy. >> they're also cutting compensation for the 16,000 financial analysts. >> we could talk to our next guest maybe. i don't know if they're allowed to tweet. mutual fund giant op i'mer funds handing over the reins to a new ceo this morning and he's kicking off his new position today on the "squawk" set. art steinmetz, ceo today. >> that's it.
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>> does it feel different from yesterday at all? >> no. not yet. it already did. >> you were the first -- >> opened up a few months ago. >> you were the first investor to hold this -- >> since the founding, which would be about 50 years, first portfolio manager to send to that position. >> and so, how do you think that changes things? because when you look at the other ceos of many of your competing funds they have not been traditionally investors. >> sure. to be, you know, perfectly fair, you know, oppenheimer has had great success under a wide variety of ceos in the past. so that's worked out pretty well. but the investment landscape is really changing. and you know, first because of the environment. obviously, you know what i started in this business, interest rates were double digits. over the last 30 years they've gone down to zero so we're done. you know, there are huge challenges for investors who, because income is a perennial need, you know, and that's how i grew up in this worst. so sensitivity to ways to find
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income for investors is important. the other thing is talent. you know, i'll be perfectly honest, you know, it's no surprise to anyone here. the act of management business which we are in is being challenged very robustly by etfs, cheap beta, low-fee alternatives. we have to prove every day that they're worth the active management fees that we charge. it's a talent game. one of the things that i'm reasonably proud of is that i've been able to source great talent over my career as much as i've been able to find great investments. and i think that's going to have -- >> has oppenheimer's funds traditionally outperformed the index? >> we have a wide variety of funds against a wide variety of bench marks. >> but you raise the issue about indexes. and there's so many people who say just buy the index, buy an etf, forget about this stuff. the question becomes, i'm sure you've benchmarked it, on an average basis if i was investing with oppenheimer relative to indexes where would i land? >> you know, again, it depends on the funds. several are below. several are above. if you look at the strongest
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areas where our strongest product areas, which are for instance global equity, vast outperformance over very long periods of time. >> is that tied to people? >> absolutely. it's people, and how they interact with each other, and it's the culture. but it's absolutely people business. >> does that mean you replace the people and the funds that aren't? >> over time, absolutely. there's -- you know you have to separate, you know, a bad quarter or a bad year or even a bad couple everys years from a flawed process or poor judgment. and you know, the art comes in to deciding how much you tolerate, and you know because certain things go out of favor. value might be out of favor. >> you don't have tenured portfolio? >> no. there is no tenure whatsoever. >> no tenure. >> i want to get your views on the market. before we do that curing the commercial break before you came on i was talking about how i was asking the ideas institute all these people were talking about these new products, lots of mutual funds that are based on sustainable corporate responsibility and all this kind
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of stuff. you don't buy it. >> well, it's not that i don't buy it. but we serve our shareholders. that's who our fiduciary responsibility is to. we try to provide the best possible returns for those investors. so you have to ask, do these things -- do they exist because they're great investment ideas, or because they satisfy some other ideas. aren't loading up in social responsibility funds because they think there's great arbitrage opportunities. >> takes a village. >> it does take a village. >> but i was writing about inversions today, and one of the things that's very interesting is you have pension funds now invested in hedge funds. hedge funds are supporting the inversions. what do the pension funds do? >> do they lose jobs as a result? >> you wouldn't buy coke if they had -- >> exactly. every single person at this table has different passions around social responsibility. >> wait a second, you buy a food company that has gluten in its product? >> i mean you're illustrating how silly, how extreme you can
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take it. >> i know. >> but let me also admit that we all have different utility functions, if you will. so if i buy an investment, is it just the return that i'm buying it for or is there some other social gratification i get from it? and that's entirely possible. so i wouldn't -- i wouldn't make light of people's interests in doing well beyond just maximizing return. >> all right real quick because we've got to go. just give us your 30 second view on where we are in the market. the sell in may and go away idea would have been a very bad one thus far. >> not so far. >> the economy keeps going. you know, i don't know what payrolls are going to be. we're clicking in at north of 200 on average right now. the labor market is getting tighter. wages are going up. so the economy, anemic though it is, continues on pace. >> is it going to be 6% -- >> the s&p? i don't know. it's up, up. >> okay. we'll take that to the bank. art steinmetz, congratulations. >> thank you very much.
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>> mr. new ceo. thank you for being here. >> thank you. >> when we come back in just a few minutes, challenges for the garden state, and looking ahead to 2016. new jersey governor chris christie will be our special guest in studio. and the last time ben kauffman was here andrew got a foot rub. he's back at 8:15 a.m. this morning. >> a massage. >> massage rub. let's hope he left the lotion at home this time. about speeds and feeds. it's all about latency. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can make gamers happy, you can make anybody happy. speed is made with the ibm cloud.
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when we return the "squawk" newsmaker of the morning, new jersey governor presides over this domain, and he has decided to join us in studio. >> here he is. >> governor chris christie is our special guest. the budget, taxes, jobs, running for president and the stuff andrew has said about new jersey. all on the agenda when "squawk box" returns. you want to see something cool? snapshot, from progressive. my insurance company told me not to talk to people like you. you always do what they tell you? no...
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violated u.s. laws. that bank is banned for a year from conducting certain u.s. dollar transactions. june auto sales will be released today. general motors announcing another recall. this time more than 8.2 million models most of them older models, because of the ignition switch defects. we've been talking about that looking at how many sales they've had. that's last year it was something like 2.7 million cars they sold. you're talking about more than three years of sales. also chrysler is expanding its ignition switch recall by 696,000 vehicles. phil lebeau will join us with more in the next hour. yesterday republican governor chris christie signed a $32.5 billion budget for new jersey. he used his veto power to squelch tax hikes proposed by democrats. joining us is governor chris christie of new jersey. we're in new jersey. >> we are. >> this is your state. becky vacations. we all love new jersey as a rule, we all, even you -- >> love new jersey. wish i had one of these pins. >> i love it so much i come
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every single day. >> i think that's why you come every single day. >> so the budget, you prided yourself on being able to work with the legislature, might not always have been on the same side. was it bipartisan this time? and there's carping now about some of the stuff but to get it done you had to work with the other side. >> to some extent, joe, this was not a bipartisan budget. i took the line-item veto pen out yesterday and vetoed straight the tax increases about 1.5 billion dollars in proposed tax increases, income tax, corporate business tax, and others. and then, you know, veto line-item vetoed spending to balance the budget. the budget this year is 1.2% lower than it was last year. >> no matter how many times we talk about illinois versus texas or florida, people still don't seem to understand that a business friendly state in terms of taxes seems to attract more revenue over time and seems to be better for its inhabitants. we did the top five states, cnbc
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again did the top five. five governors, all five states went for romney in the last election. only one went for obama, even in the previous election. new jersey is still pretty high taxed state. >> yeah, it is. >> people want to go higher? they still haven't seen the, the benefit of maybe keeping taxes low? >> no. >> they have not? >> this is my fifth budget as governor, and in four out of the five years i've had to veto income tax increases. in new jersey which has a top income tax rate of 8.97%, we're already one of the two or three highest taxed states in the country and i've had to veto income tax increases four of the last five years. you know, folks don't seem to understand that you have to make yourself competitive from a tax perspective and that's why what i've tried to do is keep the spending to lower than it's been, and from our perspective take out pension health benefits, and debt service, the entitlements at the state level. our spending in this budget is $2.2 billion lower than it was in fiscal year '08.
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so we have 6,000 fewer employees than we had the day i walked in as governor. so we've been squeezing on the spending side but the legislature has refused -- >> i don't know whether -- i don't know whether -- do you pay you say you pay -- >> i pay some state taxes in new jersey. and i'm -- >> but we still have a huge pension liability, right? one of the worst in the country. >> one of the five worst. >> one of the five worst in the country. >> and the critique, though, is that the pension under this new plan is not fully funded. >> it is fully funded for current employees. what i haven't been able to do because we had a revenue problem this year, much worse than anybody ourselves, the legislatu legislature, even the rating agencies forecasted, was i would not be able to pay down the sins of my predecessors. who for nearly 20 years made almost no payments into the pension. >> it's been the last five i believe. >> listen, i have made more payments, with the payment i made yesterday, we made nearly $700 million payment yesterday at the close of the fiscal year. i've made more payments into the
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pension than any of my predecessors, almost $3 billion. >> i'm going to get very incendiary here. i don't think we've ever had anybody from zero hedge on here before. there was an economist named armstrong, i haven't shown you this yet andrew, but talking about wealth disparity, income distribution. look at what happens here. he's forecasting civil unrest eventually. this won't end pretty. the greatest problem we have here is misinformation. people don't comprehend why and how the economic policies of the post-war era are imploding. the pensions created for those in government driving the cost of government up exponentially with time, then i'm not going to name any names or politicians but the political forces blame the rich. this merely creates a class warfare with no resolution for the future. even confiscating all the wealth of the so-called rich will not sustain the system. consequently, again and again we crash and burn and have to start all over again.
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and then, this is not going to end pretty. the question is when does society wake up, how high will the price be that we have to pay, once again, they're going to blame the rich and the idiots, not mentioning any names here, will cheer, get them. get the rich, once again, what will happen when there is no more wealth to hunt? we end up with a communist state by default, no wealth, just career politicians who blame everyone but themselves. this -- >> was this a quote from andrew's book? >> this is an economist. i just like, the reason i bring it up, if you run for president, you're running in an environment where there's this huge class struggle now, that's been brought fore and center. we even forget we're a meritocracy. we think we need an egalitarian outcome. a lot of people do. how do you act like a kind, gentle compassionate person when you have to cut pensions? >> you tell the truth. i mean listen, people aren't stupid. >> yes, they are. >> no, no, i disagree with you.
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>> i can show you 50% of the country that is stupid on this issue. >> i disagree with you. >> then read the huffington post. >> i try not to. but here's the thing, the reason why some people are less informed than others is because those of us in political life, many of us, are not doing our job. the fact is since january, even before i knew we had a revenue problem in my state of the state address i was telling people the pension reform we did in 2011 while it helped is not enough and we need to do more and here's why. and i said these chickens are going to come home to roost. i didn't know they were going to come home in may. i thought it was about a year off. the fact is we need to be talking about this. what you're going to see me do all summer is to be out across the state of new jersey making the argument that we need to fix this system or it will eat us alive. and that's what you need. we need to speak in stark, plain, understandable terms to people. and then i don't agree with you, joe, they will get it. and they will understand. and when they do, then they will empower us to take action. and i'm -- i simply think that
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politicians in the main have been at fault. >> the media enages the other side, too. >> i know that you have put in enough funding for the current retirees. but if you're a 40-year-old who is working for the state right now should you read into this that these promises that have been made will not be there when you're set to retire. >> if we do nothing, becky, they won't be there. >> what's the alternative? >> there are a number of alternatives. i'm going to lay some out this summer for additional pension reform and health benefit reform. next fiscal year for the first time in our history the state of new jersey will pay more money for retiree health premiums than for active employees. we will controls that line now. it's unsustainable. and so, what people who are in their 40s right now, what our state government should be doing is urging state legislature to work with me to be able to fix the system so there is a pension there for them. look at detroit. look at what's happening at the municipal level. that is coming for the state level. >> when? what's the tipping point? and what does it look like? what are the numbers? you just mentioned that more
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retirees, paying for more retirees than active people working. >> write on the health benefit side we'll do that starting next year. the fact is the tipping point is coming. we don't have a liquidity problem at the moment. we're able to pay our bills in the pension. we've had extraordinary performance in our pension. this year ending the fiscal year yesterday, our rate of return in the pension system is 15.5%. now, we have an anticipated rate of return of 7.9%. you see $5.5 billion over our anticipated rate of return. now those are good markets now and we have, you know, excellent bob grady runs our pension system. he does a great job. but the fact is that can't last forever either. >> 7.9% is even high. >> it is. remember when i came in the anticipated rate of return was 8.5%. in the pension reform in '11 we moved it down to 7.9% and in the next round of reform we have to move it down further to come close to historical trends. but the fact is whats 40-year-old state worker should be concerned about right now is getting reform. because if they put their heads in the sand then we will have a
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detroit-like problem in new jersey, in illinois, in california and lots of other states across this country. 40 states out of the 50 have an unsustainable pension problem as we sit here today. >> on that point, the credit rating agencies have downgraded new jersey about six times now. >> yeah. >> are they right? >> well who knows. you know, the fact is that they were dead wrong in 2008. i don't put a lot of stock into the credit rating agencies. >> how much do you think about that when you look at a budget like this? >> not at all. what i think about is i have a constitutional requirement to balance the budget and i have a state that's already high taxed and i'm not going to raise taxes on the people of the state of new jersey and drive more people out. remember when we had the first large tax increases in new jersey in 2003 to 2004 under governor mcgreevey, boston college did a study of the years 2004 to 2008, $70 billion in wealth left new jersey. not diminished wealth, departed wealth. we know because i know these folks. they went to florida. they went to tennessee.
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they went to north carolina. and in new hampshire they went to places that are lower taxed. this fiction that you can continue to tax people as much as you want, as a state, and they don't have any place else to go, these folks who are wealthier are the most mobile. they usually have multiple homes already. so it's not even a matter of them leaving new jersey. they just have to leave new jersey for 181 days. and then we don't get their tax money anymore. >> wish we had hours and hours. let's talk about 2016. you were the golden boy. you were a shoo-in if you had said yes -- >> come on. >> for the nomination. guys still love you obviously. then we have bridgegate. time heals a lot of wounds, and this is, you know, for me, i mean i'm getting audited again. all right. you've been -- we've all been. i'm thinking irs, something like this in terms of scandals instead of some stupid hazing almost. put any scandal up against it. i don't understand it from the first place but i do know how the media works so i understand.
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as things get further into the rear view mirror they go away. we're even talking about possibly electing another bush. do you believe that, after the way the last one left office, where we were? so things -- time heals. you feel like you're this is behind you now and you're on upswing in terms of being age to do this? >> listen, i don't get to determine what's behind me and what's -- >> you're up five points against hillary in iowa. >> and i'm not running for anything at the moment. >> you're not? >> so it's really great. i'm elected to a second term in new jersey and i haven't made a decision about whether i'm going to run for president or not. the fact is i don't get to determine what's behind me or not. we've seen that already. >> can you overcome whatever p/e exception was engendered at that point in your view? you don't even care? >> you know what? i'm myself. and i think what the people across this country, and i've been in 19 states now in the last four or five months since december, when people talk to me about it, it's not that stuff. they know who i am. and i don't change who i am. the fact is, that since january
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9th when all this stuff came out, there has been one new fact presented by anybody that contradicts what i said on january 9th and there won't be. because i told the truth. like i always do. i said to people of new jersey and i would say to people across the country, no politician is ever going to have a mistake-free staff, a mistake-free administration -- >> will you -- >> and so you do the best you can. and when that stuff happens you take responsibility for it, you change it and you move on. >> you were the golden boy, but it was totally, it was superficial, no one even knew you. no one knew anything about you. so now people have a much better idea. you have to be -- >> you have to be time tested. we know how you dance now. from -- but we know -- >> it's an important thing to know. >> who should republicans run? what's the country going to be ready for? someone way right -- >> who knows. >> you've got to win to govern don't you? >> well, that's absolutely true. the fact is that's what we should be focused on as a party. unfortunately i think our party all too often has been more interested in winning the argument than winning the
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elections. >> do you have ideas on what we should do? >> i'd be interested in the governor and what he's doing in new jersey is exactly what we need to do at the federal level which is get our pension structure under control and our medicare and social security are driving us into bankruptcy is an issue. but, you know, our party is now factionalized and those factions instead of coming to the which is the purpose of the party are spreading apart and aren't commune indicating and part of the faction simply want to shout and they don't want to govern. so how should a nominee of our party structure the presentation of the party so it can communicate with independent voters who are the swing vote and especially independent women voters who truly are the swing vote in this country. >> listen, we did it in new jersey last year. and enormously blue state, we won 61% of the vote statewide, 58% of the female vote, we won two thirds of the independent vote, 53% of the his tanic vote. it can be done. and the way it can be done is telling people the truth. i get --
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>> but -- like yourself run in what is the center of the party right now which is the south. and the person states. >> you're going to see me travel through the south to work for southern governors. i was in tennessee. the reception there has been great. we stereotype too much. and it's about leadership when you talk about the factionalization every party out of power gets factionalized. remember the democratic party were factionalized. you need a leader who is going to say i care about getting the job done, follow me. >> do you need a leader who is in the middle? people have argued republicans have chosen the safe choice and i don't know if the safe choices always work. or do you think you need somebody on the outside f >> those labels matter to guys like you. they don't matter to people like me and they don't matter to voters. you write about left, right, center and try to really characterize somebody that way, i've got a whole range of different opinions on different subjects. i believe i'm a conservative. other people will say he's a moderate. other people in my state will say he's crazy, he's too far
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right. all that depends on where you sit in the end, be who you are. >> but governor -- >> and let people judge you based on your results and what you say and what you do. that's what we're going to do. >> i think a guy that just wants to keep the government out of -- out of the bedroom, out of -- the social issues given away a lot of times of republicans. i'd like to talk about corporate tax reform. i'd like to talk about entitlement reform. i'd like to talk about all the things that the republican party used to know how to do, and used to know how to talk about and now they get bogged down and look at what the -- what we talked with romney during the entire election. none of those things. >> joe, listen, part of that is the fault of the candidate. if you allow yourself to get bogged down then you're going to get bogged down. the fact is that i'm the first pro-life governor in the history -- >> you're pro-life but you'd stay out of the -- and states can -- >> but i'm pro-life. >> you're saying the socialist bogged you down. didn't bog me down. >> you want to take away the right to choose from women? >> i took other issues like the
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ones you talked about and that's where i spent most of my -- >> do you think a republican candidate should run on taking away the right to choose? >> they should tell people what they feel on issues people ask you about. if you get asked a question, answer it. >> you're pro-life. what would you do in terms of what we've been talking about this morning, just the ruling that came down from the supreme court yesterday, was the supreme court right in its decision? >> who knows is the supreme court right? the fact is that when you're an executive, your supreme court makes a ruling and you got to live with it unless you can get the legislative body to change the law or change the constitution. the point is, why should i give an opinion on whether they're right or wrong? at the end of the day they did what they did. that's now the law of the land unless people in the elected branches try to change it. this is the way you get bogged down in those things. i don't think that's the most central issue we need to talk about this morning when you look at the challenges that face our country. and if i allow people to put me into that box, then shame on me, i'm not a good politician. i'm not a good -- >> you got a plan to bring, if
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you were to run, to bring the u.s. back in terms of gdp, and in -- if you might have a cooperative congress. if people say congress isn't doing anything, what should the federal government or congress or the government in general do to help us regain our momentum? because we've had the worst recovery ever from a recession. >> we have the things that need to be done and the senator just alluded to them. we need to get entitlement reform, serious across the board tax reform. >> would that help growth? how would entitlement reform help growth? >> because the less money that the government is taking out of the system, the less debt that we're running up as a government -- >> people say the deficit's taking care of itself already. >> not at this level of growth the deficit's not taking care of itself. you get gdp growth at 5% or 6% maybe the deficit starts to take care of itself. not gdp growth as anemic as we've had in this administration. but the fact is, joe, if i decide to run, i better have a plan to try to make the country recover. and have growth again so that people can have confidence again
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in their own families' economics. let alone the economics of the country and the world. but i haven't made that decision beyond being governor of new jersey. >> let's go back to pension reform in new jersey. what is the next step? because the democrats now say they don't trust you. they don't trust your word. >> you know -- >> they say this after the 2011 reforms. you're right you didn't know what was going to happen with the receipts that came in. what do you do -- >> governing unfortunately for people in the legislature, no offense senator, for people in the legislature, they can say whatever they want. when you're the executive branch you actually have to govern. and governing is not a static operation. so if revenues come in for the month of april $700 million lower than projected by us, and $600 million lower than projected by the legislature, we've got to make some changes. >> what happened? why did the numbers -- >> we believe, listen this is like, i empathize with harry truman more every day about wanting to have a one-handed economist. but the fact is what the economists are telling us now is the obama tax increases that were put into effect at the end
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of '12 forced a lot of high net individuals which we rely upon predominantly in new jersey, 41% of the income tax is paid by the top 1% in our state. they accelerated a lot of income and dividend, and capital gain into 2012 to avoid the increases in 2013. and we, our selves and the legislature underestimated how aggressively they did that. but what it tells you how skewed our tax system is. that 1% of the individuals in my particular state can skew tax revenues that severely, we're relying too heavily on them, we're taxing them too high. and we're forcing them, as a result to play games with their accountants that wind up hurting us. >> one last issue before we let you go. >> yeah. >> drugs. you've taken on drugs in this state and i imagine you may take it on as a issue nationally if you campaign for the president. i just came back from colorado where drugs are legal. why are you taking on this issue now and i ask if it in part
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because i think national polls suggest at least on things like marijuana, people want to legalize it. i'm not sure i'm there by the way. i saw some stuff we should talk about later in colorado that made me very anxious. >> i've taken on drugs for the last dozen years. and understand what i'm saying. i'm against legalization of marijuana. i think it's wrong. i don't think we should do it. however what i have said is the war on drugs is a failure. and it's a failure because this is a disease. and we need to treat the disease. and so what i did in new jersey, i think the first state in the country where for first-time nonviolent drug offenders, we are not sending them to prison we're making it mandatory in-patient drug treatment because i believe that every life is precious and what i said to the faith and freedom coalition when i went down there a week or so ago is if you're pro-life you need to be pro-life for the whole life. not just when they're in the womb. and sometimes when you're pro-life and you favor life, it's messy. because people make mistakes. i mean i wish no person took drugs for the first time but lots do. and some can deal with it and some become addicted and that disease takes over their life. and so, i think we have to take
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a whole new approach to this, which is we need to treat people, treatment can be effective. it is in fact the only tool to fight drug addiction in the right way. so, i don't favor legalization of marijuana and i don't see an inconsistency. you see some people on the left who say if you're for treatment you should be for legalization of marijuana. how the heck do those two square? i don't think we should legalize marijuana but when people do get addicted we shouldn't warehouse them in prison if they're nonviolent. over and over again and expect they're going to come out and have a different result. we need to give them the tools to treat their disease and that's what we're doing in new jersey and i'm going to talk about that all over the country this year because i believe that's a way that's conservative, and consistent with pro-life principles. every life is precious. every life is a gift from go. and even those who are drug addicted are a gift from god and we need to give them the tools to help them fix their lives. >> they're saying we -- you need to keep running new jersey. all politics are local. >> that's where i spend most of my time. >> was there any talk about doing the water sprinkler?
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do you know how -- >> because mrs. obama had done -- >> she had done the -- what about the shopping cart? >> no because she had done all those things. >> those were all new. >> we went to the lawnmower, we went to the pushing -- >> they were more manly. >> it was a dad dabsing thing. named father of the year the thursday before father's day and they wanted -- >> you weren't allow to run -- "the tonight show" and i don't know why -- >> listen it was a lot of fun and it's gotten -- >> i watched it and i can't unsee it. >> i look at yesterday so far, 6.2 million hits on youtube. >> i know. they sent it to me and i said thanks, i think. >> but my son was here today in the audience, and i asked him -- >> how did that -- >> he said i had to avert his eyes a couple of times. >> me too. >> he's not surprised it got millions of hits if you're going to humiliate yourself on national television. >> andrew put on a full body condom. a full body united states flag condom. >> i saw that. >> and you can't unsee that
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either. >> listen that's part of now my vision. >> governor we're in the same boat. >> you need to talk to our audience you know that so you got to come back here. this is -- >> and we saw each other i told you -- >> how many morning joes are there? >> there's only one my friend. >> can we agree on that? >> can't we all just get along? >> his name is chuck. that was taken by chuck scarborough so he changed it to my name! >> you're all under the same corporate umbrella. >> it's just a shtick. >> you think? >> anyway. >> thank you, governor. >> thank you guys. >> quick programming note. the governor's going to be our keynote speaker for delivering alpha on july 16th. >> see. >> we're in new jersey. >> governor thank you. coming up, the superfalcon isn't just reaching new heights but new depths. a personalized submarine for the superrich. find out who's buying this flying underwater machine. we're back with that and a lot more.
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tomorrow, at&t ceo randall stephenson is our special guest. plus, private payroll data from adp. tune in and profit from "squawk box." starting at 6:00 a.m. eastern time. ♪ ♪ 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,
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call 1-888-628-2419 to learn more. tdd#: 1-800-345-2550 so you can take charge of your trading. the first day of trading for the second half of the year. find out what's moving global markets as we get ready for the thursday jobs report. it's a done deal. specialty pharmaceutical company actavis getting clearance to acquire forest lab. we speak to the ceo. >> and another massage could be in order for my feet. >> whatever you need, andrew. >> this is so nice. >> all for you.
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all on national television. a good old foot rub. >> skwirky ceo ben kaufman is back to discuss the spinoff wink wink as the final hour of "squawk box" begins right now. >> welcome back to "squawk box" here on cnbc. first in business in the great state of new jersey. and worldwide. >> great governor of new jersey. >> i don't think you've been to western new jersey, the farm country and how beautiful it can be out there. you know, you always go east to beautiful connecticut, this -- >> it's a beautiful state. it's a beautiful state. but let's get some of the head lines. the bulls, they are looking to continue the quiet summer rally as we begin the second half. the s&p rising more than 6% year-to-date. now up six quarters in a row and it's the longest quarterly win streak since 1998.
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for you history buffs out there, the nasdaq higher by 5.5%. closing yesterday at a 14-year high. and also let's talk about some corporate news because bnp paribas pled guilty to two criminal charges. agreed to pay a $9 billion fine to resolve allegations that it violated u.s. sanctions law. fbi director jim comey yesterday. >> the $9 billion, it's walking out the door today is your money. we do these cases over and over again, and shareholders' money walks out the door. until shareholders demand from their boards that those boards choose leaders who understand what it means to create a healthy culture of compliance, the money will keep walking out the door. we'll have to keep doing this work. >> and bnp stock up on that news. also banned for a year, we should note, from conducting certain u.s. dollar transactions. in the meantime let's talk about the nation's automakers. they will release june auto sales this morning and more recalls in the industry, as well. our own phil lebeau joins us now
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with more on those stories. phil? >> yeah, guys. we're also here in baltimore at the baltimore airport for the first international flight for southwest airlines. let's quickly talk about that because they're actually boarding these flights. i know a lot of investors are saying southwest is going international? yes, this is the beginning of southwest starting an expansion with three destinations today, flying from here, as well as from atlanta, and orlando to destinations in the caribbean, and as you take a look at shares of southwest, versus delta, year to date, actually southwest has outperformed delta which has been the industry leader over the last year. this is the beginning of southwest's expansion up to 50 destinations outside the continental u.s. over the next ten years. now let's shift gears and move into auto sales which are coming out today. we just got the numbers from chrysler, and increase in june auto sales of 9.2%. that was better than what the street was expecting. they were expecting an increase of 6.3%. when you're looking at these june numbers, something to keep in mind is that june has too
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fewer selling days compared to june of last year, so the sales rate, even though it's going to be above 16 million, you might hear some people say it's kind of lackluster compared to may, we certainly don't have the same gusty that we had in may. that's not the expectation for when it comes to june auto sales. we'll be getting gm and ford a little bit later on. and with regard to general motors, as you take a look at shares of the stock it dropped about a percent yesterday after they announced the recall of another 8.4 million vehicles. it will be interesting when we look at those sales numbers, guys, is there any impact at all on a company that's recalled more than 25 million vehicles in the u.s.? we'll find out when the gm sales numbers come out a little later on. by the way, gm expected to be down around 8% for the month of june. again we're dealing with tough comps, and too fewer selling days compared to last year. guys, back to you. >> all right, phil, thank you very much. a little muscle to its line of products with the acquisition of the popular protein drink
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muscle milk. jeffrey eddinger is the chairman and chooe of hormel foods. thanks for being here this morning. >> it's great to be with you again. >> you're doing this because you're looking to draw in some younger consumers. muscle milk i think is something that's really big with kids who are a little younger, maybe working out, getting into that idea of putting a little protein into their diet. >> absolutely. this deal provides a one-two punch for us of continuing to expand our leadership in protein but doing it in a way that diversifies our portfolio and that younger consumer is certainly part of the appeal of the muscle milk brand. we've been going off the younger consumer with our launch of our snack wraps doing very well in their opening year and this should add to that franchise. >> this is a company that is expected to have sales of about $370 million this year. you're paying $450 million. you expect it to be neutral to earnings this year and accretive to the tune of about 5 cents a share next year? >> that's correct. this year we only have three to
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four months to go in our fiscal year. so by the time we add in transaction costs it will be neutral this year. nickel a share is definitely what we're aiming for for 2015. >> have you been on the lookout, i know that you've said that you still have some additional firepower you could be looking for other brands. are you actively doing that right now? >> well, we have the financial wherewithal to do other deals. we've talked about a willingness of taking on at least $2 billion worth of debt. clearly our focus right now will be on closing this transaction. we expect that to take about 30 days. and then our team will have some work to do in integrating the organization into the hormel foods family. we'll keep our feelers out there for other possible deals. >> we've seen a lot of m&a activity this year. a huge year so far, and we've talked to several people on this show who have said that it's really the people who have companies like you have an advantage over private equity at this point. because you need to be able to wrap things into an existing brand line and find other --
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find other synergies that you can tie things in with. does it feel to you like it's getting tougher and tougher to find things that you can wrap in? or how is that impacting the overall m&a activity, how is that impacting your decisions on things? >> there's certainly competition for valuable franchises. both the strategic players, the private equity players, and our food space has certainly seen more international interests from other companies -- in other companies. but really our key focus is on finding things that we can bring in the portfolio and can be part of our growth story. and weaver been successful in doing that not only with this year but last year with our skippy transaction. >> have you had any other companies approach you? there's been so much deal activity lately. >> well, we have a 4%, 49% ownership of our stock by the hormel foundation, so that allows us to really take a long-term perspective. so we have a great balance of their ownership, but also being part of the public marketplace for the remainder of the shares. >> all right. it's a good place to be.
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jeffrey, thank you very much for joining us today. >> thank you for having me. >> i should note by the way i drink occasionally the muscle milk. >> do you? >> but it doesn't seem to be helping, unfortunately. >> you put it on the spam, right? >> yeah -- >> you can't tell with him. you roc good. >> thank you. >> you look good. >> the big -- >> you know. >> anyway -- >> coming up, connecting your home through simple software. that's the wink way. the quirky spinoff looking to simplify your life. ben kaufman is going to join us. the founder and ceo and famous foot massager. he joins us right after the break, as we head to the break check out the "squawk box" market indicator. you're seeing some green arrows ahead of the market open. really... so our business can be on at&t's network for $175 dollars a month? yup. all five of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share.
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the fastest elevator. the fastest speed dial. the fastest office plant. so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. ♪ i've heard people say that too much of anything is not good for you baby ♪ >> my feet in the morning. isn't that -- isn't that a sight? >> that is a site. >> nothing like the smell of napalm in the morning. >> there it is. >> if anyone thinks there's not more to a foot massage than just
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the massage, watching that -- >> joe and becky, what i will do for this program. >> throw yourself out there. >> thank you very much. crowd sourcing giant quirky is spinning off wink, it's smarthome software business teaming up with general electric also home depot to bring connected gadgets to the mass market. and joining us now is my foot massager ben kaufman, founder and ceo of quirky, now also running wink. so welcome to the show. >> hi, andrew. how are you? >> thank you for being here. >> still relaxed? >> we'll talk about that during the commercial break. but, you've started this new company. >> yep. >> first of all, does this mean you're not involved in quirky? >> no, it has nothing to do with quirky. >> this is separate business? >> quirky is an invention platform. we want to make sure all the great ideas in the world get out there. we do a lot with our community and making sure their ideas come out. and then this new category of connected things we decided to get sort of a platform together with some of the best brands and technologies out there, and make it simple for the customer. >> you've created a platform.
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what do you have here? >> a smattering -- >> the reason i want you to show it, it may explain to the viewer what exactly this new wink business is really all about. >> so listen, wink is pretty simple. basically right now, each connected product has its own app, right? nest has its own app, quirky had its own app. for every single action you take in your home you have to open -- >> turn your lights on, open the lock, the air conditioner. >> what we do with home depot, this is really huge. we're giving the customer choice as to which products they want to buy. we have a quickset lock and a schlage. >> what is that? >> one of the brands out there. oh, it has like a -- >> ingersoll-rand brand. it's a great brand. they've got something like 70% of locksets out there. so imagine you're shopping at home depot. you want to find the lock that's going to look nice in your home. you don't have to worry about which app it's going to work
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with. everything works with wink. so that whole wall of logos there, these are some of the best like industrial and consumer brands out there, all of their connected products work on this very simple app called wink. so basically takes the technology layer and it hides it so that all you have to worry about is finding the products you love and making sure that -- >> i just don't understand that. is it a competitor to nest? >> nest makes a thermostat. what we do is we bring to the all the brands out there that you would love to shop at home depot, and some of the other retailers, and we build a simple platform where you can actually connect all of your conducted -- >> i was going to ask are you competing with apple? because one of the things they announced at their developers conference a couple weeks ig was the plan to do something very similar to this. >> the home kit sufficient? home kit helps wink. because what wink does is we're playing the patch cable of the connected world. now all of the things that are home kit enabled will be able to talk through wink. >> and home kit just so everybody understands is? >> home kit is basically what
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apple announced is their almost like they used to do their made for ipod program it's apple saying all of these things are going to work with your i-os devices. >> i can use my iphone or something to turn up the heat in the house before i get home? to open the door if i want to let somebody in like if my friend shows up before i do? is that the type of thing you're talking about? >> exactly. wink is bringing like the jetson's lifestyle on shelf next monday. >> i thought that's what apple is trying to do too. >> exactly. they are providing a developer layer and we are one of the developers that are going to be building on -- >> on top? >> as well as google. >> nest's new api. all of this helps awink's strategy because it allows us to build this cross platform consumer brand that really educates the customer, as to how to actually live -- >> where's the dough in all this? where's the money? >> the dough in all of it -- >> for you. >> all of the partners are helping us get wink off the ground. this is our first two partners, home depot and ge. and then all of the other big industrial companies have been
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sort of -- >> anyone better than that? >> ohm depot and ge? i think they're pretty good companies. >> he's being sarcastic. >> i'm worried about you. you're young. ge and home depot is pretty good. >> isn't that good? i know. >> i'm still wondering about the revenue potential. are you charging me the customer to use the service? >> free to the customer. >> so ge is paying you? >> yep. >> give me the revenue model here. >> so the companies that are, you know, big, established brands in the connected world or rather in the hardware world, people that make locks and light bulbs. you have tcp light bulbs, philips light bulbs. lutron makes those dimmers in the home. all of these companies building some of the most trusted products are allowing wink to help them enter the connected universe. >> are all of those products at home depot? >> wink has partnered with home depot, amazon, and there will be new retailers announced. but home depot is the first one to sort of come in and say,
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let's make connected simple for people. >> is it all in the package? a wink logo that's going to say if i lie this light bulb it's going to work with my wink app? >> it's very intel inside. there's a sticker on every box that says works with wink. you know that works with your existing things. >> if i were to buy this light bulb, philips light bulb, i plug it in and it's controllable from an iphone? >> from your wink app, yeah. >> that's incredible. there's no wiring in the house, nothing? >> no wires. >> what's in here? >> philips uses zigby. this uses six lopen. for things that aren't wi-fi we're going to make sure you have these hubs here. and the hubs are basically make sure you can access your home. know your security, your comfort, all that stuff from anywhere in the world. this is basically a bridge to your home from anywhere in the world. >> you know, i think all of this stuff is great and i appreciate that you have made it simpler by having it all work on one platform. i saw an article just in the
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last week, though, questioning whether all of these things to make our homes easier and more quick to access whether it's adding a complicated layer? i admit i wouldn't be an early adopter of this stuff. i'd do it but probably in three years. >> i think that you're going to change your mind when you realize that a lot of the things you're going to buy when you shop home depot or any of these stores just happen to be connected. you're going to shop for a great lock you might find out a couple weeks later, a month later, a year later, it happens to work with your wink app. so what we want to do is make sure customers are shopping for the products they love. and then let sort of the connection layer come second. because i agree -- >> that's smart. >> most people don't smart for i want to buy a connected home platform. that's like a rich people thing. we're trying to bring this into the real world. you guy a great light bulb and later on you figure out wow i can control this from anywhere. >> if i go on quirky, develop a new product that interfaces with wink. >> yep. >> do i get a special deal with
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you or do i have to now pay you plus the quirky -- >> quirky pays wink if quirky leverages the wink platform. so but we both run them as standalone businesses. >> and there's no advantage to me for creating a wink enabled product? >> don't get me wrong. i'm a product guy. i'm not a software guy. so i love what we do with the quirky community and trust me i want to build the best wink enabled products in the world. but we're really happy to be bringing some of the west brands out there into the connected world as well. these are great brands that consumers trust. >> really interesting stuff, ben. congratulations. >> thanks, guys. >> we'll be wink-ifieing our house now. >> that was not a controversial segment at all. >> i still get a foot massage during the commercial break. >> home depot on july 7th you can buy all this stuff. >> yeah? >> july 7th? >> next week on monday. >> so well all these other companies are connected strategies we have connected stuff on the shelf next monday. >> so you can go and get a wink
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app right now? >> you can get the wink app now and then you can get all these great -- >> guy knows how to promo himself better than anybody. >> there's over 60 products. >> since the oily massage of his feet have you done it again to anyone? >> oh, yeah. >> that was -- >> you cheated on my feet? >> that wasn't the last massage you gave? >> no. i'm going to leave you wondering. chris christie in the back. >> whoa! >> he wanted some of that. >> judd was too embarrassed to ask. show is over at 9:00 judd. >> my wife said don't take my socks off. >> wow. >> coming up the super falcon isn't reaching new heights, but new depths. a personalized submarine for the superrich, and then the ceo of actavis in an exclusive interview to discuss the approval of their deal to buy forest labs. at every ford dealership, you'll find the works! it's a complete checkup of the services your vehicle needs. so prepare your car for any road trip by taking it to an expert ford technician.
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robert frank is here. the superrich aren't just reaching new heights they're reaching new depths with personalized submarines, if you can believe that. robert's going to tell us more about this crazy story. >> i don't know. you may have even been on one. richard branson bought one, so did tom perkins and the co-founder of red bull. it's called the super falcon. a two-seat jet that flies under water. we talk a ride with the legendary graham hawks. first we needed special code names. check it out.
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what's your call sign? >> call sign is going to be very technical, superrich. >> okay. superrich are you comfortable back there? >> yep. feel like i'm in one of those old popcorn poppers. all right i'll admit i'm a little claustrophobic so when i squeezed into this tiny tube with that plastic bubble over my head i felt like i couldn't breathe. and we were not even under water yet. ♪ >> here we are superrich. >> unbelievable. >> flying underwater. >> the minute we went underwater, everything felt natural, and calm. and it was just like flying. and then you go -- you know, i am claustrophobic. >> your face says it all. >> i would have been so anxious. >> but once you get under water it is like nothing else i've ever done. i dive so i like being under water but this was, you look up,
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you see the sky. you look down, we were actually in lake tahoe because the visibility is so amazing. >> how deep did you go? >> we only went about 50 to 70 feet. but this can go over 400 feet. >> yeah. >> but it's so quiet you can hear yourself breathing inside the sub because the engines are so quiet. and it is so peaceful and amazing, and you know for the wealthy that don't just want to buy another yacht and sit in the sun, this thing is, you know, you've got richard branson -- >> what is the cost? >> $1.7 million. >> does it come with a spear gun? >> no. but it's, you know, when branson first went down to test it they went down and immediately there was a humpback whale right there and they could swim. because you fly underwater. it's positively buoyant. most submarines just drop down. this you sort of fly so you can go right along with the whales. right along with sharks. >> is there like an ejector seat? >> that's what's amazing about this. because it's positively buoyant if something goes wrong, it just rises to the surface.
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so it's a lot safer. >> there is a place in some of the islands, in the caribbean, in the caymans, said it was like an egg carton because you're sitting like eggs like that alone the center thing and there's about 40 people there and the guy's like manning this thing. we went down i think 150 feet and you go to where there's a shelf, and that's where you get scared where it drops off. i don't know why. you're in the water. it's not like you can fall. but the guys alike in charge the two or three guys, they're not like cayman military types. like naval guys. they're just like guys. guys that are, you know, you can buy -- the same guys that rent you the parachutes. they look like they're just normal. and they're like manning the sub and you're looking around thinking, i hope they have a really good like training course. >> the interesting thing i learned from smending hours in the subis that it's not hat hard to drive it. this one is one of the more -- >> were you on the bottom -- >> we went on the bottom. and just -- >> it's like sand, right? >> and there were these giant canyons, and mountains, i mean
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under water is just amazing. for people that don't want to dive, they don't want to learn about scuba, this is the thing. and a lot of these things can be launched off your boat. so, tom perkins, richard branson, can launch their falcons off their boats. >> which is very cool. >> yes, they have -- >> we're going to need a bigger boat. >> a boston whaler. >> you can see at 150 feet. it's totally clear down there. >> with the bubble around this thing you look all around you. some subs you can only see right in front of you. this thing you could look behind, above. >> i would completely hyperventilate. >> what this guy needs is some invest month money and marketing. i think these things would be huge if they had a broader audience. >> i got sick six weeks ago in a flight simulator. i felt so claustrophobic. >> until we went in the water i was. once you get in the water it was great. you can see more of this, secret lives of the super rich. >> are claustrophobic. everybody claims to be claustrophobic.
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welcome back to "squawk box," v. let's take a look at some stocks on the move. gopro has risen every day since it began trading last thursday. it looks like it is headed for more gains today. at least right now it's up about 9%. its initial public offering priced at $24 a share. it is now well above $40. in fact it's closing in on $45 at this point. also netflix was upgraded to buy from neutral at goldman sachs. that cites the company's international expansion and the opportunity to expand profit margins as its customer base grows. and urban outfitters has been downgraded to neutral. performance at anthropologie may indicate a slowdown in sales. >> i don't know if i would have gotten that. >> anthropologies. >> anthropologie. >> i shop there. on the prompter it was split in
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half. >> i know -- >> let's be clear -- >> but you -- >> i shop there so i know. >> did you preread that? >> no. >> that's talent. >> actavis has announced this morning -- >> i did trip. anthropologies. i stretched it out a little bit. >> actavis announced the completion of its forest labs acquisition. joining us is brett saunders the newly appointed ceo of ack to business. he had been the ceo of forest labs. so to the, brings what? to the company? >> so when we merge these two companies together today, which is very exciting, we really become a very balanced global generic company, and global specialty pharmaceutical company. very different model than really anything else in our industry. >> how so? >> well, people -- >> it seems like other people might say they're both specialty research and a generic company. no one else does both? >> i think you've seen a couple
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companies like know vart us trying to do both. they operate them very differently. the generic is over here and the branded over here. we're trying to keep the jenngec dna, keep the costs low, keep the organization flat and still do innovation and invest in r&d. >> when you come up with something new you're going to ask for the 12 years or whatever it is for biotech? >> absolutely. >> not going to be generic there. >> the idea is to keep the generic dna but not the generic margins. >> where do you pay -- where is the domiciled? where do you pay taxes? >> we are an irish domiciled company. >> where was forest? >> forest was new york. >> uh-oh. >> where was your cash? >> our cash was in ireland. >> was this an inversion, andrew? >> it was not an inversion. >> it was not an inversion. >> that's right. >> forest was an american company, actavis, legacy actavis was an irish company. >> you were already irish. >> that's right. >> now forest, any taxes that forest earns now will be outside
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the u.s., right? >> we'll pay our taxes in the u.s., and we'll pay the taxes in ireland -- >> can we talk about that for a second? i appreciate that you will continue to pay -- u.s. companies that are participating in inversions, and i don't know how you feel about inversions, will continue to pay taxes on their u.s. profits here. >> that's right. >> however, depending on how you move your debt, you can do some very tricky things. >> that's right. >> and so the question from a policy perspective, is two-fold. one is how do we actually get this corporate reform. corporate tax reform broadly which i'm sure you want and we all want to some degree. >> you just want to prevent it -- >> we all want that. >> and we want you to be able to repatriate your cash -- >> no you don't want to do that. >> i do as long as it's not a tax holiday. i don't want a one-off. i want a full-on package. >> -- anticipate your second point -- >> but barring all of that given that it seems to be so hard to do in washington, what are the
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unintended consequences of trying to prevent these types of inversions from happening now, at least over the next two years while there seems to be gridlock in washington, not to suggest there won't be two years from now either. >> i think it would be a very short-sighted move. i think what you're doing is making a situation where our companies that are based here are uncompetitive, and you're locking in that uncompetitiveness long-term. you're making it more difficult. i think what we really have to do, if we want to remain competitive as a country, is corporate tax reform. we have to have a -- we have to get out of this territorial system, go to global tax system. that's the biggest issue. you've got to look at rates second to that. look at the end of the day the united states is by far and away the best tremendous to be headquartered in. >> does the territorial system bring you more or less revenue long-term? >> it's got nothing to do with revenue. >> i'm saying about revenue to the u.s. government and taxpayer. >> well, it -- it's an argument
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of what ifs. so when the gao does a study of how much money they could make, if we don't bring it back is because the cbo will say if we give the tax holiday or we change the rules to a global tax system versus a territorial we lose x billion dollars of tax revenue but it's never going to happen. >> that's the point. we've got all this cash overseas, the cbo will score it as a tax loss, if you have a tax holiday but it's never going to come back, because, i mean -- >> if they do tax reform they'll score it -- >> you've got this cash overseas, let's say we had a territorial system where you could move it back here without having a double taxation event and a 35% rate hit you. what percentage of that would come back here to be invested and create jobs? >> i think a lot. again people want -- >> that's a true policy issue. >> there's no better country to upgrade it. and so this is -- >> we have $2 trillion. >> it was a level playing field. >> would you move back?
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>> i think we would strongly consider it. >> really? >> okay. and what would it take to move back? what is your effective tax right now? >> we just closed the deal about ten minutes ago, but it will be in the teens. >> in the teens. >> yes. >> so if we got to 25%, that's still -- >> but it's not really about the rate. it's about the flexibility of moving your money and making those investments. so if you earn -- if we're in 60 countries. if we earn our profits in other markets like russia, or thailand, or anywhere else in the world, we should be able to bring that money back and invest in innovation here to then export those products back to those countries. that's not how this tax system works today. >> what was forest's best selling drug last year? >> nemenda for alzheimer's. >> lexapro is generic now? >> it went generic two years ago. we don't sell the jebberic version. we still a little bit of the brand. >> what was actavis' biggest drug? >> actavis is highly diverse --
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about 44 billion different units -- >> you're going to keep buying late-stage drugs from other small companies? >> that's the goal. is to continue invest in r&d. to bring innovation. >> not your own r&d necessarily. >> we think about r and d differently. you heard a lot of arguments whether it's cost to capital or whether it's the source of future growth. we're kind of right down the middle of the fairway. we believe that innovation is critical to -- >> what percentage of revenue goes towards r&d? >> we'll spend a little over a billion dollars this year. that would be -- we're about 15 billion in revenue so it's a little less than 10%, 8%, somewhere in that neighborhood. if i could get it to 10% i would be happy to. we discovery research. that's the high risk side. >> you heard the ceo of valeant say forget about -- i think they do 4% of their business as r&d. our model is we're going to
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invest in start-ups and that's our version of r&d. and you think that makes sense? >> i don't. i think the answer lies somewhere in the middle. i think that we should invest in r&d. innovation is the life blood of our industry. i think the best way for us to serve our patients and to serve our shareholders is to do r&d in a risk adjusted way. to spend our money like it's our own and to invest and not compete with a stanford professor but to invest where we can bring expertise in scale. so clinical development, regulatory affairs commercial capabilities. that's where we're best suited to spend our shareholder money. >> where do you -- >> all over the world. >> every single interview we've had, i've been hearing, we've got to go. sorry. >> appreciate it. >> thank you for having me. >> a lot of riches today in terms of interesting conversations. >> we've had some great conversations. >> half full way of looking. >> the jobs report now two days away on thursday not friday this
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week. will fireworks come early to wall street? we're going to check on the markets and what to expect next. and the ceo of pay checks is going to join us to discuss the latest small business index. that and a lot more. about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.
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get our multi-point inspection with a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup only at your ford dealer. welcome back to "squawk box." the futures right now, up 42 points or so. that's a good start after a 6% gain in the first half of the year for the s&p. making head lines, home prices rose in may but at a slower pace
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as more properties have come on to the market data provider core logic reports of prices increased 8.8% in may. compared with 12 months earlier. >> lit's get back to the markets at this hour. also get some expectations from the jobs report that's due out on thursday. joining us right now is maury harris chief economist at ubs and covering the markets we have david blitzer the chairman of the index committee at s&p dow jones indices. david i want to start with you. we were talking about the we're to date for these indices. s&p is up 6% which is great if you're looking at 30% for last year but the dow is only up 1%. what happens there? what's to explain that? >> i think it's more luck of the draw than anything else. i know there's a lot of annoyance about a couple changes we made in the dow last fall. we should have left a couple in and not replaced them. the mathematics of the arithmetic of the dow is a little bit strange and we made the changes to make it a more accurate calculations.
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we don't blame to pick the winners or the losers. >> more accurate reflection of the economy overall for the u.s.? >> more accurate, because the way the dow is price weighted, it doesn't mean you have a crummy company, the stock price is low. you really want stocks that are around the average of the other stocks in the index. >> does that mean if somebody splits it makes it less likely to get into the dow? >> there are so few changes in the dow over the last 10, 15 years that i don't think you can write 0s at all as to what gets in and what doesn't get in. >> have you been surprised just where we've been over the last couple of years? we keep having people saying okay, we've come so far, it's time for our correction. it's time to give back, wait, don't put in money yet, wait for the pullback. >> first i was very pleasantly surprised about last year. it was fantastic. maybe more claims he predicted, and i'll be honest and say it was a surprise.
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this -- your first half of this year at this rate we're going to do about a third of what we did last year. and i think we're getting ahead of ourselves and it feels a little bit rich. we've forgotten the things that go down because the fed has made sure interest rates don't go up. >> let's take about that. it has been a pretty surprising first quarter gdp in the final number we got was kind of shocking to see that and see the markets still continue to rise. what do you think is happening? >> well, what's happening is the public just doesn't believe what washington is printing on the gdp. because there's so much information that suggests that the economy, in fact, is improving. the job numbers this year are growing faster than they did last year. the purchasing agent surveys are looking better, almost all of the confidence surveys are looking better. so, the market is just ignoring a big number like the gdp because it's an outlier. companies are telling you they're having a pretty decent year.
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there could be some measurement problems with gdp. but, it's pretty easy to ignore. >> when you look for this report that we'll be getting on thursday for the big jobs report, what are you expecting? >> i think jobs will be up 215,000 again and more importantly the unemployment rate keeps coming down. we have it coming down to 6.2% from 6.3%. and before you know it, we're going to be down at a point on unemployment where we do start to see those wages pick up, and that's what mrs. yellen is looking for to say that the economy is on sustained footing and that we can start to raise rates. you need to see the wages pick up, and i think that's just around the corner. >> let's ask you where you think we stand right now. the economy has been improving. maury is right this is probably a one-off with the gdp but how much do you think of this as the economy really picking up. how much do you think what the central bank's been doing to prop things up? >> the central bank was absolutely huge. but i think we're on the cusp of a massive expansion in this
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country driven primarily by energy. the fact that we have a huge amount of capital, the fact that we're still the place where all the great ideas seem to come from and that we're an entrepreneurial society and you compare our structural problems, which are involved with debt, and how you deal with medicare and medicaid, and our tax laws, with the structural problems that the other major economies have and ours are very manageable and the others aren't. so i just look at us as being a place to invest, and in the short-term there will be ups and downs. over the long run we're really in a very much a good path i think. >> david you said you were surprised by last year. what would surprise you this year? the first half is 6%. if you get 12% in the s&p, that surprise you? >> that would be wonderful. you won't hear any plants about that. i can assure you of that. but i do think looking around the central banks are essentially at zero interest rates at this point. and that makes everybody feel very comfortable, and that's a big factor, i think, there's
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been drive in the markets up. we get a p/e of 18 times. and, you know, people tend to be comparing this to the tech boom and bust of 15 years ago. but at that point technology went straight up. big cap stocks went straight up, everything else sat there. now you look across the 500 and i think 9 out of the 10 sectors were up in the last month in the last quarter. it's a different kind of game. there's, you know, there's no place left to go hide, or if it gets a little nervous there's no place to put your money to, you know, to hide out while things settle down and so on. and you certainly don't want to go into bonds, because, you know, bonds is going to be a big mistake when rates go up. >> maury, the entire idea of pinning all this on the central bank, the central bank yellen keeps saying that they're not going to raise rates any time soon but do the economic numbers that you're seeing make you believe that that's the case? are they going to be forced to
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raise rates sooner than the middle or end of next year. >> i think they'll start raising rates next spring. and the trigger getting back to what i said earlier, will be wage increases. and i think those are just around the corner. we're -- where you do see them is in the small businesses. wage increases have become much more pervasive in the small businesses. and that's always been a classic leading indicator -- >> why -- >> well, because the small businesses are labor intensive. the small businesses are not included or sampled very well for the big business statistics. like what's happening to average daily earnings, what's happening to the employment cost index. but they persistently have been a leading indicator. now, i think what's important in terms of what david was saying is that you probably are going to get rates going up and that could be the next big surprise in the market. that the market, tightened ahead
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of the fed, and i think when the market sees wages picking up they're going to say the fed's going to have to move a little bit sooner than they've been talking about. the fed initially will push back and say we don't -- we're not sure the wages are picking up, but when they see that they are, that's when i think rates can go up. and by the way, i think the economy is stand that. >> okay. maury, david, want to thank you guys both for coming in. it's a pleasure seeing you and senator gregg is our guest host. he will be with us for the rest of the program. >> when we return, jim cramer live from the new york stock exchange. and the ceo of pay checks on the state of small business. check out the futures right now in the markets, see how things are setting themselves up. we've got that screen and the dpau open up about 51 points higher. tomorrow, at&t ceo randall stephenson is our special guest. plus, private payroll data from adp. tune in and profit from "squawk box." starting at 6:00 a.m. eastern
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could help your business didavoid hours of delaynd test caused by slow internet from the phone company? that's enough time to record a memo. idea for sales giveaway. return a call. sign a contract. pick a tie. take a break with mr. duck. practice up for the business trip. fly to florida. win an award. close a deal. hire an intern. and still have time to spare. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business. built for business. get down to the new york stock exchange, jim cramer joins us now, 6% on s&p for the first half. that's perfect, isn't it, jim, going according to plan?
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>> yes, i think it's perfect. thank you for saying that. you didn't caveat it with it's yellen or one off. it is broad based. it rotates. it's positive. your show today, i mean, i love the show this morning, and i thought that the interview with the governor, you know what? i mean, you got every single point, and i'm talking about governor christie, covering the stocks, the governor, and pointed out some stocks may not have been removed from the averages, think of alcoa. covering the water front. a great show. >> yeah, you are a proud new jersey resident. >> yes. you know, look, i make no bones about it. i think that the taxes are way too high. i am very worried about the finances of the state. sounds like the governor is addressing some of it. jpmorgan put out a report, listen, it's probably the worst state for this, but yes, i'm a proud new jerseyian. i love the state.
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>> i do too. it is one of the questions of our time, on how to -- how do you become someone who wants to have a strong safety net and yet you want to attract business, don't want to look cold-hearted, but there's things you have to do to be competitive, state by state, and it makes me think they are bigger, if we think globally, we see what we have to do as a country as well. >> totally true. when i was away last week, i met two hedge fund managers that moved to florida, joe, just for tax purposes. they loved jersey, by the way, it didn't matter. >> it's a unique phenomena. people in the country always move for weather, move for family, move for jobs, but today people move because of the state governments. texas is sucking everybody out of the midwest, and you got people moving out of california. >> it's a significant event. new hampshire always had this issue in the northeast because we've been a refugee camp for
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entrepreneurs for years with no income or sales tax, but now people are physically moving. the governor said that. they lost how many millions of dollars in people that left? >> i didn't realize 41% of the state's taxes were paid by 1%. surprised me. >> i'm in the 52% bracket. jim stewart interviewed me because i'm new york, i'm new jersey, hit everywhere, and 52 %. pretty soon i'm working for myself in like five week, six weeks, work for myself. i worked for the governor, cuomo, president obama, and now i work for myself, which is super. >> think of it, all the money you spend that 52% spent so well, jim. >> getting bang for the buck there. >> yeah, right. >> yeah, all right, especially foreign aide. really thrilled. a lot of the regimes are my buds. >> yeah, right. all right. thanks, cramer.
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>> thank you, guys. >> when we come back, the ceo of paychex, how the engine of the economy is running after the break. tune into "squawk box" tomorrow, a special interview with atat's ceo, and that starts at 7:00 a.m. eastern." squawk box" will be right back. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.
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welcome back, small business jobs index shows modest improvements in the first half, and joining us the is president and ceo of paychex. numbers going in different direction, one up, one down. walk us through what's happening here. >> nudging down this month, the index is over 101 for six months. we see positive, moderate, sustained small business growth. >> how does that relate to the snarl index? you have it down in june, but talk about it growing .23. >> right, dropped a little from last month, but in the last 12 months, it's gone up 2.3%. it's been up, and we see continued positive, moderate growth in small business jobs. >> we'll get the jobs report
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monday. do you have a gamble before we go? >> well, i think based on what we're seeing, probably around 200,000, very sustained, considered growth that we'll see. >> okay. that's the number to watch. we appreciate you being with us. talk to you very, very soon. i want to thank joe greg for a great couple hours. a lot of fun today. join us tomorrow. and "squawk on the street" starts right now. good tuesday morning, welcome to "squawk on the street," i'm carl quintanilla, and let's kick off the second half of the year. futures are positive here as goldman upgrades net flix, ism, auto sales, china phi showed expansion for the first time this year. ten-year yield above 254 this morning, and europe has green numbers as well in the early going. road map begins with the first day of h 2, what the first half says about t
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