let's take a look at shares of visa and mastercard, getting a boost object news that china will open bank card clearing market to foreign firms, giving the cards direct access to a market valued at $6.84 trillion last year. mastercard surpassing the 30-day average volume of 4.2 million shares. visa approaching the 30-day average of 10.1 million shares. visa is up by over 6%, mastercard is up by 5% now and i believe over the past 12 months, visa had gained up to yesterday's close, about 25%. while mastercard had gained about 18%. kayla? back over to you. >> mandy, thanks so much. well good morning, it is 8:00 a.m. at yahoo headquarters in sunnyvale, california and "squawk alley" is live. ♪ ♪

♪ good tuesday morning and welcome to "squawk alley," carl quintanilla is on assignment. joining us is nick bilton, columnist with "the new york times" and john steinberg, ceo of the "daily mail" is here and kelly evans at post 9 and john ford is back as well. we have a busy morning. so let's start with yahoo. look at shares of yahoo after the company reported quarterly profit and revenue that came in below estimates. that stock down by 1.25% in early trading that includes display and search ad revenue which fell for the first time in

years. kth announcing it has hired advisers to consider options for its stake in yahoo japan. marissa mayer, ceo of yahoo made sure to talk about the potential for value in yahoo japan right off the bat, because she knew that's what investors were looking for. what's your take-aways? >> i understand her approach of wanting to go after search. i think it makes sense. google, the search algorithm hasn't changed in a long time. i think it is losing to facebook a little bit here and there. people have figured out how to dpam the system. is makes sense for marissa to go after that but at the same time we don't actually know what yahoo is doing as a company. as a whole. i don't think marissa has ever actually explained that to people. you can sell all of these different products, you can sell your share in alibaba, but what is the larger goal moving forward over the next couple of years that's going to give investors hope that yahoo can pull off whatever marissa is

aiming for? i don't know, i've listened to her, i've seen her, spoken to her, i don't know. >> maybe we should talk about mavens, john steinberg. >> the company has no growth and no marketing strategy. everything is so confusing. how about tumblr, 474 million users. >> maven is what i was referring to -- mobile, video, native, social. >> it should be just innovative products, if she came out and said tumblr is doing $150 billion in revenue. the maven stuff is too confusing. >> $234 million in mobile gap revenue, there's as much to like if not more than to dislike. considering that revenue is hoeding steady. they did the mow zilla deal, it's a profitable deal. if there's anybody to figure out how to keep the momentum going,

it's marissa mayer. they've got yahoo japan in the back pocket to turbo-charge. my big criticism of yahoo would be she hasn't done any kind of big, imac and i-book type move. but in terms of steadying the ship, cutting the workforce 28% including contractors, all of that is pretty good considering the whole company could be down the tubes right now. >> the search deal, she could have come out and said, we have a lot of flexibility, instead it was a press release i couldn't follow. i don't know who is the doing the marketing for this company. >> if you were watching the webcast yesterday, almost every single analyst question was trying to understand more about the new search agreement with microsoft. what it would mean, how much flexibility it would give the company. so that they could actually try to figure out what it would mean for yahoo as it tries to redefine itself. but i don't think that many

analysts walked away thinking they had all figured out. >> i'm with jon on this. i've cover this company, i follow this company. i don't know what the company is saying half the time. i think that you know, marissa was really amazing at communicating when she was at google. she was really essentially the pr queen there. but for some reason, at yahoo, i don't know if she doesn't have the right team behind her, but i don't understand. mavens? i still don't remember what that ak row name means. >> mobile, video, and social. >> let's move on from yahoo for the moment. google will unveil its new wireless service as early as today. the key feature, google is expected to allow customers to pay only for the amount of data they use each most. compare it with most other carriers, whose plans offer

buckets of data that expire at the end of the month we reached out to google, but the company declined to comment. >> there's been a name for types of plans where you only pay for the data you use. generally it's for the kind of low-market is your describe e s. i think there are people at the low end and high end who would find it attractive for a phone. it's probably more attractive for the internet of things, devices and services that use a small amount of data. you don't want to necessarily add them into a big bucket of minutes from a large wireless provider. that would allow flexibility. >> nick would you agree that would be going after the b to b market rather than the consumer space? >> i think what you're seeing is this is going to be super attractive to kids. i met a bunch of college students recently and one of the kids was telling me he got an

old iphone he bought on craigslist, he bought a wireless carrier and used it to send data to his phone and he had what's app and all of these things on the phone. he didn't have a phone number that was tied to it but he was using facebook and twitter and i think that's what google is going after. going after people that want to spend $40 a month or whatever the number will be to have a data plan and use all the services and products out there this is very different from the past. in the past you didn't have things like what'sapp and what'sapp voice and all the other messaging and texting services. >> it does beg the question whether it's the prepaid market that will be disrupted. built-in references kids, college kids, that's the market that it appears that google is going after. >> this is classic google. they do something to show the way or provoke change in an industry. remember in 2008, they bid on the 700 megahertz spectrum.

not because they wanted to win, they wanted to lose and they wanted open access rules to be adopted. they did the nexus line of phones, to show the way for other android developers of hardware. think they're doing something with this i don't get what's totally novel about this. with a lot of carriers now, you have unlimited data. which t-mobile which is a customer of mine, you have rollover as well. it's interesting that these guys are going to do this at this point. >> we haven't quite gotten all the details yet. there's something missing from "the wall street journal" article. >> can you do this with a lot of carriers, it's like the subprime market in wireless. if you can't afford, if you don't have the credit to get a really good plan to begin with, or if you're really rich and you have a whole bunch of phones and you don't want to put them all on the same plan, sure. but for most people. for the main stream. >> it reminds me of the conversation we're having for ala carte versus video.

>> we'll continue the debate. it will be interesting to see whether we get more details on exactly how this will play out. but finally apple retail chief angela ahrens discussing details of the apple launch in a video message sent to employees. in the video sent by a french apple blog, ahrens said allowing customers to order the watch online was a hard decision, but it was not a permanent one necessarily. take a listen. >> it's a new way of workinging it's a new way of doing things, it is not going to be forever. this is a unique time for us right now. but these two new products that we're launching. we love our iconic blockbuster launches that we do in the stores. and have absolutely no fear, you will see those. this is just a very unique situation. >> nick bilton, she references over and over again that retail employees have been bombarded with questions and there needs to be more clarity on this. is that typical of a product

launch? or do you think that something went amiss this time around? >> i am going to lean on the latter. i don't understand what apple is doing with the launch. if you want to go buy a watch now, it says that they're available in june. they could say that this is a supply problem, but tim cook is the master of supply. and if apple sold 72 million phones last year. if they can't put together a couple of million watch, even though we've known about this for months and months in advance, that is a problem to me. they make it seem like a supply problem and people run out to get it the problem is they can't run out to get it. things don't add up and i'm not sure what the goal is the other thing is apple has these amazing launches where people sleep outside for days at a time there isn't a company on planet earth that would not give anything to have that. yet they're not doing that with this product it doesn't all add up to me. >> this is a day for me and nick

to disagree with stuff this seems pretty clear to me. this is the most logistically complicated product apple has ever watched. you've got the watch faces and the different materials in the watch faces, but bands are the real issue. >> the watch band? >> yes. >> it's a bunch of watch bands. >> it's a whole lot of watches with so many choices you don't know how many black ones to stock over here, versus white ones. >> but how hard is it to stock a bunch of them? >> it can be very difficult if you go in and expect to get the exact watch what you want. >> that's why they're not in the stores and are pushing them online. >> so they can see where demand is and eventually they should figure out where they can ship the bands. >> my read on watching that video is supply constraint. think what happened is they saw massive amounts of orders, more than they expected online. they said rather than disappointing more people on

line. the people who walk up in the middle of the night to get it push it online. get it out the door online and we can say to people don't come on friday, i think they were trying to minimize the pissed-offness. >> if apple offers four or five fixed options, you don't think those would have sold like hotcakes? they can sell all of these different colored cases for smartphones and they can't for smartwatches? i don't understand the supply problem. this is a company that's mastered supply. essentially it's a smaller iphone that fits on your wrist. it's not like this is some new kind of technology that they've never built before. it's the same kind of screens and so on. sure, this is the case for the gold watch, but when you look at the other devices, it's just, it's the same as an iphone in my eyes, i don't understand how you can have the lead-up to this and have the wait time be until june to buy this device. >> you think something broke down? you think something went wrong?

>> maybe something wrobroke dowr they're doing what apple does, trying to create supply and demand. i think they've gone a little too far in this instance. >> tim cook hates inventory and sure, they could have shipped thousands to of them to every store and had them sitting in the back waiting for people to come in they could have shipped thousands of watch straps to every store and waited for people to come in. that wouldn't be smart business it would hamper their ability to do international launches and be efficient where they send all this stuff. you expect certain issues with certain models, it makes total sense to me. >> why would you put on your website, available april 25th and have to retract that? because it's not available april 24th, yes, and we always talk about how we wish every company could have apple's problems, because they're very much first-class problems. but still, it is a problem nonetheless, nick. i'm wondering what you think customers' levels of satisfaction will be when they have been told they could get it on this friday and they won't be able to? >> well i got a message from my

brother-in-law the other day who is a big apple fan and he said he went to go buy the watch and saw it wasn't available to june and he decided not to buy it. so you know, maybe that's, it's not going to work out as well as apple hopes. maybe they'll solve it before then, i don't know. the other thing that's interesting is for the first time, that apple is giving away the gold watch to celebrities, trying to create a buzz around the watch around that. and that doesn't, it doesn't add up. it's like you've got, you've got one instance where you're giving it away to people like beyonce and katy perry and another instance where you're telling the public hey you've got to wait until june to buy the $400 version of this. this to me doesn't make sense, it's not all adding up properly. >> maybe this is just the beyonce effect on retail. nick bilton. as always, we appreciate your time, and jon steinberg, thanks for coming by. let's check the markets at this hour. we've had quite a choppy morning so far. but right now the dow is back in

positive territory. the markets largely started climbing off of their lows on a more positive-than-expected report for existing home sales and shares of mcdonald's rallying after earnings topped analysts' estimates. u.s. sales fell more than 2.5%, thanks to tough competition and strong dollar. but that stock still up about 4% this morning. meantime shares of boeing slipping after earnings and revenue missed expectations. the company did meet its jet delivery goals, but. stock is down about 2.25%. and kelly, it's the biggest laggard on the dow so far this morning. >> an index, only about 40 points this morning. coming up the tech earnings parade will continue, we'll tell you what to watch for when facebook reports after the bell. plus speaking of facebook, its $21 billion acquisition making a major announcement this morning. find out why it could drive growth higher. the apple watch officially available for pickup this friday, and the story you should be watching is how it works with

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how can yahoo revive meaningful revenue growth. let's bring in mark ha haney.

mark, tell me it's like a tale of two yahoos here. on the one hand, you've got yahoo japan spinoff that possibly catalyzes another move here. you've got mobile growth happening. but on the other hand, top-line growth not going anywhere. which one should we be paying more attention to? >> well on the fundamentals side, the issue for yahoo is what's going to happen tonight in the report from facebook. which is that facebook is generating four times as much revenue as yahoo. google is generating 16 times as much revenue as yahoo. that doesn't leave yahoo a lot of room to maneuver within a space. of all the commentary that occurred earlier, the additional point i would make is yahoo has to consider a transformative acquisition. >> mark, this reminds me of the early 2000s, when terry simul started taking heat for not being google. in retrospect he was running yahoo pretty well. you couldn't expect yahoo to be google. should we expect them to be

google in facebook now? or might they have a separate story that's pretty good based on where the stock is trading now? >> well the stock has underperformed year to date. over the last couple of years, this has been a great performing stock, they've got the very valuable assets in asia and they've gone through the process of selling off the assets at great prices, so kudos to them and they've been very shareholder friendly in terms of repurchasing stock. once you leave that realm and we're going to leave that realm once the assets are spun off, yahoo japan and alibaba, the question is what's left. and there what's left is far, far if being anything google-esque. and you know then what do you do? you, we think probably the best step for that asset there is some sort of transformative acquisition. >> you know, mark, you mentioned transformative acquisition fwlurks are a lot of investors who are wondering what yahoo,

the core company looks like once yahoo japan is dealt with and it might make more sense to them, that yahoo becomes the acquisition target. it doesn't have the track record that other tech giants do with large deals, do you think either one of those scenarios is more likely? >> it's possible that yahoo gets acquired. the potential acquirers would be google. though there would be anti-trust issues potentially, but i think the chances of that happening are pretty slim. the greater opportunity is to try to turn around the business organically. i think the marissa has the right strategy in place to improve products. only criticism is that she's too hesitant in some of the moves. in hindsight tumblr, that acquisition doesn't move the needle to yahoo. she's tried to do all things for all people. the share repurchases, the spins, the acquisitions. our point is view she probably

hasn't done enough on the growth side of the business. >> mark, can i ask you for 140 characters on the most important thing to watch in facebook's earnings this afternoon? >> yeah. i think far and away, it the advertising revenue growth, this is going to be the toughest comp quarter that the company faces, during the course of the year. the over/under is going to be about 150%. if they can do 50% or more advertising revenue growth, that tells thaw street numbers need to move higher this year. we think there's a reasonable chance they can get above that level. that's far and away the best growth you can find in the large-cap internet advertising space. >> mark how important is it what they say about monetizing video. we've seen enormous growth in their video on their own platform. they've done acquisitions that would seem to suggest they're going to monetize that even more and they've hinted at that. there are two things, one is this video is the roll-out of auto play video ads we think has been an enormous catalyst

fundamentally for facebook. not only because they get higher cpms on video ads, four times as much as they get on traditional banner ads, and it's brought new types of advertisers to facebook that hadn't been there before. automotive, insurance, financial services, maybe even travel. it's widened the number of advertisers coming on. that's what to watch for in 2015. in 2016, we think the company is cadencing new revenue streams. instagram monetization, this company has multiple platforms close to a billion in size, they can keep layering in every year. the growth outlook for this company is one of the most robust in the spaces, one of the reasons we have a buy on the stock. >> i'm seeing an enormous amount of auto play in my news feeds. thanks for joining us. up next, the most important smartphone messaging app in the world could be getting a lot bigger. we'll explain, in a moment. go!

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welcome back, i'm meg tyrell, let's check home builder stocks, shares of pulte group and others are taking a hit as sales of existing homes rose to the highest level in 2013. john, over to you. thanks, meg in case you missed it, mobile messaging app, whatsapp acquired by facebook release an update to its iphone app available in the next couple of weeks. the latest update will allow users to access whatsapp's free calling feature, much like skype or face-time's audio service by using an internet connection rather than cell service to make calls. be a droid has had the service for a couple of weeks already. whatsapp hit 800 million active users earlier this month. that app continues to chug along for facebook. >> huge internationally. anybody who has to communicate across borders, whatsapp is your

best option. >> the properties that they've got at the multiple hundreds of millions of monthly active users, impressive. >> we're wondering how facebook would operate whatsapp in instagram, would they integrate it it's incredible to see them operating them as separate services has done nothing-team paid any of the growth. >> like mark mahaney said if they start to try to monetize it. how does that oh void scaring or irritating users? >> it's scaring some partners in a way. we've seen that some carriers in india aren't working as closely with whatsapp as they have been in the past. worried it doesn't work for their business model. >> one billion users is when they would start monetizing whatsapp. a little ways to go. >> simon hobbs, counting you down to the close of the uk and across continental europe. >> european equities aren't off their lows, they've cut their losses during the session. consumer confidence has fallen in the eurozone for the first time in five months. the european commission is saying it's because of the

situation with greece. actually the greek situation appears to be slightly better today. you've got four key players talking about significant improvements or significant progress in the talks, the negotiations with the greek government and the bonds have rallied in greece, particularly at the short end. the yields are coming down. the banks have done well today. overnight corey, one of the main players of the ecb said they would continue to fund greek banks as long as they were solvent and today the ecb announced another one 1.5 billion euros in. top gainer is the truck giant volvo. announcing it's replacing its ceo. it's earnings beat. on the down side tesko, once the dom month supermarket in the uk. unveiled a $10 billion loss, a lot of it has to do with one-off charges and writedowns. this was one of warren buffett's favorites, has lost about 40% of

its value during the last two years. if you thought last week's judgment from the competition commission anywhere europe against google was political, today she is accused russia's gazprom of gouging on prices for natural gas in central and eastern europe that will do nothing to improve relations with russia. guys, back to you. >> simon hobbs, thanks so much with a look at the close in europe. up next, when the apple watch comes out this friday, the thing to look for is how it works with apple pay. so says roger mcnamee up next. sometimes romantic. there were tears in my eyes. and tears in my eyes. and so many little things that we learned were really the biggest things. through it all, we saved and had a retirement plan.

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here's your cnbc yus update at this hour. the u.s. and south korea signing a new nuclear energy agreement after five years of negotiations, that deal will pave the way for the koreans to manage spent nuclear fuel. almost one million trek bicycles are being recalled in the u.s. and canada after an injury left one rider paralyzed. the consumer products safety commission says a quick-release lever on the bike's front wheel hub can come into the contact with the front disc assembly, causing the wheel to separate from the bike. that's hail raining down on chicago along with blustery

winds, no sign of spring here, the high temperatures in the windy city will in the low 50s, won't get much warmer for the rest of the week. as the excitement mounts in london over the impending birth of the duke and duchess of cambridge's second child. so do the stakes, thousands have placed bets. most people put their money on a girl. with the most popular name being alice. if that's true, it could cost british bookies about $750 million. that's your cnbc news update. let's get back to "squawk alley." thanks, sue. just say no, or at least not yet. that's the basic message from apple's senior vp of retail to employees in a leaked internal video this week. clarifying that the apple watch's retail availability on the watch's official launch date won't be what they had initially said in this video posted by the

french site. mac forever. angela ahrens says supply versus demand spiked the long wait times. ahrens said they'll start getting their watches on friday. joining us from palo alto. roger mcnamee, co-founder of elevation partners. roger, you think the watch is a big deal particularly for apple pay. what's your sense of that? and the overall availability issue? is it good that they're managing it this way? is it too disappointing for people who thought they were going to be able to go to the store and buy a watch at the end of the week? >> i can't see a negative scenario in this for apple at all. the reason the watch is so profoundly important, has nothing to do with the revenue. apple is a $200 million revenue company. it's four times as big as the watch market. so that isn't really the big news here. the big news is that apple has

this initiative called apple pay. which allows you essentially to replace your credit card with stuff built into the ios operating system. initially in the iphone now, in the apple watch. think about it for a moment, a watch son your body it's very secure. it's always there. if you're in a retail situation, the notion of putting your wrist up, your watch up to the pay station, is incredibly, it's just so convenient. that i think it will be a dramatic thing so when they did a million units sold on the first day. think you have to look at this as being really the pointy part of the spear for driving apple pay into the marketplace. and in the long run, if apple is successful with the watch. people will be buying lots and lots of things on that system. that means apple will be a huge factor in the banking industry. which is obviously much bigger than the watch business. and just as importantly, i think it means that secure documents

are going to go from paper and plastic cards. into the ios environment. so match driver's licenses, so imagine your passport. it's much more secure to have the thing on your body, and with the apple watch, you're going to be able to have ways of authentication that have just never been possible with cards in the past. to me this is a giant deal for apple. it's sociologically a really big deal for our economy. >> it is, roger, but the economics aren't necessarily as favorable as some of the hardware that apple produces, when you think about the way that merchant economics, they're only getting a few basis points of revenue on each transaction. so even though it might be symbolically a big deal for the economy, it's not really going to move the needle for apple revenue. >> i think that's right. but again i think you have to think about this as a long game

thing. imagine what would happen if 5% or 10% of credit card transactions wind up going through apple pay. the revenue numbers will not be huge. but mention thick you know, apple will be able to do other services because all of that stuff sem bed and i think we'll wake up in five or ten years and say oh, my gosh, this is the most important thing ever, why didn't we see it? we do see it now and you're right, kelly, it's going to start slowly. it won't be in the math. but don't kid yourself. not everything that matters to stocks can show up in earnings, there are some things that have to do with customer satisfaction that have to do with just global reach. and apple is in the driver's seat right now and i tip my hat to tim cook. >> on that point, though, google is trying to skip a beat ahead here. saying that they're going to allow for the android wearer to use your pebble or samsung watch without needing the phone on you

as long as it's connected on a wi-fi system. and i love your point on the apple pay is its convenience and availability. at what point do you think apple is going to have to either match or offer a service that allows people to not have to be tethered to their phone. >> to be clear, to be clear, think where are you in the apple environment, you have your phone, you have your watch. and one of those two items is going to be on your person in any retail situation you're in. so i don't actually think that's a real issue. i think the burden is on google. because the android marketplace just has not been able to create products as compelling as the iphones. and i think as the iwatch is going to turn out to be. i love what google is doing. i think that's exactly the right strategy. but i think realistically apple's lead in this area, it's very significant. and i think sustainable. that said, think there's plenty of room for google to be successful also and i'm really cheering for it the notion that

google and apple are going to play a bigger role in our banking system, i find very encouraging. >> roger, isn't the real issue here that if you buy the apple watch. you're that much more likely to buy the next iphone and keep on the upgrade cycle and you're much more likely to get bluetooth beats headphone when you're jogging can you use the watch and leave the phone at home. >> that's exactly the answer to the whole thing if you're trying to figure out what the revenue impact -- it's suddenly, everything you own is made by apple. and when, if they ever decide to make a car -- i mean what's the shortest unit of time in the universe? it's the amount of time it will take the person who has the watch, the phone, the computer and all that to switch from whatever they're driving to an apple car. i do think apple's strategy is huge, it's a really big idea. what's remarkable is how well the stuff seems to work together. it's -- people said when steve jobs died, well that's it for

apple on big ideas and i was among those who was worried that that might be a problem and i'm looking at it now and going well, okay. they've obviously figured it out. >> they seem to have figured some things out for sure. roger, stick around, we'll see you again in just a moment. when we come back, the man accused of the 2010 flash crash in court this morning. about five years later, what does the case tell bus the future of trading?

40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city.

you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. 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. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.

the halftime hot seat, can mcdonald's andy hoo turn things around, what should warren buffett buy next? we've got a contest win another says he's got the answer. and the arrest of a trade anywhere london. we're going to pick up on the story now. the high-frequency futures tradary accused of manipulating the stock market and triggering the 2010 flash crash telling a london court this morning he cannot consent to extradition to the u.s. and was granted conditional bail. the court said the 37-year-old was arrested yesterday. and roger mcnamee joins us from elevation partners. you have thoughts on the flash crash and the role he purportedly played in it. >> kelly, i think the problem we're dealing with here is from a regulatory perspective, it feels like whack-a-mole.

the flash crash was the result of trading practices that were widespread in 2009 and 2010. and you know, the fact that one guy may have allegedly triggered the whole thing, over $40 million investment opportunities, which appears to be what he earned from it. and yet, he sank the whole market by 1,000 points for little bit snsh that terrifies me as a professional investor. and what really bugs me is that okay, so they got this gi but it doesn't matter. the people who are trading in these markets have moved on to other techniques. and importantly, it's not just individuals. i mean obviously the very large players are doing very risky practices on a widespread basis also. and i think the regulatory regime we've got in place is just not, it's not capable of handling it. and one of the other issues obviously is that when somebody creates a big problem, if you

think about jp morgan or hsbc and bank of america doing horrible, horrible things to sink the economy, the fines that they were given, even though they were billions of dollars, they were not large enough to change the behavior. so i'm really troubled that all of this is if you will, a reminder that we should be paying attention on the regulatory side and that in general people are not worried about this kind of stuff and we should be. we should be insisting that the s.e.c. enforcement perhaps be upgraded and tuned so it does a better job. >> the s.e.c.'s report didn't even name or identify the individual. it talks about a large mutual fund, now in retrospect we know who it was and when we talked yesterday do bart chilton. he said he couldn't be specific

but thought it was a combination of the mutual fund and this guy. and some of the spoofing kinds of techniques have been gotten rid of. the open question is to whether that remains. >> the thing we hear, right, is that okay, they're doing something else now. and we don't know what that is the thing that really frightens me is wall street has attracted all of these brilliant mathematicians who know a lot about math and sound really convincing when you listen to them. and yet, an awful lot of what they're doing is merely theoretical. when you put it into practice, you get unintended consequences like flash crashes. and i just, as a professional investor, i look at this and i go wow, that's a cause for concern. >> maybe not panic, but really we should be concerned. >> there's been a question, the biggest question in this case is why it took the cftc and the s.e.c. some five years to nail down the charges and actually just moments ago, we did get a quote in from cftc chairman on

why it took so long to bring this case. and he said quote, these are huge markets. there's a lot going on. sometimes it takes a long time to put these cases together. now of course -- there are questions about budgets as well. both the s.e.c. and the cftc argue that they need bigger budgets. but the argument that the market is too big to pinpoint something that minute, you know in a corner of the market, would you buy that? >> well, yes up to a point. the problem is that this is this is like 1% of the regulatory problem. the bigger problem is that the banks and large hedge funds are doing practices that are currently legal. might not have been legal before the deregulation of the '80s and '90s, but certainly seem to be legal today. that are very unhealthy and extremely hostile to the average investor that's out there. >> in the private market space that, if we were to make a public versus private

distinction, are you basically saying you feel more comfortable operating in the private marketplace than in the publicly traded one? >> no. but as somebody who spent most of his career in the public market, i am extremely concerned that deregulation went too far and it leaves us vulnerable to things we cannot anticipate. and investors on average have blocked that out of their mind. so far, that's worked, right? i mean the last few years have been really good for stock investors. and you know, i think fundamentals right now are actually pretty good. >> we have to go in a second. the point is valid and the concerns obviously remain. larger concern also might be that people have no confidence in the very markets that would enhance their wealth long-term if they got involved. >> exactly and that's such a horrible thing for america. we need to restore confidence in the markets. >> well put. >> great to see you, thank you. up next, google has reportedly spent close to $1 billion on google fine anywhere

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. google has reportedly spent close do $1 billion in google fiber service in kansas city. and it might not be done any time soon. kay rog certificates live in kansas city with more. >> that's right. so google will be expanding beyond kansas city, but we're here in kansas city, kansas where it all began at their

start-up village. google was the first to bring the high-speed internet product to. google says it's one of the fastest around, giving you a connection up to 100 times faster than what most people have in their homes. what can people expect? here in kansas city they rolled the product out in waves, first to homes, then small businesses. it gives them blazing fast internet using these glass fiber cables. but business owners tell us it's important to remember that patience is key. >> the business application hasn't come as quickly as we had hoped. but we're in the implementation process and we're expect to have it here in the next couple of weeks. >> like jim, we found business owners willing to wait it out because they're sure that google will deliver. it's important to remember that google is building its infrastructure from the ground up. which as you can imagine has some challenges. >> well what we're seeing is looking like the early days of going from dial-up to broadband.

we didn't know what to expect, but the innovation followed. >> and that innovation has led 0 more than half a dozen accelerators here in the area, housing more than 100 start-ups, now it's figuring out how to leverage the product beyond that speed. it's not yet available on a mass scale. kelly, over to you. >> kate, thank you very much. it looks like a fun neighborhood in kansas city. our kate rodgers for us on google fiber. meanwhile it's been called taxis gone wild. portland embarking on an interesting experience when it comes to uber. (vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour.

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portland just got a little less weird. uber and lyft have been allowed back in the city. under a four-month pilot program. the new regulations will require drivers to undergo background checks, obtain business licenses and require the companies to guarantee services to people with disabilities, uber and lyft services had been suspended in portland since december. eventually in a lot of cases,

uber and lyft -- >> i'm watching las vegas, you can't even hail a cab unless you're standing at a hotel. it's insanity. >> it seems like something going on behind the scenes in a city like las vegas. where maybe somebody has influence? >> dare you suggest such a thing. ky ci can confirm it. in yoe whether portland is now at the front of a reversal. it would make a world of places in cities like las vegas. >> maybe the hires and behind-the-scenes working are starting to bear fruit. david plouffe and others have been joining the discussion. i know we'll sh watching facebook earnings after the market closed today. stock is up about .5%. it was on a tear yesterday as well, up 33% in just the last year.

hardly anything seems to be able to stop facebook except for earnings, when its expenses come in, higher than expected. >> we heard from mark mahaney who said you've got to watch the revenue number. the fact that they're doing 50% in the category still as long as they've been around is impressive. >> it is impressive. it will be interesting to see how much of the momentum continues. watch qualcomm after the bell. lots of slowdown talk particularly in asia, emerging markets. qualcomm buffeted by the inches with chinese regulators. see what their message sfwg forward after this call. there's room for optimism perhaps. if they tell a new story. >> we didn't mention coca-cola, young or chipotle. on the earnings parade. clip oatly seeing weakness. >> chipotle puts up 10%, it's a

disappointment. mcdonald's and yum do not as badly as feared and suddenly their shares are raling. >> worth noting, 72% of companies have reported earnings above estimates. so maybe expectations should have been lower for a lot of those companies. kelly, good to see you. john, good to see you. that's all for "squawk alley," it's noon, let's send it to scott wopner and the half. ♪ ♪ let's heat our starting lineup for today. steven weiss is the managing partner of short hills capital. jim leb everyone enthal is manager of asset management and john and pete in a jeer ynajari option monster. high frequency fight, latest on the trader accused of contributing to the 2010 flash crash and whether your money w