good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. there are more haunting images coming out of the middle east. radical militant group isis killing another american journalist held captive. the latest video shows the beheading of 31-year-old steven sotlov. that militant, once again, taunting america. following the gruesome execution, a militant masked man is shown holding another man by the collar. that man is said to be british citizen david hanes. president obama is in europe today and in the last hour addressed the latest act of terrorism by isis. >> like people around the world, americans are repulled by their barbarism. we will not be intimidated. their horrific acts unites aus a

country and stiven our resolve to take the fight against these terrorists. those who make the mistake of harming americans will learn that we will not forget and that our reach is long and that justice will be served. >> global markets paying attention to that, but right now, reports of a sear fire whips up stocks and securities. the office of ukraine's announced a permanent cease-fire with russia. but then a spokesman for putin denied a cease-fire had been reached, arguing russia is not a party to the conflict. the statement went on to say putin and poroshenko agreed towards steps to peace. that's when gains were trimmed and europe pulled back, too. u.s. futures followed suit. but as you'll see, they're still pointing to a higher open this morning. >> and all the strategists that we're going to have, we want to talk geopolitics.

because, you know, there will eventually, you would figure, be some type of effect, whether it's a slowdown in europe which affects us or something from all of this. oil prices with all the political and economic turmoil around the world, why are investors here at home still hanging in there? we're right near highs. joining us now, jim baldwin and joseph quellen, chief market strategist. jim, i'll start with you because it's safer most of the year, you haven't necessarily said we're going to go down 20%, but you thought that the games might moderate because the two most important things wsh herbings growth and the fed, both of those tail whippeds might start lessening a little. you think we're right for either sideways or down? >> i think we are for the rest of the year, joe.

we're near highs. but i guess this market rally with that over the last couple of years has been pretty rare in this sense. it's been led by both rising multiples and rising earnings simultaneously. it's only one of two market rallies since 1950 that's been like that. most of the time you're led by pes while earnings refresh, our you're led by rising earnings while pe refresh and then the others come into play. at this time, we're at 18 times earnings and earnings have been rising and both are extended. and i think one of the others do feel a period of refreshment. i'm also worried that bond yields will rise before the end of the year. but unlike last year's rise in bond yields, which would based on a few the economy getting better, this rise might become -- might result from people worrying about inflation starting to emerge. and that's a much more destructive force for stocks. so i think we're going to have a

period of volatility and turbulence and end routes and maybe several more years of bull market. >> joe, joouft just looking at some of your thoughts, you realize the geopolitical situation does pose some risk, but, you know, a weaker europe is not good for us. we'll get u.s. global profits coming from that region to some extent. but then you point out that it does cause a flight to assets and quality. which is the most powerful force? >> i think it's the flight to safety. it's amazing when you look at the global headlines, the money does come into u.s., whether it's real estate, whether it's securities, whether it's corporate bonds. so i think that's going to continue. foreign ownership of u.s. equities is only around 17%. treasuries is closer to 48%. so you're saying a little reallocation here. i agree with you in the sense

that geopolitics, even if we set that aside, europe which is twice the size of the chinese economy is flat lining. so i'm -- in the sense that we're going to grind higher. we don't see a big up size between now and the end of the year. when you see the european union flat lining, you can't get too excited. >> so it could be a range down the stock market. one thing that strikes me is you can almost decide if there's a lot of turbulence geopolitically. you have gold or you have the dollar. and i guess you pick one of those two based on whether there's inflation or deflation and what central banks are doing. so given that paulson said deflation might be the worry, maybe that explains why people are buying dollars and gold stays under 1300. maybe that's the choice right now. you go dollar instead of going during flux. >> you do when you get some cover there. i'm in jim's camp. we're a little more deflation than anything else. it's not just europe, it's china

in in that sense, as well. there's still a downward bias towards price increasing. that's crazy given the amount of central bank easing that we've seen around the world. that must mean demand was really, really weak, if we can throw@all this at it and still have deflation as a primary concern. >> yeah. i think we are on the cusp of, in this country in the united states, worrying more about inflation than deflation. >> you do. okay. you think it's there it's deflation. here it's -- can that be like that, we could have inflation and they could have deflation? >> sure, sure. i think we absolutely could. look at the reports coming out, joe. we had the highest ism report yesterday in the entire recovery, almost 6 0 on on the ism. and that's true, not only manufacturing but of services. got the best job market we've had in the entire recovery where we're tightening up the resource markets. i think we could have a concern about overheating conditions.

and inflation rising a little bit. >> you think bad inflation, it catches up to it? >> that's right. >> what happens in that scenario, jim? >> yeah, i think bond yields may be still end the year closer to 3.5 than 2.5%. >> is that the contrarian theory now? at the beginning of the year, we thought it wasn't going to that was contrarian. is it now contrarian -- >> no, it is contrarian, becky, you're right. now everyone has left it for dead. i think that's one of my rise up and become an issue yet. >> did you switch, too? >> no, i haven't -- i was wrong. i thought rates would go up during this year, we would find out the economy is doing better than people thought. and we had the whole weather distorted first quarter, for example. but underlying all that, i think the economy is still doing pretty well, joe. we're talking about 250k payroll

number this friday on a job creation. that's just regular every month now we're getting 200k plus. the unemployment rate is probable going to drop into the 5s before the end of the year. i think we've got more discussion surrounding what the fed may do. if we get a bad wage number or a bad cpi number sometime between now and year-end, the entire mind-set of wall street is going to shift very, very quickly. >> yeah. it's the wage pressure. i think jim is right. the wage pressure is building in the pipeline, whether it's services, health care, construction, every client i speak to talks about skilled labor charge. they have to pay up, it's cutting into margins. if that becomes a big issue here sooner rather than later, that's going to create a lot of volatility. >> all right, gentlemen, you know, you both appear on this show frequently. do either one of you have anything to tell us, beforehand, that we might be seeing on the internet at some point where you

could tell us right now rather than have us, one of our producers see anything? >> i've got nothing, joe. >> paulson? i assume you do. anything on the cloud that's going to -- >> i hope i never keep anything in the cloud. that's all i'm saying. >> you have naked pictures, just not stored in the clouds? >> there's rumors, i don't know. nothing you want to say, joe, let's put it that way. >> who would you want to see as a woman? >> are you kidding me? you're actually asking me this? do you have a preference? >> you, joe, you. >> me? >> yeah. >> all right. thanks, you guys. both of you can come back? good. >> as long as there's nothing -- you know, because don't you think that's the problem? transparency is key. >> transparency. >> we weren't uncomfortable now. >> you're uncomfortable now? >> now i am.

>> i think we just put the pictures out there. >> anthony weiner. >> that's not the weine arshot, but -- >> use your imagination. let's talk about the developments this morning in the hacking attack that exposed those nude photos of jennifer apple is denying an icloud lawrence and other stars. breach. the company says some celebrity accounts were compromised by what i tell calls a targeted attack on user names, passwords and security questions. of course, you have to wonder if that means they were using things like jwall1. if you have simple passwords, maybe that's how they could figure these things out. there are some new features that are expected to include improve privacy, but all those privacy things rest on using the icloud. apple, by the way, isn't the only major company dealing with

security issues. home depot is working with law enforcement to deal with what it's called unusual activity related to customer data. it's not calling it a breach, but this is coming despite a report saying that multiple banks say they saw the evidence that the retailer may be the result of stolen credit cards. shares of home depot dropped when that news filtered out yesterday. >> i hate to keep repeating myself, but the distinction between what happened at apple and what happens at home depot -- >> very big difference. >> one is each individual account is being hacked. that has nothing to do with a beach, if you will, of the actual core of whatever apple's security is. and the other is clearly -- we don't -- i shouldn't say clearly. we don't know what it is. but a potential breach of the system with which home depot keeps all of its data. >> yeah.. by the way, this could be a bigger problem than what we saw

with the target situation tb which was millions of people? >> the only reason i repeat that is because out there in the public, all of these issues have been inflated as one. >> one is more concerning particularly from consumer perspective. >> by definition, if you store things in the cloud and if you are able to access the stuff that you stored in the cloud, someone finds out, if someone gets your info, then they're going to be able to -- if you are aware, you better know if you put something in the cloud, then you can get it back and someone else can get it back. >> yeah. i would think high security would prevent you from putting things there to begin with. if you are super concerned about security or more importantly if you're a company that has very important information -- >> an atm machine. if someone gets your card and has watched you with binoculars putting your pin in, don't keep your money -- don't make it accessible through an atm. >> for better or worse, the

services that are available in the cloud are not available not on the cloud. what i mean by that is, for example, we have an expense system here. there's a lot of services, if you will, that can do on that dae because it's in the cloud. they can analyze the data, they can bring it back, if that data was sitting on an nbc hard drive somewhere, they couldn't do all this. you're looking at me with a smile. what does that mean? >> i'm -- you're speaking to me in a language i don't understand. >> expenses would be something that can be considered expenses as it's a corporate data point. anyway, this is not a hacking breach. netflix reportedly the company securing streaming rights for goth yom. the tv show about the city before batman and the origins of

some fan favorite universe criminals is being called one of the season's most anticipated new dramas. netflix has made a series of high profile acquisitions buying rights for "the blacklist." amc's breaking bad prequel "better call saul." breaking bad gives a lot of credit to net tlix because people missed the early seasons and then that was one of the ways they got caught up. >> i'm not sure that hbo would sell the rights. >> that's not the reason they brought it up. >> and i hear you're staying in the city tonight. >> i'm staying in the city.

whatever happens -- >> so you'll be there bright and early tomorrow. >> joe is my plus one. >> i'm the plus one. and the only thing you said, if we do go together, don't wear those stretchy skinny jeans that i bought that i told you i bought. those sevens. he told me not to wear those. fine. and i told you, i'm a liker in those jeeps. i mean, are you going to buy me dinner, right? >> that might be pushing it. >> we are ready to be grossly promotional. >> you would have to request take your picture which i couldn't guarantee, so i don't know.

>> if you were willing to -- well -- >> show a little leg? >> i'm sure they would be happy to take your picture. >> he was with that woman last night. >> p on o lai r? >> his wife, yeah. >> i took her to a yankees game. >> you do, the night before you're seeing me. is she okay with this whole thing? >> she is. >> she shouldn't be, okay? because i'm a -- well, anyway. >> it's official, cbs is stopping tobacco sales today a month earlier than first expected. the drugstore chain is tweaking its corporate name. it will now be known as cvs health because they don't sell cigarettes any more. the sign on the stores won't change. the company's ceo will join "squawk on the street" later this morning. no word on whether the -- big gulps and candy or -- >> they do candy.

>> how about sugar free gum that has all those chemicals? >> i thought if you're offering health services on the other side of it. >> you're not a smoker, you don't like people who smoke. >> no, i don't, i don't think they're cave men who haven't figure this out yet that you stink and that you're hurting yourself and if you have children -- >> you're hurting them. >> there's a million reasons not to. >> successful? >> about a week and a half. >> more and then you -- >> two or three hours. the first two and another two. >> i didn't help bring up any -- remember blame, when when she was like this? she was in high school today and scotty is starting middle school. there's transitional events. that cause a lot of angst for

me. middle school and high school are both big deals. and i don't -- i worry about just the whole interpret, the way people -- you know, just the whole thing. >> we wish everyone -- it's for broadway. >> good luck. >> it's going to be a great year. >> life is good. coming up, the final countdown, the nfl kickoff, one high profile receiver taking a seat for a few games and it has nothing to do with concussions. plus, battle of the gadgets. samsung is about to roll out new products trying to beat apple to the bunch. can it do anything to top the iphone 6? we ever ta story ahead here on "squawk box" when we return.

wide receiver wes welker has been suspended for the first four games of the nfl season for violating the league's performance enhancing substance policy. nbc sports is reporting that welker took mdma that had been cut with am fete means at this year's kentucky derby. the reports that cited league sources -- >> that's just for fun?

>> it's like -- i think ecstasy. >> mdma is like ecstasy, i thought. >> it doesn't look like their performance is enhanced, usually. >> now, but they're cracking down in the league on anything. >> is it an illegal -- >> it's an illegal -- >> no, i'm not saying you should be able to do it. i'm just saying a football player, why is he taking, you know, ecstasy? >> especially when they're handing out hundred dollar bills there. >> i don't know. i don't know enough about it. i wasn't at the vmas. i was at the dollar store. he appealed the suspension and that was denied. indianapolis colts owner jim irsay has been suspended for six games. he pleaded guilty to operating a vehicle while intoxicated

yesterday. irsay admitted to a judge that he was under the influence of oxycodone and hydroco down when he was arrested on march 16th. irsay cannot attend any games or practices and is not allowed to be present at the colts facility. a pain or something, but that -- >> look, this is the league tracking down on things. they were given a hard time because they didn't suspend rais ray rice for more and give him a higher fine for the troubles he was in. this is the league cracking back and saying this is a zero tolerance policy. >> ray rice is the rutgers guy, isn't he? >> yeah. >> and michael sam is expected to sign with the dallas cowboys. he was cut by the st. louis rams on saturday. and initially was signed but dallas is going to give him a

shot. when we return today, don't blame us. apple says the icloud didn't get hacked. the company shifts the blame on the nude celebrity scandals on targeted attacks on passwords. and flet flix getting into goth yom. as we head to break, let's take a look at yesterday's winners and losers. for you, success is a starting gate, not a finish line. for you, the ats isn't just a trophy. it's a sleek, chiseled instrument of your ambition. and for you, the winner's circle is just another pit stop, because you'll always be... ...coding it... ...torching it... ...chopping it... making it. the new 2015 cadillac ats.

good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with andrew ross sorkin and becky quick. check out this video. a 792-pound alligator breaking a state record, hunting record in mississippi. creature measured 13 feet and 5 inches. it took three people to -- that guy. they got the gator after even it bit a hole in the front of their -- >> oh, my god. >> boat. >> that could keep you in belts and shoes for years, andrew. is that what they -- is that what happens? is that why these poor guys are being hunted? is it worth it for you to feel good about how you look? >> i own none of this. >> is that what they do with it?

>> i guess. i don't know. >> you see on the reality shows they go after these guys. i mean, it's like -- >> they're the guys who tell jokes about the -- when you watch these guys, they're like -- you know. >> it's nice that they're involved. >> they make a lot of money on this. yeah. but i think you have to -- you know, i know about the circle of life, but you kind of feel bad sometimes that they target these guys, these gators. >> you know, that's if you go to the university of florida. corporate headlines this morning, toll brothers posting better than expected quarterly results. the nation's largest luxury home builder says more homes at higher than the average selling price at $732,000. kpr buying a minority stake in

savant. kkr's $90 million investment is small, but it will give them a roughly 35% stake in the company. we're seeing now a number of -- doing that deal with ge and building a new app. so there's a lot of these new apps. who is going to control that, we do not know. apple in the new ios is going to have a kit for that. maybe we can talk about that in a little bit. >> okay. in the meantime, it's take a look at the markets this morning. if we've been watching the futures, you'll see they are indicated higher. stock markets around the globe responded to this idea that ukraine and russia have struck a cease-fire. now, russia is now pedalling back and saying, wait a second, we were never a party in this. obviously, we can't be negotiating on that front. still, you see the results reflected. dow futures look like they're up about 56 points right now. s&p futures up by 7 points. if you watch what's been happening in europe, it's a similar tale there. the biggest gains are coming

from both italy and germany. italy is up by 1.6%. the dax in germany up by 1.2%. similar gains for the cac and france and ftse in london. in asia overnight, you did see the hang seng closing at its highest levels in over three years. a gain of 1% for the shanghai markets. oil prices continued to decline yesterday. bouncing back a little bit this morning. but again, check out the levels for wti. it's up 86 cents, but still only sitting at 93.74. ice is up almost $1 to 101.31. the treshy is yielding 2.4555%. that is a bit of an increase for the yield. earlier this morning, we talked to jim paulson who said he wouldn't be surprised to see it end at 3%. it seems like more of a contrarian view now. take a three dollar. it's down across the board. this comes after the dollar made some significant gains against the euro yesterday. euro, 1.3154.

dollar/yen is at 105.05. gold prices are up, $1,268.830 an ounce. we are expecting a big announcement at samsung's event which starts at 9:00 a.m. eastern time. and next week, it is apple's turn. investors bidding up apple ahead of its event. the stock is up 8% in the last month. joining us now, cnbc's john ford and senior et tore scott stein. gentlemen, let me ask you first what the fallout is from apple from these nude photos that have been out there. we do hear the company saying, john, that this is not some broad problem with icloud. do you think there are any reflections or any ripples beyond this or is this a you know off event? >> we can't let apple completely off the hook here by any stretch. yes, there were users names and passwords that were scraped off of apple's site. but apple security system isn't

architected very well. by that, i mean people are able to, when they have these stolen credentials, to get a lot of information. a lot of photos. and the user is not necessarily alerted that somebody is trying to access their information. i think over the next year, certainly, you're going to see apple have some updated security procedures to close some of these loopholes. they're going to have to focus in on this. the most valuable information you have is stored on these devices and if somebody is trying to see we should get an alert of some sort. >> scott, what do you think? >> i agree. i think it's about an adjourn statement that the cloud is about the devices you access it to. you're at this point now where it was two device authentication becoming more of a thing everywhere. not a lot of cloud services really tying it in fully. i think you're at this point where, you know, if you can find your iphone somewhere, you should be able to find when people are accessing your cloud data in that same way.

that could help a lot. and having more discreet control over which of your photoser or content are stored in which way. >> what are we going to hear from apple next week? what will we hear from samsung? >> well, i think in some ways it's kind of like the tortoise and the hare of tech. you have samsung releasing so many products and apple, this has been a year since major twices. we're seeing news on yet another smart watch and this one acting as a phone. then there's expectations about their next version of the note which is their phone cab let. for them, a lot of it is about hardware variation. it's about coming up with, you know, what types of new designs and links they have. but, you know, for apple, it's more about the hardware and the software. so we see questions about the security but you also have questions about where icloud and touch id and payments are going. a lot of talk about that with apple. as much about that as the actual

phone. >> traditionally ahead of an announcement, there's all the speculation, there's all this excitement, and then it happens. and everybody not only -- there's some sense of disappointment. that somehow they haven't delivered on this great promise of magic. are we going to see magic this time? is this time different? >> i think it's hard to achieve magic. these companies are about providing something functional. last year, maybe, if did she you know, the only thing that touched that was the ease of you. iwatch, is that going to show up? how magic can that be? >> the watch is now not coming

until 2015. >> maybe if advantage here is giving you a peek at it in some way. >> i would expect that it is possible we've got to look at a wearable device where we don't anybody necessarily get to hold it. apple tends to do these product introductions. you see it and you get it a few months later. samsung had some announcements today. just before the holiday season, they said they shipped 10 million of those. it's what apple does on a typical launch weekend. for them to ship that many in a couple months, apple does that in a few days. but it's an important category for samsung, certainly in asia where big phones are important and apple is trying to grow market share. we'll expect to see samsung come up with a virtual reality headset. that's the era that facebook moves into with its purchase of oculus and around smartwatch. we're seeing a lot of these round smashwatches come out.

we expect to see motorola come out with a 360 later this week, which is round. that's kind of the shape and design that's gaining a lot of attention these days. >> scott, quickly, you characterize this as the tortoise and the hare and you're looking at apple as the slow and impatient strategist. >> it's the variation on form. a lot of this stuff is android wear. so it's google software and everybody is coming up with new wrinkles. it's almost like flet flix. you're seeing internetly a lot of the same stuff but you're throwing all these different forms out there. it can get confusing. google is promising rapid updates to android wear. you can see that transform a lot. apple is looking for opportunities where it will work for the most people and certainly wearables, we're still not at that point. so, you know, maybe they're going to pick that point of entry that, you know, your mom or somebody else would find it

useful. but when it comes to smart watches, a lot of it is experimental. and, really, it's almost like a beta test right now. >> scott, thank you for coming in today. john, good to see you. coming up, staying ahead in this world, find out which one is leading the way with its -- which comes close to global competitiveness -- when it comes close to global competitiveness. at the top of the hour, the match vick investor ready to sound off on everything from the market to mrilts. no holds barred. that starts at 7:00 a.m. eastern time. squawk is back in just a moment.

welcome back, everybody. you can see right now, dow futures up by about 66 points above fair value. the nasdaq up by about 13 the. in our headlines this morning, the nation's automakers will report monthly sales today. as we wait for those numbers, here are some interesting statistics. the average price of a car is rising. vehicle discounts are up more than 5% from a year ago. more than a quarter of consumers are choosing to lease rather than buy. lenders are offering longer loans with six and seven-year loans becoming more popular. and there's been a nearly 13% increase in lending to so-called deep subprime buyers. the world economic forum just releasing its flagship global competitiveness report in switzerland. hitting the sweet spot, for the sixth year in a row, positive news for the u.s. two countries are ranked based

on 12 pillars, including business sophistication, macroeconomic environment and labor efficiency. joining us for the full report, jennifer blankly. >> this is -- >> sucking up to switerland because you're in davos for the fifth straight year? >> well, i was to say it does seem that it's convenient. but actually, switzerland has a lot of attributes that make it highly competitive. the labor and other markets work very, very well. the markets function extraordinarily well compared to some other places. >> the hotel infrastructure, jennifer? do you know anyone at the belvadere? i stayed at a former sanatarium when i was there. i'm not kidding. how about walking the halls at night when they turn off the lights. >> and i hear everybody enjoyed it there. >> i asked the guy, honest to god, when is that open?

all of them started laughing at once. >> that's why magic mountain was written. >> where people went there to recuperate. >> i hope that you did see -- >> so when you say great infrastructure, you could be talking about some different type of infrastructure that we talk about here in this country, like running water and room service. >> not that, but it's railroads, it's things of that nature that low you to get where you need to go. >> they're so neutral there. >> my question is is there any lesson in what switzerland does that's applicable outside of the switzerland? that's applicable to our country on or what's going on in asia? >> i think so. i've been living in switzerland for about 15 years. there's certainly no bias. i think that one thing that works that we're not seeing here in the u.s. right now is the ability of political leaders to come together to really think longer term. and also to really explain to

the public in an understandable way what needs to be done. so there's a lot of long-term planning. >> what's the election process like that? >> oh, it's very, very direct democracy. you are electing people who then represent you both at the state level, at the national level, and also you have a lot of -- >> for the period, how long are you in office for? >> it's a pro tating presidency, for example. so you elect at the national level seven sort of top people and each year a different one rotates. >> jennifer, one of the key take aways in this report is that even though you're looking at some countries which showed improvement, overall, the globe has been held back since the recession because of these government forces and because they haven't been able to get out of the way. >> well, things do seem to be getting better. but what you're seeing now is that you have had a period for -- we're talking mostly about advanced economies here where things have been gridlocked. in emerging markets, we have been seeing very high growth in event years. yes, they have not been at the

place they need. now we're facing some headwinds at this point. it's going to be harder for them to make reforms to the market, cutting red tape, and so certainly i'd say coming out of the woodwork, it's getting better and better and make sure that they really are sustainable. it's going to point to tackle some of these issues. >> we have them on the board here. switzerland, number one. singapore, number two. that one i understand. u.s. three. where were we a year ago? >> four. >> four. >> so we've gone up by one. finland was number three, then? >> it was something -- no. germany -- yes, finland was number three, u.s. was number five. u.s. has gone up by -- >> why such a bias towards the smaller countries? >> think about the top ten, you have about half and half. you have germany, you have japan. it's true in smaller countries it's times easier to manage some of these processes in a quicker way. so you know if you need

something that needs to get done, you can do that. but the larger economies are benefiting. we take into account economies of scale and those are very important. >> global competitiveness report, if i was an entrepreneur starting a business tomorrow, which country would i start at? >> i think you would look at all the countries that are sort of up near the top of the rankings. what we're seeing is there's a lot of less red tape. trying to start a business, you want it to be less difficult. >> we complain bitterly that we have all this red tape. >> it's not as bad as in many other countries. >> on the one hand, we think and you think opportunity is gone in this country and the american dream is dead. and i always argue that, wow, we're so encumbered by this government that no one can do anything. and it's all a matter of degree. there's a lot of good things. but i really do think to run health care, it's much easier in a smaller country than some of these intractable problems. >> even the u.s. being very

large, you have to remember it is the world's innovation powerhouse. these are things that will always be important. >> jennifer, thank you for being here. >> the world's powerhouse, economically, you know? at this point. we'll see. coming up, why negotiators lie more often to women than mep. the details of a new study might surprise you. plus, i'm going to tread lightly on that. home depot appears to be the latest retailer to be cyber attacked just in time to scare consumers ahead of the holiday season. one cyber security expert will tell us why this could be an even bigger than the target breach. that's coming up in the next half hour. don't just visit new york.

visit tripadvisor new york. with millions of reviews, tripadvisor makes any destination better. hi! can i help you? i'm looking for a phone plan. it has to be a great one, and i don't compromise. ok, how about 10 gigs of data to share, unlimited talk and text, and you can choose from 2 to 10 lines.

wow, sounds like a great deal. so i'm getting exactly what i want, then? appears so. now, um, i'm not too sure what to do with my arms right now 'cause this is when i usually start throwing things. oh, that's terrifying at&t's best-ever pricing. 2-10 lines, 10 gigs of truly shareable data, unlimited talk and text, starting at $130 a month. but i've managed. ♪ i got to be pretty good at managing my symptoms, except that managing my symptoms was all i was doing. ♪ when i finally told my doctor, he said my crohn's was not under control. ♪ he said humira is for adults like me who've tried other medications but still experience the symptoms of moderate to severe crohn's disease. and that in clinical studies, the majority of patients on humira saw significant symptom relief. and many achieved remission. [ female announcer ] humira can lower your ability to fight infections, including tuberculosis.

serious, sometimes fatal infections and cancers, including lymphoma, have happened; as have blood, liver, and nervous system problems, serious allergic reactions, and new or worsening heart failure. before treatment, get tested for tb. tell your doctor if you've been to areas where certain fungal infections are common, and if you've had tb, hepatitis b, are prone to infections, or have flu-like symptoms or sores. don't start humira if you have an infection. if you're still just managing your symptoms, ask your gastroenterologist about humira. with humira, remission is possible.

welcome back, everybody. we are in the chairs. water caught my attention the morning is from the daily pennsylvanian. there is a wharton study that shows that negotiators far more often lie to women than to men. this was a study set up by two berkeley researchers. they're trying to set it up as if there were real negotiations, are you investigating the person's deeds, the agent the seller, they found 70% more of the time they would lie when dealing with a woman tan a man.

>> does it matter if the negotiator is a man? >> no, even women lie to women. if they were lying to men, it was based on fact. for women, they would make up blah tant lies out of nowhere. the interesting thing was, it's also women lying to women. >> i'd like to see the protocol. >> i don't have the details on that. >> she's still mad about when she tried to buy a car. >> i am. it's funny you mentioned that. that's exactly what i started thinking about. and this would be about four years ago within i tried to buy the car. yeah, they wouldn't deal with me. i was pregnant at the time. >> why don't you let a man handle things. >> the thing that surprises me, though, is women lie to women, too, it wasn't just pen lying to women. they also found that both men and women were less interested if working with women who were trying to negotiate higher

salaries. >> this whole segment. you let the men handle this. sit there and look pretty. someone will write n. i was joking, i was role playing the type of person that we don't like. >> for so long enough, yes, right. >> that was a bad person i was just being, so don't write in that i am bad. >> you want me to talk about this story? >> you want to -- >> you want to go? >> i just want caroline, i mean, dominant last night. we're on the caroline band wagon, just, rory is winning everything, it would be nice if the other part of that equation rebounded and did very well. >> she has been doing well. >> 6-0, 6-1 last night, caroline wozniacki. >> did you see serena pulled out in the doubles, though, she injured her foot, which raises some questions about the

singles. >> like a blister. she can focus on. that they did lose. >> double faulted. >> federer, i like him, you know when i play, i don't get into position where i can hit it i can't two a two-handed backhand. people say why can't you? because federer does it. >> you are saying you two a two-handed backhand? >> no, i'm talking about, just, i wish you'd listen. if federer is the master of the one-handed backhand. i pointt to him. >> 60 majors. he has been there. >> he looks good. good djokovic and andy murray. it will be probably tonight after the party after the party, we can go back to my hotel room and watch tennis. >> you better not show me up. >> we'll see how it goes.

>> real quick. the story i was focused on was kathryn lehman leaving the "post." she was the publisher. >> besosle spotted her. >> he replaced her with frank ryan. >> i know him with ties with the reagan library and are we allowed to talk about it. big washington insiders. >> one of the insiders of politico. politico has done a tremendous job frankly undermining tear business. it's interesting this would go to him. >> digital is important. >> politico would be far left. i read it now, this is politico? really? to operate in washington. when in rome. >> up next, we have to wonder, is there a market correction coming? billion fair real estate

investor sam zell sees a pullback. we'll talk more about that in just a moment. tdd# 1-800-345-2550 [announcer:] your love for trading never stops. tdd# 1-800-345-2550 so open an account with schwab. tdd# 1-800-345-2550 and when a market move affects, tdd# 1-800-345-2550 say, cloud computing stock you're holding, tdd# 1-800-345-2550 we can help you decide what to do. tdd# 1-800-345-2550 with tools that help you see market activity tdd# 1-800-345-2550 is affecting your positions. tdd# 1-800-345-2550 so when the time comes to decide whether tdd# 1-800-345-2550 to scale in or scale out... tdd# 1-800-345-2550 you can make your move, wherever you are. tdd# 1-800-345-2550 and start working on your next big idea. tdd# 1-800-345-2550

open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound) isn't the cloud supposed to make business easier? get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm.

. deal or no deal. conflicting reports out of ukraine and russia about a permanent cease-fire sending the markets on a wild early morning ride. details straight ahead. >> don't blame us. apple is shifting the blame for the naked celebrity photos to hackers and away from the icloud. is this the calls of user error and poor pass words? >> home depot investigating a passive security breach. experts say it could be bigger tan that one at target. is any retailer safe from cybercriminals? the second hour of "squawk box"

begins right now. ♪ >> good morning, welcome to "squawk box." our guest host this morning is sam zell, chairman of equity group vermonts sam has been talking about valuation and froth for a while now. i think when we continue to talk to him. he will think the equity markets have been boosted by some artificial means and there is a day of reckoning coming at some point. we will find out what his thoughts are on that in a couple moments, first, though, we will talk about these cyber attacks in keeping your information and money and naked pictures safe. if you have any. we assume you do. criminals went right to the source. that would be the atm after several attempts of breaking into the cash machine, these guys broke out the bobcat to take the whole atm.

they were caught on camera at a kansas convenience store. the thieves got away with the atm's computer but no cash. wow. >> that would take some peanut m & m's while i'm in there is there sure, tasty cakes right there. >> no, no, no, carbs. let's tell you about water going on, the markets are getting word of a cease-fire, despite conflicts statements whether it happened. ukraine says they've agreed with vladmir putin on steps towards a cease-fire regime the kremlin on the other hand denying any deal was breached. russian stocks are holding those gains and check out this 12-hour chart of the euro. the currency, which has been battered if recent weeks, also got some support from the fees sire reports.

we will see whether those gains hang on. back here at home, another busy day for economic numbers. u.s. auto makers will be coming out with their august sales results throughout the morning him although sales are only expected to be up slightly from a year ago, analysts you say we could see the best august performance since 2003. we'll also be getting july factory orders at 10:00 a.m. eastern time. the assessment of the u.s. economy. that's coming up at 2:00 p.m.. our guest host this morning is real estate titan sam zell. he's at the helm of a $4 billion empire. sam watches markets closely. he says a correction is coming. i wonder, do you think this day of reckoning is close atham hand, sam? >> well, i the i that the stockmarket is in an all time high. but economicing a stift not at an all time high. so from my per speblthtive i

think people effectively have no were to put their money. the stockmarket is getting more than it's share it's likely something has to give here. it's almost every company that's missed is missed on the revenue side which is the reflect that there is a demand issue. that tonts cob prevalent. when you got a demand issue, it's hard to see it at a an all time high. >> there have been companies that warned about revenue. many seem like there is a tail of two economies today. high end goes well, low end does not. >> except history says there are more low end than high end people. so if that trend continues, it's pretty obvious water going to happen. >> you are not the only person that says the stockmarket is being inflated for other

reasons, if you look at what's happening in europe with the bond park. this is a same place to put your money. what changes? is the point of inflation that pushes people somewhere else? >> what's the speculation of faith the stock doesn't go down. the answer is if there is a change in confident or some international dynamic, people could take position with reference with the market. at the moment i think there is a general consensus that's the only place to play. >> you think this could happen quickly, a hot spot in ukraine or somewhere else, and it happens relatively quickly? >> i'm not predicting it. aim saying as somebody who counts with his fingers, i keep counting withpy fingers, i don't have enough. i have too many fingers than

opportunities. >> sam, half the issue, i agree, part of the issue is the timing and trying to get it right, you know, when and so when you think about this exonlynous event, is there an exogenous event? >> it's turn it around. do you remember another time where there were more issues going around the world all at the same time? any one of think could overnight turn into a majorster? you want to talk about isis, gaza, the ukraine? i don't recall any time in my career where there have been as many wild cards floating out there that had the potential to be very significant and alter people's thinking. >> you have a record for calling the top on bubbles in the past.

you have been on the right side of those trades, what have you done as a result? do you think the stockmarket is overvalued, where are you placing your bets? >> well, number one, we are very cautious with with reference to acquireing or adding to our stock positions. we're trimming them where we think it makes some sense. the problem you have is you can't quote/unquote say, okay, today is going to be terrific as andy said. when? okay. if you are wrong on when, that's a problem. so the answer is you got to tip toe through the tulips so to speak and find the right balance. >> do you keep things in suspense or are there things to give it plays? >> well, we're investing and we're always investing and we're always chasing different kind of

opportunities as opposed to historically, i remember having cash isn't a terrible thing. despite the tact that interest rates are as low as they are. . >> that suggests if you have the cash, you can pile into it. >> another way to put it is that the premium that the situation creates is significant enough to justify sterilizing some money to have it available at the opportunity. >> the idea was the fed would provide some support while the economy healed and pass the pa on the off to the economy t. fed the market, assets are inflated by the fed. the wealth effect feels a little better. housing is good. and there are signs if you believe some of the number, we are in a better place than three

years ago. >> that's like comparing help rossi to cancer. >> what if we are growing -- the comparing lepracy to cancer. >> all the statistics are subject to question. >> part-time jobs. >> we have lowest participation rates if history. we are talking about that as terrific and lower, i can lower the rate to 2. all you got to do is eliminate half the people looking for a job. >> i think if you have plus 70% on people that think we're headed in the wrong direction the only time people say that is if they're worried about tear job or worried about this or worried about that. 'there are other things that i think undercut the idea that we're getting close to full employment. i don't think people feel. people don't feel flush in this economy right now. you can see it with the way the consumer is behaveing, too.

>> to go back to what becky was saying a second ago. we also are createing a have and have not economy. part of the impact of these is we are creating the disparity. the wealthy are benefiting from government policy and the fawn wealthy aren't. >> the fed is encouraging it. a safety ned net is you never will get rip. can you do better tan you can working if you put it altogether. >> but i think that's why you have the lowest participation rate. >> the problem is, even if you

took a minimum wage job, there is mobility there. if you are you stuck on disability and food stamps, will is no way there is any advance. on where you are going, your life is one with dignitary. >> it's certainly not the way. >> it seems to make people feel vir can you with us to do that. they might be undercutting tear efforts to give people good life. >> i mean, everybody wants to do good that's a part of the problem with our society is we all want to do better. and although aim not a big fan of congress, congress generally wants to do better. the problem with our system is

which don't consider the risks of doing better and the impact on the overall economy. >> okay. all right. great. i just saw someone tweeted in here quick for you and for me the moment. it's president the daily mail, if moment you send a photo, it's uploaded not to an actual cloud but to a bank of gigantic numbing and worrying computers. so apparently the mail, daily mail is clearing, it's not a cloud oh, not an actual serous cloud. >> dprins a copy is uploaded not to an actual cloud. it's actually a bank. >> you didn't realize? >> it's the daily mail.

i love that, they're just kidding. it's not an actual tongue in keeke, no? are there people that think? they don't. >> it's not the onion you were reading. >> clouds hold rain, it looks like they're floating. >> they can hold a lot of things up there, data, moisture. >> they don't holda that. we know. >> all right. sam is going to be with us throughout this show. we have a lot more to talk about with him. >> oh, okay. >> in global news this morning, president obama is in europe. he's promising that the u.s. will in his words degrade and destroy isis militants. that's different tan containing them now. a little reset or a rethink. his comments coming one day after the radical militant group the executioner appears to be the militant that beheaded james foaly two weeks ago, following

the gruesome execution he is shown holding another man by the collar. it's just the expression on the individual's face it's just hard to it's very difficult. another story we are watching today the ebola epidemic if africa, an american missionary doctor working there has tested positive for the deadly virus. he was treating deadly women in a liberian hospital and not ebola patients. it is still unknown how he contracted the virus remember we know you have no idea what you have people treat you before anyone knows. he is said to be in an isolation unit and is if good spirits. >> talking to cyber security. the one is not in the cloud. coming up next, a possible home invasion, home depot is investigating what it calls unusual activity. cyber experts are calling it a massive hacking attack t. latest details from a top security pro when "squawk box" returns right after this.

when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. cozy or cool? exactly the way you want it ... until boom, it's bedtime! your mattress is a battleground of thwarted desire. enter the sleep number bed. right now, all beds are on sale. he's the softy. his sleep number setting is 35. you're the rock, at 60. and snoring? sleep number's even got an adjustment for that. you can only find sleep number at a sleep number store. head in for the final days of the biggest sale of the year. all beds on sale, with mattresses starting at $599.99. ends sunday. know better sleep with sleep number.

welcome back to "squawk box." home depot is investigating a massive laquer attack. they are reporting millions of shoppers may have had their credit and debt cards information exposed. the breach appears to have started in may. home depot hasn't confirmed anything yet. released this statement, saying,

quote, we are looking into unusual activity. we are working with our banking partners and law enforcement to investigate. they say this could prove even bigger than the one at target. the ceo of trusted, we talked to you earlier this week. >> you can say that again. >> you say this is bigger tan what happened at target? >> it's definitely possible. what happened with target is they realized pretty quickly the breach happened during that specific period of time. this dates back to may. they're just doing the investigation now. >> that means they had multiple months of harvesting credit card data and started using them fraudulently. hackers could have had access to those credit cards. >> let me go to the same question the last time we saw each other, disclosure transparency, when is the company supposed to announce this? in there we don't foe when home depot discovered it. they may have come to this information as soon as that brian krebs article released.

you have to be more transparent. they give folks an understanding of how bad this really is and what they should be doing to protect their credit card information. right now there is no laws that say you have to disclose when a week or two weeks, they definitely need to be more transparent, otherwise they will be getting hammered from the security industry. >> david, let me make this more complicated. in this report the krebs report, this hacking attack can only be interpreted as intented retry bugs for u.s. and european sanctions against russia for it's aggressive actions against ukraine, it speculates these were russian hack eers what do u make of that? >> sween it stem from the target brooch as well. what the russian organized crime units are going after are monetary type gains where they can actually hack in, steal money, they've increased their sophistication in attacks, so it could be stemming from russia. it's definitely possible. we are seeing a huge uptick from

the russian region after the ukraine conflict. >> here's the piece i don't understand. we find, we hear about unusual activity and a hacking attack. we sometimes hear unusual activity is trying to use the information, but oftentimes we don't hear about them trying to use the information, are they hoarding that information for some time later to use that information to get more? what, how does this work? >> yeah, you know, especially when it comes to the credit card areas, what they call carter's, they definitely collect it for a long period of time in order to, you know, maximize the impact the damage that they have. whether it's using names and passwords they steal from online banking, it's to maximize the online profits from the specific attacks. >> they're not trying to necessarily take the credit card and tomorrow go on, i don't know and i don't joke, go to amazon, buy up all sorts of things, they're systematically using the information with an intent of using it later on a massive

scale? >> that's what we're seeing with home depot. they didn't foe until the bnk reported them. the banks can go back and say, okay, these 5,000 people were imimaged. what tim similarities did they shop at? they pointed back to home depot. they harvested them for months without protection and sold them to the under ground market to make a profit. they're waiting a while to sell later on. >> what does the mean for consumers? are there things i should be doing? should i not worry because the banks and retailers will end up covering it for me? >> right now is a steady time we have the magnetic strips on the back of the credit card. we haven't moved to euro pay master card or part is card chips. once we move to that, it's a lot more secure or harder to hack. with reway behind the times. >> in the meantime, though, should consumers make sure their savings accountss aren't linked to their credit and debt cards?

>> monitor your credit. the bank isn't always going to detect fraudulent transaction, monitor your credit. >> can you explain the distinction between what we are seeing in this type of attack and the others with what happened at apple? >> absolutely. you know, apple is more of an what we call a black cat hacker trying to gain access to the celebrity hacks and things like that. these are more on the monetary side. there is a number of different factions, you have haktivism on the political side, state sponsored which is more so on hacking and government secrets and intellectual product. there are different factions going after our technology. we are getting hit from multiple side right now in the united states. >> wow, thank you, david, very much. for waking us up to terrible news this morning. appreciate it. >> and on that note, when we return the chinese have been pouring money into american real estate. one chinese firm has picked a new jersey town with great access to new york city to start the build. why the change in strategy?

that's coming up in the next half hour of "squawk box." .

. coming up, no one in congress wants to see person companies move abroad to save on taxes, but there is little political will for the tax reform to necessarily fix the problem. up next, for rob portman has a plan to stop tax inversions, talk to him. see what the republican plan is. then it's time to seb up some breakfast the ceo of dieing equity, julia stewart unveils new waffles at ihop. staying hungry, "squawk" will return in just a moment. you probably know xerox .ng

female narrator: sleep train challenged its manufacturers sleep train challenged its manufacturers to offer even lower prices. but the mattress price wars ends sunday. now it's posturepedic versus beautyrest with big savings of up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years' interest-free financing, plus free same-day delivery, setup, and removal of your old set. when brands compete, you save.

mattress price wars ends sunday at sleep train. ♪ your ticket to a better night's sleep ♪ . welcome back to "squawk

box," everyone. shares of toll brothers trading high this morning. the nation's luxury home builder sold more homes, reportedly earnings and revenue beat the street. that stock is up by a half a percent. the number of americans applying for mortgages, interest rates fell during the period and one indiana community is cheering this morning. it broke the world record for the longist high five chain. check out this video, more than 1,600 people of all plaj i places took place in terra ho. in coin the previous record was set with about 1,400 participants. >> we will talk with senator portman saying about inversions and i get "fortune" magazine, but i don't open the envelope normally. i don't know whether i should. sorry. they had a cover called positive. >> he doesn't read me either. don't worry. >> it's true, "fortune," business magazine, cover,

positively unamerican, unpatriotic for a company to do what's totally legal and what some are being, i want, i made the point yesterday, if a business moves from illinois to texas, is that positively unillinois? >> how about a new yorker moving to miami? >> right. is that positively anti-? is that anti-new york? is that the person's fault or the entity's fault that is making it less. >> how about if somebody moved from new york to lonld and deprived the state of all the revenue? is that unamerican? >> i guess it's always in question. >> french cordoza i think it was who said when he made the distinction i distinction between avoiding and evading taxes. we have a system. the system has definitive provisions in it that state this is both legal and accepted.

if the government doesn't like the result, change the law. >> how about changing it to disallowing it to happen, but keep rates high and keep the way that we double tax. >> i think the collateral damage to those kind of just do it doesn't peak any sense. i mean, you have to have a rational tax policy. >> it's $20 billion over ten years, there are trillions of dollars that are left abroad that can'thome come home, because it's taxed there and taxed here. if i were the president or any politician i can quickly see trillion. i know what trillions mean, i know what 20 billion means over ten years. so me, i would put all my efforts on the former, on the trillion. but they don't. >> well, i just think that this

inversion thing has been captured. >> as an electioneering. >> electioneering item. the reality is you could take 25 other provisions of the code and you would find inversions, different definitions of inversions, you'd find inversions all over the place. what's an inversion? an inversion is a response to an existing law. >> let me ask you a question. so on a personal basis, if you were to decide you wanted to renounce your citizenship from the united states, i don't know if you know the tax laws about this. >> i do. >> but your entire wealth, all of it, would be taxed as a one-time gain, on the year in which you leave the country. right. so we have done something. >> for the, i don't think that's correct. i think what's correct is that on the day you decide to revoke your citizenship. >> yes. >> all of your unrealized gains are recognized. so if you yoen own stock in a

company that you founded and your stock was 25 cents but it was worth $20. >> yep. >> you would immediately pay the difference in a capital gains tax. >> you are on your way out. >> there is no such ting as a wealth tax. >> yet. >> maybe there are some people that say there should be a wealth tax. >> there are other people scared to death. >> buffet wants attacks on income because he never pays himself income, suggest a wealth ta tax to him. see huh ho likes that. >> that might not go over as good. >> we have laws in this country write immense him i don't know few agree with them. we decide for example a kane couldn't decide to effectively invert itself. you saw stanley works and people that went to the cayman islands. that doesn't feel fair. would you, did you think? >> fair is a good word. >> i don't even know the definition of the word "fair. request itself. >> take fair out of it.

>> you can't make an argument without that word. >> i think the answer is that there are laws and in effect, you have first and foremost the responsibility to abide by those laws. >> do you think the laws should be changeled? >> i'm not necessarily, i don't know the answer. i mean, do i think the top tax rates should be changed? you bet. do i think that the united states being one of the few countries in the world that taxes world wide income? as opposed to everybody else doesn't? that's why we have this problem. okay. if we had the same tax system as most of the developed world, this would not be a problem. >> we'd by a tracting capital. >> right. >> just because the capital i know there are men that pressing the button, watching the capital outflow that should be enough to tell you that it's a downtil hill capital that's flowing

downhill to where it's treated better. we should be a place where capitalments to him co. it's stupid. >> the electioneering we are seeing right now is minimum wage, which affects only 2% of the people. it's an inversion deal it's all based on. >> jack wellks said give it to them. so it's not an electioneering issue anymore. >> so the idea that we're focusing on it is -- >> yes. the radio, we saw what was happening last week. that was radio address. which shows you why we got 75% saying we are headed in the wrong direction. my next guest on air rob portman is here. i understand why americans are mad at burger king with tim horton's. he says anger is better directed at washington and its refusal to fix america's broken and non-competitive tax statistic. rob portman serves on the

finance committee. i'm worried about the french fries and that smokey taste of the burgers, rob, for burger king. for me, it's okay. i don't go there, anyway. you will fix it. you want to fix it through some type of small reform rather than just the palliative solution of just disallowing companies to do it. >> hey, look, we got to fix the tax code. if we don't, we will never get at this problem. let's take burger king as an example. if we simply make it less competitive by taking away the tax benefits for these companies. they will be targets for foreign takeovers. they will sell off some of their assets to foreign companies. so you know the solution here is really simple. the president has talked about it. congress know was we have to do. if washington wasn't so broken, we would have fixed it already. let's get busy, let's lower the rate. sam zell talked about it. let's go to a competitive international system. with reone of the few companies that taxes on a world wide

rather than a territorial bachlts it makes no sense. we are hurting the workers if america. that's what all the economic analysis shows. it's the rank and file workers getting hurt here. so the solution is obvious. let's get busy and do it. >> private sector jones, this is like we just said, rob the cloud is actually not a cloud, it's actually computers. we made that clear. private sector jobs aren't created by corporations that operate in the private sector. >> i don't think that is obvious. at least half of this country at this point. and it would actually be better if those companies were more nimble and more able to compete globally right now. wouldn't that be better domestically for more people getting hired? these things are. >> okay. absolutely. >> we are talking at each other. >> you need a tourniquet now. because there won't be corporate taxes left. it takes three years you want to do and they'll all be gone by

that. that's what the tourniquet people want. >> it doesn't take three years. i have a proposal. others have a proposal. we know what we have to do. let's get busy doing it. every time we come up with a tax reform, we say it will take too long, let's wait. let's not wait. let's do it. >> you don't need to. >> republicans won't pass the tourniquet. so instead of wasting time, actually trying to do something, we will waste time just, you know, pretending that the democrats are going to pretend they can pass the tourniquet, which they can't, right? >> right. >> look. its not just about the tax rate. it's true canada has a 15% tax rate. really 39 when you add the states, clearly a company like burger king sees a differential and an have aening to be in canada. it's about this international system and sam's point that you paid about companies being able to deploy their assets where they want to, move money around, if countries can do that outside

of the united states, those companies are going to have a competitive advantage. >> the problem, i go back to it. what happens if you don't pass the legislation that you are proposing and we do lose 25, 50 large american companies? would you have preferred -- >> andrew, we will lose more of that. >> as opposed to the tourniquet. we may lose more than. that we may. >> and how is the tourniquet going to help? you tell me. we tried this once. the tourniquet didn't work. >> what durnlgs for ten years nobody did it, right? >> no, there is already a tourniquet if place. that is the amount that you are allowed to deduct based on how many, what percentage. >> for many years, we did not see those type of transactions, we made it more complicated. >> we are seeing them right now. >> i think a part of the problem it used to be this was not a verytive tax rate from a lot of different places, what has

happened is the world around us could change. >> when ronald reagan set that tax rate at 35%, it was below the average. be i the way, that was a long time ago. pete rose was playing for the estate reds, that's how long ago it was. every one of our competitors, all of them have reformed tear tax code since then except us. every country has not only lowered their rate. they have gone to a more competitive international system. we're sitting on the side lines thinking, we're america. we will be fine. we won't be fine unless we get busy making our tax system competiti competitive. we spend more than anybody else. >> it certainly goes, pete rose will be in the hall of fame. >> exports in our trade system. >> poet rose will be in the hall of fame before this president actually seriously tries the new tax reform. he will. >> well, look, if the president would work with us. >> someone's got to lead. >> i'm not talking about reforming the entire code. >> right. >> i'm talking about dealing

with this one why, i'm sure all of you would. post-businesses are pass throughs. we got to deal with this issue. otherwise we will have a hauling out of america. andrew to your question, if we make companies less competitive, there will be foreign takeovers. you look at what happened, there have been more foreign takeovers than inversions, that will accelerate if companies fix that. >> it doesn't fix. >> it doesn't fix building facilities over there that have a tax over there. it doesn't bring back the tourniquet. it doesn't fix any of this stuff. >> we got to repatriate that money. we need it over here. >> it might go to dividends and shareholders. nobody needs that, rob. >> and a few jobs. >> nobody needs. if i told you -- >> it's totally about the workers. what would you do? what would you co? >> it only goes to jobs if the jobs are there, if the demands are for the jobs. maybe that would conjure up the

demand that we all need to get the economy growing and the gdp. >> we will continue this conversation in just a moment. when we come back, throw the skyline view of new york brought to you be i the chinese. find out why some of the best views by the east and west coast are being built by a chinese company for chinese buyers. "squawk box" will be right back.

. >> we're back on "squawk box." the chinese have been buying u.s. housing for some time now. they're billing them a. company partnered with leonard to build a million dar condos with a view. dinah olick joins us with more on that story. >> reporter: that's right. they will build 200 kond pinnium units. i'm not showing you the parking lot. what you are spending a million bucks for per unit is that manhattan skyline view, chinese developer lancy bought this from u.s. home builder lennar, their neighbor. lennar is actually going to help them design and build the units and model them after the units they have built here. i soak with the chief executive through his managing director

don ho interpreting in there the chinese market is very competitive and the u.s. housing market is growing in recovery or expanding rapidly, so for us as a company to invest a certain amount in the united states, that makes a lot of sense for us. >> reporter: land sea is putting about 1 billion dollars into the u.s. housing market beginning with three developments. this in new jersey will be condominiums with priceless views. it also plans to build town homes in san francisco and single family homes near slaevenlgs landsea which has developments in asia and europe is centering on markets where job growth and information technology is strong. >> our customer is here domestically in the united states, because of our background and who we are and our brand from china, we will

get chinese customers will want to buy our homes. >> they are focusing on markets with well known universitys. chinese parents have been inupdating new developments in southern california, buying homes there, so their children can attend school. builders like len far have cashed in on that market. no surprise landsea is working with lennar on the project, which lennar will help design and build. now, landsea says they will be using do mostic labor and domestic materials and these three parents are starting if are the start. they're also looking at washington, d.c. and the chinese have put nearly $3 billion of u.s. commercial real estate last year. they're on track to do even more this year. at this point it seems that the skyline is the limit. guys. >> thank you for that report. >> let's bring you the chairman of the equity groups residential. sam, your thoughts on this

story. you know these landsea guys the. >> i don't know these guys, but i have been involved now with other chinese developers i am not sure you produce the story. these are big companies, well funded. the u.s., we think it's a good market. obviously, we're in it. >> right. >> so we shouldn't be surprised they have come. now, remember, there were the japanese before them, then there was the canadian invasion the british invasion. but we historically had enormous flows and would have even greater flows if congress fixed it. >> but they've often come from. >> what is frua. >> congress passed in the crisis days, they passed the laws that charged foreigners more on their profits on real estate tan u.s. people on the teary that this

was going to chase them out or, you know, put a burden on them. it's stupid. it doesn't make any sense. >> when these sort of invasions happen, is it a sign of strength of that other nation? is it a sign of attractiveness of ours? sit a combination of the two? >> i think it's a combination of all those things. i think, number one, i'm sure that in previous weeks you've carried stories about the fact that there seems to be what of a surplus of real estate in china. >> yeah. >> the only question is, how big is the surplus? so by definition, you would expect successful chinese developtaries are well funded to be looking at other places in which to use tear talents and to use tear capital. >> but are they calling it, i mean, traditionally, when some of the foreigners have arrived, it arguably has been a topic. >> not true. japanese came in the early ''80s

and didn't stop until 'european. the canadians, same thing. ferdz the answer is -- in other words, the answer is if the volume of these increases, then they will be competing with each other. they have one enormous advantage and the lady who did that story and i think understated the relevance of housingability in the united states and how attractive that is to chinese nationals, who have very few investment opportunities. >> those markets, so san francisco, new york and l.a., you are in all three? >> that is correct. >> would you buy more right now? >> the answer is tell me what the deal is and the answer is yes. i mean, they're wonderful markets. we're doing very well. we are 97% occupied. >> you already, the stockmarkets overheated, are those markets overheated right now? >> no i don't think so.

i don't think we will see a wild upward movement in rent. but the supply alrea-demand is equilibrium. ultimately, ultimately, it's the over-supply that kills the markets. >> okay. we will hear a lot more from sam throughout the show. thank you. up next, though, streaming gotham, netflix streaming a deal for the drama. finds out what it means after the break. waffles lovers, ihop is rolling out new tumts on the menu. we will do a taste test at "squawk box." stick around. we'll be right back after the brake.

. comeing up, high flying tech picks from not one but two "squawk" portfolio members, names like facebook and adobe bring great returns. it's two stops off the beating tech path. later, all aboard florida, there is a doctor 3 billion train project in the sunshine state. it's grabbing attention of politicians and business leaders. we have that story when we return. before we head to break, two quick stocks to watch, j.p. morgan upgraded, the firm also downgrade, bank of america to neutral from buy. we are back in a moment.

. >> the fax at 14-year highs. pet stocks keep rallying, two of our "squawk" platinum portfolio managers are here with names that can help you make money now. from miami to the home of harry potter in just three hours. is a new high speed rail coming to florida? the details from one hid hon cho. >> the president of dine equities straight ahead. we get you ready for trade on wall street. the final hour of "squawk box" begins right now. ♪ welcome back. we don't do welcome back at 7:00. we do it at 8:00.

>> i do. >> people already know that, though, i think. but, that's, you know, you are right. welcome back to "squawk box" here on cnbc. first in business world wide. >> say it proud, loud. >> first if business world i'd. i'm joe kerr fan along with becky quick and andrew ross sore kin. joining us this morning sam zell, chairman of equities group. it's good we are first in business world wide our tax rate does not allow our country to be first in business world i'd. >> it's first in real estate world wide. >> take a look at this. this was rapper 50 cent throwing out the first pitch at the mets game earlier this year. some people said maybe that may or may not. a rising star put him to shame at dodger's stadium, she's only 13 years old. the details on a picture perfect first pitch pitcher, we'll have

that later this hour. okay. let's tell you what's happening at this hour, check out shares of toll brothers the nation's largest luxury home builder sold more homes, beating the street as of today. you can no longer buy tobacco at cvs. there is upsetting joe t. nation's sec largest store chain stopped sales a month earlier than expected. not because joe smokes, the company's ceo will join "squawk on the street" in the next hour. also, apple denying an icloud, some celebrity accounts were comprised. we talk about what it calls a very targeted attack on user fames, passwords and security questions, the fbi and apple investigating the hacking attack that exposed nude photos of oscar winner jennifer lawrence, model kate upton and fe pail stars saying those were spec and it wasn't that the actual system, itself, was breached.

>> if anybody asks the question of why these people take the nude photos? nude pictures? >> i don't have those crazy things, you have to be so nas cystic to go around taking feud pictures of yourself and storeing them in your phone anyway. >> you might with your husband or something, or not your husband. >> oh, come on, what do you feed a pick for? >> basically, everybody looks pretty similar naked. i see it all the time. i shower every morning, i don't need to preserve that moment as a memory. >> what i think has happened, i don't have pictures either. i think it's a generational thing. when you used to have the send it to the photo place. i don't think they would take them. they were worried people would see them. now everyone has a digital camera and os stenably there is no photo mat guy or gal to see it. >> there is a whole thing going on. >> i ask why? i don't have a problem with it.

but why? >> the male member and the female, they're pretty common. each of us has one, don't we? right. >> 50-50. or 50.2, 49 plus. they're everywhere, aren't they? >> anyway, we are also along with that story and those pictures, we are also watching shares of netflix this morning the company announcing it has acquired streaming rights to warner brothers, gotham. they have been on a spending spree, buying up black list and better call sol. david bank at rbc capital markets, a pedia analyst what do you expect from this. >> i think the implications are a lot bicker for the media side in that what you have a situation now where, you know, investors don't want to invest in hit risk. that's the one thing, we're being counters, we're not doing

hit risk. how can you be more swefl skwfl by selling the show before it hit the air. netflix made a global commitment to buy the show. is there a better business than media when you can do that? it's incredible. >> is that a change with what we have seen with netflix or media guys saying, hey, we will embrace in and take it for all its worth? . >> i i think it's a combination. i think it is a few window for content. right. that kind of usually, you know, you would typically wait four or five seasons for something to go into syndication. >> sure. >> increasingly, fet flicks has been willing to buy it. they've had fewer seasons, now they're buying it before it guess on the air. we saw wit extant, amazon the dome. >> are companies like netflix, i imagine amazon and others will do this as well. getting a better deal by doing

it now before it becomes a bonified hit, would they be paying a lot more? how does it change the economics for the content creators? >> well, it does two things, first off, they are probably on some level getting a better deal. right. because they are taking the hit risk. my sense from the digital side, amazon, netflix, i think there is such a competitive spirit out there to acquire the premium content that it almost feels like, you know, the buyers are kind of -- there is an intense competition amongst these three players him we feel when we hear about a show sold into one platform, there was intense competition from each platform. so i think on the one hand, you should get a better deal because you are ledgeing to other guy's risk on the hit. on the other hand, you got three really vienl bable buyers who

desperately want this content. >> what do you make of the other premium provider, show time, netflix, i don't know why you think amazon is, will you see hbo or show time buy content like this. >> i don't think you will see hbo or show time or stars buy content at least domestically for an rotc service. it's not on brand. it not what hbo has to differentiate st. a clear franchise frau value of hbo content. i think the big question is, do we see the next guy come in for an over the top service, sony come in with a hybrid gaming/tv video on demand platform, do we see something like that, one of the wireless guys trying to come up with a content product? and that, you know, that's where i think you'll see it next. >> all right. thank you very much for joining, david. we'll talk to you again soon.

>> you bet. >> meantime, it is back to work here on "squawk box." that means all this month, we are opening up the "squawk" platinum portfolio. today we have two all star managers, kevin landis, xael of cio management and ceo of the value fund and paul meeks, investing at saturno capital. let's start with paul. he joined us april 9th with three of his top stock pick, adobe, facebook and microchip technology. adobe and facebook are up 17% respectively. she dropping microchip. he says he is bullish and owns it in his fund. he sees more opportunity with xilinks. first let's check out kevin's portfolio. he joined us april 8th. with his top picks. he is sticking with land. that stock is up 31% him but he's dropping gtat technologies and adobe from his "squawk"

model portfolio. in their place, he is adding ruckus wireless saying it is stealing market share from cisco and vincents that makes the chips and wearables. why drop adobe at this point? >> the valuation argument for adobe was a good one. when you get appreciation on the value stock that argument gets a little weaker. still a good company, despite a little slow down in digital add results lately. but i think that these new picks probably have a little more upside to them. >> let me just ask you, very quickly, palm, what do you think about that, adobe, due like it at this point? >> i'm thinking with adobe, my read from reseller contacts is create a cloud, their new suite is selling very well. bookings are very strong. they will announce earnings on the 16th of this month i think they will upside surprise again. >> you are making money and you are done?

>> it's a good stock, you asked for my three favorites. it's not in the top three. >> let's talk about the two you are adding. why? >> invent sense is a great little chip play. if you think of the motion sensing that goes on in wearable devices as well as tablets and cell phones, smartphones, that's a terrific opportunity and so the $2 billion market cap. it's a multi-billion unit opportunity. it's the right place right time. >> you are adding ruckus wireless, what does that do? >> ruckus networking is cisco got a bad case of guy gantism. which is normal. people are managing careers, not managing for success for the company. so if you can identify companies that are young and aggressive and have their act together, they can take share from cisco, ruckus is exhibit a on that. >> let's talk a little about

lamb, though, why are you sticking with that one? it's up 31%, too. >> this is another case where the exceptor is a mess. applied materials were number one and two in spy conductor equipment. they're going through a allergier which is such a kind word, it's a messy process and again people start focusing on internal politics in keeping tear job and who has power and not focusing on customers and so a company like lamb stands there and takes mark share while this is all happening. >> paul, let's talk about how you are changening your portfolio. you are dropping microchip from the portfolio. you still like, though? >> i think microchip is a great company. if i'm wright and have you an explosion with the steam, the internet of things, they should be well positioned for that. >> however you like something else better? >> i like xylinks. it has more upside potential.

xilinks is the logic devices, a nice niche in semi conductors, high cash flow. the interesting catalyst is these chips are going into base stations installed by coin mobile. >> let me ask you the biggest trends in technology, what you are chasing at this point pcs have been gone an note bads are gone, too, what happened now? >> in spite of jennifer lawrence, i think the cloud is the biggest of four or five mega-themes. >> joe just discovered today. >> the daily pail. we have been following ppgas. i think 20 years. that used to be we used that theo programmable gator aid. we used that again and again, few want cherry, you are out there. if you want the, you are on the field, it's field programmable gator ade. you can get whatever kind. >> joe the nice ling i thing about that space the piaa

istomily dominated by two players. >> xilinks and owe glow for years, xilinks -- >> are they finally back to their highs from the late '90s? >> i don't think so but they have had owe glow nasdaq isn't either. right. >> but when you think about these chips going into bay stations deployed by first china movie and thoin china uniand telecame. that come /* telecome. this is a lot offer withable units. >> i know people wear fitness bands and the part is watch will fall on us next week from apple. but you don't need to wait. it's already happening, tler companies shipping good product out there. >> i see you wearing a up band. i wear one, too. once the watch is fixed out. >> right. >> i assume aum all this gets embedded and i wonder what

happened to the bits and everybody doing this prior specific thing. >> this is the story of tech ever an always, the markets crash together. i'm fully subscribed. we have two risks. there is my apple and my jawbone. these people can put a watch in here. these guys can put a sensor in here. i think the battle will go to the disc here. >> thank you for come income today. coming up, there are good ent (furs, then there are the elee. we will find out what separates them and whether or not these skill sets can be taught. later, sweet sticky goodness. ihops new waffles are in the house and ready for a taste test. we will talk about the dinner of breakfast. check tout "squawk box" market indicator. we are back if just a moment. .

welcome back to "squawk." our next guest means the effort of trading tomorrow's entrepreneurs build business plans in launching tear ideas while learning their degrees.

so can ententrepreneurs be taug? joining us is sam zell, from entrepreneurial studies at the university of michigan. our guest host sam zell is here. this is the ex-essential question can whatever sam has, can it be bottled up, whatever that magic is and taught to somebody or are you just born with it? >> well, i think you need to stop thinking of entrepreneurs as being super human. think of athletes. we are all born with a certain hand-eye card nation. can you take that, learn how to use it. you can train, work hard. we are not all going to become tom brady be sam zell or mark zuckerberg but we can become incredibly good athletes, play in the pros, semi pros. look at eentrepreneurship as a l and learning and practice at it. >> three out of four fail the first time around.

the average entrepreneur makes $60,000 a year or something. this is what we'd like everybody to be. that's why you teach it to inner city kids, just starting a business is all it means and succeeding, right? >> get in the game. the more you do it. the more you learn. you fail, you learn. you try something, you learn, you win, you learn. it's about getting out -- >> park zuckerberg, it's unfortunate, i could never been an entrepreneur. you could. >> at a big part of being in an entrepreneurship, it's learning by doing, not sitting in a classroom and learning theory. >> how do you sooech teach risk taking, i would argue part of your success has been an element of willing to take risks and there are other people who are just risk averse. >> well, here's the way we try to get people the think about it is. every action you take when you are trying to develop your business is simply around rick reduction. everything you do, whether it's

sharing your idea, developing a prototype, applying for patent is an act of derisking. if you continualry take risk out with every step you move forward along the way, you advance the deal. >> sam, do you consider yourself a rick taker, do you look at things in a likely manner and do you know the likelihood and the odds before you do it? >> first of all, if i knew the odd before i did it, i'd be rich. the answer is, of course, i view myself as a risk taker. because i'm the guy where the buck stops. there are a lot of entrepreneurs along the way before it ever gets topy desk who are applying those kind of principles. i think the answer is it's probably more of an art than a science and so much of it has to do with your upbringing and how much confidence you were given. i mean, perhaps the most

significant issue in entrepreneurship is confidence, self-confidence. every prent entrepreneur i've met even those that aren't terrific have an innate self-confidence. i can do this. now, for people. >> oddly not an overconfidence. some of them have this almost healthy insecurity at the same time they have this confidence, which is what drives them. >> i think it's not a healthy insecurity. insecurity is a part of the deal. insecurity is part of what keeps you moving. okay. it keeps you going. you are afraid of not, you know, fulfilling of whatever your objective is. so it's all wrapped towing. i mean, but when you think about what are the characteristics of an entrepreneur, i mean, whether it be failure is not a part of their lexicon, high energy levels, perspective that says i

can do this, i mean, people ask me and my expartner who unfortunately died 20 years ago, how did you guys do this? the answer was nobody told us what we couldn't do. so if nobody tells you what you can't do, then you keep trying to do it. that's what an entrepreneur is all about. in other words, he can't teach that what-can do is awaken it. because embedded in him, in you and her, and everybody are entrepreneurial characteristics, but the question is, you do you awaken them? how do you get that motivation going? and that's really -- >> so how do you do that? that's almost a psychological class as as the business class. >> well it is. >> what is entrepreneurialism if not psychology? >> think about a student sitting in a classroom and maybe have tag self doubt. i don't know if i can do this.

you bring in somebody sitting in that same seat with the same skills who has gone and done it. you give them a chance while they're in school to start a business. you give them a chance. we have three student investment funds where students can be venture capitalists, can invest in real deals and learn that side of the equation. they have been there, they have seen the deals. >> stewart, thank you. awesome. awesome conversation. this is the stuff that inspires people about business. >> but you see, you got to take back, this conversation and then play immigration into it. because immigration and entrepreneurship are critically important and we got to do something about it. >> sam is going to be staying around. we can continue that conversation. the political side of it. >> someone started the first ihop at some point. but pancakes and profits, the ceo who runs ihop and applebuys will join us, stock is up almost 60% in the last two years. she is set to talk about her

secret breakfast weapon. it's a game changer. they're called wafflishous. i can tell you, we will have a free breakfast. "squawk box" will be right back. i wish... please, please, please, please, please. [ male announcer ] the wish we wish above all...is health. so we quit selling cigarettes in our cvs pharmacies. expanded minuteclinic, for walk-in medical care. and created programs that encourage people to take their medications regularly. introducing cvs health. a new purpose. a new promise... to help all those wishes come true. cvs health. because health is everything. it's in this spirit that ingu u.s. is becoming a new kind of company.

one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement.

wafpishousicious. check this out. mo'ne' davis was at the stadium showing them how it's done. the pitcher from philadelphia, she made history as the first girl to pitch a winning game in the little league world series. you go, girl. >> and one of the perks of working in silicon valley has long been lavish free food. there are big buffets, okay, in-house fast food joints and stocks fridges, now the irs is raising a red flag. get this "wall street journal" is the tax man are arguing the free byes are a taxable fringe benefit i'd love to hear what sam has to say about this. the irs is trying to increase back taxes. this can amount to 30% of the meal's fair park value. >> this is a perk when you get to go out stay out four or five hours, entertaining people, missing your family and you should pay taxes on that? >> that's what they say.

>> what they're really talking about is the free lunch. in that sense. but, the argument historically has been we provide lunch for our people every day. why? because they stay in-house. >> they work. >> and they're much more productive and they all create an opportunity to interface. >> crazy. >> when we come back, spend your morning at the wonderful beaches of miami, hop on the train and turn the night into a high speed adventure a. high speed rail project is planning to do that. does it make sense? does anybody do it? we will talk about this after the break. as we head to the break, take a look at the equity futures, indicating up higher, s&p up by just over 6. [bell rings] time and sales data.

split-second stats. ♪ its so close to the options floor, you'll bust your brain-box. all on thinkorswim, from td ameritrade. we're changing the way we do business, with startup ny. we've created tax free zones throughout the state. and startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure.

thanks to startup ny, businesses can operate tax free for 10 years. no property tax. no business tax. and no sales tax. which means more growth for your business, and more jobs. it's not just business as usual. see how new york can help your business grow, at startup.ny.gov

welcome back to skwaungs. let's look at stocks on the move in the pre-markets trading. first half star posted a much smaller than expected loss for the quarter. they were helped bea rebound. also boring retailer lungberg lick which stators got its stock

upgraded to outperform. the worst of the company's supply chain and issues are behind it. vo vodafone may be a takeover by japan soft markets. chrysler reported its seas, a 20% increase over a year ago, that's above estimates of a 15% increase. ford and gm are expected to report in about an hour. joe. >> go ahead. >> i'm not going to do it. okay. all aboard. can you imagine a trip from miami to orlando in the comfort of a train? florida east coast industries is trying to make this pipe dream a reality with all aboard florida. it is a quest to make ground transportation along the floridian corridor faster and more comfortable for business and tourists alike.

explain this, cramer of florida east coast industries and vice chairman, performer of stifel nicolaus in the america if you recall, gentleman, thanks. >> good morning. >> i remember when, this was years ago and we were talking about infrastructure in this country. the president wanted, i don't know more stimulus money to build rail transportation between a lot of difference. it came under a lot of criticism at that point. these are almost like bridges to nowhere. there are cities they talk about where people don't travel. where it's almost easier to drive. people don't like maybe when the government runs amtrak. we know how well they do that. this is private. this is a private fishtive to go between miami and orlando which might make a lot more appeal to people. >> it's a huge benefit that we have. this is a 100-year-old infrastructure. >> it's already will. >> flagler railroad he built to transform florida. these guys, have not very flattered to be around it but

are investing $2.5 billion of private money to peak it work and transform a place and make it a better place in the process. >>s is there enough intrastate travel? do people in miami want to go to universal studios? do they want to go up the corridor? is people -- >> it's the malfa that makes it work. the travel is tremendous. >> is that local, that tourist surface what is it? >> yes. it's a combination, yes and yes. so every single year there are a half a billion intercities trips between miami, fort lauderdale, west palm beach if orlando. that's comprised of tourists about 40% of the trips are made by tourists, both international and domestic. the balance are split between local floridians, moving around the state of florida and business people, if roughly 30%

each. it's actually quite diverse and the numbers are staggering. it's shorter in terms of time if are you on the train. >> the proposition for us is. >> you can blackberry. >> it's simple. can you have a very productive trip and you can, we can shave at least an hour off your trip between south florida or orlando and we can cutture trip half the time if about half if you are traveling within south florida by itself because you are limited to the -- >> the other thing about the train is long hauls make money. a seller makes money. >> we had the transportationing is on and he said, oh, yeah, amtrak makes money. he didn't though what he was talking about at that point t. eastern corridor makes.. the northeast corridor does make.. that's even with the government running it. so you know the key to this, to their deal is that they're not the government and, therefore, they don't have to stop where the government wants them to stop. you can, you don't have to run

it to jacksonville. okay. >> our economic scheme. >> no political issue. >> if you are running an economic scheme to make money and, therefore, are able limit what you have to do. therefore, you have a higher probability. >> this morning you had the countries, right the competitive countries and you think about an infrastructure was a big part of that thing, so i'm a big believer the stimulus that should have and, a thousand dollars a person to go spend. >> do you see families getting on the train? the reason i ask is i think we went for a wedding, we when to the a wedding and we took a train. i thought maybe we should have driven. i got two little guys, all their junk, our jung. i'm thinking it might be easier to be in a car doctor was there a baby crying on the train? is that -- are we back with this again? so you don't want kids on the train? how are they going to get there,

they can't fly, they can't get on the train, how do you expect people. >> the price stag keeper tan four seats on a train. >> the economics work better for the for smaller gruchls when you think of the people moving from miami to orlando, particularly the tourists, will is a level of affluence that allows them to get on the train and trade their time and productivity for dollars. >> water the highway down will? is it -- >> i-95. >> i've often wondered whether it's under permanent construction, which it seems to be, it's a nightmare and there is, i've tried the figure out the demos of florida to find out why there are so many accidents. there are a lot of elderly people going 40 and a lot of guys open shirts in cars going 90 smoking butts it's a scary road. >> it's like driving if rome. >> it is, it's the worst -- there is constantly sick alerts,

thee horrible accidents. >> on the interstate, i-95 construction started in the late, early 1950s, finished in the early 1960s, population in florida was 5 million people. the population is now almost 20 million. you have infrastructure that can't be expanded and four times the population, ignoring the 90 million visitors. >> you had this track for a long time. florida east coast 100 years. you have been in many businesses, mostly land. >> we are infrastructure, we have a transportation business if florida but are focused on port infrastructure. >> is this your deal? >> i'm the new kid. it's a miracle they've gotten it to where it is. >> it was a controversial company a few years ago on how much the land was valueding right? >> no. >> a lot of coastal land valued at a certain. >> i think there was some towns who wanted to be included.

>> there was clearly disruption that will happen here. having said that the track has been there for 100 years, we want to be the neighbor and run a road show to talk to a number of those communities how best to do that. >> orlando is a magnet. miami is a magnet, too. it makes sense. >> and orlando is largely a domestic magnet. miami is an international magnet. those two markets act independent of each other. this is an opportunity to create a super region in florida. >> you will check it as it's never been, florida as a place, business friendly, tax friendly, operating at a surplus, 300,000 move there. >> all of this will get harder. in 100 years, train is the right way to move people and things. it's a really cool thing to make it a better place. >> thank you both for coming in. >> thank you for having us. up next the ceo o dine equity, owner of ihop and appleby's

rolling out a brand-new item menu on the set. the waffleiscious waffles. >> ah, bacon! you do a lot of things great.

but parallel parking isn't one of them. you're either too far from the curb. or too close to other cars... it's just a matter of time until you rip some guy's bumper off. so, here are your choices: take the bus. or get liberty mutual insurance. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. see car insurance in a whole new light. call liberty mutual insurance.

the international house of pancakes is getting waffle-iscious with sweet and savory menu options, check out the blueberry and keyscake waffles. they hit the menu for a limited time starting next week.

we get a preview. dine equity stock is up about 20% over the last year and 130% since july ja stewart took the helm if 2002. julia stewart is the c of dine equity. tanks for being here this morning. >> welcome, glad to be here. >> this is something that seems counter. these look delicious. these are low fat. that's counter with what you see with the rest of the encounter. what's the secret? >> two things are going on. one if you try them, will you love them. the bacon cheddar or blueberry cheesecake, more importantly, we still have wonderful low cal items under 550 calories. when you are indulging or splurgeing, this is the what i to go joe, your take on the

blueberry. >> i don't worry about carbs, like you said, if you want to splurge, i don't want to splurge with no fat, no, you know, there is a time and place for everything. everything in moderation. >> that's true. >> julia, what do you find in terms of the strength of the american consumer. we hear there are two tales of the economy. the high end is hitting if the low end is not. i never heard of that as high end. i know you are packing them in. >> what we do at ihop is we have a broad base of consumers, if you think about it. you'll find in a parking lot on a sunday, beat-up volkswagon and a mercedez. we appeal to everyone. families, couples, singles, because we appeal to so many people. we have such price value. we have something for everybody on the menu him we had incredible results because of that. >> i will come over and feed you.

>> where do you think other chains are going wrong? look at what's happened, with red lobster, you guy versus avoided some of those problems at applebuys. it has to be an uphill slog. >> here's what i think, we are number one in casual dining. i think part of that is we continually differentiate ourselves. we work to info rate is every day. we test every day. i think that's staying in front of the consumer is probably the latest lesson for us and success story. >> what are the biggest changes you have to do with applebuys? >> i think it's attracting the millennial, it's finding ways, whether it's our food product, ambiance decor, making sewer we keep that baby boomer and all the others that come to ap spokesman by's, but we do enough to arack the millennial and get them coming back frequently. we are successful.

>> i keep reading how they don't want to go to the same restaurants their parents have dwon to they don't like the same sort of decor on the pence, you do you serve both those populations and how does the pence of an appleby's look the same as a year ago. >> they have all been remodelled by the end of the year. you will see a modern and contemporary and much more relevant casual dining restaurant cheney. i think over the next couple of years, you will see more activity in the bar for the millennial. you will see more effort focused on the menu at the bar, what we call shareables and edibles, you will see a lot more relevancy for the millennial, whether it's the food, whether it's the ambiance. you will see more things that make it comfortable for the millenni millennial, but a place that the worker will go to. >> is that tapas? >> small plates, people enjoy, food frankly that our

millennials want. we have done enough of our home work-to-know what they like about it and see us improve. >> what should we be watching in terms of anything else about the economy, when it comes to food input costs, have prices risen across the board? >> you will see inflation in the back half of the year, we are 99% franchised, so the inflation doesn't really impact the corporation, if you will. but we're always looking to help our franchisees. frankly, i think the best thing we have done is start the purchasing co op. we did that in 2009. it combined the ihop and appleby's. that's been a good send. >> what do you make with pittsburgh donald's? they seem to have a tough time of late here in the united states specifically. >> you know, i think what i said earlier. i mean this. i think in every category, whether it's fast food or fast casual or family dining or casual dining. uconnstantly got to be differentiateing yourself, standing out from the crowd.

i think that's the focus that all of us in the restaurant industry have to really apply to. i think when are you a chain in particular, you have certain advantages, certainly cost being one of them. we certainly get it at a different price tan an independent. one of the things you have to strive for is not only that consist circumstance that differenciation, what makes you stand aprart from every one of your competitors? that gets tougher and tougher to do. it makes us stronger, i think we have as to work on the differentiation. >> i would have breakfast three meals a day, i can remember, i don't do it anymore, julily, i can't. the tables weren't really big enough at ihop. i get two over easy eggs. i get pancakes plus sausages to make my own, plus i makepy own picks in a blanket. you know how you serve those, you can order the sausage, i get french fries that dip into the over easy egg. >> we call you a core consumer who loves to customize.

>> yes. >> i want, i started with the blueberry. now i'm on the bacon. off camera, i opted to feed you some of the blueberry. >> you did. >> it's very central. why did you become so uncomfortable with that? i don't understand that? >> you let another man pa sanilac your feet. >> yes. that's true. >> we work together. we're going out tonight. relax zblb anyway, july yellowstone national park thank you very much. thank you for sharing these news waffles with us this morning. >> it's great to be here. >> coming up, jim cramer on this morning's business buzz and what you feed to watch. the clock starts trading. much more from sam zell, including his take on jobs and the economy. "squawk box" returns with that. maybe joe will feed me on the break. .

welcome back to squawk box, down to the new york stock exchange where we are joined now. mr. cramer, how are you now? >> well, i don't know. guys, there's so much to this. listening, they anoupgsed there's a vaccine that's going to be able to cure this epidemic, prices coming down, no one's looking for this. just announced. >> really? >> yeah, just announced. pork belly prices double in the last year, bacon up dramatically. 5 billion pigs died. this is major in the price in x index. >> pork bellies don't trade anymore, do they? >> they do. . >> didn't make sense that they didn't, but used to be the most volatile thing you could buy. they are still high. a lot of other things came down, beef. >> pork is the highest it's been, and this announcement --

had them on recently, look, working on a vaccine. this is the epidemic that's really made it so pork is out of control. combine that with the beef sanctions putin put on, there's a surplus of beef and pork. this is where the complex killed the consumer. it's important to remember that if food prices come down r, thas why inflation is noisy. i know hardliners hate the term noisy, but, boy, prices have come down. >> stock market question. we had sam on the program arguing that the market is over valued. where are you now? >> the markets have unbelievable growth, high multiples, stretched multiples, some arguably, and if you get a recession in europe, there's a lot of internationally oriented stocks from the united states with numbers too high. you need the yield curve to be

better for the banks, but there's money sloshing around, and it's going to go to the bond equipments, and it's going to go to high growth in the united states. it shifts around. i don't think there's a bubble. i think that we duofrom bull market to bull market in various places. >> okay. see you in a couple minutes. >> coming up, on jobs, later on squawk on the street, larry merlo joins jim and the gang. "squawk box" returns in a minute. who work with regional experts who work with portfolio management experts that's when expertise happens. mfs.

because there is no expertise without collaboration.

it's in this spirit that ingu u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. you just have to win 70% of your points at net. and keep unforced errors under 10%. on the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. data can help show you how to win, no matter what business you're in.

today there's a new way to work. and it's made with ibm. let's get back to the guest host, sam, and the chicken-egg question we ask a lot, we'd like a consumer to have more spendable income, so some think maybe raising minimum wage is a way of doing that adding to the economy and velocity of money. others say get the economy going first and markets rise by themselves with better paying jobs and people have mobility between better paying jobs. can you do both? is there a chicken-egg argument for that? >> i don't really think so.

i think the tinkering with the minimum wage is a very dangerous game. i think the collateral implications in terms of jobs is very significant. you start talking about a 13 or $15 minimum wage, and you'll have robots operating mcdonalds, and i think that's a lot more to the mcdonalds entry level experience than just $8. it's a whole training, discipline, et cetera. i think we have to be very careful that we don't get lost in the minimum wage thing and lose sight of how relevant that work experience is, and if you double the cost, there's no question that everybody will figure out ways to use less people. >> frustrating when there's not wage growth in the employment reports, though. there's jobs added, but maybe they are not high paying jobs, you don't see wage growth, and

we all want inequality to lessen because it's not good for society. >> but in the end, everything comes down to what's the value? in other words, there's a reason why the compensation is lower than you'd like it to be because it's a function -- >> sam, anyone that you say, do you believe in wage price controls. they immediately say absolutely not. we saw what happened when try, but it is a wage control that somehow people agree need to be in there. >> i'm not sure i agree with you that people agree -- >> that's the one wage price control they seem -- z >> i take the position that i think minimum wages have always been a poor -- >> in a negative -- >> a poor substitute for economic policy. >> all right. sam, straight talker, great to see you. >> always. >> as always. thank you for sitting on set with us. >> fun morning, thank you. >> has been, thank you. >> you like blueberry better?

>> i'm not a waffle eater. they were okay. just not my thing. >> pancake guy? >> no, no. >> eggs? >> i'm a bagel and eggs and bacon guy. >> got it. join us tomorrow and "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and jim cramer at the stock exchange. words of a cease fire between ukraine and russia, although there's dispute what was said. meantime, auto sales and factory orders later on this morning. road map is with a cease fire, wait, known steps could faci facilitate a cease fire. trades overnight and pulled back