it that we can't introduce programs like that. so we have ways to approach each of these programs but we have to redesign the delivery of care. >> thank you for being here. >> thanks. >> great conversation. we learned a lot. we hope to have you back. great to see you. make sure you join us tomorrow. "squawk on the street" begins right now. good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. twitter surges in the premarket after earnings and we have a fed statement this afternoon. the ten-year did spike on that gdp print but has settled back just a bit. europe is mixed as investors weigh sanctions on russia. our roadmap begins with the surprisingly strong rebound in economic growth coupled with

weaker-than-expected hiring. twitter taking the street by surprise. shares are soaring after the company's results were disclosed after the bell yesterday. we'll dive deeper into those results as well. what a difference a quarter makes. the first quarter comes in at 4% growth. a big rebound from the contraction of 2.1 in q1. adp says 218,000 private sector jobs have been added this month. the fed gets ready to wrap up its policy meeting. that statement due out at 2:00 p.m. eastern time. person consumption up 2.5%. and the revision makes people think maybe it was a moderately bad quarter due to weather in q1. >> yeah. you step back and you're looking at an economy that has defied a lot of expectations. there's just a lot of people who keep getting it wrong.

we had -- joe lavorgna got it right. someone said this morning, someone got it right. someone got it right. one guy -- this is the biggest economy in the -- one guy got it right. it speaks to what's going on in the stock market, though. this is -- there's just a lot of people who can't figure out whether the economy is doing well or badly. one of the reasons we can is because it's so bipolar. it's doing badly -- no, it's doing great. somewhere in between, maybe we say, it's growing at 3%, 2% to 3%. we all have to do normalized earnings for what the gdp is growing particularly because we have the fed today. if it's at 4%, the people say they have to raise rates tomorrow -- >> last night, you talked about the market losing tailwinds like housing. people talking about auto sales starting to peak here.

u.p.s. wasn't a good barometer yesterday. >> phil lebeau is saying auto inventory is getting bigger. the existing home sales are quite horrendous. aerospa aerospace, people have decided it's slowed. there's a huge amount of money going into biotech because there's a belief the economy has slowed. then we get a 4% number, interest rates go dramatically higher overnight. and it just says that everything that i just said is wrong. it can't be. the individual companies aren't all wrong. they are seeing a slowdown. they are. they're seeing a slowdown. >> they are? >> yes, they are. housing they thought was -- housing and auto is a huge part of the economy. >> it is. >> other than the crazy things that we see in versions whatever -- not that good.

maybe the economy is u.s. steel -- they pick up america's trash. the volumes are down. volumes are down. then that means there's less business activity because waste management's biggest business is developing -- picking up trash from when new projects are developed in housing. >> although architectural buildings are setting new highs. >> but heating, ventilation, air conditioning is bad, which is exactly what goes into housing. in a lot of ways, what you do is you say to these executives when they come on air, they say, give me something positive. and they say, well, okay, if the u.s. government were to be less dysfunctional, we could -- wow. you can't get anything positive out of anybody. >> right. >> but your point is, don't take a 4% number all the way to the

bank. >> exactly. there's a lot of special situations that are great. expectations are everything. for instance, panera, let's break it down in microstocks. panera, people expected the absolute worst. they gave you lighter better than the absolute worst and the stock goes higher. buffalo wild wings, people expected the absolute best. they gave you great, not enough. 4%, much better than we expected. but that was because we had been set to believe the bar had been set lower. we need to stop highithinking a high-low and taking the average. things are okay. >> one of the highs is going to be twitter today soaring in the premarket after better-than-expected q2 numbers. they posted a surprise operating profit. users are up and last night on

"closing bell," julia boorstin asked how much was driven by the world cup? >> fantastically. it's generally been the case that it's product changes that have driven new user growth. it was over the course of the quarter product changes we've made and that we've talked about that was driven the growth, not the event itself. >> and let the upgrades begin. b of a up -- >> what happened with twitter -- and i admitted ahead of time i couldn't figure out what could happen. suddenly that's considered on twitter to be a violation. but to admit that i thought it was going to be too hard to figure out -- the reason why it turned out to be too hard to figure out is suddenly we have a new metric here. we thought what mattered was registered users. that went up nicely. but what really mattered was

monthly average users we didn't know about. >> that's what's mattered for a long time. that's what the hedge fund guys have been focused on. >> but turns out we shouldn't. what we should focus on is number of people who look at it, which is now 500 million. i came here -- this is just a great one. >> i'm not writing that. people have noted that line to me as well. >> here's the line that made this stock go up -- >> or the comment, i should say. >> anthony noda, who's very respected, cfo of the nfl, he says -- >> will you just say it, already? >> i want to be like macarthur. i came here with one belief, and since being here, that belief has only been reinforced, that we can build the largest audience in the world. there you go. >> yeah, he was very, very positive. more so than people i think thought and said everything's working.

>> i said going into this, if he comes on the conference call and he makes a strong presentation, this is going higher. he did not make a stronger presentation. he made a presentation that said, we're growing faster than anybody in the world. he's talking about have been 1 billion users very quickly. >> to this issue of monthly average users, it went up by 16 million. a number of services got it right in the past that look at tweets and retweets. that number from some of these services was 5 million. you had a lot of people looking for a much lower addition of monthly average users -- >> it was the 260 benchmark that they beat. everyone got negative on that. >> a lot of the skeptics talking about the off-platform users which you don't monetize yet. >> and then -- there's the world cup factor.

last time it was the super bowl factor. then it was the academy awards. now it's world cup -- i'm seeing a pattern here. things happen in the world and more people go on twitter. they were the biggest beneficiary of world cup than any -- >> 31% for marriott. >> how about that? and new election in brazil and suddenly people are going crazy for brazil positive. argentina going to default but everyone loves argentina -- >> not so fast. more than argentina in a moment. >> the issue still is -- they go to the service but are they there a week later or encountering enough things that make them uncomfortable? there is still a focus on that. i would say many believe the short case may have been blown up. but you haven't made the case where --

>> and that's the issue. >> despite the gain today, stocks back to levels that it was at four months ago. >> the reason why i felt this was unfathomable is because the expectations had gotten so low. but at the same time, it's not facebook. facebook, don't forget, 61%, advertising, 63%, monetizing like mad. these guys are not doing facebook. but people are saying, nodo was telling -- it's growing faster than twitter. can't figure that out. actually i can i just don't want to share it. >> we're going to talk a lot more about it today.

twitter has company when it comes to the earnings spotlight. we'll look and see how their stocks are reacting. something the tech world doesn't want to hear. find out which ceo is saying the tablet sales are in his words crashing and why. take one more look at the premarket. the nasdaq is down four straight. haven't done that since march. if it's down today, you have to go back to 2012. more "squawk on the street" live from post 9 in a minute. in india we have 400 million people who don't have electricity and i just figured that it's time i do something about it. what we're doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. i think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when it's needed by the consumer. a smarter energy system is made with the ibm cloud. the ibm cloud is the cloud for business.

♪ a lot of earnings to talk about. amex beat the street helped by an increase in credit card using. amgen results above consensus. announcing they're cutting up to 29% of jobs. and sprint says it lost 334,000 wireless subs during the period. amex, card spending up 9%. card balances up 5%. >> i thought that was incredible. last quarter, it was 6%. now 9%. 13% per share growth. it's a great blew -- blue-chip

stock. it's going to be -- this stock is like a core holding financials. it's not hamstrung by the justice department. it's doing a great job. you mentioned amgen. amgen is interesting. the legacy products were really terrific. starting to see kick-in from that onyx merger. and a lot of people are getting excited about a bone cancer drug. numbers were up 34% for this bone cancer drug. this stock is going much higher. it pay join the group. >> david, what happened at sprint? >> listen, the metrics were less bad, perhaps, than some people anticipated. it doesn't sound so good and it's not that good.

you mentioned the losses, of course. but the street was actually readying for what might have been even worse numbers, hence you see the stock is up a bit. the case, though, is all built on the idea that there is massive growth in ebitda coming down the road. once they get completely done with the network changeover and of course they actually perhaps succeed in consolidation -- we'll see. not saying these numbers were great by any means. they were not. they reaffirmed their guidance in terms of certain areas. but sprint and t-mo as well despite john ledger and all the things he's done, they're in trouble, long term. they just don't have scale and scale is what you need. >> tablet growth good, handset growth, horrible. capital expenditure growth, $1.4

billion 6789 -- i thought it would be $2 billion. how did they cut capex? >> i don't know. the call is going on right now. perhaps we'll get that question. but i don't have an answer for you on that. we talk so often about, is the reality as much of what -- is it worse than they ever anticipated? perhaps you could argue yes. is it going to be tougher? will it take longer? yes. are they out of luck if they don't get a deal with t-mo? maybe. and by the way, again, back to that, most likely september, from what i'm hearing. very little has changed except the calendar keeps passing by. even when we do get that expected announcement of a deal between the two you have a long arduous regulatory process that many believe won't end up in a

favorable outcome for them. >> which is less bad. that's better than good. i was looking for a bad sprint number. we dent get a horrendous number -- >> we didn't. >> it's a little daunting to try to figure out -- u.s. steel, i was looking for a horrendous number. but they said the next quarter is going to be good. so the stock goes up 15%. >> at&t keeps lowering the pricing ceiling. they're repricing their entire base of customers. we talked about that last week. and that brings that ceiling down for t-mo and for sprint to be able to compete even more. t-mo's done a great job of doing that. may get tougher. >> t-mo has to join the framily -- is that what it is? >> bizarre, those ads. >> pricing business. today there's a story about the companies that are hiking prices, kimberly clark, 3m,

hershey, campbell's, right -- >> offline, it's very questionable whether canned soup is going up. right? canned soup? >> canned soup, yeah. sorry. i'm focused -- i'm trying to actually break a story, okay? excuse me. >> excuse me. i'm talking up canned soup. >> we'll take a break and get cramer's mad dish and count down to the opening bell. take another look at futures. a lot more "squawk on the street" from the nyse straight ahead. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

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got about eight minutes before that opening bell. we're going to start with a name that you have liked for a very long time -- >> since $5. >> and to the benefit of many of the viewers of this show and "mad money." >> thank you. what's going on here? i was talking to bob pisani. huge amount of money is pouring into biotech. two things happened this morning. they have this cholesterol drug breakthrough. this is the alternative to statins. there's a market of possibly 10 billion people who take statins. >> there aren't 10 billion people in the world yet, you're getting ahead of yourself. >> in other words, the governments around the world would feel better for health care if everyone took statins. >> put them in the water like fluori fluoride.

>> exactly. but a lot of people are allergic to statins. there's a drug that's been incredible for macular degeneration just got approved. this is a $30 billion company. i mention it because this is the wonder of this market. regeneron out of nowhere making fortunes for people like -- i don't know if you see that gilead goes up every day with their hep "c" pill. b biogen getting better and better. it ri manis the story that biotech is doing better than pharma. >> we have to remember the market value of gilead is far

above that of bristol-myers. it's become the modern-day drug companies -- >> i like to talk about price -- gilead sells at nine times earnings. >> seems hard to imagine. >> nine times earnings. it is the cheapest drug company i follow. >> with incredible potential growth. >> the big factor is if everybody took it that need it, it would bankrupt the system. >> although it cures the disease. >> it's a cure. what price for a cure? the answer is, whatever it takes. and that is costing the system a lot of money. >> back to regeneron, $5 to $300-whatever, you still like it? >> i do. there are just too many people -- columbia presbyterian said everyone has to lower their cholesterol more than they realize.

those of us who can't tyke statins are outliers now. four years from now, regeneron is going to be a one-a-day vitamin. if you're allergic to statins, you're going to take regeneron's medication. >> so many stocks to watch this morning. having gotten to iac. we have the opening bell five minutes away, coming right back. female announcer: you're on the right track to save big during sleep train's triple choice sale. for a limited time, you can choose to save hundreds on beautyrest and posturepedic mattress sets. or choose $300 in free gifts with sleep train's most popular tempur-pedic mattresses. you can even choose 48 months interest-free financing on the new tempur-choice,

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[ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. you're watching cnbc "squawk on the street." live from the financial capital of the world, the opening bell in about two minutes. if you're just joining us, what a morning it's been already. adp comes in a little bit light but second-quarter gdp, 4%. and q1 gdp revised higher. we still have to see what yellen and the feds stay today at 2:00. >> interest rates are up kind of dramatically on this number. i can tell you the bank group has been stalled horribly waiting. the bank group will go up today. that's the key angle as far as

i'm concerned about what rates do. and the bank group is a market leader. it's what started this big rally. it has been stalled. let's watch the banks today. >> a lot of earnings to get to. we haven't really done panera or marriott. whole foods and yelp tonight, jim, among the standouts so far? >> whole foods has been maybe one of the biggest growth stock disappointments. it could end up being a little like panera here. panera reported a number that was frustrating. it didn't go down. maybe whole foods is frustrating and doesn't go down. i'd like to have more of a reason to buy its stock. yelp going up big because it, too, is a monthly average user play. some people say, wait a second, twitter's got better numbers, maybe help will, too. i wish the world was that simple. >> with all that, opening bell here in just a minute. don't forget that fed statement comes at 2:00 eastern time.

a look at the s&p and the open at the top of your screen. at the big board, the tessa health care opportunities fund celebrating its opening on the nyse. over at the nasdaq, contrafect. >> and pisani's been dead right about these. it's very clear that the number of biotech ipos is off the charts here. that caused a short-term peak in the march/april period. but then again, they're doing well. >> yeah. >> doing better than they did. >> hess is one of the big gainers. you doing this in the faber report? going to file with the s.e.c. for an ipo in q1 of next year as the trend continues. >> what a win that's been for

elliott -- >> 'hess is doing exactly what n activist wants and the results are good. and i think this is a lesson for many companies. >> revenue -- consolidated revenue down 5% year over year. they cite solid growth at the match group. but there was disappointment match didn't grow faster. it did grow. they say modest growth at match. that may have been less than people thought it would be.

but they also cite revenue declines at search and applications and increased investment at media. they're down about 4.5% this morning on its earnings. >> adt is going to be a winner. average revenue for customers up as they try to work their way into the smartphone business. >> a lot of people still want to eviscerate them in that business. i'm not a big believer in them yet. >> michael kors gets a downgrade at baird reflecting increase risk to revenue and margins in north america. seems like they just went public the other day. and what a high flyer it's been --

>> that's an overall handbag call. they say handbags are soft. i feel like every time you say something's soft, you get this reaction of everyone feels, i thought it was soft -- be aware that people turned negative on kors and therefore the expectations are much lower. i don't know. i feel like that that's just a football stock at this point. i want to mention, a stock that i had -- a company i had on recently, edwards life sciences, leader of the s&p right now. this company has a remarkable device that requires you not to crack the chest cavity in order to put something in it. it's for people over 50 to 100. the way that we're going to be doing business. they came on, they're very non-promotional. this company is a juggernaut because they have the better mousetrap. just putting it out there. it's the number one performer on the s&p right now. >> did want to mention shares of family dollar getting back to

our big deal from two days ago. carl icahn has cut his stake in the company from 9% to 6% saying there may be better places they can put some of that capital for a better return. you can see that stock. the question continues to be, will dollar general consider trying to do something? on monday i reported and they've been confirming, i understand, to their various shareholders that they were surprised to see the dollar tree deal. surprised does not mean, though, that they're going to jump that deal. but we have to keep an eye on it, of course, as you might expect. dollar general's ceo is going to be leaving in may. you're asking a lot of a company to consider jumping a deal when it doesn't even have a ceo or won't have a ceo. but that said, the synergies for dollar general, carl icahn would agree, as many dollar general shareholders and perhaps fdo shareholders, are more significant than they are for

dollar tree. dollar tree itself perhaps levering up its balance sheet to do this deal already. they don't line up perfectly in terms of businesses. one actually sells everything for a buck or less. the other sells at multiple price points. would dollar tree be able to compete were dollar general to try to come over the top? icahn has made a decision to sell some of his stake -- big winner for him given he didn't get in very long ago. >> listen, ring the register, not a bad thing. this is just a total win. i think there's a lot of focus on the fact that -- remember yesterday's downgrade of walmart, which we didn't get to talk about that much. there's a sense that people are going to the dollar stores. they are not what you think. they're kind of -- i don't like all the stories that you read about how they're for the poorest group. go to one and you will know that you're wrong. these are not for the poor. this is where you go to do some very good bargain hunting.

i resent the idea that the dollar tree is for poor people because it's better than that. just the analysts are way too snobbish to get the story. >> finally, twitter is up 22%. and there is a halo effect. facebook is up almost a percent. facebook market cap now bigger than intel or disney as money keeps piling into that name. >> i wonder if the ceo at intel and at disney, he's probably saying, you just wait till my quarter. wait till you see these franchises we have. but he's a competitive guy. i like him. >> want to get to macro story involving argentina and the possibility -- in fact, what seemed to be the increasing likelihood that the country of argentina will default. of course, all of this a as a result of rulings from a judge

here in the states. and then the decision by the supreme court a number of weeks ago not to take the case. basically forcing argentina to pay bondholders who did not exchange their bonds under a previous exchange that took place many years ago. the negotiations have actually begun or have taken place over the last let's call it 24, 48 hours. between the plaintiffs in the case, a subset of the plaintiffs, elliott management being one of the key ones, and the mediator and argentina. you've also got third-party interest in argentina. the businesses of argentina that would potentially suffer if the country were to default, they have also now moved into these negotiations. they organized, they reached out to what i'm told by sources was a subset of plaintiffs to see if they could move these negotiations at the very least

to get judge griesa to stay his previous ruling, to give time for further negotiations between argentina and these plaintiffs, of course, who want their money or who are looking at least for some sort of deal. we've had jane newman on from elliott. no conversations between elliott and the other subset of plaintiffs and the country of argentina. and the likelihood appears that they were potentially going to default. but what we can tell you right now. these third-party business interests are now involved. the mediator is involved. argentina and the subset of plaintiffs all at least talking. the idea being that you could conceivably see a stay here which would allow the parties continue to negotiate, give them more time to do so to try to cobble together some sort of deal under which argentina would pay them but avoid default. remember argentina says, we're not defaulting. we put all the money in the bank already to pay our existing bondholder, those who actually did exchange their bonds.

but that seems to be lost on many people. bonds in argentina are rallying on what i believe is sort of this general idea that something is going to happen here to avoid a default which would take place today. >> but there are clauses which say that everybody has to get it. >> right, the clauses say if you make good to them, you have to make good to the existing bondholders that took the exchange. that exspires at the end of the year. but, again, jim, nothing says you can't negotiate some sort of settlement with everybody that would be for the good of almost everybody, including apparently businesses in argentina which have gotten involved here at the last second saying, hey, come on, can't we figure out a way to make this all work? that's what we can share with you at this point on argentina. >> i have to do some self-serving things. we interviewed mike two weeks ago. and he said, it's time to buy argentina. the stock is up five bucks today. it was a great call.

got to salute people who make great calls. >> very nice. dow is up 54, 55. and bob pisani is over by post 8. hey, bob. >> hey, guys. we're looking at the markets on the upside. 4% gdp in the second quarter, not a bad number. flattish for the first half and everybody i know seems to have 2.5% for the second half of the year, some had 3%. what are we at? 2% growth for 2014? fair, not great. certainly 4% is better than 3%. so we have big gdp numbers on a fed day. i'll take that. what's important is we have to hold the gains today. we're up 60 points a short while ago on the dow. got to close around that. nice move up in some of the major sectors. the growth sectors, energy, financials, industrial stocks, tech and material stocks all trading to the upside right now. want to get to the ipo market.

$28 to $31 are the indications. looking at 4.6% yield here. yield plays have been popular. the assets put into a partnership vehicle then you have a long-term contract usually from a partner. you get a nice yield. there are some tax advantages, partnership is taxed at the individual level, not the corporate level. a lot of reasons people like these yield plays is a lot of them out there. that's going to open very big to the upside. but it's choppy. 22 ipos, forget about it. a couple have postponed because there are too many ipos coming. they'll come but later on. bottom line, there's too many ipos out there. too many choices for investors that they've got. this big one is coming and there's still interest. we've told you about synchrony.

looks very promising. 125 million shares. 6% of the whole ipo value is in this company for this week. but the one to watch, the one i want to see, mobileye. this is really, really hot. sales are growing rapidly. the margins are very high. everybody wants s is in and the levels have been raised to $21 to $23. by the way, the etf for the ipo business, the renaissance capital ipo is up 2.5% today. and you know the reason it's up 2.5%? because twitter. twitter is about 9% of the value of this etf. and the big move up in twitter today that you've seen is the reason we're seeing that move up. quickly, the earnings here. u.s. steel has a huge 15% gain because they had a gain. we were expecting a loss.

the ceo says that he's expecting levels to increase significantly over the second quarter. certainly very good news there for u.s. steel. back to you. >> thank you very much, bob pisani. let's get to rick santelli who's already had to wade through a lot of economic data today. morning, rick. >> good morning, carl. but had an outsized gdp with an influence outsized by inventories. we'll talk about that on "santelli exchange." look at two-year note yields. they are now at the highest yields should they close in this zone since may of 2011. we'll call it over three years. let's look at the spreads. many are saying that the flattening has nothing to do with the fact that the economy's underperforming. but this augers differently. as you look at the one day, on the two-day chart it's a makeup for yesterday's flattening that

put it at the flattest since june of 2013. let's stick with the theme of flattening. look at 5s to 30s. it still didn't overtake settlement. it's a new fresh 5 1/2-year flat. we continue to see the long end, even though yields are going up with all this flattening because the numbers were better, it's not going up as fast as the short rates. let's look at this chart of 10s. if it's holding that 2.44, low yield closed ant 28th, according to technicians, we could actually see a higher rate scenario. the euro didn't respond well to sanctions or the data today. new fresh lows going back to november 2013. carl, back to you. >> rick, thank you so much. in one ceo's words, tablet sales are now crashing. up next, we'll tell you who we're talking about and why he's espousing that view. a pop culture phenomenon gets ready for an encore.

sharknado 2 on sci-fi tonight. and we'll talk with the film's screenwriter when "squawk on the street" continues.

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some stunning comments on tablet sales from best buy ceo. in an exclusive interview, he

said, quote, the tablets boomed and are now crashing. the volume has really gone down in the last several months. the issue is once you have a tablet of a certain generation, it's not clear that you have to move on to the next generation. we know what jim floss over at corning said, having missed that trend in their quarter. >> i don't know. cell phones' screen getting bigger -- i feel that if you go back to what intel's been saying. it's like the new clam shell is doing quite well. there are a lot of factors. if someone sells apple off this, they're gravely misplaced. it's not what's driving apple's earnings. >> although ipad weakness at apple isn't a surprise. >> they telegraphed it. apple's been one of the winners throughout this period because they've pretty much said -- the new apple says this is what's going to happen. and people say, apple's gotten it right.

if someone sells apple off this, they haven't done enough homework. >> tim cook asked about that and said, this does not worry us, the ipad weakness. >> there's other ways to skin the cat. when we come back, a way for you to actually text a scent to someone. how so? we'll find out on squawk alley at 11:00 a.m. eastern. "squawk on the street" will be right back. with all the opinions 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

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comcast business. built for business. time now for cramer -- >> pitney and bowes, i like this stock very much. and another one, eaton was downgraded. i think the idea when everyone downgrades a stock, what have we learned? it's closer to a bottom than a top. >> that is true. that's why we have those penguins or at least we had them back in the mid-'90s i guess. what's the problem they have with eaton now? >> sandy cutler let people down.

he just missed on a bunch of numbers. they're saying it's underperformance after underperformance after underperformance. and he didn't do a spinout everyone was expecting. there was no indication he was going to do it. but this is a case where people said, cutler doesn't know what he's doing. he's done a bad job. and they've all turned on him at once. when you turn on someone all at once, they tend to make a comeback. >> what's on "mad money" tonight? >> r.r. donnelley, catalog company. people don't use catalogs anymore, right? they had a very good number. and then genworth, the stock is down very big. we'll have them on. they don't do any tv at all. be interesting what they have to say. >> kcoda on twitter, they are o track for a gain. you didn't want to go hard into the quarter with an opinion. what do you make of it now?

>> we're up 8. i thought that nodo who is compensated by stock -- nodo raises an interesting point which is if you have all these users, it's going to be a good situation. i know that i no longer have the ability to tell people to buy it. i was surprised as how good it was. >> yes. and certainly some indication for all those executives who promised not to sell, remember? >> those guys who sold on $31, they have genuine scrambled eggs on their face. the kind i used to make. >> jim, see you tonight. "mad money," 6:00 p.m. eastern time. let's get to simon and see what's coming up. >> good morning, carl. carl swisher will take us behind what is a blowout quarter for twitter. bank of america/merrill lynch co-head will join us. that and more in the second hour of "squawk on the street."

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welcome back to "squawk on the street." our roadmap begins with gdp.

the u.s. economy growing at 4% in the second quarter beating forecasts as the fed wraps up its two-day policy meeting. plus, twitter soaring more than 20% after its costly results. find out what you should be doing with the stock now. and the day is finally here "sharknado 2," the second one premieres tonight on sci-fi. we'll talk to the movie's screenwriter about where he gets his inspiration. we start with gdp. the first reading for the second quarter coming in above forecast. 4% growth. steve liesman has more details on that. >> there are a lot of questions investors have to ask about this big jump to 4%. is it here to stay or just a one-off and how does it affect the central bank and their policy to raise rates gradually? the negative print we got in the first quarter cited by so many bears was unquestionably an aberration likely caused mostly by weather. here's what you see. a 4% number reversing the 2.1%

decline, what is now reported. that number was revised a bit higher. a lot of guys on the street still don't believe that number. here are the details. you had an economy that was firing on all cylinders. consumer spending up 2.5%. more than double the prior quarter. business investment up more than five times the prior quarter. residential up and government up. what you don't see is there was a slight drag from exports from net trade because imports were so strong. economists divided on whether this number shows an improving trend. over at ubs, they say consumption and investment shows a bit more momentum and the saving rate has been revised up notably giving more space for consumption acceleration as confidence returns. but another economist says, growth over the first half of the year is record only at 0.9%.

inventory building is a reversal from the prior quarter, raising the question, if business got caught with too much stuff on their shelves and will have to work it off this quarter. back to you. >> steve, thank you very much. steve liesman there with a very, very strong reading on the second-quarter gdp. let's bring in ethan harris, co-head of global economics research with bank of america/merrill lynch global research. welcome to the program. >> thank you. >> is this growth here to stay? >> look at the data. the second half of last year, we had 4% growth on average. we then had this terrible first quarter. then we had 4% growth again in the second quarter. so where's the aberration here? it's the first quarter. the economy is looking better. we've had average growth in the last four quarters of 2.4%. that's not great. but we're moving in the right direction. >> the question of normalization brings into sharp focus exactly where we are on the markets and

what is likely to happen. steven lewis write that is rarely in 45 years has he seen such a sense of foreboding at the markets, volume of comment about the extreme valuations that we have. yields on the bond market which don't really indicate we're going to get a great recovery, and equity valuations that could be compared to 2000, 2007. he says one of the reasons we got here is because the central banks have rigged the markets for five years. now we know the fed is going to pull back. are the equity markets and the bond markets capable of dealing with those corrections of so much activity from the central bank? what do you think? >> i think that the bond market is definitely at risk here. there's complacency in the market about the growth pick-up. i think once the bond market's convinced that growth is really here and once they can see the fed in sight, i don't think they see the fed yet because it's too far out. once we get those two things, we'll get some real pressure in the bond market. the equity market is fine.

equity valuations, i think, are sensible by most metrics. the equity market shouldn't be fearing a fed exit. a fed exit is the fed saying, we think we have a solid, steady 3% economy. that's why we're exiting. i don't think the equity market should fear the fed. >> isn't health care spending a wild card as it was in the first quarter which we don't quite know yet and could be a drag to take this one down? >> actually, as we go forward, health care should do better. remember, this was a really tough winter. actually, it was a mild flu season this winter which depressed health care spending. you also had people signing up for new health insurance under the affordable care act. but their spending doesn't really get going until the second half of the year. so what's really happening here is people misunderstood the health care act, thought the spending would be immediate. it's really a second-half story.

health care will be a small tailwind for the economy in the second half. >> ethan, let me come back to the central point you made that the market doesn't yet fear the fed. janet yellen is keeping a lid on what they're actually saying about the real economy. do you think this afternoon in the minutes for that credibility they have to acknowledge that the labor market is actually improving, that unemployment has fallen to a six-year low of 6.1%? >> well, i would expect some pretty small changes in the directive this time around. we won't get the minutes for a while here. we won't hear what the internal discussion was. but i don't think she's quite ready to switch gears here. as the year goes on, if we keep getting good data, like friday's employment number, another solid number there, over time it kind of chips away at that dovishness and by next year, i think you have a different fed. >> is it sustainable for janet yellen to be as dovish as she is

when the economy clearly is where it is? >> yeah, the pressure's building. i think that she really wants to make sure we have a full recovery before the fed shifts gears. it's understandable given that she can look back at the horrible experience of japan and europe, around their crises. didn't get full recoveries. had second recessions and ended up with deeply damaged economies. so she's got that history in her mind. but at some point, you start to feel you really have a recovery. one good quarter of gdp isn't enough. you need a couple more. but at some point you start to feel really good about the economy. >> people mindful of the bubbles we had in the 2000s. thank you for joining us, ethan harris. shares of twitter are soaring this morning following better-than-expected second-quarter results. let's bring in the managing director and senior research

analyst with sterne agee. can this growth and momentum that twitter is seeing last? >> i think the doubts have been put to rest for now. i think the expectations going into the quarter were actually quite low and i think that the outperformance in this quarter was driven by a couple of things. one is some of the product changes they've been making for quite some time. and also the benefit of the world cup. so to me, the third quarter might be a better indicator of what the underlying trends are. but all that said, they put up a stellar quarter, great guidance. they had a lot of momentum in the quarter there. >> yeah, i was just going to ask you, basically, what would the user -- monthly average user numbers look like without the world cup in this quarter? can you model that? >> it's very tough. the company says that they got a lot of engagement out of the world cup but that the user

growth really wasn't impacted by the world cup. if that is indeed the case, then going forward, we should see similar types of numbers in the third and fourth quarters. we are modeling slightly lower growth in the third and fourth quarters, around 14 million new users versus the 16 million they just put up. even that would be a pretty good number. but they have to show this type of result on a sustainable basis for investors to really believe that this is going to be a large-scale platform. >> that's really been the concern. you heard. it was alluded to in the interview with julia boorstin. that they can reach a broader audience. 271 was an improvement and much more than analysts were looking for. but facebook has 1.3 billion users. can this platform get to a broad user base internationally and domestically? >> i think that is the $25

billion question out there really. and i think each quarter is going to help us get a better idea of what's really happening. i think the second quarter -- i don't want to call it noise. but world cup certainly was a big influence. if you look at the growth and where it came from, a lot of it was international. u.s., in fact, was very much in line. that would tend to suggest that the world cup was an influence and therefore i think the jury is still out on that front. as far as the visitors that they get, which they indicate are two to three times of the actual users, i think the monetization of those visitors is not clear to me yet. so i'm not immediately thinking the opportunity for them is three times larger than what we see on the surface. >> the other thing that's changed, management's shake-up. no anthony nodo brought in as the ceo. no longer chief operating

officer. will these moves have an impact? can you attribute some of the strength in the turnaround to the shake-up? >> not really. it's too early for anthony to have much of r an influence on the company. but it's a good hire. i think over time, as anthony sort of gets his hands on the company and his fingerprints on the company, i think that we will see some positive changes. >> i thought it was interesting his comments on on the call when he was saying, don't think of us as a technology company, we're not disrupting any sort of existing technology out there. we are growing and changing the way people communicate. communication company was more how he was phrasing it. is that a message to wall street? >> i think they want to be looked upon as a partner more than just a disrupter. i think they call themselves an information network. >> information. >> and i think that in some ways that's accurate. but i do think that wall street

is looking for monetization beyond just what they're getting today and the user base to be much larger. those are going to be -- however you define the company, those are ultimately going to be the important metrics for wall street to watch. >> well, vernal wall street was too low this time around. we'll see what happens next time. always good to have you. thank you. >> thank you. when we come back, kkr's global head on macro and asset allocation. and then later, kara swisher weighs in. some of these insurers beginning to take it on the chin. and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely 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,

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on the new tempur-choice. the triple choice sale ends soon at sleep train. welcome back to "squawk on the street." shares of rockwell automotive hurt by recent events. currently trading at about a two-month low, off more than 7% at this hour. david? >> thank you, bertha. where in the world should you be investing? my next guest travels the globe to figure out which regions have the best investment opportunities and what asset class is there and where the biggest risks are as well. joining me now is kkr's head of global macro and asset allocation, henry mcbay who just

returned from europe. i want to talk europe. but first, i'd love to talk china, a place that you frequently go. will go back to in the fall. in your latest mid-year outlook, you cite risks. that's always a good place to start. many investors see it as a risk. we hear so often about the overbinging on credit there. why is china a risk and what are your expectations? >> i think the china story is changing dramatically. it's creating dislocation in the economy. the second thing is they have a new regime in terms of management and they're making some pretty big moves on the anti-corruption initiative. so from our standpoint, today we have 16 businesses or investments in china. we're very much skewed away from exports, largely skewed away from fixed investment towards what we would say is china 2.0, towards things like food safety or health care.

things that will help them deal with their problems going down the road. our base view is china is structurally slowing. there's going to be dislocation in credit. given that they have $4 trillion in reserves, it makes them different from other emerging countries. they have that buffer. it is a different china. i go there about two or three times a year. from our standpoint, we are making a different bet than some of our competitors -- >> we being kkr in terms of the investments you guys are making within the country. >> absolutely. >> what about a credit bubble there? we hear about it and see it in housing and they have to be careful in terms of actually not cutting off credit too quickly and stifling continued growth. >> yeah, i think that what you've seen recently is they've done small measures. it's much more targeted. you've seen them increase, if you think about the municipal banks, they've allowed some more lending, making it more accommodating there. they're not doing the 2009 damn the torpedos, let's cut rates

and spend. it's much more targeted. i would give the administration some credit for what they're doing. but they've got -- when you just look at credit as a percentage of gdp relative to other parts of the world, it's huge. they're trying to transfer it from the banks in the private sector and the local government to the federal government. and that is going to create bumpiness along the way. but the game plan they've laid out, since i joined kkr, a couple of years ago, they've largely executed on that. >> let's move on to span the globe. recently returned from europe. and in reading your notes, you are constructive, it would seem to me, on europe and the opportunities there. why? >> our base view in europe has been that it's a little bit of the asia financial crisis 1997, 1998. you need to shrink your current account deficit. most places in europe have gone from a huge deficit to somewhat of a surplus, spain, greece, other places. unimaginable a couple of months ago. second is bond spreads have come

in massively. same thing we saw in asia in the late 1990s. so we're not bullish that europe is going to surprise massively on the upside in terms of growth. but what we're trying to do is use the rifle shot approach to really target where we see marginal change. we've seen exports are boom in spain. that's something we participated in. >> spain can borrow 2.6% on the ten-year, seems excessive. >> the ecb will continue to grind spreads in. a lot of the big brokers are fighting that. that's not to fight you on a wage right now. i think the ecb while it's not going to be the shock-and-awe campaign of the fed, i think they'll slowly grind spreads -- >> what does that mean in terms of asset classes within europe -- >> from a private equity standpoint, we're largely focused away from traditional consumption. looking for things that have value. and a lot of recaps. we've been active helping companies when banks shut them off, either lending to them directly or helping them

de-lever their capital structure. that's a multilevel phenomenon. we kind of had the first wave. i think it's going to be bumpy through the stress test in the fourth quarter. but i think that you should be turning over stones right now during this period of dislocation. >> and bring me back here to the u.s. we get a 4% print on gdp. >> right. >> amongst the various markets, you're not that inclined to think bullishly about the u.s. opportunity -- >> i think the u.s. is a structural de-leveraging story. the way i think about it, two steps forward, one step back. we got gdp last quarter of minus 2.1%. and this quarter, plus 4%. that's fairly unprecedented. our base view in the u.s. is there are four drivers, housing, autos, energy and manufacturing. i'd say we're ahead of schedule on autos. a little behind schedule on housing. and as i think has been detailed in the press, we've been active in the energy arena. we still see opportunities.

ultimately how do we make money for our clients? we're seeing the beginning of a credit cycle in emerging markets. that's something we're very levered to through some of our funds. the second thing is i think we've gone into real estate and energy in a big way. we put $500 million of our own capital to start an energy practice -- a new energy practice or new fund and we started a real estate practice with our capital. so we see opportunities there in the u.s. and in europe. and then, look, in the public markets, you guys report on this all the time, particularly you, balance sheets are inefficient. so whether it's activists or other types of players in the market, they're trying to extract value out of that. to me, that's going to continue to be a theme. i would say in the emerging markets we're trying to be more disciplined, focus on where is there political change or central bank change and there's more domestic demand. so i would think about mexico,

india, potentially indonesia. but the overall message is, i think -- when i first met you in the '90s and the 2000s, it was about a synchronous global recovery. what i would tell you, at kkr, we see nothing like that at this time. you have to have more boots on the ground. we have 22 offices. trying to turn over a lot of stones. but it's a different backdrop than what we saw -- >> globalization not going as well as many as had. henry, we appreciate your time. simon, back to you. >> david, thank you. up next, affordable technology could reduce trucking accidents and increase safety. why do only 10% of trucks on the road actually have it? more on that right after this break.

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check out the dow after opening sharply higher, up 60 points or so. we have dropped down negative. and now we're pretty much at the unchanged line. this after our economy grew 4% in the second quarter. that was a surprise, at least on the upside. but there are some questions as to whether that will be sustainable. higher inventories and the like. we'll be talking about it all day. higher treasury yields as well. dow flat now. all day, we're bringing you an exclusive cnbc investigations inc. stories. while examining the trucking industry and why there are so many accidents in the past few years, exploring technology that could prevent these incidents. >> reporter: there is a serious problem on america's highways and it's only getting worse. >> nearly 4,000 people are killed in trucks accidents and over 100,000 people are injured every single year. >> reporter: a mix of operator error and faulty equipment

causes these horrific accidents but companies are actively working to improve safeties on semi trucks. >> the truck will not let me go faster than him. >> reporter: one of the companies banking on safety is volvo trucks. we visited the plant in dublin, virginia, where things like enhanced cruise controls and lane departure warning systems are being installed. we took a ride to see volvo's new technology in action. >> my foot's not on the accelerator. >> reporter: some of the safety technology includes setting a cruise speed that doesn't allow the truck to go any faster than the car in front of it. >> you get some slow beeps here from the radar. as you get closer to them, it starts beeping faster and faster. if you get too close, you get the alarm. >> reporter: whenever we did get to close, this would happen. >> the truck is doing all the braking. my leg hasn't moved. in cruise, the system will completely stop the truck.

>> reporter: this technology very well could have saved dan's family. his wife, mother-in-law and two young sons were killed when a driver slammed into the back of the family's minivan. >> the impact was so severe that they didn't know what hit them. >> reporter: one of the other features volvo installs in its trucks is intended to help truck drivers, especially those who are fatigued, stay in the right lane. if the driver fails to turn on his blinkers and veers off -- >> you'll notice a little -- >> reporter: the american trucking association estimates that only about 10% of all trucks on the road have some kind of active safety technology, which begs the question, why aren't all trucks required to have such safety features? >> the rule-making process is just too slow. the governments needs to speed up the process of evaluating some of these opportunities. >> reporter: safety experts say

organizations like the federal motor carrier safety administration are working too slowly. but that ultimately these rules should be put in place and enforced. and volvo is not the only company trying to stay one step ahead of the regulators. mercedes' parent company daimler has unveiled its autonomous truck. mercedes wants the trucks on the road by 2025. skeptics say it will be a long time before we see many of these innovations like fully autonomous trucking on the road. and no matter how much technology a truck has, it only mitigates the chance of a collision. whether or not you're truly safe on the road really all comes down to who's behind the wheel. >> eamon joins us this morning with more. it's a great report, it's a reminder of how much we've come to rely on trucks as manufacturing efficiencies have taken hold in this country. does daimler really think this driverless truck can happen? >> reporter: they do. it's fascinating to watch it. we're talking years from now before we see fully robotic

trucks out there on the road. we've all been out there on the highways and all felt that moment of nervousness when you're in front of a truck or off to the side and wonder how quickly they can stop this thing. they say they can make it a lot safer and make a dent in that 4,000 number, that's the number of americans who are killed on the highways in fatal truck accidents every single year. >> i remember when we couldn't find enough drivers in this country. what's going to happen to jobs if this technology takes hold? >> the industry says they have a 30,000 driver hole right now. they need a lot more drivers out there than they can find because of the improving economy and they're moving all this material out there to market. ultimately, though, if you go to fully robotic trucks, there are millions of truck drivers in this country that's going to dramatically impact those jobs in ways that we can't even imagine today. and then just think about all the bus drivers and cab drivers and other folks who drive for a living, those jobs could change dramatically over the years. >> what are the lawyers saying

about liability if an accident happens under driverless technology? >> that's one of the big questions. is it the company that operated that truck or the company that built that truck or the person who got in the way of that truck? all of that still to be sorted out. and we're seeing google wrestling with a lot of those same questions as well as they work on the driverless cars. if a driverless car gets in an accident, who's to blame, who does the insurance company charge and who has to pay? >> eamon -- >> it's scary the idea of truck drivers cruising down the road with their hands off the wheel, their feet off the pedal, checking their ipads. but those jobs are going to change to being less about driving the truck and more about monitoring the load. you wonder what's going to happen to salaries as a result. a lot of those guys won't need to be as skilled. they'll have to get the truck up to speed and onto the highway and then for that long haul part, they can turn it over to

the computer, a lot like a pilot can do a autopilot in an airplane. >> eamon, great reporting. thanks a lot. >> thanks, carl. heading towards 10:30 on the east coast. that means it's time for the data release at the nymex. jackie deangelis joins us live. >> good morning, simon. we are waiting for the number to come out on crude oil inventories. we are seeing a draw of 3.7 million barrels, this is a steeper draw than most traders were expecting. i want to keep in mind here, this is not in line with seasonal norms. actually we usually see an injection this time of year of roughly 1.5 million barrels. so this is sending prices higher. we were up about 45 cents, now up 50 cents. $101.50 is the price for west texas intermediate. analysts are expecting these to rise as well. it takes more crude to produce crude products. those products, some of them, end up being exported. i want to talk about gasoline.

we've got a build of 400,000 barrels there. as we know, gasoline futures have plummeted as a result of a few weeks of builds here and of course prices at the pump have come down as well. back to you. >> jackie deangelis, thanks very much. twitter may be going gangbusters today, at least the stock. but can it compare to facebook? kara swisher doesn't think so. we'll be right back with her on "squawk on the street." the cadillac summer collection is here.

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twitter's quarterly results surprised wall street. the shares surged last night and are up again today. the ceo was on the "closing bell" last night discussing what exactly has changed. >> i think differently you're seeing in the raised guidance due to the success we've had over the course of the year and our view as to haw that translates into the back end of the year. >> kara swisher joins us this morning. you call it a nice surprise but you say it did not completely -- cannot completely fix the growth problem. what are we supposed to make of this now? >> i think actually it was very promising. i think that it surprised a lot of pundits, including some on cnbc who were sort of calling twitter dead. and it was kind of interesting to see them get some traction in the user, the monthly active users and of course the

advertising doubled -- i think more than doubled. so it's an interesting situation to see if they can keep it going. if it's not just part of the world cup or if they can continue to add to users and experience engagement. so i think probably the next quarter will be more interesting. but it was good news and obviously caught a lot of people by surprise. >> what do you make of this argument that the off-platform users are growing so much faster than the on-platform users and there's not a clear path to monetization there? >> i don't know. i think they're trying to figure out what metrics to offer wall street. they have a new cfo who's very good at talking to wall street. we reported they weren't going to offer new metrics and they didn't. other people said they would offer new metrics. but they're not doing that right now at least. and so it will be interesting to see how wall street takes this information. if they see increasing revenue and moving towards more users and engagement, i think that

will be probably good news for twitter. the question is, can they sustain and keep bringing people onto the platform and using it in a vibrant way -- >> when i read your take last night, i was wondering whether the story of the stock market reaction today was the surprise factor, the fact that analysts had this stock completely wrong more so than it's really an exciting growth opportunity. does wall street get this company? >> i think it's hard. it's a question of -- the people who love it, love it. and the people who don't know about it don't use it. it's not like facebook which has a wider appeal to people. lots and lots of people use it. it's a very particular product. the question is can they convince people who are just -- if you're in it just to learn about the world cup and then you move away, are there enough events to keep people interested? it's sort of like the news business. can they keep interest and sustain interest by people who are not necessarily using it but might see their ads, might see the offers, all kinds of things

they're going to be offering? if people don't use it themselves but consume it in a different way, it's just like looking at the news or something like that. >> when we saw what happened to facebook, there was a point at which they clearly got mobile and they got how to monetize it and then the stock ramped higher and it's more than doubled over the last year as a result. could the same be said of twitter? they've learned how to get subscriber growth or is it always going to be piecemeal and ad hoc? it's a one-time experience that drives the stock higher and higher. >> i have no idea. i think it's a question of products that people want to use. everybody called facebook that, including me a long time ago. it depends on whether consumers -- if it offers something that's an exciting way to find and discover news. i actually had dinner with dick last night. it was really an interesting discussion about how people

discover news and they discover it first on twitter instead of having it to be an important part of the eco system. people discover news on the service. the question is, can they discover other things and can twitter provide products that create that experience? if it does, it will be successful. if it doesn't, probably get sold or something like that. >> we've spoken to you in the past couple of months in which you said you would keep your eye on the possibility of them getting dressed up for sale. is that still on your radar? >> i think if they can sustain this, no. when they hired anthony as the cfo, they were preparing for sale. it's a valuable property to a lot of bigger companies. but the question is, if they can sustain this and continue and build it into a business, they don't have to sell. but i think it's the question of -- this is a good quarter. it's well done and it surprised

a lot of people. and they show that they really could get some traction. and the question is, can they continue it over time? they've always gotten mobile, by the way. twitter's always been a mobile product. can they continue to, with this result, grow users at a strong rate? what's funny, last quarter twitter grew monthly active users by 25% and wall street was depressed. this quarter, they grew by 24% and wall street is ecstatic. it's just funny. it's all about expectations. i think people will have higher expectations for twitter. and then we'll see where it goes from there. >> peter's done some great work on it as have you, kara. good to talk to you. >> thanks so much. >> nbc news group is a minority stakeholder in re/code.

coming up, why the fed is in need of a major tune-up with the dow down. be right back.

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welcome back to "squawk on the street." hess, the best-performing member of the energy sector in the s&p. the company said it plans to spin off some midstream assets mostly in north dakota to support growth of its production in the bakken oil shale play. posting better-than-expected second-quarter results. the shock currently trading up nearly 3%. simon? >> thank you very much. with the dow now down 35, let's get to rick santelli in chicago. >> thanks, simon. i'd like to welcome a special guest today, michigan republican congressman bill huizenga. thank you for taking the time today, congressman. >> thanks for having me on, rick. i can't help but throw out my twitter handle after that conversation just before the break. @rephuizenga and @billhuizenga.

it's a tool i use and it's a great way of communicating with people around. just wanted to throw out that. >> and they had good market-moving data on their own behalf today. did you see the data by the government regarding our first look at second-quarter gdp at 4% today, congressman? >> yeah, real briefly. and i can tell you in west michigan where i'm from, my family's involved in construction. we've been having a very good summer. manufacturers in our area and its office furniture, automotive, a lot of different diverse manufacturing. they're having a difficult time finding people to hire again. they're going well. i think it's expected. the problem is that this has been the longest, shallowest recovery in modern history. we all know that needs to turn around. >> but it is gaining some traction, which really does present janet yellen and company with some issues. and as to the federal reserve and today their meeting, their 2:00 statement, i would

congratulate you on the garrett huizenga bill, passed the house financial services committee this morning at 32-26. can you tell us a bit about your bill, especially in the context of the current janet yellen policy? >> it's scott garrett from new jersey and myself trying to get at the fed in two different ways. trying to deal with their monetary policy but they've also become a super regulator under dodd/frank. we believe we need more transparency and openness from the fed as we are going forward. sorry, it's a little loud behind us. we have somebody with a cart. hopefully you can still hear me. but what we're trying to do is make sure that we have a rule put in place. we're not saying what rule the fed has to put in place, but we need to have a rules-based monetary policy system going forward for predictability, for openness and transparency rather

than ad hoc monetary policy which we've seen over the last couple of years. >> on a different front, the highway bill, we have two versions, the house has a version r the senate has a version. in the senate's bill, they've eliminated pension smoothing, which actually 45 conservative house republicans agreed with that didn't vote for the bill in the house. did you vote for the bill, sir? >> yeah, i did. it's a lesser of two evils, in my view. we needed to get this issue dealt with. the president is purely playing politics. the senate who's been doing absolutely nothing finally figured out that they're probably going to lose in november. so the reason why they pulled that pension smoothing part out is to take the time frame and shorten it up so that we have to deal with this in lame duck before harry reid's no longer senate majority leader. pension smoothing is not a direction i want to go. personally, i want to leave that money in the hands of states originally. i served in the state legislature. i know how frustrating it is to

send that money to washington and get pennies on the return for that. i'd like to leave it with the states and deal with this in a long-term basis rather than sort of this kicking the can down the road. >> believe me, i understand all that. i think it's very admirable. but i think conventional wisdom notes that the pension smoothing, especially me being from a state like illinois, understand that these underfunded liabilities, we have to quit some of these gimmicks, congressman. final word to you. >> yeah, i don't disagree with that. i'm looking forward to trying to make some real long-term solutions in this. but we've got to go back and make sure the fed is dealing openly and honestly with the marketplace because we've got to make sure that this economic recovery continues and doesn't stall out again. >> excellent. thanks for taking the time and being a sport as i peppered you with your vote. sara, back to you. >> thank you. >> and even got to twitter there. rick, thanks very much. we have waited and it is finally here.

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angeles this morning. good to see you. >> good morning. >> how on earth did you come unwith the idea for sharknado? >> i really can't take credits for that word. sharknado was used in a script that our director anthony feronte wrote. a throwaway line from a town that never recovered since it was hit by the sharknado. the folks at sci-fi caught on and decided they should have a movie called sharknado. they brought me the idea and i wrote a script that would somehow explain tornado full of sharks. >> take us through the writing process. this is a wacky one. do you hear tara reid when writing this script? >> on the first one we didn't know who would play those roles. it was basically i put myself in the role of the hero, the finn shepherd and thought what would i do in this insane situation? for the second one, of course, it was different, because i had, ian ziering and tara reid in my

head and knew what they were capable of and was able to write to their performances from the first one. >> and in the second one, which is scarier? "sharknado" on the east coast, new york city, or one in los angeles? >> everything is tougher in new york. including the sharknado. >> tougher? so what are your best tips for surviving a sharknado? >> hang out with ian ziering and make sure he has his complain saw with him. >> thunder, you know, a lot has been written about "sharknado." "the washington post" says the film created a form of online togetherness and made good on the internet's initial idealism of bringing us closer. is that too much responsibility, or do you welcome that? >> no. i think that's great. i think that's exactly -- we certainly never intended that. we hadn't planned "sharknado" as this social interactive event, but what happened that night that the first movie aired, i think it did show the potential

of the internet as a way for people to have a theatrical experience, you know, of thousands of people sitting and enjoying a movie together, even if they were all separate in their own homes. so maybe that's the future of our society. >> if you look at some of the big hits, "game of thrones," "orange is the new black," these are very different. what is it that has people going crazy for "sharknado"? >> i think it's the sense of fun. you don't need to think about it too much. it would probably hurt if you thought about it too much. it's just ridiculous fun, and i think people need that every once in a while. >> finally, the cameos. my god, kill osbourne, perez hilton, billy ray cyrus, lauer, roker, andy dick, judd hirsch. did anyone say no when you first approached them? >> not really. we were luck any cameos. originally hoped to have rudy

giuliani playing himself but he was out of the country, so we ended up somehow luck sboing ou get robert klein to play the mayor of new york and ended up the perfect blend of giuliani and ed koch, we think. >> does it have a happy ending, we just want to know? >> when sharks are raining down from the skies, it's not going to be a happy ending for everybody, but, yes. there will be some sort of a happy ending for folks to take out of this. >> all right. thank you for joining us. we're looking forward to it. that's is the writer behind "sharknado." 1 and now 2. airing tonight. over to kayla tausche and see what will rain down in the next hour on "squawk alley." >> simon, well, twitter stock is soaring after that massive second quarter earnings yesterday, but as it grows, can momentum continue? and can it actually reach everyone in the world? we'll discuss that with roger

mcmam mcnamee. and the market is crashing because people aren't upgrading. will that continue? that's on top, too. finally a rare interview with the co-founder of paypal and chairman of yelp on the future of technology and social media. you won't want to miss that, all up on "squawk alley." she's still the one for you. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache.

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good morning. it is 8:00 in san francisco. 11:00 a.m. on the east coast, and "squawk alley" is live. ♪ good morning wellcome. welcome to "squawk alley." joining us, rotch 0er mcnamee, co-founder of elevation partner, jon steinberg, kt tunstall, jon for for for fortt -- kayla tausche, jon fortt. trading up as much as 35% after

earnings easily topped expectations. our julia boorstin joins us this morning. hey, julia. >> carl, better than expected results across the board, higher full year guidance, dick costolo was bigger on bullish to catch up to facebook. >> we don't think there's anything pleechbt preventing, us structural from preventing us having the kind of results from other players in the space. >> i asked him if he thought they'd be able to have the same size audience at facebook. his goal, have the largest total audience in the world and reach every person on the planet and the nothing less than that. for the first time, costolo delved into the potential of twitter's audience outside the 271 million saying hundreds of millions of additional people come to twitter but do not log in. responding to a question tweeted in, how he plans to increase the user base, costolo