>> thank you. >> i got's in my ear. >> thank you. >> did that work for you? i just did it right away. >> thank you for that. >> you're welcome. >> i appreciate it. >> are we done? >> back to you. >> oh, join us tomorrow, and "squawk on the street" begins right now. good morning, welcome to "squak on the street", i'm david faber live from the new york stock exchange, carl is off today. the justice department where eric holder is expected to announce bank of america agreed to a nearly $17 billion settlement that would end a probe into morgan securities that the bank and its units and, of course, those that acquired in country wide and merrill lynch sold. we'll go live to holder once he begins remarks. we have a live and exclusive interview with the hp's ceo, meg

whitman, after posting better than expected quarterly revenues, of course, driven by strong numbers amidst personal systems group, including sales of pcs and the like. a mixed picture for the rest of the businesses, but a lot to get to. bank of america, though, you can lose sight, jim, of the numbers themselves, almost $17 billion. we talked about this, speculated on for so long. ranked up as one of the worst deals of all time. >> $17 billion on 4 billion. >> by the way, almost have they paid? i don't know how much you attribute seoully to countrywide and accusation of merrill as well. it's a mortgage machine i reported on. years and in "house of cards" documentary on it, a book i wrote, that was going on for years in which, of course, you had borrowers not qualitied put in loans, packaged up, sold, and

made into c degredos, and now, years later, seven, eight years later, we are seeing some of the settlements. >> i think they made a decision at bank of america. i think there was a faction that just wanted to fight this all the way through to a new administration, but the process that holder was clearly put in place has run the show. it's to sue them everywhere. so in the end, you had to make a decision. sued everywhere, and powell pushman from new jersey suing new york, or you pay the piper. the piper is $9 billion in cash. that's the key number. rest is not as important. i understand this is difficult to know what the reserve was. this wipes out the next quarter, 25 cents charge. you know, i think that the number they arrived at, the former ceo of wells, the number that was maximum pain. that was the number embarrassing to bank of america?

it's not like they sat down and said, here's the damages. this puts bank of america in a position where you figure out normalized earnings power. remember, this deal was known by the fed so the fed still let them put the dividend through, why is the stock going up? the answer is because jpmorgan went of up after they did their deal, and this -- >> citi -- >> had a good deal, but i think -- gary lynch, by the way, bank of america guy who is new, former head of enforcements, he's great, he's a great lawyer, but he was up against a justice department that wanted to maximize embarrassment, the pain, and it's interesting, you talk about the things you report on, how many of the people were interested or paid for it. said, listen, they just going after the bad guys, would have. the lesson, but justice department got it, and this is very big thing. >> yeah. >> well that, of course, there's news that, of course, angela, 75

years old, ran country wide, may face civil prosecution from the justice department, reporting out there. >> they came after him and other countrywide executives that went by the wayside. there's mr. mozillo. they never got the head, so to speak. >> no. >> in it was, again, reporting on it for many years during and after the fact, it was widespread. >> right. >> no doubt. many, many people within the organizations were well aware that mortgages were packaged that was below any quality that conceivably they should have been, and then repackaged and repackaged again into synthetic cdos which, of course, the likes of pallson, for example, was able to bet against making billions of dollars. >> yes. >> that comes from the advocacy deal, back from that deal. >> they got stuck. listen -- >> no people.

>> no people. remember, back and forth, bank of america, it was my judgment, no one knows what you have in reserve, okay? that's not a disclosed figure. i know that they had a certain amount of earnings power, and i think the justice department picked a number to wipe it out. citi had a better than expected quarter, so turns out the justice department guessed wrong in wiping out citi. they are controlling the bank, and bank's making a comeback, full disclosure, but could exceed the number. doing well. beware. i'm saying the process was to figure out kind of what do they owe, and let's make it above the reserve. >> let's try to make it painful. >> right. bank of america could have a blow out quarter, and everything will be fine, but i think the process was a very punitive process, not against the people you described.

>> a quick summation. they are done now. they are are done. >> i know, that's why i like the stock. that's why i like the stock. >> manned up having been $70-plus billion, and now most, if not all of it, is blind them. >> i don't know what it does to a certain degree to the districts, but the stock's higher because now -- i'm thinking there's $2 earnings power. interest rates have to go higher to hit the $2 number, but a possible $2 number as early as 2015 and a buyback, but i am very bullish on the settlement. it's just that i'm bullish to have it behind. >> the $2 on 15, are you kidding me, really? pe of seven and a half times, come on. >> a lot of earnings power. >> okay. >> some say not until 2016. if interest rates go to 3, delivering alpha, everyone thought the 10-year 3.

then they have the earnings power. at this level, no, this level of added interest rates is killing the banks, even welsh, such a machine, gathering assets, but they can't deploy them. >> moving on here, up next, exclusive with hp's ceo, meg whitman, she's pauking here to post nine. we'll talk when "squawk on the street" comes right back. but what if you could see more of what you wanted to know?

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taking 5 look there, a live

shot of the justice department awaiting attorney general holder's remarks on settlement reached with bank of america. in fact, the starmt is out that they reached a comprehensive settlement with the department of justice, certain federal agencies, six states including release on securitization, origination sale, and other things related to securities related to mortgages and all the different things they did with the mortgages as well. 9.65 billion in cash, and 7 billion, cash portion is 5.02 billion, and 4.63 billion in compensation payments. we'll monitor remarks on what may be the last of the big banks to settle with the department of justice. >> i love they got the numbers. i mean, it's like they are the most capricious, arbitrary

numbers. >> that lady is testing things out. hp reported an increase in the quarterly revenue, increased sales in the division that sells personal computers, tablets, things of that nature. they continue with the turn around effort. joining us now in the exclusive interview is the chairman and ceo, meg whitman. first time here. >> excited to be here, thank you for having me. >> first time i said "chairman" as well associated with that p zb. >> yes. >> we wish whitworth the best. >> yes. ralph and i worked together closely, and we just decided, the board decided it made since to combine the chair and ceo role. double responsibility, but focuses the turn around, maintains consistency of the strategy, and pat russo, you know her well. >> yes. all right, to the turn around

itself, almost three years in now, focused yesterday on the fact there was revenue growth, for the first time in three years, but it was spotty to be fair. printing was down. as you said in the conference call, different businesses, some are still in decline, so is revenue growth here to stay? >> yeah, it was a milestone for the company after three years, put up 1 % revenue growth, not the aspiration, but better than declines we had. as in any turn around, there's bright spots and spots to work on. as you pointed out, pcs strong, servers strong, industry standard server group up 9% reversing a long term trend, traditional storage was up. we had some very good bright spots. we got work to do. >> yeah. when you say "work to do," what do you think about in particular? >> we have work to do to make sure we continue to grow our software business.

software is in the middle of a very difficult transition from traditional license model to sas, so we have a portfolio that moves from licensed to sas. that is choppy on the front line, moving to a payment over time, that changing the financial architecture. >> we sat here many times talking about the death of the pc, despite the fact we're surrounded by them. not the case. >> right. there are those saying it's a con tracting market. you said that you believe you'll continue sioux see growth there. largely results of taking market share? >> it is a result of taking market share. the traditional pc business is flat to declining market overtime, but there's pockets of growth. workstations, amazingly, a pocket of growth. convertibles all in one. we have to segment the market, go after where they is growth, and then take share. you see consolidation in the industry where they take share

from the smaller players. >> one of the highest businesses is printing. margins moving up there. in fact, what many anticipated, but right now, revenues are not moving up. >> yeah. >> there's certainly concern. give us some sense there as to why you're confident that ink, so to speak, and toner as part of printing, are going to actually stabilize, if not start to grow again? >> well, this is one of the great all-time businesses for hp, and what we see in both ink and toner is some stabilization, and we will see that going forward, and what we're excited about in ink is ink is moving up into the office. you think of ink as your home printer, but ink is twice the speed of laser, same quality, and half the cost per page. so businesses are saying, wow, this is a really interesting way to cut costs. we're excited about our ink and office product. it grew nicely in the quarter. >> expect ink in the office is something to rely on in terms of dropping price? >> yeah, absolutely, absolutely.

you know, on the laser side, listen, we have an installed base. we had not kept up with multifunction printers. . we didn't have a product in ten years, but now we're the leader. i think toner resolves over the next year. >> hit in part because competition from japan, i think, the weak yen. you'll see more toner sales. >> i want to first congratulate you on free cash flow. you'll return cash to shareholders, but i think you need to get into 3-d printing. stratus is real, real earnings, manufacturing, and cost $7

billion to get. why -- >> he plays banker as well. >> that's the growth story that say to people, hp is not playing defense. it's not growing at is 1%. we're not mid-single digit, but it's real, why not do it? >> well, so we are going to take really the enterprise side of 3-d printing o koesed to the consumer side. >> that's why i said stratus, not 3-d systems, not that way. >> all ogranicly? >> all ogranicly. it has a lot of shared technology with actually our toner business. >> makes so much sense. >> we're doing that ogranicly. as i side, we'll announce the technology, and you'll see that begin to pick in for hp, but remember, we run $1 10 billion company, so even a couple hundred million dollars in revenue, fabulous for a startup, it's hard to move the top line on a big company like ours. >> is this the israeli technology? >> yes. >> very smart. >> you got questions on the m&a

first time i recall because there was release saying you have nonpublic material information preventing the company buying back stock in the last quarter, raising, okay, what were they working on, was it m&a related? >> i don't comment on it because it was nonpublic, so if i told you, it would be public. >> good point. >> this is a desemination. they say it's okay. >> it is. we're safe. that never works, by the way, never get a ceo to tell me something. to jim's question, you said you'll consider it now, but -- >> yes. >> you seem to be drawing a fairly small circle around, which you're willing to do. >> well, first of all, we have spent the last couple years repairing our balance sheet, and we have a net cash position of 4.7 billion, which is so different when i first started talking to you, it was 12 billion dollars negative cash position. or negative net debt. good news is we're in a position where we can comfortably do m&a, but we want to be thoughtful

about it and committed to our capital allocation strategy of returning 50% of cash to shareholders through share repurchase and dividends leaving us room for acquisition, but we want to be thoughtful, returns based, and do things we only can't do ogranicly. one of the core values of the company is innovation, engineering, research and development. when we unleash engineers, amazing what they can do. we'll acquire, but thoughtful about it. >> talking about engineering and research and development, people are led to believe, give me examples here. people seize on that, the old hp, ideas of incredible innovation. growth, and that comes with it. >> so you saw our announcements in may on hp helium, our hybrid cloud built on open stack. great reception to that. think about the server road map, moon shot, introduced apollo in june, first water cooled server.

we have a lot of innovation. all flash storage, so there's a lot of innovation. look at ink in the office, another, you know, innovation. our laptops, you know, some of the best laptops we've had in years. our software define networks offering in our networking group, so a lot of innovation, and the good news is, you'll start so see it hit the market at a much more rapid pace than before, and that's what growth is built upon. >> i know you cannot be happy with enterprise services 6% decline, why is that? good sales people, good equipment, that's happening in the line item? >> people do not know we're the number two services business in the world behind ibm, and that business had a couple big accounts that ran off as i got to the company, actually. we talked about them, general motors, bank of america. those are still running off. we are signing new logos, but it's hard to sign logos fast enough to account for the run

you have. good news is it's almost complete now, so now we start from a stable baseline, which we ought to be able to grow from. >> are you worried about a trojan horse relationship between ibm, number one, and apple, where you dip in the iphone6, and then you go to the it department saying, listen, i don't want my hewlett-packard, i want apple, a beautiful mac. you have to be worried that a trojan horse against your company, not just samsung. >> yeah, so, listen, we watch with great interest, obviousldy and that's their nay senior thing. we got to be in thosing thes. we got to sell the value of hewlett pack ard, and it's easier to manage devices on a stack with one easy vendor. we have a plan there. one of the great things in the technology business is it's amazingly competitive. you see it here at the desk. what happened in three years happens now in three months.

look at the cloud. if you thought the cloud would be as important as it was even three years ago, no one would have said that was the case. >> tonight on "mad money" -- >> yeah. >> the bigger picture, meg, people watch the turn around as we have, thanks for the willingness to come on with us, update us, cost discipline in the company, seeing growth in areas we might not have anticipated. a go-to market strategy many say is greatly improved, 50,000 employees will have left the company by -- end of this year or next year? >> end of next year. >> but when do you transition, if you do at all to sort of a solid growth trajectory? >> that is another major milestone for the company. we have to get the basics right and strategy of the company well articulated. we have to capture heards and mind of hp people who have been through a rough spot, and if you

don't have your people with you, you have no hope. your people show up to the customer every day. i'd say the basics are now in place. we made a lot of investments in automation in systems to be more efficient, and now we have to turn to consistent, profitable growth across all of our businesses. now, there's always going to be issues in a company our scale, always a problem somewhere, but we have to be more consistently delivering profitable growth in the businesses, and that's the objective over two years of the five-year turn around. >> there was a thought when you began, certainly, i think, among some -- even amongst your board, perhaps, that if this does not work, the breakup plan is to separate businesses, separate the company and allow each of the divisions to go on their own. >> yeah. >> do you still think of that as a possibility? >> well, our objective is to execute the turn around strategy laid out three years ago, and we're working forhearted on

that. as i said before, we have to prove that thesis, but we do believe with that providing an end-to-end solution for our customers is a very important valuable proposition. so, again, we have to prove the thesis, and we feel good about the turn around. pull the lens back and say, we're about where i thought i would be here. >> you are, really are? >> sometimes a little bit better, sometimes worse, but about where we thought we'd be heading into the fourth year. >> three years went by in the five-year turn around. with ink, you get a read on the economy worldwide. >> yes. >> you shared with us in the past. worried about europe now, are you worry about europe? what are you seeing in trends around the kbloglobe? >> yeah, we had a good year in europe overall in the enterprise business. they go up and down rapidly. a small thing happens in, you know, portugal or greece, and, of course, you get russia and

the ukraine. our overall performance in europe was very good. russia was tough, and, of course, russia affects all of europe, so i'd say europe is next. the united states, to me, feels like it's getting betser, and you know i said for many quarters, boy, i don't see the improvement, but it feels better to me, spending picking up, confidence to invest in it and future of your small, immediame big business. asia is doing well for us. we had a good quarter unlike our competitors, china was good to us. commercial pcs did well, printing did well in china, service was up double digits there. a good quarter in china. >> autonomy, two years since we sat here and talked about -- and you didn't use the words "fraud" , but i did. we have not seen anything. was that not what you said it was? >> autonomy, the wheels of

justice says turn slowly, and we appropriately urn itted the investigation over to the department 6 justice, serious fraud office in the u.k., and they are doing their work, and nothing has changed in my mind from the time i, you know, the day after earnings went on cnbc to explain exactly what happened. i feel confident in the case. >> thank you for being here. >> fun to be here live. great to be here. >> great to be with you. ceo of hp. we got a lot of other stories, of course, and movers to talk about, and we'll have cramer's mad dash counting down to the opening bell right after this. [bell rings]

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prices, hormell, david, working hard to be independent. >> back to the price paid by hi hillshire. incredible. any chance it could perhaps be justified by the market? >> no. >> okay. i wanted to make sure. >> none whatsoever. this is not dollar general that pays 90 and is acretive. good dividend, terrible input costs in spam, and yet they were still able to deliver a quality. >> trying to stay independent, i'm not aware, but there's a lot of consolidatioconsolidation. >> of any protein company, that's why bob evans is interesting to watch. protein is the future. look, like plastics in 1968. >> when was that? >> there's a great movie. >> can't beat it. opening bell about to ring, 15 seconds or so. look at the s&p realtime

exchange constituting itself right now. there's the opening bell, the united states tennis association doing the honors at the big board to kick off the u.s. open that begins. >> wow, already there. >> on the 25th of august. >> wow. it's the end of the season. >> the nasdaq, als association celebrating a record amount of donations this year as a result of the ice bucket challenge. well done, incredible social media phenomena. i think i'm about done with it. i'm done with the ice bucket thing. not giving als -- >> awareness -- >> not any of that, just give money. >> just give money. >> that's what we can move on from the ice buckets. all right. let's talk about sears. softer side of sears? >> you mean the sales, earnings

softer side. >> the release -- i lost it. oh, there it is. >> another one where lambert says it's unacceptable. that's a common issue to say it's unacceptable. it's like a text analysis. the -- it's just challenges challenges. david, the company's revenues are declining. land's end was a good business. >> it was. the decrease was $858 million to $8 billion. now, you have to remember, that, of course, they separated out the land's end business, completed in the first quarter of '13, and that included the effect of fewer stores in operation. >> yeah. >> that was 256 million of the decline, and 140 million at sears canada as well. also, you had lower domestic p comp store sales, 47 million of

the decline. ? think of the numbers of lowe's and even jcpenney. there's a lot of revenues here bleeding to other companies, and they are talking about these initiativ initiatives, talking about the initiatives hurting the growth margins, and it is just an endless decline. that is not -- >> where does it end? where does it end? what does it end with? >> you're talking about the credit. they have a good grab on the credit, say they have a good position, not to worry. i feel this is about, e, send us merchandise, still selling it, they is a lot of revenues, but they are closing on profitable stores. give them that, but this is the exact opposite of what we're seeing from almost every other major retailer. i'm surprised that a walmart or target just doesn't say, let's go put them out of business. >> just end this show.

>> yeah. >> they go into detail in their quarterly release, and you don't hear very often from lambert. writes letters. >> right, right. >> cash balance is 839 -- >> meaning don't worry about us, creditors creditors. >> the amount to borrow was $240 million. they said that reflects the effect of the springing fixed charge ratio borrowing base limitation in the revolving -- point is, great focus on their ability to borrow and service and pay their vendors, and on the factors they rely on, vendors rely on, and everyone else on this chain of financing. >> retail is about growth, dave. over and over again, growth, growth, growth. this company is -- has the

worst -- in retail -- decline in growth -- i don't want to say decline, but you know what i mean. just bleeding. sears canada is now bleeding. i don't know what you do, maybe you close every single unprofitable store as leases come off, maybe that's the way. a core profitability, a small company, maybe that's the way. if i run it, i come in, pay the leases, say, listen, we have all the credit, break all the leases, pay them off, get down to a critical number of stories, see what k-mart is not doing well, k-mart and sears, jim, you don't know what you're talking about. i do. >> they didn't buy back stock in the quarter. >> interesting, huh? not a bargain. >> they did not repurchase shares of their stock. they have half a billion dollars remaining in the organization. could be using that elsewhere. >> they have the sears club, but costco has a club that seems to be profitable.

i want to say something good, i don't, it's the one store that i do not shop at, and dollar general, family dollar, and dollar tree, i go. i do not shop at k-mart. i'm not a k-mart shopper. >> have you been to bontons? >> sure. >> just curious. >> dave, dillards? kohl's? i'm game. >> back to bank of america and the financials. the stock is up almost 1% this morning. we talked about it, of course, the key, will interest rates rise and net gain, and therefore the multiple is cheap, conceivably, but we don't know what interest rates do. jackson hole, by the way. yellen's going to be talking at jackson hole. >> you need -- this is one literally where the most important -- past justice, now

just net interest margin, and it's not going the right way. i think merrill is doing well. i think that the bank itself is doing well. i think they are focused. did not feel these things even two years ago. i think the company -- you know, why do you like the stock? because every time one of the justice department deals is done, they focus on being bankers, not being lawyers. >> hertz, you did it yesterday. >> wall of shame? >> yeah. put them on there? >> of course. >> yesterday, of course, late in the day, we got a filing from carl icahn, god bless him, 8.4%. >> he's a buy back. he's a buy back. >> january, i recall, i first reported -- >> dead right on this. >> it's a drinking game when i say "first quarter". >> there's people who tweet every time i say it, they got to drink. it's one of those phrases that i use. >> ridiculous. >> it's true. it was back in january, the

company could have poisened because icahn was large in the share. beat back, if you will, at that point, in favor of the split that they eventually did on their own, which is equipment, lease -- >> delayed that lease. >> icahn never sold out, came out recently with purchases that began in june and picked up over the last few days, some at highs, and some 2 million shares at 28, and here we are with the filing yesterday, basically saying management stinks. >> well, management stinks. it's one where if you had a very quick change at the top, if you just had ceo resign, the stock is at $35 this afternoon, and i think he is toast. this is -- where's the board? the board is serious. real people on the board. this stock goes to 35 the moment he steps down. how can they not know that? i mean, the earnings power here. the consolidation, there's no longer any real discounting going on because finally you're

getting to the point where there's rationality in the business. >> north america up, and all the things that hertz said is the industry is in trouble, and -- no, why was avis up? avis is really well run. that is the talk of the industry, how well they are run. >> runs dollar thrift, thompson would love to have the job. >> i got to tell you, this is a great american company that is just being run horrendously, and it's time for that to end, and i think it will shortly. >> moving on to hewlett-packard. it's up. i didn't know which way it was going. it's a mixed picture. up over 2% now. >> remember, the cash generation is good. the flexibility to do things is good. the revenue, okay, so you had to start somewhere, at the same time, there are other players in

the business that are better, and i do worry about the cyclicality of the pc refresh meg talkinged about, but, look, i am continuely impressed about the way she tells the story and how the business went back from the brink. at a certain appointment, you have to have more. >> i agree. your question on stratus is an interesting one, and one she's gotten before, although, it is hard to move the needle in a company of that enormous size. it is. >> but -- >> growth gets investors exited. >> industrial 3-d printing is a great growth business that could move the needle. it is. i was skeptical initially. they are a good company, but what i say, she said she'll do it internally, but you need what dave -- dave, is planting seeds, planting seeds, we need new seeds planted. i was worried about printer. i don't like it.

it's a core franchise, grow it. add 3-d printer, hewlett-packard has a soup to nuts sweep, that's great, they don't have data to speak of, but cloud to speak of? not what i think you want to see, but if, again, cash generator, when you have cash, it is king, and, boy, do they have a lot. >> generated 2.7 billion in free cash, 3.6 billion in operating cash in the quarter, and they lowball free cash flow generation. put the yield on the stock, and there's an argument where it's up today. they are focused on that. others want eps growth, though, in addition. the cfo, that's where -- >> in is the quarter they can do it. this company does not tell you they are doing well, said mixed, was not good, was not good. they don't dress up the divisions that are weak. they know it. they try to fix it.

i think it's i thimpressiveimpr. >> more is moving. >> interview was great because traders here say it moved the stock. you see it in the intraday stock. the dollar index trading at 11-month highs. we are off the level now, but that's a real carryover from yesterday's slightly, you can call it hawkish comments, adverse impact on the gold market, the higher the dollar value, gold prices tend to move inversely to that, trading the gold now, down by a percent and a half on the trade overall. look at the overall follow through, 10-year yields, and that's a carry over, it taked higher on fed comments yesterday, and if you look at the reason why, there is some concern going right now, it's because of global manufacturing. you take a look at our markets against those in europe like in france, germany, and china. china and the eurozone coming out with weaker than anticipated

data weighing on the markets here. although, the dow jones average up 20 points now, above the -- just above 17,000 mark. of course, a lot of traders here saying that really this is about a a holding pattern tomorrow. we have a lot of fed presidents speaks today, and yellen, the federal chairwoman speaking tomorrow and ecb head, draghi, speaking tomorrow. remember, 10:00, we have existing home sales, david, as well as what's happening with the fed. those things may be catalysts forget markets in 20 minutes. back to you. >> thank you, a contentious situation we are following on the faber report, the battle for family dollar this morning. family dollar rejected the $78.50 offer receive the monday morning from dollar general, and as we told you here, rejecting because of concerns of antitrust

risk. concern on the family dollar side is the 700 stores proposed for divestiture is not sufficient to meet what they believe is the opposition of regulators or potential opposition of regulators to the transaction, which we're talking about, obviously, thousands and thousands of stores. in fact, in speaking to people close to the family dollar, it is their expectation that potentially thousands of stores needs to be divested. i direct your attention to the letters from both companies. in fact, yesterday, late in the day, almost at night, actually, dollar general put a letter out talking about the history of the two companies, what they talked about, and that they had not. i focus, though, here on the discussion of antitrust, prior to rejection received this morning. we believe the number of divestitures in the offer letter is more than sufficient to take this issue completely off the table. we remain ready to share with you your counsel of our

conclusions of antitrust work once you take the appropriate steps under your existing agreement with dollar general then we'll begin discussions. okay, they view basically simply said that it's more than sufficient to take it off the table. what i heard from the family dollar side is, great, you want to do that? put in a held or high water agreement saying you buy us regardless of what happens for antitrust rejection. i note, jim, you don't always say that, they just don't quote the ceo, but ed garden, board member, co-founder. remember the original activist in the stock. they are in it to win it. ed quoted in in release, pointing it out because it's important saying the following, the ceo of dollar general said he believes that antitrust is

not a risk, but did not put forth proposal that eliminates regulatory risk for family dollar shareholders given the significant abty trust issues involved with dollar general's proposal, we will not jeopardize the dollar tree deal for a transaction with dollar general that is is high likelihood of not closing. >> due to antitrust considerations. >> that's where you come down, is there a willingness to put in hell or high water? dollar general tells you that levine, it's about social issues. he wants to run any combination, has a place in the dollar tree deal. >> vicious. >> if you speak to other board members or those aware of the board deliberations, there's a belief that's not the case, there's a willingness on the part of levine. their concern, jim, in fact, what this does is prevent a vote from going through to the dollar tree deal keeping fdo sidelined, and then pounding them down to

buy them later cheaper. >> there are lawyers who know appty trust, explain why one lawyer says there's no, and that being said, the lawyer who deals with this, all this experience from the fdc comes to one conclusi conclusion, and the metric consul tamts in as well, comes to a completely different conclusion. >> this is -- >> high profile, competition within that location, price, and everything they think will be looked at. >> if you're in the justice department, attorney general holder runs the justice department i think is acutely aware of the headlines that witness the bank of america decision, wouldn't you want to say, you know what? the underclass, the lower class is served by more competition,

and the -- the old days, dg, and they really do not serve the lower class. it's a bad thing for lower class. that's a gleaming argument. it's a political to some degree. not saying they are corrupt, but it's easy to make a play that says poor people, rick? >> if you look at two day of tens, you see not only have we scaled up, but this time zone, coordinating with the better than expected drop in initial jobless claims, that may be interest rates push the up for those reasons, but it almost doesn't matter because they are back down parallel shift on

yield now, twos, fives, sevens, tens, 30 s a point lower than yesterday. if you continue on the notion of relative value between two different entities, switching gears, look at bunds versus tens, an amazing chart. we go wider and wider, and it's an ongoing reason on a relative value why we have interest at these prices in treasuries, and this has been since 1999. let's look at what's going on. more specifically loox at the chart, two day, yesterday, steepening on the minutes is important because this fives and 30s spread trades at the tightestight est flattest in six years. remember that. look at year to date. remember they correlated tick for tick, no more. that dynamic is truly changed, and talked about the dollar

index doing better, and it is, and one of the reasons is the next start, we want to pay attention to jackson hole, many out there whether correct or not, thinking that a major undercurrent is going to be foreign e change. david, back to you. >> thank you very much, rick santelli. coming up from jackson hole, talking with john williams, the man who succeeded janet yellen as president of the san francisco fed. here what he has to say ahead of keynote speech by the fed chair. we'll be right back. where the reward was that what if tnew car smelledit card and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits.

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that's why i always choose the fastest intern.r slow. the fastest printer. the fastest lunch. turkey club. the fastest pencil sharpener. 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. all right, it's that time, time for stop trading. let's get to it. >> yeah rs you know, there's a lot of controversy about whether they get paid or whether there's competition that compensates from abbvie, a good company. stop worrying. stop worrying. the insurers will pay.

abbvie, don't worry. >> $84,000 for a treatment? >> it's a cure. >> cure. >> it's that cure. it's a cure. the reason i point it out you know i felt the key to the market, they have been our leaders, okay, and if they power higher. ten times earnings, everything the insurers pay, there is no competition. the fda does not like to improve drugs when they got them. the drug that's working. so just keep this in mind as you see it go higher, there's growth money in it rewarded, and that's going to continue to come into the growth funds, and you get virtuous circle. it's high. >> what do we have money"? >> the key to the tech market, as you listened to meg whitman,

excellent interview, turned around, the cloud, the $4 billion company there, talk out there tonight, and rick, a story, david, that they are a sand company, make fracking sand. are they taking it? can you do well without that sand? this is not the stuff we see at the beach, david. this is not montauk or jersey sand, but sand that works. >> jim, are you in tomorrow? i hope so. >> oh, no. >> we have to go. breaking news on phillie fed, lie, existing home sales data when we come back.

if energy could come from anything?. or if power could go anywhere? or if light could seek out the dark? what would happen if that happens? anything.

welcome back to "squawk on the street," and we have breaking news. green on fed, and it is a good one. 28.0. keep in mind, the last number was the best level since march of 2011. this number continues to be the best since march of 2011 because the number was 34.7, but a good one. july, leading indicators, up anyone-tenths of 1% month over month, the best since the 1%

read in march of this year. we also have july adjusting home sales, and for that, we go to dianna. >> well, rick, existing home sales up 2.4%, month to month in july, to a seasonally adjusted rate of 5.15 units, higher than expect the, a revision in june, still the highest rate in ten months, that is since september of 2013. sales, though, still down, 4.3%. last july was a cyclical peak. midwest up 1.7%, and west up 2.6%, all, though, other than the south, down year over year. median and existing price, 229,000, up 4 hadn't 9% year over year. you are seeing the median rate coming down in the price deappreciation.

inventory up 5.8%. that's a 5.5% month supply, that's good, saying it's roughly in balance, and, single family of 2.7, condos unchanged. 29% of the market, that is very unusually high, and it's not moving, even though investors dropped to 16%, first time home buyers, 29%, interesting one, distressed sales just 9% of sales, a new low since the realtors tracked this in 2008. back to you. >> all right, that is a milestone. thank you very much, market reaction now, a record high for the s&p 500. the level to watch, 1991, 139, the record, set on july 24th, brief briefly above it. the dow jones at 17,000, first seen since july, almost a month. has not closed above 17,000

since july 24. not major moves, you are seeing very important and very bullish record territory and levels here. david? >> yeah, looking, talking about record territory, of course, shares of hew lit pack ard now, up over 3%. that did not appear to be the trajectory for the stock after the company reported earnings after the close yesterday. the revenue numbers appointmented out many times, up 1 % overall. led by the personal systems group. pc sales actually showing a lot more strength than anticipated, although printing, another important and much higher margin, and not as strong as they hoped for, but our guest earlier on "squawk on the street" seemed more confident in those looking at the numbers. i asked, of course, about the bigger picture, that being this turn around that they are three years into, that she has said many times will be at least five years in length.

where are they? how much more do they have to go? >> our objective is to excute the turn around strategy laid out three years ago, and we are working hard on that. as i said before, we have to prove that thesis. we do believe that providing an en-to-end solution for the customers is a very important value proposition, so, again, we got to prove the thesis, but we feel good about where we are in the turn around. i pull the lens back and say we're about where i thought i would be here. >> you are. really are? >> yeah. >> of course, that also responds to a question of, is it still possible that the company will break into its different sectors and different industry or different components. that was her answer. one thing that hp has not been focused on is 3-d printing, and, jim, cramer asked, well, why not do an acquisition? this is a company with good amount of free cash flow, cash

on the balance sheet now, very different story than, of course, when whitman took over as ceo. not why consider, perhaps, a company like stratus's? this is what meg whitman had to say. >> we'll do 3-d printing, but taking the enterprise side opposed to the consumer side ogranicly because it has a lot of shared technology with our toner business. >> makes so much sense for you. >> that's done ogranicly, we'll announce the technology this fall. it'll kick in for hp. >> focused on innovation but many say, hey, it's great, three years in, a great deal on cost discipline, 50,000 workers exited the company, doing benter in terms of the go-to market strategies, as they say in terms of the products, but how are you ever going to get revenue growth? you're not going to get it unless there's new, innovative

technologies that are going to lee the market. >> improving cash flow, could make the acquisition. >> without a doubt. of course, this is a company built in part on acquisition, and, yes, they could make one if they chose to interesting to note in the quarter in question, they cited nonpublic information, leading those to believe they were involved in looking at an m&a opportunity. >> she didn't comment. >> would not comment on that. they are buying stock back again, so it's clear to say that that has passed whatever it was they were looking for. >> let's get insight now on hp and bringing in tony, an analyst, recently, out perform rating, and raise the the price target to $40. tony, welcome to the program. you think there's 10 to 15% upside here potentially. is that because we talk about halting 11 quarters of revenue decline because pc sales jumped, you think that's more than just

a blimp or a windows xp phenomena? >> i think it's really a reflection of the whole port folio at hp. we now had three quarters where revenues have been relatively flat, and in the context of a enterprise not growing much, ibm will be done, cisco's level levels will be flat. that's not bad. hp is trading at a discount to almost all enterprise companies. it's the sixth least expensive stock in the entire s&p 500 on price to forward earnings. there's more revaluation that occurs in m&a. >> when you see critics of the company say, look, the longer term shift is supposed to be towards services and software, but neither of those are actually growing, you would say you do believe that meg whitman drags it to where it needs to be? >> i think it's out on the long term, quite frankly. think about what happened in the

hp in the context of the turn around plan, they stabilized the company now and done a nice job really focusing on cash flow and matching expenses to revenue growth, taking out 13 to 14% of the work force, but revenues from the peak fell from that same amount. they've done a nice job in stabilizing the company. i think if you believe this company does not grow, that top line is flat, but they continue to drive margins higher, continue to buy back shares and perhaps get five or six percent growth and pay a 2% dividends, that's worth two times earnings, putting the stock at $40. that's my belief. in longer term growth, the jury's out. there's challenges around the end markets they play in. >> are you fired up by the idea that meg might make acquisitions? is there enough cash to make acquisitions big enough and transformative enough for such a large company? >> it's very hard for a company

with $1 10 billion in revenue to do transformative acquisitions. hp said repeatedly they intend to return at least 50% of free cash flow to investors. if they generate seven billion next year and spend half of that, you talk about the maximum, spent on one acquisition the next year of maybe being $8 billion unless they wanted to take on debt, which i don't think they will, so it's really hard to move the needle, and quite frankly, historically, hp's not had good success with large deals, so not holing my breath they'll do anything meaningful or transformative. >> $9 billion this year at least, tony, 7 to 8 next year, assuming it goes up, maybe it's a difference assumption. cheap on a free cash flow yield. >> it is inexpensive. david, i do think it goes down

increase year. what hp has done incredibly well is lower cash conversion cycle, and that gives a one-time boost to free cash flow which we are seeing this year. i think next year if cash conversion cycles stay flat and hp says it may not even be that good, then you would expect cash flow in about the mid $7 billion range. >> got it. >> almost out of time, what is your best idea at the moment? where can people make the most money, in your view? >> in the near term, apple and hp have good business momentum. they are trading at very low valuations. so i continue to rem those stocks in the next several months. >> good to see you, tony. thank you for your time. >> my pleasure. >> all right, pulling off the record high on the s&p 500, over to a quick market flash. >> retailers today are doing well, and one of them leading the pack, children's place.

the children's specialty retailer raise, and in line with expectations, and the street's bullish on them today, up better than 3 .5%. >> thank you. u. up next, bank of america facing the music with a settlement, largest by a company in the history of the united states. we'll talk to charles about that, a former treasury official. also formally of the iff, remittiremit i representing the banking group. he'll join us when "squawk on the street" returns. ♪

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>> shares of of bank of america trading higher after announcing the details of a $17 billion settlement with the bank, largest of its kind in american history. are we have the juicy details. >> bank of america acknowledged today they made ris representations of core quality mom r morch securities. the justice department agreement breaking down into a 9.65 billion cash penalty payment and 7 billion in consumer relief measures payment, will cur b profits by 43 cents a share. in a press conference in

washington, eric holder, the fifth multibillion dollar corporate settlement since 2009 said it's effort to insist on accountability for the wrongs of the financial crisis. >> as a part of the settlement, bank of america acknowledged that in the years leading up to the financial crisis that devastated our economy in 2008, it, merrill limplg, and countrywide sold millions of dollars of toxic loans whose quality and level of risk they knowingly misrepresented to investors and to the united states government. >> as for whether the penalty at one point expected to be as high as $to -- $20 billion was too low, he said this. >> the size and scope of the multibillion dollar agreement goes far beyond the cost of doing business. this outcome does not preclude criminal charges against the bank or its employees nor was it inevitable over the last few weeks the case would be resolved

over court. >> one interesting note of that is bank of america plans to appeal the loss in the hustle mortgage case, in which a former employee was liable for fraud as the announcement today. could be more fireworks in court still to come. >> yeah, speaking of that and focusing in on country wide in particular, what duo you think f the report for individuals to be punished? i believe on the antifraud legislation, that has a ten-year statue of limit taxes, a man, of course, already settled, i believe, with the f chiropractic c, having made over half a billion dollars during his ten year at country wide. >> sure, simon, yes. we had reports yesterday, which we confirmed that the u.s. attorney's office in los angeles may be preparing a case against mozillo individually. as you noted, settled with the fcc in 2010 for $70 million, just a relatively small portion of the half a billion he made

running countrywide over charge he committed fraud and misrem misrepresented loans that shouldn't have been in the first place. there's e-mails to that effect in existence. awaiting developments on that, not file yet, and the attorney is saying it's without merit. you are right, though, that few, if any people on an individual basis are held accountable. only person to face jail time is the result of the financial crisis is a former credit swiss manager accused of hiding losses in terms of the bank's exposure to mortgages. most people have not heard that name, and as you can see, not a well-known figure from the crisis, few of them individually held to task. >> or, indeed, apparently, ten other employees at countrywide are part of this. >> that's part of what we are hearing. >> thank you very much, still ahead on the program, the new app capitalizing on impulse buying and making shopping miles

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stage at jackson hole tomorrow morning. way can we expect in the wake of the fed minutes yesterday afternoon? the senior reporter is cheek by jowl with the central bankers already. he's live in jackson hole. >> reporter: simon, not as close as that, but, yeah, the minutes raising questions about the fed policy. hopefully we'll get answers here in jackson hole the next couple days. the meeting beginning this evening. let me show you the key issues out there. the conference is about labor, and when it comes to labor, the big issue for fed policy is how much slack is out there? there's been a lot of talk about the dangers of low rates and whether or not they create excesses in the markets. do they deal with regulation or hiking rates? the minutes mirrors the question about whether or not the fed should hike sooner rather than later. the issue of market complacency, is the market ready for a quicker hike or over on one

side? i talked to the president of the kansas city federal reserve, host of the meeting as the citi fed president is every year, and i asked if the market is leaning too much one way and when it should hike. >> there's a lot of complacency now, and look at the market path for interest rates relative, for example, not median, the fomc's projections, you'll see that those have been far apart, and i think that that is a risk requiring us to communicate as we continue to discuss. >> reporter: unlike last year when the fed chair bernanke skip the meeting, they are all here. and draghi speaks at 12:30, the question is what he can do to foster growth or resurrect growth in the european union there, and the japanese central

head banker moderates the session saturday. at 11:30 this morning, we have the san francisco fed president, johnwomans, charles foster at 4:15, jim bullard at 8:00, and lockhart saturday. quite the line up from us making news from this location where i am now, dpiguys. >> steve, 5 lot of people -- i'm a european, focusing on draghi, but focusing on what the ecb will say. if the data in europe is lousy, jp morgan suggests sovereign debt likelihood, if the eases, is that difficult for yellen to tighten because liquidity in the world generally, and bank of japan as well, and the fact the

dollar shoots higher, worry her, move with all the central bankers as she can so the currencies do not become a risk? >> i was not spoken to yellen about this directly, but i assure you the thing that yellen wants from europe is growth. what she does not want to do is marking down u.s. gdp because we're not getting growth from europement i think she wants draghi to turn around the economy over there. there's talk whether or not buying sovereign bonds would really do anything for europe. as you know, the bund is trading below 1%. it's unclear how even lower rates would help europe. is not an interest rate problem, but perhaps a liquidity problem, and that's why there's a lot of focus, listening to draghi intently about the issue of asset back securities, and lending in the real economy as opposed to the financial economy. as far as the currency, if the u.s. currency strengths

vis-a-vis, there's more breathing room with inflation. >> interesting. >> 11-month highs on the dollar. back to the federal reserve and given the lineup of the regional fed presidents you're talking to, do you sense there's increasing pressure on janet yellen, we know now tends to lean in the dovish direction, defending the super easy policy, do you feel there is pressure building from inside the fed, from the other presidents to move away from that policy? to move the needle there? >> i think there's certainly a discussion. i don't know how much pressure there is, but i will tell you that my take on the minutes yesterday was that they were more hawkish than the statement, and i thought the statement was more hawkish than the prior statement. there's a conversation going on inside the federal reserve we learned yesterday maybe in more deat a ti detail than before. wondering whether or not if the data keeps going the way it's going, do they need to change the market's attitude weather

interest rates rise earlier rather than later. the suggest question is, what is the slope of the hike? we had richard fisher on "squawk box" weeks ago saying the conversation is more in his direction, and now after the minutes, we know what he's talking about. he gave us a head's up on the conversation. >> all right. more importantly, have you seen any moose yet, steve? >> reporter: you know, the wildlife has been scarce as are the view of the mountains which are covered by clouds behind me, but i think things will brighten up. >> david saw a moose. >> i was in the same park. >> i've been there too, and have not seen a moose. >> i saw two. >> looking forward to the coverage and the interviews. we'll talk to former imf treasury executive charles dallara to talk about it, and the state of global economy. we'll be right back.

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3.6%. >> very interesting. thanks, bertha. joining us at post nine, former assistant treasury secretary, also managing director of the institute of financial finance. you'll remember from those greek debt negotiations. now executive vice chairman with partners group. good to see you. we want to ask you about bank of america. you come at it from an interesting angle having worked at the treasury and also representing the banks at the iif. is this justice, $17 billion? >> you know, it is a huge fine. mistakes were made, huge mistakes were made. the citizens should not be subjected to illegal or unethical conduct whether it comes to mortgage business or any other business. but a lot of this was done, as you know, before b of a acquired countrywide, before they acquired merrill. i think it is a great opportunity to turn the page, settle, move on and now allow banks to focus on what they can do to support their recovery. >> you do raise an interesting point, which is should b of a be liable for the subprime problems

at countrywide and not merrill? >> that's an interesting point but it is a very complex legal point, sara. i don't think i can add much to that. i just think it is time to turn the point. we need banks to be more active in supporting recovery in this country. it is not all about monetary policy, even though it seems that way. >> if i was to tell you that there were reports angelo mozilo, who co-founded countrywide and made over $1 billion for doing it personally, may now again be prosecuted under anti-fraud laws. what reaction would you have towards that? >> i don't know mr. mozilo. >> but you do know what countrywide is alleged to have done, for which there is now a $17 billion settlement. >> yes, that's true. the court system in our country works in ways that are not easy to understand at times. i think we have a huge settlement here, that this now allows bank of america, the institution, to turn the page. i think that's what i would focus on, not the circumstance surrounding this particular individual. >> one of the other big plels f problems for big banks right

now, this debate about returning monetary policy back to normal. where are you on that? >> i think janet yellen is a wonderfully experienced and capable central banker, as is mario draghi. but they do not have magic elixers. i think maybe we are expecting too much from the fed. maybe even the fed is expecting too much from the fed. >> is she expecting too much by saying we should still have 0% rates because there's too much slack in the wage growth and too many temporary workers? >> i think we've proetty much runt course with what qe3 can do. to be honest with you, i'm increasingly inclined to support the position of those who suggest that it is probably time to shift gears here. interest rates are going to rise. they're either going to rise by a decision of the fed or by market decisions. frankly, i am inclined to think that the markets will move the rates probably before the fed does. >> just on this subject, maybe it is a technical question, but what do you think about the fact that the 10-year yield is now

below 2.4%? this huge rally that there is in tes treasuries. market interest rates are not rising. >> it is a remarkable rally. i think it reflects the huge geopolitical uncertainties. we see a real safe haven right now. think into treasuries, into u.s. equities as well. there is a lot of liquidity out there. i think, however, if you look back 10-years were 15 months ago, they're still up considerably. think we'll begin to see 10-year rates beginning to move probably sooner rather than later higher. >> there has been a warning repeatedly central banks need to be coordinated in their policy actions. they are looking increasingly uncoordinated. is that a dangerous thing? >> i think it is a risky thing. i think they are looking uncoordinated. i think central banks have developed a little bit of a habit of desiring not to coordinate. i think right now markets could benefit -- >> i believe you call that a currency war. >> well, i'm not sure i would go so far as to call it a currency

war but i do think there is a need for greater coordination. i think however central banks are in different circumstances. right now i think europe is under threat of deflation. i think it will be increasingly urgent for draghi and the ecb to take more action. >> can they actually -- even if they bought sovereign debt, is there any point in driving the 10-year bond? we all know you well during the greek bailouts and the haircuts. greece has lost 25% of its economy. it's been destroyed. it is now running a very painful structural budget surplus. very few countries actually achieve that. as you look back at where europe is now, how do you feel? >> i feel that the debt restructuring we did cleared an important cloud off the horizon wiping 73% of the claims of billions of dollars worth of private collectors away. but it was insufficient to allow the greek economy to be restored because the program was flawed

in its design, simon. there should never have been as much repeated emphasis on short-term budget cutting and tax raising as there was. there should have been more emphasis, and still today, on structural reform. greece needs more financial support. >> but it will get it because it's done what the boys asked it to do, or the boys and the girl, angela merkel, asked it to do, crucify your economy and presumably they'll get the loans. >> i generally don't use terms like that, but -- >> do they ever really sever the link between the sovereign and the banking system and get rid of some of those problems which plagued them and brought on the european debt crisis? >> no, they have not. i'm afraid that the well-intended stress tess that's under way with the european financial institutions this year is adding further stress to the credit environment there. the fact of the matter is europe desperately needs both structural reform and a boost in domestic demand. we cannot count on the global

economy to pull them out. ecb has to act. you've asked a very good question. what about pulling interest rates down further? i think that the reality is, as the fed starts to move, the risk of not only the base rates rising but spreads widening again in europe which could further damage the recovery is a high risk. i think the ecb has to take action soon. >> they've already got negative deposit rates. charles, we've got to leave it there. we've covered a lot of ground. good to see you, as always. still ahead on the program -- the san francisco fed president john williams will join us live for a first on cnbc interview. we are live over the next couple of days from jackson hole. janet yellen speaking tomorrow. . ♪ ♪ [ male announcer ] during the cadillac summer's best event,

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new candidates to become the ceo of paypal are reportedly being told that they may prepare for a spinoff of ebay -- paypal, i beg your pardon, from ebay within the next year or so. hewlett-packard in the wake of david faber's exclusive interview now up almost 4%. i think the timing on that was around your interview. am i right in thinking it didn't more particularly after the earnings? >> it was down a bit after earnings. listen, the top line, there was growth of 1% but it was a mixed bag, to be sure. so i do think that the interview may have at least contributed to a more positive view of the earnings report. >> i did hear you talk to meg whitman about the japanese yen? >> i did mention that, yes. it's impacted toner sales. that's weakened exports from japan, as you well know. >> i do. i want to mention two things. hormel is interesting. because that's protein, protein, protein. we talk about food shifts and

demand? hormel is the maker of spam. spam, canned pork, which i know you are probably a huge fan of. jenny o turkey burgers. remember, hormel bought skippy peanut butter. the s&p 500 right now is a winner unto itself because it is in record territory. we are just trading about 1,992. if we can close there, that would be the all-time high of the year. some losers db st errs -- staplo and dollar tree. dollar tree came out with results and they also commented on their bid. >> their bid is still the bid that is accepted by family dollar which today rejected dollar general. as we told you they would. based on concern about antitrust risk. there is a significant gap between what dollar general views as a requisite amount of diverse turs that should take

place in a combined dollar general and family dollar as opposed to what family dollar believes will be a necessary amount of diverse turs if these two companies come together of stores to satisfy any antitrust regulators. i don't think dollar tree had the greatest quarter. >> what about all the pushing and shoving with carl icahn? >> he's always pushing and shoving. no, listen, it was not a significant role. there was already a lot going on. he's sold down a lot of his family dollar position choosing not to play the risk in this case. probably regrets having done so having they did get that overbid from dollar general. question is what will it take for dollar general to win the day. it would seem they'll have to include a provision in their offer that says we'll take on any antitrust risks even if it is blocked and we'll still buy

you, or the economics of that. >> or there will be a big break-up fee? >> no, they would have to be hell or high water. in other words, we'll do whatever it takes. >> let's send it over to rick santelli at 9:43 local time. >> i'd like to welcome my friday eve guest, jeff snyder. we have a delay here, jeff, so let's try to play a little bit of pepper. thanks for taking the time. today is the preclude to jackson hole where all the economists and central bankers are having a kind of powwow. if you were head and had a chance to make itinerary for the topics, what would you make the main topic of all these central bankers and economists to discuss? >> well, i'd take a look at financial vulnerabilities as they exist in, say, the repo market. again, we are going through another surge in repo failures that's quite concerning actually. also take a look at the reason

why, in the economy, if jobs are growing, why aren't wages? i think there is a disconnect there that demand for discussion. >> i like those two topics. in your writing, you bring up something that i find so fascinated. i personally would grade the economy right now average, maybe a lit below average considering how many months it's taken us to get to average. yet we have recession-era monetary policy. how can you reconcile those two? >> i don't know that you can. there are definitely structural issues at play here that have absolutely nothing to do with monetary policy as it is today. in fact, i think we have an overhangle monetary policy -- talking about the housing bubble as it existed in the mid 2,000s. there's an over hang there. i think a lot of what central banks are doing is inappropriate for the times that we're in now. >> well inappropriate is a good word. so let's stick with that theme.

if we have structural issues, why do we continue to do it if it is structural versus cyclical, why has it taken the fed so long to arrive at this conclusion? why keep interest rates at zero and basically have all the unintended consequences down the road? >> i think from the perspective of central bank, i don't want to get too far in that direction but i think there's really not much else. as far as what a central banks look at, they're thinking of, what are the primary monetary channels. primary monetary channels historically has been housing.

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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. it's like instagram but with a "buy" button. the brand-new shopping act spring aimed to change customers' shopping experience. here to explain exactly how it works, a woman who knows her apps, julia boorstin live in l.a. hi. >> hi to you, simon. spring is one-stop mobile shopping for consumers to buy easily and directly from brands. the app allows you to follow 250 brands with 200 more in the works. you can see their stream of product photos. then after you enter your address and credit card information once, you can buy with a swipe of a finger. from the high-end carolina herre

herrera, and others, spring gets a less than 10% fee compared to a retailer's typical raised $7. from google venture, and other investment arm group arn o. simon? >> thank you very much. stick around. with us here at post nine, spring ceo and co-founder alan tisch. >> thank you for having me. >> what is the business model? >> sure. spring is the easiest and best way to shop on your phone. a mobile market base connecting brands directly with consumers on their phone. brands post products every day, customers follow theirdiscover d can shop from the app directly from them. >> how do you make money? >> take a minimal fee from the brands on each transaction, incentivizing them to do what's best for the customer. if they offer free shipping, we

cut our transaction fee in half. >> julia? >> who do you consider your main competition for this app? >> sure. i really think there's a lot of easy ways to buy things on your phone, but there was no way to go shopping. that experience of walking around soho on a saturday afternoon that just didn't exist on your phone. we're focused on creating an easy way to go shopping. >> so i have shopped on mobile before and i get what you're trying to do here. elimb beating the shopping cart? right? have to click on it. fill out everything. an easy swipe. >> yes. >> how do you avoid people buying things by accident? >> absolutely. we do confirm the first purchase. and we also have an amazing customer service team if a customer needs to change anything about their order that's always standing by to help them. >> you're also cutting out platforms like google? importantly for them. as these apps proliferate what do you see as the future for those intermediaries? desperate to get close to the people you're desperate to get close to? >> a lot of people sell things.

for us, about creating the best experience for customers and we're focused on that and not focused on what other people are doing. >> what do you see as the future for brick and mortar? your competition, sounds like, and malls? trying to eliminate them completely? >> absolutely not. we have a deep respect for the retail sdi and i learned a lot from them, but we saw an opportunity to create a unique experience on your phone similar to what these people do in real life. >> the question i have, look at instagram. why haven't they done this and if they or pinterest eventually do, do this, is that a major challenge to your business? >> absolutely. i'm a massive user of instagram and pinterest, great products. but the difference on spring, it's about shopping and the intent shopping is different than looking at pictures of your friends or something you cooked last nice, for example. >> simple. i'm surprised nobody else thought of this. >> which is the point julia's making. >> absolutely. we don't spend our time focused

on that. we're creating the best shopping experience for our customers. >> the relationship you have with these retailers? can anybody else get those as well? >> absolutely. a brand where we service or brands and offer data, analytics as well as customers. if we execute, that it's all that will matter. >> julia? >> you're asking retailers to do a lot of work. giving them a lot of control. deciding what their stream of products looks like, how much they charge them what kind of exclusives to offer and asking them to da a lot of work. are you purting too much pressure on them to do this work sand that too much to ask of them? >> absolutely. retailers can get set up to sell on spring in less than one hour. the response is incredible thus far. >> on the financial side, how much money have you raised and i assume you're not cash flow positive at this point. how quickly are you burning through? >> raised $7.5 million from an incredible group of investors

coming from retail and the technology industries. having their support made it incredibly helpful. >> you are a tisch, from the tisch dynasty. i'm fascinated at 26 that you're creating this app, a year and a half into technology on a day when jpmorgan and bank of america say they're going to raise the salary of junior bankers by 20% in order to retain talent on wall street. what's out in? what are people talking about? what do they need to do jp where are the bright people going? >> a real opportunity in the start-up community for people that. traditionally bankers and working in the financial industry -- >> can che actually make money? are they cashing out in the same way you did on wall street? >> execution. perform well and offer something valuable to customers you're always going to create value i. feel we'll be seeing a lot more of you, mr. tisch. >> i hope so.

be sure to down load the app. >> as we speak i suspect sara is doing that. over to jon fortt, has every app downloaded on this phone, i'm sure. >> not yet, sara. maybe before the end of the hour. coming up, heard about amazon jones. turnsous-of-out india could be the place that arrives first. talk about the pros and a snag that could hit. also virtual reality. a big deal. the ceo of a company that hopes to take advantage of that from top to bottom, coming up. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier.

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oh, dear. the week i've had. that was monday on the show as i took the ice bucket challenge. in turn, of course, i challenged three other people. one of them was marriott ceo. the others gopro and, of course, priceline, already come through with their challenges. finally, the ceo marriott answered my challenge and in a sense, as you watch this clip we're going to play you, answers the question, where do big launching ceos go on holiday? take a look. >> simon hobbs. thank you for your nomination to do the als ice bucket challenge.

oh! ooh. >> arne sourcen late, you should do it within 24 hours, but we can see he completed the challenge. where do you think he is? i'm assuming with his family somewhere mountain world. >> maybe greece? >> a volcano behind him jp they have twol or three private jets. they can go anywhere. >> could be at a marriott. >> would you stay at a marriott if you ran marriott? >> the equivalent of me dumping -- >> i thought i was putting ice over you. wasn't that going to happen today? >> i made a donation. i think that's the point of the real bucket challenge. >> get to stronger women. kayla tausche with the "alley." >> three for three. quite a good record. don't know of any one else with that luck with ceos. we'll see. good morning, 8 o'-of-o'-:0

alto and 11:00 a.m. on the street. and "squawk alley" is live. ♪ good thursday morning. carl quintanilla is off today, but joining us for the entire hour, dennis berman, business editor at the "wall street journal." dennis good to see you today. >> good to see you. >> jon fortt you're here as always looking good and in shaum br shaumbray. >> i like to pull it out at least once a week. >> report on the information that said the company is telling potential paypal ceo candidates a spin-off of that unit could come as soon a