ox begins right now. ♪ >> live from new york where business never sleeps, this is squawk box. >> good morning and welcome back to squawk box. becky is off today. she is on her way back from omaha. he'll be back in the morning. in the meantime new york rolling out the red carpet last night for the annual met gala. it has become one of the biggest nights of the year for high fashion. beyonce and jay-z, rihanna, george and amal clooney, lady gaga cher madonna, kim kardashian kanye west. it's a fund-raiser for the metropolitan museum constitute institute. this year's show was called china through the looking glass. there you have it. anna wintor.

now we'll get to business at hand this morning. if you're just waking up let's get you up to speed on the markets and what's going on in the futures. looks like a little bit of a mixed morning. the dow might open slightly higher. nasdaq would open marginally off and the s&p we'll call it across the board. we'll see how things play out this morning. joe. >> it used to be mostly new york social sociallights wasn't it? >> five years ago it became -- >> very strange that it became -- >> sort of a moment. >> it's almost like the white house correspondence dinner. >> it's for not nerds. >> for real celebrities. >> for actual celebrities. >> very few cross overs for the two i would think. >> probably a hand full. >> maybe a hand full. >> other big stories we're watching today a packed earnings

count are among the names set to post results today before the bell. disney archer daniels, discovery, kellogg and bloomg brands and disney moving it's release up to 8:00 eastern. so executives can attend a memorial service for survey monkey ceo who died over the weekend. his wife cheryl sandberg sits on disney's board. on the economic front, two reports of note today, international trade at 8:30 eastern and then ism, nonmanufacturing at 10:00. and in global market news australia central bank cutting interest rates for the second time this year. this is an all time low as policy makers are trying to protect the economy from decreased mining investment and fend off tim pact of a stronger currency. >> we got some stock to watch. we should talk about dave goldberg at some point. among the stocks to watch this morning, texas roadhouse share with a boost on better than expected quarterly results.

profits also more than doubling. wall street expectations more people with health insurance use the hospital chain's facilities. we'll talk to the ceo at 8:15 eastern time this morning. don't want to miss that. also anadarko petroleum with a loss. the output rose to a record level during the quarter. also on our stocks to watch eog resources plans to resume fracking if oil hit $65 barrel. posting better than expected earnings in the latest report and then the shares of the armored car company get a bump. an 8.2% stake in the company called it undervalued and ubs posting it's highest quarterly profit in near flooif years today. the swiss banking giant also announcing it's in advanced talks to settle allegations of foreign exchanged market rigging. we have a lot this morning.

germany's adidas with better than expected sales. among the driver a recovery in it's north person unit and strong from its running and fashion. >> underarmour, nike it's tough. >> yeah but they used to be a big deal. i remember when reebok was a big deal. >> it's competitions and millennials who knows the way they're going to go. let's check on the markets this morning. the futures are indicated pretty flat. so far up 6 or 7 points on the dow. s&p up fractionally and the nasdaq up as well. we had two days of gains but we're just around 18,000. we have been sort of up they're going to be at the halfway mark and we'll talk to someone in a

moment about which way this reconciles it's but we haven't made a lot of head way. there's europe today. nothing more than a half a point move on the upside but greece is down 3%. it was back above 800 but maybe ready to breach that level again. asia hang seng and shanghai. getting the worst of it. other markets are closed today. if you didn't see the equity futures they changed. they were up 6 and now they're up 8. that was a fat finger. be glad it wasn't a trader with a lot of money or it could be the start of another flash crash. and then the euro 111. that's kind of retraced as oil has as the dollar has, retraced some of those moves that people

thought were going to go further. check out gold quickly and then we'll move on and get to the afore aforementioned next guest. let's get more on all of this. on the markets and the key economic and employment figures coming out this week. really? is it the first week of may, the big jobs report? friday is the jobs report already again? i have to come up with another thing to do on my sign i hold up. it's hard every month to come up with something. >> so you did watch the fight. >> yes. >> so you saw juan 316 on manny pacquiao. >> maybe we could hear those bands around our head. >> and you saw freddie roach had the geico band. i mentioned that to warren

yesterday. how are you? >> good. >> do you think there's going to be a reassertion of some of these trends. i'm going to summarize. you think the economy reasserts itself as being stronger than most people thought although you do acknowledge descent on that. you think the dollar gets the parity with the euro. >> oil is probably going to stabilize. my guess would be around 60 because that's a level you can make money. >> we just heard someone would start fracking at 65. >> that's right. in that ballpark is where economically it probably levels out. >> i eluded to the stock market which -- i don't know if i'd say stall but we've been flat the whole year. it doesn't take much of a sell off for the media to say we're

down for the year. so we're right there. do you think that finally when it breaks out one way or another you think it's higher? >> i think that the direction of stock prices is higher as the economy grows and the earnings grow but i think this year if i'm right about the economy getting stronger in the united states ironically that makes me better for european stocks. >> because the fed. >> because of the currency. >> so if the u.s. economy is strong as i think it is and wage growth is strong as i think it will be that might prompt the fed to move sooner and that should help the dollar and ironically that might help the earning of companies in europe more than it helps the earnings in the united states so you might have a more robust 6 to 8% in europe. >> you think the fed goes twice this year? >> it's based on my relief that the labor market is stronger

than most people think. part of the reason why some of the pressures of wages and change in hourly earnings are weaker than people think is because some of our fellow baby boomers are making a lot of money being replaced by less than expensive work. some show wages are already growing at close to 3%. that's a better measure of what the underlying wage pressures are and that's good. america need ace raise but that will also put the fed on watch that they need to start to tighten monetary policy. >> you're a big time asset manager now. you're not a one trick pony anymore. so do you pick different sectors here for your clients or say i'm going to europe? >> it depends. we have been moving some of the money this year into europe that didn't workout well in april but we still like the united states.

we're still overweight u.s. stocks but not as aggressive. >> any particular area here? >> if you like the u.s. market you want to look for parts of the market that will benefit from higher interest rates and higher movement in the market. we tend to be very diversified. we're not making big bets on industry or individual stocks but there's good opportunities in stocks but maybe not as dramatic as a few years ago. >> you're hearing people he said there's an easy way to short the bond market. the 30 year and maybe even the ten year that he would it's getting pretty common.

>> two things make it contradictory. rates will raise but 3 is the new 6 it will seem like a more normal rate and it will have a ten year bond for quite some time. there's still a tremendous demand for safe secure returns and that tremendous demand for bonds and relatively constrained supply means that rates will low for quite sometime. >> are you 60 yet? >> i'm over 60. >> doesn't look it. >> i'm older than you are. >> 60 is the new what now that you're over? >> i hope it's new 40. >> is it the new 40 or 35? >> i'm with you. >> i glued my price target down. >> you're 30. >> i'm thinking 30. >> i'll go with you.

my mother never turned more than 29. >> so you go with 40. and you're there and you know what you're talking about, right? >> i hope so. >> i shoenlt be afraid. >> thank you. nice to see you. we're going to turn to d.c. for a moment 2016 is the big focus. governor mike huckabee will be the latest to declare his candidacy. john joins us now. >> good morning. i wanted to run through some of the highlight of this poll. let's first start with a very fluid republican race that grew by two yesterday. jeb bush is in first place. right behind is marco rub i can't from florida. he's at 18. scott walker at 14 and the votes carved up before that.

jeb bush improved a quit in terms of his potential vote from our last poll in march. then you look at the democratic race it's absolutely locked in with hillary clinton even though she has taken a bunch of hits over the clinton foundation and various scandal stories. 8 in 10 democrats think she is knowledgeable and effective enough. experienced enough. can get things done. shaez she has taken a hit on how straightforward she is. 52% of democrats rate her as being honest and straightforward. now when you look at the other elements of the race president obama's improvement in the polls polls, he is now up to more positive than negative in terms of his approval. 48% approve of the job

performance. that's a benefit going to democrats in 2016. one final note on trade we see the effect of the improving economy on the number and the assessment of american people of whether trade is good for the united states or not. you now have a 37 31 pluerality. and that will help as they try to get votes for trade promotion authority and the transpacific partnership coming down the pike later this year. >> it's weird to watch all of this. i've seen editorials written about how at this point even democrats are desensitized. they're like we're used to this and we don't care. they said that bill was going to take a backseat and not be real involved. they put him out and he is -- he is as good as he ever was.

he's like i just don't see how -- if we get money from other countries and it's used to help poor people i don't see how that's a bad thing. >> you're good at that. >> and i'm listening to him and then he gets a little teary eyed. he's unbelievable and they better not put him in the back corner. that's their strongest asset is that guy. >> joe, you were talking about democrats and new information. when you have been in the public high for a high level for as long as bill and hillary clinton have been your image is pretty well fixed. it takes a whole lot of information to change how people look at you and so i think that's why the stories will take a nick at hillary clinton and with certain characteristics, people thinking she is candid

you'll see some knock on effect and the question is whether it's enough to change the race. >> i asked buffet yesterday i said all of this stuff and then i said let me ask you, is there anything, anything that could come out that would cause you to change your opinion? i don't think there is. maybe murder or something. i don't know. i don't think there's anything that could come out -- there was a saturday night live skit with the president when they were talking to six obama voters and they all complain and then they said but would it be enough for you to not vote for him. no. it's funny. 25% think she is trustworthy. anyone else would think that's a bad number but not her but i think you need to add a couple of those republicans together. i don't think you can -- when bush has only got 23 and then you have 18 17 14 you can't do a fair evens up comparison

against hillary clinton. >> sure t republican field is fractured. >> then it will be much closer i would venture because she has the democrats but i don't know about swing voters. if she moves left she may lose swing voters. >> joe the race is already close so we matched up hillary clinton and she leads all of them but margins aren't huge. she leads rand paul by 4 marco rubio by 6, jeb bush by 6. this is not a situation where hillary clinton is running away from it. jeb bush leads. so it is not fated what the outcome of this election is going to be. >> there's another part of the survey that ran as a separate story in the wall street journal this morning and i don't know if this is something you focused on. this was about our favorite

topic at this table, maybe mine joe, which is economic inequality but what was so interesting was it said the survey finds americans are more concerned about moving up the economic ladder than about the rich becoming richer. if that is true do you think it's going to impact the way hillary clinton approaches the issue. >> it's not only true it is impacting the way hillary clinton and everybody else is approaching the race. the issue of the ability of the middle class to make gains is much more important to people. we saw that in our poll by something like 30% points. as long as the middle class is move ago head the gap won't be debilitating. >> but the left played this class warfare issue with it being about the rich being richer. >> the two are linked. the middle class, yes the rich are getting richer and the

middle class are not getting ahead. those things exist. >> but the emphasis is do you try to make the rich poorer or do you try to make the poor richer? that's really about how this discussion gets framed? >> yeah true but the discussion is being framed about the middle class getting ahead. the campaign is not going to be about making the rich poorer. i can guarantee you that and it's not going to be about income inequality itself. it's going to be about the ability of average families to move ahead as they have not moved ahead for 40 years and one element of that as i said it overlaps with and is related to trends in income inequality. larry summers said his values haven't changed but his view has

changed because of the rise of inequality and when you have the trade offs between economic efficiency, what makes the engine run most smoothly and fairness. some level of redistribution, what you do at the top end the balance has shifted. >> you're doing good damage control. >> hold on a second. but when hillary clinton says i'm going to topple the 1%. i'm going to topple the 1%. >> topple. what does that mean? >> what does it mean? it means it's a 0 sum game and i'm going to take from the rich. >> no. >> i'm going to be hillary hood. >> that's a cartoon picture. >> she didn't mean it. she didn't mean the private sector doesn't create jobs. she never means the stuff she says. >> what she and democrats want

is not to topple or make the rich less rich. they're trying to -- they're trying to raise some money. >> in this case i think she has approached it in terms of framing the issue a little bit differently. >> no, no. but it's with the middle class. i'll leave you with this. >> we're in trouble. we've gone too long. >> their approach is -- government needs money and they're going after it from the 1%. not to make them poorer but to pay for things they think need doing. >> okay. i think we're going to agree to disagree this morning. it's wonderful to see you. we'll see you soon. in the meantime we'll talk about changing the world because becky quick sat down with warren buffet and get this she also sat down with bill and melinda gates. they talked philanthropy. find out why gates argues profits shouldn't be the sole motivating factor for entrepreneurs but first, here's a look back at this date in history. ♪

>> new performance numbers today on the world's most powerful hedge fund managers. last year's fund performance was the worst since 2008 with the top 25 hedge fund managers bringing home half of what they did the previous years. the founder and ceo on top of the list for the first time with earnings a billion dlee. that's not the fun and me management. >> becky caught up with the

gates in omaha. also joining their conversation warren buffet who pledged much of his fortune to that foundation. >> i know that this is an important year for berkshire but there's other anniversaries too. it's been 15 years since the bill and melinda gates has been founded and nine years warren since you made your pledge to the foundation. i just wonder from your perspective how things are gone. up until now it's perfect. >> warren hasn't aged in that time and neither have we. >> if you look at what the foundation is doing before what you have been able to do since the pledge was made to the foundation, do you mark that time as before and after? >> yeah it was pretty phenomenal. we learned a lot of things. we got this doubling of capacity an we were able to be

unbelievably ambitious in what we were going to do. that's our life's work now is making sure the money is well spent. >> all three of you are very busy. you have been traveling all over the globe. why was it important for you to get here for the 50th anniversary too. >> this is such an amazing time for berkshire. i wanted to come. it's been a few years since been here. it's been tricky with children. warren has a great time and bill has a great time. it's a huge milestone and so exciting to see all the things the company has done and all the people that come in honor of berkshire. >> she may be busy on the 100th so she thought she should make this one. >> how would you say your three's friendship and partnership has evolved overtime. >> well, with me started on july 5th 1991 and bill was

reluctant reluctantly meeting with me and we hit it off and we had a lot of good time since. we started doing things together. one of the great things was the arranged so i could eat hamburgers the whole way. that was big. >> i tease bill because i think there came a point in our life where it seemed like omaha was always to or from the east coast. >> how would you say you're so busy -- well you two are. i don't know about warren. >> you had to bring that up. >> how often do you get to communicate about foundation business and berkshire business? how does that happen? >> it's not real often but bill knows what's going on at berkshire and i know what's going on at the gates

foundation. >> what would you say in the evolution of the partnership you had -- was this something that was cemented when you first met? >> i think that first day i met warren and how he was curious about why the world worked the way it did and he was asking why doesn't ibm just do what you do and how do the profit dynamics work? i had always wanted somebody to talk to about those questions and be fascinated about it. we find the world fascinating. we'll never understand it completely. there's some things you know in technology i might be able to see. >> you have a small edge on me there. >> we went to him ripping things out of magazines and now he hands them to debbie and she scans them and she uses e-mail. so i get things more quickly. >> i'm incredibly flexible.

>> one of the things i often hear from bill because i don't see his calendar but we talk about the next day. if he has a phone call with warren the next day he says i get to talk to warren tomorrow and he looks forward to it. but it's a nice piece of their friendship, right? >> we'll hear more from becky in the next hour. coming up greece facing a major deadline this week and the country's future in the eu could be at stake. one of the top eu negotiators will join us on set next but first a look at yesterday's s&p 500 winners and losers. e announcer ] your love for trading never stops. so open an account with schwab. and when a market

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greece and it's lenders working to resolve the debt crisis. joining us with what is happening behind closed doors is the head of the euro working group and part of all the negotiations with greece. you're the equivalent of cfo, if you will. is that a good way to describe what you do. >> advisor to the cfo, co. >> that's you. >> take us in the room. where are we? what's happening? >> well greece has had a pretty long and troubled history over the last five years before and

even before if you look at the development of the fiscal situation and competitive situation and the new government started learning and was doing after it was learning the election with a government that's so new you can't learn before the election. you don't have people that have been in there and doing the job. >> so you have new guys in there but the current state of play -- we thought we'd get a list of things they're going to do just this week. >> technical experts have been shifted to brussels. they're talking there. we have a euro group on monday. we hoped we were so close that something was in sight. now colleagues have been battling with fiscal issues. labor market reforms and it's fair to say that the judgment of

everybody including the greek colleagues is we will not yet be there. >> no deal on monday. >> no deal on monday. >> but will a deal be reached before a true crisis ensues? >> sure. never say sure. i am very convinced. >> you are very convinced you'll get a deal. >> we have a program current until end of june 2015. there are still around 7.5 billion euros. 7.5 billion still to be dispersed dispersed some of it from ecb profits and some from fire fighting funds and i'd say we've got another good month in which we can come up with a deal. then you need a couple of weeks, three weeks to do all the parliamentary processes. >> why are you convinced that

the greek political leaders are going to give you what you need before you dispense that money? because there's going to be people on the other said that say this is not enough. this is not going to work. we're putting another band-aid on this problem. the greek population is firmly convinced it's future is in the euro. it's given a man date which is quite clear to me it seems to me and the greek politicians. do whatever it takes to come to a conclusion with the creditors and i'm quite convinced that we'll get there. so far certain steps have been made but these are steps in a direction. we're not there yet. >> we have to go but just so i understand, a grexit, katz catastrophe or not anymore? >> an exit of greece three years

ago would have been a real catastrophe. i don't believe it will happen. but if it were you have to deal with probabilities or possibilities. we're well installed kated. there's quantitative easing of the ecb. we have a fund to take care of that. it would be bad for greece. not good for europe and not good for the world. so we're fighting on. >> thank you for being here. we rarely get to speak to the man in the room. so we appreciate it. >> thank you. >> thank you very much. >> thank you for being in the room with me. >> we think it's not going to get done but it's always going to get done right? >> if you're in the room you need to think it's going to get done. >> so they're handicapping it. >> yeah. >> we'll take it with a grain of salt. we're watching. >> we'll get there. we'll take your advice. >> come back when you do. >> coming up a media start up raising serious cash. it's called refinery 29 and it's

target audience is millennial women. we'll talk to the two men behind the company next. >> unbelievable. >> squawk box will be right back. and when you bundle your home and auto insurance through progressive, you'll save a bundle! [ laughs ] jamie. right. make a bad bundle joke a buck goes in the jar. i guess that's just how the cookie bundles. now, you're gonna have two bundles of joy! i'm not pregnant. i'm gonna go. [ tapping, cash register dings ] there you go. [ buzzing ] bundle bee coming! it was worth it! saving you a bundle when you bundle -- now, that's progressive.

there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.

stories front and center this morning, panera with a no no list today. they have listing 150 artificial additives it plans to remove from its foods by the end of next year. it's the first national chain to make such a list public. >> we'll talk now about refinery 29. it's a media site for young

women and audiences that advertisers and investors want to mix they just announced a $50 million series deround of funding. they're the co-founders of refinery 29. don't try to diffuse the issue. >> it's steafano. we have two men running an organization for women. how did that happen? >> we started with creators and those doing something different about fashion and style. it was really a unisex thing but women gravitated toward it. >> so you just raised new money and you're doing new productions with lena dunham and others.

>> yes. >> what kind of stuff are you trying to produce? >> it was around fashion and style but we believe women's life style is sort of 360 degrees of audiences lives goes into global culture or travel. even the wage gap. the 360 degrees of every day life. >> right before you guys sat down or when you sat down during the commercial break i said is there a media bubble. we have a lot of digital doesn't folks come on the show recently. vice just raised a huge amount of money. they're claiming to be worth 4 billion. does it feels frothy in media land? >> it does but there's real economics to it and there's certainly a trend that you see of real companies emerging out

of the digital core setting themselves up to the the mtv of a new generation and that's happening in and around a cluster of some core companies that you mentioned. and they're going a long way. that means you have to think you just rub the old traditional businesses and they won't be what they used to be. >> absolutely. it's never been more efficient to reach a consumer directly and many businesses haven't figured out how to do it in an organic and cost efficient way. >> what do you think of a vice which was, i would argue, a digital media company up until about six months ago and tried to transform itself to an old media company.

>> well much of media is -- media is converging right now so you have a lot of old players trying to get into new media and a lot of media players moving back up into more traditional formats because there's still a lot of revenue tied up in the formats and being able to effectively run and drive a new digital business while being able to really take advantage and capture old media dollars -- >> do you have a female ceo or will you eventually? >> no. >> that's the first thing i thought. is you better get some senior management that are ladies. >> the majority of them are ladies. >> yeah. >> i don't know what you know about millennial women. i think i go right to some millennial women to figure things out. >> men play a really important part in that conversation. >> i'm trying to help you guys. because you have to walk the walk. >> we have an office of 200

millennial women that do all the hard work every day. >> so when you think about your business, right now it's totally adverse tiegz driven. is there a premium element. >> it's very diversified so it goes from events to video and integration. >> how much are you leveraging? now there's a lot of big multinational corporations that created these marketing buckets just for women and women's issues. is what you're doing trying to take advantage of that or is it different? >> i don't know. for us it's about driving a smart informed conversation for millennial women and working with brands and facilitating the most -- the smarted conduit between what a message is and how to engage millennials online. >> thank you for coming in.

>> thank you so much. >> the exact dates. >> 18 to 35 now. >> i don't want to go and figure that out. my daughter is 15. >> she is gen z. get ready. >> gen z. >> that's the next wave. >> you're thinking about that already. i can see it in your eyes. >> all right. still to come the ceo of rubbermaid plus tenet health. and we'll catch up with dan gill brett. first it's cinco de maya. we'll talk about tequila. i'm not going to taste any. grab a glass. squawk box will be right back. ameriprise asked people a simple question: can you keep your lifestyle in retirement?

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2,000 calories is the recommended portion for a full day of food but some snacks alone could snack up and oronge mango juice, italian sandwich with mayo and chips and a cookie from potbelly or a single slice of chocolate cake from the little italy hot spot little italy could take up the calories.

you know this already. >> we have a pretty good idea. >> like a cinnabon is like 800 or 900. >> it has it be more. i think one could be your whole day's worth of calories. >> that's rough alcohol is something and we'll talk about trends because i will tell you, i need spirits because beer fills me up too much now. and wine -- so i never thought i would be a spirit drinker and tequila fits the bill. cinco demayo. sales in the united states more than doubled over the past decade. used to be $926 million and now over $2 billion last year. joining us now is one of the world's leading experts on the subject of tequila and the global ambassador for jose cuervo. >> for me it's an honor to be here with you.

thank you very much. >> i'm glad you're an expert because i have a lot of questions and i was just talking about how beer i can't drink. the first six go down pretty smooth, but it's that -- no. for spirits, i like tequila. i can't imagine people trying to drink premium vodka. it's tasteless. tukealia i understand because it has a great flavor. are people doing the shots or doing the -- i like margaritas. >> everybody knows margaritas and the shots of tukeel tuqueela keel. >> that's where the growth has been. what is clooney's brand? he's got one, too, right? >> yes, of course. >> so cuervo is coming into the

mix here. >> yes we start with this is more than five years. five to seven years and where it starts is 1995. >> i need to know do you know the difference between the different types? >> i know nothing. i know nothing about nothing. >> it's white after the process and then we have minimum two months and no more than one year and then becomes and no more than three years. after three years. >> no kidding. so what is this? >> this is how long? >> this is 5%. >> where does it stay? in barrels? >> we use american oak and french oak. we take the best of the house. in 1995 to share the best of

the work and the private cellar and celebrated the company in 1995. so every year is a special collection and the box is painted by a mexican artist. >> hets let's taste this thing. >> seven years. >> give us a price tag. what does a bottle cost? >> 150. >> 150 bucks? >> this is for sipping, not for marg margaritas. >> not a shot, just a sip. >> try, okay perfect. we say salus. >> thank you for coming in this morning. coming up this morning, we'll see how tipsy we are a little later. the boss of rubbermaid owns a whole set of products we're familiar with. cellophane cookware teflon.

>> you sell cellophane. >> see i'm drinking already. >> two sillyllablesyllables. >> graco. >> it's in the middle of a big cost cutting effort and we'll talk about that and a lot more. stay tuned.

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a changing of the guard. the top bond fund. details on the new king and fixed income just ahead. earning season still under way, but we have an early report card. >> gentlemen, senior midterms grade you. >> they're not posted yet, sir. >> i've seen them. many companies struggling to

hurt earnings estimates. how the scorecard is shaping up. >> 0.2. >> fat, drunk and stupid is no way to go through life son o. the new star wars movie set to open up a big revenue stream for disney. >> merchandising, merchandising, where the real money from the movie is made. >> from toys to books to video games, disney set to make billions in merchandising. we have the second hour as the second hour of "squawk box" returns right now. first in business worldwide i'm joe kernen along with andrew ross sorkin. u.s. equities were up and now

they're down. not a whole lot of action. a lot of numbers coming this week and a lot of analysis. we're in another world. a stronger economy, a weaker economy? we will get a better indication on friday because it's already time, already time for the employment report, again, because it's may. may 5th. it's okay to do a tequila segment on cinco de mayo. >> you took one tiny sip. >> she said i made a face. >> if you haven't eaten anything. >> just a little coffee. >> coffee and tequila, breakfast of champions. >> this might be good. >> maybe you should drink every morning. total return fund has lost its crown as the world's biggest bond mutual fund. the company announcing another $5.6 billion in withdrawals last month net outflows for the fund

that brought its assets to $110.4 billion at the end of april. the new king in town vanguard's total index fund with 117 points as of the end of april. chicago fed president charles evans says that rate hikes could begin this year without harming the recovery, but he said he would prefer the fed hold off on raising interest rates until early next year. and among the names set to post quart eerly results before the bell disney moving its release up to 8:00 eastern so executives can attend a memorial service for survey monkey dave goldberg who died over the weekend. his wife sits on disney's board and he was a friend of the show. we just had him on the broadcast about two weeks ago. the story about how this happened has gotten saturday sadder

and more terrible. 47 years old and now it appears he was on a treadmill and hit his head. might have fallen off. maybe collapsed. or exactly what happened. >> you need to find out. i guess, probably. do you go through all that? i don't know. you find out if it was a heart attack first. >> they said it was head trauma was the ultimate cause. so, wouldn't you think it was a heart attack. who knows? terrible, terrible and our hearts go out to the sandburg and goldberg family. >> he was just one of the great, great people on this planet. >> great guy. anyway time to check the earnings scorecard including a couple sectors that are standing out or outstanding. don joins us from cnbc headquarters. >> good morning, joe, guys. >> we are about three-quarters of the way through earning season when it comes to s&p 500 companies. 370 companies in that index have

reported through yesterday. so, we got the tallies through yesterday. and right now it's been generally positive. if you want to look at it this way. 68% of companies have beaten average analyst averages. 10% have met average analysts and 22%, one in five have missed. the rub here, the caveat always is that analyst expectations typically come down going into the earnings season. maybe it is below a lower bar already. some of the best and worst sectors overall for earnings growth. we already knew that oil and gas was going to be a real drag. it, though earnings per share growth is only down about 54.5%. that's better than the drop of all the 64% that we thought we were going to see at the beginning of earning season. this all according to the estimates. if you look at the best performing growth part at least earning story, it will be your health care. up 17%. we are only anticipating up 7% move on health care overall. that's on the earnings picture.

health care stands out and energy drags. the same story plays out here for revenue growth. health care as an overall revenue sector growth. pretty amazing here. up 7%. we were only expecting 8.5% in the beginning of earnings season. energy down 34% here. we were expecting just about that amount at the beginning of earning season. here's the thing, guys. if joe, all the earnings report comes in for the s&p 500 company in line with estimates, we could see 2% earnings growth as opposed to the 3% earnings drop that we were going to see or expect to see at the beginning of the season. right now it's not crazy positive but still if we can manage to meet expectations for the rest of earning season. we could actually turn out a slight bit of earnings growth guys. back over to you. >> rates better stay low, dom. some people just like to talk

about stock appreciation as earnings plus dividend growth and you're talking low single digits then. >> if you talk about it discounting the present value the way people try to value these stocks. of course, interest rates will factor in there because that's what you are going to divide by. >> dollar is obviously, a problem. 2% is you know it's not what you we shoot for in terms of year-over-year growth. >> obviously, the stock market is near record highs right now but we're seeing growth here. remember when we started the season we were going to see a 3% drop in earnings per share. that could have been prateetty bad. some case for those people out there who think the market could still run a little bit. the numbers right now on the revenue side. you saw it right here. the revenue side is still not a good picture. anything that companies are eking out in terms of earning's growth seems like it is coming from the expense out of the equation. >> all right dominik, thank

you. how stocks should be valued right now and he did it right here on "squawk box." >> the market against normal interest rates is on the high side of valuation. not dangerously high, but on the high side valuation. on the other hand if these interest rates were to continue for ten years stocks would be extremely cheap now. >> rebecca paterson some merit in that argument? also a cnbc contributor. you don't really have to think that long or that hard to say, yeah that's probably true. rates are, there's no alternative. maybe stocks don't have normal valuation metrics with bonds at 0%. that's probably a given. >> if we take away the bond factor and don't look at relative, but look at absolute valuations equities are getting rich. whether you're looking at a forward or schiller price earnings ratio, they're expensive. when you put bonds next to them

suddenly they look like a bargain. >> what i want to ask you about is whether, what we're seeing in 4x and interest rates and everything else is it going according to plan? we had the big move in the euro to 105. now, everything always it never goes in a straight line and it has to shake out people who are in that trade. we're back to 111. doing a retracement of some of the move and doing the same thing in oil. will that original trend in your view reassert itself? >> i think the dollar definitely will. the european central bank is not very happy and see bond rising a lot. that's their goal to fight deflation to end deflation but they want to keep borrowing costs aggressively low in europe to help foster more credit creation and more loan-driven growth. so, bond yields rise too much and that's part of the why the

euro is rising as well. that works against the ecb's plan. i wouldn't be surprised if over the coming weeks we see different ecb officials coming out and reiterating that they just started qe in march and it is going to go for a long time. >> those guys shorts look like -- >> you're talking and we're looking at a guy out the window. >> looks like he's jogging in his underwear. >> boxers. >> in new york city. >> okay no -- >> this is a normal retracement. >> i think the dollar will continue to strengthen. we just talked about evans. >> want to bring in whom? you're talking europe. the reason that the euro has gained some strength is because the whole best neighborhood, best house in the neighborhood has been thrown into question with that first quarter gdp number. the last employment report we had and a lot of other numbers. a lot of the dollar strength and the trade of the euro getting weaker and weaker had to do with us growing at 3% this year.

and we're not. >> not taking the fed to raise rates. >> now they're not going to raise rates. >> wait, not going to raise rates? >> not in june. >> not in june. september. >> we're going to want to kill urourselves. >> they're not going to have raised. >> not do anything in this whole year. >> i think they are going to move this year. i think they desperately wanted to raise rates and they go zero to 25 is more symbolic than anything. >> in september, not december. >> that would be my bias because i think the u.s. will improve into the summer. >> why? >> why because gasoline is still a lot cheaper over a dollar cheaper than it was a year ago because borrowed costs are still good. >> waiting for that to filter. >> housing data are still improving. the job market is still improving. jobless claims or other job surveys and at the end of the day, it comes down to the labor market more than anything else. i'm not saying it's going to be gang busters. >> gdp.

it looks like low 2s, again. doesn't it? >> i think it will be close to what we got last year. mid-2s, maybe. >> that would be an uptick. >> mid-2s would not be the worst thing in the world for equity market. that's a nice backdrop for stocks. >> even if they went twice or 0.5%. it's still low interest rates. >> they just want to show the world that we're getting back to normal. >> equities. we have been you know right around either up or down. i made the point earlier that if we have a big selloff, the next day you'll say the dow is down for the year. we're right, any big sell-off even -- is tomorrow the anniversary? is it may 6th? do we know? >> we should know. >> someone said we mentioned it earlier. i was kidding about a fat finger trade. my point is -- >> may 6th. may 6th 2010. >> something to talk about tomorrow. >> the anniversary. >> it doesn't take much for us

to say, wow. it's may and the stock market is flat for the year. this is it's struggling to make head way this year. >> this year is sort of revenge of the global investor. we had two incredibly strong years for u.s. large cap equities and now that europe has ingameengaged in quantitative easing and the weak currencies are helping their exporters, it's feeding through. this is a reminder that taking a globally diversified approach to equity investing, you'll never get exactly right tilts to any country at the right time. if you take that broader view i think overtime you get both better returns and less volatility along the way, which means you get better compounded returns. you make more money. right now we are neutral on europe and japan. we hedged as much currency risk as we can. i wish we had even more. but just be neutral. those parts of the world have helped us get a return on a

diversified portfolio with bonds. that's better than s&p. >> are you convinced this is all going to end in tears? >> the bond rally or the bond move, i should say? >> i think bonds are the scariest thing out there right now. >> but is the fact that everybody is saying this. literally, everybody is saying this. >> everyone is saying that ten-year treasury yields will be slightly higher over the next 12 months. i think the 12-month consensus forecast if you look on bloomberg is about 2.5%. by the end of this year. for the ten-year treasury. and we just did a road show meaning a lot of our clients around the country and we surveyed them. what do you instinct? slightly higher. it doesn't mean all great minds are wrong, but a consensus view that is wildly held it's wrong. bond yields i think, have a very real chance of being quite a bit higher -- >> or back under two. >> that would be scary if that happens and that's not our base case. but i think you have to be weary if bond yields crack because the u.s. gets the momentum that is a period of voltity for

equities. >> you have all these rich clients. you have a rich husband. >> i do not have a rich husband. rich in love. rich in character. >> but he knows about the super rich. >> yes, he does. >> are the super rich buying municipal bonds with seven-year duration or ten-year duration. >> we have one of the largest underweights to fixed income that we had. >> even with taxes. >> because they're going to follow what the taxable bonds do. >> some people think this is a secular you know period of -- and even if it is only 2.5 or 3% tax free that gives you five basically. >> but a lot of those folks and i'm not just talking about wealthy individuals or families but people all around the country. everybody. my mom. they lived off cds for years and years. they lived off income. in 1995, a bond portfolio gave you a 5% yield and if you had, if you had $1 million bond

portfolio, you got $50,000 in income. today you get $8,000 in income. you can't live off of it any more. people have to go into other asset classes. >> that is a no. robert frank is not buying muni bonds. >> i won't let him. >> i am shunning muni bonds. >> other places. people that can't sit in cash. big institutions can't sit in cash. we're going to sit in cash. >> if you're a sovereign fund and you're a fixed income manager. you'll buy stuff with negative yields and deal with it. >> you have any cal fulawn in your house? do you have any cellophane in your house? >> i have both. >> you have some caflon pots? >> everybody has it. >> just saying. >> because they're good. >> they've never been used. >> you know what else they make that joe uses every day. >> depends. >> a sharpie pen because he

signs all his 8 by 10s. love joe. >> i go through those like water. >> or today jose isn't that what you said earlier? >> i did. >> that's spanish. >> if you ask nicely, he'll get you a glossy. you want clothed or unclothed? >> clothed, please. coming up from pots and pans to home organization. chances are you do have a new rubbermaid product in your home. talk earnings and consumer trends. if you're telling cnbc he is not worried about the prospects of oil coming to market. we'll take a closer look at crude in our trading block just ahead. ♪ ♪ ♪ it took tim morehouse years to master the perfect lunge.

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consumer product giants rubbermaid is known for its products ranging from cafalon pots and pans to sharpies. the company announcing plans to cut $150 million in annual costs on top o of $500 million savings already planned by the end of o2017. michael poke is the company's ceo and he joins us on the set

now. you brought us markers to sniff. >> that's an ice cream. >> washable? >> now they're washable. as we come into the -- >> it smells so good. just like a grape soda. >> yeah exactly. >> you brought a sharpie here for us with our name on it nonetheless. >> then this is the cool i want to talk about the company. i want to talk about this pen for a second. >> the new papermate ink joy. a pen and stylus in one. >> if you had your ipad you can use this side. can people see? >> this side and then on the other side. >> if you want to retain information, writing is critical. but if you want to publish information, obviously, technology is an enabler. retention and writing go hand in hand. >> then these. >> you can see, it's a sharpie. >> you can see where to stop so you're not looking down all the time. >> those don't smell. >> but they highlight really

well. >> rubbermaid is a perfect stock. it is all stuff that everybody has to use. >> buying them outright. >>ed i with buy them outright. >> we are busy creating -- >> i remember rbd and i remember before it was known as rubbermaid. putting them together made sense, too. >> how big is the pen business relative to car seat business? >> that's graco, right? >> graco car seats and prica in japan and another baby gear business in europe and we just bought a new brand called baby jogger, city mini and city select. we're the leader in basically every category that we compete in. professional facing tools for craftsman and commercial products which you'll see in any of the office buildings or on

the street, quite frankly, in new york. and we are the leading baby gear company in the world. so, we compete in big, global markets with number one or number two share positions. the interesting thing about this business versus other ones i've worked in is that these markets are unconsolidated. so, despite the fact that the running market is a $20 billion global market and we have the largest share with about 10% of that global market the, if you were to think of all the brands out there in writing and consolidate them they would only represent 36% of that $20 billion. >> how much is international? >> in writing, probably about 50/50. >> total company -- >> the dollar has been kind of a pain for you. >> it's been quite a hit for us both last year and this year. we earned about $2 per share last year. >> trash liners and things like that. >> we're not in the disposable

business we're in the durable business. it's all durable products. >> rubbermaid. how many products total do you know off hand? >> believe it or not, this is an issue for us. we have 75,000 skews around the world. thereson is an opportunity. >> you want to take that down to what? >> doing all the work as a way to release, we link our cost agenda, cost is inextricably linked to growth. >> the value between the pen business and the city mini business. >> sure. these five segments whether it's writing, commercial products tools. what we call home solution where brands like cfalon. we're building a set of capabilities that can stretch across the top of those. we're trying to build a set of brand development and innovation delivery and applying these common skills across an advantage relative to our competitive set across these five different businesses is

beginning to really unlock a lot of value for us. the combination of that work capability development with cost out is giving us the flexibility to invest behind these brands and the strengthening innovation like the products. >> five years from now, you think you have the same brand set? you think you have the same five categories? you think you hide one or two off? >> we're focussed on building the core of our business either organically or through a combination of organic development and external development. but we're not interested in broadening the shoulders of the portfolio right now. >> the cuts that you have announced. how do you get there? >> we're in the midst of transforming this company from a holding company. when we started 13 global business units. each with their own functional christmas tree. and we built, we're building out an operating company. we're releasing all this overhead in the business that is being reinvested into the capabilities that i was describing and also behind the brands. we tripled. by the end of this year we will have tripled our advertising

support on these brands. so, the cost out is inextricably linked to growth as i said before. a holding company, like the one we had, was very heavy in our overhead structure. and so the latest $150 million of cost out is just the next step. the next milestone in the set of actions we're taking to strengthen the company and build these grants. >> did you make this thing, by the way? >> we just bought this brand, contigo. we invested in two on the go beverage brands. one is contigo and we're in thermmales and hydration. fast-growing market for us. fastest growing consumer durables market in the u.s. because it taps into you know under lying lifestyle trends life on the go. these products are engineered for the flow of modern life and they also provide consumers an opportunity to do something every day that's a little bit more socially conscious, which is not throwing 25 billion

plastic bottles into landfill every year or throwing 25 billion styrofoam cups. >> thank you for being here. >> my honor, my privilege. >> the pen. thank you very much. >> you know this is like when cramer made a coffee table book about coffee tables. this is like this is an autograph sharpie. >> sharpie has my name autograph on it. >> it's liked a signed sharpie. >> pick it up a little higher. higher higher higher. >> over here. see, joe kernen. and it's spelled right. >> it's a sharpie signed with a sharpie. >> he has a lot of 8 by 10s to sign. earnings out this morning from different companies. we'll tell you about reports from discovery and arthur daniels. that's next. (music)

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little bit last we looked. not too bad. they were down 20 and now they're down 15 on the dow and down 2 on the s&p and nasdaq down the most. down a percentage basis. i think down 8. archer daniels the earnings beat the street but revenue fell short. the company says a strong dollar limited u.s. grain exports. discovery communication topping expectations on the bottom line with revenues in line. the growth was helped in distribution revenue in its u.s. and international networks. let's give you some exclusive survey data. uncertainty brought on by currency rates contributed to a drop in global co optimism. that's according to the latest results from wpos. here at home confidence slipped from an all-time high and yet american executives remain more upbeat comepaired to the global

composites composites. expecting increased sales ever ss over the next few months. an exclusive cnbc partner with 22,000 executives worldwide. coming up when we return the price of crude reacting to geo political news and tackles the moves next. plus we'll show you what saudi arabia oil minister told cnbc earlier this morning. head to a break. here's a look at u.s. equity futures at this hour. we're back in the red. back in a moment. why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain

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among the stories that are front and center. resume fracking if oil hits $65 a barrel. a positive sign for the industry that worried that a drop in crude would permanently triple growth. jordan is perpetially under value. shares rising on those comments. also, bank of america, merrill lynch upgrading shares of netflix to buy from underperform. the analysts points to subscriber and earnings potential based on a growing portfolio of original content.

in the meantime we'll talk about oil now. crude futures slipping towards $66 a barrel on news that saudi arabia considering halting its bombing campaign in yemen. when asked if there was a price, saudi arabia would consider cutting back production country's oil minister telling cnbc that no one could set the price of oil. >> nor die i try todo i try to predict where the price is. >> our next guest predicting another selloff. founding partner and also a cnbc contributor. good morning to you. he doesn't want to predict, but you do. tell, help us with your rationale. >> he also said he didn't only think god knows and i certainly felt that sentiment in my career andrew over the years. but, no i mean all the elements are in place that broke the back of $100 oil mid last

year. and i think we're certainly still there right now, despite the recount, for example, being halved. we're still seeing oil production here in the u.s. high level, 9.3 million barrels a day. and we're also seeing slow down around the world. in particular, china, where they have another bad economic data point sunday night which the market admittedly ignored. these pressures are still there. the big worry is the persian gulf is yemen right now. that's what we're trying to deal with at this point. >> john when we set the segment up we're basically 6 bucks away from the reemergence of fracking, again. what do you think the chances are we'll see that in the next 12 months? >> amazing dynamic here andrew. tons of the new oil wells called ducks. ducks on a pond if you're a baseball fan. drilled but uncompleted and they're ready to receive the

fracking levels. introduce another 500,000 barrels to the market if prices hit 65. it's hard it see pricess maintaining themselves if we could see that kind of jump again, in u.s. production. the saudis are producing at a record level still over 10 million barrels a day. this is what i'm saying something of a relief rally that appears to be hard to sustain in my view as we look forward. >> what is going to be the tipping point to move lower and how much lower do we move? >> i think the tipping point is going to be the emergence of the gasoline season. for the past several years prices have run up this time of year and consistently fallen throughout the summer once the summer assesses that gasoline inventories are fine. i think we'll see that again. we'll see a return to the low point that we saw down around $43 a barrel. i'm not sure about the 30s and 20s that we all hoped for for u.s. consumers but certainly a return trip back down to the 40s is definitely in the cards and more to mid to late year phenomenon as we saw last year.

the same timing as refiners go into maintenance and gasoline worries and the economy is seen for what it is. somewhat shaky, again. >> when we think about the fracking companies and what david recently said what was his line? i think he called it a mother fracer. was that his line? are you bullish long term on fracking companies or would you short the stocks? >> i think that his analysis is certainly correct. it's been a perplexing one. they need to feed continually on new drills new production. that is what got the rate of production up in this country so fast. they haven't imploded yet andrew. they get their credit lines pulled and able to tap the equity markets. it will last longer term and i think the problem we have the thing i worry about for the company is that the depletion rate on the wells is quick. "a," if they don't have the money to keep going. but, "b," longer term the saudis can still outlast us in the long

run and i don't think it is necessarily something we should be counting on in the 10 20-year outlook. no way. >> thank you. coming up the bill and melinda gates foundation is one of the world's most recognizable charities and the group's leadership doesn't shy away from controversy. up next, bill and melinda gates explain their plan. (trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade our passion is to power yours.

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the bill and melinda gates foundation is the world's largest private foundation. also joining their conversation warren buffett who has pledged much into that foundation. they address some of the controversy the gates foundation has faced recently. >> can i ask each of you about the work the one item that you've worked on at the foundation that you're most proud about and, warren i'll ask you first because i heard you talk about some of the stuff that melinda has worked on. >> i think melinda was fabulous and i don't know how long it's been now, maybe two years ago or

so and melinda really put her energies, her voice and money beyond that. but the voice of the energy are probably even more important behind family planning and as she traveled around the world, i should let her talk about it but she saw what happens when people really aren't in control of the family size and planning and that took some guts to do. but i think it's had a huge impact and it's had an impact beyond the money and beyond the specific grants that may have been made. it could change the world in a major way. >> melinda, you want to talk a little bit about that world? >> i took on this work two years ago of getting contraceptives into women's hands. edgeicating them and then letting them make that decision for themselves because if they can space and time the birth of their children the women are healthier, as are the children.

it's a very controversial area and we've taken it off the global health agenda because of the controversial in the united states. it is now back squarely on and we now have countries all over the world pulling through commodities teaching women about contraceptives and delivering it to women. >> if it was a controversial issue and it was one you knew you could get backlash for -- >> meeting women all over the world. i am just back to india. two days of government meetings and two days on the ground in the rural areas and in the slums and when you talk to the women, it's just so clear that this is one of the things one of the many things they need but it's literally, they will tell you, a life and death situation for them. >> if you were to pick something from the foundation that is something you could be proud of would it be family planning? >> family planning or vaccines? 6 million children are alive because of the vaccine work that we've done in deep partnership.

that is the thing i'm most proud of today. we're newer to the contraceptive work. >> they both are in a position and they're effective at persuading people in positions who can commit big resources around the world to things like vaccines. and, so that's something that is almost unique to the two of them. and they're playing that hand very forcefully. >> bill how about you? >> funding science that helps poor people. science in general is underfunded because the benefits to society are greater than what comes back to the inventor. a certain risk. science that helps support people is where capitalism really doesn't have the right incentives. i do love the idea of challenging the best scientists who wouldn't know the needs of the poorest. we use this thing called grand challenges where we solicit

ideas. one that got more headlines is one of about 80 we've done. but we solicited the idea of a new condom. you know that was more, less unattractive. >> i'm not helping you out on this one. >> you're on your own. >> the buffett foundation was accused of funding a cherry-flavored condom and it turned out they were guilty. >> never should have done it. should have been strawberry. >> cherry flavored condoms. >> we have our pens that smell like grape. that one is a chocolate, mint chocolate chip pen. get out of that. it's a way to get out of it. talk about pens. you can see more of becky's interview with warren befuffett and bill and melinda gates. casualties of the latest bout of bird flu now total 21 million birds. which tells you 21 of them have

are gone. you figure how many we produce in this country. morgan brennan, as we call it on the egg beat. she'll join us next to talk about the impact on that on poultry farmers and later, results from disney. expected to hit the tape at 8:00 a.m. eastern. we'll bring you the numbers and the market reaction when we return.

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>> merchandising, merchandising, merchandising. space balls the breakfast cereal. space balls the flame thrower. kids love this one. since the first "star wars" movie came out in 1977 toy licensing alone brought in $12 billion in revenue, about 44% of the total revenue from the "star wars" franchise. new "star wars" films will kick off a new bonanza of purchasing. new generation of toys books and clothing set to hit stores in september. disney earnings said to hit the tape at the top of the hour. join "squawk on the street" at 9:00 eastern time. >> melhad it right. purchasing. the box office take.

>> merchandising, merchandising. >> no kidding. are we taking advantage of these pens -- >> used to have the mugs. these mugs don't even say "squawk" on them. maybe a little on this side. >> i don't know. i don't know if we really monitor everything that -- >> how about joe kernen doll. >> like a blow-up doll or just a smaller -- you mean a life size. >> no maybe just a little one or with a hair dryer. >> or different toupee. >> if we're not going to do the blow-up doll for me can we do it for you? >> let's get to morgan. quickly becoming the biggest bird flu outbreak in u.s. history. three governors have declared states of emergency. several companies have been affected. what does it actually mean for the bird business? try to think about this with morgan whether it was, did you actively ask for this?

she's on the beat. she breaks down the poultry market to explain what consumers need to know about the bird flu. was it drawing straws? did you lobby? how did it happen morgan? just lucky, i guess. >> i was just lucky. i'm excited for any assignment i get. i got this assignment and off to iowa we went and now this is the egg beat, like you said. >> right. >> $21 million is a big number. and i can't imagine that prices aren't going to go up at some point. >> well it's not just $21 million any more because this is getting worse. both iowa and minnesota announced more "probable cases" last night. that brings the total number of turkeys and chickens likely affected up to $25 million. we're still waiting for confirmation on those final numbers. what does this mean for the poultry mark isn't well in the u.s. poultry is a $48 billion annual business. so there's broilers 8.5 billion birds last year. these are the chickens that are raised for meat. 68% of the overall poultry

market. eggs 22%. turkey is 11%. so so far this has been an egg and turkey story. take a look at this map. iowa is the top egg producer and minsote thaw top turkey producer and both have been ravaged. broilers are raised in the south and largely unaffected. eggs are the biggest issue right now. 60% of the u.s. supply is off line. chief commodity strategist at the american restaurant association expects prices to rise about 15%. that's based on the current number of cases that could go higher. now, for turkey. we've lost about 1.5% of the country's total. the problem there, some young birds that would have been used to repopulate some of these farms getting hit and they are getting infected as well. that could drive up prices for thanksgiving. as for the outbreak as that escalates, the stocks to watch, egg producer hormel for turkey and if broilers do become impacted, something you'll watch in the fall. sanderson farms, pilgrim's pride and tyson which is already

seeing demand for dark meat chicken weaken because mexico are imposing poultry import restrictions. we got that that insight from them last year. so, i just want to mention, guys, the usda and the cdc both say that bird flu strain poses little risk to humans and no cases have been detected at this point. largely, the impact is going to be on supply and prices. >> that number it's not affecting broilers but the number that you gave puts it in perspective, doesn't it? 8.5 billion. that's -- so you're talking about turkeys and other things at the 21 million. but 21 million versus 8.5 billion shows you what a huge market it really is. you don't know how many eggs. can you get me a number on how many eggs are produced in the u.s. every year? >> just under 100 billion eggs per year. i believe the number for last was 99.8 billion eggs produced. the majority of those come from iowa. >> what are 99.8 billion.

that's like -- you didn't need to check, did you? i asked you to look it up for me and you didn't even round it up to 100 billion. could be final jeopardy. thank you, morgan. did you hear that? 99 billion eggs. >> a lot of protein. >> i kind of came up with that. because i was -- i don't know why. because 8 billion chickens and let's say they each do a dozen. that would be like 90 billion, right? 96. i figure they are each good for maybe a dozen. how do you get a dozen? >> how many does it produce? >> you buy them in dozens right? they produce 12. >> i suspect, i think they probably produce more over the life -- >> probably. >> but it did work out. coming up dow component disney set to report. we'll bring you the numbers and reaction from the street and then later, cleveland cavaliers owner dan gilbert is going to join us.

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entertainment giant disney set to report quarterly results should investors hold on to the stock or just -- ♪ let it go ♪ >> the numbers and treat reaction just minutes away. investing in start ups while facing a potential tech bubble. how are venture capitalests valuing early stage tech companies and we'll ask eric where he's putting money to work and where he sees a bubble brewing in the big apple. dan gilbert talked about his drive to reinvigorate the motor city and the cavs chances against the bulls in the nba playoffs 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. becky is on her way back from omaha. here are the futures at this hour. they've been mixed most of the morning and now actually up. they were down 20 or so and down 15 or so. dow indicated up 2.6 points. we are waiting now for dow component disney which i just looked. >> it looks like it's crossing the tape. >> we can go it's $112 stock. $188 billion. i remember when it was 13 or $14s. why don't we send it across the country to julia borsteen. she has the quarterly numbers. julia? >> looked ded like a beat on the top and bottom line. 12.6 billion. adjusted eps per share cominging up and growing 14% to $1.23 per share up from $1.08 a year ago. that's also better than expected. and now looking at what's

driving the quarter here it looked like it's real strength in the parks division in particular. driven by the domestic park. so we saw parks and resorts and big increase at the domestic parks and also studio entertainment despite comps to the year ago period when "frozen" came out. holding its own in studio entertainment. broadcasting holding strength in operating. operating income in the broadcasting division in particular. part of that media networks division, which is of course o, the company's largest division. so big strength in broadcasting, which we could assume could be a result of better performance at abc there. but huge increase in the interactive division. 86% increase in the interactive division. 32% increase in operating income at consumer products and 24% increase in operating income at the parks and resorts.

due to strength in domestic parks. bob iger saying the power of the winning combination is that worldwide success is reflected in marvel's "avengers" which has opened at number one in every market so far. the "avengers" has come out this past weekend and not included in these results just yet. back over to you guys. >> content. >> julia, we will be joined -- yes, content. however, i want to tell you something. and not to be the bearer of bad news. operating income at cable networks including espn decreased 9% to $1.8 billion for the quarter due to a decrease at espn. we always say content is king. here's what's happening. this is part of the issue. the decrease at espn was driven by higher programming and production costs. costs more and more to get the rights for these production and we have to make it up on the

other end with the subscriber. >> it's costing them more to bid on the things that they want. my point is he was, and i wouldn't say that he was criticized, but that looked like a lot of money for pixar and looked like a lot of money for marvel and a lot of money when they're paying for those things and as it turns out, $188 billion company now. based on the value of the content. >> merchandising, merchandising, merchandising. >> they are merchandising with content. the content is valuable. >> i'm not -- >> did anyone think marvel was going to be content? >> i'm not questioning that. >> and then "frozen" is not even pixar. you still watch that every day, don't you? >> best best movie out. we're waiting for "frozen 2." we went and saw "cinderella" so we could see the seven minutes before it began the "frozen." we'll talk a little unbundling. our next guest, as well. >> you have got more worries about everything in the world. the american dream is over and

we're going to run out of this and football is over and boxing is over. everything is changing and dying with you. you got to get more optimistic. >> if it bleeds it leads, my friend. some stories that investors will talk about. u.s. stock mutual funds and etfs $36 billion last month according to new data. it's the biggest move away from u.s. equities since the financial crisis. also pimco losing and 24 consecutive months of outflows. bond market index fund now takes the top spot. >> sitting the. chuckling. he is. there's no doubt in my mind. showed you guys. >> we should tell you on the economic docket today. international trade data get that at 8:30 eastern time and get the ism nonmanufacturing numbers and that comes at 10:00 a.m. also a market alert. crossing above $60 a barrel just a few minutes ago hitting the

highest level since december 11th of last year and who was it this morning that said once you get to $65, the fracking game is back. >> usg resources said. or was it -- >> if the numbers get back to 65 they will begin fracking once again. >> you were right about the chickens. 259 eggs a year for aheard-working hen. >> that is a hard-working hen. >> as they get, as they get more, as the eggs get bigger. those jumbo eggs that you see. >> that's an older chicken. >> you learn something new every single day. learn something new from our next guest. a huge event here in new york this week where the nextal big tech start ups make their pitches live on stage and we have one of them here with us on the eric, a big question for the markets right now. are we in a bubble?

i know it's the perpetual question. but it feels like you know if this is a baseball game, we have to get closer to the eighth or ninth inning than the first or second. >> i went through the 2000 bubble. if a bubble looks like that today, it doesn't look like this. the companies that we're investing in for the most part have businesses. they do tend to go public later, which is very different than what we saw in 2000 where there was this rush to go public without a business plan. >> are you worried, actually that this private market or this longer private market has created this bizarre bubble where we actually don't, there is no real market. we don't really know how much this stuff is valued. if it is valued perhaps it's overvalued. >> no question that late stage companies are valued very highly. part of it is because they're going public later, the early public investors, you know the t. rowe price of the world have now become the late-stage

primary investor. >> do you worry about public investors being in this private market? >> i do in a sense that they you know our business is only private. their business is mostly public. can they really price those companies correctly? obviously, only want to go public where we know. >> we're up to 70 unicorns now. over billion dollar start ups? >> at least. >> how many do you think will be in business five years from now? >> the majority will. if you look at them they all seem to have strong businesses. some are not yet profitable. will turn profitable. a lot are the enterprise business. a huge phenomenon. we see this in new york where i mostly invest. 30% of our current portfolio is enterprise. >> let's tell the audience about some of the bigger investments you have more successful ones. so, buzz feed. >> buzz feed. >> by the way, you know this guy was behind huffington post which just had their big party last night. >> the ten-year anniversary. >> used to be the editor.

>> no no i was the ceo. >> ceo. >> arianna has always been the editor. >> birch box. >> very successful subscription company. >> perk laid.lade is one of the biggest, very very successful. >> what kind of glasses are you wearing? >> as an investor you have to wear but i have a very complex prescription. >> they can't handle it? >> well i haven't tried them yet for that. very successful company and disrupting the eye glass business. disruption is the name of the game. >> you are an investor in mike? >> i am an investor in mike. >> you know about this anthony tweet at twitter. what's going on there? can you tell us? >> this is all news. this goes back two, three months where anthony nodo just -- >> cfo of twitter. >> that he wanted to buy mike.

mike is still a private company. hasn't been bought by twitter. >> got it. when you think about buzz feed how much do you think it's worth now for real? >> well well above a billion dollars. they raised it was announced public publicly, raised 850. the company has made a lot of oprogress since then. it is one of the iconic companies. >> we just had another media, digital media company on this morning. refinery, is it refinery 92? it's one of yours. and then we were talking bout the vice valuation. those are, i consider those sort of more media companies than necessarily digital companies. i don't know if you think that's fair or unfair. >> vice seems to get a lot of its money from selling programming to television. >> that's where i was going to go with that. these new media companies have to go into old media to actually make money? >> no not to make money, but i think as a market expansion. what is happening is that old

media is finally waking up to the fact that their audience is leaving traditional outlets, such as television, you know not cnbc but everybody else. >> thank you very much. >> and, so they need to buy programming. they don't know how to create this programming. it takes years to develop programming that is adapted to the digital world. companies like buzz feed sorry refinery and vice of course know how to create that problem. >> thank you for coming in. how often have you disrupt them and seen something and walked out and given them money? >> about every year we see something. this year i'm one of the judges to the competition. i'll see them all very closely. >> sort of like, their own version of "shark tank" over there. thank you. appreciate you coming in this morning. let's get more reaction and stick with the media theme about the disney results. joining us now on the squawk news line. david, you knew that the company had already talked about espn

having to pay more for programming. that was not a surprise. does it indicate is it negative in any way for espn? >> well i mean look here's what i think. what stood out to me more was the extraordinary performance of the broadcast networks right, that they're benefiting from the rating strength at abc and some of the strengths on the broadcast side. i think the current quarter's results on the cable nets you know given the ramp that they have in affiliate fees, i don't think it's a concern, but i think we probably will want to get more color as to you know this kind of sustainable expense level. it will be the primary focus of the call. >> every time that i iger bought content, did it always seem like he was overpaying? >> well, i think he bought intellectual property instead of content. >> that's what i mean. >> it always seemed like how could they possibly monetize

this intellectual property to generate a return that makes sense. and i think with very few exceptions. little bit maybe on the video game side. has really proven everybody wrong and, you know the next big bet, obviously we'll see what happens with "star wars" but it has been a bad idea to have second guessed bob iger on the m&a front for the past decade. >> no super hero fatigue in sight? >> well i mean you just had the second biggest opening in history in "the avengers." i don't think so. i think as long as the movies are good. you know they're not, don't think of these movies as necessarily just kind of classic super hero movies. these movies appeal to a broad, you know four quadrant audience. these are not just fan boy super heroes guys that like to read comics.

you know they're broader than that. it's too simple i think, to describe them as super hero movies. action movies, for sure. >> so i just think that $188 billion company if you were to just sink content, disney content is probably universal. i just think about the market in china for theme parks and just for everything else and it seems like you could just multiply $188 billion by two, three, four times down the road. but will there be piracy and can they control their intellectual property in places like china? >> in a place like china, i think their strategy. china the reality is isn't quite as open a media market to be polite, as a market like the u.s. is or some other, you know western europe or a place like india. so, the strategy has been to approach the market more from a consumer products and, you know branded perspective. that's the rationale, i think, behind the parks and some of the

consumer products strategies they have. so, i think, yes, piracy is a concern. but the bigger the bigger driver is ultimately going to be in, i think, exploiting the brand in ways that are outside of pure media. i think, you know the next thing we're going to watch for is over time what is the plan for espn? is there a lighter bundle coming? is espn in it and what are the secular forces that impact that business as opposed to piracy? >> better be in it. david bank thank you. we appreciate it. we'll see you soon. be sure to catch bob iger today on "squawk on the street." going to talk hospital operations in the recent deal and the stock up 11% over the past year. here's a look at the futures after dow component disney reported a couple minutes ago and that reflected the dow's positive.

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reporting after the bell beating on both the top and the bottom line. benefiting from the drop in the number of uninsured patients. the stock spiking a bit on the news premarket. joining us now, president and ceo of tenar health care. whenever tenar has some good results the affordable care act has given more people insurance and that should be good for hospitals and that always is one of the positives and it was, again, in this quarter. >> that's true. you know i always point out that two-thirds of our growth in the quarter is unrelated to the

aca. so we are getting some benefit from it. but our core strategies and investments we're making are also driving a lot of growth. >> i saw something troubling yesterday, trevor. i don't know how history will finally judge everything that happened in the past five years. but emergency room visits were supposed to decline and now we see they're spiking again and the reason given was that primary care physicians are in short supply so that people now have insurance, but they go to emergency rooms because they don't have primary care physicians right now. and right when this happened when you add this many people or try to add people of the uninsured to the insured ranks in and is the supply of doctor stays the same we know how supply and demand works. that means it will take longer and be harder for people to find health care from. >> i'm not particularly surprised with this trend, joe. i mean this is similar to what happened in massachusetts when

they put in an expansion and coverage. you've got a lot of people who gained coverage through medicaid and still many physicians who don't accept medicaid. that's part of what is going on. there is also a trend, though among consumers who are choosing to be treated in emergency rooms or urgent care centers. we're adapting to that trend by making our emergency rooms much more accessible and proving the ease with which people can get treated quickly and leave or be admitted to the hospital and we're investing heavily in other sites of care in order to relieve some of this pressure on the emergency rooms. >> so you're just going to go go with it. i mean that was one of the big selling points in the aca, emergency rooms are swamped and it will cut down on that. now we know that is probably not going to be the case. let me be hyperbolic for a second. one of the fears and complaints about single pay and other countries, everybody is covered,

but no one can get health care. yeah i'm covered, but it takes me nine months to see someone. why should we think that is not going to happen the more that we don't increase the supply and the more demand increases? >> well the supply is increasing somewhat and, like i said, we are moving out of the hospital setting into the outpatient setting for a lot of care. our growth for many quarters has been much stronger in outpatient visits than in inpatient visits and i think some adjustment period, just like i said on the physicians accepting medicaid, there is also an adjusted period you have towards the outpatient setting where there is more capacity being added. >> that might be one way to do it. and i guess you don't -- how many of these things of people going to the emergency room could a qualified nursing professional or someone handling an outpatient setting rather than expense of emergency room setting. >> it's a lot. but, for example, i was just in

one of oour hospitals in california a couple weeks ago where they have a nurse right at the door of the emergency room who is doing the initial screening and, you know if you don't really need emergency room care there is a separate track that they're putting you into. >> what a concept. what doesn't everyone do that? why don't we do that? >> it's being done a lot in our industry. and it makes total sense. >> you want to talk to trevor at all? >> i love trevor. you asked all the smart questions so it becomes very complicated. no i'm not being sarcastic at all. >> funny how? >> funny, haha. >> it's a pretty clean quarter. not a lot to ask about. >> when you have i mean it would be stupeid for me to ask because you have great management, that's just the obvious question right? >> 110,000 people who are really good. >> that's the way to answer that question, too. >> you haven't gotten --

>> what? >> is there something to be said at this point? >> yeah. go ahead. do it. >> sadly he resigned from our board in december in order to pursue other opportunities. but, what a great guy, what a great candidate. he's so smart and we're very supportive of him. >> he's he actually had some ideas. >> and he understands business. he was always very well prepared in our board meetings and certainly understands the impact of regulation and sort of epic changes in regulations on industries. he understands health care very well. >> that's health care. >> does he undo obama care? >> oh, i think he favors private sector solutions. and i think, personally it's a little bit late to undo this and have millions of people who gained coverage who didn't have coverage before that was a really pressing problem that we saw in our industry. >> we could make it better. he could make it better trevor that's for sure. right? >> i think he could do a lot of

things and be very smart. >> okay. >> all right, trevor thank you. appreciate it. >> thanks guys. >> see ya. coming up in the market for a tesla but not willing to shell out all that cash. elan musk has an answer for that. george mitchell has a new book out today called "the negotiator." delves into his childhood and he's going it be our guest in just a bit.

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elan musk is getting into the used car business. launched a preowned vehicle program at the end of april. a new program that offers older virgs of the ss ss virgsversions of the sedans and like other high-end carmakers it gives a four-year or 50,000 mile warranty on preowned vehicles. take a look at tesla stock sitting near a three-month high but well off its 52-week high. you're looking there at $238. by the way, i thought batteries, though, don't last. you always have to replace the batteries, right? >> lithium. >> how many years has tesla been out with their vehicle, if you want a preowned tested you are probably getting it in the first year. you're getting a 1.0 version of the car. >> is that a used car? >> it's a used car. that's what it is. >> it sounds fancier and nicer.

>> it does. >> would you buy a preowned vehicle? >> i don't have a problem with a -- >> much cheaper. >> they say right after it comes off the lot, it loses 20% of its value. >> another thing that's been done. certain smells you can't get out of a car. remember the guy, the valet parked it once and he had to sell the car. when we return former senator george mitchell talks politic politics, the middle east and then later dan gilbert founder of the cavs and rock ventures and we'll hear about his efforts to revive downtown detroit, which is starting to happen, i think. as we head to break, take a look at u.s. equity futures. thank you for being a sailor, and my daddy. thank you mom, for protecting my future. thank you for being my hero and my dad. military families are thankful for many things. the legacy of usaa auto insurance could be one of them. our world-class service earned usaa the top spot in

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welcome back to "squawk box." breaking news. we have the most recent march for trade mrans andbalance and it's a deficit much larger than expected by 10 billion. $51.4 billion. and that comes on the back of 35.9. you talk about some escalation. boy, that's the highest at least going back on my records to

around the end of '08. so we will continue to monitor and we all understand that the valuation of the dollar has implications for trade deficit. but this really is a big one and it will have big effects, of course on things like gdp. interest rates coming very close, again, in ten year to testing on changed on the year which was 217, falling short by about a basis and a half. but we continue to monitor and monitor, of course deals on the ten-year moving back very close to 0.5%. while all this is occurring, we're handicapping what direction different central banks will take. the music goes on and the markets continue to move in a fashion that seems to cumezerate with weaker than expected economic growth. ""squawk box" game. back to you. >> thank you, rick appreciate it. we'll turn to politics for a minute. few political leaders have earned the title of negotiator. none more than former senator george mitchell striking peace

accords in the middle east to being the chairman of disney during their search for a successor to michael eisner he's done it all. the former senate majority leader is out with a new memoir today, appropriately titled "the negotiator." thank you for being here. >> thanks for having me. >> you have this title as negotiator and it is a question around washington and around this whole country is whether you can actually negotiate any more. do you think it's actually possible? is there something, you think that the world has somehow changed? >> the world has changed. especially the political world and washington. but i think it is still possible and i think, in fact you're likely to see some little movement back towards bipartisan efforts and legislation this year. there are some issues that the interest in the parties will converge and i hope they'll overcome the differences and i think that is possible this year. >> you think that's happening because? >> because a convergence of the

senators themselves i'm talking now about the senate are tired of the fray and the partisanship. they are there to get things done. and i think the issues coincided. >> senator, you are a democrat. looking at the tenure of harry reid and the majority or the leader of the senate. i mean would you have in your wildest dreams would you have imagined being that type of leader? >> well everybody's different. and i led the senate on the way and dealing with the circumstances at the time. i didn't face the problems that harry faced. in the six years that lyndon johnson served as senate majority leader, he faced two filibusters. and harry reid six or seven years he faced 700. >> would you have changed the filibuster role? >> i faced 175 filibusters, but i did not change the rule. the number keeps increasing all the time and, so you deal with

the circumstances as they exist. >> we're running under you right now, we have on the screen the art of negotiation. >> yes. >> so for those out there that are trying to do it like you do it if there were two or three things you would tell them they would be what? >> first, listen to the other side. genuinely listen. you've got to have a lot of patience and perseverance. if you are a mediator as i was, you'll have to submerge your ego and be very humble and boost the egos of those who are doing actual negotiation. >> right. you know when we introduced you, we mentioned disney and mr. iger. are you happy with the successor to mr. iger who seems to be on the table? >> an outstanding disney official executive. he's been there for a long time. the board made clear that this is not an automatic transition. i think he's got the job to lose. but i think very highly of tom

and i think he'll continue the success they've had. disney has been very fortunate. michael isner did an outstanding job for a long time. bob iger has been terrific. >> remember we had phil graham on last week. he drew a bell curve and said this is the way the political situation was in the united states 10 15 20 years ago. people in the middle and then as you went further out on either side. he said now it's a camel. it's over here. and i'm sure you would probably think republican party is moved far right, as many democrats do. would you be willing to concede that the democratic party at this point has moved far left of where it was when you were serving? >> no. what i would say is that some democrats have moved far left and some republicans have moved far right. >> don't they seem like they have the louder voices on the extremes at this point? elizabeth warren you got burnieernie

running for president now. >> well. >> do you think the country is matched up with how progressive the company has gone? >> i don't think they're matched up with how far some democrats have gone or how far right some republicans have gone. i think the fact is that there remains a broad majority in the middle. i think one of the reasons we've had this recent pollerization is that if you look back over history and see when economic times are tough, polarization grows. you saw that during the time of the great depression. you've seen it in depressions in the past when times are better i think people are more positive and less susceptible to extreme requests. >> we're told every day that they're better. >> they're getting better. but i think one of the great challenges we face is the collapse of what i call middle class jobs. i describe my life in a small town growing up in a small town

in maine. when i was a kid there, there was a large railroad repair shop that employed hundreds of men and a paper mill and my mother worked nights in textile mills and within an hour's drive there is 24. not a single one of those enterprises right now in that area. and we haven't, we made the technological and communications and information transition into the future but the job market that we haven't replaced the jobs that that technology has displaced. and i think that's the great challenge of the coming centuries. my mother was an immigrant. she couldn't read or right. my father left school after the fourth grade and he was a janitor. because of the openness of america at that time i became the majority leader of the united states senate. that was historically the case throughout american history, but that's changing now in a negative way in part because we

haven't been able to replicate the jobs that what i call middle class, working class jobs that have been lost. that is the great economic challenge that we face in the coming decades. >> the latest 30% of jobs are going to be robots is the latest lead i saw. 30% within 15 20 years. >> but, well one of the keys is much greater level of education knowledge and skill. >> you can program the robots. >> i hope we can all negotiate like you did. >> thank you, andrew. >> i thought that negotiator was some kind of fast money. you sure that we have a show in the middle of the day for the guy who called negotiator, too. >> he may look let's not even mention it. copyright thing here. i don't know which one it was. eric boling or something. when we return owner of the

cleveland cavs dan gilbert joins us to talk about his drive to rebuild the motor city. tomorrow, another big lineup right here on "squawk box." entrepreneur and investor jb pritzker geo presidential candidate carly fiorina will be here. "squawk box" will start tomorrow at 6:00 a.m. eastern. we'll be right back.

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dan gilbert is not shy in promoting detroit to attract and retain top talent in businesses this morning at the forbes reinventing america conference gilbert shares his strategies on how to build a great corporate culture. joining us with more is dan gilbert, chairman and founder of quicken loans and also founder of the cleveland cavaliers and for some reason i've seen some media coverage national media coverage lately dan, about detroit. i mean there's been some positive stuff since last time. i think when did we start, a year and a half ago talking about this when you started and it's bearing fruit already, isn't it? >> yeah you know things have really really turned in downtown detroit and detroit as a whole. now that we got through the bankruptcy and got through way faster than people thought we were going to get through. we have a mayer and a governor

who are really focused on working together. detroit city council and a business community and a foundation community that is all working like they've never worked before in unison to make this city a great city, again. >> so, what can you point to? has it been a bounce in property values? i mean are the street lights turned back on? you know, the police if you call them they come. >> all of the above, joe. and, you know believe it or not, in downtown and midtown detroit, you can't even find an apartment. we're at 100% occupancy. both rehabs and new buildings. the office space and most of the large, sort of class a, class b office towers are 98% full. believe it or not, if you're a large tenant let's say 50,000 square foot or more looking for space in downtown detroit, very hard to find. we have challenges in the neighborhood that we're aggressing aggressing. we're removing close to 1,000 homes a month. 1,000 homes a month are being

taken down and you have all that going on and you're out of the, again, out of the financial sort of storm clouds that have been over this city for years, if not decades and you have a car business, an auto business that is doing very very well. put that all together very very positive here in detroit. >> you can do it there, but that's in new york. you can do it anywhere. that's true though right? if people want to -- a lot of people like the urban environment to live and all you had to do was just give it a chance and very exciting to see that happening. and, you know you probably make a lot of money but i think it's good that wasn't necessarily your first motivation. >> and, joe, just one other point. if i could tell you, as far as young people go i mean detroit has become not just in detroit and michigan but across the country, for instance we have 1,100 plus interns coming into downtown detroit and we had like

22,000 applications for those internships, you know with no advertising. people from harvard and yale the east coast and west coast and michigan state and, so you have this intense interest by young people and that is really the most exciting part of all. >> we might as well talk quicken. what got you in the crosshairs the way you talk it's almost like it sounds like you think there was almost a van detta against your company. why would that have happened? >> i'm pretty independent on that front but i tell you what joe, you know we're the lowest default rate lender in the united states for fha. we have the lowest default rate of any major lender in the whole country. we're the largest fha lender and we're asking that question that you just asked and for three years they came in with an investigation. really, i don't think it's quicken loans, hey, large lenders. let's just, we're at the doj and let's put up all the large lenders on a white board and

extract settlements from them. you know what if the companies are at fault, you should extract settlements. we have the lowest default rate. they use quicken loans as an example as best practices. now, there are great people fha and hud. we're talking about the doj and small group of enforcement people who really don't understand what is going on. a quarter million fha loans that have closed since 2007 with the lowest default rate in the country and they looked at 55 loans and they told us 55 loans we don't like these out of quarter million and pay us a larger money and admit you committed fraud. and we're not going to do that. >> the doj harasses you and then the fha gets taken hostage. so, the people that end up paying are the people that can't get the loans now. it actually hurts -- >> it's very ironic that at this

very time that we're having very big challenges in this country on middle class, lower middle class, upper middle class people who want to buy homes. first-time home buyers. the fha is a great program. it works well. some challenges with it it works well and we have proven it can work well and the fun can be very, very profitable on fwgood, well-written loans like they have produced. for this kind of enforcement action to have taken place that has no validity to it in all of this, again, we ask the same questions you're asking. >> you have nothing on this sorki sorkin. >> i want to talk about the cavs. >> you're joking. >> you were doing the quicken loans for me. >> there could be a time when regulation becomes self-defeating. >> there was a quote today that an idealist is someone who smells roses and cabbage and says i bet you can make better

soup out of roses than cabbage. they're idealistic. is this wrong minded? >> i just want to talk about the bulls and the cavs. i want to know if they can win. i know it was a tough night last night, i want to get the, you know, sense from the man who owns the place. >> well you know we had eight days off. first of all. that's a long stretch when you're in the playoffs. so we're a little bit rusty last night. 40% of our starting lineup was out. kevin love unfortunately, had the shoulder injury and he's out for the rest of the season jr smith was suspended for two games. he's been a starter since the middle of the season. we're adjusting a little bit. we were in the game until the end and i believe in this team and i believe in david griffin, lebron james and ciryirving. >> we have to get you some rings. we have to get a ring. >> that would be great for cleveland. >> i saw him across the way, he was at berkshire over the weekend in omaha. i don't know so it's nice to

see you on the tv. >> you didn't go over and talk to him? >> i didn't get to talk to him. i'd like to talk to him, but i didn't get a chance to talk to him. he was at the brunch the day after.

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let's get down to the new york stock exchange. jim cramer joins us now. looking forward to the iger interview. there are walt disney shares. you're like me you go all what it back, i know you do what was the guy's name? ron miller and one of the disneys roy or something. >> roy. >> they bought arvida and were like blind without a came. then eisner came in.

remember ovitz? >> remember shamrock? you guys did the show in philadelphia mark haines was there? there was dissidence everywhere. there was a gigantic block that traded during the teens in the bad period. this company is firing on all cylinders. when we talked to bob, it's difficult to find anything that is not perfect right now. you could argue, maybe that's the issue. no. this is an on-fire company with many franchises. one of the best quarters i've ever seen. >> and he did it with -- i don't know if i would say low expectations, but when they first picked iger he was the heir apparent. he's good looking. i was like can this guy really supersede michael eisner? you have to say by all accounts the pixar deal everything that's happened is clicking. even marvel. when they bought that, isn't marvel tired and it wasn't? >> the marvel franchise may be

the most exciting thing he's done. we've got "star wars" in the fourth quarter. >> andrew is worried about espn. >> is that the viability? i wonder what the margin will be like for espn long term. >> i think they have to pay up to get programming, but they manage to do something no one thought could happen which is put the bcs on espn. i think espn could have more different live programming than they are thinking of five years from now. there will be sports we haven't thought about watching that will be big margins for them. they are doing so many things right. broadcast is very good. it's the money they are making at the theme parks that's the real shock. >> thank you. >> thank you, guys. >> look forward to watching you with iger. >> thank you. when we return, manny pacquiao under fire for not disclosing a shoulder injury. he may face fines. we'll explain after the break.

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diesel car brand in america. macy's is testing a

so-called offprice business with four pilot locations in the new york city area called macy's backstage. the stores will sell clearance goods from macy's stores and discounted items from other fashion brands. merchandise will be 20% to 80%. andrew easy. that got your attention. >> i've got to get down there now. >> it's like a filene's basement. >> there's only 50 seconds left in the show. you are looking at the cheapest man in america right here. >> you're thrifty. >> fallout from last weekend's big fight. nevada state attorney general's office will look into why manny pacquiao checked no if he had a shoulder injury. he could face a fine or possible suspension. the fighter disclosed the shoulder injury to the u.s. anti-doping agency before the fight. that agency approved the use of an anti-inflammatory shots for the fight but state regulators weren't informed about the

injury and denied the shot two hours before the fight because they had no previous indication there was an injury. he'll have surgery this week. >> i wish they would let him get the shot because it might have been a better fight. >> exactly. it will take a while to come back to a $100 fight after that. >> you don't know whether it's real or not. join us tomorrow. "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. disney's bob iger and a cnbc exclusive. company results beat the street. later this hour cisco's john chambers stepping down as ceo after running the company 20 years. big show today. the premarkets slightly negative. plenty of earnings. moments ago oil cracked