>> i try to avoid that a little. >> we have trump coming up today. are you excited about that? >> well, i'm wondering why he's intermixing this question of his net worth with the question of him running. i'm not sure -- if you say you're worth $9 billion -- >> do you want to declare how much you're worth right now? >> i'm not running for president. >> will you declare it for me? >> why would you say that number just before running? >> "squawk on the street" is next. >> congratulations to the chicago blackhawks on their third stanley cup championship. we're at the new york stock exchange. another day of pressure on stocks as the red lines out of europe are less than encouraging. a two-day fed meeting begins today. the 10-year is down around 2.32

percent. the road map, a glimmer of hope. another m&a chatter in the health care space. it was anthem and cigna. there time it's united health going after ed in a. reports say coty won an auction. first up investors have a lot to digest today, weaker housing starts conditions about greece. on the tape we have jim saying even though the headlines are getting more aggressive he says there are powers at work trying to get something done. >> i say give me a break already. i mean if there really was any sort of deal it would have been this weekend, and i think that greece thinks they win either way. the politicians there think they battle the people if they default and the people really want that and if they don't, think get free money. and it's really kind of

basically saying to the rest of the world powers and obviously to the germans, listen you know? we fooled you. we took your money and now we're doing great. enough is enough. i think we all have to position ourselves for recognizing the default is coming and if we don't get it it would be nice but you have to recognize that it's pretty much game over. >> auto sales out of europe has been a bright spot but slowest in six months. german zetty w miss at. car registrations very disappointing. i think europe is paralyzed by greece. i think it's time for the germans who are running the show to say enough. >> you mean just forget it? >> here's the plan. in the next 17 days these three things are going to happen. prep yourself. i think this is hurting all of europe. it's not like energy has come back so much that europe has slowed down. it's come from 40 to 60 but i

think where a lot of things could be going right here but it's greece that i keep hearing about. i got up early this morning and before there were comments the futures were down really badly and europe was down almost everything was down more than 1.5%. the hockstock market is hostage to greece. capital market is slowing down because of greece. it's time to move on and take the hit. >> i don't want to buy stocks for at least the next two weeks given that thought. >> i think you're going to get a great opportunity but it's not here. let it default already. default is bad. there's no doubt about that there are people who are poorly positioned. that's always the case. i'm not saying -- this is take your medicine move on. everyone takes the hits. the countries that own too many of these bonds maybe get downgraded. there will be hedge funds that blow up. maybe we go down 3 to 7%.

>> you don't see that happening at this meeting? >> that's the avalanche, so to speak, not the pharmaceutical, but i think the people have to recognize that this is like it's really frustrating the rest of europe and i think europe it's time to fish or cut bait. our country, we would have cut bait by now. >> you'd like to hope so. >> i mean the state of rhode island we have to let that one go let orange county go. >> in the meantime back here talk about a volatile high frequency data set. the two-month pace is the highest since '07. multifamily is going bananas. >> existing homes sales, i think there are too many homes for sale at high prices and the market is unrealistic and those have to come down. the housing market is all over the place. hard to draw conclusions but you can see standard pacific merged with ryland because it's not

that great a business. in general the housing business is not doing what it's supposed to do. is it credit? we don't know. the banks will tell you it's still hard to get a mortgage. the regulators want them to lend more. the only way to have no increased nonperformers is to lend less. >> speaking of m&a, in the health insurance space united health has approached aetna about a take over deal valued at $40 billion. cigna buffed a $45 billion deal from anthem. >> we say 5 to go to 3. in other words there will be three of these players. they think the government would still let that pass. it's just going to happen. what's interesting is humana wasn't rumored yesterday so it went down. it's all five and there's going to be three and they're trying to figure out what the three are

going to look like. >> do you have favorites? >> i think signal is inexpensive. you can buy et ma. >> these reports, anyway for cigna, the range they're giving around 175. the premium would not be insane. >> these stocks have had amazing run. >> cigna was at $90 not that long ago. and it's not like these companies are doing that well. the struggle is that you bought these stocks betting that the fundamentals were going to get better and then you got lucky with this wave of takeovers because the fundamentals getting better. they were all getting better but if there was no chatter, these stocks would be down big. that's why they have huge moves. >> you can say that about a number of spaces. i can think of a number spaces we've talked about already where fund fundamentals are deteriorating

but -- >> what's incredible is this market is up i would say probably 70% of the increase in the last six months are shorts having to cover because they don't want to be betting against diageo. there's been three up grades from sell to hold or buy. they've been right that the fundamentals are weak. but if deeiageo gets a big from the brazilians you look like an idiot if you have a sale on it. a food company that's not doing well a kraft, they were in every division that was wrong. it's too dangerous to short humana even though the fundamentals weren't that good. the last news with humana before takeover is that business was not strong. . >> brings to mind this next

story. published reports say that coty is buying products including calvin klein. p and g has been looking. routers and the new york post saying they're getting close. >> we used to joke about the idea that there could be a win/win. target and cvs were both up yesterday. but procter and coty are both up. if i were a banker it would be the greatest time in the world. this is really an alice in wonder land moment. coty trying to buy avon? notice i didn't say twavon. >> it got some pickup. >> it made a mistake.

i thought things could get better and business would get better and major advertisers would come in. i didn't think that the monthly average users would do bad. i like the service. i think it's good. i can't believe i can't monotize it. the interview with david and with you guys last week was horrendous with dorsey. things happen -- sometimes you just get had. and i feel like that i got had on twitter and i admit it. i own that. i thought that it could be doing better. i still have hopes that maybe someone comes in or they put through things. obviously if people start floating that someone's going to buy twitter, you don't buy a company that's not doing well. you buy a company that's doing okay and you make it better. >> this is a new 52-week high on twitter. >> that's mostly my fault for the last 15 points. >> mkm today, cuts to a neutral.

they say fair value is 39. no catalyst to improve in a long term but a google bid. >> a google bid. let's ask them to bail us out. you know there's no charity in this business. google is not an institution that bails out people who own twitter. i think that again, if twitter were to listen to large users and get a large group of potential advertisers together and make it so that people don't have to call me to say how do i get on twitter? i've had people who call various tech departments that i work with saying please tell me how to get on twitter. that's not reassuring. but they keep talking product. there are some other people who obviously could be in the running for the ceo, but i think that that interview on friday changed the narrative. >> somebody gave you a hard time this morning saying they're going to get bought and your response was at what price? 25 in 39? >> exactly.

i mean there is a price where everything can be bought but it may not be at this level. avon got a bit from coty that did not materialize. i think you can't buy stocks because you think the company is going to get bids. that's a sucker's game. we've seen a lot of consolidation. why not wait until twitter reports they have numbers. they want to see if more people are added and i think that the idea that a ceo was exhausted by critics? get tough. remember when belichick, i always default to him because he's a wild man. but remember when they had we're going to cincinnati. we're going to cincinnati. we're going. it was like -- there should have been a cincinnati moment for costolo but there wasn't. it's more like we are who we say they are.

>> we'll talk more about twitter's action later on this morning. when we come back gap ceo arthur peck we'll hear where what he told kourtney reagan about the planned store closing. and ron shaich his restaurant taking on a new concept this morning. and we'll see if the greece headlines continue with this sentiment. a lot from with "squawk on the street" in a moment.

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gap announcing plans to sell more than a quarter of stores in north america. 175 of them over the next few years. it'll also cut jobs at head quarters. peck told us what he hopes to achieve by these moves. >> i think we streamline the organization and eliminated some of the fleet that wasn't getting us very far to get back to a fleet that we're proud of and we can do business in front of our customers. >> kourtney will have a lot more of her interview with him later on this morning. they have the number of gap

stores, the name sakes in north america has gone down every year for ten years. there are now more old navies than gaps. >> we have too many stores in the country and i think that's something that everybody realizings. way too many gaps but that's a stunning figure. home depot has only opened a couple of stores in the last couple of years. they realized we don't need a lot more stores. we don't need a lot more khaki and jeans stores. i used to go to gap. my little kids we would go to gap kids and i used to go to gap because i wanted a pair of slacks. but then i started going to crew because they had an outlet and there's an outlet of an outlet. there's really there's no raise on debt. i just like to say that. >> you and your french is so good. you've expressed your frustration with retail in

general. gap has been dead money. >> dead money is the right -- i don't suggest writing calls but that has been an unbelievable call. it's done nothing. now, look, costco which i love that stock has done nothing of late but that's my kind of definition of a retailer. it's exciting. a gap is not exciting to go to. it's like oh i have to fall into the gap and i think that's part of the problem. we have too many stores where you just don't have an interesting going, it doesn't grab you. >> it's one of the few retailers that still gives monthly comps. who knows why because may down 6. april down 15. you'd think by now if they were mc mcdonald's, they would have stopped. >> i'm sure they're watching. enough with the comps. you don't have to do it. they membership like self-flachlation. let's whip ourselves with these

monthly numbers. it's not like baseball. you don't have to show the standings every inning. >> is there a level where it's shrink to grow. is there a point at which you think these guys are now small enough but that there's only an up side from here? >> kourtney is doing a fabulous job and i'd love to hear why gap should exist or old navy or banana republican and that maybe, if you shut down all the underperforming stores maybe what's left could be doing well. i mean you know i hope it's not like an airplane where engine one is down but we're still flying and three and four i don't know, you're not flying. i don't know if there's enough critical mass gap to make a difference. >> i'm thinking if say target taking canada out was a bold move. >> and it was the right move. i remember when target was dayton hudson and it was like they're going to get rid of

dayton hudson and become this weird thing? are they out of their mind? that made sense. i kept thinking when would they close a lot of kmarts and they're finally starting to sell kmarts. they have a crazy thing going on but i think we have too many stores. we had a bradley's moments in this country where we were closing builders square. it's time for a new wave of closings. >> brian cornell of target was on last night. here's what a quick listen at what he said. >> we're really excited about the partnership. we think it will continue to strengthen our position in the wellness space because we have an expert in the space, one that brings scale, expooerngs capabilities that we think will continue to bring a new level of experience to our target guest. >> and that's great when you're

not really good at something, bring in someone else. macy's brought in finish line? you know get someone else who knows more. and i think, by the way, what is the best performing like at jc penny? sa forra. this isn't a bad idea. he said cvs is the best at what they do. this was a brilliant move for both. >> target up almost 6% for the year. does a trust own it? >> yes. that makes up for twitter. twitter idiot, target maybe not. i want to reiterate that everything that's going on with twitter is is mostly my fault. it's largely me. i was stupid enough to buy it. >> you'll do better next time. >> i can't own stocks but, again, what happened with twitter is that i was focussed on the product. and i should have been focussed on the user and that was my bad but i have a new guy who's even

more focussed on the product. you saw. it's all my bad. i'm going to go beat myself up like gap. i'm going to start issuing daily monthly user numbers. how's that? >> when we come back we'll get cramer's mad dash and count down to the opening bell. we'll get you one last look at the opening bell. a bounce in futures in the early morning. more "squawk on the street" street ahead. s ahead. t ahead. r ahead. a ahead. strai ahead. g ahead. ahead. t ahead. being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know?

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goldman in a new business. >> this is interesting. i remember when goldman sachs was considering being in the discount business. they felt it wasn't appealing to their brand. they had a $10 million minimum to have an account there. this kind of lending they're thinking about going to. i've had lending club on mad money. if you use algorithmic lending, it's been successful meaning that you don't have a lot of people who default. goldman has the capacity. they have a bank. why not put it to use. this is not peer oh to the peer lending. they have money lying around so why not make money on it. given the fact that algorithmic lending has been so smart. >> is it a liability for lending club? >> i wouldn't want knob that business against goldman. the issue for me is a brick and mortar guys they may be

expensive in terms of the production of loans but they're pretty good at it. goldman can do it i think, do it in a separate division. that's -- they have remarkable nonperformers. they lend to people who know -- they have data. it's much of an impeer cal lending. >> and it's a statement on what goldman sees in terms of appetite for credit and availability of credit. >> that's true. you have a little bank why not make a little money? >> we'll get to the hoping bell in just a few minutes. don't go away.

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you're watching "squawk on the street" live from the financial capital of the world. the opening bell in 90 seconds. no deal in sight regarding greece. that's keeping an anchor around the ankles of the market. in the meantime continued m&a chatter in the health care space. china china, jim biggest drop.

>> thank heaven the baltic freight is up a little bit. the dollar is too strong and we have a fed meeting. you have to get past greece even though i think it shouldn't matter but it does because we don't know where the bonds are held. if it turns out that x, y, z nation owns a lot of greece debt, we're going to talk about it. they're out of time with greece. >> we've been down this road before many times. >> we have but i think everyone is tired of it. this is the time when i think people are wising up to the fact that greece never had any intention. look, you could offer -- the thing that was supposed to be on the table was a 30-year. basically you meet certain milestones and you're fine. that's what's off the table. that's what's changed. >> unbelievable when the terms are extended like that. we'll see if we get any movement or headlines today.

big meeting on thursday of the finance ministers. people say if a deal is going to happen before the end of the month, that's the best chance and even then time wise it's a tough fit. >> i think greeks want to roll the dice. >> there's the opening bell. a look at the s&p at the bottom of your screen. the big board today it's foelsmolson coors and a virtually wall technology company celebrating its listing anniversary. monster added to the focus list on citi. >> monster never should have been down this down. when you switch distributors the guys who you were using, they're not keen on you. i think coca-cola is going to do wonders through the distribution market. i think coca-cola is going to be able to buy monster if it wants to. they understand the greatness of monster and understands the

greatness of keurig without the downside. he's got a great call and knows coca-cola is a steady stock. it is a safer way. i happen to like monster, not to drink. if i drink it i don't go to sleep for three days. >> monster is the second best performer on the s&p surpassed only by aetna like we talked about a moment ago. >> aetna is -- it is not -- i mean -- in the time that we've been talking about it now it's more expensive than humana. this stuff is going to keep happening. five goes to three. there's such great scale when you merge these companies that you have to imagine they're going to merge and they're talking and if david faber were here right now, i think he'd be talking about that these bankers are trying to get a deal done. >> you want to explain what's happening, this new class of stock at under armour? there's a lot of confusion about

what it means, how does it change voting rights? the stock's not moving on it. >> no. is it comcast? is it google? remember when it said go read the note. i read the note. i think kevin is going to have to come on. maybe he's waiting to come on with receivenstephen curry. this class slide fies this position. they keep saying it's the same as the split. if it is then why didn't you split. it's not and i'd like to know more and i don't think that as much as i'm a big fan of under armour and the stock, i've been championing that for a long time. i think kevin needs to come on explain. that would make me feel more comfortable. i don't want to see that it's just an entrenchment.

>> we'll see same six tonight. they're talking ratings could be 20 million people tonight. >> the games are breathtaking. i watched the last game in a san francisco bar. it's riveting. >> they adopted golden state. >> they have. >> chicago, by the way, fab yule. >> deutsche goes by the hold. >> i think that that was a funny decision that you go all the way. you win and you get nothing. it's kind of like the way liablebel works. that was a courageous effort for nothing. >> we'll see. a lot of discussion about whether it goes to the supreme court or not, whether greenberg is truly done. >> i don't think he's done. i think he's on a mission that is just to prove that -- a mission on principle. i recently was involved in a lawsuit, and it became about principle. i totally understand the idea

it's just that it's not -- aig has been a great stock, and this is something i think that was just a well-timed grown grade. it's been such a win. >> ups not moving on this but they're planning to end certain holiday discounts for shippers. >> i'm surprised this was the news today. some of my friends who were on the business and they use ups said this went through a little while ago. ups is tired of having a bad holiday season. it comes out what they were doing wrong and it was that they were trying to please everybody. they can't do that and still make a lot of money. i think this is smart and ups should be higher. >> logistics have failed them the last couple of holiday seasons. fedex is getting aggressive. >> these are well-run companies. ups in the end, i think is -- one of the great things about them is how customer friendly they are, but you can't be

customer friendly to something that wrecks your delivery something and makes it not smooth. this is a smart idea. some business to turn away is a good idea. that business you want to turn away. those things that make it so the trucks aren't useful. >> and scec seeing a gain? >> i didn't know that stock was allowed to go up. i think thought -- it was like camelot. many moons ago it was made that had to go down. this is a nice change. >> crowd funding for vendors, i believe is even as amazon is looking at handmade? >> it's great to see that they were talking about -- when you go over the per spect us it was odd. they said it's not about making money, basically. i could say it was boiling down that it's not about making

money. i always think when you're a company it's integral. >> yesterday we closeding in having the gains. what is the psychology of buy the dipper and are they going to move in front of the fed or not? >> i think there are a lot of people putting out shorts. they're not putting out -- they're putting out market shorts. they're afraid to short individual stocks because when you get humanaed. there's a lot of negativity but we keep having sellers come in because they're afraid something bad happens, greece. the fed is not as dangerous to greece as me. i think the fed reads the papers. the only thing i don't like about the fed is that when they speak, there's always 50% of the people saying they're going to tighten eminently and there's a lot of parsing. i don't like the setup because i want clarity when i wake up. i think people get beleaguered

by that. yesterday was a day where it was like a nice loss. there was kind of a comeback. i don't trust it. >> you don't? >> no. i want to see copper up and some better broader data and i'd like to see the retailers acting better. i just don't get that. one of the ones to watch for me is boeing. is mcnerney call and say how am i doing? how is air bus doing? it's like my friend it's like who are the saints going to draft? i think that they're talking about the big orders boeing is getting. i'd like to see it translate to a bigger stock price. i'd like to see just some news come out and a stock go higher on the news. i think other than takeover news. and we're kind of stuck in a world where right now only

takeover news is driving the stocks. >> the dow is up about 45 points for the entire quarter. we'll see what today brings. >> you had that stat this morning. youed that cool video. how do you know how to do that? >> i'll teach you later. let's go to the floor. >> got a mixed open here. everything is on a fraction on either side of positive or negative. europe is a lot calmer today. greece is down again. everything else is a lot calmer. germany is well off of the lows. i went to a hedge fund idea dinner last night where people exchange ideas and what they're buying and selling. nobody wanted to talk about greece. a surprising number seemed to be comfortable with the idea of greece leaving the euro thinking maybe it would turn greece into a cheap tourist mecca. i don't buy any of this.

having seen the 2008 financial crisis, i think it could create the potential far failed state in europe. thousands of people fleeing greece who are impoverished. increase in crime. a russian naval fleet in athens. i know this sounds crazy but it's not. we don't know how to control that. i think muttle throw is not a bad option. and trying to keep them in the euro is the most viable solution right now. in the u.s. everything is in play in health care. you mentioned this. it's amazing. we were talking yesterday about cigna rebuffing a share an offer from anthem. united health might be considering a bid for cigna or aetna. aetna might be looking at humana. united health care might be considering a bid for cigna or aetna. the bottom line is they're all in play at this point in some way or another and they're all moving in different directions. humana had a pop up when there was talk about their involvement in this.

procter & gamble has had a horrible year it's up a little bit here. there's a report in the new york post that coty may want to buy prorkter and gamble's beauty products. this is not confirmed. coty is up about 14%. finally the fitbit ipo which i've been excited about just got a lot more exciting overnight. they increased the share size. so fitbit is scheduled to price wednesday night. trading here thursday at the new york stock exchange. we had until yesterday 29.9 million shares at 14 to 16. suddenly it's been up. 34.5 million shares at $17 to $19. that's a big jump. the demand is strong because this company is growing fast and

it's profitable. 2011, this is one example. they had $15 million in revenue. now in the trailing 12 months they have $970 million in revenue and they're profitable. they have $170 million in net income profitable company here. the only competitor out there, it's not really a competitor but go proin the wearables is growing 34% a year. fitbit is growing more than that and they haven't taken any massive amounts of venture funding before that. the two big companies that bought into them put in about $70 million or so. this company is at the midpoint. we're looking at $3.5 billion of market money. this is going to be an exciting ipo. it's going to be behind me thursday morning. we'll be all over that at the open. right now the dow is up 62 points. >> thank you very much bob. >> that's going to be a great

deal. great deal and a great pucket. >> yes. do you wear one? >> no. the wife wears one. >> oil in the meantime right around $60 and change. let's get to jackie. >> good morning to you. that's right. we are clinging near the $60 a barrel level. oil is up $0.28. while wti is up 36 in the last three months the last month it remains flat at this point. the market is asking is $60 a fair price for oil and at least for now it seems to think so. but we've got a storm coming in houston, tropical storm bill bracing for that. a lot of refineries are down that. we could see flooding. that could boost gasoline higher. that's what's been taking crude a little bit higher as well. i want to talk about prices at the pump. $2.80 is the national average for a gallon of regular. up only $0.10.

down $0.86 from a year ago. at this $60 range for crude, consumers are still getting a big break. back to you. >> when we come back the countdown to this week's fitbit ipo, we'll meet the ceo of one of the rivals. in the meantime the dow up 60 points trying to retrace some of the losses from yesterday. don't go away. ♪ ♪ ♪ it took tim morehouse years to master the perfect lunge. but only one attempt to master depositing checks at chase atms. technology designed for you. so you can easily master the way you bank.

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as we mentioned earlier n fitbit rising the price rake $17 to $19 now. at the midpoint it would value the company right around $3.7 billion. expected to debut on thursday. they're based in san francisco. they are profitable. revenue growing 3x. >> it's a great company. now, that doesn't necessarily mean there's some level that the stock is not going to be too

expensive and people are going to say why didn't you tell me to get in? it's very hot. >> you say this every time. i can't think of the number of examples this year. jack. >> it's going to be too expensive because there's a scarcity value of new deals. it's a very company that will be overvalued versus other companies but it has a great product. i really think that -- i just gave one to my daughter just for her birthday. because i just think it encourages people to stay in shape. it's that kind of product. it works. and i think there are people who don't like the apple watch as much because it's not as effective, people say, as the fitbit. >> it doesn't go the fitness element quite as well, some would argue. >> i think that's true. and there are many things that this does like i don't speak to my fitbit and say come in please. it's not, my fitbit doesn't have any stocks.

but neither my fitbit for this can i really run twitter from. >> they've sold 20.5 million of these things. half of them last year. the price points anywhere from $60 to $250 for some models. >> there are some special ones. i think the regular ones are fine. there are ones you can put on different places. it's a real company and it's been a real company. when i interviewed them about a year and a half ago i was like wow. these guys are so together. this is an amazing success story, and i think that's going to be applauded when the deal comes, and it's going to be hard to get stock. you have to be a really good customer of a brokerage house and that's how it works. i don't control the process. >> it's coming at a time where we saw the list of rivals garmen among them. that's been bouncing among lows.

>> garmen but that's a niche business. the wife is like walking around. she's at 9,280 steps. she's going back and forth before she goes to bed. she has to get to her 10,000 steps. it's a little nutty. >> but they said you can't measure it you can't manage it. something like that? i remember a time when you thought we were over ipo and you were leery of too much new supply coming in and drawing the oxygen out of the room. that's not your complaint now. >> we don't have a lot of deals. this is nice. it's a profitable company. it's not anything -- it's going to open at a high price but at least it's profitl.able profitable. at this point in the year 2000

we were having companying not making a profit coming forward. the market was going crazy with companies that are losing fortunes. this company is making money. there was a company yesterday that opened at 12 and went to 40 and it was like okay. a little deal but no, we're underdealed and i like that. that's one of the positive things that's happening. and it's unique to the u.s. it's not -- the rest of the world is not as good as we are. >> that's right. you got that right. >> that's the problem. >> we'll get stop trading with jim in a moment. dow hovering at 59. don't go away. when you're not confident your company's data is secure the possibility of a breach can quickly become the only thing you think about.

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and then hains celestial. this remains the natural organic play other than white wave. i had a new company on last night that has a good tasteing frozen natural organic unit. this is still the hottest area in the supermarket. >> we've talked about the smaller footprint from star bucks. we're going to talk to panera about their new con settlement. >> panera has had a couple of disappointments but notice the stock hangs in there. it's impressive. >> what's on mad tonight. >> dun an brad street. the company doesn't talk enough. the company is really good at what it does. and bob carrigan. and then we have a mini

allergan. i've got to tell you that this drug group remains an area and biotech. it remains something you have to be in. it's not hostage from greece or the fed. other than when janet yellen takes a periodic swipe. she only did it once. >> probably more volatility than most people are willing to put up with over the last couple of weeks. >> i want people to be aware that when the greece news occurs and it will be market down. be ready. it's okay. i mean if you haven't thought about it yet, you really are from another planet. i mean i'm sure that there are people who like if you ask a fifth grade stock picking class, they're waiting for greece. >> i would imagine it gets talked about. >> finally the bias on day one of a two-day fed meeting is pretty good? >> i think people are nervous to be negative. all fed meetings have been good

but i think we're going to start befighting the fed. >> goldman calling for two hikes this year at year end, 2.75. >> the market's not ready for that but maybe their lending division is. >> we'll see you tonight. mad money, 6:00 p.m. eastern time. when we come back art peck in his first television interview since becoming ceo of gap. and as we said panera bread upping the ante in the restaurant wars. don't go too far.

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welcome back to "squawk on the street". stocks trying to get out from under pressure this morning. the headlines regarding a would be deal in greece not encouraging but the bias in a fed meeting around a fed meeting generally positive. dow is up some 60 points and oil trying to add to the gains as well. >> the gap talking to cnbc in an exclusive interview.

hear to say what he has to say about the store closings and job cuts. >> and what makes the racing so successful in we're talk to the spartan race ceo at post nine. >> and coty is it a buying opportunity for p and g or for coty. >> and an exclusive interview with the ceo of panera. we'll talk about their new concept popup in new york city. >> permits surging in may to the highest level in almost eight years. builders broke ground on fewer homes. taking both months together housing starts are also now running at their fastest pace in seven years. let's go to co-head of lynch economics. and scott wren senior global strategist with wells fargo.

this is good news from the housing sector at least as far as jobs are concerned. >> definitely. it's good news and it's consistent with some of the other data that has been coming out which supports a view that the economy is in better shape than the first quarter seemed to indicate. most tracking models, ours and those of other analysts suggests that q 1 was not as bad as the first data or the first release indicated and that q 2 tracking is now running, in our case it's running 3.4%. that's about 1 percentage point higher than they were tracking about a month ago. this adds to positive momentum in the u.s. >> scott, clearly this feeds through to the fed meeting. given the two-thirds of the market think there will be a rate rise in september anyway how do you feel the market is positioned here the equity market?

>> i think the equity market is really close to fair value right now. that permits number which is a great leading ind kart for housing is helping. we've had some mixed data. the industrial data wasn't good. the housing is improving. i think what's going to happen tomorrow is that certain think fed is not going to make a move tomorrow but if they're going to move in september and that's what i think is likely to happen, they give us even though they don't need to move, they give us a token move they're going to start hinting that that's going to happen. they are going to give the market two or three months of a heads up. they need to prep the market and if they're going to do it in september, i think they're going to start doing it tomorrow when they announce when they release a statement and janet yellen has her press conference. >> at this point we go to where the majority of the market thinks there will be a rate rise but if they start talking about it what happens to the market? >> i think what they need to do

is tell us when it's going to be. if it's going to be september, they need to tell us the magnitude which will be very minor and then they need to tell us what the pace is after that initial increase. that's what's really important. i think they're going to tell us start to hint it's going to be in september. it's going to be a very small increase. we're going to skip a bunch of meetings potentially between hikes and this is a multiyear process. i think the market can digest that. they can deal with that. but the fed needs to prep us. they cannot be two or three weeks away from a september meeting and the market sitting here not knowing what they're going to do if they're going to do something. i would argue that if we don't start getting hints today or tomorrow rather about this september time frame, it's moved off. it's going to be later in the year. >> it's become a little bit more confusing. and it's certainly going to be a delicate dance that the federal reserve has to do in terms of communicating its next move and then the path of interest rate

hikes after that. do you think that they can do this effectively or do you think it's going to be messy? >> no. we think they will do it effectively. we think they learned quite a bit out of the experience of the temper tantrum and they're going to be a lot more careful this time around. as you know i tend to focus quite a bit on the emerging markets and obviously there's concerns there. also given the severe impact that we saw during the temper tantrum. we think that time around the impact is going to be less severe than in 2013. >> steve leaseman is out with a fed sur stlavey that we do on the networks. this is amongst professionals on wall street. two hikes this year four next year seems to be the consensus of expectation and the belief is that the s&p 500 can rise by 3.6% in year and then another 10% next year.

do you see those two things at contradictory? >> i do a little bit. actually, in my mind i think we have a good chance of seeing a 10% total return this year. i think a good chance in the next couple of years even though there are not official numbers out of 6 to 10% total return. the fed is going to inch this up. i don't think it's going to effect the economy if they do it slowly. history would say it's a rough road. >> we just heard that alberto felt the market was fairly valued. why do you think you can get 10% in less than half a year. >> i think you have to see the earnings growth come through, and in my opinion, just like the first quarter, coming into this year, the consensus was too low on earnings every quarter. consensus is too low for the whole year. we're going to see upside estimates move up. i think the earnings situation this year is going to be better than what a lot of people think, and i think you're going to see

5% to 7% the next couple of years after that. earnings have to pull the market higher. >> a lot of people hope that will be true. thank you to both of you. >> when we come back as competition increases from brands like h and m, forever 21 gap is closing stores as it tries to bos its stock. hear from the new ceo has to say about all of it. we'll be back with it next.

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the street." shares of orb gosh down. they said sales and profit were hurt by bad weather in the third quarter. these guys make all kinds of specialty heavy equipment including a lot of the mine resistant personnel carriers that the armed forces use. >> also watching shares of gap. art peck will kick off the annual investor meeting in san francisco. he sat down with us for an exclusive interview. kourtney joins us with more.

>> reporter: good morning. actually behind me is where the meeting will take place today. art peck describes himself as decisive. within the first four months he's closed piper lime. he's closing gap stores from the fleet and also jobs and refocusing gap and banana republican brands on the product taking a page from what's going right at old navy. >> we, frankly, eliminated some of the complexity in the fleet that wasn't getting us far to get back to a fleet that we're proud of and we can do business in front of our customers. we're always looking at real estate. every quarter we swept the entire portfolio. we look for opportunities to open stores and we're looking at places where we shouldn't be. >> are you looking at the current toys r us location in time square? >> we're looking at all good

real estate. time square is the cross roads of the world. that's an amazing location. >> what do you say to people who look at the gap in the lands of today's announcement or perhaps the last earnings report and say the hay day is over? >> i try not to engage in the conversation. if i looked at gap inc. and our portfolio, a huge asset that's not in our is our name sake. >> and the name recognition and the love the consumers have for the brand. i don't buy the argument at all. i believe brands are incredible assets. gap is an incredible brand, and i think it's very relevant today. >> so old navy has begun as you talked about a number of times to make their lead times more responsive experiment a little bit, order more of works and less of what doesn't. what took so long to get there?

>> speed is part of it but not all of it. it was what the team did to layer some of our responsive supply campaign capabilities. those are capabilities that we've been building over time and what you've seen at old navy is now three years and great numbers. a billion of incremental sales over that time frame which by any measure is gaining market share. old navy is proof of concept into a new way of operating the business and a new product model that allows us to stay on trend and on brand consistently. >> reporter: peck is directing gap and banana republican to use the shorter pipeline strategies that old navy has used. he acknowledged speed as helped competitors get it right more often. fast fashion meaning many of the

european players expanding in the u.s. >> it's interesting to hear him talk about the execution. there's a headline today in the washington post that says how millennial shoppers have made gap's basic look obsolete. the question is where is the fashion coming from? you remember gap for khakis and jeans. that was what young people in america wanted. who's directing the fashion right now and what are they trying to emphasize there? >> reporter: you know what's funny is later on in the interview he said being in the middle is an okay price to be in terms of price and style. gap is what it is. it's classic and american. art is okay with that. i think the fashion comes in, prapgs perhaps, some more of that at the banana republican chain. and art peck has acknowledged that the fashion and the trends, fashionable or basics haven't

been right at batch and banana. they're working hard to get it right. old navy is fashionable and the faster lead times helps them to get there. they're working on it. they're not quite there yet. >> they do make very good flip-flops. thank you very much. kourtney live in san francisco. with that exclusive gap interview. don't see that very often. >> in the meantime a voluntary evacuation is underway for parts of texas. joining us from galveston, texas is stephanie abrams. >> reporter: right now a little bit of a dry slot. this thing is coming ashore as we speak to our south. we had high tide water covering the entire beach. now it's low tide. the water is pushing out. you can see this now. a lot of people have been coming

out to see the waves and the wind. also this pier. this is called pleasure pier. i didn't name it. this was destroyed during hurricane ike. we're not going to be problems with that. i think the flood-proned issues are going to have issues. we've had an east winds. that means the winds come east and push west. you can see it on the grass that covers the dunes and the palm trees. that shows the east wind has been persistent. and this is the wall that they built in 1800 after the 1900 hurricane that killed approximately 8,000 people. ten miles long 17 feet high. i have spoken to folks over the year. they say it's settled down about 2 feet but even this little

distance from the beach to here, you can see the wind get a little bit stronger. if i take a wind measurement, it's been about a 10 miles per hour difference from down on the beach and right now the winds are around 20 miles per hour. that's about all we're going do see throughout the day also we get a stronger wind gust from a passing thunderstorm. >> stephanie, our thoughts with the folks in texas who have already had so much to deal with this spring. when we come back it's one of the most popular summer activities in the current. what is it that makes the spartan race so successful in we're going to talk to the ceo right after the break.

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sports. far more people will try an ocr this year than will run in marathons. what's fuelling this industry? >> if you're struggling on a wall on a course the next time you have a minor headache it's not going to matter so much. >> take a cold shower do 300 burr bees and go over a ball and you will stop complaining about the ridiculous things we complain about. joining us the ceo of the spartan races. joe, it's good to see you again. good morning. >> great to see you. i wish we were on that boat again. >> we'll see more of that later in the week. this has been called the fastest growing sport in fact country. how fast is it growing? >> just in 2010 there were 150,000 racers. this year there will be 4 million racers globally. >> for those who have never done one, describe one. describe the limits that you're

trying to get people to reach. >> this is basically a military-inspired obstacle race. it's something you'd see. you're going to climb walls and jump over fire. everything we do is athletic in nature. we're trying to push you to your limit. when you get to that limit, you retreat. you hopefully make it to the finish line and now you've got a new goal in life. you can push yourself a little further every time and hopefully as i said when you were interviewing me hopefully you stop complaining about the little things. >> you are a former wall streeter. you had a really good career on the street for a long time. and then you chose to quit and start this basically from scratch. basically creating an industry. why? >> i enjoyed racing myself. i traveled around the world as a way to clear my head from the headaches on wall street. you know what i'm talking about. and i just fell in love with it. people that were around me that

raced with me fell in love with it. it's a great way to find new friends, people that are inspiring. look, we're an average of our five best friends. they pull you up. >> to you background on wall street your buddy has a question for you and that is your theory about starting the day from held and how everything else is a relief if you start the day suffering with pain. the k can you translate that to wol street and investors right now who have seen bailouts and intervention and all the things that ease the pain and whether in his words, that will lead to the economic and societal down fall? >> well we're not talking about starting a day from heldl that isn't physical? the problem with mentally

stressful day. it's a great way to start today, purposeful suffering. it makes everything else easy. maybe your trade didn't work or maybe you've got an error if you're sitting on a trading desk. it's not as bad as the burpees or the cold shower. you're just happy to be alive. >> you'll be aware that brands like yours are powerful because they cut through. other people within the space, perhaps not as extreme as yours, have decided to open hotel changes because they believe they can attract business through that. would you be interested in doing other things with the brands? would you put it on a snack or food or open other establishments? >> we have to be really careful with the brand. the word spartan means so much. there are things to do with the brand. our consumers want to know how do i eat? how do i train? what do i wear? we have a great partnership with

rebox rebox who's created a show. and in training we're certifying trainers. so i think the brand is going to expand from races. >> joe, anyone who's familiar with you is probably familiar with tough mudder probably familiar with warrior dash. are you guys going to duke it out and see who comes out on top? >> who are they? >> nice. >> what is the status of the competition? >> we took a different approach. we're very athletic in nature. everything we do is about timing. it's about competition. we'd like to get this in the olympics someday. the competitors took a good approach, more of a party and a fun atmosphere. not that spartan isn't fun, we were worried if we took the approach they took it wouldn't have longevity. once a sport settles in no matter what it is it tends to last a long period of time.

so this is really about sport for us. >> how in shape do you have to be to do a spartan race? >> 90% of our competitors are couch po sayday toes that get ripped and sledded. >> there's hope for me. and joe, long term we talk about this in our piece but the danger of this becoming a fad in ten years, right? becoming jazzer size down the road. >> just look at the brand. there's no chance this becomes jazzer jazzersize. iron man has been around 30 years, and i think we're on that path. >> joe, it's good to see you again. we'll see you at the next race maybe. you can see a lot more of joe and of obstacle racing this thursday night 10:00 p.m. eastern on the new high extreme sports. a new documentary. >> is that you? >> no.

that's not me but you will meet the man who's jumping off of the clip. >> and we'll see you doing a lot of extreme sports. >> some. maybe not that. >> coming up. procter & gamble has had a rough few months. down about 5 months. now reports are giving the stock a little bit of a bump. we'll be right back. automotive innovation starts... right here. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a redesigned cabin of unrivaled style and comfort. the 2015 c-class.

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good morning, everyone. here's your cnbc news up date. speaking out for the first time since resigning as the head of the spokane chapter of the naacp. mat lawyer asked her when she started deceiving people about being black. >> i identify as black. i do take exception to that because it's a little more complex than me identifying as black or answering a question of are you black or white. >> the saudi arabian prince says he has settled a libel suit against a magazine over a reporting of his fortune. he claimed that forbes undervalued the stock holdings of his shares. and three new deaths from the mers virus. they walked through thermal

imaging cameras. and the first lady receiving a welcome at a london girls school this morning. she gave a short talk and took part in a round table discussion. and that is your news update at this hour. back to you guys. shares of coty are jumping this morning amid reports that it's won the bid to require procter & gamble beauty products and they're signing contracts over the next couple of weeks. we have a ubs analyst with us this morning. welcome to the program. >> thank you. >> basically they're going to get all the brand and perfumes? transformational for them? >> for coty it is yeah. it's a much bigger deal for them than it is for p&g but it's important for p&g as it's going to

be behind it's behind loreal but bigger than us day lauder. how are they going to pay for this? >> there's a lot of speculation. my guess is it's a reverse trust. after the transaction is consummated, p&g shareholders will be technically in control of the company. current coatyty shareholders will own a percent but will control the company. it will be a reverse mor isz trust. for p&g, it's tax free. >> the question i'm asking is how much debt do you think they'll have to take on given that they have $3.6 billion? >> i think it will be very minimal. i think it will be more of a share exchange. >> coty is a small company.

revenue of $4.4 billion. this would take it to what looks like re knewvenue of $11 billion. >> to be clear, i don't cover coty to i don't have a huge opinion of coty's stock but this will change them dramatically. it will give them a much more substantial footprint across beauty. it will give them a significant amount of cost synergy to execute on the combined business and it should theoretically give them other avenues for growth. these are good brand but brands that have been of low priority for procter. they're be high for coty. you should see coty's growth rate accelerate. >> are you surprised to not see more of a positive reaction from

p&g as they continue to get above average market prices for some of the brand or does the market want them to sell even more to spin off even more and to potentially even break apart for? >> there's two dynamics there. one is they're getting fair prices. we had value this group of assets of between 10.5 and $13.5 billion. we're right in the middle. there will be some stranded costs but probably about a net neutral transaction for p&g. again, most of this was expected for procter and for them this is a relatively small, this is a $200 billion plus company. we're talking about $12.5 billion. the bigger question is now that we're through or approaching the end of the vast majority of their brand of estimates, how do we get growth at p&g to reaccelerate. this is a business that's been

growing between 1 and 2%. there's a lot of investment needs. getting rid of these lower priority brands removes a distraction but doesn't solve the core problems. in the background there is an undercurrent of investor frustration that says it's too hard to move the aircraft airier as it is structured but we need a larger breakup. >> have you seen any evidence of any kind that absent these distractions they have the operational efficiency to leverage what they do have left? >> i think their biggest issue that if you think about the last couple -- there's a couple of big issues. one is they are priced. their products are priced at the premium end of their categories pretty much across the board and across the globe. in this current macro environment which we've now been in for seven or eight years, that's the wrong positioning. consumers are trading down or to

niche products. p&g needs to protect that. in the last several years they have been reorganizing. they've had management changes. they've been cutting costs and executing this brand of estimate program. there's been a lot of change at p&g. as we get to the end of this nearly a decade of change or we get to a new steady state, that frees them up to refocus and re-invest and reaccelerate growth. it very much remains to be seen because the current trend have been the opposite. >> i question is question is whether structurally parts of their market are changing faster than they can actually restructure what they do. i was reading at the weekend, for example, that everybody has been surprised by in china the number of people that have gone online to buy every day items and they don't have pricing power. they can't control the space they have on the web page and that's undermined everybody in the space.

>> well yeah. is going through. and p&g has a challenge in that they have a broad portfolio. they manage their brand goblely, oftentimes from cincinnati and they compete against a number of players who are if not local, that are more locally organized. you think about how come gait is structured. they run their company by region as opposed to global brand category. that makes it harder for p&g to respond quickly. i think their lack of response the last several years has been in a lot of ways exacerbated by the amount of change they've had internally. i think there is a case to be made that once you get through the heavy lifting that they should be more nimble better focussed and better positioned to reaccelerate growth. but they do have -- they are, they are in a lot of ways

disadvantaged in that they're priced high and oftentimes in the wrong channels and they are a big ship to move quickly. so when their markets are changing dramatically it takes an outsized effort for p&g to respond versus smaller players. >> thank you for joining us. steven powers joining us from ubs. thank you. >> no greek debt deal in sight after talks broke down. how big a threat is this with the u.s. economy. steve liesman is here with the results of the cnbc fed survey. >> reporter: wall street seized a greek strategy in the making but not necessarily an american strategy. what you can see in the survey is that 50% now see -- believe that greece will leave the euro zone in the next three years. that's a big jump from 39% in april. i want to show you what they

think about the other countries. very low percentages for other weaker european countries. 12% for portugal and 8% for italy. only a slight rise for greece. the idea of greece cascading is not really in the card at least not at this time. take a look at the biggest threats to the u.s. recovery here and you can see they're all global here. 25% judged geo political risk as the highest. global economic weakness still high. then you get to domestic concerns 17%. this was mostly the winner most times. and then over here i want you to flag this. rising interest rates are 4%. low relative to the other ones but coming on fast. starting to get worried about the overall situation with higher interest rates and the effect on the economy. put it all into the hopper and

we have this thing we've been tracking far long time. the probability of a u.s. recession in the next 12 months was as high as 36% back in august of 2011. relatively low right now. just up a little tick. it had been 14 and change. now it's 15.1%. the low of the series is 13%. despite, sarah, the geo political risk the concern about global economic weakness the chance of a u.s. recession remaining low according to this group of wall street respondents. >> that would be a good sign. thank you, steve. coming up an exclusive interview with the ceo of panera as consumers become focussed on nutrition and ingredients. how is their company responding? he has brand new initiatives to announce today. big day?

ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. what if there were only one kind of dog?

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are oil stocks telling us somebody about the oil commodity? find out on trading nation. catch our live version every day at power lunch. more "squawk on the street" right after this. leave early go roam sleep in sleep out star gaze dream big wander more care less beat sunrise chase sunset

do it all. on us. get your first month's payment plus five years wear and tear coverage. make the most of summer... with volvo. take a look at the industrial sector. every other sec nowhere positive territory. the industrials down very slightly. we have more back at hq. >> we're watching the industrials closely. it is currently the worse performing sector become dragged down by airlines like southwest and american airlines and delta all down by about a percent or more in the early trade. they're being led by united rentals. late last month the company had comments on the -- they downgraded the stock from a prior neutral rating.

they will cut rates further as activity remains weak in the oil and gas sector. back over to you. >> thank you. to panera unveiling a new add campaign. the focus is on health transparency all natural ingredients. panera showing off the new concept at a popup store where the head chef showed us around this morning. he made new meals with new simpler ingredients. here he is actually making me a very early breakfast morning salad. he said of course it has to have kale, and he told me about one specific example of one of the changes coming to the menu. >> here's a great picture of a -- of the mozzarella flat bread. a year ago it was a paninny.

we made it lighter and more contemporary. we have flat bread. that's a way of taking something old and making it new again. >> lots of menu changes going on. how far difficult how difficult is it to make them for a company with 200,000 restaurants around the nation. the ceo is with us this morning? >> good morning. how are you today? >> i'm good. i want to know how difficult it is. you have a pretty ambition plan to change 150 artificial ingredients, taking them off the menus. these new campaigns and this new transparency. a lot of changes. how difficult is it to pull off? >> you know, you know panera well. we've been on this journey for two decades. we were the first national restaurant to serve chickens raised out antibiotics. today people like mcdonald's are following us. it was seven years ago we were

the first people to pull nonnaturally presenting itself transfats from the menu. today you have the u.s. government literally today within an hour announcing all restaurant chains and all the food must do it. we did the same thing with calorie information five years ago. >> i was going to ask you about the new fda rules today. you did it nine years ago. what's the next thing that you're doing that the fda is going to ban? >> well it's interesting. we announced a year ago our commitment and our food policy we activated it 30 days ago when we announced our clean food policy which essentially represented 150 ingredients that you would not find in a panera. to us it meant essentially creating a simple transparent line in the sand so people knew when they walked into a panera they were going to get food that was clean and food that was minimally processed.

what's interesting to me is the way change occurs is it occurs to the marketplace. we've had any number of restaurant concepts that followed us to doing it. we announced it. within a week others were doing it and announcing some versions of what we're trying to do. the reality is the consumers want food that they can trust and food that's good for them and is good. and panera is moving to continue its two decade poilgs of doing that. i think they're going to continue to see others following. >> they're also concerned about the effective gmos even though our regulators say they're safe. chipotle moved to take them off the menu. are you going there next? >> we have 450 ingredients in a panera. our chag is how to know what is gmo and what's not. we favored the labeling so

retailers like us can offer transparency to our guests and allow them to make the choice. we cannot ourselves provide that information today. >> what about speaking of labeling, what about the new york department of health proposal to start labeling high sodium. i know some of the products are delicious but they are high in salt. are you opposed to such a regulation? >> no. i am in favor of those regulations and i think we may be the only restaurant company that is. we believe in transparency. i remember when there was a huge debate in our industry about posting calories. this was maybe five or six years ago. we were the first people that came out and posted it and i thought to myself why not post it? we're in the business of letting people make good choices about their food. let's give it to them and if you're embarrassed about what you're serving, maybe you should change your food and not try to hide it.

there are a number of items on our menu that have high salt levels or that are indulgences. but you know what? that's okay. as long as you're clear and you're making the choice and you're aware of it and you have the ability to make it on your own. >> are you going to have to raise prices for consumers with all the changes with new ingredients and the new ad campaign? tell me how you're thinking about prices? >> i don't think we're going to raise prices beyond inflation as we normally have. i think the reality is this is part of where we've been for several decades which is trying to make a difference in the lives of our guests. it's not complicated. that's why panera has been so successful. our stock has been up 4,000% in the last ten years. there's a reason. we're making a difference in people's life. >> what about the idea that you are refranchising to keep the

profitability high? a question from one of the twitter users is is it harder to make changes when you are passing more of your stores onto on to franchisees? >> well just to be clear, we have 35 and 55% of our stores company-owned. we continue to believe in that. it pushed above that at 50% level. we decided to modestly bring it down and announced we would refranchise between 75 and 150 stores and we're in the process of doing that. it's very easy for us and within our community or within people we know very easy for us to do and it's really just adjusting within our policy. for us a healthy mix of company and franchise is like asset allocation. you know we want to have

franchise stores when -- and for people to share the risk and have local skill and local operating skills. on the other hand we want companies to benefit from the kind of equipments that we're making. >> i have to say that i enjoy the 7:00 a.m. kale caesar. >> sara we know you love panera. thank you for being such a -- >> yes. pleasure. absolutely. take care. >> the krchlcarl? >> thank you very much, sara. we want to get to jane wells. >> carl the las vegas review journal has reported that the billionaire has died here at the age of 98. kirk kerkorian, a self-made billionaire helped shape las

vegas. he then built the mgm grand in las vegas before it burnt down and he's still, i believe, the largest shareholder at 19%. he gave away so much money over the years, carl and yet a very very private man, insisted that nothing be ever named after him. reportedly dead at the age of 98. >> jane, thank you so much. "squawk on the street" will be right back.

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the lone star state has established its own gold and silver. hi kate. >> reporter: carl, thanks so much. i'm standing here in rainy austin in front of the texas capital where lawmakers recently passed an historic bill. the idea is to store gold and silver and precious metal bars

underground here that would lure out-of-state gold back into the state on the promise of storage that might be cheaper. that's the hope. however, we're not sure what the reality will be. the university of texas investment management company, which is the country's second largest endowment fund with $36 billion under management has $645 million of gold currently stored in new york. bruce zimmerman says he will consider repatriating it but the details are yet to be seen. >> if the depository comes into being and if it is a robust member of the system and if the costs are equal to or lower than what we currently are paying and if we have physical gold then we would have it in the depository here. >> reporter: a representative

says it's the long-term goal and the fees will be competitive and over time generate profits for the state. now, the other point here is the idea that people can write checks that are backed by gold an alternative form of liquidity and a guard, carl from a seizure from the government which happened in 1933. >> good story kate. thank you so much. congratulations to kate her book is now in paperback as of today. >> that's it. we'll sent it over to jon fortt with a look at "squawk valley." good morning, jon. >> good morning. we have a lot to talk about. fitbit is maybe raising more money towards its ipo. twitter downgraded to neutral. and it's all about the games again. it's e3. that's coming up on "squawk hour." ...gas, bloating? yes! one phillips' colon health probiotic cap each day

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