electric truck that's also a drone launcher. it's thursday april 22nd 2015 and squawk box begins right now. ♪ >> live from new york where business never sleeps this is squawk box. >> good morning, everybody and welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. welcome back joe. >> on earth day no less. >> they haven't launched the drones. the postal service yet have they? >> no. >> drone launchers on a postal truck? seriously? i'm staying indoors. you can put an eye out with one of those things. >> you can do worse than that. >> earth day as andrew mentioned. about 1 billion people are expected to participate in events that celebrate the

environment today. earth day started in 1970 making today it's 45th birthday and attention sky gazers out there, april's top meteor shower is here. expected to peak before dawn today and again tomorrow. this is debris from comet thatcher. this could be the best part. no special equipment is even needed to see them. just hope there aren't too many clouds out there. >> climate change. >> earth day is not a climate day. >> i celebrate it. >> you should celebrate the earth. >> but are you sure the meteors aren't related to the warming? you know the earthquakes from fracking i can sort of you know, i don't know enough about it but i could sort of see how that -- >> makes sense. >> it's a lot more sense than 100% of an increase causing all of these different things.

>> we're going to celebrate it. >> we needed the earth. >> are you an earth mother? you're down to earth. >> a little crunchy. >> you're not like a tevas. >> every once in awhile i wear those out. >> why is a shoe company trying to buy mylan. >> no that would be teva. >> so teva -- >> you were out yesterday. >> yeah. >> you saw the headlines. >> yeah. >> didn't quite add up. >> all right. let's check on the markets very quickly if you're just waking up we'll get you up to speed on this. right now things are under a little bit of pressure. right now the dow futures down by 60 points and nasdaq down by 15. >> we're looking for big stories this morning. a couple of things to watch. before the bell here's what we got coming. we'll be looking for quarterly results from companies including boeing coca-cola and mcdonald's. coming up this afternoon we'll hear from at&t and facebook

among many others and -- what are we now? halfway through earnings? >> i don't know if we're there yet? >> this may be the peak week though. >> right at the peak week. and housing the big story because at 9:00 eastern time we'll get february fhfa home prices and then later march existing home sales and in corporate news regulators looking at that comcast time warner cable deal. officials are set to meet with the department of justice antitrust reviewers as well and we're mentioning you at the top of the show. the wall street journal reporting that google will report a new wire lesser vis as soon as today. it's set up to let customers pay for only the data they use. they agreed to carry the traffic on their networks. at the start, google service will only work on the latest nexus 6 phones and the question

becomes if google does something like this will apple follow suit and will other networks play along. you're only work at the second tier networks. they're willing to reset time over their network. >> it's also daunting for us to understand. google doesn't have the infrastructure or any of that. they're going to lease it or something? >> in the u.k. this is very common. most of the networks are forced to some degree. >> it seems like providing the wireless is owning the spectrum. what is google -- how are they part of the -- >> they're just providing the service. it's a branded service over somebody else's lines but by the way this is what virgin mobile in the united states -- virgin mobile never owned the lines. those were usually sprint lines.

just like you would buy virgin mobile and it doesn't matter. nobody necessarily needs to know who owns the line. that's sort of the issue. >> it's almost a marketing employ at that point. >> yeah but ultimately can you provide a different type of service? better service? different pricing scheme. does that then push other networks to provide schemes like this? >> do you prefer dealing with those overseas you can pick europe. >> yeah right. >> they're a great monopoly. >> but they don't like that over there. looking for something else too. looking at bringing another one in. oh that takes some stones to go after those guys. they weren't going to do it because they were already doing stuff with sanctions because of

what they did and now they'll say that's not working anyway so now we're going to go after it. >> so they shutdown it down. >> interesting that they wait until spring. >> they waited until the other things -- i don't know have we had nothing -- we forget things don't we? >> we do. peak earnings week i'm not sure right this moment. >> you say right there. >> it took -- they annexed a large part of the country and now own it as they rebuild the soviet empire. that's hard to backtrack on it. >> yahoo! earnings and revenues fell short. they fell short of estimates. shares got a boost after marissa myer announced that yahoo! hired

advisors to explore how to cash in on its stake in yahoo! japan. did you see the controversy about senator rubio saying chipotle. it's not. because as you can see right there it's chipotle. right? >> i say chipotle. earnings beat the street. revenues were short. they were forced to remove pork from some of the restaurants after discovering a supplier did not meet animal welfare standards. it will take until the 4th quarter until it gets fully restored in terms of pork supplies as a result full year sales will be hurt. earnings topped estimates despite a drop in store sales but the owner says that the business over there is now at this point recovered.

>> happening now, the high free yen sy trader is in court in london today for an extradition hearing. wilfred frost is there and joins us with the latest. good morning. >> good morning, becky, thank you very much. we were expected to hear from the man accused of being involved in that flash crash about an hour ago. his hearing has been delayed but is due to take place at some point today. relates to charges filed by the u.s. department of justice in february this year which were made public after he was taken into custody today. it involves various kounlts of financial wrong doing and fraud from 2009 to 2014 including counts relating to that 2010 flash crash. he's alleged to have made some $40 million during these counts of financial fraud and the u.s. authorities have frozen some 37

million of his assets. the case today is just a bail hearing. presumably he will plead not guilty. if he does then follows a lengthy proceeding to see if he will get extradited from the u.k. to the u.s. this will take months. not weeks. that hearing is due to take place in the next couple of hours because it has been delayed. were he to plead guilty things could move faster. otherwise we're expecting things to be delayed over the next few months but at the moment we still await to hear from the man arrested here in the u.k. before we hear from him. guys back to you. >> very good. thank you. dow and s&p closing lower with earnings continuing to be the focus. our next guest, though remains bullish on the u.s. stock market. joining us is tom lee. the founder and head of research. tom there's constantly so much noise and investors had been -- had done well to have listened to you over the past two or

three years so after we have periods like this it's always good to see whether you're still feeling the same way and the point you make right now is all of these headwinds that we talk about and sometimes we see them effect the market there's no one that doesn't -- isn't very familiar with all of these at this point. >> that's right. i think when you think about what's in the news it's not stuff you necessarily want to take action on unless you think it's going to get worse. >> it is already well-known. >> exactly. >> about the strong dollar. you're talking about the oil. >> oil, dollar q-1 earnings. pork price. >> pork price is not treating the pigs properly apparently. >> yes. >> the thing you say might be different is that these head winds can become tail winds and what you mean by that is you finally see some consumer spending more because of oil. how does the strong dollar become a tail wind? >> well i think what we're going to see with strong dollar is

that it's going to strengthen the u.s. consumer considerably right? and that's the engine for global growth. housing is really going to be one of the big drivers. >> housing is over the next six months what you think provides it. >> that's right. now oil companies are saying oil is low for long is what they're prepared for. i think a lot of companies were only like 10% into earnings season. a lot will talk about this big margin story. anyone that uses raw materials. there's a big margin story. companies have to raise margin guidance. >> so the oil not only as a consumer but even with companies that input cost. >> so, in fact this earnings season is going better than people thought as well. >> that's right. >> they lowered expectations. >> some people like to point out

analysts really made big cuts into this earnings season but they're beating by the biggest margin in 12 years. >> the companies are quick to point out the head winds that they're facing and give you down to the penny what it's costing for share on those items. you don't hear anything about how that's helping. dupont was one example we saw that with this week. >> as you know the complexion of who reports changes so what you juan to look at is companies that are true industrials having a dollar head wind. they're forced to take market share due to markets. when you look at domestically oriented cyclical industries they're seeing real savings. their end market pricing is based on demand. >> but back to back nobody is talking about that. >> it's partly because we're early in the earnings season. we are really early. we only heard from a handful of companies but industrials talked

about margins being better. it's just the dollar headwinds. >> so the place to be is consumer as you said and financials as well. also technology. >> i think tech if we take a step back has turned into a good business and industry and has a huge tail wind of capital spending an eventually picks up and it's still priced to cheaply. >> we're going to talk about yahoo! in a moment. i'm not sure i put yahoo! in the same category aztecs tech. >> yahoo! is more of a media company. >> you're talking hardcore servers in tech. >> people think tech is a narrow list of winners today which is the secular growth stories. i think the big tech story like ibm, hps really come back to life. we pay 12 times for software stocks and 25 times for toilet paper and the multiples will

converge with the software multiples going up. >> do you ever run out of toilet paper? >> it's scary to run out of toilet paper. >> there's a reason it's more highly valued. >> the multiple goes up on the last square. >> that's all you have to do is run out. tom, thank you. i had a quick question for you because i think of you -- >> thank you for having me on the show. >> i think of you as an analyst at times. my take on the bundling controversy was that i go back to -- >> at verizon? >> i go back to when a content advisor says see i told you they would fold because people want the content to matter what. so the content providers are in the driver's seat and now they're banning together saying hold on. but the question that i have for you is if they can't prove that the contracts that were signed

prohibit the slimmer bundles, could the content providers be forced to go ahead and let verizon take what they want and do what they want with it? or does it matter what's the fine print in the contract? >> it's all about the fine print and that could be that too. >> i'm happy and proud too. >> let me just say this. the contracts are iron clad. what verizon is doing relative to what the contract says and allows. it's completely at odds with what the contract says. >> they put the language in again and not allow this to happen. >> and to the extent -- look as we digs cussed the content world is going to fight tooth and nail the idea of bundling because effectively content loses power.

>> verizon is taking this to the court of public opinion. they saw what happened with net neutrality and they assume they're going to get help. >> you don't know. no one voted on net neutrality. >> what they're doing is a violation. >> what they are doing is a violation of the contract. >> i do think -- i don't know if becky is in the same place, i think the public -- if we're just talking about straight up public interest the public would think they juan choice. whether they should get the choice is a different question. but that's what they want. >> then we find out i'm going oh yeah i do want that. oh i'm above the -- i'm paying more for my ala carte. >> it's not just ala carte. it's being bundled with your direct competitors. do you want to have anyone riding your coat tails. do you want everyone riding your coat tails because they're

paying for you and getting everybody else as a result. it's the worst of all possible worlds. >> the demise of the bundle. i think it's going to take a long time and we'll see. your job is going to be fine for at least another couple of years. >> thanks man. i appreciate it. it makes me feel better. >> just as a fall back position, you know? >> this unbundling thing happens. i have to figure out something else to get food on the table. >> when do i put that on the calendar? >> 2016. >> i don't know yet. could be -- i'd say first half -- sometime within hopefully the first half. >> is all the -- are all your couch casting interviews are those over? >> that is complete. yeah thanks. >> okay. it's just casting. >> just casting. >> let's get back to yahoo!. let's get back to yahoo! missing expectations on the top and the bottom line in the first quarter. the shares are now down about 14% since the start of the year but as you can see the stock was up after hours.

if you look back all the way to when marissa myer took over in 2012 they're up more than 180%. eric covers yahoo!. thank you for being here today. >> thank you for having me. >> we look at the earnings let's talk about those first. missing on top and bottom lines but coming up with mobile advertising showing strong growth. how would you rate the quarter overall? >> it's two stories. there's the traditional yahoo! business of selling display advertising on pcs that's declining close to 10% year on year which is becoming a smaller part of the business with every quarter. the bets marissa and the team made are now up to a third of revenue and growing 60% year on year. she has a business transportation issue on her hand. she needs it to be 50% or more of total revenue to get people more interested in that core core yahoo! business. still a couple more quarters of transformation.

>> it was the announcement they made in the erngarnings call yesterday that they hired people to advise them on their stake in yahoo! japan which is worth about $9 billion. that turned things around for the stock yesterday. we saw this with alibaba. do they buy themselves more time by dealing with these issues and rolling them out as sweeteners to investors to stick in there? >> we believed yahoo! is a sum of the parts story until you get into 2016. you'll get the spin of the alibaba stake in the fourth quarter. investors will get that. we long believed yahoo! japan was the next asset to be monetized. the announcement came about one to two quarters earlier than we thought we were going to get. if they can monetize that in a tax efficient manner nobody has that as well. that's another leg of the story so one of the main themes we're coming out with is there's multiple ways to win here. the last one is the turn around. >> but the last one is the turn around. he basically said once alibaba

is gone and now to the extent that japan piece is gone she is for lack of a better word naked. she would now be -- the company is exposed for what it is in terms of operations. it added $500 million in cost to their operations so the question then becomes what are we actually going to be looking at and is the company that's left even if you get all the value still there, what are we going to be looking at a year or two from now and does that transformation take place that you're talk about. >> there's early signs it's taking place. if you look underneath the hood they could transform themselves from a mid to high single revenue grower in 2016. what the market is doing is putting the most value on that score. if you trip that today you're talking about a $3 billion value for score yahoo! today. >> and they would have a billion dollars. >> and about 5 or 600 million of

free cash flow. >> you think the valuation is undervalued at this point. >> correct. that's why i think it remains a sum of the parts story for now. i agree if we get to this time nest year and alibaba announced its happened they have to produce revenue growth to get people interested in that core that remains. she still has multiple quarters. >> for now you tell people to buy at $44 and change. >> 44 today. 59 price target. >> okay. thank you very much for coming in. >> thanks for coming in. coming up when we return an all electric truck that doubled as a drone launcher. sounds too crazy to be true right? the postal service, they disagree but first here's a look back at this day in history. ♪

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welcome back. the buzz story of the morning includes drones. a new postal service fleet could include drones. is this true? >> yeah. it is. >> don't you want the u.s. postal service to find new forms of revenue? this is one of the great money losing black holes. >> i don't like drones no matter where they're coming from. >> i'm just saying we have been trying -- >> the postal service is a

public entity. it's been effective in managing and running things in the past. >> somehow the mail gets to me every day. >> i think they said well the postal service -- then we figured out they lose $6 billion a year to do it. >> maybe the drone thing will fix their problems. >> well, they better save effort for liabilities. did you see it drop something? drop it right on your head. >> it's the same play that amazon is talking about. i don't like it in either case. >> the agency really really is i guess, talking to contractors about options including an all electric truck that i like the term drone launcher. it's an electric postal truck that launches drones. it's being pitched by a company and the university of cincinnati. >> there you go. >> now he likes it. the school has an unmanned

research vehicle. >> i thought you meant that the whole research project was conducted on its own. it is research conducted by people into unmanned things. >> right. but if you think about the postal truck running around without a person driving it and then the unmanned drones. >> it's rise of the machine. >> getting there. >> when we come back petrobras is expected to release financials after the bell. it could have huge implications far beyond the company. michelle joins us to explain right after this. ♪

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>> today is the day that petrobras admitted late last year it couldn't report results because investors had no idea how much money had been ripped off from the company in what was

a decade long bribery scheme. is this the turning point or tipping point? she's in rio this morning at the company's headquaters. michelle. >> andrew consider this petrobras is the world's most indebted company and in a world washed in debt that's saying a lot and it's involved in the biggest financial scandal in brazil's history and if you know brazil that's saying a lot. even though they trade on the exchange this company is controlled by the brazilian government. they control more than half the voting shares and they use the company as an arm of government boll policy. all of that is coming home to roost. in march of last year one of the directors was arrested for bribery. in september he started to sing like a canary and told investigators for nearly ten years every contract was padded by roughly 3%. the money was used for kick

backs and funneled to the ruling parties of the country. now nearly 50 people have been arrested. ceos politicians and party members and at risk is the country's president. her party treasurer has been arrested and she was chairman of this company for most of the time in question. she denies knowing anything and investigators have not connected her to anything. tonight the company expects to report fourth quarter earnings. right now everybody is reporting q-1 earnings. tonight they expect to report fourth quarter earning ifs the board approves the release today. if they don't that's going to be a huge disappointment to the market. we expect to get a credible number on the amount of fraud. the spread is wide. could be anywhere from $6 billion to $30 billion. then a press conference tonight. guys, to give you context of how big this is one third tier executive upon arrest within 24 hours offered to give back $100

million. that is one guy. it's a big story down here. back to you. >> michelle is it true that petrobras is better off financially when oil prices are low? how does that even work? >> yeah that's part of the issue of government intervention. so petrobras is the only company that can sell gasoline here but they don't set the price. the government does and set it below cost so subsidize the population. there had been a boom for a long time in brazil so even though they drilled tons and tons of oil had to import oil in order to produce gasoline. so the price would go higher and higher and higher and steeper and steeper loss every gallon that they sold to the public so things are better off for them when it comes to their cash flow when prices fall because they don't lose as much money. you see government intervention.

>> the woman that runs morgan stanley sustainable investigating group. it's not the group that i think is sustainable right? >> she's hoping it's sustainable. it's a group that invests in sustainable fuel. >> yes. >> misplaced modifiers. >> it's both. >> going to join us next and mike jackson on his company's quarterly results. and later joseph stiglitz. check out the dollar this morning. actually how it's doing against some other currencies. the euro the yen, and the pound. we'll be right back. ♪

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welcome back. u.s. equity futures are weaker. dow futures down by 56 points. the nasdaq down by 14. yesterday morning we looked at the futures. they were positive. by the end of the day they had given background. we do have a lot of earnings coming out today. by the way, you remember this flawless 100 carat diamond on set last week? well it was up for sale. last night it fetched $22 million at an auction. the presale estimate was between 19 and $25 million. the seller wants to remain anonymous. >> pretty good estimate.

wasn't that right between 19 and 25. >> it is. >> we have been talking about earth day and in honor of earth day we're taking a look at sustainable investing and what it is exactly and whether this movement is gaining traction on wall street and what it means. she is the ceo of morgan stanley's institute for sustainable investing. like the group to be sustainable too. >> so sustainable investing is just simply integrating environmental and social and good governanc efrkse. so we think that's smart investing and when you think about a world with 9 billion people on it 35 years from now and this huge increase in deman that's a significant trend that's a great opportunity. >> when people talk about sustainable investing they think about do gooder investing and the question is is there a trade off between do gooder investing

and the profit incentive and all of that. >> that's the $64 trillion question and we did two studies to try to unpack that. first of all, we surveyed individual investors, a thousand of them and you're in the majority. 54% believe there's a trade off. so then we say is that true? we looked at the numbers. we looked at 10,000 mutual funds and compared the performance over seven years of sustainable investments and found that on average investing options performed the same or better from returns and also the same or better from a risk perspective. >> throw out a couple of company names for us to understand what you put in the category of a sustainable investment and then a couple of names of not so do gooder. >> i can't talk about individual companies but i can talk to you about sort of how we think about this. so companies that we would say are good sustainable investments are companies thinking about what is the fact that water seems to be much more scarce and more expensive.

>> so coca-cola earnings later during the show would they be sustainable? they're doing all sort of things for water. would you put them in the sustainable category or no? opposite? there's mothers that think their kids should never drink the stuff and that would be not on the do gooder side. >> investors have to think about what are the most important considerations and some investors care much more about the health impact and some about the environmental impact. but any company isn't thinking about what is going to happen when water becomes more expensive and scarce. when food becomes more expensive and scarce. >> you need to refer to it as do-gooder. when you consider how much food we're going to need and it's going to be producing the situation and how water is for agriculture. i don't even see it. i wouldn't think there would be a negative trade off for it either. i think that there's different

ways that there are investments and all kinds of different -- that are specialized. >> for example harvard and stanford with their endowments and the students -- >> that's different. >> that's a sustainable investing category too and they're protesting those endowments. >> fossil fuels but i don't think -- >> and the do-gooder. >> i think audrey is pulling the sort of just avoiding it and that ideological argument. nobody could disbeauty or disagree or have a problem with this. >> tell us the companies that fit into that frame of thinking though? what companies are being aggressive about trying to make sure that he are anticipating demographic changes and how that's going to impact the planet. >> there's a huge range of companies and industries. there's a huge opportunity that hasn't been fully developed around water efficiency or affordable housing.

when you have 3 billion more people on the planet you'll need affordable housing. you're going to need as joe said more sustainable food production so there's a ton of those different kinds of opportunities. >> so we're going to need energy obviously and people have different feelings about nuclear. they have different feelings about natural gas versus dirty crude oil or whatever. would you be able to invest in a clean natural gas company or are fossil fuels off the table. >> no transition happens overnight and we'll need a mix for awhile to come. >> if you want to fly or drive or. >> look the energy companies frankly are, many of them are trying to do a much better job at being more efficient. but we're looking for more opportunity to get those. investors are dying for this. >> one other related question do you think the shift toward sustainable investing is going

to change the behaviors of companies that aren't considered in this bucket and i know you're unwilling to actually put the companies in the good bucket or bad bucket but that's always been the question. would investors invest in cigarettes after what happened and there's people that cig invest in the cigarette business. it hasn't put them out of business. they've had to stay in business. >> so, look i do think that companies are going to change and we're already seeing they are. today already one out of every $6 in the united states under management has some sustainable investing comeponent around it and the big change is going to be fuelled by the millennials. they're two times more likely to check products sourcing an packaging to buy a product because of its environmental considerations. they're twice as likely to invest in what they consider a good company and divest. we're seeing a big movement for

millennials to say my money, my employees, my organizations that represent me and my money should think about their values as they invest. >> thank you for coming in on earth day. morgan stanley. appreciate it. good to see you. >> lennon's birthday too. >> the real lennon. >> the right one for you. >> not the one -- the one on the upper west side. you know who i'm thinking of. >> yeah. >> when we come back this morning auto nation's ceo mike jackson pulling into earnings central. his company's latest quarterly results and view of the american consumer. and later his name might sound familiar. you certainly know his dad but chef ben ford is a rising celebrity in his own right. we'll talk about his latest project. a restaurant inside an l.a.x. terminal. he'll join us in studio at 7:40 eastern time. stick around. squawk box will be right back. ♪

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welcome back to squawk box. we're going to look at some stocks that you might want to keep an eye on today like broad com that posted better than

expected earnings and revenues. they sell wifi and broadband chips to cell phone makers like apple and samsung. the companies stopped consensus helped by higher drug prices and lower spending on research and development. >> autonation experiencing its 18th consecutive quarter of double digit year-over-year share growth. it's up 13% year over year. let's get behind the wheel with mike jackson, chairman and ceo. it's always great to see you. that you for being here today. >> becky, good morning. it's a pleasure to join you. yes, we had our best first quarter ever achieving 97 cents earnings per share, which is up 29% versus last year. as you said just under $5 billion in revenue. we had our best customer care quarter ever in the history of the company, up 12%.

and we also completed acquisitions in the first quarter that have revenue run rate of $300 million. so just an outstanding quarter for the company. >> let's talk about some of the numbers, mike. you said 13% growth in revenue, which is impressive. if you look at earnings per share, it's up 29%. why are the earnings per share, why is the growth so much stronger there? are you buying back shares? is this improving margins? what's happening? >> well to achieve a 29% improvement in earnings per share, you would have had to have done all of the above. first we had significant revenue increases in all aspects of our business and we were able to improve our margins. i already called out the growth in our customer care business which is a very high margin business for us. plus we have very attractive acquisitions now which are in our run rate from the previous year. plus compared to a year ago we've bought back in a

significant amount of our stock. so you put it altogether and you'll get a 29% improvement in earnings per share. >> when it comes to sales, it looks like the domestic auto sales were the strongest out of all the three categories that you break out. is that true? >> if you look at on a unit sales basis, the story is all about truck sales and there the domestics have a very strong position, so our operating results in our domestic business improved the most 24%. we also had significant improvement, though in our import and premium luxury business. you know we're very diversified in three distinct types of business, the domestics, imports and premium luxury. and we are very diverse from a geographic point of view going from the east coast to the west coast. >> so how are consumers doing at this point, mike? >> well consumers are still doing quite well when it comes

to automotive. we have certain advantages maybe over other segments in that we had a depression in automotive so sales stopped for several years, so there's significant pent-up demand that remains. the average age of vehicles on the road in america has not changed, even with the recovery of sales. it's now 11.5 years. so consumers need to buy something newer. whether it's a brand new car or whether it's a used car. you see we had a double-digit increase in our unit sales for used. the financing is the best availability we ever had. they continue to perform on all their loans. and we have cheap gasoline all of a sudden here in america again, which is pushing truck sales, which is a better margin business than just low-end cars. so it's really a extraordinary

goldilocks period that at the moment is pretty clear, will continue for the next several years. >> hey, mike horror of horrors, but in a hyperbolic piece here that a lot of people hit with copster nation edmunds.com, the headline was more people trading in their electric and hybrids for suvs, the report claims and it's from the car buying service edmunds. says in the first three months of 2015 there was a noticeable uptick in electric and hybrid car owners trading in those cars for fossil fuel suvs. people say they don't know whether that's true or not but 22% of the people doing that up from 18.8%. do you think there's anything to that? >> well first, joe, i'm surprised they were able to find that many owners to get a statistic on it. >> i'm telling you, priuses in

san francisco, every other car is a prius and you can tell because every car looks ugly. go ahead. >> joe, in principle the story is absolutely correct. if you look at industry sales year to date up 6%. that's entirely in trucks. trucks are up 11% and passenger cars are down about 1%. within that if you look at the sales of hybrid and electric it's still stuck in low single digits, even though every manufacturer has invested billions in hybrids, plug-in hybrids and the offering of all electric is expanding. and, you know with cheap gasoline, it just pulls the rug out from underneath the justification for these expensive fuel-efficient technology and the american people are very practical, back of the envelope. they say what does the technology cost how much money does it save me at the pump and at $2.50 a gallon across

america, it's hard to make the case economically for hybrids and transactionelectrics. yes, there are certain people who are motivated about the environment and can afford to pay the premium, but that's less than 5% of the marketplace. the rest of the marketplace is very pragmatic and it's a kitchen table back of the envelope calculation. so in principle, joe, the headline is correct, even though the industry has been mandated to sell fuel efficiency. it's tough to convince america to eat its broccoli. >> hey, mike it's great to see you. thank you for joining us this morning. >> my pleasure. >> when we return we've got quarterly results from three dow components, boeing coca-cola and mcdonald's. first joseph stiglitz will join us right here on the squawk set when we return.

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dow components boeing and coca-cola expected to report this hour. we'll have the numbers, the market reaction and instant analysis all coming up. plus cuisine that requires a tsa security check. chef ben ford wants to shake up airport dining. he's bringing breakfast to the squawk set. an arrest made after a brazen heist of a big batch of kentucky bourbon. police say members of the crime ring met years ago through a softball league. we've got details ahead. drink up. the second hour of "squawk box" begins right now. live from the beating heart of business new york city this is "squawk box."

welcome back to "squawk box" here on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. andrew is here joe is here i'm here. we are watching earnings today and we are expecting results from dow components boeing and coca-cola within the next half hour. then we'll be getting mcdonald's results at about 8:00 a.m. eastern time. in the meantime we've been watching the markets. so far it looks like the bears are in command this morning. dow futures down by about 52 points. s&p futures off by 5 and the nasdaq down by 12. >> we've got a couple of big stories this morning. the european union has filed formal charges against gas prom accusing them of raising barriers to competition. they appeared to be headed towards a settlement until

russia's annexation of crimia last year. also the high freaksly trader arrested in london is due in court this morning. investigators say navinder sang used a program to generate large sell orders that pushed down prices. he then cancelled those trades and bought the contracts at lower prices. the biggest buyer of u.s. chicken has halted imports of chickens and eggs after a bird flu outbreak was discovered in iowa on monday. morgan brennan is that at facility and will join us with an update in a few minutes. it seems to be spreading and bigger issues now. >> already in 10 or 12 states. >> we sent her out there? >> it's only 1% of chicken -- >> 5.3 million hens is what they're trying to get rid of and kill off so it doesn't spread. >> it's still a very small percentage. but we make a big deal of it

because it's gross and big. >> 5.3 million birds. >> it sounds like a big number but on a relative number it's not. >> poor morgan she must have made someone mad. we sent someone out there? >> bird flu, very dangerous, you go. >> people have a thing for chickens already. they're kind of gross. especially when infected with bird flu. >> i'll never be able to eat again. >> do you ever see how they make the chicken? they rip them open and all the guts fall in the package. >> come on it's morning. joseph stiglitz out with a new book called "the great divide unequal societies and what we can do about them." he is the 2001 laureate in economics. professor, it's always great to have you in and kick these things around. i thought about how to intro this and i'll start with it really is a dismal science. i'll tell you why, economics. you've got the nobel prize.

you have certain opinions. and then we have milton freedman has one and f.a. hayek was award awarded one. i look at the way you view the world and the way other gentlemen view the world and it might as well be polar opposites. it's not in any way close to similar. >> but i'm right. it's my duty i'm going to have to take the other side and push back so we'll end up talking at each other again. but there is a huge divide in the country right now in so many areas. but the question is there is one side that thinks that pro growth is the way to go and there's the other side that thinks that redistribution is going to be the answer. >> i don't think that's the right characterization. so you know one of the important ideas that i try to bring out in the book is that more equal society, less divided, grow actually better. >> i'm sure that's true. we just disagree on how to get

to a more equal society. >> and we also disagree about how we can get more growth. we began in 1980 you might say, around 1980 with an experiment. the experiment had lower taxes at the top, less regulation you know, a whole set of changes focused on supply side. you probably remember supply side. now we've had 35 years of that experiment. what can we say? you know the theory behind the experiment perfectly understandable. some said it wasn't going to work. the theory was that you provide all these incentives, take away the restraints the economy will grow faster. that yes, the middle bottom would get a smaller share but they would get a smaller share of a bigger pie and everybody would be better off. you know the results are in. a third of a century and what do we find? growth was slower than before we tried that experiment.

and the middle not only hasn't -- it was right that they were going to get a smaller share, but the slice of their pie, the size of their pie, their slice has gone down. >> but we've got the evidence for the past six years where we've sort of taken the opposite tack and had the federal reserve with its policy and it's exacerbated -- every other recovery, the federal reserve itself estimated growth in 2011 to 2015 would be 3.5 to 5%. we have not gotten out of the mud at 2%. we're growing anemically. >> you're exactly right. >> and that skews the results. the growth in the '80s and '90s was fantastic. >> we were building up things in the economy and when things come down, they break the way they did in 2008.

it takes a lot, a lot to get it going again. i agree it's been miserable. the fed models have been very flawed. >> if you took your numbers out after 2008 just go straight up to 2008 what does it look like then? >> pretty bad. >> still bad? >> still bad. the fact is that even in 2008 people were in the middle worse off than they were 10 15 years earlier. >> he's not talking about growth, he's talking about income inequality. >> i understand. but let me ask you a separate question. >> gdp growth from 1980 to 2008 was lower than it was from say, after world war ii until 1980. >> but then layer on globalization. i mean this is the tom freedman theory of the world to some extent, which is that the world changed and that all of a sudden there became competition and that you could argue post-world war ii the rest of the world was effectively out of business and we were able to create this

middle class because we had a monopoly on the globe and the world and technology and all these other things have made it much more difficult. >> well, see the way i would put it is all those advances in technology and globalization were supposed to help us make us grow even faster. didn't work. and new and anticipated the extent to which inequality would grow in the united states. today people with median income was lower than it was a quarter of a century ago. median income of a full-time male worker is lower than it was 40 years ago. so if you have an economy that is not delivering raising standards of living for significant factions, i'm talking about majority of our citizens, you ought to be worried. >> your solutions are raising corporate taxes, raising taxes on the wealthy. there's a capital flight out of

the united states because of our corporate taxes being where they are right now. we've got the highest in the world. let me just show you one quote here. this is from an op-ed piece that was in the "journal" yesterday. look at what's happened over the past six years. food stamp use up 66%. 20% more people on disability. the participation rate in the labor force is plunging from all these things. we're at about 49% in terms of 51-49, those receiving and those taking. would you like a permanent number of citizens on the dole? >> this is all a reflection of how bad things got build up the build up of problems before 2008. >> that's where the disagreement is professor. let's read this quote that i had build up that the golden goose, the private sector has been destroyed in the past six years through regulation

overregulation, through taxes. here it is right here. despite the biggest fiscal stimulus program in history, the most expanse i've monetary policy in more than 150 years, the u.s. economy is underperforming much more than it has in the past with recoveries because of bad economic policies. with better economic policies america was like the fabled farmer that had the golden goose. that would be the private sector. it laid golden eggs. we've drained the pond burned down the coop and let the dogs loose to chase the goose around. now we're reaping what we so. the goose has stopped laying golden eggs and the administration's apologists argue we're in a secular decline. >> the basic fact you have to understand was that this was the worst economic crisis since the great depression. go back to the great depression. how long did it take us to get out of the great depression? we didn't really get out of the great depression that started in '29 until world war ii. now, yes, this recovery has been

slow, but it's commensurate -- >> if the private sector doesn't save us if the private sector doesn't create the jobs that everyone is able to earn a living and feel -- earn success, what do you do without the private sector? why not spur the private sector? >> let me first say i agree with you, we need to spur the private sector, but first let me point out the private sector would have destroyed itself had we not come in. the banks needed the government. they had done such a bad job of managing risk allocating capital, that we only have our banking system because the government intervened and saved them. now, would i think take on the issue of the corporate taxes, what we need to do is lower corporate taxes for those firms that are willing to invest in america, great jobs in america, and raise it for those who aren't. >> how do you do that? >> provide incentives to invest in the united states. >> so lowering the rates or keeping them where they are and

giving discounts to companies that are investing in the united states. >> exactly. i agree that incentives are important. but right now we have some perverted incentives the way our tax structure encourages people to invest abroad. so to me that's the way i restructure and say if you're investing in america, yes, you should get lower rates. >> what kind of rates are you talking about in many terms of where you would raise rates, where you would lower, because most people we talk to who want to see tax reform say they would like to see corporate taxes lowered but evenly spread out so that companies that aren't paying 28% -- >> and frankly a territorial system which to some degree may inspire people to either leave or keep cash abroad. >> i really think that the key issue here is provide incentives for firms to invest in the united states and providing a big differential between those who invest and those who don't. >> do you think you can do that and make them competitive? part of the argument that they

suggest around the way our tax system is structured now is that internationally in a global multi -- when you're a multi national conglomerate they can't be competitive. >> that's basically nonsense. let me explain. when you invest as it is you get a tax deduction. interest is tax deductible. so, yes, at the margin you're paying higher taxes, but most of the investment in the united states is financed by debt. some equity but new equities are relatively important. the net flow is actually out of the corporations not into the corporations. so once you recognize that debt is tax deductible then the tax system doesn't overall discourage investment. and then if you could add on to this a sort of incentive structure. say look to the corporations, you want to operate in the united states, this is where the sales are, this is where -- take

the drug company, where they're making big money selling in the united states, so they're not going to leave. the real question is can you get them to start producing in the united states. because they're going to be selling here. >> so build a factory here instead of in mexico instead of in africa instead of other places. >> exactly. we are too important of a market for them to say we're not going to have anything to do with you. >> we're going paul ryan on talking about this trade deal where actually president obama has actually called out senator warren and said you're wrong on this. are you with senator warren on this trade deal? >> yes. i think she's absolutely right. i think this trade deal is not about jobs. make it clear, it's not about jobs. you know our tariffs are already pretty low. the successes that we've had in number of rounds of trade agreements. what this is really about is two things. one is drugs.

generic drugs versus big pharma. >> this is the -- >> we worked out a compromise in the united states to try to balance the incentives. you want to get drugs at low prices, you want to have some incentives for innovation and we had that big debate in the united states and we got a balance. i thought it was right. >> secretary clinton, presidential candidate clinton over the weekend was quoted as saying we need to topple -- she's aiming to topple the 1%. is that the way to do it? bring them down or bring everybody else up what do you think? >> what i think we have to do is try to get shared prosperity. right now too much of what is going on is say, in some corporations not all, the ceos are taking a lot of money out of the corporation. >> but it's the minimalists in

terms of -- >> but they're taking -- it turns out to be a significant share of the corporate pie leaving less for wages and what really worries me is less for investment. >> when you consider a wage of a ceo and compare the total payroll of the company, it's a fraction. >> we're not talking about the wage of the ceo. it's all of the top management. we have to ask the question it used to be when we were growing the fastest after world war ii, our ceo pay was 30 times the average pay of workers. >> these are the same flash points, professor, right here. we've got to get -- >> today it's 300 to 1. >> bringing them down is not going to help elevate everyone at the bottom. what we need -- 2% growth is the issue because that's the problem. >> and if we didn't have so much going to their ceo pay, we'd have more money to invest in america, more money for creating

more jobs. >> if you look at the numbers, it's a fraction of a percent in terms of -- >> no i said it's not just the ceo, it's that whole management structure. >> even that way. but is there a problem with the -- is the goose broken that laid the golden egg, the capitalist goose? >> yeah. >> so that's broken. it's not the way that it's being regulated or overtaxed, it's an inherent problem with -- >> no, no, it's not inherent. that's one of the points i try to make in my book. it's that we've created what i sometimes call a false capitalism. woe bail out the banks, we socialize losses and privatize gains. we create an unlevel playing field. we invest more in the education of our children of the rich rather than children of the poor. >> of the bailout money most of that was paid back. >> paid back in a very very strange way. so the fed lends money to the banks at essentially 0 interest rate.

they take the money, lend it back to the government at a higher interest rate. >> you wouldn't advocate that they haven't done that? >> what i think that they should have done is bail out the banks but not bail out the shareholders, not bail out the bondholders, not bail out the bankers. they had to save citibank and they had to save the banks, absolutely. but they could have done it in a way where we had a system of accountability. >> you just described a very nuanced approach that would require a scalpel. >> no. i say obey the laws nft united states. the laws say when you go into a bankruptcy, the standard procedure, chapter 11 or chapter 11 7 -- >> the question is whether you could have saved the way you're describing in an environment where confidence was at an all-time low, whether confidence would have been reinspired the way you just described. >> but if you're talking about chapter 7 or chapter 11 you're looking more at gm. >> well chapter 11 -- the laws

we had about what's called conservativeship, which is the way you're supposed to handle bank restructuring mean that -- this is standard in all countries, is that the shareholders lose everything the bondholders step in. you only need a government bailout when there's not enough money there with the bondholders. that's the rules of the game. what we did is we changed the rules of the game. >> shareholders got hurt. tell the citigroup shareholders. >> you're backing hillary? >> yeah. >> would you back elizabeth? >> i think right now we need to see where their platforms are. you know more than one issue. >> would you go all the way to bernie sanders if he were to run? >> what i think is that we need to address the problem of this great divide. you know the fact is --

>> redistribution not growth. >> it is not delivering for the majority of our citizens and something is wrong. >> it has been too long since we've gotten to talk to you. obviously way more to talk about. >> the book is called "the great divide." >> thanks for being here. when we come back bird flu is threatening the nation's chicken supply. a report next from the iowa farm that suffered the costliest outbreak so far. then are the government's gdp numbers misleading? steve liesman has a special report on growth in the fist quarter. plus cuisine that requires a security screening? celebrity ford ben ford joins us on set. harrison ford's son is elevating cuisine for travelers at l.a.x. airport. stick around.

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mexico banning imports of eggs and live birds from iowa after a deadly bird flu outbreak there. morgan brennan joins us now with more on this story that's kind of grossing us out, to be honest with you, morgan. good morning. >> reporter: understandable. i tell you the smell too at some of these farms not so pretty just have to say. anyway, so this is sunrise farms. this was home to 4 million egg-laying hens and this is where the latest and largest outbreak or case of bird flu has struck. so this farm is now under strict quarantine and government officials are euthanizing the

entire flock. that's really because this strain of bird flu is highly infectious and highly lethal to poultry. guys, i should note that according to the usda it poses low risk to human health. so including this case, that brings the total number of turkeys and chickens that have been affected boy bird flu, this outbreak that started late last year up to 6.5 million. those are cases spanning multiple states including wisconsin, which just recently declared a state of emergency due to this situation. now, if you know anything about poultry, these numbers might not sound that large. after all you've got hundreds of millions of chicks hatched each month here in the u.s. but analysts say what's really worrisome is how this virus is spreading, especially here at sunrise, which had strict biosecurity measures in place. so, so far talking about how this is impacting the poultry industry, the flu has had the biggest impact on the turkey

market. we've seen 2.4 million birds destroyed. that's something that's affecting hormel which came out and said they're facing headwinds in their supply chain due to this issue. citibank analysts also saying we could see turkey prices start to rise in the stores relative to chicken. that's really the thing you'll want to watch now. if we see this outbreak of bird flu continue to ratchet up and start to affect some of these so-called broiler chickens basically your chicken meat that's where you'll start to see an even bigger impact on the poultry market. that's going to contribute to higher operating costs for companies in this space as well as weigh on export volumes. guys back over to you. >> morgan this is kind of a stupid question. but the birds that they're destroying at this point, what do they do with them? there's no way that winds up back in the food supply right? >> reporter: no absolutely not. they have very very very tight protocols between federal and state regulators and the industry. so this farm i actually was over by the entrance this

morning, and folks are patrolling. they're not letting anybody near the entrance of this farm. this farm is quarantined and all of the farms within a 10 kilometer radius are quarantined as well. they have to kill all of the birds, whether they're displaying symptoms or not and there's a whole disposal process that happens. these farms are quarantined until they can prove that the virus has been completely eradicated so that's an indefinite process. >> morgan thank you for this. good luck with the smell and whatever else is going on over there. when we come back we've got to tell you about a crazy story. it was a seven-year conspiracy to steal more than $100,000 in kentucky bourbon. police say it all started over softball. we've got the details of that massive bourbon bust when "squawk box" returns. ...and takes the wheel right from your very hands... ...this isn't that car. the first and only car with direct adaptive steering.

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so, the question your customers are really asking is can your business deliver? welcome back to "squawk box." we've got a wild story for you. it has been more than a year and a half since 65 cases of ultra premium happy van winkle bourbon disappeared in kentucky. but police say they have busted a crime ring responsible for the heist. nine people responsible for stealing that and other bourbon valued at more than $100,000 reportedly met through a softball league. police say it was an inside job. at least three of the people indicted were employees of the

disstillers that were targeted. one man sold stolen bottles of bourbon out of the back of his pickup truck. there were 18 full barrels of bourbon recovered. state officials said it would probably have to be destroyed because of consumer safety regulations. so there you have that. in the meantime we're going to take a quick look at the futures board and see how the markets are setting themselves up this morning. we do have a number of big earnings reports. we'll be getting boeing and coke in just a moment. you can see red arrows there. but boeing's quarterly result just hitting the tape and phil is in chicago with those numbers. >> andrew, we've got a better than expected earnings release from boeing coming in well above guidance and well above where they were last year. boeing earning $1.97. that's core earnings. that's what wall street looks at when it comes to boeing of $1.97 a share. that's 17.6% above where they were last year at 1.76 well above guidance or estimate on the street of 1.81. revenue a little lower than expected, coming in at $22.1

billion. the street was expecting revenue of $22.5 billion. the core margins down a little bit compared to last year. 9.6% versus 10.2% last year. there will be a few questions about the operating cash flow. it came in at $88 million for the first quarter compared to $1.1 billion a year ago. but we should point out that boeing is not changing its guidance in terms of operating cash flow for the year. still expects it to be at least $9 billion. in fact boeing is reaffirming its guidance when it comes to eps, revenue and deliveries. the commercial airplane unit delivered 184 airplanes in the first quarter. that's an increase from 161 a year ago. 30 of those were 787s, so that meets the projected production rate of 10 per month from boeing. but again, $1.97 in the first quarter for core earnings from boeing. that's an increase of 17.6% compared to a year ago and well above the estimate of $1.81 a

share. guys back to you. >> okay thank you. while you were talking we also got results from another dow component, coca-cola, that are out this morning. the company has reported earnings per share of 35 cents. they say comparable earnings per share are 48 cents. the street was looking for a number of 42 cents. you want to look at some of those items that impacted earnings per share, they cite things like primarily related to the early extinguishment of certain long-term debt costs associated with our previously announced productivity program and charges related to our venezuelan operations. the questions will be how much did analysts know about this how much did they put in those expectations and numbers. >> you can tell whether it's good or not from the estimates for volume right? that's what you look at usually anyway. it doesn't look too good from where i'm sitting here. >> when you look -- >> case volume -- do you have the estimates there? >> i've got the estimates right there. >> let me just tell you that north america was zero.

>> north america was supposed to be up marginally. >> worldwide was up 1. >> supposed to be 1.6%. >> latin america zero. >> supposed to be 1.9%. >> europe was 1%. >> supposed to be up 1.3%. >> no down. >> down 0.3, i apologize. >> so we haven't had a single one good. asian africa. >> up 3.7%. >> up 4. >> what was the europe number again, the actual? >> europe case volume up 1%. >> so that's better than expected. they expected a decline of 0.3%. so two numbers are better but worldwide below expectations. if you look at the stock it is trading higher right now. closed at $40.78 yesterday. looks like it's up by 1.5%. >> they continue to view 2015 as a transition year as the benefits from the announced initiatives will take time to

materialize against a macroeconomic environment. we we continue to create long-term shareholder value and we will see what people like mr. -- >> global sparkling beverage volume grew 1%. global still beverage volume also grew 1%. which they said was mostly tea. >> got an e-mail this morning, wintergreen advisors the activist investor who's been making a lot of noise about coca-cola putting together a list of six questions that he hopes gets addressed on the earnings call today. >> i guess he didn't listen to jack last week. >> jack said we should right winters off. >> he specifically mentioned him and he's smaller than people jack was talking about not listening to. >> nonetheless, one of the questions he asked is -- this goes to the issue of why the stock is up today, has the coca-cola board purposely set

growth expectations too low for this year in order to make an even mediocre performance look like success on their part. of course i imagine he will be trying to ask that question and get an answer on that call which i believe happens this morning. >> did you get your e-mail? how does he always get through to you. >> he's got my e-mail address. >> we just spent 30 seconds on him again. >> forget about him. you know what reasonable question to ask. >> we do have an analyst for coca-cola coming up a little later this hour. we'll ask him about that. >> the conference call is at 9:30 this morning. >> organic root revenue growth was 8%. that's pretty good i guess. maybe that's why it's up. all right. coming up are the government's gdp numbers misleading? steve liesman has a special report next on a pattern of distortion in the first quarter data. as we head to break, take a look at u.s. equity futures.

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government data indicates the economy weakened again in the first quarter, but there may be a reason the q1 slump feels like -- did you write -- feels like deja vu all over again.

>> i didn't say all over again. >> i know but it always follows deja vu. it's like the soup du juoour of the day. steve liesman joins us with a look at the government reporting that raises questions about the gdp data. are we under a percent yet? >> they haven't reported q1 yet. it's 1ish very 1ish. >> wow. >> another weak first quarter on tap, not reported yet. maybe as low as 1%. given what we know so far about the first quarter. will it be a coincidence that it's another weak first quarter? we went back to 1985 and did a detailed review of 30 years of gross domestic product data and found what looked to be substantial and persistent problems in the data. here's what we found. gdp for the first quarter averages 1.87% versus all the other quarters. all of them combined add up to

2.7%. six of the worst ten first quarters. since 2010 it looks like another economy, more like europe averaging 0.62 versus 2.3. it is underestimated by wall street economists 80% of the time, by far the most underestimation of any quarter. here is what the average is for all four quarters. you can see it right there, it's substantial over the past 30 years. the second quarter picks up some but not all of that growth. this is true whether the economy is in expansion or if it's in recession. our work was checked by three other economists all of whom were surprised by the findings and they also duplicated the work. they found the differences statistically significant, which is a big deal for economists. they said such large differences, they shouldn't appear if the data was correctly adjusted for seasonality. given the failure of the data to correct itself over time the government should be involved in trying to correct it. but the bureau of economical analysis, they do the gdp work for the government, they declined to comment.

now, the potential for the q1 effect to be depressing data right now is significant since fed officials are considering rate hikes and some have suggested that the recent q1 weakness gives them pause. investors faced with the issue whether the economy is really weakening or should they be banking on a second quarter rebound. here we go again, guys. we've been here before. i knew it was true since 2010 because -- but the trouble is there's only six first quarters since 2010. and we had a couple of big negatives. we had a big negative last year. even though everybody said it was weather effect it went way beyond what anybody thought that negative 2.1. the miss from economists was 3.2%. they were looking for 1.1 on the up. it came in minus 2.1 down. get rid of 2010. go back from '85 to 2010 q1 still lags. do it in recession, do it in expansions, it still lags. it's a problem in the data i think. >> you see that enough people are saying the fed never raises.

you saw that? >> there was that little hint out of dudley right? i don't know if you were -- you were gone monday and tuesday. >> yeah. >> i think it was monday that dudley said we hope to raise in 2015, which people took as a possible sort of i guess photographic negative. maybe that means you don't want to, you're not going to raise in 2015. >> it certainly raises the possibility that they won't. >> well lockhart who we had the end of march was pretty definitive about it. it's going to be june or september, i'm not sure which one, but one of those. now taking june off the table, more leaning toward september. >> september or never is the -- yeah. >> thank you, steve. i want you to come back and talk about the stiglitz debate. >> you can read the whole report we did on cnbc -- >> cnbc.com. coming up chef ben ford raising the bar for airport dining. he'll be on set with us to talk barbecue. his cookbook on adventurous cooking and growing up with a

celebrity father, harrison ford. we're back in just a moment.

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welcome back everybody. demand from travelers for better food in airports has led to an emerging business opportunity, chef its opening hot new restaurants on the other side of the security line. ben ford is the chef and owner of ford's filling station, which has locations at l.a.x. airport and in downtown los angeles. he is also the author of the cookbook "taming the feast" and i think that is what brings us to this massive brisket sitting in front of us right now. >> absolutely. this is like gold nowadays. >> you guys weren't over here early enough to smell it. it is really good. it's got some smoking on it. taming the feast, how did you come up for this idea cooking for big, massive groups. >> it was something we were doing in the restaurant. we were getting involved with raising our own animals. i started going outside and building contraptions to roast these big animals and turned to a cookbook.

i was researching this stuff that there wasn't a lot of information to cook that way so i wrote the book to demystify and empower people to cook that way. another part of the book is tamed down for the kitchen. >> so 8 to 10 -- >> or all the way up to the ceiling. >> we know that you have your restaurant, that you are now downtown l.a. >> yes. >> moved out of culver city? >> yes. moved down there. aig was a big partner. that really was some energy i wanted to be a part of so we're real excited to be down there. >> you like being downtown. >> yes, and it gives us some synergy with the airport. >> we've seen people like wolfgang puck who have gone to airports and opened up. don't often think of airport food being great food. when you think of some locations, i can see it. what kind of stuff to you serve in there? >> well we try to do everything -- we're probably the only restaurant that i know of in a major airport that preps everything on site. so fresh food doing things in a

chef way without compromise. we had to break a few rules along the way, but i think that really has helped improved the quality. >> is it sit down? >> a sitdown place. >> no take-out? >> there's to go. there's that element to it. i think when you're sitting there, you don't feel like you're in an airport restaurant for a few minutes. that's what we were trying to achieve. we wanted to elevate it and make it feel like you weren't eating what you would think of as airport food. >> i think about what i pay for bad airport food. >> extremely profitable. it's also a good test. any time you can retest yourself in a different market it's a good thing. >> because you can charge more because the rent is low or because there's just so much foot traffic? >> there's so much foot traffic. there's so much foot traffic. you'll tend to drink a little more and tend to have a little more of a balanced check after it. >> worrying about the flight. >> they're expensing most of it a lot of it are business travelers. >> that's a big part of it as well. there's lots of little factors that go into making it a better business, but it's been tremendous for us and one i'd

like to do a lot more of. >> do you have plans for expansion right now? >> absolutely. >> where? >> i don't know yet. well, i know we're working on some projects but i don't know where they are. >> when it comes to some of the contraptions that you've made up you said you cook some of these things outside. you were looking for contraptions. you played off of what your dad's carpentry experience had been for that? >> we grew up in a really kind of a shack in the hollywood hills. it was an old ranger's station built in the 1890s. it was a playground for kids. it was incredible. at the same time we also had a workshop next to it because my dad was a carpenter at the time full of wood and chisels that we could ruin and lots of good stuff like that. but we had free rein over there and he really did install that into us as kids really to be able to work with your hands, have a craft, understand what it means to work with your hands and he allowed us free rein in there so it translated into a lot of contraptions that i build now. >> what is this? >> this is baked beans. >> i thought it was. >> a little brisket there,

collard greens some pickles. >> what's in that jar? >> good barbecue sauce. >> you don't have -- you're not canning that. >> you can't get any of this just yet. working on the barbecue sauce down the road. >> open it, it's smell it. >> would you be doing more canned stuff? would you sell stuff? >> oh, yeah. it's great. >> in terms of your brand? >> i mean selling outside of your own restaurants? >> absolutely. barbecue sauces barbecue rubs and all that stuff is really a great way to go. and something i already have a passion for. >> what are you doing with that there brisket. >> taking it home joe. >> i have a backpack. >> that's my lunch for the week right there. no really it's amazing what's happened to brisket prices. they have really soared through here. >> what does this cost you and what can you sell it for? >> this costs about $3 a pound, $3.50 a pound right now. it's up a dollar from the year period prior. >> do you know why that is. >> one, we naturally have rising

prices during the summertime, beef prices tend to go up. but also we have a lot of stress on the system. a lot of stress on the actual product. it's become very popular as you can see by all the barbecue places you have in new york. there's about one every block. and also arby's has done very well in the -- >> love arby's. >> they have taken up 5% of it. >> 5% of the available brisket is at arby's? >> yeah. it's really shot it up. >> how is your father feeling? >> he's doing pretty good. he's healing up. you know he's a real life superhero. >> is he psyched up for "star wars"? >> he is very psyched up. >> as you said old getting asked about your father kind of get tiring? this is your thing now. i'm willing to just talk about you. will you ever expand outside the galaxy? >> you know -- >> see how i just keep it -- i keep it without even referencing -- >> he knows better than anybody how he's feeling. we all care about him. >> we've had conversations about

taking it to space. >> first place to colonize mars. >> to the cafe. >> they need food up there. >> ben, thank you very much for joining us today. thank you for bringing brisket too. >> appreciate that. >> i would like to see joba eat that thing cold. >> he probably would. >> thank you. coca-cola just out with quarterly results. we'll dig through that report with an analyst. then next -- in the next hour mcdonald's. coke and mcdonald's at the same time, expect a report. we'll bring you the numbers and the market reaction. stay with us. the technology changes the design evolves the engineering advances. but the passion to drive a mercedes-benz is something that is common... to every generation of enthusiast. the 2015 dream machines, from mercedes-benz. today's icons. tomorrow's legends.

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coca-cola out with earnings. muhtar kent called this a transition year. is it a transition year? what does the other side of the year look like? >> i do think it is a transition year. remember going back a couple of years coke cut marketing spend when kurcurrencyies started to get bad. it usually takes one and a half to two years to get a full return on this spend. as we get through this year coke has a lot of cost-cutting they're putting into place, investing back in their brands so in 2016 we should see acceleration of volume growth. >> what about the currency issue? >> it was basically in line with our estimate.

currency is easy to model because we see the movements every day. it's now going to be 100 basis points worse for the year than they thought going back a few months ago, but basically for the quarter it was in line with our expectations. so we'll see where the dollar goes. maybe next year they can actually get a tailwind depending on where the dollar is relative to other currencies. >> we've got to run. fair price for the stock, what is it? >> we've a price target in the upper 40s. we think that's a pretty reasonable target. nice 20% upside from where we are today. we think coke is a good 12-month opportunity. >> we've got to leave it there. thank you for joining us and giving us your perspective this morning. when we come back mcdonald's expected to report at the top of the hour. we'll bring you the results and reaction from an analyst. congress is talking trade today. the house ways and means committee will hear from the commerce agriculture secretaries and committee chairman paul ryan will join us right here on cnbc.

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es ronald on the right track? fast food mcdonald's reporting right now. the menu makeover and what it's going to take to get the stock sizzling again. plus the president pushes back against opponents of his trade deal. >> when you dig into the facts, they are wrong. >> house ways and means

committee chairman and former vice presidential candidate, paul ryan, will join us to talk about his comments, the economy and the race for the white house. move over harley there's a new hog in town. >> i can get 70 miles to the gallon on this hog. >> it started as a dream in a chicago warehouse and has now become a reality for the founders of genuine scooters. we'll hear their story and we're going to go for a cruise as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york this is "squawk box." welcome back to "squawk box" here on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. we are about 90 minutes away from the opening bell on wall street. the futures this morning have been under some pressure. the news from mcdonald's probably not helping. it looks like mcdonald's came

in -- i know same store sales are lousy. >> you've got 84 cents, which is a decrease of 31%, and even consolidated operating income was down 28%. but there's a lot in here. number one, there's strategic charges totaling 17 cents a share. i don't know -- that will get you to -- >> that probably is added back. >> it doesn't get you to 1.06 but there's negative foreign currency translation impact of 9 cents a share. in constant currencies and excluding the strategic charges earnings per share was down 11 cents. so it was 1.21 last year. i'm not willing to call this 1.10 because everything in here -- nothing is good. >> can i just suggest to you, we have a new ceo. you say we're going to have a turn-around plan. >> there's still numbers in here that aren't just throwing stuff in the kitchen sink.

comparable sales decreasing in the u.s. down 2.6% and that's not just throwing it in the kitchen sink they're saying it's negative sales and guest traffic was bad. promotional offers did not overcome the competitive activity in the u.s. market. and up here it also says due to weaker -- the consolidated operating income decrease of 28% due to weaker operating performance and strategic charges of $105 million. they're closing restaurants. and also just -- >> i'm saying they're starting anew. >> we know that. you're making the point that it's a kitchen sink quarter, we got that. it's a new guy, throws everything in. on top of everything else it's bad. >> but i'm saying they didn't spend -- but one of the reasons that i would argue that it is as bad as it is this quarter is they probably didn't spend much on the quarter knowing that it was going to be a disaster and as they say in their statement, they're developing a turn-around

plan and will put an initial details plan out on may 4th so investors will have to look for that in a couple of weeks. >> will keenly focus on acting more quickly to better address today's consumer needs in a competitive marketplace. we're developing a turn-around plan to turn around performance and deliver enduring profitable growth. at this point the stock is trading higher. it's up to 95.25 to 95-50. >> asia pacific and africa the first quarter comp sales were down 8.3% and they say this is due to the impact of prolonged broadcast consumer perception issues in japan along with negative and improving performance in china. >> coke was units, right, so that wouldn't be reflected to the same extent. >> although for the quarter, 77% in constant currencies because of strategic restaurant closing and other charges. so there are many things that they're dealing with here one

of them is consumer perception issues in places like japan and even in places like the united states and that's going to be the big issue they have to tackle. >> revenue is down 1% -- 11% if you take -- if you put currency in. but still 1% even if you back currency out. it was still revenue actually lower than in the year ago period. for more on the numbers, r.j. r.j. r.j. r.j. hatovi joins us right now. the company is dealing with some of the same issues that have been -- that it's been dealing with with its last ceo. got a new ceo. still dealing with some of the same issues. was it worse or better than people thought, do you think, that was already out there, r.j.? >> yeah, i mean i don't think the expectations were very high for this quarter. frankly the numbers i'm hearing were pretty lousy. i think it came in a lot lower than most people expected. but i think people are eagerly awaiting what steve easterbrook has to say and the turn-around plan. i think that will be the focal point of today's conference call

a little later this morning. >> this guy is someone that has had some success with what he's done in the division that he was running at mcdonald's, so there's a feeling that he may know what the right medicine is. we're just waiting to see what that is? >> yeah. there's a sense of optimism surrounding steve right now. i think if anything the way he's positioned himself to explore all options to enhance shareholder value right now. i suspect that we'll see four priorities today. a lot of focus on the menu and what changes need to be made. >> you don't expect to hear that today. he's now saying he's going to put that out in this plan on may 4th, riot?ght? >> i think we'll see some direction, some hints towards what we'll see there. we'll also see some emphasis on improving franchisee relationships, what it takes to turn around japan and germany as well as maybe some hints towards refranchising or at least

acknowledge they have looked into retransactions. i think those are the things the market wants to hear from steve today. >> r.j. when you think about this as a kitchen sink kind of quarter, just throw it all in because you know it's going to be bad, one of the points joe was making and i don't want to make it for him was this idea when you look at same-store sales, they're down unto themselves. was there something they could have done this quarter? do you think they stopped spending just knowing that they have this turn-around plan coming? >> i think it was something of a kitchen sink quarter, but i also think the results show that it's not going to be an overnight turn-around. there's a lot of moving parts, a lot of significant investment needs to be made and a number of parts to the business. so i don't think there's a lot more they could have changed. to the point about changing consumer perceptions in an evolving marketplace, i think that's the key thing here. so even though it is something of -- go ahead. >> no go ahead. finish your thought and i'll tell you what others have said. i'll read you easterbrook's comments. i like this.

they're nebulous and totally philosophical but go ahead. >> i was going to say i don't think there was a lot more they could have done to change around the quarter in the same-store sales. >> he said ray kroc made a statement about our business that is as relevant today as 60 years ago. take calculated risks, act boldly and thought fully and be an agile company. so people we've had on in the past, r.j. said slim down the menu. you don't need to be everything to all people. make it fast and make it fresh. go back to your roots. the perception of whether you're gmo-free and healthy to millennials, maybe that comes, maybe it doesn't come. there's still a lot of people that go to mcdonald's expecting what they want and just get it faster and fresher and that might be enough right there. >> yeah i think the phrase right there, the key is calculated risk. i don't think we've heard something like that in mcdonald's releases in some time. i think that's probably if anything what's driving the market up on the name right now.

>> they have been taking big risks, right? they have been doing crazy stuff. they make that -- what was that rib thing. it wasn't even ribs. they had a mold they put some kind of -- >> the mcrib. it was a mcrib sandwich. >> it was crushed up stomach -- >> what do you think chicken nuggets are? >> into a mold to make it look like -- nobody needs that. >> they were kind of popular when they brought them back. >> if they were that popular, they'd still be there. so are they going to be able to turn around the millennials and michelle obama? >> you know, i think what they'll do i think they have to focus on what demographic they want to go after. if it's millennials some changes will have to be made. >> never going to be in school lunches, r.j. >> that's fair. that's a fair point. if they want to go after families, i think some changes need to be made. but to easterbrook's point certainly simplification is the starting point. go after fresher ingredients, because that is something that commands pricing power in

today's environment. that's a good starting point. again, it's not going to turn around overnight. we're probably looking at negative comps through the rest of the year. but if you look at 2016 and beyond, maybe you'll see an inflection point but it all depends on the blueprint for a turn-around here. >> what are you saying? you know a place they could get a good deal on some chicken, that is what you were going to say? >> no, not at all. looks, you know my phobias. look out with avian flu. >> chicken, cheap. hopefully that doesn't -- that's a scary situation. anyway, r.j. you're not an expert on bird flu, are you? you need to know. >> no. >> no? >> conversational. you don't have to be an expert but you have to know the potential implications. >> worrisome, if it's contagious. >> and they do chicken nuggets. >> i know they do. becky says that's really not chicken, though. >> no it is chicken. >> some parts of chicken. >> it is chicken. it is molded though too.

>> is it moldest? >> i don't know what that means. >> by the way, when the obamas leave the white house, could mcdonald's hire michelle obama to actually be a spokes -- >> to help them get more -- >> she would be a great spokesman for them. >> kids don't eat -- they won't even eat what's on their plate anymore. at least they used to see something. now they see this thing of kale and like a raw broccoli. no. they're not even eating now at lunch. they're sneaking out and getting pizza. >> this is very true. we've got a couple other things to tell you in the meantime. our good friend becky, has a cough. it's been a mixed bag on corporate earnings so far. while many big earnings beat on earnings, they missed on revenue. here to talk about the trend and his outlook, jim paulson is here chief investment strategist at wells capital

management. good morning to you. >> good morning, andrew. >> so you've been -- you were bullish, bullish, bullish, then i think you sort of turned. where are you now? >> well i've been expecting kind of just a volatile flat year. i think that's kind of what we're getting and it could get more volatile yet. i think the market is somewhat vulnerable because we've had a good run, sentiment has improved, maybe a little too much valuations have improved maybe a little too much and we're probably going to have to reset interest rates higher before the year is out. that makes it vulnerable but it puts it between a difficult position right now. i think the market is worried about whether the first quarter weak are growth was a one off or whether we're going to have a spring thaw and a bounce. i think we're going to get a spring thaw and a bounce and that might bring some optimism to the stock market maybe push it toward 2200 but the problem in the united states is if we do

get better economic growth we're going to quickly move up the exit of the federal reserve again and bring the prospect of rising rates back into the picture. so i think if growth doesn't recover, that's a problem for earnings. if growth does recover, that's a problem for interest rates. that's the problem for the u.s. stock market. >> although is there a chance that you could still see a real goldilocks scenario jim, where the economy improves and that allows the fed to maybe race rates once and be done with it let things lie for quite a while. the economy continues to improve. because the fed has to look at the dollar strength and try to figure out what raising rates here while everybody else is lowering rates would mean. >> that's certainly possible becky, there's no doubt about that. i just think -- i think it's not as likely as struggling for a period with some overheat pressures. you know wages in the first quarter, average hourly earnings, were up at a 4%

annualized pace. i sort of suspect the dollar is peaking as we speak and crude is bottoming. i also expect that we're going to see a bounce in growth overseas, in europe and japan. that's kind of what those stock markets are telling us that a bounce is coming. and if you get that together i just think you get a weak dollar, a jump in commodity prices unemployment heads towards 5% wage and pressures show up even more pronounced all at the same time then boy, i think the slow and steady exit approach of the federal reserve, what they're advertising, goes out the window and it becomes a panic tightening if you will. and i just think we're going to have a little turbulence in dealing with this. after the mother of all monetary easing cycles if we're exiting that finally, i still find it difficult we're going to just skate right through that without any turbulence. that's kind of what i'm looking for. >> if you're right, if there's panic tightening and panic

selling in the stock market as a result of all that turbulence out there, do you look at that as a buying opportunity? >> i do. that's my most likely outcome. i don't think the bulls over the next few years. i think this is a bull refreshing year where we gut check sentiment, we bring valuations down a little bit, we start the process of raising rates so it isn't such a big deal anymore and maybe we can convince another run. but it could be a pretty volatile ride until we kind of get through some of those refreshing parts. i wouldn't be surprised if we get better economic reports here in the next quarter and the market runs up towards 2200 but then i think i wouldn't also be surprised if that brings rate fears and overheat fears and maybe we see a market below 1900 before the year is out as well so just a volatile kind of frustrating year is what i anticipate. >> jim you've been an economic bull for a long time. every year you know it looks like you're going to be right

and then you always get hit with something like this current period we're in again. you're big economic bull scenario isn't going to play out in the first quarter again. all of this -- i don't know where all your wage increases and inflation and commodities is going to come from in such a tepid, domestic semi. do you re-evaluate from time to time and say god, look at this here we go again. >> joe, i think that's an interesting point. i think wall street could be making a big mistake that we can't have overheated environment with weak growth. here's why. i've been believing all along that our problem is not so much lack of demand the reason we're growing slowly is supply issues. we have no labor force growth because of aging demographics. the working age population is growing less than one-half its average post war speed in this recovery. and then to add insult to injury, this is the worst recovery for productivity of any in the post-war era.

if you put those two together we can grow about 2% from the supply side of this economy. now, the reason that's important is take the unemployment rate. we're growing job creation at 2% a year but only growing the working age population about half a percent a year. so even if labor force grows better than the working age population, say it grows at 1, the unemployment rate is going to be falling 1% a year from here. has been. and what that means is even with very slow growth 2% growth a year because we have no supply side growth in this economy, we could get to overheat sub5% unemployment pressures very quickly. so i think it's a fallacy to think that you need 6% 7% 8% growth to have overheat conditions. you can have that with very slow growth if you have no supply response. >> then you're headed towards stagflation and nobody likes that. >> you can even boost prices is

my point. if demand for labor is going at 2 and supply is growing at half to 1% that could lead to higher wage rates. >> hey, jim, thank you for joining us. >> thanks for having me, guys. coming up when we return google fiber expanding. "squawk box" returns in just a moment. it's chaos out there. but the m-class sees in your blind spot... pulls you back into your lane... even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

google chose kansas city's kansas and missouri to be the first locations for its launch of going el fiber, its high-speed internet product in 2012 after a nationwide competition. today it says it is expanding. kate rogers is in kansas city kansas, with a look at what it's done for the area. kate, good morning. >> reporter: hey good morning to you becky. we're here in kansas city's start-up village and in a few hours all of these bungalows are going to be filled with entrepreneurs leveraging the fastest internet in the country. so since 2012 the buzz around google's fiber product, which is gigabit internet 100 times faster than the average connection speed has brought more than 100 start-ups in the area thanks to six accelerated program real owe making this an entrepreneurial hub in its own right. >> when google chose kansas city

to bring google fiber, it ignited passion and innovation just simply because they chose kansas city. people rallied around it. >> reporter: now startups are figuring out what to do with that blazing fast connection. it can be kind of hard to develop products that leverage fiber because it's not available nationwide yet. it is available, though here in what google called fiberhoods. there are hundreds of them in the kansas city missouri and kansas city, kansas metro area. as they expand their footprint here, there's one major question and that's how much google actually spent on this project. now, kansas city missouri officials tell us that as they expand their footprint to five additional metro areas, google will have likely spent about a billion dollars in this area alone rolling this out. back over to you guys. >> all right, kate thank you. that's an interesting point, though, that you're only as good as your weakest link. the fast stuff works but only in the areas where it actually exists. >> reporter: that's right, becky. the buzz is it's really been incredible and ignited the

passion for entrepreneurship here in the metro, which is something amazing in and of itself. >> kate, thank you. when we come back this morning, the 30 under 30 list revealed. and then the president defending his trade deal saying that it is the right thing to do. and that his opponents are wrong. congressman paul ryan chairman of the house ways and means committee, will join us next to talk about this. "squawk box" will be right back. good. very good.

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welcome back to "squawk box." box." ink magazine rolling out its 30 under 30 list. who are the young entrepreneurs making it big and making the list? here with us now on the set to give us some of the highlights from that list is eric shuren berg. many of the folks on your list have been squawk guests. why don't we go through some of the list. why don't we -- i always say letterman style, we can go 10 to 1 or 1 to 5. >> why don't we do by the most. which is the one that's most likely to be the next zuckerberg. actually he's been on your show or they have been on the show the collison brothers from limerick ireland. their company is called stripe it's disrupting the payments business. what they do is make it very easy for merchants to take online payments without having to send you somewhere else like paypal. so that's a real benefit to the

merchants, makes it much more likely for completion. the company is now worth $3.6 billion. >> so if you were betting on one -- >> if i was betting on one, that would be it. >> stripe is your company. >> one on being successful one on being a huge market cap company, one on changing the world. if you look at zuckerberg he kind of did all those things. >> yeah. well that's what i define it as, so doing all those things. it's a very profitable area disruption is ripe and they're pretty good leaders. >> so who else do you love? there's a guy on your list who has given me a foot massage on tv. do you know who this is? >> couldn't be guta could it be? >> no. >> we can talk about him. >> think about someone that's a little quirky. >> ben kauffman. great guy. >> what do you think is going to happen to that company? >> i don't know. i think that their partnership with ge is awesome and speaks well for both companies. kauffman is an awesome entrepreneur. he started his first company

when he was 9 years old and has gone through a couple of great wins in mofi and now quirky. he's a previous 30 under 30 winner. >> i thought he was a winner this year too? >> no. he's one of ou proud -- >> he's an alum. >> he's an alum. >> diversity on the list. >> the company called nature box. what they do is kind of a subscription service for healthy snacks. pay $20 a month and you get nature box branded healthy snacks. he was overweight as a kid and saw this as a way to kind of fight back. >> women on the list? >> a third of the 30 under 30 this year are women. >> now, did you try to do that or do you think that it was organic? >> well it was a little of both, but i think what we're seeing is that a lot more women are getting funding and a lot more women are starting companies. >> what the coolest business that you'd put on that list. >> the host heart warming was

kate keegan shilenberg. what they do is 3-d printed orthotics. she was flat-footed as a kid. she was embarrassed by it threw them in the back of her closet. she decided as an entrepreneur that she would solve that problem. >> do you think that you have to be young, meaning under 30 -- >> to get on the list yeah. >> to get on the list yes. but to have true sort of shoot the moon entrepreneurial success? there are people who say, as you might know peter teal for example, likes to invest in people who are under 30. that's actually like a cutoff for him. >> i don't think that's necessarily true andrew. i think it's an advantage. figures show that the age at which you have the highest likelihood of success in starting a company is actually 39. >> 39? >> tloin39. however, look, if you're under 30 you are digital native so you have an upbringing that sdpoez disposes you to think of things that are disruptive. also because you're entering the

workforce in the most recent few years, you question things and come up with innovations. >> thank you for being here. go out and get the issue ink magazine. cnbc will be teaming up to create the first ever ionic tour. it's a tour that focuses on entrepreneur entrepreneurship, small business and innovation. part 1 is may 19th at the chicago theater and features key speakers, including kneelneil blum blumenthal blumenthal. you can register at cnbc.iconicconference.com. coming up, the roller coaster ride that is the amusement park business. six flags reporting this morning. should you buy the stock? that's coming up.

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welcome back everybody. let's take a look at some of the stories that investors will be talking about this morning. first up the trader accused boy u.s. authorities of an illegal role in the 2010 flash crash is opposing extradition to the united states. he appeared in a london court earlier this morning. it is official the u.s. filing formal charges against gasprom. it accused of the russian company of raising barriers to competition when the gas markets of central and european. later today we'll get existing -- we'll get data on existing home sales. >> did we just -- did we say the eu or the u.s. >> we said the u.s. but i thought it was the eu. >> they're letters, two letters. and the u is the same. >> there are regulators -- you're right. >> if the u.s. went over and did that, that would be --

>> why we would say -- >> that would be cool. we don't do -- get involved with that do we andrew? would we go over and do the -- >> yeah. what's that movie, extradition. >> that's sticking our nose into someone else's business isn't it? anyway president obama stressing the importance of passing trade promotion authority. in an interview with msnbc's chris matthews last night. >> everything i do has been focused on how do we make sure the middle class is getting a fair deal. now, i would not be doing this trade deal if i did not think it was good for the middle class. and when you hear folks make a lot of suggestions about how bad this trade deal is when you dig into the facts, they are wrong. >> congressman paul ryan chairman of the house ways and means committee joins us now with more. good morning. i'm going to call you mr. chairman, i think, today. you've got a lot of titles. >> all right, mr. kernen that

would be fine. >> okay. and then i read about rob portman. i mean i've never seen -- in the "journal" today, i don't know if you saw that piece, paul. >> there's an op-ed with ted cruz in the "journal." >> no. he wants to put some currency manipulation language in it which wouldn't work. he's up to re-election and that's pandering to his interests in ohio. god almighty. everybody has got a horse here. strange bedfellows, you and the president. nice. nice to see. but the president said elizabeth warren is wrong. there's fighting on all different sides. it's weird. >> it is different, i'll give you that mr. kernen. hello, mrs. quick, mr. sorkin. >> nice to see you. >> nice to see you guys too. look, here's the deal. this is about more jobs and higher wages.

one in five jobs in america are tied to trade. 95% of the world's consumers don't live in america, they live in other countries. so if we want more jobs if we want higher paying jobs and trade-based jobs typically trade more we need to open up markets to our products so we can make and grow more things in america and send them overseas. the second point is the rules of the global economy are being rewritten writeright now, there's no question about that. who's going to write them america and our allies or is it going to be china. i would strong low arguely a if we sit by and do nothing, china will rewrite the rules to china's benefit and that will not benefit the american worker. it's about getting a more level playing field for our workers so we can have more jobs. look our economy isn't growing near its potential. opening up markets, giving us access to nearly a billion new customers, 40% of global gdp in asia's case is good for us it's good for jobs it's good for our economy. in this case i think the

president is right. and so when i think he's right, we're going to support him. that's why this is a bipartisan effort. >> i'd have to say the same paul that if the president -- you know we take issue with a lot of the moves, whether they really do help the people he's trying to help. i think he's sincere that he wants to help the middle class. some of the things i think are self-devote self-defeating, but in this case if you, paul ryan, and some of your associates on a private sector issue can actually agree with this president, i mean it's got to be right. if he's on board, you've got to go way left of him to where this is not a good deal. >> go to "the wall street journal" today and ted cruz and i have a joint editorial explaining why this is very important. why trade promotion authority is the necessary process that gets congress engaged early on makes us co-drivers in this process, keeps congressional

responsibility, the constitution intact, advances trade and is important for workers. you see republicans saying the same thing that some democrats are saying which is we need to open up markets, we need to write the rules of the global economy. this is good for jobs. it's about getting a better deal for our workers and leveling the playing field. and so if you are standing still on trade these days you're slipping behind. joe, there have been 48 trade agreements since 2000 in asia alone, and we've only been a party to two of them. as a result, our share of trade, our share of the imports going into asia has gone down 42%. that means we're losing sales. all of our competitors have done better than we have because we haven't been on the playing field. now we're finally getting engaged and so we have bipartisan legislation called trade promotion authority which we think makes sure that we get the best trade agreements we can. we don't yet have a trade agreement with asia yet. we haven't finished negotiating this. then we're going to try to get one with europe to increase trade there as well. this is good for us and it's whether we write the rules or

china and that's really the question. >> it's funny because now you've got cruz all the way to you all the way to the president. so that just leaves let's see, elizabeth warren joe stig litslitz and the castro brothers isn't it? what's wrong. >> no comment. >> why do we think, paul when you phrase it that 95% of the consumers are outside this country. so it would be hard for me to argue the other case. but i see what they're saying because we want jobs here. we don't want labor being exported to where it's cheaper. we want to -- it's almost as if we want it both ways. we want to sell to the rest of the world, but we don't want their labor to go into a lot of the manufacture of it and i can understand why unions would feel that they're not getting a fair shake. they're still -- people are still arguing about nafta. >> i'd make two points joe.

number one, take a look at what we're talking about here in this trade agreement. take a look at what we're talking about in trade promotion authority. 150 negotiating objectives have to be met by the administration. and the quick to that is raise the standards. bring these other countries up to american standards, don't lower our standards. and if we don't do something like this then china will write the rules which lowers standards. so i would take a second look if i was somebody who's suspicious about this. this helps raise our standards to american standards. that's point number one. point number two is we already give most of these countries pretty good access to american markets right now. we don't have reciprocal access to their markets. so this is about leveling the playing field and opening up access to these other markets that we don't now have access to. typically if you're a multi national and you want to sell to another country, you might have to manufacture in that country in order to sell in that country. but with trade agreements you reduce those barriers so you can keep your manufacturing here at home and send them overseas because you removed those

barriers and sell to those market places. that's the deal here. >> paul where do you think the country is right now? and i'm thinking about millennials. i think you might even be a millennial. >> i'm an x generation. i'm like sorkin i'm x generation. >> you're darn close. but you even look at the way -- i remember when the clintons -- when bill clinton was in office he was called a liberal. we now look back at the type of positions that he took and we realize maybe he really wasn't a liberal. now we're at a point where senator clinton, secretary clinton is being pulled much further left than she and her husband were back in the '90s when they were in the white house, even to the point where she says we need to topple the 1%. what's happening in the country? have we skewed that far or do we just think we're that far to the left all of a sudden. are we really there? >> look you're asking a conservative to give you

psychoanalysis on the democratic party. >> you're just trying to do what you can do. i just wonder if we're past the point of no return with the millennials because they buy into all this don't they? >> i think the progressives have basically taken over the democratic party and run the party for the most part. but no i don't think that's true with millennials. millennials are suspicious of big government. they don't like being told how to run their life. >> is that true andrew? >> that's exactly how i feel. >> they are libertarian types which is what i would call myself a classal liberal, limited effective government free enterprise free markets -- >> i can't get you to get out of the bedroom, though with a lot of your views so you just said what we want to hear. libertarian and yet we've got people saying that the conservative -- or the republicans have to run someone who can galvanize the religious right to turn out in droves and that's the way we're going to win. is that the way we're going to win? >> i believe the way to win is

another reaganesque -- look i wrote about this a lot in my book. as conservatives we need to show why these important founding core principles of america are so special, so important and how if you apply them to the problems of the day you can offer far better slougszolutions than what the left is offering right now. i do think we can be extremely competitive. i think we can assemble a big coalition of people who want to turn the page on eight years of progressivism and get back to upward mobility get back to economic growth. and i think -- get back to a foreign policy where america is stronger where america is leading and where america isn't doing this proverbial leading from behind. that's why i'm pushing for trade. that's why i think this is good for economics. >> and what would you say the chances are that this -- that this works? >> i think it's going to work.

what do you mean, are you talking about trade? >> yeah. >> first of all, it's bipartisan. i know there's a lot of anxiety but people ought to look at the facts. >> handful of democrats. that's what sandra levin said. >> i disagree with that. i think there are more than a handful. we negotiated this with ron woidenwoid widen. the appellate ispresident is a democrat. i don't think democrats in congress are going to let this president fail on probably his biggest signature issue foreign affairswise, tradewise of the day. >> all right. mr. chairman mr. congressman, mr. vice president candidate -- >> kernen mrs. quick, mr. sorkin. >> have you endorsed anyone? >> no i haven't. >> give me your top three. >> i'm not going to do that. >> it's not that hard. >> no i'm not going to do that. here's why. >> give me your top 26. >> how much time do you have? >> there's 26. you can't give me one? >> i'm the chair of a thing

called the presidential trust, which is the fund for the general election for the nominee. so i'm actually required by my chairmanship of the presidential trust at the rnc to be neutral and therefore because of this position i'm not going to answer your question. >> but you're not backing hillary. >> that's correct. safe assumption. >> you might like elizabeth warren. who doesn't? anyway -- he's like get me out of here i've got things to do. thank you, paul. see you. >> thanks guys. see you. when we come back this morning, an earnings recap. the companies that are moving markets this morning, including dow components mcdonald's and boeing. later the story of a couple of guys turning their scooter parts warehouse in chicago into their ultimate dream. check this out. they are bringing the scooter back to the streets across the u.s. the founder of genuine scooter will join us in just a bit. guys these three scooters have our names all over them.

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six flags are reporting a quarterly loss of 75 cents a share. that was a little bit wider than the street had been expecting but revenue did beat wall street estimates. joining us right now is an analyst to talk about this. before we do we should point out that the stock is on a run, up more than 40% over the last six months. barton crockett joins us right now, he covers six flags. barton, we know the company lost money for the quarter. that's because many of the parks

aren't open for that quarter. what did you see that you liked? >> this is a small quarter, only about 5% to 6% of the full year which is why they lose money but their attendance was up 13%. i think that's really an encouraging start to 2015 not just for six flags but potentially for the theme park group where i think the backdrop of declining fuel prices you know i think easy weather comparisons to last year and a steadily improving job market is encouraging for the year. >> that's what i was wondering, how much do you think is lower gas prices and consumers feeling a little more flush and how much of it do you think is weather? >> well, i think all of those things factor in. i think the -- you know the weather is a big thing. last year we had a lot of delays to school -- at the end of the school year the polar vortex was a big issue. but six flags under this ceo has executing tremendously well. a lot of that is in the stock which is why we're market perform, but i think they're pioneering some new approaches to selling membership and season

pass that's resonating as well as i think just making some very good investments in the parks that consumers are responding to. >> is that the active pass that's what's been selling? >> yeah. >> that was up 53% been selling? what did they say 53% or something. >> they had 53% growth in the past year in a monthly kind of subscription membership program. if you're sitting around thinking about what you're going to do for the weekend, if you have this pass paid for you go in. you notice that in the small periods and i think that's a big part of what happened in the quarter. >> thanks for your time. >> great thank you. >> we return with jim cramer back on the street. earnings and what investors are going to watch ahead of the bell today.

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jim cramer joins us now. what was more interesting or noteworthy? >> i have to tell you i think mcdonald's given the fact that there's so much hope here the revenues were made. so the idea that there can be a main meeting that can be something that's major or

talking about bold there's a lot more to come here. coca-cola coca-cola, i love the organic but the idea that there's a data point, a big deal with the revenues being met, there's game here people were not counting on. >> i guess a good point. too early to say anything. we don't know anything do we. >> they did turn around internationally. very tough. by the way, i have to tell you i think the heat should be off here. this is a remarkable quarter from the point of view with bang for the buck. they did a lot of marketing that cost a lot less. don't forget monster closes in q2 and that's important. both of these are surprises. >> the term honeymoon period, how long typically is a honeymoon period? >> two days right. two days. >> two days all right. >> i got to see fast and

furious. that's a honeymoon. >> time dilation. everything happens faster in this new world. jim, thanks. see you in a few. all right. what's coming up when we return? it's the age of a scooter. i can't call it a bad boy. i'm sorry, it's not a harrell lee. -- harley. financial noise financial noise financial noise ♪ if you're looking for a car that drives you... ...and takes the wheel right from your very hands...

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40% of streetlights in detroit at one point did not work. at the time that the bankruptcy filing was done the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. they had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. kids are feeling safer while they walk to school. 40% of the lights were out but they're not out for long. they're coming back.

welcome back. this hog here gets about 100 miles an hour. joining us is the founder of genuine scooters. saving a lot of fuel. you don't want us driving cars. you want us to drive these every morning. >> absolutely. to help the economy. it's a good cost of ownership with it. mostly, they're fine. >> how much do they cost? >> between $2,004,000. >> i'm going to put the helmet on. do you wear the helmet? >> it's a good luck the recordfor you. >> you want to see a good look? how about that? >> just like the guy from outer space. now i'm worried if i were to do this on the way to work is my

hair going to get screwed up? is this suppose to be a fun vehicle? >> you can commute with these. >> is this a clutch? >> no it's not. >> there's no gears. >> it's automatic. >> would you feel safe driving around new york city? >> absolutely. take the motorcycle safety course. some of them that bike could go on the highway. >> instead of your porsche would you want to get on one of these? >> if i was going to take the chance i would get on a motorcycle. >> that one does about 40 miles an hour that one 60. >> this is a city bike. >> yeah this is better than the city bike. >> you've been in business 13 years?

do you sell in the united states or elsewhere? >> just the united states. we do have some in canada and working on australia. >> did you bring one for us all to keep? is that how this works? >> good-bye, everybody. time for squawk on the street. >> good morning and welcome to squawk on the street. i'm david with newly wed jim cramer. he's ready to go too, man. let's give you a look this morning. we are looking for i guess i'll all that an open after yesterday's down day. crude oil, 10 year note is what we go