faster than ever before. it's wednesday, may 13th and squawk box begins right now. >> live from new york where business never sleeps this is squawk box. >> good morning, and welcome to squawk box here on cnbc. becky and andrew are off today. an amtrak passenger train carrying 238 passengers and five crew members derailed late last night. at least five people are confirmed dead. the train was heading from washington to new york when it went off the tracks just north of downtown philadelphia. passengers say everything started to shake luggage and people went flying and then there was a violent stop. >> we were sitting there and then it just -- you saw it go like that. you can feel it off the track and then we just rolled and

rolled and next thing i knew we were pushing out the emergency exit and i was outside and there were people screaming and bleeding and we helped them out and they're okay now. >> 7 train cars flew off the track. some cars ending up on their sides. others landing mostly upright. rail traffic between new york and philadelphia is shutdown today as the investigation continues. >> philadelphia mayor said there's no way that train service is going through philly in the next week. >> right. >> this is -- you know it's always horrific and tragic to see this but we all take that train at some point. >> it's home to everybody. >> we go to d.c. a lot of us take the train. >> yeah we choose the train over the airlines because generally you're far more certain to get there on time. >> it's nice. >> this was the regional. >> this was the northeast regional. >> still. >> still. it's huge and packed.

>> same track. we all go through there and baltimore. by far the most heavily travelled rail. >> this is inevitably going to raise questions about spending on infrastructure the finances. >> old track. old, old track. but amtrak had been sort of talking about how safe it had gotten to travel by train and this will definitely refocus the attention on safety. no doubt about it. horrific. could go up from five too. >> they have it for everybody on. >> 65 were treated at the hospitals. >> and they're not sure they have accounted for everybody on board at this point. >> it's really a terrible tragedy. one that hits home for all of us here. here are the big market stories we're watching today. three economic reports of note. april retail sales and import

export prices at 8:30 eastern and then march business inventories at 10:00. retail is a key sector to watch today. we'll also get reports from macy's. ralph lauren is set to post quarterly results before the open and an activist battle brewing in delaware. shareholders will decide on a battle between the company and nelson peltz. his management is pushing for four seats on the board. talk about that in a second. two of the components on the day today will feed into gdp so a better read on second quarter growth. dennis lockhart said that retail consumer is going to be the key in whether or not to raise interest rates. >> oh boy. every economic thing we talk about he's going to give us all of this nuisance. >> that's one of the benefits.

>> we're going to get so far into it. >> the value. whether it's added or subtracted is entirely unclear. >> 603. >> 60345. >> how does the phillip's curve play into any of this. >> it's absolutely essential. is it ralph? you said lauren. >> i usually saw lauren. >> it's ralph lauren. >> is it? >> not that it matters. he made it up. >> i have the same trouble with donna karen. >> no. how do you know that? >> you really need to question when it comes to class and everything else. >> he's not here today.

>> you are now in charge. >> with you here i'm second in line. >> ralph lauren. >> like i said he made it up. it doesn't matter. which did he decide on when he decided i needed a better name. let's look at some of this morning's stocks to watch. they're terminating a safety trail of its obesity drug. the cleveland clinic was conducting the trial. it says the study is being halted because of an unauthorized release of trial data in march that may have compromised the integrity of the study and godaddy posting better than expected results. this is the first quarterly report since the company went public. through yesterday's close the stock is up more than 33% since it's first -- since it's april 1st ipo and then american express shares are getting a boost. companies purchasing up to 150 million shares and increasing the dividend by 12%.

i haven't looked at whether that's a yield or not. do you know? i always think we should put that in there. >> what? the current yield? >> knowing it goes up 12% doesn't tell you anything. >> especially in this environment. >> prior to the boost yielding 1.3%. >> that's the amazing part. when you wake up in the morning and you can buy a 10 year treasury yield. >> and american express. >> american express is yielding more why wouldn't you buy -- >> you can buy at&t or pfizer. >> you get the yield and potentially the underlying asset appreciates as well. >> at&t is 5.5%. pfizer stock is 3.3% at this point but even general electric yielding 3.4%. >> i think it's because the ten year is like your cv now. people use it to park cash. >> people that need to park cash. >> we can keep cash.

i'll take my chances. >> but you wouldn't park your money overnight or over a week or a month in american express. >> you're not that concerned about it. they had a surprise about loss of principle in the last month or so but in general it's a place where you might put it. >> you're seekingly quiddity. >> -- you're seeking liquidity. >> people pay to hold their money. >> it's an interesting question. >> we don't have to do that. we leave it where it is and we assume we can get t-bills or something but you can't do that if you're an insurance company. >> you want to get really down in the weeds. >> no i warned about this. >> theoretically central bankers want to get rid of cash. >> right. >> because cash inhibits their ability to reduce interest rates and make them negative because

at some negative interest rate it pays you to take your money out of the bank and put it in to actual dollars. so there's a debate over that. >> to get rid of cash and to some total. >> i think that's basically -- vertex shares are jumping. they approved a drug that treats cystic fibrosis. >> let's show you what the markets are doing this morning. the futures are suggesting the dow open higher by 72 points and nasdaq 25 and s&p 500 by more than 8. let's show you europe where we had government auctions and a lot of data out showing the gdp rates within the various countries there. germany is higher by .3%. ftse higher by .5% and greece is higher by 1.6%.

that's more like an option than anything else. hang seng and shanghai lower by .5%. the price of oil is back above $62 now. 1% 6135 for wti. brent at 67.30. the ten year yield, 2.2%. did we get up to 2.3%. >> we did and the german bund which is not a cake. >> a bund cake. i never thought about it. >> it's different. there's a t at the end of that. but that got up to about 75 again. the stock market moved again. >> the stocks turned around because they were down deeply in the morning and then came back and somebody was asking them what happened. i think that's what happened. >> the government borrowed money just this morning. i'm trying to remember what the yield was but it was

significant. >> it rises for first time in auction since 2014. >> did you look at the dollar? >> i'm getting to the dollar. the euro is going to cost you $1.12. pound will cost you $1.56. so dollar is a mixed bag this morning and price of gold is higher by $1.30. >> let's get a check on the markets with gina sanchez. she's the ceo and rich is president of steinberg global asset management. we have a lot of things that was talked about in terms of the fed. to me it looks like 2015 has been a year where the stock market is digesting an inflection point in the long-term interest rate picture and we have gotten nowhere. my real question is when rates

finally do start going up will the resolution be higher from this trading range this year? or will it be lower from where it is right now? >> look i think that depends on why rates are going up. i think a lot of people are expecting that rate versus to go up because we're expecting it. it's a credibility move. et cetera et cetera et cetera. if that is the reason why rates go up and in fact the economy isn't strong enough to handle it it could be pretty ugly. now if we start to see continued evidence of growth fuelling a rate hike that's a different story. we can look forward to better earnings. earnings are actually okay this -- in fact they have been touted as good but if you look at sales they're still tepid considering gas prices being as cheap as they have been despite recent rises in oil prices. it still hasn't fed through to

sales. so it's really hard to imagine a situation where you're seeing incredible growth rates and that's the reason we're seeing a rate hike. >> you tell me. you're the expert. you tell me. are rates going to go up because the economy improves or because they go up in europe and we follow suit? is it going to be for a good reason or bad reason? >>. >> more likely than not there's going to be a credibility hike and it's going to be as delayed as possible. our expectation is the markets continue to go sideways. particularly through the summer. we're heading into the summer now and rates continue to go sideways and in the fall we should start to hear whether or not we're going to have a hike. >> rich you haven't made any money for your clients this year have you? >> we're up slightly this year joe but this is a year where we're going to tread some water until we see where earnings go

in 2016 analysts are at $134 versus $120 for this year and low gdp growth may be hard to get in the snp although we're very happy with the action we've seen lately in the markets even with the back up in interest rates that the markets haven't freaked out. and the key is if the markets continue to tick up here in the ten year which people don't use for savings rates then the markets will be okay. the fed will see it as doing a lot of the heavy lifting. >> i don't know what to think of the notion that if earnings improve a little that that absolutely means the stock market goes up. i don't know, everybody is saying that. all we need is a little bit of earnings growth. we get 5% earnings growth. we get 8% this year.

i don't know. if the market at this point is already, you know trading on that anticipation or if it's fed induced or whatever it is i don't think it translates exactly to a gain for 2015. >> i put you at $120 in earnings for this year. 17.5 multiple. 2100 is the target. we'll be stuck in this trading range and investors have to realize, that's okay. you know the road -- we're not in a binary world. >> easy for you to say. you're managing the money. easy for you to say. you want to keep their money. what do you think gina? >> look i think that it's going to be our call at the begin ofg the year that this is likely going to be a sideways year and that seems to be how it's panning out. i think a lot of good news was already priced into the markets and so you know if in fact the best situation is that rates

really go nowhere and we get maybe one hike and that's it that could actually be a goldilocks scenario but that doesn't push the stock market up. it probably lets it digest where it is. it's probably a little beyond fair value but not hideously beyond so it could survive. >> i'm sure that janet yellen if she raises rates she would be -- she would sign on for flat in the stock market in 2015 i think. if she can just orchestrate that. >> if the punch bowl is taken away here and we end up in a flattish type of year it wouldn't be so bad and if you have a dividend strategy you end up with you know three or four percent yield it wouldn't be the end of the world. >> excellent. thank you rich and gina. we'll see you both again soon. why can't you -- you can be in florida and do this. see how he does it?

>> yeah great. >> it's warm all the time there. >> it is. >> let's head to philadelphia. we want to get you the latest on the train derailment and start of the investigation. adam is on the scene. >> good morning, the mayor says we can't be sure that everyone has been accounted for so we have seen search dogs go in and hire men to rip through the metal of the train to see if there are still people inside. we're waiting on a crane to lift one car off the other. the train left the 30th street station in philadelphia about 9:15 last night. it made it's way here at about 9:28. as it came on to the bend it derailed all 7 cars off of the tracks tracks. passengers describing a chaotic scene. suitcases and people flying around. one of the cars overturned was the club car. might have been people standing up inside there.

they'll want to know what went wrong. the federal railroad administration will be coming here. ntsb fbi, they'll be looking into the speed of the train. when were the brakes a applied. they'll try to determine what went wrong. we know what happened but we don't know why. back to you. >> thank you. we'll be watching this throughout the morning. >> senate democrats delivering a major blow to president obama's trade agenda but this is a defeat or set back for the administration's transpacific partnership? john harang gets john harwood sat down with mitch mcconnell. >> it's almost been an out of body experience but i have been communicating with him a lot the last few days. if we had a republican president not a single democrat would vote for trade promotion authority. what i said is if we want the

next republican president we hope will be sworn in less than two years from now to have a chance to do trade agreement with the rest of the world that's about this president. >> give me a verbal diagram of how you get over the goal line. >> the white house is in charge of the democrats. we'll have most of the republicans. i want to compliment the president. the way he took on the base. elizabeth warren the labor unions. >> are there a lot of democrats that think obama's right and you're right but are scared to vote that way. >> the unions have always been against trade bills. the question is how many democrats pay attention to them on a question like this. more of them seem to be paying attention than in the old days. >> for more of john's conversation with mitch mcconnell go to cnbc.com. >> coming up an american success story. a small business owner in harlem trying to make it big and she's a big star on our brand new future. big hit on cnbc reality show that airs tonight. but first, here's a look back at

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you make more money from that bar than cooking and or baking. >> that's a great idea. what are we talking about in

terms of numbers? >> it's going to cost about 310,000. >> something like that. >> the steel costs a lot of money. >> the steel. >> they have to move the electric and put the steel in. >> the idea of taking next door and making it into a lounge which connects into my existing restaurant is a great one but when i hear breaking down walls these are things a sweet shop wouldn't necessarily require. so ultimately it's going to come down to which one am i going to make the most money from. >> that's a clip from the premiere of cnbc's consumed. the realest rant business in it's new primetime show which premieres tonight. melba's is looking for new ways to go. joining us now is melba wilson. good to have you here. >> thank you for having me. >> i love that clip. the ultimate question for a business owner, how do you get

the best return on capital. what decision did you make there. >> it's all about roi. my money is what i call mattress money. i didn't have a lot of money starting out in this industry. i saved my money for years, literally underneath my mattress. >> what did you have like $100,000 in the mattress. >> yeah. >> that's crazy. >> was it comfortable? >> i had a good mattress. >> i would put it under my mattress before i put it in a negative yield instrument. >> i learned from watching you guys early in the morning. >> obviously not if you're putting it in your mattress. >> she started a restaurant. >> she invested it. >> i read in the -- i haven't seen the whole episode but i'm dying to see it. i read that one of the struggles you faced is do you bring in a partner who then brings you money and know how but then you

have to give up some control which is always the dilemma you face as a business owner? >> totally. it's a struggle because i've owned melba's now for ten years. this is my ten year anniversary however i'd like to have a little bit of a life so bringing in a partner may not be a bad idea but do i want to give up control. we have to watch tonight and see what happens. >> where are you going from here? ten restaurants? new york city chain? national dream? >> it's all about branding and merchandising for me. i'm a single mom with a 15-year-old son, born and raised here in harlem and i'm living the american dream. for me it's about eat or be eaten and i'm ready to eat. >> does new york city make it hard or easy to be a business owner. >> new york city truly does? >> hard ore easy. >> harder. because everything we do here is under such a microscope and it's the rest ran business. it's one of the toughest businesses out there so to be

able to survive in the restaurant industry in new york. >> because this city is an entertainment business. people go out for entertainment. it's what they do for hanging out with friends. the competition is brutal. >> the competition is brutal and again you have to eat or be eaten. so it's all about the service. it's all about the food and it's all about the fair. it's about the entertainment. >> can you talk about that part of town where you are. that changed a lot in my lifetime and even in the last ten years. how does that work toward or against your business. >> in 2004 i was the only restaurant on 8th avenue. >> amazing. >> but being born bread and buttered in harlem it's all about having vision and if not me who and if not now, when? >> but now it's the hot place for restaurants. that whole strip up there is a place you want to see and be seen going out to dinner. >> you're 100% correct.

we have everything from ethiopian food. it is definitely the new restaurant place. >> it's a great story. >> it's a great story. we can't wait to see the show tonight. we wish you the best of luck. >> you brought us something. >> i brought you my homemade sweet potato pie. nothing goes better with coffee than my sweet potato pie with whipped cream on top. >> there is nothing that whipped cream done make better. >> is there anything it would hurt? >> not much. >> i don't think there is. thank you. >> i think you need to open up another one i think. you can't get enough out of just one restaurant. >> i'd love to open up more. i think it's in the pipeline. >> it is? we'll have to watch. >> thank you. >> great having you on. >> don't miss the premiere consumed the real restaurant business tonight 10:00 p.m. eastern time right here on cnbc. >> making headlines this morning, facebook partnering

with nine news publishers to launch instant articles. they'll publish articles directly to the mobile news feeds. stories load more than ten times faster than standard mobile web articles. >> okay. all right. wow. this is serious. it would be -- can you imagine lauren lauren? you know that ralph's son married one of the bush girls. lauren bush. >> her name now is lauren lauren. that's my whole point. how pretentious is that? coming up a retired four star general is out with a new book on what business leaders can learn from the battlefield and he will join us next.

a look at yesterday's winners and losers.

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trying to win a market share battle between u.s.shale production. there's a gain of 55cents. brent is trading $67. 67.21 per barrel. >> today's executives need to take a page out of the military's play book if they want to lead their organization on a successful path. here now with us we're glad to welcome the retired four star general and author of the new book team of teams. new rules of engagement for a complex world. i can see how a lot of things in the military would translate to the world of business and how often we heard business is war and whatever but then again i'm not sure i'd want that sergeant as a boss either. i don't know. i know you wouldn't because he would be calling you pile and remember everything that happened -- you need a kinder gentler -- >> i don't get a chance to

respond. >> kinder gentler way to translate what goes on in the armed services to corporate life. >> they're largely misunderstood in that regard. in combat they're much more scared of the enemy and they only do it for you. they don't do it because they're scared of you. >> that's interesting. it certainly translates to business in a big way where you are actually on a team where you want to -- you know you want to please the people that you're working with. it's a team and everyone wants to move forward. what else? >> we talk about teams so much. we go back to the 2004 men's basketball team and we learned that just good talent doesn't build success but i grew up in a world with the pest small teams the military ever fielded yet in iraq we were losing the war despite our proficiency. what we found is against a network enemy leveraging

information technology like never before we had to change ourself to a team of team which is is a different construct. it has a different dynamic between the teams and that became the key of what i'm so passionate about. shared consciousness across the organization them empowers subordinate teams and individuals at the lowest level to take immediate action. >> does that work in business? >> it's absolutely necessary in business. if you think about it in 1961 he came up with the idea of the butterfly effect. that term. we misunderstand that. we think that means leverage. what he meant was uncertainty. we're in a world now where things change so fast and they're so inner connected if we can't make decisions close to the point of action they're always irrelevant. we have to change the construct in a culture that allows us to do that. >> while we have you here we don't have that much time but can i just ask you some general

questions about the state of our military preparedness at this point? the world in the last 18 months or so it's refocused that there's good guys and bad guys. are we cut to the bone yet? are there ways we can still save money or are we down where we have to start increasing our spending again. >> i think just the way the budgeting is done, there are ways you can save money but i would argue you have to be very careful about that at this point because we're probably near in a lot of things and the world is a place where we're seeing there's major competitors as well as all of these threats so we have to be very careful about the kind of sequestration type things that happen. >> i've heard people and it was off the record i think so i won't mention names but someone that has a lot of influence in foreign policy said that it's a mess right now. there's no doubt that the middle east and things are in disarray

but that no one could have managed it much better than the current administration was his view. to see that -- just from me to see that suddenly saudi arabia and israel relations with both of those key allies deteriorated greatly and we changed with iran it seems to be a strange way to conduct foreign policy. >> you navigate from where you are and not from where you wish you were. it's a mess right now. we'll have to rebuild relationship with traditional allies and rebuild coalitions and reestablish credibility. not just in the region but in the world. we need to be effective in the next few years. >> what would you do against isis at this point? should there be more american involvement? i heard him speak and advocate for much more aggressive stance by the military. >> there needs to be more

aggressive work against isis but isis is not the primary problem. isis is a symptom of the disarray in the region. what we need to do is not assume success against isis if isis suddenly disappeared would solve the problem. syria is in tatters. iraq has problems. >> are you suggesting that's a diplomatic issue and not a military issue? >> i'm suggesting the actual state of stability across the region and into north africa is so weak even if isis were to disappear much work needs to be done. >> so you would say that the engagement with iran has been the right path to go down? some people say once isis is gone, hopefully, some day, iran will emerge as a bigger threat than isis ever was. >> iran is important. i'm a great believer in that you talk to your enemies because why would you negotiate just with your friends but at the same time we need to be firm with iran. we need and want a nuclear deal with iran because we would

clearly like iran not to have nuclear weapons. on the other hand their behavior across the region is irresponsible. we can't sell one to get the other. we have to support our allies. they're nervous about that. >> hard to supply your allies when they're in one place and the enemy is in another place. >> if you look at it we're supporting iran in one place and allied with them inside iran and clearly opposing them in other places. >> the story related to whether or not the u.s. knew for a long time where bin laden was, that we learned about it and dealt with the pakistanis about that what do you make of that story? >> i would have to see the proof. i don't believe it at all. i was too involved with that for too long. it's very possible that someone in the government was aware of it. that wouldn't surprise me a bit but i don't think that the highest levels they knew. i also don think they informed the united states.

>> okay. general. thank you. good luck with the book. appreciate it. and what's that guy's name? ernie is the gentleman's name. let me ask you this as you're marching do you know any of the good stuff that rhymes to get people to march in cadence? >> yes. >> do you have any with curse words in it or stuff like that? >> i would never repeat it again. >> general, thank you very much. coming up the numbers, number of americans using more than $100,000 in medicine tripling in the last year. startling new stats, next. but first as we head to break let's check out the dollar which was even against the euro. there we go. stay tuned, squawk box will be right back live from the heart of midtown manhattan.

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shocking new numbers on drug spending. >> this is coming out from express scripts. really big numbers here. more than 500,000 americans spend more than $50,000 a year on prescription drugs and more than 100,000 americans spend more than 100,000 dollars on prescription drugs. this was last year. looking at 31.5 million americans and extrapolating that data out. the top five spenders accounted for 61% of the country's entire

prescription drug spend last year. the majority of this is covered by insurance they found there. they were looking at people that were covered so that does change the equation. we're looking at who is the super spender. it's primarily a baby boomer and they're primarily male. 3 out of 5 people that spent more than $100,000 was baby boomers and slightly more than 50% were men. they also tend to have multiple malitys. a third of them were treated for at least ten conditions. the things contributing the most are cancer drugs, hepatitis c drugs. most people for high blood pressure, high cholesterol and things like that but the things that contributed were the high cost medicines and express scripts have been waging the war against the costs of the drugs. they're trying to bring down the costs and an interesting point here is most people that spent that much have at least four different preshrivers. that really added to the

complexity of trying to manage those costs. >> i just wish i knew the percentage of people that take at least one drug. i wonder how lucky i am as a boomer. i take fibercon. everybody needs fiber. >> that's a prescription. >> no it's not a prescription. those are the only two i take. centrum silver and i never thought i would. >> we would know if you had silver. but do you take a vitamin or anything? >> i'm a lipitor guy. your cholesterol is good. >> yes. >> do you workout every day. >> no. >> you work your mind. >> thinking all the time. >> do you know meg, how many people, let's say 55 to 65 take at least one prescription drug a day. >> i'm not sure i have that data. >> they're talking about putting it in the water. it's so common.

>> there is a small percentage of the total population that accounts for a huge percentage of medicare spending. >> absolutely. the average spend for an american was $1,300 per year so then you're talking about that very small proportion of people. >> the last six months of life. >> can data point you to a solution or is it just now we know this -- it does sort of say if we want to -- robert frank. right there. he's walking right there. >> robert frank. you can see anyone here from the window. >> am i like that when i get out of the cab outside. >> he's looking for a phone booth to change. >> he's coming up next to talk about the auction. >> is there something that the data points you too? >> it's trying to lower the costs and they say they have solutions by trying to manage the things together and have different formula plans putting the lower priced drugs higher. that's what they have been

trying to do in hepatitis c and they're threatening in do in other areas coming up. >> if people exercised more would they be -- we have to go. >> prevention would be the less way to go. >> thanks. >> meg thank you very much. coming up a top ranked company on our list of cnbc disruptors. it's called lisnr and it could revolutionize how we do everything and shop and how we listen to music. we'll explain next. the network that monitors her health. the secure cloud services that store her genetic data the servers and software on a mission to find the perfect match. and the mom who gets to hear her daughter's heart beat once again.

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this is great. next company on the disrupter 50 takes the sounds around us and turns them into opportunities. listener has developed the tick knowledge to send inaudible smart tones, that is data over audio, to debtget messages directly to consumers with smartphones. rodney williams is founder and ceo. give me the vc pitch here. you've got a thing that does what? >> we connect. we've created an efficient way to connect any device with a speaker and microphone. yes, we're using audio. we've essentially made it very easy for any speaker to use to connect devices whether no experiences or just for device to device. >> does it disrupt wi-fi then? >> not an alternative.

something that can be used if tandem. think of it not necessarily as a network, but the new bluetooth. to say whether you want to understand where a consumer may be within a particular environment or what if cnbc wanted to send a message to everyone watching today. >> so how would we do that? >> example, very simple, for cnbc today home viewers on the cnbc app could get messages synchronized with the live broadcast of today. it could be appalachian he will segment particularly and you can deliver additional content about apple to viewers at their home. we do a lot of work for stadiums. so imagine our technology listener being broadcast throughout that stadium and we give those teams the ability to send messages to fans batessed on their location. so imagine you get up to use the bathroom and before you get back to your seat, you get a recap of what you you just missed. what you just missed.

very peculiar to you. >> it comes in a video form a text message? the user experience is what? >> essentially you have the mlb app or the team app and you get a notification and it basically would say, hey, rodney hire's what you just missed. >> are you using existing pathways? is it bluetooth or wi-fi or a different communication thing? >> we're using our own proprietary -- >> so it gets to might be he will michelle's question. this is another way that i can connect any two devices.be he will michelle's question. this is another way that i can connect any two devices. is it better than bluetooth? >> it's better in a number of use cases. top four reasons why it's better in terms of battery efficiency, range, as well as efficiency and accuracy. my favorite example is the apple watch. >> got one. >> great. it's a big battery drain, right? you charge it testify day? >> when i use it for working out, yes. >> exactly.

if you were to use our technology to connect via the smartphone instead of bluetooth, you would increase the battery efficiency by 5 to 7x. >> that's a lot. >> that's days. that's essentially instead of you you charging every day -- >> so why isn't it doing it now? >> haven't met with them yet. >> is it sound waves? >> these are sound waves. >> is there any -- is there spectrum with sound waves? is it infinite? >> we're in a bandwidth that is inaudible. >> you can never exceed what you need with the amount of foregoing, can you exceed the amount that's available? >> in terms of the number of smart tones, we've created billions. the bandwidth we're currently operating in this is our fourth vision of the tone. we are leaders in the space of using audio to connect the message. >> see, i didn't think of this. i'll be honest with you. i did not position of using ultra high sound waves to -- who the hell thought of this? were you an engineer in school?

>> i was not. my first job was department of energy. >> are you going to freak out dos? >> that's what i was donnere wondering. >> you can tell me who thought of it? did somebody come to you and say i have an idea of how this works? >> no, i thought of it. i was at procter & gamble and i was completely obsessed with technology and how it could be used to touch consumers more effectively. and i wrote some patents and finally started to write this one. >> and you're in cincinnati. >> i am. >> urban revitalization and core that is going on there. and you hire 22 26 people? >> yes. >> nice part of the story that i just told you because you don't have time. >> and we'll tweet out the answer on dogs after that. >> do you have any patents? >> yeah. >> i have a phone call. >> she has patent leather. >> thank you. that was great. coming up businessman ken la

there. go never one to mince words. we'll ask him to sound off from everything from politics to the economy. e financial noise financial noise financial noise

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breaking news a deadly train derailment in philadelphia. we will bring you an update on the casualties and the damage to amtrak's busiest rail route. plus we'll hear from former chairman of the ntsb about the crash. costly game of chicken in the oil market in the standoff between u.s. shale producers and middle east drillers. the iae says the u.s. blinked first. details from the report ahead. and problem calling wealthy hedge fund managers society's

lottery winners. >> you pretty much have more than you'll ever be able to use and your family will ever be able to use. there is a fairness issue involved here. >> ken langone weighs in as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city this is "squawk box". welcome back to "squawk box" here on cnbc first in business worldwide. i'm steve liesman along with joe kernen and michelle came russo cabrera. squens injured after a train carrying from washington to new york derailed in philadelphia. shear reaction from philadelphia mayor michael nutter. >> it is an absolute disastrous mess. never seen anything like this in my life. and most personnel will say

that, as well. >> federal investigators working to determine the cause of the crash. we'll get a live report in a few minutes. and at the bottom of the hour, we'll talk to former ntsb chair deborah h willersman. >> delta raising its quarterly dividend. and it announced a new $5 billion share perform program. the airline says it will result in more than $6 billion returned to shareholders and we'll hear more about this from delta ceo richard anderson who will join us later this hour. among the other stories that we're watching at this hour economic growth in the eurozone outpaced u.s. growth in the first quarter. europe posting gdp growth of 1% yearoff year. that's compared to 0.2% of in the united states. gdp in germany and the uk however, came in below expectations. france however which has long been a laggard outpaced germany

and the united kingdom and posted its highest growth in two years. and "new york times" and buzz feed will post stories directly to facebook's mobile news feed. stories post this had way load more than ten times faster than standard mobile web articles. and reuters is reporting that cablevision will drop its bid for the new york daily news. cablevision could not justify paying even $1 for the tabloid because of its poor financial conditions and prospects. there is a second round bid deadline for the "daily news" coming up next week. >> i had the early call on that. >> you absolutely said it wasn't even worth a dollar. >> i said a dollar is way too much for the editorial content of the dwael"daily news". our guest host is a man no longer influenced by the daily market jitters. although i'm sure he pays attention.

instead swayed by his own investing convictions. who in god's name just wrote that? did you tell them that? that's the biggest crock i've ever heard this my life. ken language again isone is founder of home depot. set to tell us what he's doing with his money. he has a lot of different things going on. good morning ken. >> how are you? >> i'm great. we just played a bite of -- i've seen the president say this before, and that is you only need a certain amount. how many boats can you water ski behind or whatever. the notion that you get to a certain point, you should stop making money because it's the zero sum game. >> or give more to the government. >> the attitude he's always had about it's a zero sum game, if somebody has money, they're taking food out of the mouths of other people's children. you came in and said how much did robin hood raise? >> as of last night, $101.7

million. >> and there are hedge fund guys there. >> i would say that 90% of the money came from hedge fund guys. minimum. >> something called langone medical center. >> yes, sir. >> i don't know who that is named after. >> some guy that wanders around. >> i said check out m.i.t. lack for cancer research and he said the name has been changed to the david h. koik oig center for ch center. i've heard of that guy. not even the fill planlan fill planhilanthropic stuff. they pay 30% on the millions that they earn. isn't that some somehow positive for society when people pay that much in taxes? >> look the system works. do we need things fixed? yes, we do. but the system works.

and let me just give you a little story personal. my middle son had a kid he grew up with, didn't want to go to college. called me up can i get a job at home depot. got him a job at home depot. moved up the ladder ended up managing a store in idaho. i just spoke to him day before yesterday. he's retired. terry, you're 51. why are you retired? 52. why are you retired? he said i had a great run. i said i don't want to get personal, but how much are you worth? he said i'm worth $3.8 million. and he said my wife and i can live very comfortably on the dividends on that stock. he's not a hedge fund operator. he's not a wheeler and dealer like me. he's not all those thingslike our politicians, both parties by the way, like to castigate, like to vilify. he's a wonderful plain decent guy that worked hard for 30 years, delivered, performed,

produced. does well. >> earned success. american dream. but hilly wants to topple oig the the 1%. >> these people are wonderful until you ask them like big spender joe biden, $3,000 to charity last year on over a $400,000 income. what do they call them limousine liberals? >> the other thing that is so frustrating, president obama says if we change carried interest, i would have more money for early education, et cetera. it's this assumption that the federal government is a much better spender of money on society's needs than individuals making individual choices about what they want. >> let me make another point. i can make more money, but i can't generate more time. you look at a guy like paul jones, or me or all these people forget the checks we write. think of the time. i'm not exaggerating. i give 80% of my time a week to

fill planphilanthropic causes. whether i'm raising money, involved with them. same with stan. stan has poored himself into the harlem children's home. paul jones, the atlt amount of time paul spends on working on clarity, i'd like to see what haresident clinton done in the way of this clinton global initiative. you look at the travel bills, you look at the salaries and you say, hey, wait a minute what's going on here. i'd like to see them grab a charity here in new york, bill clinton he's made new york his home state, grab a charity and work like hell for it. you know what? no way. they will give you all the barbed wire you can eat for nothing. that was an expression billy martin used to describe yogi berra who was 90 years old yesterday. isn't that great? >> a lot out on that yesterday. granddaughter maybe should get a congressional medal of freedom or something. that he's been an iconic and a

positive for -- >> absolutely. >> integration in baseball and everything else. >> you know who else was there last night? mo rivera. what a guy. you had a great guy on before general mcchrystal. there is a guy who has really given to his country. his time p which you never get back. >> we've had a great show this morning. we had an entrepreneur from harlem, this kid from cincinnati. it's pain it's been really inspiring. >> capitalism is alive and well in spite of our adversaries. >> who are sometimes ourselves. the united states i'm talking about. >> and some of them might be among us here onset. >> well, he might be getting a little testy. he's our house socialist. >> just for argument sake let's assume capitalism is a positive. what team of things are you -- >> wait. take a picture of me and how much i've said so far. thank you. >> but not while your head is

exploding. >> thank you. keep it on me. now go to joe. >> nobody needs to see that. >> i haven't said anything. >> i know you haven't. you're being very good. >> have i said anything? >> not yet. but you will. you're saving it all up. >> before we talk about what you're doing, let's talk about one thing which to me i found myself aligned with the president in dealing with the progressive left. >> just stop there. >> i think it says something when the base of his party has moved to a point where he actually looks conservative and reasonable about trade. that's saying something, isn't it? >> yeah. >> unfortunately, the president now sounded like -- almost sounded like what we've been saying for a while, a lot of the progressive policy if you you connect the got sdots, they don't work. and now the president is saying you don't understand economics. we've been yelling that to him

and progressives for a while. now he's in the unique position of saying to them now which is weird. but the other side, and i said this off camera -- >> he's only got two years to go before he comes back in the real world and shakes the tree like president clinton. >> but he's speaking down to them the way he used to speak down to republicans in terms of i know what's best. they're getting a taste of that. >> he's speaking down to everybody. >> but his point is it's interesting to see -- >> an intermixing argument. >> if we all live long enough, we'll all become capitalists. steve, i'm telling you, it will happen to you, too. >> take your vitamins, steve. >> i think there is some capitalism in you somewhere. >> they say you don't know who the patsy at the table is it's probably you. i had deep reservations when i looked at the guest list about even comeing in this morning. you can have a better time without me. >> no, and the other communist

last night -- >> communist? >> he had to go to seattle he said. i said, no you were afraid to can on with me. >> can i ask one question? >> by all means. >> please. >> let's have fun, though. >> because my interests unlike whatever my fellow colleagues over there think is not about government distribution it's how and why the market works the way it does. and when there is a nexus sometimes for the government to come in and help the market do what's right. how do you get to a place where a ceo who makes $30 million or $25 million, let's say that person were to make $20 million and $5 million of take were to be distributed to workers. why is it that the market, let's say it's the market, is distributing all of this money to ceos and to executives and leaders and joe let's leave aside the issue of the athlete because i think that's germane but not precisely. >> go ahead. get to your point.

>> how do we get to the place -- the market is distributing more to workers. >> it's easier than that. get boards of directors that are truly independent that take a step back and say what is this guy worth. you could not pay jack welch enough money for the results they delivered. and more importantly, for the lives they impacted in very positive ways. job creation. it was legend. what i'm saying to you is, i can't explain -- how do you explain there was a vanity fair article about where are these guy as now that led their companies in to disaster in '08. i can't explain how they got $150 million. everybody thought nardelli got -- he didn't get anything like $200 million. not even close. >> so i ask a question and now they have on go to break. just for the record. >> did i answer you? >> it's the beginning of a

discussion. >> it comes down to the things that have been approach. transparency, corporate governance, making sure that the boards aren't in the pocket of the ceo, make sure -- no one is arguing crony capitalism is better than socialism. two parts of the same coin that hinder -- >> what you're talking about is endemic or systemic of- >> what i'm talking about is shareholders should ski how much the ceo makes, not society, not government. >> there is something wrong with that from -- >> why? >> it's their company. >> let me explain. it's very simple. there have been a lot of sfuddyes on this. shareholders have very gift interests and do not act as a bloc. and that's something that the executives -- >> a bloc of what in. >> -- takes advantage of and do not for example -- >> who gets hurt? unless it's a zero sum game and you think society is hurt by ceos making too much money --

>> let me give you a for instance. i argued with a couple of dupont directors for crying out loud let them come on your board. let -- >> you mean nelson peltz. >> let them come on the board and he's got $1.8 billion worth of stock. who has a better reason to see the right thing happen than a guy that has that much at stake? >> just hang out right there. you'll be here the whole two hour. right now let's get an update from the site of the deadly amtrak train derailment. chris pollone joins us from philadelphia. chris, are you there? >> reporter: yeah, that's right, guys just learned some sad news in the last few moments that a sixth person has died from this train derailment that happened last night. doctors at a local hospital just came out and said that. so now that means that six people have died from the train derailment, five remain in

critical condition. and 65 at least were treated for various injuries including broken bones concussions, things of that nature. this train was headed from washington, d.c. to new york city. it had just left philadelphia when it approached this northeast philadelphia neighborhood where i'm standing. people on board the train said it started to go into a curve and then everything started vibrating and shaking. that things started flying. people briefcases luggage, things of that nature. and then it came to a very abrupt stop. and that's when people realized how bad it really was. many injured people, broken bensben s bones, concussions. people able to move were bringing people out trying to help them get off the train. more than 200 first responders started taking to the hospital anyway they could do it. now the focus turns to the investigation. what caused this. the ntsb is on scene. they will be trying to figure out that in the hours ahead.

back to you. >> chris, thank you very much. very sad news. coming up, former verizon vice chairman weighs in the company's deal with aol plus the role of public education in fixing income inequality. then exclusive with ceo of delta air lines on the company's buy back and dividend news. richard anderson joins us at 7:30 on set. later, christie's on track to sell more than $1.5 billion in art this week alone. we'll talk to an art expert at the bottom of the hour.

president obama speaking at georgetown university on a panel about poverty. he renewed his call to close tax loopholes enjoyed by wealthy hedge fund managers. >> you pretty much have more than you'll ever be able to use and your family will ever be able to use. there is a fairness issue involved here. if we can't ask from society's lottery winners to just make that modest investment then really this conversation is for show. >> the president said hedge fund managers are paying 15% on the fees and income they collect. he wants to treat that as ordinary income and tax it around 23% to 25%. president obama said that changing that rule would allow more investment in early childhood education.

>> but he is very consistent, though, in a lot of the comments he's said over the years. that one there was something i heard that -- oh, the lottery. they didn't build that. that was the implied -- >> right. anyone can have a hedge fund. >> what i don't understand is why everyone -- like breaking sticks. i don't know why everyone doesn't become a hedge fund manager then. >> because it's just playing the lottery. our next guest is mere to talk about income inequality and the importance of education. former vice chairman and cfo of verizon. fred, give us your idea of the best way to combat inequality. >> well, it's clearly involves education. there is no american dream unless there is education. and that was always the case. i know my grandfather when he first came into this country was

an iceman. came over from italy. and he stressed on all of us you had to get an education. my father who was really the breadwinner for ten family members in the same house stressed education. so we always found ourselves trying to make sure we got the best education possible. and we had a choice. what is happening today, all of the people that come into our great country, if they're for the given an opportunity to get the best education possible they're always going to be behind the 8 ball. they will never be able to get that american dream fulfilled. you know ironically enough, the governor of new york state just yesterday announced that there wassing for to be a program that he is supporting parental choice in education. basically that would be able -- you'd be able to use some tax

funds to fund educational alternatives to give parents a choice. and we have in many neighborhoods the poorer neighborhoods of our city, a failed educational system. and they need choices to try to get their kids into schools that in fact will enable them to really live the american dream. so i think education is number one. >> is this a campaign or are you supporting vouchers from the government? that seems like the main program that you think would be -- make a huge department in ibnequality. >> this is going to be a tax rebate so that if people give money to any kind of school, whether it be a public school, private school, it could be religious school, whatever, they in fact would be able to get 100% rebate for certain portion of that contribution.

we need to keep these schools alive. there are 44,000 students in new york state that are supported by these schools. and we need to give parents choices so that they could send their kids to these schools. >> fred, the thing that i find in this whole discussion that is interesting is the push back. we're arguing apple pie and motherhood. we're saying let's equip our kids to be able to do higher requirement jobs where the better pay is. but also fred you and i have talked -- by the way, how is your golf? >> horrible. >> okay. well that's two of us. anyway, you you and i talked about the need for corporate america to begin to think in terms of doing whatever can be done to help people live better quality lives through better pay. because they earn it. we all make a lot of money. those of us this business i could not have done and bernie or arthur it if we didn't have

370,000 people in those stores. yeah, i'll concede this will to president obama. without those 370,000 people we're nothing. but those 370,000 people have minimum requirements of intellectual need. and what i don't understand is let's do what we're good at doing in america. let's compete, let's have catholic schools and anything at all you want to pick in the way of education and say, okay parents, pick your choice. send your kids there. what i don't understand is this fervent effort particularly by the unions to say don't -- charter schools are bad for kour children your children and bad for education. so you're on spot, but it has to be on two prong thing. we in business have to figure a way out to pay people better and society has to figure a better way to educate these kids so they come with the skills that enable us to do the things we to

and do them better. >> you know fred the thing is and ken, i understand at least on the surface what you're saying. and that is it will take time to get these alternatives ramped up. you can't do this without fixing our public schools. and their point is that if you take your eye off the ball and don't -- 9 first thing that needs to be done is you need to try to to as much as you can for the existing infrastructure of public schools. and there is some truth to that that you can't ignore public schools and just focus on everyone going to an alternative. don't we need -- unfortunately, their idea is to just throw more money at it and i don't think that's how you fix it. i'm not sure what the answer is for fixing public schools, but you need to fix that system, don't you? >> you do. as a matter of fact, i think it can be fixed. when you look at 2450es models that we're talking about, they're alternative models. models that the public schools could look at and say, gee, this works fine here this does not

work. but if you're a very, very large entrenched system you have to be open to other suggestions. if the system is not working and in many instances you have failed schools, everybody agrees that these are failed schools, we have to show them a model that does work. and that's what these alternative schools provide. >> vested interests are just so powerful. it's really unbelievable. they work against themselves. thank you so much fred. really -- >> i have one thought. there is an example -- his grandfather was an iceman. he becomes one of the top executives in america. how? education. >> you bet. >> okay? if there is proof that the system works -- >> thanks ken. coming up a caper maker posting big gains on acquisition news. that story next. plus delta air lines ceo richard anderson joins us onset. how many total airports are there in the united states?

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question. how many total airports in the united states? the answer 19,453. welcome back. among the stories that are front and center this morning, an investigation beginning into a deadly amtrak train derailment in philadelphia. at least six people are dead. dupont is holding its am meeting today and shareholders will decide on a battle between the company and nelson peltz.meeting today and shareholders will decide on a battle between the company and nelson peltz. deal news to tell you about. container maker owens illinois buying food and beverage container business of mexico's vitro to nearly $2.2 billion. and it's official pal corp is being bought. $127.20 a share. >> great company. fabulous company.

and coming up, dwell delta air lines stock down. but the company just announced a dividend hike a big one, and share buy backs. richard anderson will join us on set next. out of 42 vehicles based on 6 different criteria, why did a panel of 11 automotive experts name the volkswagen golf motor trend's 2015 car of the year? we'll give you four good reasons. the volkswagen golf. starting at

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welcome back. delta air lines hosting a private analyst meeting here in new york the company raising its quarterly dividend to 13.5 a share and announcing a new $5 billion share repurchase program. here to break down the news on our set is richard anderson ceo. great to have you. >> thank you for having me. >> this is what is so great about -- how do you like our new studio? he thinks it's good. >> i think it's wonderful. >> and you're here and instead of looking into an aperture you get to look right at us. >> this is the first time onset and it was a smart move because everybody comes to midtown to talk to their investors. before you you do an investor day, you come on squawk box. >> and we thank you to doing

that. in the past, you haven't been buying back as much stock and you haven't been known as a yield play. what's changed? >> enormous free cash flow. we will be in the top ten free cash flow among the s and p industrials. >> percentage of reviews? >> just pure numbers. absolute dollars. we will be heed a of the railroads, federal express and names like john deere. thousand we're given street guidance that we estimate that our free cash flow after capex will be $4 billion to $5 billion. >> you've done things with cash before, so it's not like someone could accuse you of not having anything better to do with it. you own, what 49% of virgin atlantic, you bought a refinery.

>> correct. >> you've added to your stable of planes. so it's not just financial engineering. >> it's not. no, i mean in terms of investment, we're returning -- we're covering about 170% of our annual depreciation in our core capex. so we're making the right investments to run the best airline. and to make the right strategic investments. but we want investors to understand that we're a high quality industrial. and by the end of the year, we'll have investment grade credit metrics. and cash flow, free cash flow in the top ten of the -- >> how much new equipment have you got coming online next five yearses? >> . >> in the next three years we'll replace 20% of our fleet. >> mostly 737s? >> 737s a-321, a-330, we have

1872 727s. >> you put a repro on your board. frank is a real catch for you guys. i can't say enough good things about him. >> well, it took some work. but we were the first -- we're the first board he went to. >> i know that. because he's gone on p&g now. >> here's where we go from here. for years and years and years, you cooperate invest in airlines. you might to a trade, but you couldn't invest. warren butch at the timeffett got so burned on u.s. air that he would never invest again. legacy guys, issues are mostly -- have mostly gone away from a horrific experience in bankruptcy court and mergers that almost had to happen. there are some people that think you're making so much money now and that the industry is finally doing well and solvent that there must be something wrong. that there is not enough

competition. that you've reduced capacity so much right now that you've got a stranglehold on the american public. you don't give them pea nuts. you don't carry their luggage. you charge for everything and service is bad and you're making all this money. >> actually all of the opposite is actually what is going on. we've actually now have the right level of investment in the business where we can buy airplanes, delta has about $6 billion of terminal investments going on right now in the u.s.. and really we want to run the best airline for our customers. yet we just get our jd powers results here soon and we're only ten points away from being the top rated jd powers airline in the u.s.. if you look at real airfares the market is very contestable. there are about eight airlines, there are four big ones. there are two big regionals. three or four much smaller deeply discounted carriers.

and the industry is very contestable. >> are you familiar with a senator named chuck schumer or andrew ross sorkin? >> i'm familiar with both. >> i'm told there are routes that are very close to monopolies at best al ollie gop plis. >> one of the criticisms out there, i don't know what the answer is to this, that multitop trips cost the same as nonstop and that that's a sign of collusion in the business. some west coasters, will you make a stop same cost as if you went direct. >> well, it's not as much about input costs as it is about what the contest ability of the marketplace is. and the market place is very contestable. if you bring up any internet site independent internet site consumers in the u.s. today have perfect transparency 24/7 to

every single product on the shelf. and we have to price -- >> but if you can't get a gate and only a couple of airlines fly, then it can't be contested. >> virtually every market in the u.s. is contestable on a -- >> margins are zero return on equity was zero for 25 years. now you're making a lot of money. doesn't that by definition say these aren't being contested the way they were? >> no it doesn't say that. if you look at the data and the d.o.t. data from 2000 and you compare what real airfares are today with real dollars -- >> i've made that point. >> it's down by -- >> used to be 800 bucks to go and back. >> now it's cheaper. decline in the price of oil, and then the recent climb again, what are you doing in terms

hedging fuel prices? do you lock these in? >> it's a difficult equation. we believe over the longer run that in our long term plan you know, we're assuming oil prices are in the 70 to 85 range. because the one thing for sure in airline, if you plan high fuel prices you won't be disappointed. >> right. >> and you'll run your business much more astutely because those input costs are higher. but we've had tons of volatility right? i mean it's up 20 25. yesterday brent was $67. and a year from now is 70 71. >> do you look at these numbers? >> i did on cnbc.com. >> i used to call him macgyver because that guy's name is richard dean anderson. delta, long routes in cincinnati. major hub.

delta lost its way big time. and even my father finally soured on it. who was the guy before neal mullin bad? >> ron allen. >> and then you went -- then they got a mckenzie consultant and brought him in and you think it -- consultant is someone who -- >> you say like it's a bad thing. >> like someone from out of town doesn't have a job and comes to basically -- but ran the airline into the ground. so this guy, i mean, not just saying that, but you need to be smart to run an airline. >> do you see pricing what you don't charge for baggage and pea nuts coming back? >> no, i do not. and the reason i do not, if you look at most consumer products today, if you look at hotels or rent a cars, or smartphone or computer consumers want choice and consumers want to pair for their own desires in terms of

how they specify a product. so i actually think you'll see more unbundling not just in the airline business but in all consumer businesses. and in fact one of the ways we're addressing the discussion about fares is we're actually putting in a very basic economy fare that is much lower than regular economy, but it's no seat assignment nonrefundable, and it appeals to that customer thatment wants no frills. >> ron allen wasn't so bad. i guess it was the mckenzie guy. if i way thank you. >> it took a south texas college law grad. >> to bring it back. >> you got a hell of a guy. >> thank you. >> great having you on. coming up an update on the

deadly train derailment. debra herself man joins after the quick break. sgrirks h. rita. sandy. ♪ ♪ meet chris jackie joe. minor damage or major disaster, when you need us most, we're there. state farm. we're a force of nature, too. ♪ ♪

playing for the usual phil? always stacy. at kpmg we've always believed leadership is about vision and integrity, confidence inspiration and passion. pitching wedge. thanks phil. and always having the courage to take your best shot. see the best of the best at the kpmg women's pga championship. welcome back to "squawk box". futures right now have been up most of the session.

sort of a valiant stand the market made yesterday as it got scary again with the german bupd and then bund and then the ten year. it was down 140 like all morning before the market opened. and then by 11 chlt 1 16r789 chlt 30 or so it was stand. are those numbers coming out? >> retail will be really important. and also -- well, sales reports. >> let's get more insight into the deadly amtrak crash that happened overnight. deborah hersman is former chairman of the u.s. national transportation safety board. good to have you here. >> good morning. >> your initial thoughts as you see what happened overnight in philadelphia. sfwr >> of course our hearts go out to those injured and the family members that have lost loved

ones. but the daylight is extremely helpful for investigators to get on scene, to identify any perishable evidence and to gather those all-important recorders. >> this will certainly raise questions about at this point have we invested enough in infrastructure, has amtrak invested enough. you can give us a framework for thinking about this as investigators get to work as to what happened? >> sure. and i will tell you as far as i know from a structure investment goes, this is really a huge issue in our country. you all know this as a tremendously traveled corridor, and so shutting the northeast corridor done not just for the amtrak trains but for commuter trains around philly is a huge issue. and so while they're doing the investigation, that will be shut down. but they will be look very closely at the human, the machine and the environment to understand what caused this crash. >> what is the process like for the investigators? >> so they will arrive on scene and really what they're looking

is to secure any evidence that might be perishable. they will look to conduct witness interviews very quickly because it's important to get those first impressions before people start hearing a lot of information and their stories get affected. when they download toeshose recorders, that will give them a lot of direction about the right questions to be asking. so they will be look at speed throttle position, braking. and then that will help them understand where they need to be looking next. >> any sense of how long we'll see the corridor shut down at this point? >> i think it's really hard to tell. the challenge, you have the electrification, you have to get the cars out of the way and repair and inspect not just the track, but the electrification and make sure everything is working. so i'd say they have a big job ahead of them. but i know this is hugely important. it's shutting down a vital transportation link.

>> yeah, it will be tough. thanks so much for joining us. >> thank you. and coming up it's a huge week for art sales with auction house christy's alone on track to sell more than $1.5 billion in art. a cleeer look ercho closer look next. and then we will talk trade deals with paul ryan in the next hour. why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us.

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an art auction bonanza here in new york with record breaking sales rocking the art world. robert frank with the lateettestlatest. >> reporter: sother sotheby's selling a painting that went for 29.9 and tonight a controversial nude could xwhoe for $50go for $50 million. joining us now, director of the gallery. andrew, people look at these prices, this $180 million picasso, and say it's insane. it's a bubble. is it? >> it's insane, but this bubble has proved to be pretty much impermanentim impermanentable for ten years. it confirms the fact that this bubble is inhabited by a number of great artists. and this bubble is very limited. there are certain artists going

in and certain that are going out. >> and it's people looking for stores of wealth. more rich people around the world look for being a safe place to put their money. where are the collectors for these pieces coming from? >> collectors are all over the globe now. christie's sale of 35 lots on monday, they said they had buyers from 35 different countries. and in that sale alone, of the ten highest lots sold christie's said that those ten buyers are recent in the last five years buyers to their firm. >> normally brand new money is a bad thing, right? but the art market celebrates it. >> because you have this cushion and this enormous buffer of wealth of soshlcial accept tnsance confirmed throughout the dialogue. so it's all cop figuren figured into a perfect storm where everything

is validated and anointed. certain things come in and out of the bubble. >> and that last point, 29 ppts.9 million, we hear we have poich rich people, but picasso isn't painting anymore. other guys are still paint being and yet their works are going if $0 million. is that rational? >> only because a lot of this30 million. is that rational? >> only because a lot of this urge to buy these artists confirms the fever to buy more. it doesn't have a breaking effect. it has an accelerate being effect. now, there is a point where it comes to a dead halt, should the price and desire wain. but right now it has the opposite effect on the market. and christopher wohl is probably the most important mid career painter in the world. $30 million is a lot of money. he's into the making these word pictures anymore.

there was a great quote saying he's really hard to like but really easy to hate. >> we can say it about these prices, too. thanks so much for your time. guys, back to you. coming up afl-cio president joins us next. the labor group unveiling a new study about ceo pay. you can draw some conclusions about the conclusions right here on "squawk box". their list of the high he is paid chief executives after a quick break. [ male announcer ] your love for trading never stops. so if you get a trade idea about, say organic food stocks schwab can help. with a trading specialist just a tap away. what's on your mind lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move wherever you are. and start working on your next big idea. ♪ ♪

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northrop grumman. breaking overnight, a deadly train derailment. it happened on amtrak's busiest rail line, the northeast corridor corridor. >> it is a stasdisastrous mess. >> the latest from the crash site straight ahead. writing new rules for global trade. paul ryan reaching across the aisle to try to get democrats on board with new trade rules. plus former nyscc ceo joins ken langlangone, his take on the wall street and the question most are not asking the fed. 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". i'm joe kernen along with steve liesman and michelle caruso-cabrera. andrew and becky both off today. in studio today, home depot co-founder ken langone. and we're about 90 minutes away from the opening bell. futures have been up most of the session now. back up over 70 after a valiant stand yesterday, what could have been a down day, but it wasn't. we continue to try to move on somewhere above 18,000 on the dow. basically flat still for 2015. >> if you're just waking up breaking overnight, a major train derailment on amtrak's busiest corridor. rehema ellis joins us from philadelphia with the details. >> reporter: good morning.

it was a tragic sdwentaccident here on the train tracks. behind me the activity is just enormous right now. as the sun has come up there is more activity around even more than last night. the call came in around 9:30 it was amtrak train number 188 coming there washington bound for new york. but when it passed the philadelphia station, something went tragically wrong. it derailed from the tracks some people said it was like an accordion, like shopping carts crashing into one another. the engine actually separated from the other cars. there were a total of 243 people on board, five of them personnel, and so from that we have now found that six people have died in this, five of them were critically hurt, and some 65 were transported. several others dozens of people able to self evacuate but the teams on the ground now are trying to figure out how they remove and how this happened. the ntsb will be looking for those recorders to try to get

information. and they will try to find out what the speed of this train was as it was rounding this bend. and if that may have had anything to do with why this train derailed. steve, back to you. >> thanks very much. very sad story. here corporate stories. investors talking about danaher buying pall in cash. the deal valued at $13.8 billion including assumed debt. owens illinois is buying the business of mexico's vitro for $2.2 $2.2 billion in cash. microsoft upgraded to buy from hold. analyst says lower estimates and slower pc market already reflected in the stock. and just hitting the tape macy's quarterly results earnings and revenue falling short. retailer is raising its dividend by 15%.

>> you can see it's down a buck 83. kind of surprising with gas and everything else. but well below, 56 cents versus estimates of 62 cents. and then the company also said something, steve, i decided to look the at it, 4.75 is where the street is. so that is in line. at least for the current quarter -- >> i want to know if it tells us anything about the upcoming retail sales report. >> looks like sales slightly below, as well. first on cnbc the afl-cio releasing its new executive pay watch report one of the lead headlines is that last year on average ceos of comes in the s&p 500 made 373 times as much as the average rank and file american worker. 35 years ago, the ratio stood around 40. here now to take us inside the numbers is richard trumka, president of the afl-cio.

also with us our guest host ken langone. good to have you on, mr. trumka. >> thanks. i appreciate it. >> so looking over the result i'm curious about something. in the paperwork that you put out and press release, you have a big focus on walmart. and yet the ceo of walmart doesn't even come close to the top 20 people in here. discovery communications, $156 million according to your numbers. time warner at the bottom of the list, $32 million. and then walmart looks small relative to those numbers. why the focus on walmart? >> well, because walmart ceo makes 810 times what his average employee makes. and that ratio is destroying morale and is bad for the company. its eye an 's an outrageous figure. ceo at costco only made 129 times what their average worker made. it shows how distorted walmart

is and how overpaid he is with comparison to his employees. >> what do you say to critics who say walmart has created a tremendous number of jobs in america given employment opportunities to many and at the same time has been able to lower costs for so many americans, so that way they can have a better standard of living because of their mere existence? >> well, there a cheap impoert of goods, they import more goods than anybody else and that creates jobs in a lot of other places other than here. but it doesn't matter. you look at the ratio and that's an indication of how fairly they pay their employees. and an 810 ratio for walmart ceo is simply outrageous. it destroys morale and you see the workers right how are very very upset and asking for a raise because he's overpaid and they're underpaid. >> mr. trumka ken langone. how are you today? >> i'm fine chlt how are you?

>> i'm well. i hope you're siding do you go because i'm going to say something you you won't believe i'm going to say. i break we have to do a lot about income inequality in this country. big time. and i'm making a major effort with a lot of other people to try to get industry to understand that people need living wages to participate in the american dream. they also need something else. they need an education. and look at theed a vents of the advent of the teachers unions in public education and then look at the results that we're driving out of be public education. you give home depot bright educated public school kids out of high school and we'll give you very very success it will people. earlier on the show i told a story about a young man who came to work for us. i have no trouble whatsoever with paying schoolteachers a lot of money for one reason. they have one of the most critical jobs in our society and

our economy. but that pre-supposes we're getting results. why are the unions so opposed to allowing competition in how we educate children in america? >> mr. langone, with all due respect, i don't think you're an expert in education. >> i bet i have more time in it than you do. >> and they're not the only variable. when you underfund schooling, when you have a school that is a half a block from the capital where kids have to -- are overheated in the summer and they're freezing in the winter they can't learn. let's really invest in our entire system and let's work together to create an education system that is world class. we have that. let's create a public school system so that every american can enjoy in that. but that's a total bogus issue when it comes to ceo pay. sgr no sgr. >> no, it's not. >> workers are barely getting by

and ceos the new royalty in this country, got a 16% pay increase last year. they could have taken some of that money and put it into education and helped those kids you're worried about get an education so -- >> it's not a zero sum game. number two, you talk about s&p 500. that represents one out of 820 firms in the u.s.. and if you go done and look at the average ceo, include the 820, instead of just one of the s&p 500, and it's 4:1 ceo pay. so your beef is basically with the s&p 500 ceos. have i got that right? >> that's correct. just the s&p 500 companies. they sort of control things in the country. >> the only thing i'd say -- >> like walmart costco, ge like other ones. >> the only thing i'd say is that i look at the floyd mayweather oig fight $100

million for an hour. i won't did the math and did that 200 days a year, eight hours a day, because i could come up with a great number for you. it would be, i don't know what it would be, he makes like $20 billion a year if you amortize it. or jennifer lawrence the actress. she's demanding $20 million per movie now. i know floyd has a great punch, but a ceo that has 50,000 employees and has to satisfy, make decisions based on their livelihood and their future, as well as shareholders are you sure that floyd deserves what he makes versus ceos making these global decisions? or do they -- can they be worth -- >> this is about ceos. doug mcmillan from walmart made 810 times what his applyemployees made. >> i heard that. >> anything about 20 to 25 times what your employees make is bad for morale and bad for the

company. now, that's not me saying that. that's management guru peter drucker. i make three times what the average employee makes here. and i disclose what every one of my employ years gets paid including myself. we need to have the worker to ceo ratio explained and disclosed. decide where those ceos are paying their workers fairly. because as it stands right now they're contributing to the inequality that mr. langone said he wants to get rid of. >> and i'm working on it. >> how do you want to go about it? if it's not shareholders do you want society to decide what is fair and what isn't fair in terms of ceo pay or the government to decide or should shareholders arbitrate that? >> that's such a joke. shareholders don't get to decide what ceos make. there is a compensation

committee that does that. when the shareholders vote, you know it's only advisory. we've had vote after vote where they have said cut the pay and management just ignored it. >> how would you do it then? >> you're trying to mislead your listeners. >> how would you rein in ceo pay? >> i think there is a lot of ways. we could set a ratio. anything above it gets taxed. >> the government set ratio in terms of law? >> there is no one ratio for would do if, thet, the government? would the government do this? >> anything above 20 to 20 times is bad for morale. that company isn't paying their employees fairly. >> you're not answering the question p. >> who will set the ratio that is fair? >> i'd let the shareholders set it, but i'd make their votes mandatory. right now it's just a suggestion

from the shareholders. right now they're set by the compensation committee that does a lot of things. even back dates stock options to give them more money. it's a rigged system. i sit on your compensation committee, you sit on mine. and we rig the system. everything dries up. >> richard, good for have you you on. thank you for joining us. coming up tapping alumni to help with student loans. we'll talk about the rising cost of education and how the company is helping students save money. plus the battle for dupont's future comes to a head today. mary thompson takes a look at what is at stake for the chemical company.

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we are just minutes away from what is expected to be a bruising meeting for dupont. mary thompson is outside their headquarters. >> reporter: well, at stake of course board seats and the future of the 212-year-old company. the fight played out when nelson peltz issued a letter and in that letter he outlined trio's plan to double the stock and criticized management for what he called its consistent underperformance. dupont characterized the plan as being high risk that would break up the firm and burden it with excessive debt. now it's in the hands of shareholders who will vote on the white card which is 12 nominees or trion's gold card

which includes four nominees including mr. peltz. trion wants ellen kullman to consider splitting up the company. they also want her to get aggressive about cutting costs and aggressive about returning capital to shareholders. dupont is defending kullman's performance. they also point out the company is in the midst of a $1.3 billion cost cutting ram and that it's submitting off its performance chemicals unit. now of course it is in the hands of shareholders. proxy advisers are split. some say put peltz on the board, none of the others. one is packing all four. the 12 of the 16 nominees of course that get most vote will be named to the board. the meeting starts at 8:30. we'll be back after the meeting with the first on cnbc interview

with ellen kullman. >> mary thanks very much. >> i think he has a long term point of view. you put him on the board -- >> it's a big deal. >> youput him on the board and hands are tied. now you're in the trenches. how do we create shareholder value. >> we're moving on here. 71% of millennials would rather go to the dentist than go to a bank according to a recent study. one company on the disrupter list wants were rowing to be a little less painful. it's a nonbank lending alternative and the largest provider of student loan refinancing. joining us now from san francisco, julia boorstin with the ceo. >> mike thanks so much for joining us. give us a quick description of how the approach is so

different. >> unless you're a private client at a bank sometimes even if you are a private client you're probably not getting the kind of products and ser have i advice that you need. sofi uses leading technology to deliver great products to folks with good credit and great income. >> so you started off with student loans. what is your business right now? >> start with student loan refinancing back ifn 2011. that's more than all of our competition combined. but we've used that position to build into other products. over half will be in mortgages and personal loans. >> big banks have so many resources. how can really compete? >> in the spirit of disruption we're trying to foye cuss on two areas. product and delivery. and using mortgage as an example, we're one of the few lenders that willlwill do 10% down payment major mortgages. and we do that through the phone. you can go online and through

your mobile device and get a quote underwritten to you. >> you will do $4 billion this year in loans. are you profitable and what is your plan to go public or be acquireded? >> sure. we're profitable and we're as any private company, we want to be opportunistic about when we go public, but realistically in the next 12 months it should happen. >> we look forward to following that. mike thanks so much. guys back to you. >> we have many more disrupters coming on cnbc today including the ceo of number 26 on the list john with a reeves of zen payroll. do you know what that is? >> no. we'll find out, though. >> that's on squawk alley at 11:00 a.m.. coming up at 8:30 the former ceo of new york stock exchange dick grasso. we'll talk markets, the state of wall street and a the feds.

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still to come retail sales and import prices for april. plus former nyse ceo dick grasso joins the conversation. and writing new rules for global trade. paul ryan will join us.

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welcome back. here to talk about market opportunities, state of wall street and the one big question nobody is asking the fed, dick grasso. i always said glass so herasso, but people in the know say grasso.

so i'm asking the source. >> when you're grasso making $81 a week that's fine. but when you move up a little, you become swiss and it becomes grasso. >> wow. grasso is good. anyway -- there grasso is always greener. >> you and i think ken helped arrange to you come on in studio came. >> how would you make langone -- >> trempgfrench. >> what's the one question we're not asking the fed. >> how quickly are you going to shrink a $4 trillion balance sheet. and how are you going to do it in the context of everyone else in the world lowering rates, applying, if you will, the type of stimulus we applied five years ago, six years ago. and you can see how well that worked. >> do we know that -- and i think liesman might be able to figure this out better than i

can. what is the more appropriate number for us? $800 billion or -- >> there is a chart that yellen -- you wouldn't necessarily go back to the 800 figure because the amount of currency circulation would increase over time. it's probably more 1:2, 16789:3. >> it doesn't come out without some pain. >> two thirds shrinkage is unprecedented, but -- >> what does that im34r50i willply will happen -- >> i'm sorry, we have to get breaking news in. i'm being told. david faber is at the nyse, news on the dupont folks. david. >> thank you. wanted to update people on of course the proxy fight taking place. we heard from mary thompson

earlier. while the votes could change at this point does appear according to sources that dupont will win its proxy fight with trian, meaning that four nominees put up by trian will fail to secure enough votes including nelson peltz to actually be put on the board. in these situations votes can change up until the very last moment, that moment is fast approaching. but we did want to pass along the fact that it does -- sources do see them winning. it appears the index funds voted against try anian. very close. more on "squawk on the street". back to you. >> let's go to rick santelli for retail sales and import prices. >> headline retail sales are advance of course april unchanged, goose egg on top line. definitely a bit light, but we're expecting light anyway.

only looking for up 0.3. last month did garner a little. many times it's all about transportation and autos. if you take x autos, up 110. x gas up 0.2. if you look at what is known as the control group, takes goose egg unchanged. and as people try to get used to the control group, because we look at more minutia because we want to find better clear answers, this really isn't as we were looking for up half one percent. now let's look at import prices also for the month of april. down 0.3. we'll have to dig through this to see what energy implications there are. year over year a down 10.7, much more than we were looking for. so all in all -- well, one other thing. look at export price as. they were also down 0.7. so this is pretty fascinating. how is the market digesting it?

well, yesterday we still closed above a very key level at 224. but only by a basis point. we're now drifting lower. i still contend that maybe 2 to 2.25 is a trading range, but look for outliers and they will be all like we were the night before last, extensions up yield down in price. of course many have said the bund is our new fundamental. that may in part be true, but i think market mechanics and margin calls and leverage really the ongoing fundamental. rates did move down in that data. so in the market's opinion, of course it's digesting that as neglect i have news. so we see stocks move high we'll have to wait and see. back to you. >> this is a big deal guys. take a look at the ten year. yields fallen six basis points. is this a bigs can appointmentment. it challenges the theory that you have this winter robproblem when it came to pruchs purchases

and the idea that you'll have a strong snap back in april. this is the kind of number rather even than a 230,000 on jobs that takes a june rate hike from the federal reserve off the table. if the cullconsumer won't snap back, it's a big deal. we have to wait inflation numbers. these are not inflation adjusted. but i think this will challenge the growth numbers for second quarter. we'll see what happens when it comes later this morning. but it will be a challenge. i'm looking at a lot of negatives. department stores down 2.2%. maybe that echo what is we heard from macy's when youed had that earnings miss earlier today. grocery stores down food and beverage. could be an inflation number. remember march was pretty good. >> whenever we've had people on and they say, oh, yeah first

quarter outlier, and i do expect growth. i always ask why? how do we know that it's definitely going to reaccelerate. and just as a given that it will reaccelerate. and because i'm worried that the fed can never get out. how do we know that we can allow with what they want to do because the economy will cooperate. >> they may be locked. >> that's what i mean. >> this economy is not robust. it's okay. but it's only okay. >> with 0% interest rate. >> it's a struggle. >> do you remember what your last -- do you remember what we were talking about before? >> about slinging oipg theoig the balance sheet of the fed. if two thirds of the xwchlt dp is consumer driven and kmer is supposedly a beneficialry of lower energy prices i think a lot of consumer sentiment was these prices are artificially low and they're not going to stay low and they were right. they have spiked back. oil has spiked back about 50% from its bottom.

now, i think that happens to be a very big positive going forward into the second half because i don't think it's going any further than where it is. it might top out at around 70 72. but once the consumer is confident not going back to 100 -- >> you said that there was a risk when the fed tries to shrink the 4 trillion, how will that manifest itself? >> well, first of all, i don't think janet yellen will do something disorderly. i think she's a terrific leader of the fed. and we're for nat tofortunate to have her. but she has conflicting signals from around the world. everyone is going in the opposite direction. she's got the issue of which is becoming a '16 issue, income inequality people screaming about you heard rich trumka with kenny earlier, people scream

building the disparity between the worker at the line and the ceo. >> what if she's causing it what if all of this financial engineering that is happening because it's just ir race and he will for a ceo to buy back stock. when money is so cheap, you help the share count, et cetera. and inevitably people who are asset rich with stocks and real estate et cetera do better off than people who don't have assets. >> you can only financial engineer to the point of being a private company. and you're not going to see general electric or comcast or any of the great companies that are at the core of the u.s. economy become private companies. what you have to balance, what i think fed chairman yellen has to balance is the reality that we are in a period that doesn't have a comparable. for getting about the seize ofside of her balance sheet. you've had row longed low interest rates for a period unmatched in our country.

corporations are looking at when do i make the capex expenditures we've all been anticipating. if it's not in that direction, it's going to be acquisitions. let's hope i'm wrong, but you saw the aol stage two acquisition announced just hours ago. stage one didn't work out very well. the time warner aol acquisition. and i think that people good leader focus on their business. they understand if you look at ken's business look at what home depot did from its bottom when the stock was at $20 for where it is today. you had a great leader who said let's take the business case how do we enhance it. how do we enhance the people who are working for us. >> and there's something else.

mr. trumka throws out this 810, that's based on a black shoals value of what the options are. the fact is you you can't get top line growth. the only way you'll impact your stock over the long term in terms of earnings is attacking costs. i argue that there are too many companies doing financial engineering. but there is a lot of companies out there that are spending a fortune on technology to get the results. you look at company like eaton, you look at danaher buying pall. these are all solid moves and all designed to enhance the bottom line. that doesn't help the economy because it doesn't create jobs. that's a different issue. totally different issue. and this is what is wrong with this political screaming about ceo pay. this is the biggest draw

democratic back to the validity of that argument. look at any well run company is going to say how do we do better.look at any well run company is going to say how do we do better. how can we take a dollar a sale and make it nine cents in earnings instead of -- >> even in the s&p 500 add it up and look at the number that you're talk about. that won't solve our problem. >> absolutely not. >> so that's just a perception and fairness issue. i don't know. he said it had to do with morale. i think if we have 3% 4% growth, morale improves. i still don't know what i'm worried about with the $4 trillion balance sheet. how does that ghe go wrong? >> rates spike. the latest thinking i know of at the federal reserve talks about the idea of tapering the rollover. >> that will take forever. >> they want to take forever. they want to maybe take six or

seven years on bringing that balance sheet down. they didn't see it as a big deal either way. so the idea would be that -- i don't know what the rollover is but let's say it's $15 billion or $20 billion a year. one year you don't roll over 14. and then maybe 12 or 10. and then you taper it the samde wap way -- >> hopefully you you grow out of it. >> you you need cash in the economy to grow. and they do not want to use the balance sheet as a tool because they didn't know the effects it will have. >> i think you're right about that retail sales number, that again, we'll ask ourselves what is wrong here. we need -- is growth really too old fashioned. we need growth. >> a million more jobs. >> the fed needs to toss to do what corporate america is doing.

financially engineer their balance sheet. >> it's been a rare show of bipartisanship in washington on free trade legislation. but yesterday senate democrats dwelt a blow to the work put in by both sides of the aisle. paul ryan sounds off on why the economy needs new trade deals next. the volkswagen golf was just named motor trend's 2015 car of the year. so was the 100% electric e-golf. and the 45 highway mpg tdi clean diesel. and last but not least the high performance gti. looks like we're gonna need a bigger podium. the volkswagen golf family. motor trend's 2015 "cars" of the year.

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paul ryan chairman of the house ways and means committee joining us with more. mr. chairman, good morning. >> good morning. >> so immediately president has gotten a taste of sort of wrong minded progressive analysis in policy that republicans have been hearing a lot of suggestions from the far left that they know won't get us where we want to go. now he's gotten a taste of his own medicine in seeing how wrong minded an issue can be. was that satisfying at and you would? >> i don't know if it's satisfying. it's clarifying. what is satisfying is getting through in snafu. i can't imagine the democrats are going to deal the leader of their party, the president, this kind of defeat and i think we'll get through this.

they have been through their and a half fewsnafus fairly often. but democrats have to work with the president to do it. so much is at stake. that's why i think this will get done. our credibility is at stake. >> i don't know if it will get done. i don't know. but also now the progressives are mad at him because he finally talked to them the way he talks to republicans. i know best. you're stupid. you're wrong. i know how to do this. so they both got a taste of -- it was really kind of rich to watch it happen. but why do you think -- what was it 54-46, what was it? >> yeah there were a few people. >> where will youuyou you get eight? no way you're getting eight more. >> we had a couple republicans missing that we would get back. so they need at least six. and i think they have the six. they just for some reason cooperate put this together. look, the point is joe, yeah sure, they're gettingist a taste sft same medicine, but that

doesn't get you anywhere. the point is that the democrats will have to sort this out and figure this out if they want to get this train back on the tracks. i believe that they will because our entire national credibility is on the line. our trade partners are watching. china is watching this. look, the global economy is happening. there is constant change in the global economy. the question is are we going to guide that change, are we going to write the rules or are we going to cede to countries like china. that's the question being answered here and i don't believe that every democrat in the senate will be content with not just dealing the president this kind of defeat but to our country. and so when you sift through all of the points and all of the anxieties about trade, this is this our country's interests to get this right. >> there is an election coming up again and i don't know what will happen. but -- >> there is always an election coming up. >> but do you think we can glean just how far left the center of

the democratic party is now when president looks so reasonable and when barack obama become the voice of reason from the center because of how far the center of the party is? that's saying something, isn't it? >> i know there is a lot of irony in this story. the point is i think the president is trying to deal with the democrats, clearly isn't working. i think they will have to reassess and come back together. we're there, we're ready to go. we republicans believe in trade. >> are the -- and then you've got the far left and far right agreeing. we need some way of -- i don't know. we need like a summary of the vested interests of all these different parties. because it's hard to understand. >> what we find ourselves doing most of the time is slaying all these urban ledgegendlegends. people are looking at trade agreements from 20 years ago. that's so different.

this bill brings more accountability, more transparency, it leds people read everything. it gets us in the driver's seat. it gives power to congress and binds the administration to congress' will. >> do we always get screwed with the currency though? that's what people are saying. every time we go in to one of tease things, we get viewed and it screwed and hurts our workers. i've heard reasonable people say is that. >> the wrong way to handle it is to trigger trade wars. with a what we need on do is open markets to american products. trade is happening. in just asia loan, 48 trade agreements since the year 2000. u.s. has been a party to two of them. and as a result, our share of raid in the region has gop down 42%. 3.2 billion consumers in the middle class in asia by the year 2030.

this is a market can for us and if about we say no somebody else will take it and we won't get the jobs and income we need. and when 95% of consumers live in other countries, we have to know you don't negotiate on television, but is there room to come -- incorporate any of the democratic suggestions from the republican side or is really as you suggested a matter of the president with his party rather than a matter between republicans apdemocrats? >> in this case i think this is a matter of the president with his party because these are process arguments they're making. there are substantive differences, but then just vote. they can't even get to a vote. so these are really process arguments that they're making. and i can't imagine that the president -- that the democrats will deal this kind of defeat not only to the president, but to shake america's credibility and tapstanding in the world. >> when is the last time you spoke to mitt? >> to mitt romney?

e-mailed him yesterday. >> is he coming back in the race? >> no, i don't think he's coming back in the race. but he's supporting trade promotion authority. >> all right. well, we had another crappy retail sales number paul. and here we are. we may get a negative first quarter read eventually on gdp. six years. lucky to get 2%. is growth -- >> bad fiscal policy in washington and we need to clean it up. we need more pro-growth. >> that's so 1990s. anyway, thank you. >> next president. when we return the latest on the deadly deadly derailment outside philadelphia. a former congressman traveling on the train will be our guest next.

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you got to hear these guys during the break. futures this hour we did come down on the retail sales numbers down. would open just 22 up. s&p up four. still hanging on to a gain. i don't know if we're going to do the 10-year bond.

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looks like dupont won. >> however s if the board, if nelson gets a significant% aj of the vote that's not a victory for dupont. they should take a step back and say wait a minute. what are we to do. i think it would be very short sided for the chairman and the board to say wait a minute we got a lot of people outside the tent. what are we going to do to make it one again and i think nelson should not go away. >> active managers and shareholders verses passive

owners. >> or indexers. >> indexers are in the stock accidentally. they're not there because they made a decision not to own the stock. i want to know what do my active owners think, what do my institutional owners think. they've made a judgment about maend me and minute strategy. >> is nobody immune or. >> they shouldn't be. they should not be. >> the amount of capital there now. these companies have big money to go after big companies. >> what nelson wants to do is put himself on the board with three of his colleagues and hopefully create value for the stock halders. he wants to go on the board and

become an insider and make the accompany better for shareholder. >> and have his hands tied up. once he's on the board everything he does with the stock. >> is every activist created equal. i want someone who represents my interest and benefit all shareholders shareholders. have mercy for them. i have sympathy when you get votes for the indexers. you have to examine each case bill is in. his interest is where he's an o

poender as opposed to. >> right, very very different set of circumstances. >> look. 30 seconds. the shareholders should be heard. the ones that limit the price of the stock, it's now down to 70 in change? >> that's all i'm saying. i'm feeling really. you throw that in there. >> i didn't have hair like that when i was 17 s. >> we're both raging capitalist. >> make sure you join us tomorrow. it's been great having you guys on. squawk on the street is next. don't move.

good morning and welcome to squawk on the street. we are live from if new york stock exchange. let's give you a look at futures. we are poised for what appears to be an up open crude oil. the 10-year figured yesterday. with those retail sales numbers, there's the yield now. 2.211. we got a lot of news. let's get to it. our road map