une 9th 2015 and squawk box begins right now. >> live from new york where business never sleeps this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. the technology world is taking note of lebron james this morning because he has been a pitch man for samsung for years but lebron gave his teammates apple watches during a get together before game one of the finals. the nba star does have some connection to am as well. he advertises for beats and apple's big push in the music streaming in just a minute. >> he once said that he would never juan to be on a mcdonald

establish diet and then actually was sponsored by mcdonald's or some crazy thing. >> i'm sure they appreciate getting an apple watch. >> let's get to the future's markets this morning. the dow futures are down another 43 points. s&p futures after by close to 8 and nasdaq down 21. >> hsbc cut it's risk weighted assets by a quarter. we've been having this conversation all morning about how to pronounce his name

property. reaching out to urge yen rahal motors into a merger. contact with activist investors have yet to land a backer. activists pushed gm to buy back billion millions in stocks months ago. some analysts are calling this gm pitch a desperate one on his part. one of the things though i can't see mary bara of gm going for a deal like this. >> no but u.s. taxpayers that bailed out gm the idea of them selling a company to a foreign entity. >> after all of this. >> not going to happen. what do you say? not going to happen. >> i don't know if that would cause it. >> i'm with becky. 100%. >> looking through some of this stuff. >> after the bailout you can't do it. >> you can't do it. it's an american company now. if it wasn't american before it's really american now. >> how many billion dollars. >> it's like not being able to

buy dannon. >> kind of sort of. >> if we were going to make a stand, you know when i think we should have made it. >> bacon. >> exactly. >> yeah i remember. >> if we were going to make a stand should have drawn the line there. gm, i don't even own a gm car at this point. nothing against them. >> i don't own a gm at this point either. i own a -- no i have a jeep. so i have an italian jeep at this point. >> you just have rental history. you got a flat tire. >> i got a flat tire. that was a japanese car. >> it was a small suv. >> it was nissan. >> i'm almost done though. activist investor elliott is taking legal action to try to block samsung's $8 billion asset shake up.

u.s. based fund wants a court to stop the merger of two sister firms that it says is unfair. >> who would get involved with that? it would be that -- what's that -- the rock guy. >> it's the other one. >> it's the other guy. so they would be the ones that would patriotically -- >> i just think senators -- people would be howling. >> even though they already own chrysler. >> if you're the activist pushing for that you would be facing a bad pr battle. even if you were successful. >> it's a mobile world now. you want the tpa and trade authority and that stuff. >> i'm not abdekated one way or another but i do think it would be a difficult battle and i understand why activists may not want to be involved in this. >> they're just huge. >> out of control. >> the justice department would sue that company out of existence. >> they're label to do anything.

>> you can't handicap what they're likely to do. on today's agenda she the hero. i've seen stories about him. >> yeah. >> just as a demi god. as a demi god stopping the inevitable sell out of the u.s. the corporate interests. he's like all the left wing media matters, tom wheeler and he is just a demi god and he is. one of janet yellen's favorite economic reports the rob openings and labor turnover survey is due at 10:00 eastern. it provides color on the employment picture not seen in the monthly payment report. >> it's so simple. if you're ever going to raise them you don't want to do it quickly. you don't want to be forced to do it by -- that made sense. if you got to get back to 3 or 4. if you got to get back to 3 or 4

eventually the earlier you start the slower you're able to add the quarter points as they add up. >> they want to go slowly. >> they want to get back but it made sense to me. more i thought about it it's obvious. if you want to do it slowly and orderly you start earlier than you normally would. maybe they'll still do it in june. that would be a shocker. >> if the market isn't already on its way down it's going further down. >> you're adding fuel to the crack addicts that are down there on wall street. >> it is what it is. a number of companies are hold holding annual meetings today. general motors tesla and netflix. plus former house speaker hastert will be arraigned on charges of evading bank regulations and lying to the fbi. we asked ourselves he left and then we find out he promised

someone $3.5 million and we go say what? and then we realize he became a lobby lobbyist. >> and ramped up after being shaken down for hush money. whatever was going on in wrestling. i don't know what it is. but when we read that we knew. >> assumptions were corrected. >> our assumptions were correctened people are blown away by that. totally out of character. >> let's talk about stocks to watch this morning. lululemon's earnings and revenues beat the street. total store sales rose by 6% during the latest quarter. h and r block is posting better than expected profits but the

revenue were light. that stock is down by 1.3% and dave and busters earnings and sales topping forecasts. the entertainment and gaming provider is raising it's full year revenue view. shares of pep boys getting a boost. we should also mention united natural foods is down sharply this morning. the organic and special foods distributor with disappointing quarterly results and offering a down beat forecast and check that out. missed on that but watch shares of etsy today as well. tiger global raising it's stake to 8.9% from 6.4%. >> greece and it's creditors in discussions over an extension to the country's bailout program through march of next year. athens would get access to more than $12 billion in aid to help it stay solvent. >> let's get a check on the markets this morning. as joe mentioned the markets were down yesterday putting the

dow i believe in negative territory for the year. you'll see the red arrows continuing. what's happening with greece. concerns about the consumer. the dow down by 48 points. s&p futures off by 8 and nasdaq down by 22. in europe the early trading arrows there as well. we're taking our queues from europe these days. the dax is down by 1.5%. the cac is off by 1.1%. the ftse is down by .6%. if you check out asia overnight you'll see the nikkei was also down. down by 1.75%. take a look at oil prices. at least at this point wti looks higher up by 66 cents. but still $58.80. in terms of the ten year the yield at this point looks like it is 2.361%.

yields ticking up. part of this because of european bonds. also some people taking a look at what's been happening with the economy and worrying about whether they're going to come back in. >> go with it. >> vigilante. >> you sound more european. >> it might always -- >> people will hemiss pronounce nevada but unfortunately it's pronounced that way. >> i say aunt. >> i go straight up aunt. >> what do you put nowflowers in? >> vase. >> vase. >> i would hope i'd say vase but maybe i have sinned.

>> in the meantime let's talk about apple. they made a huge splash in the developer conference. here's what tim cook used to say about a milestone for the company. >> the app store has passed 100 billion apps downloaded. the rate of growth and the momentum is staggering. the industry has never seen anything like this before. it's forever changed software and software distribution. >> here with us to discuss this and the other headlines out of the event is the manager editor. your top three picks for news -- it was a long thing. i sat there watching it. >> it went on and on. >> there was cool things in there. there was other less cool things. what are your top three?

>> top one was apple music. that with you what we were looking for. what it was going to look like. a lot of that news leaked out ahead of time. >> you were impressed or not? i've seen people ecstatic about it and i've soon others that say it seems like a radio station mixed with other stuff. >> the show was impressive. the product itself we have yet to see if it will work the way they want it to work. it's not that much different from what's already out there. there's a bunch of those. >> that was nice. >> they don't want you to share the passwords. it's a smart play but it's not revolutionary the way that they're claiming. it's a streamsing music service and a subscription cost that you know spotify has been doing it awhile now. >> what's revolutionary is for late adopters this is going to open it up to an entirely new market and i'm one of those.

>> you'll do it. >> i have not gone to the point. >> we're a little too out of the curve. >> i thought hey that's really cool and i could see buying the family package and saying we're all going to do it and i'm going to get on board. >> so you're going to do this? >> yeah. >> and given the fact that a lot of people in your family have ipads and iphones. >> when steve jobs changed the whole music industry with 99 cent track downloads. >> guess what it's going to this other thing. it's just the thing that you want. >> that's actually good because i don't have time to know what the latest music is and what i

want for all of these things. i can do it for $14.99 and the kids kids think it's a cool thing. >> how cool can it be if there's basically one radio station for the world. >> there's one radio station played constantly for you to jump into. you can also make your own play list if you juan to. >> how do you think that spotify has certain parts of this like the pricing scheme for trying to figure out ways. >> a little mistake in -- >> he's an outspoken guy. he likes to --

>> he was upset about the taylor swift thing. >> that's what we're talking about. >> taylor swift pulled her tracks from spotify. a lot of artists have complained about spotify as they're not making that much money for them. because most of the listening is for the free version the ad supported version and the amount of money that funnels back to the version is nowhere near as much as they would otherwise get. so they say we don believe in free either. we want people to pay for it. >> what do you think of the proactive service? it's supposed to anticipate what is supposed to happen. google does it well as an upgrade to siri. >> it's turning your device into your every day companion. i don't use those services that

much myself. it's fun and neat. it doesn't always work so i don't know that i want to rely on those things. >> this is more of a philosophical question. i want to read a quote for you as well. tim cook and others have been arguing that what they do better than everybody else is they don mettle with your privacy and they're not looking at all of your stuff and it's a whole differ approach to the world. here's a quote from dustin curtis apple is going to realize very soon that it's made a grave mistake by positioning itself as privacy against google. the truth is collecting information about people lewes you to make better products and the more information you come leblth collect the better products you can build. you see some of the things that apple is doing but perhaps on a relative basis to what google will be able to do -- they'll be able to look through the data to

be able to predict. will am services long-term be as efficient and relevant. >> they say we're not going to collect data on you. there's level of privacy and what i mean by that is apple's push to o consumers is we're not google in the sense that we're not collecting data for the purposes of advertising the way google does. that's their business. apple advertising is still a new idea for apple so they're not collecting data in that way. however they're collecting on usage in terms of this app tends to crash on you. they're doing that. >> you know how often times you get a phone call and you don't know who it is just shows the number? >> why does it do that? >> it doesn't know what the number is. >> even when i have it programmed into my phone. >> that's a bug but this new

service which is amazing is it actually looks through your e-mail tries to figure -- it sees the number but it doesn't know the name associated with it. looks through your e-mail to try to figure out if it knows the phone number and say maybe becky quick is calling. >> maybe. >> because it's not sure. >> one of the questions is now we're back to the privacy debate of whether you're looking through people's data. >> it feels freaky certainly so apple's point is we're not logging that ourselves and they're like hey guess what that was a weird moment because it was in the middle of the night. >> are they going back through all of your g-mail? they say that it's device dependent so to me they could only look at the e-mail on the device. that might be the last 100 messages. >> it's convenient but only to a point. i don't know if you have noticed but what i'm using with my phone i can e-mail it and it's really

convenient. i always do that. >> convenience over privacy. >> they want to balance the convenience of it ahead of the privacy. >> i just thought of proactive. do you remember those commercials? >> they're still on. >> they're still on. >> do you know what i'm talking about? the celebrities who have the -- make up -- >> you were watching this. >> i watched it streaming. >> i had it going in the background. started at 1:00 eastern. >> i was working while it was on. i was listening. are you scared now? >> no, i just missed the belmont though. >> i had a flat tire. >> you have plausible deny

deniability there. >> it was on our list of things to do. >> it's on the apple website. >> on s arkafari. you have to use an apple browser. >> i might have a problem. i don't know what you're talking about. it's a little complicated. >> that's something you want to look out for too. you can only do it on apple this or google at a. you'll see more of that in the future. >> nice to see you, sir. >> thank you for coming in. >> big decision today. could have an impact on china's stock market. they'll announce whether chinese mainland stocks will be included in it's global indices. eunice joins us from china. eunice. >> hey, guys thanks a lot. as you guys know everybody around the world is talking about the shanghai stock market

including the people where i am today. i am in a small village in western china where all the farmers have gone stock market crazy. >> they say money done grow on trees but the farmers in this remote village in western china are learning that it does grow in the stock market. apple farmer invested more than $8,000. it's a lot easier to make money from stocks than farm work he says but it's risky. hundreds here are buying into the shanghai market for the first time. so much so that the villagers set up a ministock exchange center to monitor their investments minute by minute. >> they started plowing their savings into stocks after one heard about the market craze from another town. my advice is to follow the country's economic development and government policies she advises. she told me she started with $820 in 2010 and grew her portfolio 40 times over to more

than $33,000 to date. with the chinese government supportive of stock investing farmers have a bullish long-term view. i made small profit but i feel anxious when my investments aren't doing well. anxious that something could upset the apple cart. and as you guys were just talking the msci will be deciding at the end of your day whether or not it's going to include china a-shares when the emerging markets index. the villagers have all heard about it and are cheering it on and very much welcome american investors and money going into the shanghai stock market. >> if you -- let's say you need to go somewhere right now, can you call uber yet where you are in this village? >> not in this village. but you can call uber in a lot of other place. >> there's a big story today in

the journal about that. >> no. >> but opportunity for uber. >> we're about three hours the warriors are. it took us awhile to get here. >> what is that? like 6 million people? >> actually, no. in this case it's thousands, really. it's thousands. not the usual village of 4 million. so there's thousands and hundreds of them are in the stock market. so it is a honest to god true small village. >> okay. >> i know a lot of them have probably thought that this is fantastic to watch their money grow like the grocer you showed watch it going up 40 times. have any of them dealt with losing money rapidly? >> no. and a lot of people have talked about how they're worried about the risks but none of them have

had experience with with any protracted down turn and that's the scary part but they're very excited about it and that one woman that you did mention, she was talking about how the government is just really encouraging this so that's one of the reasons why everybody is jumping in. a lot of the villagers haven't had an opportunity to invest in the stock market because of all the controls. they're really excited. she is nicknamed here the village stock market godess because she has done so well. >> thank you. it's a fascinating look at that and we really appreciate it. that's our eunice yoon. when we come back this morning, a health scared. a woman carrying an extreme form of tuberculosis came in the united states and travelled to three states before seeking medical treatment. the hundreds that could be at risk is next. but first here's a look at this date back in history.

>> meg has the latest on what's happening. >> what we know is a woman with extensively drug resistant tu

berk you -- tuberculosis travelled from india to chicago and then missouri and tennessee before seeking treatment for tb. it was active tb. she was transported to nih which is treating her in isolation. she's in stable condition. health authorities are similarly to what we saw with ebola tracking her contacts. they're looking for the flight manifest and contacting the other passengers on that plane. there's low risk that she transmitted the tb on the plane but to be very cautious they are tracking down those folks and any contacts she may have had in the community. that's what we know right now. this is a very rare infection. extensively drug resistant tb. we've seen 63 cases in the united states. it's very scary though because given the name it's very very hard to treat. they say 30 to 50% of the cases can be be cured.

>> 70 to 50% are not cured and sit fatal. >> that's right. so they are looking to see whether her form of tb is still susceptible to any available drugs. another option is surgical resection. >> where they take out the diseased part of the lung. >> yeah. the diseased part of the body. >> so if you were on a plane in chicago during this time if you're worried about these things how long is the incubation period. apparently she didn't know why she had it. >> the idea was tb it's a bacterial infection. it can live in your lungs and it can live there for awhile before you have an active infection. it's not contagious unless you do have an active infection. that's what we know. we don't know how she was feeling or anything like that. we don't have those details but they're saying it's a low risk that she transmitted it on the

flight. >> you can have it for awhile and not realize it. >> it's a matter hoff how strong your immune system is. so they say people with immuno compromise are at higher risk of any kind of tb. >> i don't think of it as fatal but before you could cure it people would try to wait it out basically in sanitariums. did their immune system ever win and they would actually exit the sanitarium? by the time i was born it was already -- we go now and stay in tb sanitariums. we do. that's hour hotel room. >> it kills 9,000 people in the united states. >> you go to high elevations where there's not a lot of allergens but you'll die from tb. that happens. >> that does happen and especially as you -- there's overuse of antibiotics or improper use of antibiotics. >> she looks at me.

>> z-pack is my friend. doesn't work anymore. >> i wonder why. >> you got the other big story in your world today. meeting on cholesterol drugs. this is pretty interesting. these injectable -- i saw it with lester last night, injected in your leg and these are people when they took statens they cone do anything. they take this a couple of times a month and her cholesterol went from 350 to 70. could take it down 50%. >> that's right. so right now these are drugs being made by regeneron and amgen. they're very similar drugs and they're having beviewed today and tomorrow. everyone expects these to get approved. the question is what patient population should they be approved for?

we know they lower the bad cholesterol but they haven't showed what the out comes of that are. >> but there's hereditary people too. which is really the problem. one out of three people are on them right now. so still the cause and effect -- >> that's right. it is more accepted it will lead to a risk of cardiovascular ooecht events. people expect these drugs to be approved and we should see the outcome studies testing howell they do lowering the risk. >> leading cause of death among men and women. >> absolutely. the question here that's so interesting is because these are injected drugs how much are people going to want to take them? there's a slight difference between the drugs in that amgen offers one dose and you can take

it either once every two weeks where you inject it once each time or once a month. >> you can do it yourself. >> it's not an injector. exactly. >> it didn't seem that bad for me. >> depends on your tolerance. >> they think that you can't do something like that. >> you're at severely high risk of a heart attack your risk benefit profile changes. >> okay. >> thanks. >> we should tell you before we go to break by the way it is official. we have news from general electric. we told you about it yesterday that it was coming. it's now officially across the tape. ge selling it's u.s. sponsor finance business to canada's mention plan investment board. it's doing that in a deal worth $12 billion. include ace $3 billion bank loan portfolio. it's part of the effort to spin off the ge capital business. it's about $55 billion through that process thus far. planning by the end of the year

to get rid of $100 billion of that business and that just crossed the tape literally about a minute ago: we will take a look through that and bring you more of that in a little bit. in the meantime why they left $315,000 at the track over this weekend. but first take a look at yesterday's s&p 500 winners and losers.

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because it's so challenging a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day.

you are looking at two airplane fuel gauges. can you spot the difference? no? you can't see that? alright, let's take a look. the one on the right just used 1% less fuel than the one on the left. now, to an airline a 1% difference could save enough fuel to power hundreds of flights around the world. hey, look at that. pyramids. so you see, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized.

. espn reports the majority of people, large majority of people that had $2 riding on american pharoah decided to hold on to their piece of history keeping the tickets instead of turning them in. in fact there are $94,002 bets made and only 4,000 were turned in to win $3.50. if you multiply 90 how times $3.50 you could get to that. >> keep it for a piece of history and some of the tickets are going for $100 on ebay. >> the state of new york stands to collect the winnings that the gamblers didn't take.

they get $315,000. not going to help but. >> would you have kept the ticket yourself. >> yeah, i woenuldn't have turned it in. >> the only reason anyone really bought the ticket. those odds when you go to the track it's like even 6-1 is like sort of -- not a favorite but 6-1 you have a pretty good chance. >> it was a lousy pay off. the trifecta was a little more. >> it's not like the guy that found his $126 million ticket in new jersey. that you turn in. >> that you turn in. >> but by the time you're done with that it's not that much money. >> i saw how much that guy made. >> it's like $10 million. >> well he was giving some of it to his son or something. he took home $20 million. >> i thought you only had to pay half in taxes. >> but it's like over years --

>> well he will not ever go in. we'll all pool our money and buy a ticket. >> i ran it down to 0. no one wins. that's just the way it is. don't walk outside because a spees of sputnik is going to fall on your head or you'll get a horrible disease. >> i have come to realize over the years that you're right. you have swayed my logic. >> don't tempt fate. if you want to get -- you don't want anything that happens 1 in 3 million times happening to you. >> freak out. >> you don't want it happening. coming up the ceo of i.t. products and then later bove on why he says bank stocks are undervalued, plus pity the fool sucka. >> nice. >> he's had health issues.

i'm so well that he's coming in to see us. that mr. t, do you remember what his name was? we're going to play that music. stay tuned. we'll be right back.

you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox,

you're ready for real business.

tech data sells to apple, microsoft, hp cisco and sony. sales are up over the last 3 months. joining us now is bob. he's ceo of tech data. i'm fast natecinated by your company. you saw 125,000 -- >> 125,000 unique products. >> different things. mostly end user stuff. not like little components.

you sell -- >> we sell everything from amos to a mainframe computer and all steps in between. >> mice. >> mouse. mouse. >> i just wonder if you say mice. >> who needs more than one. >> if you sell a lot -- >> you don't sell mouses. you sell mice. >> we count them in skid loads. >> okay good. you do like $6 billion and a quarter in revenue. but it's a $2 billion company which is a reflection of martin right? very thin margins and that's the nature of the business. we're a wholesaler so we buy from the manufacturers. the companies that you listed like sis coe and apple and ibm. we add some value through logistics and supply chain and then we sell to a channel that then sells to the end user so there's a very small margin to be made there but the trick, the secret of tech data is our customers can dial 1-800-tech

data and have access to those 125,000 products you talked about. we have technical expertise and configuration capabilities to bundle those technologies together for the end user. so the vast majority of our customers are actually value added resalers. if you have an apple product chances are tech data handled that product before it got to the retailer but we take products and build solutions and sell them. >> it seems looking at your results and expected results i can't count on you growing earnings 10% every year. you might have a great year in 2013 and earn less money in 2017. how does that happen? >> our performance is very much

a factor of the mix of the products that the market wants. if you look at the last quarters the pc was very hot. we sold tremendous volumes. much more than expected. we get great leverage against the cost structure. >> hiring was up 230,000 new jobs. the technology gets old and when technology gets old it becomes less reliable so you'll hear us talk about the age of the fleet. >> do you get better margins than certain companies than others. >> or products. the margins between a pc from hp and dell are tight. >> but i bet between dell and apple might be different. >> are different.

>> i'm thinking lower for apple. >> for sure and then the margins between a pc and server or router or a phone. >> this is what i love about the stock market. so you do 6 billion revenue and you're worth $2 billion. what do you think alibaba does in a quarter. >> in terms of revenue? >> way high. >> 3 point. >> up up. >> alibaba holding group, yeah that's earnings per share. so they do 16 but they're a 220 -- they're at a multiple of sales and you're at 20% of sales. they're at five times sales. how does that work? >> it's called china. >> and it's called growth. >> we do more than half of our business comes to us electronically whether it's e-commerce based. we're one of the largest e-commerce companies in the

world. >> it's clearly unvalued. >> thank you. appreciate it. >> you hear the music. >> we do. >> when we come back this mortgage the company behind many of the nation's shopping centers. a unique take on the consumer. stick around. squawk box will be right back. that's where at&t can help. with the tools and the network you need to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most. leave early go roam sleep in sleep out star gaze dream big wander more care less beat sunrise chase sunset

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the answer is yes, it can. so, the question your customers are really asking is can your business deliver? . welcome back everybody. more than 200 ceos will gather to talk about strategy.

the real estate investment trusts have taken a dive on fear of higher interest rates. david henry is the ceo of kimco realty. it's great to see you in the studio. >> thank you becky. >> tell us what you call this tale of two cities. what's going on? >> the fundamentals of the real estate business are very strong. our rents are going up occupancies are going up. historic highs again. cap rates which we value properties at are at all-time lows. at the same time stocks have had a bit of a rough time the last six weeks or so. and it's tied to perception of interest rates for the moment anyway. we're hoping it settles down a bit. as the 10-year and other rates have marched up sharply, stocks have marched down. >> it seems crazy investors freaking out over a rate hike in the future that we're still

unaware of. we're still sitting at zero. >> rates are only going to go up if the economy shows some signs of strength, which usually translates to good things for real estate. rents go up, occupancies goes up. supply is still very very muted. in our sectors we used to build 2,000 shopping centers a year. we're down to less than a couple hundred. though you may see a few new stashts, it's going to be a long time -- >> would you argue we were overbuilt before? >> definitely. with the housing boom of 2008 2007 there were a lot of shopping centers that were built in anticipation of growth in what we call the sand states the phoenix, florida, texas. >> commercial real estate wasn't that bad rb right? it was totally overbuilt too? >> shopping centers at one time. we were building in anticipation of growth.

>> it's nice -- i mean i know you don't like it when your stocks are down but at least somebody's thinking somewhere about what might happen. the fed would never actually anticipate something. so the stock might be anticipating rates go up supply comes back people start building again. so people do things in advance of when it happens. you'll never see that from the fed, right? >> that's right. but there is -- >> it knows something. whereas the fed, tough hit them over the head before they realize it's a problem. >> i wouldn't go there but basically it's not all that bad the e rates are starting to move up. >> or the european economy strengthening. because we were anchored lower with that economy, right? >> that's true too. >> what do you see in terms of the strength of the american consumer right now? >> it's been a little soft this last year and a half. recently we've seen nice signs of strengthening. you've seen autosales at all time highs. consumer spending is picking up.

our top ten tenants are the tjx's of the world. their sales are strong. the bed bath and beyonds. so sales are good. >> i've talked to a lot of retailers about this. it's not the place they would go shopping. auto sales have been strong. we've also taken a look at electronic sales. it seems -- and also eating out. it seems like consumers may be spending their money in other places. do you get that sense or not? >> i agree with you, they're really fascinating to us. one is called fast casual dining. this is smashburger, chipotle things like that. off the charts in terms of their growth. the other is specialty grocers. trader joes of the world, whole foods. the concept of whole foods is taking off. those things are growing and absorbing a lot of empty space.

>> david, thank you for coming in. always a pleasure talking to you. we love having you in the studio. >> thank you. when we come back why veteran financialist dick bove -- back in a moment. the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day.

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apple taking on streaming services like spotify and pandora. >> today we're announcing apple music, the next chapter in music. >> but the company's taking criticism for not thinking different enough from the competition. analyst gene munster weighs in on the new offering. behind the wheel of a possible deal. fiat chrysler looking to talk gm into a merger. why the automaker is putting itself in play. and an american icon is

launching a new home improvement show. >> i pity the fool. >> it's called "i pity the tool." mr. t. is here. >> addiction? >> yes, addiction. >> pain. >> the second hour of "squawk box" begins right now. >> live from the beating heart of business, new york city, this is "squawk box." >> mr. t. was in "rocky." welcome to "squawk box" on cnbc first in business worldwide. take a look at equity futures at this hour. it's kind of marginally better. looks like the dow would open off 7.5 points. and the nasdaq off about 9.5 points. >> let's take a look at some of our top stories.

chrysler ceo is reportedly reaching out to urge general motors into a merger. the contacts with activist investors are calling this is gm pitch. they're calling this is a desperate one on his part. hsbc is slashing its investment bank. the company will be selling its underperforming businesses in turkey and brazil. and europe's biggest spender cutting its weighted assets by a quarter. plus we're watching shares of sage therapeutics. we should note that the study was very small. inaddition now on wall street. watch on any given day. the dow gave back all of its 2015 gains in recent weeks. here now, mary ann bartel from

merrill lynch and ubs wealth management. just looking over some of your comments, i guess i'd summarize it that don't make things too complicated. we've got a lot of positive things happening in terms of economic indicators. and in all likelihood there may be head fixes. to learn about multiple contraction. and we may be in for a good period. >> that's great, joe. great job. you can do my job. this is awesome. maybe flush it out. >> what we're trying to do because there's noise in the markets every day. and what our goal is to help our clients is to achieve their goals. and a lot of the noise can have

clients make mistakes in a portfolio. we're trying to do at merrill lynch is talk about a transforming world. obviously we've entered the digital age. that has to do with a lot of innovation. it has a lot to do with tech. whether it's big data cloud, cyber security becoming a big issue. and we think there's investments along those lines. then you have the baby boomers. and the baby boomers are impacting health care. two years ago nobody wanted to even look at health care. with the affordable care act, everybody got nervous. yet they forgot about the baby boomers. the average male aged 55 takes two pills. but the time you get a group 60 to 80 both men and women, you can be up to 15 to 20 pills a day. so i think if we could focus on longer term themes our clients will be better positioned within their portfolios. but looking at the short-term we do believe that yes, the fed

should raise rates in september, but to keep in mind that rates are not going to skyrocket. and that rates are going to be longer within the portfolio. >> so you feel okay but you're not -- just moderately so in terms of this country or everywhere? >> we think there's still some upside in the u.s. but it's more moderate because they're no longer supported. it has to come from earnings growing. you think you could get high single digits returns over a 12-month period. we do believe in the eurozone you have better opportunities. also again it's an earnings growth story. there's greater potential for earnings in an economy at a moderate clip. >> we heard maybe just the grexit is something we should look beyond. but is there anything to cause

you to be concerned? maybe that would be it? >> the grexit scenario where greece leaves and there's questions whether other wills down the road that's not a good scenario. but there are a number of ways to resolve this. may be something that helps by moving some of the uncertainty. i think ultimately at the end of the month this will be helpful for market sentiment. >> you speak french and german? >> i do at times. >> fluently in both? i'm going to france and germany. can you answer a question totally in french if i ask you one? >> i could. >> but financials you think are leading the market right now and bove is going to come on later and say that they're undervalued. >> well we know we have the

backup in rates. the banks are breaking out. and how does a market go down when the financials are doing well at the banks? we think that's a silver lining right now that's telling us that the markets are still in okay shape. >> i want to know what percentage of your portfolio do you think you want on the sidelines if you think interest rates will go up and there's going to be a lot of volatility and opportunity to get in at a better price. or would you not even try to do any timing at all? >> well we've trimmed a little bit. a couple of years ago, we went extremely overweight equities. we went in our moderate portfolio 68%. last year we trimmed a little bit. we took 2% off and we recently took another 2% off. >> what'd you do with that extra 4%. >> the recent one we put into cash because we didn't like the bond market. >> you put in cash assuming there's going to be a correction

to use to deploy that cash? you're not getting anything if you stick it in a bank. >> right. we took a victory lap. 68% is way overweight our benchmark. in reality most of our clients haven't made it to the 68%. we're still recommending a 64% exposure to the market. and they're not even there yet. >> what are you telling people on that same core? >> it depends on your rusk profiles. that's the first question. right now we're telling people to focus on the eurozone rather than the u.s. >> what would you do if -- you got a portfolio, you have 60% in stock. what's the other 40% go to? would you buy any bonds at all? >> i think you want to have some bonds. it's still, you know in your baseline they're probably not going to be the better performs assets.

>> the biggest bond bubble in humanity especially in europe. >> certainly looks like it a few months ago. we've taken a bit of the air out of it. remember it's still the only truly diversifying asset class. >> why do you care? >> because there's nominal value. the bonds treasuries are the ones -- >> to minimize volatility and risk are gone. so you can do cash. >> what we do is ask the clients what does your safety bucket need to be? what is the amount of cash or instruments you need to have? and we've put treasuries in those buckets as well as cash. >> even treasury gills or whatever short-term? >> the thing is that clients just have to get used to the idea that you're not going to get that 5% risk free that you thought you were going to get when you retire. the rates are going to be in a much lower level. >> okay, thank you.

coming up dick bove says it's time to buy financials. he explains next. then some buzz from apple development conference. and lululemon stock up nearly 30% in the last six months. and mr. t. is here to talk about his new home improvement show "i pity the tool". stick around. we're back in a moment.

. our next guest says financial stocks are undervalued and it's time to buy. dick bove joins us now with more. good morning to you, dick. >> good morning, andrew. >> so we just actually in the last segment talked about the financials how there's been an argument made as i know you were making that they were undervalued. among the biggest banks, if you had a dollar which banks would you put them in? >> well i mean, if you take a look at jpmorgan right now, the company's net cash per share is $148. and the stock price is under $70. if you take a look at its cash relative to its common equity it has more cash than common equity. which mean ifs you liquidated the company, you'd walk away

with more cash than you would given what the current price of the stock is. so that stands out. citi group, you know has $70 a share. and the stock is at $85. there's a tremendous amount of value in these stocks which is not being recognized. >> how much of this is a calculus of stocks going up. and how much is a calculus about the legal system? >> well, in terms of interest rates, versus bank stock prices. what we did was there was zero correlation. to see there's a link between interest rates and what happened to bank stocks. in terms of the legal situation, i think that that's turned somewhat positive. in other words, yesterday the financial times came out with an article in which they said the top 16 banks in the world were

charged $300 blz in fines. and one-third of that amount was bank of america. if you assume they're not going to pay another hundred billion dollars, then there's a tremendous amount of earnings power in these companies which will now be shown as a result of the fines will still be there. >> dick, front page of "the wall street journal" this morning, equity loans, decrease sharply on money borrowed a decade ago. how much should we worry about that in terms of the larger picture for banks? >> right now low losses are below normal. in other words, we're going through a period in which banks are losing less money on bad loans than they have i guess since i've been following the industry. and i think it's true to say ever. all right? in other words the loan losses are so low. to assume they're going up from this point is a reasonable

estimation. it's because, you know, lonesans are going up. at the peak of the last cycle, loans almost beat $8 trillion in size. it took six or seven years to get to that level. and they're being driven by commercial loans and real estate loans to commercial buildings. and what now looks like it's going to happen is the consumer may start borrowing again, may start to see more credit card loans coming through the system. personal loans, housing prices have come up. so you're going to see more home equity loans. driven by an increase in loans, you'll see earnings probably get back up to $70 billion for the industry. and the stocks don't reflect it

at all. from the end of march into 2014 to the end of april in 2015 the appreciation in bank stocks has been zero. the appreciation in the market has been 12%. valuation in the market has gone up substantially. valuation on bank stocks has gone down. so you're going to see a rotation into bank stocks if nothing else but the bottom line is you're going to see a rotation into stocks selling at below their normal valuation. and whose earnings are going to go up for at least the next two years. >> dick two questions before we go. the first, i know you're calling on the sector to rise broadly speak speaking. is there any bank you would just run from right now? >> it's hard to say, you know there's one in real trouble. as i see it it's one stock with multiple names. so if the industry does well it's very unusual to see a given bank do very poorly.

and i don't -- obviously i'm not enthusiastic about banks which are operating in the oil areas of the country. companies like comerica make me somewhat concerned. but, you know, i think most banks are going to do reasonably well. >> the last question i wanted to touch on and i don't know if it's a bank you technically cover is deutsche bank. we saw the news yesterday about the two co-ceos effectively going to be resigning. james leaving earlier and will have a new ceo. what do you make of that? what do you think deutsche bank becomes both here in the united states and abroad? >> i think it becomes a bonanza for american banks. right? in other words, what we're seeing is deutsche bank getting -- because basically -- i don't follow the company. but the builder of the capital markets and closely related to trading. barclays has moved out of that area. ubs moved out of that area.

credit suisse has moved out of that area. so the banks that used to compete head to head with american banks are leaving the sector and are shrinking down for those who remain in the sector. it's a bonanza from jpmorgan. you know, american banks will have an opportunity to increase market share as a result of the problems we're seeing in these big european banks and the fact they are leaving businesses which the american banks can take. >> okay. we're going to lee it there. appreciate your time this morning. >> thank you. >> thank you. coming up help wanted in minneapolis. patience required. pox not apply. plus new rules for march madness. stick around.

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those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. welcome back to "squawk box," everyone. central banker wanted. the federal reserve bank of minneapolis announcing the search criteria for

replacements. the search will be led by the minneapolis fed six non-bank directors. they say they are looking for someone with the experience to be a strong policy maker and strong leader and they will look inside and outside the federal reserve system. >> i'm looking for someone with an easier to pronounce name. >> finally -- actually probably have finally learned how to say it. and now he's leaving. >> yeah. >> that's murphy's law. murphy would be good. you can say that. that's good. in "squawk" sports news march madness will look different next year. a series of rule changes for this upcoming season. the biggest change the shot clock goes from 35 to 30 to add possessions to each game and encourage more scoring. i don't know whether that -- i kind of like it when it's longer. i like the passing. you know then it's --

>> more finesse? >> i just don't like nba where it's just run and gun and run down and shoot and run down and shoot. >> because it reminds you of soccer because it's the opposite of soccer? constantly scoring versus never scoring? >> no i like -- >> he likes the suspense. >> and i like that a great team can beat the five greatest athletes. anyway, the ncaa is also cutting the number of time-outs. those are fun too. remember the first round when you filled out a bracket and you never heard of the team but you're living and dying at the end of every time. >> i wasn't quite there with you. i cared, but i didn't watch every minute like you. >> you would have more if you pressed that one button where you pick the teams for you. >> i think you were watching my win/loss ratio than i did. >> you were like third place up to the end. >> monkey right here.

anyway, when we return today, buzz from apple's latest development conference. better battery life and the streaming music service. we'll be joined right after this. right now as we head to a break, check out equity futures once again. still looking at red arrows with b but not the declines we saw earlier this morning when the dow was 45 down. right now dow down about 10. s&p down by 1.5, nasdaq by 9. "squawk box" will be right back. or stop to find a bathroom? cialis for daily use, is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away

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welcome back to "squawk box." an nbc news exclusive this morning. a woman carrying an extreme form of tuberculosis entered the country from india in april. she arrived in chicago and is now being treated at the national institute of health outside of d.c. health officials are rushing to track down hundreds of people who may have had contact with these people. it is not easily caught by

casual contact but extensively drug resistant tb is so dangerous that officials want to warn those who may be at risk. also we should tell you the former fed chairman paul volcker now raising the rate on state finances. states can then shift the timing of receipts and expenses across years borrowing long-term to pay current bills and delay the funding of pension and health care retirement. he says healthier than they are, they appear. and makes it harder for states to engage in what he calls so-called shenanigans. alibaba executive chairman jack ma is in new york today. and there's an op-ed in "the wall street journal." he shares a message to americans about the chinese company's strategy for the market. he writed in part in his words, that we want to help u.s. entrepreneurs, small business owners and brands and companies of all sizes sell

their goods to the growing chinese consumer class. chinese consumers will get to buy the american products that they want. this in turn will help create american jobs and increase u.s. exports. ma plans to meet with potential partners during his visit this week. he will tell them china's middle class today is the same size as the entire u.s. population. it is expected to double within seven years. ma argues that unlike the u.s. china doesn't have a bricks and mortar retail infrastructure. so online market places are key. >> that's a compelling argument. >> it is. >> the entire size of the united states population is already the middle class. though i wonder what middle class in china qualifies. what can you buy? >> in gdp terms you have to translate it. up to $40,000, $50,000 per capita over there i don't know. but years ago it was like 10, 12, something like that. that's why when we do

comparisons of whose economy is bigger, if you just do it and adjust it it's like 20 years off or something. although a lot of people want it to be next year just to say it. >> why? . . let's talk a little bit about the big headlines out of the apple developer's conference. we've been talking about it all morning long. joining us now off the flight from san francisco is apple's analyst gene munster from piper jaffray. great to have you here. >> thanks for having me. >> what excited you the most? what do you think is the biggest deal in terms of changing the game for the company. >> this is all refinement. this is taking little things and making it better. siri and the digital assistant which is going to make our lives better. they played up the music service a lot, but few people are

actually going to use that. apple pay was one of the big takeaways too. they're starting to make progress. i think this is negative for paypal. this is the start of something that's going to be big for apple. >> because they're signing up more retailers now? >> they're signing up more retailers, but also the progression. they're laying the ground work of a more progressive product. also doing other payments online. so i think those are some of the obvious ones. and there's some subtle analysis to point out. for example, there's been speculation that google is going to be replaced as the default search within safari. we don't think that will happen. >> a positive for google? right. and the last piece is doing apps on the watch. this isn't just -- this is going to create some new features for the watch over the next several months which is desperately needed. >> music question for you and you seem to be in agreement.

apple's new music revolution not much of one. becky plans to use the service. >> i am elated after all of this stuff. but because we have the apple ecosystem, i like the idea of a family group and have it instantly take it over. >> spotify is 14 million users. i mean people will use it but we just try to -- the numbers are so big in terms of the phone, it's just kind of skews my perspective of lots of people using it. >> how do you then look at the deal for beats? does the beats deal look good to you? or is that not the way to think about it? >> the way you think about it is this. they need to continue to refine the product. they spent $3 billion doing it. for them it wasn't much but beats did well on it. i think it was the right move longer term.

even though if not a ton of people will use it, it's important they fix that problem. >> nerms -- in terms of other things, as apple pay was the biggest potential for long-term strategy? >> i think if you just think about your wallet in general, that's basically going to go away over the next decade. apple's making it really easy to ditch your wallet. they're making a lot of progress. there's a lot of evolution to come in the next year or two years. >> one of the things we talked about in the last hour was the proactive service. and the idea that they're going to be able to go into your e-mail and figure out the phone number that's calling you and where they're supposed to be. at the same time tim cook has talked about how his service is going to be different than google. can you be as good as google if you're not actually going through and looking at all of the information and all being done on the device opposed to

the cloud? >> unlikely. it's unfortunate, but unlikely. how much they want to get up for what features. so the google services are going to be probably more predictive but i think it's going to be important for consumers. >> but who's going to win that battle? >> i think at the end of the day is -- >> are consumers willing to give up their privacy, if you will for ads and other things for better service? or will they take a potentially lesser service in exchange for privacy? >> i think over time privacy is going to win. >> you do? >> i think that's going to be a bigger deal for consumers. that's going to be a bigger to tus. i think ultimately near term it wins. >> when does that happen? i've been waiting to when consumers say hold on a second. i've been concerned about it for quite a while. do you think this is something that's starting right now,

starting next year? >> it's going to be a subtle change. and probably during that time apple will get a little bit better. so it's a big advantage for google. and google wins in terms of the experience to your point. but i think that yes, it's a better experience now. but i think that gap will close. >> i'm still an apple guy. i talk a big game about google. i still use an apple. joe has made the point repeat repeatedly so goes apple stocks so goes the market. where do you put the stock at the end of the year? >> we're at $163 target. we think they will continue to gain share over the next couple years. which should move the stock higher. >> joe? >> let's see where that would put it. >> he's trying to figure out where -- >> a trillion-dollar company there. >> i don't think it's quite a trillion. >> yeah, it would be. close. no, the -- i don't -- it all has to do with technicals and

just -- when these clowns finally decide to add apple, that's like a sign for the latest bull run. the market. and the market's been flat for three months and apple has gone nowhere for three months. we'll see. maybe it consolidates. they finally add it after it's gone from $9 billion market cap not that long ago, they add it when it's $750 billion market cap. that make sense with you? they do it with all of them. it's like an endorsement by them is consensus thinking. it's universally loved. no one's left to buy it that doesn't love it. and they call a top. we'll see how that works. >> but to get to that price target that's a gain of 25% right now. what's the catalyst? >> the biggest catalyst is share gains. this is with the iphone. ultimately the 6 and 6 plus we

think are having a big impact. so if they can gain share, every one point of market share point, they have about 17% right now, adds about 4% to the numbers. >> to the revenue? >> to revenue, it's a little bit more to earnings. >> we've got to run, but upgrade cycle. you have the 6 s and 6 s plus we think coming this fall. the new ipad pro which is larger and now can do dual -- multitasking at the same time which looks terrific to me. how many people do you think actually upgrade? >> i think the cycles that really sizzle behind them is going to be a little more subdued. what's going to happen is it's just going to take people more time to upgrade. that's going to be the iron horse. those products they have today is going to move the stock for the next few. >> what is it? shin yao or whatever they sell them for half price in china. almost as good right?

do they ever get as good? that's the thing. gaining market share into the hereafter for apple, other leading companies, you need to stay on top. you don't always stay on top with people gunning for you. maybe they do they be may don't. >> 17 plst% market share. it can go up in the u.s. i think there's a small movement -- >> it sounds like such a no brainer. who doesn't own it? everybody should own it right? >> there's also -- if numbers go higher, i think more people could own it. also if numbers go higher they could give more money back to shareholders, buy more stock back and manufacture the stock going up too. given their massive amounts of cash flow they have. >> gene thank you so much for coming in, for joining us this morning. it's great to see you. >> thank you. coming up lululemon out with stock trading higher. we'll dig through the report with an analyst when "squawk"

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director of have we finally turned a corner? >> it looks like they're finally making some moves. i think a lot of the lows of 2013 are fading into the woodwork to some degree. >> and when you look at their business relative to what the gap is doing and all of the other competitors in this space, can they ever get back to where they were let's say 24 months ago or is that boat sailed? >> i think it's a matter of how well they engage the consumer in the stores. that's why i upgraded the stock. i noticed they were really getting it together. i could tell that the store managers had more training. most importantly they were engaging the customer. i always thought of lulu as half the product, and half the engagement. and with all the stuff that happened it was more the engagement -- >> do you think the product is as good as it's been? >> i think what happened since

2013 during the see-through pant saga and so on was that people afterwards became much more looking. made it sound like something more. prior to that they never looked even if there was a problem. i think it was much more psychological. i think that's faded into the background. >> who do you think are their biggest competitors right now? if you're them looking over their shoulder they're looking at who? >> i hope they're looking at how well they engage the customer. they don't have retail the way lulu does. >> you even have an athletta owned by the gap. >> i think that's there but i think they can raise their game. even if their stuff is more expensive, it would be about 40% more. so for whatever it is from a production standpoint it's a pretty good value. and i think it's more technically adept than a lot of competitors. >> your price target on the

stock? >> i forgot where i am right now. i think i'm at 77 if i'm not mistaken. >> and in terms of getting there, beyond the engagement is there any product shift that you think is going to need to take place? >> no not really. i think that -- i've never written about the product as a problem except for the fact they had that see-through pant problem. you look back to the second quarter of 2013 they comped an eight in their stores. in the midst of that big problem. so it never really was the product. it was sort of a lot of the stuff that took them -- took the steam out of it. >> real quick, you mentioned under armour and nike. between those two, right now, who do you see as the winner -- >> nooikwell -- >> nike is far bigger in terms of the stock. >> i like under armour better. >> you think there's more upside. >> i do. i think we can see this 25%, 30%

growth for the next five years. i think nike is a great, great company, it's just 26 times next year it's hard to step in here. >> sam, thank you. appreciate it. couple of other stocks to watch this morning. general electric selling its u.s. sponsor finance business to the canadian pension plan board. the transaction for the lending unit is valued at $12 billion. campbell soup is buying garden fresh. $231 million. united foods is down this morning. the organic foods distributor posting disappointing quarterly results. it also offered a down beet forecast. and dave & buster's earnings topping forecasts. raising its full year revenue view as well. stock up by 3.75%. coming up at the 1904 world's fair, a cool crisp beverage spiked in popularity in the united states.

iced tea promptly became the drink of choice for much of america today. you want to know more about iced tea and no one else can help you, stick around because mr. t is here to talk to you. i think it's iced tea day or something. we'll have that next.

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>> i think you wear panty hose. >> mr. t is returning to television. this time with a new show on diy called "i pity the tool." also fuze iced tea is teaming up with the icon. we are joined by the man himself, mr. t. we cut some other interviews short, mr. t, so we'd have more time with you. but i want you to let me know when we get to the level of the talk show. i don't want to get to the level of gibber jabber. >> no. this is business. that's why i'm glad to be here. i appreciate you knocking guests out the way. you did the right thing. >> they were suckers. >> yeah yeah. we had to pity them. >> yeah. that's right. if you watch the show you many analysts, i do -- i do call them suckers and fools. >> pity is good. you showing mercy to them. you not hating nobody. because we don't want to hate. exactly. >> so people think that you know, you can take any icon and

give them a home improvement show. you did this. you did cabinet -- you know how to make cabinets? >> exactly. i did it in high school. i'm hands on. when i got the job to do "rocky" they said can he act? so now i'm doing a home remodeling, they said can he do it? you can't win. you know? i did it in high school. i used to go around with my father when i was in chicago. we used to tear down things and build up stuff and stuff like that. i'm a worker. you know? >> but you made the point, you're not just going in there with a sledge hammer. >> no. you build up. break your body down. then you start to build it up. like you go to the dentist, you got to get the bare teeth out, the cavity. pull that out first then put in the new one. >> but you don't do it with dynamite to get the teeth out. >> no no. >> how did it happen?

someone said you don't like sly stallone. they said you hate sly stallone. >> no. rocky balboa in the movie. >> bryant gumbel was in the movie. >> no. he wasn't in the movie. he asked me right before we were to fight the rematch, he said do you hate balboa. i said i don't hate balboa but i pity the fool and i hate anyone who try to take what i got. i ain't giving it up. you know? i'm not going to do something stupid. i'm going to do the right thing. not only you don't want somebody to tear it up you don't want yourself to tear it up. >> what kind of connection do you have with fans when you walk around? the three of us remember you from "a-team" and "rocky." >> i don't want to sound cocky, i feel the love out there. i'm a hands on person.

you know? so i don't say they bother me if i'm eating lunch and they come back. i take time to appreciate them and let them know i say thank you. one said mr. t is the only that said thank you for taking his picture. i was raised that way. so they come by i say thank you for coming. he said thank you for taking time. i say no thank you for showing love. >> you were on "squawk box" before. >> yes, many years ago. >> you were. and i remember back then you had a setback with your health. >> you have a good memory. i use everything. it's sort of a breeze to get over something to let people know. and i walk around and visit patients. i remember before i was diagnosed what really changed in my life when little kids started loving on me through the make a wish foundation. it was a kid's last wish to meet

me. and other kids come in through the make a wish foundation and starlight foundation. i say god love them mr. t love them. now ten years later, now mr. t is diagnosed with cancer. so i say if i can't practice what i preach if i can't stay on the word i told them kids about then i'm a liar. i got to believe it. sop i had to walk through that. i'm better at telling kids don't quit just because you're diagnosed. >> did you like george? >> i liked everybody. see, people didn't like me. sometimes rumors start and stuff like that. he was our leader on the a-team. >> he was. >> that was hannibal. he was the colonel. you know we had a lieutenant. we had a captain. i was the sergeant b.a. baracus. >> how do you choose -- i'm shower they come to you saying

they want to sponsor something. you just gave us mr. t in your pocket. >> yeah. how do i choose my products? very carefully. people come with their own gibber jabber. would you do this here this is a good product for you. i say it might be good for you, fool, but not for me. a couple years ago they wanted me to do a beer commercial in japan. said won't nobody see it. i said i'll see it. then i be lying to the kids. if i don't drink why i go over there and do that. i'm true to the word. certain things don't gel with me. if i don't use the product, i'm not going to promote it. >> you like equity or cash? >> a little bit of both. both and both. you want some stock in it. i'm no fool. i'm a businessman. >> you're no fool. >> no fool. i pity the fool. but i'm not a fool. i watch and i learn. >> i'm going to ask you on camera, see how you do. >> all right. >> i wore regular pants in.

you know i almost did wear jeans in. would you just say to me i look pretty good in them jeans. would you say that to me? >> no. i know that's a joke eddie murphy had. >> did you like that routine? i lost it on that. i cried i was laughing so hard. he's great. >> he is. if he talking about you, thinking about you, that's something. people say you going to get eddie murphy? for what? he helping my game. you got to be a fool to misspell it. how can you go wrong? >> let's talk about your name. you told us a story before going on that i didn't know. after knowing you for years and years how'd you come up with mr. t? >> i'm going to call it like it is. as a black man growing nup a white society i watched my brother come home from vietnam a marine and it was 1967 in chicago driving around. some white guy said boy, learn

how to drive. i said, man, i asked myself after that watching other black men they called boy. i said what do a black man have to do before he's given respect before becoming a man. when i became old enough to die for my country then i am old enough to be a man. so legally i changed my name is mr. t. >> i hope this works great. we're going to be talking to you in a year about how big this show is on diy. and you'll come back and we'll call you mr. t when you come back. >> congratulations. >> and you better say it next time when i wear jeans. >> thank y'all, so much. when we come back, tim armstrong is with us for the next hour. stick around. "squawk box" will be right back.

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jumping into the music streaming biz. flying high ahead of a shareholder meeting. alibaba's jack ma telling let me help you sell more in china. aol ceo tim armstrong is our special guest host. plus should investors worry that italy is the next greece.

market watchers growing more concerned about the country's mounting debt. a cnbc exclusive coming up. and wheels up hitting a sponsorship exacta. the zayuts here. the final hour of "squawk box" takes off right now. live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. after yesterday, things have evened out. we did come into weaker futures this morning. right now futures are relatively flat. dow down about 10 points. s&p futures down 10 points.

those losses have eased a bit too. the dax still down .9% but it was down 1.6% earlier this morning. the cac is down and the ftse down both .25%. headline out of greece reuters reporting that athens new reform proposal is not sufficient to strike a deal to unlock new funding. greece and creditors are discussing an extension of the country's bailout through march of next year. obviously this is not the last headline. i'm sure we'll hear many more to come. >> other big corporate stories this morning. hsbc shedding almost 50,000 jobs. biggest lender planning to cut its assets by a quarter. a couple of notes on this. 50,000 sounds like a lot and it is, what it is in reality is about 25,000 full-time jobs about 10% of its workforce. it's also going to be getting rid of its business in turkey and brazil. that's another 25,000 employees.

and in addition to that will be investing more of its business in asia where it's had a lot of success. of course the big question in the uk this morning is whether it's going to remain there. and of course this decision comes a day after the change in leadership at deutsche bank and speculation about them getting out of the business or at least reducing their risk. something that hsbc is doing. the stock did not move the way they expected. saying hsbc failed to bring out anything radically different for moves which had been expected for some months now. also happening this morning, we can tell you that at headquarters in frankfurt being searched by authorities. it's related to security transactions by clients and employees in the bank are not accused of wrong doing. at least thus far. we have another developing story to tell you about this morning. fiat-chrysler ceo sergio

marccione is reaching out to get gm into a merger. you remember several months ago activists successfully got them to buy stock. marccione has been calling for consolidation for some time. and they're calling this is desperate one on his part. nbc news reports a woman carrying an extreme form of tb tuberculosis entered the country from india back in april. she arrived in chicago, spent time many missouri and tennessee. she's now being treated at the national institute of health outside d.c. health officials are now rushing to track down literally hundreds of people who may have had contact with the patient although tb is not easily caught by casual contact. this extensively drug resistant tb is so dangerous that health officials say they want to warn those who could even possibly be

at risk. and in other news to make you think, global health news hong kong issued a red alert against non-essential against south korea. a picture of eight new cases of mers. that brings the total cases of this respiratory syndrome in south korea to 95. and out of those, seven fatalities. a few stocks to watch also this morning. lululemon's earnings and revenue beat the street. the retailer says total comps rose 6% during the latest quarter. we just spoke to an analyst about that. hewlett-packard has settled a class action lawsuit over the dharge it took following autonomy. it still believes the action has no merit, but it's settled to avoid burdensome and protracted litigation. the company insurance will pay $100 million into a settlement fund. joining us right now is

aol ceo tim armstrong. as it's acquired by verizon and a cash deal. tim is our guest host for the hour. it's great to see you. >> good to be here and good to follow mr. t, of course. >> good day to come in? >> it's like following a kid on a variety show. it's awesome. >> i was not here the day the deal was announced. i just want to say congratulations. >> thank you, becky. >> there has been a lot written about the deal since that first day. there's been a lot people questioned. i want to ask you yourself. i spent time trying to figure it out, why did verizon want ool? what were they getting? >> i think verizon is a company that is one of the largest companies in the world and one of the most successful. i think when they were looking forward, they were deciding how to play the future of media. and aol over the last years we've molded other the photo and video and con stent bands. from verizon standpoint that's a great company that makes things flow through the pipes.

we're going to offer a new layer of service through the pipes which will be all about media content, advertising, and i think if you look at those two market places those video and advertising are going to be $80 billion markets over the next five years growing at 30% to 40%. i think it's really about looking forward as much as possible about where consumers are going to be and values are going to be. that's the basis of the deal. that's how the deal got constructed over a year-long period. that's the discussion. where is media going, commerce going, and i think this is an open area for verizon. >> i know they are looking into content. but if i was thinking content, aol wouldn't have been my first choice. you're thinking movies and ways to compete with hulu. a lot of people have said it's because of the platform at aol is that strew? >> it's both. we've been successful in ad platforms partially because we invested in content.

we have about 396 million consumers every month an aol's properties. we were first to launch an online cable system aol build which is live. we're actually a larger group in content than people realize. we news that content and other content to drive systems. i think that's the $600 billion industry that only 4% of it is run on machines. there's 96% left. you put on machines and that's going to build aol. >> when you think about verizon and the conversations you've had with them, you think they think of you as that platform and that's the true impetus for this? they're saying we love the"the huffington post," we want to own "the huffington post" and these video services. we think we can monetize everything we're doing because of the platform you developed. >> no. i think that is a big piece of it. so as we've gone through the conversation with them they realize how important content is. there were a lot of stories

whether or not verizon would keep that part of aol. that's something they're excited about. we have the"the huffington post" and moviefone and mapquest. we're investing more in mapping today. i think verizon is getting a full suite. we're the world's largest internet company really in the world. and i think it's a great deal for verizon to -- >> when we saw you the morning of the transaction, one of the questions we asked was what the breakup fee was. and you sort of tried and dodge and said it will come out. it came out since we saw you, and it kind of seems there was really no auction. and the breakup issue, some people question why there isn't a bigger one or you're getting something for it. or there's some kind of ghost shop in this transaction. >> i think the way to think about it is actually -- and i've

been on the show many times where you ask about the. it's been widely known for our business we've been investing heavily in the future of these areas in general. i think the second piece is you've asked me this many times is what about combining with this company and doing that. the reality is the conversation around aol has been out. there's been rumors for a long time. we as a board took a step back and said what is going to take it to the next level? we had a sheet of paper with more on it. verizon ticked all of those boxes. we got the best deal for our shareholders, our team and employees at aol, for verizon. >> will anyone lose their job? did anyone think, wow, i used to have all the upside in aol and i was working at this place downtown called you know internet coming down from

verizon verizon. >> you know, the employee base had had the opposite reaction. which is verizon has 1.5 billion connected devices in the united states. and if you think about the fact that the internet's going to be about 80% mobile in the next two or three years, you asked me many times why don't you combine with an internet company. it's a good article. but the reality is half the m&a deals right now are synergistic. this deal is all about growth. we're structured inside of verizon with the best of both worlds. >> i didn't lump that into the column on purpose. >> thank you. >> i know you think of it as a different story. >> do you feel better?

yeah. >> yeah. did -- was it a load off your mind? you're still going to integrate things with aol, but you built it up brought it back sold it. you're going to do well. something goes wrong, it's like -- >> no i don't approach that. when we sit down to buy companies -- >> so what's independent now? you're still going to run aol? >> yes. i've worked harder now. i've worked hard before. i wasn't slacking. >> how do you measure you're working hard? i say you work the same. >> we have the busiest time at aol. you're going to see lots from us this summer that will surprise you. we'll be working hard on a number of future looking things you'll be excited about. >> we're going to spend the next 45 minutes or so trying to talk about those issues. tim is with us for the rest of the program. thank you for that. when we come back this morning, vineyard vines has

amassed a preppy cult following. the company known for the little pink whale is making waves in the industry. the cofounders will join us to talk preppy retail and plans for expansion. also look at what is coming up later in the show. more "squawk box" after this. financial noise financial noise financial noise financial noise ♪ if you're looking for a car that drives you... ...and takes the wheel right from your very hands...

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welcome back to "squawk box." among the stories front and center this morning, u.s. winning the opening game of its womens world cup schedule. the americans beating australia. you're kidding me. there were four goals? boy, they can defend a tournament. the united states next play sweden on friday. the women are on a quest for a third world cup title and the first, though, since 1999. okay. turns out embracing your inner preppy is good business. vineyard vines has brought a new england relaxed style to the masses and the malls. ian murray and chet murray are here. >> we're thrilled to be here. >> does everything have a whale on it? >> not everything does.

>> it has to have a whale or not? >> no. >> explain this to me in terms of how this business developed. you guys are bros. i want to know how it actually works to work with your bro. but in terms of deciding that this business was going to like, somehow preppy was different than everything else and how you sort of made it distinctive to everything snels everybody trying to do it and you've done it in a way nobody else has, it feels like. >> my brother and i were working in manhattan and didn't like what we were doing so we came up with making a necktie. then we made neckties that represented the finer things in life. along the way we said vineyard vines should be every day feel this good. we made ties for when you had to wear them. then why not help people dress

for the good life. so let's start making clothes for men, women, and kids and dress the whole family. >> and so how big is the business right now? >> well we're private, so we've got the luxury of not having to talk about that. but what we can say is that we in terms of size we make something for the entire family. that's really what we try to do. so we were talking earlier off air about our bricks and mortar stores and how they've become a place for mom and dad. we think that's part of the reason why this is doing so well. >> as we continue to grow our online business, it grows at the same -- it's the same size as our 65 stores. >> it's roughly a third. wholesale, retail and direct.

>> and what do you want to do with these? do you effectively want to go public one day? >> we want to wake up and have fun. i mean seriously. >> you want to sell your company? he just sold his company. >> i think what we did -- shep and i spent a lot of times speaking at schools. they say what's your exit strategy? we don't have an exit strategy. >> i think one of the -- tim is a huge success story and i know you're going to speak to kenny. sells belmont and american pharoah up on he created that opportunity. tim going from google to aol, it's really -- at our house we have a quote from henry ford that says if you think you can or think you can't, you're right. and so those people who are watching saying there's no opportunities out there, you have to wake up with a great attitude and prove to everyone you can do it. you have to want it.

>> you already executed your exit strategy when you left the crappy job. and now you own this company. i don't see any exit. i think you're there already. 65 stores. these guys are like 30 years old. >> we started our business -- >> maybe a little older. >> we started our business with $70,000 of credit card debt. >> so awesome. >> if you're still thinking about that henry ford quote, what's next? >> we're continuing to roll out new stores. we've got a lot of opportunity particularly here domestically. there is opportunity to go national. talking about home goods or a fragrance were those natural brand extensions. >> what's kept you from doing that thus far? >> we want to stay focused. >> we were told do one thing and do it well. that's what we've done. i think it's not what's next. for us it's what's not next. as long as we continue to kind of go at it 100% that's --

>> hot topic every quarter. it's like no these damn kids. but they don't have to change anything. it's timeless. >> it could be restaurants. it could be home furnishings. there's so much stuff we could do. and, you know building that infrastructure and making sure we deliver our customer -- great customer experience. number one is make vineyard vines a great place to work. we have this awesome new office. deliver a great customer experience. and then three, make money. >> i was going to say having known shep and ian for many years now and seeing the business when it's small and big, first of all their business looks like an internet platform business from a growth standpoint. i think they have one of the fastest growing businesses in the u.s. in this category probably in the world. the second piece is if you go to their offices, their amazing connection with consumers and ian you should talk about this with the internal program you guys have. but the third thing is other than apple, they're one of the only companies i've seen that

does online and offline to the same extent. if you go to their stores there's a real community there. if you want to see the future of retail, go to one of their stoers. look at their catalogs and how they do online. >> we started approaching 20 years ago so the guy who bought our tie, the first tie is now 40 years old. he's making substantial income. so we want to make sure we have something for him as he grows up with our brand. but even more important, we look at our internal program which we take seriously. what are we doing right, what are we doing wrong, what is it you're looking for? for everybody we should be listening to them because they're the future of our brands. their opinions matter quite frankly more than ours do. >> we had over a thousand applicants for our internship

program. >> that's harder than getting into harvard. >> the opportunities with e have for them is beyond what they prepare for us. it's awesome. >> great american business story. >> it is. >> ian and shep we appreciate it. >> did you guys meet mr. t? >> we did. >> you have a great company. mr. t seriously. >> yeah. amazing. >> thank you guys. when we come back who should pay for college? parents or children? we have details of a new survey after the break. plus check out the futures. again, things turned around quite a bit this morning. >> i pity the fool. i pity the fool. i pity the fool. >> europe has improved to -- mr. t, enough already. down about 1% for the dax. we will hear from italy's finance minser in a bit. "squawk box" will be right back.

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

you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business.

welcome back to "squawk box," everyone. turns out more parents are telling their kids if they want to go to college, they have to pay for it. the discover student loans survey reveals the vast majority of parents continue to see the importance of their child obtaining a college education. however, fewer are planning to help pay for it. when asked how much responsibility their child should have in paying for college, nearly half of parents

46% said their children should fund at least some of the cost themselves. 45% of parents said they expect their child to pay for most or all of their education. coming up could italy be the next greece? we'll find out when we speak to the minister of finance for italy. as we take a break, look at equity futures this morning. dow looks it would open off 4 points. we're back in a moment.

welcome back to "squawk box," everyone. here is what is making headlines this morning. small business confidence rose to a five-month high in may. the national federation of independent business says its monthly index rose to 98.3. ge struck a deal to sell its private equity unit. for about $12 billion. and campbell soup is buying salsa and hummus maker garden fresh for $231 million.

greece about -- we're actually going to use it the expression here, is about to kick the can down the road. way down the road. into march of 2016. how could this impact other euro nations? cnbc's chief international correspondent michelle caruso-cabrera joins us now with a special guest. >> hey there. yes. we're here with the italian finance minister pier carlo padoan. good to have you here. >> great to be here. >> you are here to talk to investors about it willaly. i assume a lot of them are asking about greece. what's the situation? are you finally going to get a deal here with greece? >> i'm confident the deal will come soon. technical talks continue and the political will to find an agreement is there. so i hope that the negotiators will get together soon. >> a member of the council went as far as to say yesterday that if greece left the euro it

wouldn't be a big deal for the eurozone. we haven't heard somebody from the ecb say something like that. do you agree with that? >> certainly if there is an accident, there might be some shock waves in the system but the system is very strong. it's much stronger than when it all started in 2010 and 2012. now we have a banking union. we have stronger institutions. we have more sources. and above all, all the countries including the so-called periphery countries are much stronger. and financial vulnerabilityies are gone. >> certainly it's a difficult discussion. and there's many that think this should be an alternative. i don't think this would be a good idea for greece in the first place. >> okay. why not? >> well because one has to weigh in not just the apparent benefits that would mostly come through a big devaluation of the

new drachma, maybe, but because of the cost which would have to do with the fact that would put an additional burden on greece to repay that debt which will not go away. >> more than one finance -- more than one hedge fund manager told me behind closed doors they said to varoufakis what if the creditors tell you no on all your demands? he said i have leverage, it's called eded italy. he said italy would be vulnerable to leaving the eurozone as well. >> i have a good relationship with him. this is not the first time he said something i totally disagree with. italy is as completely turned around. it's now agreeing. it's a country that's implementing more than any other structural reforms. it's becoming an example for europe and i'm not saying this as the international organization imf, the commission saying that italy is

an example. and it's becoming stronger by the quarter. so i'm afraid that this time my good friend varoufakis got it wrong. >> switch topics. interest rates in europe still at low levels but have risen sharply and rapidly over the last month or so. why? >> there are many ways to interpret this. i have my preferred view that maybe we are going back to more normal times. remember when interest rates were clear? now we're moving away from that. and this is in the longer term good for the european economy. for the global economy. there's more room for maneuver. more opportunities for long-term investors. and we can live with higher interest rates with no problem for sustainability. >> you are not concerned about the rapidness of the move and the potential for it causing instability? because the trade was so one directional for so long. >> we have seen volatility as we all know. volatility is like you know a

bump in the road when you're driving a fast car. but also i would like to point out the fact that liquidity is abundant. and as far as it's concerned, the ecb has introduced a qe which is a long time horizon which will stick to that. and this will stabilize expectations. i'm not worried about short-term volatility. >> you say liquidity is abundant. but when it comes to bond trading, there's not enough liquidity. no liquidity. that there's going to be moments where there's going to be incredible gapping in prices because of market making and a number of reasons. are you concerned about lack of liquidity? >> no. i see this as reallocation of funds in other classes of assets. so as i said maybe bonds will suffer a little bit, but other segments of the market will benefit. this is part of the readjustment. we should have more money going

towards equities and so forth. >> minister padoan, thank you for joining us. back to you. >> thank you. when we return on "squawk box" this morning, they sponsored american pharoah and jockey victor espinoza at the belmont. now wheels up flying high thanks to a triple crown win. kenny joins us next to talk business and how a sponsorship like this pays off. plus tomorrow's lineup make sure to stick around. "squawk box" will be right back. ause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, af your heart is healthy enough for sex.

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we're here with tim armstrong. a couple more questions about this deal and also the future of media. so one thing we need to ask you about is the future of ariana huffington and "huffington post." there was a piece last week saying she's working without a contract and may or may not be happy about this transaction and may or may not have been trying to sell the company or at least the brand and that particular business separately. >> sure. just at a larger level, "the huffington post" is an important asset for the company. the first six years it got 20 or 30 million users. it's now over 200 million consumers. i think ariana is a great entrepreneur and i think the turbo charges of "huffington post" is exciting.

we've worked closely with her for four years. we've spent a lot of time on the deal in terms of working with verizon but also where the deal is going to go. i think arianna has a relationship with us and with the company which i think will be ongoing for a long period of time. >> so a year or two if you came back arianna would be -- "the huffington post" would still have a huffington at its helm. >> yeah. the construct has been how do we grow globally how do we have arianna as a huge leader in force. she really wants to stay with "the huffington post" and be with it for a long period of time. i think she describes it as her third child. and from her standpoint we want entrepreneurs to feel that way about the company and feel that way and really to fuel them with that kind of desire behind it. i think the reality is arianna and her team want to grow "the huffington post" and verizon if

you look at the financial resources, probably the single best thing we could have done to the "the huffington post." >> your stock's trading a little over $50. why is that? >> you know i don't know. you could talk to traders, but i think the bottom line is it's been trading around 50. >> but the deal is for -- >> 50. >> yes. so a little bit more than 50. so there's something going on here. >> no. i think there's optionality that people always look at if somebody was going to jump over the top on the deal. our movement in the market place when i said "the huffington post" is one puzzle piece, we have looked at deals about sellings part of it in general. but that was about growth. the larger puzzle pieces "the huffington post" inside of our largest asset set is super valuable. the stock was at 50. i think it's bumped around a little bit pricewise, but i wouldn't read too much into that. >> and one of the topics we're talking about is this bundling

unbundling thing we talk about all the time. >> you're totally changing -- >> no i'm not changing my story. >> yeah they'll pay more but some companies are going to -- >> yes, no. but he made the point that individuals are going to pay more ultimately for content. >> that's what we've been saying all along. >> not true. once unbundled, there's a lot of people that will lose. that's what i've been saying. >> only if people don't want their products. i don't know how much i'm paying for cnbc inside my cable bill. i'd probably pay more for it individually. >> the point joe has made is over and over is people won't unbundle because it would cost more later. >> right. >> what i've said is people even economically, that's the smart economic decision. >> that's stupid. i pity the fool.

this is gibber jabber. >> it is. but people think they want control. >> they're willing to pay for it. >> they may be willing to pay for that control. and once you unbundle a lot of businesses become quite complicated and stressed. >> i think the reality is consumers want what they want. they'll pay for a lot for entertainment. it's highly likely if you're a sports fan or cnbc fan, you might pay more than your current bundle. >> or final four or take anything -- >> how much would you pay to watch the belmont live? andrew would have paid for it. >> i had a flat tire. i missed the belmont. >> did you guy gos? >> we didn't go. i watched it. >> you had a flat tire and couldn't watch it? you need a mobile verizon phone. >> we'll have more from tim in a moment. when we come back jim cramer

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let's get down to the new york stock exchange. jim cramer joins us now. love your views. first on apple. where did you come out on that? >> incrementally positive. the streaming music i think is a threat to pandora. i like the fact they're already coming out with a new watch, basically an os for the watch. and i think that anything that makes it so that windows that kind of a windows view of apple so it's just more fun to use. i don't think there's anything wrong with that. i think app sl an inexpensive stock and most of these conferences is to get people excited about writing for apple. enjoy yourselves be creative and we'll take your stuff. it's a way to create a lot of jobs and create interest on the

large devices from apple. everybody's got them. >> lululemon, have they turned the corner finally? >> i think this is still a show me situation. you've got to listen to the call. the call is to determine on this one. and until i hear it, i don't want to necessarily say it's out of the woods. ki i can tell you it's good to listen to. >> good to talk to you. obviously i follow you closely. what is your take in terms of the media sector right now performance and consolidation? you and i had lunch a few weeks ago, but you had some big views. >> i think it's pretty exciting. i think the companies are far more bullish than everybody else. andrew had an article today whether the mergers are necessarily weak for the companies without growth. some of the cable companies, yes. but i think a time warner unbelievable to keep buying stock. disney buying back stock. it's really one of the most robust groups and i've got to

tell you, tim, i think that verizon is going to be considered a media company. i know you've got great, great video. we're going to think of verizon as a media company with a phone business. >> we're going to france next week with 12,000 others for the french advertising festival. and we're going to talk a lot about it next week with verizon. >> fabulous. great to see you. >> jim cramer see you in a couple minutes. up next wheels up flying high after a sponsorship weekend. kenny dichter joins us right after the break. financial noise financial noise financial noise

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hey, this is mr. t and i pity the fool who don't watch squawk box. >> wheels up hit the daily double this week. they hit a sponsorship deal with american pharoah. also serena claimed her fourth victory. kenny dichter is with us. you just missed with justin rose. >> we almost hit the trifecta. if he had drifen the ball a

little better he did have a chance. >> he did. >> anyway big -- when they came on and he was wearing the wheels i was like this is like how did that go down? >> 6:30 a.m. my partner gets a phone call gets me at 6:45. >> which day? >> thursday. >> ben sterner from leverage. this is the power of being nice. ben sterner is a new guy in the business. he needed someone to make a call quick. i called my partner to make sure i wasn't crazy. when the risk reward is right, you push the purple chips up. >> whenever you buy an option, the time value is what makes it expensive. you paid the value for that. >> i paid the enhernt value and i said to the owner, i said here, you want to seal the deal while i'm on the phone call i said wear the hat.

>> and they were on the show. another guy had the monster hat. anyway. >> you got it right there. >> it was obvious to get it on the leg like that? >> the leg is in my view the most powerful piece of inventory on the horse. we had both legs in case the cameras did a reverse deal and the lower back and then media from thursday morning when we signed the deal until yesterday. >> you return on that, you haven't disclosed what you paid for the sponsorship. >> i talked to kenny over the weekend, and he thought maybe we got $20 million of value. i think there was $200 million plus. but that's also over the course of time. it's a piece of history you bought. i can i kenny is one of the best entrepreneurs in the country. >> i think there's a dislocation when we walked about this yesterday, what people are

paying for a plus content and what you get in return it's a buyer's markts right now. >> i'm still looking at pictures from 1973 from secretariat. you know how many pictures i've seen of that? >> and american pharoah ran the last 24 seconds faster than secretariat. tim was an instrument tall person for me when earn looking at wheels up and getting it started. we had a disruptive horse in the race. >> does instrumentll mean loaded? >> i would say he's been supportive. >> how did you get serena away from net jets? >> she's supplementing with wheels up. anything that's two hours and up, she's using the xls. she's been a good friend for a long time. >> how did that happen? >> it's like with joe with his golf clubs.

when a new pitching pejwedge comes out, it's in his back. she's a smart woman. the other thing that's worth saying is the call that we got at 6:00 on thursday morning, it's about relationships. you think about scotterness, what these guys are doing, the support we have to start this businessless than two years ago, it's been gang busters. >> what are the numbers of jobs you've put in wichita and the ability to -- >> i would say it's hundreds and thousands of jobs. and every time someone steels a membership, it might be a seat. we take it seriously. american jobs in wichita, kansas are important. >> how do you get to hundreds of thousands of jobs? >> you have the 11,000 people who work and then components. you have 100 different different companies that make components.

the largest employer, boing, affects the most people in the country? >> what happened to net jets? >> jordan he's sort of the guys that were racing against american pharoah. i think he's faded out. adam johnson and bill noe are there. i think if facebook and twitter are in the same business as sony then we're in the same business. i think we're trying to take things to the next level. >> does your mix shift in terms of what's happening next in terms of planes? >> we have the king of the 350 i at the base. >> it's okay. we can clear the limit. >> we're starting with the king air. we go to the excel which is a four-hour airplane and we've been talking to others. they go up to the latitude and the citation ten. >> you don't need bigger than

that unless you go abroad. >> the citation 10 plus fastest highest plane nonmilitary in the world. we can do 85 90% of the world's missions. >> we don't charge a fuel charge like some of our competitors in the space. we want to be totally transparent. if fuel moves, we'll be transparent and move the prices. it's not affecting us right now. it's the greenest plane and the most fuel efficient. ping plane is something i can't disclose in full but we're working on initiatives where we're going to put charitable stuff attached to the plane. i think tim has seen a google shot of a plane being painted. >> we are putting a pink plane in and i'll discuss in details later but it's going to be exciting. >> i went to bed and told pe nel

pi i was going to be on this morning. >> jim edmonds. >> what was the next shows of than in my wife is like -- >> the mother. >> jim edmonds -- >> there's a new show that came on that they were talking about wheels up. >> i stayed up last night to watch it. it was on bravo. >> you missed the belmont but you saw the housewives of beverly hills. >> odd mom out. >> you watched that? you watched odd mom out? >> this is why content is going out. >> real housewives wheels up is going to be the first private aviation company that focuses on women, serena williams. >> did you know there was a hockey game on on nbc?

>> yeah. you have to support the home team. >> okay. all right. >> it was a great weekend for nbc. >> great job. thanks. >> thanks kenny. >> that does it for us today. make sure you join us tomorrow. right now it's time for sidewalk on the street. . >> good tuesday morning. at the new york stock exchange. futures have had a bit of a bounce this morning but the dow has lost its gains for the year. s&p is on track for a four-day decline. ten-year is creeping back above 24 this morning and oil is caught up up a bit. our road map begins with the slicing and dicing in the financials. ge finds a lender. and thousan