>> 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. if you're running late today the universe is working in your favor today. you'll get an extra second. a leap second will be added today at 8:00 p.m. eastern time. this is being done to make sure that the atomic clock is synced with the earth's rotation. athens needs to make a debt payment to the imf. it is not expected to do that. the country's existing bailout program also runs out today. overnight european commission president jean claude juncker made a last minute offer to greece but the greek prime minister alexis tsipras is not likely to agree to the proposal.

we're going to be talking more with michelle in athens and she'll be joing us from there with the latest in a moment. first let's get a check on the markets. you saw what happened yesterday here in the u.s. with the dow down 2%. these are modest declines based on what we saw yesterday but the dax is down by about a quarter of percentage point. the cac in france is down by .2% and the ftse in london down by .5%. the markets continues down another .9%. after the declines yesterday with the dow down 350 points you'll see what's been happening with the futures this morning and so far things have been trading slightly higher. we'll see what happens but this is is coming after a big sell off from yesterday. >> did we look at asia? >> we did not overnight. we're going to in a moment. >> we're going to in a moment. >> because europe is not doing

much but asia is rebounding. >> yesterday we overlooked asia. >> i don't know if we overlooked it. >> 4.5% yesterday. >> we talked about it at the top of the show yesterday. >> when i say overlooked. >> we looked at shanghai a bunch of times. >> it's down by about -- >> that's big news. hey, we missed the story yesterday. >> we talked about it a lot. i'm saying i thought the markets were not focused. the markets were not focused on china the way they should have been. >> i would have looked at it right out of the box. >> shanghai was down 7%. you're talking about big swings. >> it was in bear market territory as of yesterday but if the world is ending and the financial markets are going away. >> we'll let you know. >> you would think it wouldn't be up 3%. so i think our futures are up 15 points or so. >> they're up slightly. >> we're going to get more on greece and asia and the markets but first we have other big stories we're watching this morning in corporate news because insurance broker willis

group is buying tower watson an all stock deal. that's implied equity value of about $18 billion. ge reportedly also now close to selling it's european private equity finance unit. they continue to shed financial assets and then at the top, microsoft taking steps to shrink it's money losing online operations. it's not going to hand over it's display advertising business to aol and sell map generating technology to uber. financial terms were not disclosed. they'll be focussing on the search advertising business. >> that's a huge step up for aol and that deal proving that it's worthy. >> joe, you were right. the dow is up about triple digits at this point. >> and 15 taking it's queue from

asia. and you said willis. but you didn't say what did you talk about willis and you also said bing and you didn't say bing like groundhog day, right? >> yeah what you talking about willis. >> if you say willis group is there anyway you can't say -- >> you know my kids run around -- i remember when mr. tee was here he gave out that thing and now my kids say i pity the fool. >> we use that a lot too. >> i wish i hadn't given it to my kids because i still needed -- when you start with the jibber jabber i need to say no time for the jibber jabber. >> yeah people are like who is the greatest business titans. >> you think mr. t? >> no i added him to my list of richard simmons, fabio, mr. t and shatner. >> oh yeah.

other stocks to watch, shares of uno therapeutics jumping. a ten year partnership including an investment of $1 million and the ceo will join us live at 7:15 eastern. today it's dale earnhardt junior that i'm thinking about in studio. >> add him to your list. >> exactly. >> apollo education under pressure. shares falling after they reported weaker than expected quarterly revenues and the chairman says the company has no mans to spin off it's chips business right now. edge fund janna partners is pressuring qualcomm to do so amid heightened industry competition. he will be a speaker at next month's delivering alpha hosted by cnbc and institutional investor. for information and tickets go to delivering alpha.com. >> let's take another look at

the markets this morning. if you want to see what's been happening with the futures, you are looking at a very big rebound. of course yesterday it was a 350 point decline for the dow. it was the worst day for the markets all year. you're also looking at the lowest close since february 2nd and the lowest close since march 26th for the s&p 500. you see the dow futures up by 143 points. s&p futures up by 17 points and the nasdaq up by about 34. again in europe it looks like things are down but not drastically. at this point, actually the dax is up by about .2%. the cac up by .2%. the ftse down by a third of a percentage point. in asia overnight there were big rebounds there. the shanghai up by 5.5%. hang seng up by just over 1%. if you want to take a look at oil prices crude oil was down by 2.2%. it was a three week low. this morning up by 37 cents to

58-70. also look at the ten year note. this is one place where investors were running too yesterday. you saw the yields down to 2.33%. this morning 2.368%. the currency markets have been a huge place of action. the euro closed up by 0.6% yesterday. that kapdcapped off the biggest reversal ever. it had been down as low as 109. the dollar is up against the euro. 11193. >> as we said i don't think we said it on camera but the euro soars yesterday because it's leaving or staying? >> or because so many people had shorts on the euro too. there's people short the euro forever. >> you think they're staying? >> think of what's going to start happening in terms of groceries. think about what's going to start happening in terms of pharmaceuticals pharmaceuticals. >> and nothing being there. >> it's easy to say i'm going to

stick to my guns and say no but we're so fat and happy and soft we don't know how much pain is inflicted over there yesterday he said only local people can only get 60 euros. people here foreigners are allowed to -- >> take as much as they want. >> you have to wait in the line though. did you see those lines? you're a foreigner over there, when you go to an atm, it's like -- oh you know there's a person at the atm and then i see them and when they're supposed to say do you want a reseat no i'm finished? when i see them say another transaction and i see they're going to make a deposit or something i'm like this is totally unacceptable that i have to wait for you to do two transactions. can you imagine waiting for 100 people at an atm. >> and then to be told you can only have 60 euros. >> that might be the end of the world for us. we might not survive that. we're way too spoiled and fat and happy over here. i'm starting to feel more

empathy. >> when you look at the unemployment play these are horrific depressionaler error. >> between a rock and a hard place. you either get more pension or. >> par of it is you can't imagine paying more than a 40% tax which is what most people are paying. you can't imagine some of those things adding up however at the same time they're there because of -- >> i don't know if you're standing in line are you sitting there saying to yourself these horrible europeans screwed me and i'm going to stand in this line and it's going to endened and i have to get away from these people or they've shown me how bad it is now and how much worse it's about to get? that's the question. >> i was thinking about you again. i think about you a lot. in good ways lately. >> lately. >> but reading the huffington post how this is yours, this is on you. and the whole stance is that --

the liberals want no one to ever pay for anything. and this is merkel being mean and sort of taking food out of baby's mouths in greece and it's going to be her legacy. >> that's the way it is there. >> i see it in huffington post and probably new york times but you can't have a debt to gdp of 300% without -- >> right. >> you made your bed. i'm sorry you have to sleep in it but it's not her fault. it's not germany's fault. >> they're working 18 hours a day. >> germany also benefitted greatly. >> let's get to athens and the latest on what is a dire financial situation. michelle joins us on the ground. michelle. >> you should know about a headline breaking across here in greece. it suggests that the prime minister is reconsidering going back to the table and looking at a last ditch offer made to him

you mentioned it at the top. there's one newspaper reporting. it is the newspaper of record here in greece. i rarely show it to you because they don't often have an overtly political headline to show but they're the ones reporting he's considering this last ditch offer. that could be a potentially big event here if it turns out to be true. there was no comment from prime minister tsipras when he arrived at the office this morning. if this is true it is contrary to what he said on national television last night when he was interviewed on greek state television where he insisted greeks should go to the polls on monday and he urged them to vote no. so that's the one big headline so far this morning is the prime minister considering going back today is the day that the imf payment is due and the program for greece officially expires.

it's more meaningful and has legal and technical issues associated with it that relate to the banking system. so it's important. the other headline is morgan stanley says a grexit is a 60% possibility up from 45%. you mentioned the lines at the atms. we check them every day. there out there every day. we pulled up to this atm. these people had been in line for awhile in the sun. it's very hot and about five people in and the machine ran out of money. so they had to go find yet another atm and then joe i saved a sound bite for you. you were on vacation last week. the antieuro rallies, there's always lots of communitysts. we found one gentleman showing us his communist flag and whenever i interview them i always ask them the same question to see what kind of answer i will get. >> many people would say there's no evidence in the world that

communism actually worked. for example the soviet union and cuba. why do you think it would work now? >> i think that the first time that humanity has tried to reject capitalism in favor of a society that will have no classes has failed because there was not the experience yet. people who are not prepared to face the new problems may lead the bureaucracy that came and formed the political kounltcounter resolution actually took the power back from the people in favor of a bureaucratic elite. >> it's not that communism is flawed. it's that the bureaucrats ruined it. >> right. and there's no connection between not having a sort of a profit incentive, an arrangement where there's accountability and the buck has to stop somewhere

and there's no correlation between communism and the rise of bureaucracy. can you have one without the other? >> exactly. how do you have the government running everything and then the government has to hire them to run everything. they go hand in hand. but -- >> right. >> whenever there's a vote no rally or antieuro rally, there's a lot of communists that want to lead the euro. >> it's not like it's gone from this country either. if you go to maybe you don't see it necessarily on the video that the networks show but in wisconsin during a lot of the recall stuff and union stuff there was communists all over. at least signs. >> really? >> yeah. >> maybe we just didn't do it right the first time. maybe it's worth another try. maybe we can try it in a small place like greece. maybe that's the place. ink you incubator. >> the reason communism failed is they didn't have the right

software. if they had big data it would have functioned. >> right. >> they didn't plan for those three zeros. thanks michelle. do you know how you say good-bye? do you know that yet? see you later? >> i've learned a lot of greek, yeah. [ speaking greek ] >> that means no. >> yeah they say that a lot. yeah. >> all right. see you later, michelle thank you. >> joining us on the squawk newsline is harvard university's larry sommers, the former treasury secretary and director of the national economic council. mr. secretary thank you for being with us today. >> it's good to be with you. >> last week you wrote an op ed in the washington post that laid out pretty dire straights. you see eventually historians will look back. they look back at how world war i started and they understand it. but do you think that might be

what historians do when they look back at this moment with greece? >> yes. i do. i think that it is a sad story on all sides that doesn't reflect very well on any of the prospects but the hour is getting later with the imposition of capital controls. seems to me that everybody needs to lift themselves up from their preoccupation with the next hour and a half and the next measure.

there needs to be a rate they can grow. fwrees is now 25% below where it's gdp was at a previous point and given that. if it does grow the debt ratios will improve and people will seek better out comes and more willingness to expect and carry out economic reforms. you have the prospect of getting a virtuous circle going. but it's not going to happen without a vision for growth and that's not going to come from people debating about whether we're going to incrementally adjust this pension or whether there's going to be three different rates or four different rates. the value added tax which seems to be a preoccupation of the

imf. >> what happens if greece does leave the european union? what happens if they bring back the drachma? a lot of people say that's the best thing for the economy. that's the first thing that would allow them to start to rebound. what's in it for the greeks to stay in the european union? >> it's a very dangerous experiment. it's certainly true that a currency that could be devalued could increase competitiveness that could help greek exporters. it would remove some important excuses for greek failure. on the other hand it's hard to see how the banking system would survive a switch to a new currency. a weaker currency would mean a very substantial reduction in real wages and the pensions

which would have tremendous political consequences. and i think a greece less tethered would be a much more uncertain place and that would inhibit investments of all kinds in greece which would be an adverse factor. not to mention the wider ramifications on the global economy so it's to be hoped that this marriage between europe and greece can be saved but there are no assurances and one decides a marriage cannot be saved. it's quite an uncertain road from here but my hope is still that a way forward will be found.

>> the constant talk is this would be much less traumatic than two years ago, four years ago, five years ago if the greeks actually lead the european union. do you think there would be broad ramifications beyond the greek economy if that happens? >> i'm sure it's less grave financially. that's because -- and this is important for listeners to understand. the european governments put huge amounts of money in. hundreds of billions of dollars. that money has not gone to the greek people or greek budget or greece's reserves. it has gone to replace banking loans from europe with loans primarily from europe. they have been much more than northern european financial institutions than southern european -- southern european

citizens. and i think that's important to recognize. but the consequence of it is that yes, i think there's less financial systemic risk than there was. but i think there are still other important kinds of risks. a family is never the same after a child is lost. >> greece also occupies a central geo strategic slot in the southeast of europe. there's others who lo covet that

territory and what the united states has been able to realize through it's alliance with greece. so i think an environment in which greece suffers economic and financial collapse is a costly one on a variety of nengss. >> i realize that you need to board a plane but we want to thank you very much for calling in this morning. appreciate your time. >> thank you bye bye. >> bye bye. >> thanks larry. coming up when we return, market strategists will talk to us about what the story means for u. suspect investors today. plus a big day for apple. the streaming musical service going live and taylor swift fans aren't the only ones excited. plus a proposal could have millions of workers getting overtime pay for the first time. first before we take a quick break here's a look back at this date in history. ♪ a number. but not every insurance company understands

the life behind it. ♪ 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 this morning. apple music begins it's streaming service today. unlimited access to tens of millions of songs for $10 a month. hoping to convince it's itunes account holders to sign up for that service and there's one already at this desk they wanted which is you. >> are you going to sign up? >> i probably will. not today but eventually.

>> let's talk about washington news. president obama announcing a proposal that would make nearly 5 million more workers eligible for overtime pay it would be just over $50,000 a year. >> joe is also a cnbc contributor. you were pretty calm before in your notes even before we saw the futures today. looks like at least at this point the stuff you told us is being born out this morning. why do you think the markets are up today? is it because of what we just heard? maybe it's not over? or they're shrugging it off because it's not going to effect us as much? either way? >> a lot of back and forth may

be getting attention to that minute to minute. the larger context is important in that this isn't just a referendum on greece. this is a referendum on broader global economies and the degree to which greece impacts larger economies is going to depend on the degree to which those economies are strong and we are seeing a lot of strength across the board globally so this is taking place where we're seeing economic resilience and steepening yield curves and economic data and good optimism. so i think in that context the markets are better placed to absorb some kind of shock. >> i've seen some things joe that is always fun to consider the worst case scenario. especially in the news business?

if there's a recession this time we got nothing. greece needs to take a stand because of portugal italy and pain and then you have smaller puerto rico but we'll talk about it and the new york times peace is load of debt global ailment with few cures. >> growth. growth is a cure. >> it is. the ecb wasn't in the form it was. five years ago it's different. there's a big backstop and the private sector holds so few greek bonds which wasn't the case five years ago but we need growth policies. it will help a lot. the problem is you have austerity and you don't have good policy. growth makes the problem worse. >> how can greece go until it gets reforms that allow for

growth? >> we need strong institutions. the governments change a lot and there's been default. that's a very good question. i wish i knew the answer but i don't. >> is it a european problem or a greek problem? >> well europe the thing about europe, if you look at germany, the unemployment rate was at a record low and they're very competitive. although the case in spain, though, spain has become much more competitive because they have a big collapse in wages so they become competitive. you have to set in motion a foundation of institutions that allows the growth to take place. the chicken and the egg. you have to have a way to collect taxes and there's a great new york times article a few years agatha the greek authorities were going over with helicopters or planes to see who had pools because people weren't paying taxes. so that's the problem and you should have the institutions first and collect the revenues to pay for the social services that you need. but that's the problem.

310 people declared a pool on their income tax statement. that's an example that people are avoiding -- you have to raise taxes to pay for government services. >> that's right. >> what i don't understand is why they spent so much time focussing on taxes on things like pools, on taxes over 40% that you know is crushing at a time like this. why they haven't spent more time on the real reforms like making sure you can't retire when you're 56. that seems like the most common sense type of things. the long-term structure reral reforms. >> i thought it was 56.7 and they're trying to push 58. >> i don't know. >> there is an intense demographic issue in greece which makes it in a weaker position than other countries but the tax question is important because you look at

something like ireland that has a very very low tax. went through intense austerity but has had a good recovery and when you have high tax you're inviting tax avoidance. that's the nature of the system. >> and you're taking money, if things are going right, that would be better spent in the private sector. it would be treated better. the capital would be better in the private sector. >> both of you think we're 2.5 gdp. things are going pretty well. >> relatively speaking. the problem is potential growth has come down dramatically. 2.5 is the new 4. >> you're staying long. >> staying long. yeah absolutely. >> equities and high yield. absolutely. it's going to be so easy for so long. >> okay. thank you. >> technically you can get a pension at 58 though. you're supposed to start getting it at 61. there's a group trying to move it to 63 and the latest plan is 67. >> 67 i know you think is like the new 97 but 67 is the new 27

just so you know. >> i know. feeling good about that. >> when we come back this morning. >> some day you're going to need that in your back pocket. >> when we return we're going to talk about why senior uber executives are being detained in france. first as we head to a break, take a look at yesterday's s&p 500 winners. not too many of them but there's losers too. check it out. ♪

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we're in the chairs looking at stories fascinating us and becky is changing shoes and joe is holding on to the shoes right there. are you a shoe man? you look like you could be at a shoe store. >> do we have any champagne. >> that's so nasty. i have been running around in those shoes. you can't drink anything out of that. >> i used to sell shoes. >> you did tell me that right. >> that's one of the things i have in common with al bundy. >> jack welch did too. >> i did a lot. how about al. al finally gets out of the stereo type and has a huge success. >> the modern family stereotype is a much better. he's sweeter, kinder gentler. >> i love him so much.

and katy segal got out of it with sons of anarchy. >> she's in pitch perfect 2. >> i've been wanting to see that. >> let me just lean back here for a second. >> oh man. >> i was changing shoes because those are flats. >> i do not have a shoe thing. i also don't understand websites that people go to to watch people step on bugs. >> or toes. >> or small animals. is that something -- >> small animal thing? >> stepping on bugs? watching people? >> no. >> there's a lot of fettishes i don't get. >> we're going to talk sort of business story. uber paris, the guys got detained. >> courtney love got surrounded by an angry mob or something. >> detained because now uber is running a service that allows --

this goes to your issue, any driver if you just have a car you can pick somebody up. technically this is illegal in paris. this is illegal in new york too. taxi drivers in paris can spend upwards of 240,000 euros. so you do understand how the economics are break down. so these guy versus did not detained and it's another piece of evidence of the fight against uber and the fight against the steady march of technology. >> the farmers and stuff block highways. the slightest thing that tamper with the status quo and not surprised that this is happening. >> but you have an economy -- and you're having this in new york city, these medallion drivers. you can talk to a taxi driver to understand what's going on with uber. it's a problem for them.

>> you go to the u.k. and a place like london. you were just in europe. those drivers have spent years creating what's called the knowledge where they train. they go on motor bikes every single day. it's like going to college. >> i put taxi the whole time. >> you understand both sides of the argument though. this morning we're focussing on the establishment getting thrown in but you also understand new technology pushing up and saying this is a faster way to do it. people that use uber love it. i understand why you would think it's great to be able to hit a button on your smartphone and have a car show up. >> shockingly i've never been in an uber. did you see birdman? >> i didn't. >> you have to see it. there's a part where his daughter is saying you mock twitter, you don't even have a facebook page you're totally irrelevant and i was watching going -- i mean the speech that she gave him, unfortunately it

hit home. >> as a result you started a facebook page? >> no. as a result -- >> i have news for you. i have breaking news for you, on this show you have a facebook page. you don't even know it. i was going to e-mail you. >> how do i have one. >> i think this facebook page -- thank you for the logo. this was created by you or possibly somebody at cnbc a couple of years ago. >> it wasn't by me. >> you're a part of it though. >> i don't know about it. i haven't shared anything. don't you have to do something to be part of facebook. >> during the next commercial break i'll show it to you. it's your page. it's not some random person that made the page for you. >> we're getting yelled at. guest list please. coming up, greece isn't the only place in financial trouble today. why puerto rico's problems could be even more worrisome to u. s. investors when squawk box comes right back.

welcome back to squawk box. let's turn our attention to puerto rico. the governor saying that it's debts are simply not payable. puerto rico $72 million. it's wildly held by u.s. mutual funds and investment accounts. the key danger is many may not be aware of that. our next guest calls puerto rico the greece of the u.s. and finds it ironic that the crisis is happening concurrently. she is a cnbc contributor. we're focused on greece but sounds like we'll be talking about puerto rico this summer. >> it's really extremely similar. >> how bad?

>> it's bad. what's interesting is that two months ago the governor said it's molly to consider we would not pay our debt and now he is saying it's folly to consider paying our debt. this is something that many people certainly i have seen coming for a long time. >> walk us through what may happen next. >> okay. so there are really three main issues with two issues as relates to the debt. one is coming up tomorrow. where is the money coming to pay electric power authority, general obligation bonds, july 1 is big interest payment date. then what's going to happen to the debt in terms of restructuring? and he has already pretty much said there's going to be restructuring so longer longer maturities higher

coupons. he also, by the way said, and those who are expecting financial gain should be ware kind of thing which to me is a direct comment to the hedge funds and distressed buyers that have come into the market over the past year. and then there's the issue of what do you do about an economy that's structurally imbalanced that's going to take a long time to fix and is going to involve major changes. >> how wildly held are these bonds? we keep saying -- everyone is like we don't know how wildly held they are. >> this is where my question comes into it. when i was in the business we had big offerings of puerto rican bonds and you would wonder why. they're doubly tax-exempt. >> there's some in every state. >> so instead of just getting like a mizzossouri go -- >> if you couldn't find the right missouri bond or if somebody knew they were doing estate planning and kids in

different states they might buy puerto rico bonds. >> are any of these insured? >> yes, a big chunk are. about 14 billion are. >> are we going to look at those companies again? >> they do have strong claims paying ability. they will pay. they don't have to pay all at once. they'll pick up the interest payments and maturities. now they will pay as if the bonds are never restructured. the stock of the insurance companies were down significantly yesterday. >> that's interesting. see, that's the deal. you wouldn't think who is the puerto rican municipal bonds. they have been pedaling these things. >> at the time -- >> oh i'm sorry. >> they felt they were doing the right thing. >> touting, pushing. >> advising. listen at the time puerto rico was a different situation. now go back to wildly held they are wildly held because they're

in muchtual funds. half hold puerto rico bonds and four out of the top five are oppenheimer funds. >> how could they prevent people from capital gains if they're buying discounted bonds and do pay at par? how can you say don't expect to have capital gains? give you a hair cut or 80 cents on the dollar or something. >> yeah i mean. >> that's what they're threatening to do. >> yeah. >> forget 8 cents on the dollar. might go lower. >> at the time you could do that. >> this is the really interesting thing that similar to detriot, we are now facing what was once held as you know a contract but when there's no money to pay there's no money to pay. what was interesting to me was in 1975 when the court overturned the moritorium on the

new york city note and my dad said the flag was not allowed to touch the ground in a very dramatic way. >> you meant detroit municipal bonds. you didn't mean where at the took the rule along and threw it in the toilet. >> no, i'm talking about detroit. >> just being clear. >> the u.s. government has come out and said as they have with every municipal issue going back to new york city that they are not going to bailout puerto rico and puerto rico by the way, unlike all of the states cannot declare bankruptcy which is one of the things that the governor has said now that is not right and would like the u.s. to change. >> thank you. >> thank you. >> you're going to be back i think a lot this summer. i think we'll be talking about this all the time. >> i'll be happy to come back. >> thanks. >> when we come back this morning, spinning off the contractor service as part of its business today. the new company ceo will join us after a quick break. ♪ but not every insurance company understands

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home improvement company masco is spinning off the contractor services unit called topbuild. starts trading today on the nyse. got a cool symbol. jerry is the company's ceo. you've been in charge of this division for awhile. >> sure. i've worked with the corporation

over 30 years. and for the last three or five years, i had been directly involved with these two operating companies that are going to be a separate public company in about an hour and a half. >> so masco makes a lot of stuff. and it had divisions that would go in and distribute the stuff you make and you'd have people that would install installation and stuff in. >> sure. two separate business models. great consumer brands. those are masco companies that people know. success driven by product innovation, manufacturing expertise. then another model. the companies that are going to be part of the company topbuild involved in the service business. so we are leading installers in the u.s. >> and you would call a topbuild

distributor or a place that employs guys and puts stuff in your house. your general contractor would say come out here. >> correct. we have 260 branches around the company. we have 8,000 employees around the company. and it's to partner with residential and commercial -- >> you split up but why is it better -- so would people not use you if they used somebody else's stuff and now they can use you? is that the rationale? >> it's about two different business models. >> 30 years of rationale was they fit together. why do they suddenly not fit together? >> strategic intent. >> what is that? strategic -- who -- the bankers involved in e the ipo tell you the strategic intent will be better this time? >> not at all. you know, new ceo came to masco

a year ago. the two separate models has been zus discussed for a long time. it was not so much the concept that was new it was the timing. >> does the timing have to do with the resurgence in the home building industry? >> it is. we think it's on track. we think it's got several years to run. we believe that's the right time to create this separate public company. again, it's all about masco creating shareholder value. and we think this is a good play. we think this is the time to do it. >> masco has been amazing to watch over the years. it's cyclical in a -- when there's a bad time in housing. do commercial stuff too? >> we do. >> what's the split there? >> about two-thirds of business is residential. the other third is what we refer to as repair and remodel and commercial. >> you have other stuff too. >> we do. we have a group called building services. and we are the experts relative

to understanding what goes on inside a home relative to proper air flow relative to safety and comfort. and energy efficiency. it's a big deal right now. consumers are looking for that. >> thanks. we've got to go a break, but across train in germany two out of three houses are solar. nt. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet?

it is the 11th hour for greece. hopes for a last-minute deal are dwindling dwindling. we have a live report ahead. juno therapeutics stock skyrockets. the ceo joins us for the new collaboration with cell gene.

it's time to drop the hammer in daytona. >> i'm dropping the hammer. >> no you're not. >> ahead of this week's coke zero 400 on nbc, dale earnhardt jr. joins us on the "squawk" set to talk the business of nascar and advertising. >> i'm ricky bobby. people used to call me big red but i told them stop it because there's only one big red. america's number one cinnamon gum. >> as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business new york city this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. futures earlier were showing nice rebounds. not quite as much now. we were up about 130 or 140 earlier and the s&p was up about 18.

but that is a rebound based on the 350-point drubbing yesterday which was the worst of the year. i think since 2013. unclear today whether the euro rebounded yesterday -- unclear whether this is because there are rumblings that maybe there are going to be new offers on the table. >> tsipras says he'd like to restart the negotiations. >> you have to have that anyway. >> some said there were new ideas and maybe tsipras said no or maybe he didn't. but there's movement here. you just wonder. so we'll see. that's what's happening in europe. that's been green and red so far this morning. mostly red. >> we saw it up a little bit this morning. so you're seeing a swing of about .5% in one direction or the other. >> the government considering a last-minute bailout offer by the european commission. prime minister alexis tsipras is not likely to agree to the

proposal. we'll have more from michelle caruso-cabrera in a minute. we also have a nice rebound in asia after the shanghai and chinese stock market moved into bear market territory on another weak session yesterday. but big rebounds over there today. but those have moderated as well. shanghai up almost 6%. let's tell you about other top stories this morning. president obama announcing a proposal that would make nearly 5 million more workers eligible for overtime pay. in an editorial on "the huffington post," president obama would double the threshold a salaried worker can earn and still be eligible for overtime pay. we have more details on that plan. we haven't really talked about that and the implications of that could be. apparently right now the overtime rate is $23,000 and this would go up into the 50s. >> right. >> that's pretty incredible in terms of how many people would get captured by that and what it would do to business. i'm surprised joe hasn't jumped on this yet.

>> i was getting up to speed on something else. i'm multitasking. >> okay. will etlet me tell you about other things this morning. chris christie planning to formally launch his presidential bid today. he'll be the 14th republican candidate to officially enter the race for the gop nomination. corporate news this morning, microsoft taking steps to shrink its money-losing online operations. the company will now hand over its display advertising business to aol and sell some map generating technology to uber. financial terms not disclosed. but here's the good news for microsoft. they will now focus on their search advertising business. binge. you like that? it will become the search engine behind aol next year. this is a new vote of confidence in new tim armstrong, verizon, aol combination. it means they -- if aol starts taking over lots of this type of business from other people it

could be big. >> you said who said binge? >> i don't know -- >> needle nose ned. dated my sister and told you to stop. you don't remember? steven. >> no but i used to read the columns. stanley binge. >> you're taking it to business. i'm take ig it to bill murray. . then he'd step into the pothole with the puddle. and he would start laughing. and finally at the end, he actually hits him. >> well if it's not enough to be references groundhog daying with we've got our own version here talking about greece. we will continue talking about it for the foreseeable future. michelle caruso-cabrera joins us live right now from athens. michelle? >> hey there, becky. what dominates the news here is what you were talking about at the top of the hour. which are these reports that the prime minister of this country

is considering returning to the negotiating table in brussels after a late night conversation a conversation that was confirmed with the head of the european commission. we have no confirmation that he's considering return. it comes from greek media reports. i would add this asterisk of caution here. every time there have been conversations between the prime minister of this country and. e the leader of the european commission they say they have made progress. the reason we had that massive 300-point rally in the german dax a week ago because he said they made so much progress. and then the whole thing was thrown out. let's wait and see if we get any confirmation from other people who would be sitting at the negotiating table to see if this is really something. today is a key date. today is the day that greece is supposed to pay the imf 1.6

billion euros. today is the day the program expires. perhaps that means the ecb has to take a step tomorrow to figure out if they're going to get even harsher with the banks. there was a big no vote rally last night. remember, this whole series this whole escalation of the crisis began when tsipras announced they were going to host a referendum on sunday about whether or not to accept the creditors' bailout proposal. there was a no rally last night. and what we see increasingly from the no people are they are far less concerned about greece leaving the euro. are you going to vote yes or no? >> no. >> what if that means you have to leave the euro? >> the euro it's okay. >> really?

>> yes really. >> why? >> as far as i can understand it's not about the currency that we have. it's about the wealth country owns. so the british have their pounds. they're okay. >> the british have the pound and they're okay. that's his rationale. it's not necessarily a bad way to think. for the first time that i'm here, i see a growing chorus of individuals who would like to leave the euro. we have no official polling yet on what sunday's referendum will look like presumably leading into the past weekend. greece still wanted to stay in the euro. but in the next few days we should see numbers. the tonality has changed compared to 2010 2011 guys. >> do you think -- do they seem like they have a good grasp of the ramifications of what it all

means? or there's a bunch of millennials over here protesting gmos with no knowledge of the science. do you see a bunch of young people that haven't got history to judge on what the ramifications could be or are they people that actually know the situation? >> they're actually i think a lot of them very well informed. they'll say things like it will be very tough at first. however, we will be more competitive. i've had people say we're going to be more competitive. we'll be able to sell things better. unemployment will get better. and they've taken a look at some of the economic arguments that we've had on cnbc now for years about whether or not greece should stay in or out of the euro. the people who very much want to stay are the one who is have debts in euros maybe outside the country. and suddenly they're going to get paid in drachmas if it returns. that's going to be devastating for them. the upper middle class very concerned, the poor less so. >> they should have thought about it before they did it.

once you're in, you can't get out. idealistically, it's yeah let's get out. >> larry summers told us the banking system there is not likely to survive it. i don't know what that means. if you have nothing to lose, you're not concerned about it at that point. >> michelle can i just ask one question. >> go ahead. >> it sounds like if they're trying to get some new deal on the table in e the next day or two, that deal can't be signed without the referendum right? so no matter what we're still stuck on this vote. so i'm unsure why people are -- the markets are even up -- >> is that true? >> well that's what i'm trying to understand. michelle? >> so i think what would be significant, if there was some kind of deal is theoretically alexis tsipras comes out and says i've been telgling you all

to vote no. but now we've been able to convince the europeans to give us something better. and therefore you should vote yes. right? and that would be substantially different theoretically. i mean we're talking about an -- we don't know if he's going to do it or not. but that's the idea. yes, we'll live with the referendum. ultimately i think people would like to see how do greeks feel about the referendum. we see this as a vote on your part as to whether or not you want to stay in or out of the euro at this point. >> all right. michelle, thank you. we will check in with you again in the next hour. right now for more on the crisis in greece, we're joined on set by the u.s. investment strategy "fast" allianz global investors. >> thanks for having me. >> we look at this and try to see what it means. up another 100-plus points

today. what do you think happens at least in the near term? >> our expectation is more volatility. but this could be viewed as a buying opportunity. keep in mind that greece has been an issue on and off for years now. but what's changed is the ecb. it seems like a far more potent central bank today after mario draghi's pledge in 2013 to do whatever it takes after it initiated. so the world and certainly the eurozone is in a better position today to weather this storm. and as a result this could be perceived as a buying opportunity. >> you could say that about the first half of the year. we've gone nowhere. has this been a buying opportunity for the first six months of the year? >> it depends on what your time horizon is. but for many who have a long enough time horizon, it makes sense. particularly those underexposed to equities. >> how long do you have to plan on being in the markets in order for this to make sense and what are you talking about in terms of the other aspect?

>> probably five-plus years. think about it this way. we're in a global environment of financial oppression even though we're looking to tighten in the united states. so that means the risk reward profiles on asset classes are somewhat different than they had been traditionally. and as a result bonds are just not attractive. sovereign debt is not attractive. core bonds aren't attractive. stocks are in many ways the least dirty shirt. >> when you say somebody who's underrepresented by the stocks in their portfolio, what is the proper allocation at this point? i realize it's different for everyone. but if you were looking at the traditional 80/20 split, what's the proper allocation for stocks today? >> if you have a long enough time horizon and i would say that's ten-plus years, then you want a significant exposure to stocks. you want 60 -- you definitely want probably more than 60% stocks. and certainly alternatives at times can be proxies for equities. so you might get up to 80%

equities. but at least 60% equities if you have a longer time horizon. >> would you put those in u.s. stocks or internationally? >> we'd be well diversified. each region has its pros and cons. in the u.s. the economy looks like it's improving. we could actually see some upside potential from stocks just because earnings really have been somewhat -- expectations have been managed there. and so we could see some upside potential. but valuations are not screening by in the u.s. the eurozone we could see -- certainly valuations are attractive now. sure we have this headwind of greece. if we could get past it that could be good as well. >> all right. thanks for coming in? >> thanks for having me. >> thank you. so apple. >> yeah. >> saw the market cap on the close yesterday. 717.

just saying. but when was apple the announcement of added to the dow? what day was that? where was the dow and where was apple? >> i don't know. what's the answer? >> that was 1795 and apple was 126 and change on the announcement. >> this is the s&p. so goes the -- >> saying that was a top. but now i'm worried because when i'm right about this and you know you said apple is not exxon and it's going. you're going to say well it wasn't apple. it was the overall market. it was greece. it wasn't apple's fault. >> now you're worried you're not going to get credit for your call? >> i'm worried you're going to attribute it and i'm going to say it doesn't matter what causes it, it's just the technical act of doing it. you know something is going to happen. and it really looks like it is. right? they topped the market out by adding apple to the dow, no? and does it get to a trillion dollars or do we go to $600 billion for awhile? >> we'll go to $600 billion before going to a trillion. still ahead this hour we've

got an exclusive interview with the ceo of juno. then with iran negotiations expected to miss a key deadline for that nuclear deal oil prices are back in focus. and it's time to drop the hammer in daytona ahead of this weekend's big race. we're going to talk to dale earnhardt jr. stick around for that and more. coming right back. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it.

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welcome back. cell gene and juno therapeutics announcing a collaboration. shares of juno soaring on the news. joining us now exclusively the ceo. a nice company to get into an alliance with in terms of the ability to add to your i guess, war chest for financing. >> well yeah. we're delighted. the money is important, but they're also a spectacular scientific partner. they're a respected global oncology company with deep roots in hematology. so we think this is transformative for us. >> celgene has built a $91 billion company on sort of rediscovering how potent the

derivatives are in certain types of cancer. i don't think of celgene as the leading company on basic science for immunotherapy. is juno? is that what celgene needs from you? >> i think they are a great science company. if you're going to be as successful as they are developing drugs and actually buying assets you have to understand the basic science. now, i do think we enrich their scientific credentials. our company is focused on t-cell biology and how you use them to fight cancer. that's something we think our company is very good at. >> i think it's okay for you to say, yeah they needed some additional research bona fides in t-cells. you don't have to say they knew everything. right? they came to you for a reason didn't they? >> good partnerships are based on making both partners strong. >> well they have a $90 million

market cap. >> yeah. >> what's yours? >> in the $5 billion range. >> so this is a potent alliance. >> it could be. >> in terms of t-cells, you're ramping up for certain types of cancer before the t-cells didn't recognize it as cancer? >> exactly right. cancer hides from our immune system in a number of different ways. what we do is take immune cells in the -- t-cells in particular. >> you take them out? >> we take them out, we put into the cell a new gene which allows them to find the cancer and then kill it. early results in leukemia we're showing patients that have failed other treatments. in the 80% and 90% range promising the earlier results. and also a number of trials due to start in solid organs. >> solid as well. right now you're talking about leukemias and lymphomas. is the gene conserved in solid

tumors? >> yeah. the gene we put in depends on the cancer we're going after. so we program these cells to find blood cancers, we target the cells towards a protein called cd-19. if it's a solid tumor, there's a range of different protein targets we'll use. >> so cd-19 is expressed by the cancer cells. why does the immune system not normally see that as not normal? >> because it's also expressed in the cd-19 example also expressed on healthy tissues. >> so how do you decide to differentiate between that? >> well the good news for blood cancer here is that even though the current t-cell wills get rid of the b-cells, they also expressed cd-19, we know patients can live without -- >> so it tells it to make the antibodies. >> that's right. one of the biggest cancer selling drugs in the world is one that does the same thing.

it does gets rid of b-cells as well. >> so it's interesting that immuno immunotherapy has moved away from just b-cells. and now t-cells seem even more powerful in finding a way to actually have a permanent solution to cancer. >> well let's hope so. certainly i don't think we've ever seen a more potent anti-cancer effective cell than the t-cells. >> that's kind of new. that's exciting too. >> it is. >> and there should be ways of looking at each different cancer and finding some way to make it recognizable to your immune system. >> yeah we think so. i think that's the -- >> not just taking out t-cells and modifying them. but other ways to do it too. >> that's right. i think what makes immuno immunooncology is we're seeing multiple approaches work. also check point inhibitors. >> uh-oh. viewers at home -- i'm

interested. >> whek points are antibodies. the way they work ultimately is they release your own t-cells to go after cancer. so to your point we're really understanding multiple different ways of going after cancer. that's what this -- why this partnership is so strong. we're a company whose roots are in cell therapy combining with celgene's rates -- >> did you cap your upside at all? what did you have to give away? >> i don't think so. we partnered rest of world rights primarily. >> rest of the world rights. >> yeah. >> what do you think, andrew? >> it's all over my head. >> that's not true. >> what does it mean for potential for cures down the road? what's the next step? what do people who have been waiting on new drugs, what does it mean for them? >> well i think this deal does two things broadly. firstly it allows us to invest even more in developing our pipeline expanding the reach of

the pipeline starting trials in other parts of they have world. and i think that's going to accelerate the speed at which we can get drugs approved. and secondly it allows us to go after other complementary approaches. and given how complicated the immune system is i think that's a number of big advantages. >> what a huge move. that's amazing. 20-point move. you must be happy. >> i'm happy for patients. >> i know i know. >> but it is you know science as you know is hard. it takes resilience and it takes thought. that's what this deal is all about. >> all right. very good. thank you. >> my pleasure. thanks for having me. when we return this morning a bold prediction for netflix or vibe -- subscribers numbers. more next. listen up team i brought in some protein to help rearrange the fridge and get us energized! i'm new ensure active high protein. i help you recharge

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welcome back to "squawk box." among the stories front and center it is official. greece's finance minister says his country will not pay its imf debt due today. big question now of course how will athens respond to a

last-minute proposal? also we have some corporate news. trian building a 7% stake in pent air. calling on the pump and valve maker to acquire rivals to consolidate that sector. at the alpha conference. with so many different stars. it's hosted of course by cnbc and institutional investors. and you can get more information and tickets by going to delivery alpha.com. >> do you think we're finding stories that relate to people that are, you know appearing there? >> no. i think we have such an amazing lineup and roster it just so happens that every single morning there are headlines attached to these people. >> it's incredible. >> and i don't say that with the sarcasm that's dripping on that side of the table. i just want to say. >> don't look at me. >> i'm going to scoot over by

andrew. >> i've already enamored us with millennials today. the management that would have a problem with that is far away, i think, in far away places. >> where they have no tvs? >> that's possible. i think there's only one. there's another guy who might have a tv. anyway also a wildfire fueled by high temperatures burning in washington state. at least two dozen homes have been destroyed. hundreds of others evacuated. giving some families only about 30 minutes to evacuate. and check this out. we have some incredible video out of florida. these are pictures of a driver actually jumping a drawbridge. the driver jumped the bridge as it was going up. police say they think he was distracted. they suspect he was dealing with his gps. fortunately they were treated for only minor injuries. he was cited for reckless driving. >> looked like he crashed once

he got over. >> he landed hard. >> remember dukes of hazard? >> it does look -- those guys are on commercials now. they're old. >> that's what i always wanted to do. >> what's that? >> you know, do what this guy just did. >> that cure you of your desire watching this? >> hey, now. i heard that. i don't know if anyone heard what he said. coming up, we're watching the price of oil as negotiators attempt to strike a nuclear agreement with iran ahead of today's deadline. we'll get a live report from tehran. as we head to break take a look at u.s. equity futures. ♪ never settle for verizon's overpriced gimmicks. try the un-carrier risk-free for 14 days you'll love it, or we'll pay for you to go back.

got a global market alert. greece says it will not make a $1.6 billion euro payment due to the imf today. futures, though at this point to a higher open at the moment. dow looks it would open 95 points higher. nasdaq 23 points higher. s&p 500 up about 12 points. and european stocks, we should say, are always off their lows this morning. all the result of some kind of speculation which i'm not sure i

understand that somehow there's going to be a deal ahead of the referendum or more importantly that something could get arranged such that alexis tsipras could tell the public you should vote in favor of this which would change the dynamic. that would be the big difference. >> we keep saying they're right on the edge of default, edge of default. then we say they're not going to pay the im f1f 1.8. it's not the default of the country yet. >> but the implication is they're not going to pay the debt to come. right. >> expected to miss a deadline to halt iron's nuclear program. joins us right now with the latest. >> that's right. it looks they're going to miss another deadline which is set

for tonight. the foreign minister flew back to tehran after consulting with iranian leadership. to get direction from the supreme leader on what he will and won't allow in any final agreement. in vienna, it's a full house of foreign ministers trying to clinch a deal in their last opportunity to do so. if they can't get a deal together in these next few days it seems very unlikely that they'll be able to resurrect these talks again. at this late stage in the game, both sides are blaming each other for moving the goal posts. amongst them, access to iran's military site. what sort of limitations are going to be on the research and development once a deal is signed and for how long. and of course sanctions relief. iran wants to know when that will kick into effect and what sort of mechanisms will be in place if iran is deemed to be reneging on their commitments. so a lot this week in vienna. >> thanks for that. let's get more on this situation

in iran and hone in on the set. founding partner. might also have some views on europe. i don't know what that's going to do to anything. >> yep. permeates everything. >> so talk through the iran situation and how that plays itself out and therefore how it impact this price. >> well, right now the happy talk is flowing from both secretary kerry and iran's negotiate that things are looking good for a deal. that means there's potentially -- there are 30 million barrels of iranian oil in floating storage, on tankers, in tanks potentially ready to hit the open market. we've seen the asian buyers all of them buying more iranian crude oil already. they bumped up to about 1.2 million barrels a day last month. it's on the rise because it's well suited to their refineries. so if there's a deal and that oil can flow that means an

oversupplied market is going to get even more iranian crude oil quickly because the share is very much on. >> and then do they let up? is there any letup in terms of -- therefore you think the price goes where in the next couple weeks. >> greece and other things have helped get us back to the lower end of this torturous range we've been in. this should produce a break down into the 50s. >> then how long would we stay there? >> i think just like last year the second half of last year is when we saw all the big losses in the market. it's when we just started to see the industry react. to retool for the winter season, that's what i think will happen this year. probably break 50 again in the third quarter as we head into the new year. >> is greece such a pimple that it doesn't matter in your world? >> well it matters in a couple

of different ways. certainly to the extent it's any kind of shock wave or hit to the european economy. anything that argues for a lessening demand only serves to crush prices even lower. so it matters in that regard. so the markets are shook up by it. >> okay. thank you. >> thank you. coming up nascar and nbc putting the pedal to the metal. the fireworks will fly this weekend at daytona international speedway. we preview this weekend's race with dale earnhardt jr. himself and nbc sports analyst steve letarte.

♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ 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. ♪ dale earnhardt jr. is fresh off a top ten finish out in sonoma and will be at the daytona international speedway this weekend which kicks off a ten-year partnership between nascar and nbc. dale is here with steve letarte. who's now an analyst at nbc

sports. i guess there's no bad blood. good morning to both of you gentlemen. what makes someone all of a sudden start winning and -- you're all great drivers. is it what happens in the pit with the crew? >> the crew chief, the car is very important. it's a big factor in being able to perform. the car's got to be fast. got to have good guys working on it. need a good crew chief to put all the right people in the right place. you got to have a crew chief that knows what a good engineer is, be able to bring those guys in. the crew chief's got to be able to rally everybody together keep morale up. >> so it's not being a centimeter away from other cars going 200 miles an hour. it's really the crew chief? >> well you want to depend on your driver not to make a million mistakes out there. you want to guy you can believe in when you're out there, but the car has got to be quick. >> for people that aren't true

fans, steve, i mean there's a lot that goes into staying in a certain place and letting someone else break the wind as you're going along. not everyone really realizes that that watches. some people just turn it on. >> yeah i mean the difficult thing about nascar is everyone can go out and play football or throw a baseball. but driving on sunday afternoon is a place none of us will get to. it's hard to understand the edge of control they operate in. if you get 43 of them together, it's fascinating to see how good they are and how close they can race. >> opposed to just for a layman how is it different than what is it called cart racing or -- >> indycar? i've never drove indycar. they're open pit and their cars get airborne pretty easily. and they go much faster than we

do because of the down force they have. >> what's the highest speed you have? >> we run about 218 to 220 at the front straightway at michigan. that's the fastest we get throughout the season. you get used to the speed. 180 to 220 you can't really tell the difference, to be honest with you. >> wow. >> because i've gone on a dark night i've gone 145. >> where? >> in indiana actually. >> on a highway it's scarier than 220 on a racetrack. >> it's truly a picket fence. you know you're going 150. >> do you have trouble when you're just driving down a street in a 25 miles an hour zone? >> no not at all. i had a lot of tickets when i was younger. i learned my lesson quick to stay under the speed limit when driving through town. >> is there anything bigger? it's tv audience but also the way you pack them into -- a lot of people can go to the stadium.

it's expensive too. in terms of dollars, is it behind football? >> it's behind the nfl. the nfl is the most popular sporting event. other than the nfl it competes with every other stick and ball sport. the beauty of racing is the size of the venues are unbelievable. it's hard to imagine. you go to a big football or baseball stadium, you might see 70,000 or 80,000 people. we go to these racetracks that have well over 200,000 people. indianapolis, the front stretch -- >> what's a ticket cost? >> there's a huge range. for less than $50 you can get into grand stand seats. just like some of the new stadiums daytona just had a revision to suites. there's higher end options as well. >> how much of your week do you spend thinking about the sponsors and the business of what you do relative to actually what's going o happen on the track on a sunday? >> i actually think that we're -- you know you're thinking about the business side of it every minute you're out of

the car. because that's a big part of it. i'm an owner as well in the xfinity series. so i understand what my car owner in the cup series is going through, what he's trying to do with his company and the moving parts, pieces that are in play there. so that's part of it every day that's in the back of your mind. sometimes at the forefront. and you have to be -- you have to do everything in a budget. and you have to represent your sponsors and make sure that they're happy and that you're doing a good job there. there's so many moving parts and pieces aside from just getting in the car and strapping on the helmet. >> you made some comments about the confederate flag that the only place you should see it is in the history books. you came out with that. how many -- let's say last year how many confederate flags would you see on a typical racing day? there were still some of them around, weren't there? >> yeah. we saw one this weekend at sonoma. they're at the racetracks.

you know, i think that -- i never really looked around and counted them. but they're out there. >> for people that had no -- i don't -- are there people that don't understand the tie with the past that's not -- there's something to be proud of. is there a way to celebrate the south or the nascar fan that it's a southern sport. is there a way to do it without something that has an implied racist -- >> yeah. i think we celebrate our southern heritage every time we race at darlington, for example. or daytona. and we tie a lot of what we do into representing and acknowledging, recognizing the military. we'll do that this weekend coming up at daytona. and i think that you know we obviously understand that our sport started in the south. we have a huge fan base in the southeast. >> want to keep them.

want to be inexclusive of everyone and realize it's a different world in so many different ways. >> just the schedule has changed. when i started in the sport in the mid-'90s there was a huge percentage of our races that were in only the southeast. and since then we've gone to las vegas and texas and kansas. we've expanded across the country. i think as the sport grows, so doesn't all the things that go with it. you have to see you're truly nationwide and worldwide. >> live sports is one of the few areas where you can still demand a premium. especially a venue that draws so many people to be watching all the time. i mean that's something that's changed over the course of your career too. >> this all the time. the best reality tv is sports. we just saw it with you know the u.s. open. no one knows how these sporting events -- they're unscripted. no one knows how they're going to end up. that's what makes sports the highest demand thing to watch in person and on tv.

what these guys do on the racetrack is remarkable. but to see it in every venue when it's competitor against competitor, you have no idea what could happen. >> who is really on a roll right now? >> kevin harvick. the 4 car has been fast for several months now. he got paired with rodney childers and they went to stewart-haas racing. we saw right away we were working to test in december before he won his championship last year and saw the speed right away from that team. i recognize them myself as one of our toughest competitors throughout that season. turned out he ended up winning the championship. >> when's it on this weekend? >> xfinity on saturday night from daytona speedway on nbc sports network. and sunday night in daytona for the big guys. >> steve's big debut this weekend. >> i'm in the booth. >> letarte or letarte.

>> i don't know. i'll have to see if you bumped my stock with this letarte. >> who are your top two country music stars now? >> i've always been a big dwight yoakum fan. >> and he's a great actor too. >> yeah. sling blade. how great was he. who was number two? >> i have to say sotomayorit's a toss up. george strait. my fiance would be upset if i didn't say george strait. >> he's an old school guy. >> he is. >> good luck this weekend. >> thank you. appreciate it. >> can't satey it too many times. coverage begins on saturday at 6:30 eastern. >> we're going to be watching. >> good. i'm excited. >> good luck. when we come back, can the transport sector get back on

track? we will open up our second half playbook and show what could be in store for the sector after the break. ete visibility into your business, it can quickly become the only thing you think about. that's where at&t can help. with innovative solutions that connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most.

welcome back to "squawk box." officially in correction territory with the index down over 11% this year. morgan brennan joins us with a look at what we can expect in the second half. morgan, good morning to you. >> good morning. we're going to expect that weakness to continue especially for rails and other carriers

that move commodities. but not so for the companies that cart goods for consumers. that's as more discretionary income translates into spending. that should be good for trucking which is how most consumer products end up on store shelves. following all the congestion at west coast ports. lower deez sell prices should continue to boost margins as well. given all those facts analysts like names like swift, knight and warner enterprises. all stocks have been hammered so far this year. a stronger consumer also means more demand for parcel carriers. u.p.s. and fedex will be gearing up for holiday seasons. expect them to put in new pricing strategies to focus on their peak network capacity. and something else to watch, more american consumers are buying goods from international vendors. a stronger dollar should propel that trend pushing u.p.s. and

fedex to continue cross border ventures. that's an interesting move we've seen in the last year or so. >> cool. thank you for coming in. >> thanks for having me. and i got to meet dale earnhardt jr. what an exciting day. >> the ultimate transport. >> yeah. when we come back this morning, our guest host for the next hour is the chairman of the atlanta federal reserve bank and the ceo of southern company. we'll talk about why the supreme court's epa ruling is a big one for his company. that's next right here on "squawk box." but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet?

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greece is the word. on the verge of default the country is rejecting an eleventh hour debt deal as a massive payment comes due today. larry lindsey is here to share his thoughts on the global economy, the fed, and more. greece isn't the only one with a crisis. puerto rico facing major deficit hurdles as well. why the governor there is seeking chapter 9 bankruptcy for its massive $72 billion debt. a live report straight ahead. and millions of americans could be getting more for overtime pay. a new proposal to be announced by the president. how it could affect small business.

the final hour of "squawk box" begins right now. can. live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" right here on cnbc first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen. we're less than 90 minutes away from the opening bell on wall street. dow looks it would open 127 points higher. s&p 500 up about 16 points and the nasdaq up about 31 points. check out markets in europe right now as well. things are looking up because there is new speculation that something is going to happen in greece. >> up down up down up down. we came off the highs. now back to the highs. europe went negative, positive negative, now positive again. >> but all on some kind of view. we're going to get to michelle caruso-cabrera in a moment that somehow a deal or something is going to be reached ahead of

this referendum such that tsipras or somebody can advise the people in greece. >> they always thought a deal would get done. referendum or not. >> well it changes it -- >> does it really? there's time. >> we'll see. maybe they can sign a deal without a referendum. it's on the table. >> they've been broke for how long? five years? probably longer. so i mean -- next month, the ecb payment is next month. >> why don't we try to get to athens if we can. greece of course the main story that is weighing on the markets. we should tell you among the latest headlines coming out of greece this morning, merkel says the bailout program ends at midnight. she's not aware of anything that

changes that. michelle has more of wast going on on the ground right there. good morning. >> so andrew we have confirmation now from the european commission the spokesperson coming out and saying the following. that the president of the european commission had a phone conversation with the greek prime minister last night about a last-ditch offer here which would be extremely similar to what was on the table friday night. the proposal that was rejected by the prime minister. however, also included in this would be a commitment to revisit debt sustainability. what does that mean? greece has a lot of debt as we all know. what this government has long wanted is a writedown of the debt. a real restructuring of it. what the europeans have said in the past is we're not going to write down your debt but we will wince again as we have in the past if you fulfill your commitments, we will extent maturities and extent rates.

so we may see inclusion of some kind of sustainability. that gives the prime minister a win, gives him an offramp to use the vernacular of our state department of our white house in this situation. but also would be a requirement for the prime minister to now campaign for a yes vote for the sunday referendum he has called up until now and maybe en last night he was campaigning for a no vote and rejection of the friday deal. so that is the latest that we have. we are waiting to see if this is real if the prime minister will really do it. and then if the rest of the finance ministers will go along with it. so a lot of ifs. but that is what's moving the markets this morning. another thing we want to tell you about, a member of parliament this morning, harry theoharris has tweeted out and said in parliament he knows for a fact and knows of plans by the current government to transition

from the euro to the drachma. they have a transition plan in place that they are working on. he said to me over the phone in his opinion that's what this government would prefer but that bottom line he says it would be irresponsible for them at this point not to be planning some kind of transition. so once again, harry theoharris who used to be the tax collector in greece confirming he said in parliament and on twitter that he thinks -- that he knows for a fact -- >> all right. looks like we are having trouble with that shot obviously. >> the guys did you see this latest stuff? >> from the german finance minister? >> yeah. one side says a no vote means you're out of the euro. but the greeks says it doesn't mean that at all. it's just a no against this plan. and merkel was sort of wishy washy on whether -- some of them said if you're out, you're done.

and he says that they also might be able to tab eu support fund and that the ecb would backstop the euro as well. so we don't even know whether the referendum means you're out. >> but what does it mean the. >> doesn't mean you get thrown out immediately of the euro. >> but if you continue to not pay the debts as they come due, that's bigger and bigger issues. >> i think there's a perverse incentive if you start coming up with plans to let them either stay or make it easy it just encourages spain and italy and portugal and everybody else -- >> rewarding bad behavior. >> that's why we're at this position here because the ecb had to stay tough. i don't know if i were in spain or italy or portugal i'd be pretty afraid. >> i'm be concerned too. >> ecb is tougher than in the past. >> that's right. let's bring in another voice on

this. larry lindsey and then our guest host for the morning tom channing channing. great to see you. let's start with larry. to me this has been an odd situation. trying to figure out who has the better hand at this bad poker game. who has more at risk to walk away from this? is it greece or the european union? >> well i think both have tremendous risk. but that's because both of them have very different objectives. ever since he was elected and he did his victory lap in january and february tsipras' goal is to transform europe. he called his election not just a transformation for greece but a transformation for all of europe. if you're angela merkel or draghi, you don't exactly want to be transformed. and they want to have some kind of europe by rules.

so when you have that kind of very different conflicting set of objectives, it's very hard to see how you work it out. and i've been kind of skeptical that they're going to get a work out. with this latest scam that i'm not sure how much substance there is to it. but i don't think that leads to anything. all that they're talking about now is will greece adhere to rules it has already committed to under the previous government. and then maybe we'll talk some more in october. i don't think that's exactly what tsipras has in mind. so i really don't think it's going to be followed through. >> michelle was just with us a moment ago and she's been talking to people on the streets who are saying at this point they'd like to just be out of it and bring back the drachma. what actually will happen? what's the downside for greece if they do bring back the drachma? we know the upside is they can deflate the currency and that will help their exports and tourism industry.

but what's the downside if they go ahead with that plan? >> well the key step here is repudiation of the debt. so if you can take 180% of gdp in debt and just kind of throw it off your shoulders, you're a lot better off. now, you have to pay a price for that. you don't have access to credit markets for probably two two and a half years. but suddenly the greek government and the greek people no longer have this enormous debt burden. now, once you get rid of the debt, i think it would be very hard to see how they can stay in the euro. but, you know the legalistic views in brussels and frankfurt will have to figure that out. that's the advantage going down this route. there's definitely going to be short-term pain. when you get cut off from credit and they are definitely a country that is in need of financial inflows. you know things are going to be painful in greece. >> sounds like they're already painful in greece. >> they're already very painful.

they will get more painful. but i think in tsipras' mind if they can work through that pain quickly, if they can devalue, then maybe by the time he's up for election again things will be looking up. that's their strategy. flip side of it is the creditor countries are going to be out that money that greece is going to be repudiating. and, you know that's not insignificant. it's about 2% of eurozone gdp. that's going to be -- have to be reflected on the national bank's budgets. the french italians, spanish are all going to take their share of the hit. you know, that's why they're not very happy about this either. >> tom, what does this mean? are there ramifications that will be felt here? >> absolutely. a value is a function of risk and rurp. how do we think about the value

of the united states economy with this going on in europe? you have event risk in greece and perhaps russia and a variety of other things. from a risk and return standpoint, what should we expect in terms of economic growth and what is the risk? what's the added volatility of a potential greek withdrawal or general volatility in the euro market? so it causes business leaders to be reluctant to commit long-term capital in light of this bigger volatility. we should know that increased risk in financial markets has a real cost of business. and so to the extent we're growing risk in europe that actually serves to kind of devalue future economic growth even here in the u.s. the not gone effects, the so what of greece to the united states is particularly important. think about what the fed is doing right now in terms of monetary policy. when do they lift off and when is the trajectory. >> you think it pushes a potential rate hike further? >> certainly. we got an interesting

conversation in this conference of chairs recently. and my metaphor to where the fed is right now is dividend policy. when a company makes a dividend decision, it's not about history. it's not even about the current period. it's about what are future expectations. everybody's fix sated on when is liftoff? is it going to be september or december or even '16? but the bigger question is what is the forward trajectory and how sustainable will fed actions be. if we can get to a period where we think we can predict with some certainty what the track will be, that will be the benefit of capital growth. because that gives businesses something they can rely on. >> and we do eventually probably need to get back to three or four maybe do you think? and that's four times four -- that's 16 raises. i mean -- we're going to sweat out every one of those 16 raises? >> exactly. and it's really three by 17 or

18. >> larry wanted to get started earlier. doesn't look like your wish is going to come true, larry. >> no. i don't think so. i think that the chairman is right. i thank him for his service to the fed. i think they're going to use this as another reason to delay. the problem is all the delays haven't solved anything. we still have debt building up. we still have distortions in the capital markets building up. and eventually the fed is going to find itself way behind the curve. and that is going to be, you know, a very disturbing event for markets and for the economy. >> all right, larry. thank you for joining us. it's great talking to you. >> my pleasure. >> tom of course will be with us for the rest of the show. we want to tell you about a couple of other stories in the headlines this morning. first up president obama announcing a proposal that would

make nearly 5 million more workers eligible for overtime pay. that change would raise the maximum income a person can earn and still be eligible to just more than $50,000 a year from somewhere around $24,000 right now. paychex ceo marty mucci will be joining us in a minute and will talk about this topic. chris christie will be the 14th to join the gop nomination today. and willis group is -- >> what you talking about willis? >> there you go. >> an all stock deal. equity value of $18 billion. >> different strokes. come on. >> what was that kid's name? websterer? >> gary. >> no. >> webster's a different one. >> that's a totally different show. >> was that gary coleman? >> yes. you guys were kids. >> no gary coleman.

and sadly, remember what happened to all those kids? >> dana. >> terrible terrible things that happened to all those kids. >> there's a -- you can learn. there's a lesson there. coming up a new strategy -- >> starting early in life. >> starting pretty early in life. get you all messed up if you rush yourself. >> explains a lot. >> too which is also -- deal with that every day. new strategy for powering america. solar. lithium ion batteries. natural gas. we'll talk the futures in the crude world. check out this futures at this hour. we'll be right back. the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪

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let's get back to our guest host this morning. for his pulse on the future of alternative energy. you have a pulse. >> yes sir. >> okay. you're a very animated guest. whenever we have you on. we have some guests that do not have pulses. anyway, tom fanning chairman and ceo of southern company. if you're long-term on crude

prices but you've still got to be involved with it. >> absolutely. >> but these are one of the long-term things you were talking about. >> that's why you have to play a portfolio. if we ever try to get in the business of predicting you're lucky if you win half the time. >> we just heard if you believe kerry and you believe the guy from iran they're getting close. that's 30 million barrels. we're going back down probably. right? >> i had a good conversation with john before i got on here. it was really interesting stuff. yeah but it's going to be low for how long? >> i don't know. >> but one of the things we were talking about -- i think up with of the things we underestimate in america is the advance of technology. when you think about what's happened with natural gas and the technology revolution that permitted directional drilling and fracking and the whole bit, look at what that's done. in my view there's more potential to unlock more natural resources in america. that's why and we chatted about this in past shows.

that's why i've been in favorite of exporting everything we can for the benefit of the broader economy. southern company is like the third or fourth largest consumer of natural gas in the united states. and yet we're all for unlimited exports. i think that will lift the boats and the bigger effect to us will be a growing economy really helped. >> you lose every time over the past three or 400 years unless you thought buggy makers would -- >> nobody can predict the future. >> well talk about this epa thing. is that a positive for you? the scotus decision? >> it remains to be seen. the d.c. circuit really says that the rule remains in effect until they figure out what they're going to do. they could send it back. >> the supreme court was saying you need to toss -- it can't just be wow this might be bad,

you know 100 years from now and it's going to cost $10 billion until then. >> here's the point though. forget the tactical situation of what the supreme court just said. the bigger issue is and i've said this is million times on here. as a ceo of one of the most important companies in america in our industry we have to balance clean, safe reliable affordable energy for the benefit of the customers we serve. the only other entity in america that has the lens to make that balanced bet is congress. because right now since congress has kind of during this last administration has been rather frozen, right? and so we're having policy made by regulators. think about it. epa, clean safe, reliable affordable. epa can handle clean. but they have no way really to assess reliability or affordability. that's why policy needs to be made in congress and let the

regulators kind of enact the policy that's put into place. >> you know you think that those writers in hollywood don't know anything. you remember the original simpson movie, do you know who the villain turned out to be? they kept saying epa, epa, epa. it was the epa. >> i think epa is well intentioned. >> oh, jeez. that makes it all right then. >> no, no, no. [ overlapping speakers ] >> they are good intentioned. they just don't have the ability to assess affordability and reliability. >> gee, let's all act on well intentions. >> they have to take into account. >> idiots act on good intentions. >> i didn't say it was good, i'm just saying that's what they're doing. that's why regulators can't make policy. >> but they are now. and they have been. that's what elections are for we

keep hearing. >> piece of cake. >> we'll have more from tom throughout the morning. coming up, is it too risky to invest in puerto rico debt crisis? the governor there saying they allowed them to file for bankruptcy much like detroit. then later the president to announce sweeping changes to overtime pay. paychex ceo will join us and give his read. "squawk box" returns in a moment. these two oil rigs look the same. can you tell what makes them so different? did you hear that sound? of course you didn't. you're not using ge software like

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puerto rico facing an historic default on their debt. >> good morning, andrew. i'm standing in front of the capitol building in san juan the capital of puerto rico where lawmakers are grappleing with remarks made to the notion that $72 billion in the island's debt was not payable. in an address last night, garcia drove his point home with some strong remarks. he said in the past the government could sweep the problem under the rug asking for more loans. now is the moment to face our problems and deal with them once and for all. the debt is so high that we don't have access to the markets. now, that may be a little bit of an exaggeration at this point, but his point holds true in the fact that government projections in a study they just commissioned shows at this rate

by 2025, new loans could double their dead -- debt loan. so what's next? well lawmakers will have to decide what they can do from here. right now people are facing a deadline of tomorrow to pay $416 million on one set of puerto rican bonds. and it's really not clear that there's the political will to embrace some of the solutions including for example the idea that puerto rico as an island can file for chapter 9. that's an option only for cities. in the meantime, markets reacting badly to this news this week. you saw the bond insurers who were exposed to puerto rico tumbled yesterday. and the bonds tied to puerto rican debt has tumbled in terms of their face value. >> okay. kate kelly, thank you. i imagine we're going to being

seeing a lot from there over the next couple weeks. thanks. when we come baa b, the state of business. and as we head to a break right now, look at the u.s. equity futures. different picture from yesterday. this morning looks like the dow futures are up by about 110 right now. s&p up by 14.5 and nasdaq by 29 points. "squawk box" will be right back. ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one.

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welcome back to "squawk box" this morning. let's take a look at some stocks on the move. pentair shares are jumping after a 7% stake was made. pushing for pentair to consolidate the industry by buying its rivals. nelson peltz will be a guest at the delivering alpha event that takes place on july 15th. also conagra matched profits. the food maker share is getting a boost. however, announced a new plan to boost profit margin including

the private label business. and fitbit shares are higher in the pre-market trading as coverage of the stock is an outperform rating. rapidly gaining share in a growing business world. there you go. will rtall right. bill gross warning part of a shadow banking system. he says that those funds are in effect bank bs that are not required to maintain reserves or emergency level cash. and a topic we've been mentioning throughout the show president obama announcing sweeping change to overtime pay. extending pay to nearly 5 million americans. here to discuss this and give us paychex's monthly report is marty mucci. steve leisman here as well. let's start with marty and the implications. good, bad? what's going to happen here? >> well it always adds more

cost to small businesses. you know we want to make sure that people are paid right, but when you increase that many into the overtime bucket, it's going to put a lot of pressure on small businesses to reduce overtime hours and drive more productivity from existing workers. >> long-term don't you think what will happen is just base salaries will get reset? >> well i think so. but in the short-term it does put pressure on small business who see a positive economy right now. but now booming yet. so they're being very careful to add workers. this just puts more pressure on them to keep their expenses down. >> steve, this is the jared bernstein proposal right? >> i'm having a hard time getting behind it. when i think it through and maybe tom can help me out with this. i've been thinking about it this morning. is this idea that olympics so i don't want to engender all about this other worker you brought

on. and the net result of that is a less productive worker. because the guy you want doing the overtime is the guy who is -- or the woman -- who was doing the job ahead of time. now you bring in another person. i'm not sure the macro of this scales up to being positive for the economy. plus i am totally and largely in favor of getting workers more money. and i don't mind putting pressure on big business to take profit from them. i do mind putting pressure on small and medium sized business. >> that's interesting -- >> you want people to get more money because they produce more. >> yeah i want them just to have more money -- >> without any conscious about production. here's the deal i would have as a ceo of a company, especially little businesses, to say we want to reduce overhead in business. you don't want to have gunk the the engines of commerce. all we're doing now is increasing overhead. we need to reduce the size and cost of government. >> is this absolutely going to

happen, by the way, marty? >> not sure. looks like it's getting close to happening. again, as you guys are saying it's going to put a lot of pressure on small and mid-sized businesses. they're going to try to drive productivity within the 40 hours to keep the overtime costs low. >> steve, that actually would be a better thing. >> in other words, do it in the 40 hours. think about a personnel who works this extra time. right? they're -- and then the small business owner has to decide do i pay this person time and a half or send this person home. that person's paycheck is going to be lower. >> why are you willing to be confiscatory of a larger company but not a smaller company? >> i think there's an out of whack balance between shareholders and employees at the moment where there's absolutely no bargaining power on the part of employees.

this has resulted in one of the finest profit levels of gdp that we've almost ever seen. >> what do you say to that? [ overlapping speakers ] >> -- six years of slow growth. >> i think that's kind of a short-term argument. >> it's been going on for like five years. >> but i think it's kind of garbage though. really you've got to meet employees halfway or more. you can't just drive everything to the bottom line of a corporation. really viable corporations in the long run meet the interests of all of the stakeholders. got to make it all. >> i get so tired. but i'm glad you're here. someone actually in the business. seriously. i'm exhausted. i've only been back two days trying to answer -- >> it's a heavy lift. >> it is. >> in the long run companies, great companies pay attention to employees.

in the right way. >> and when you're trying to keep good employees when you're growing at 3% or 4% when you're trying to keep them the marketplace allows for things to all balance out. >> and growth and providing opportunity is -- >> i started -- and i look at why the market -- why -- >> you rarely arrive anywhere near the marketplace. >> i almost always do, joe, that's the thing. >> all right. >> why the market is not providing workers with the gains from productivity increases. that suggests to me a huge lack of balance and bargaining power on the part of employees. >> interesting point. >> you can't deny tom, that the data show that wage growth has lagged productivity and that capital has accrued almost all the gains of productivity over the past several years. >> that's a false argument. if you look at the top 40% of

workers in america, yeah, they're doing pretty well. it's the bottom 60% that haven't done particularly well. hang on. when you look at just the data you've got to look at where the jobs are being created. and the problem with one of our economic recovery issues right now, jobs are being created in the service sector. they're being created in part-time sectors and unemployment looks better because disaffected workers are making the statistic look better. >> marty, he's got the numbers. he knows these numbers. is that true? you're listening to this conversation. >> you definitely are seeing an increase in part-time workers. that's a good point. we're up to 8% of the total workforce. that's up 1.5% from a year ago pen 2.5% from two years ago. part of that is the affordable care act i think is driving employers to be a little more careful about hiring full-time workers. but i do think -- i think workers have a bit more to say. it's more competitive to get

workers into your business. i agree you've got to take care of your employees. >> i know you have the small business index. let's talk about it here. top states for small business employment, washington retaining the top spot. and the top metro for small business is now dallas? >> well, dallas is -- yeah. dallas has been at the top for some time now. dallas has been a very strong market for employment. texas overall dropped a little bit. i think that's the oil and energy jobs going down in houston. washington state is back in the top spot. a lot of high-tech jobs you'll see in some of the areas there in the mountain region is back up. overall, pretty flat. >> is that right? >> houston dropped -- houston's dropped for a few months in a row now. i think that's the spillover from jobs down a bit. overall pretty much flat. >> nice to see detroit up there. >> it's jobs thursday this week.

have you guys been talking about this? >> we're still on greece tuesday here. >> why are you sighing? >> my number. >> that's the best part of the month, isn't it? it's like your little drawing and stuff. we're looking for 233. so i'm just wondering -- the reason i bring this up today is focus so much on greece by the end of the week we start to refocus on the u.s. economy and what it's doing and whether the market gets redirected. >> everybody's on the edge still on the greece, right? >> no. i don't think that's right. i think a strong jobs report could put greece in some context. >> put household incomes up. that's what i'd focus on. just recently. >> steve, thank you. marty, thank you. >> thanks. >> have a great july 4th. up next is the power grid at risk of a cyber attack? the deputy secretary of energy will join our guest host of southern company to talk about this major security issue. by the way, tomorrow on "squawk

box," the countdown to thursday's jobs report begins as steve just teased. we'll have the adp report coming up tomorrow. and then we get reaction from nobel prize winning economist robert shiller. "squawk box" will be right back. defiance is in our bones. new citracal pearls. delicious berries and cream. soft, chewable, calcium plus vitamin d. only from citracal.

♪ ♪ ♪ (singing) you wouldn't haul a load without checking your clearance. so why would you invest without checking brokercheck? check your broker with brokercheck. welcome back to "squawk box" this morning. a growing number of hack attacks have raised cyber security over the past year. when it comes to protecting our nation's grid our next guest

says government needs to team up to manage the threat. joining us is deputy secretary of energy. liz, thank you for joining us this morning. we're thrilled to have you. scare the heck out of everybody, or i imagine you will. when you guys think about the worst possible threat or what's really in front of us what is it so we just understand what could really happen? what's realist snick. >> good morning. you all know as well as we do the threats are dynamic and evolving and serious. we're working closely with tom and his colleagues in the electricity sector to ensure we can keep the grid strong against any threat it may face. whether it's manmade or natural. whether it's virtual or whether it's physical. we've got lots of work to do together to ensure that we can keep the power on for the american people. >> and liz, when you talk about

trying to create a partnership with business and trying to create a partnership with people like tom what does that look like? in terms of information sharing what does that look like? >> in fact liz, the technology systems of -- >> hey, tom. >> hey how are you? >> i'm great. good to be with you. >> nice to be with you. talk about the escc work and kind of the broader expanse of what we're doing in the information sharing technology and systems. >> so we have an extraordinary partnership with your sector tom. what we're doing first of all is evaluating the threat together through technologies that we've deployed to work with you to ensure that everybody has an understanding of the threats that we face. then we share data in realtime through systems like the crisp system we implemented. then the department of energy does lots of work to do research and deployment of new technologies that we can put out into the field for the use of

our utilities and power sector. and finally we're strengthening our partnerships. as you know, we're doing terrific stuff through the electricities council that you and i chair. you and i for leadership of our government. and there we're doing things like exercising together. we just finished a big hurricane exercise. and in the fall we're going to do grid x-3 which will be a big test of the resilience of our electricity sector against cyber threats. the point is we've got to work together because as you know better than i do, 90% of the infrastructure in the electricity sector is in private hands. >> so you guys are going to do an exercise. this is like a hacking exercise. are you going to hire white hat hackers to hack the grid? >> this is like a war game for the electricity sector. and what we're going to do is work together. we have a secenario we developed and we have thousands across the

country to work to test our ability to respond and mitigate a threat. that's something you know we do in the defense world and we're doing it in the electricity sector to ensure we can deliver power to americans come what may. >> hey, liz, and we are -- it's fun to criticize government sometimes. liz is one of the celebrities in government. she has a distinguished national security background. in fact she has her own kind of nickname i found out. she's lsr. that's who she is. liz, talk about the importance not only of getting the electricity sector right but the so-called lifeline sectors like telecom, water, finance. >> thanks, tom. this is one of the very important innovations that tom and i have developed together. that is we need to bring in the other sectors of the economy that will be involved in any crisis that we face. so, for example, the electricity

sector is dependent on the oil and gas sector. we need the communications sector because we know in a crisis whether it's a hurricane or an attack on the grid we're going to need to be able to use communications to communicate quickly to the american people and restore capabilities. we need other sectors as well. what we're doing in these exercises is bringing in other sectors to make sure we coordinated well in advance and we asesed where the gaps are and we work together to fill them before we face a real crisis. >> hey tom, just because you're on the ground both of you were on the ground but you see it every day. i assume there are hacking attacks constant. >> constant. >> on your grid. >> sure. on the grid, yeah. in general there's a million different kinds of ways people try to interfere. >> right. >> so grid is one. there could be a variety of others. >> we haven't had a major grid go down because of cyber attacks. that we know about. >> correct. >> do you think that's realistic? is that a very realistic

possibility over the next couple years? >> so, you know -- >> how connected are we? >> the doomsday scenario is always one we think about but we work exceedingly hard to avoid. so in the short run is it possible? yes. we work like dogs to assure that it's not likely. and i think this notion of linking together technologies understanding critical infrastructure understanding the systems that are critical to running that critical infrastructure and then understanding how we share information. at the federal government it's a challenge. among private industry it's a challenge. and the boots on the ground at local and state levels. then finally we've got to link in with international. it is an e mor-- enormous task. but to be working with liz and other sectors that we're now working in realtime trying to pull together this

interconnection. she said asynchronous events. we can't create this notion of an imaginable line. >> tom, is there -- i mean, is it a viable possibility that there's a solar event if it were to hit us head on? >> that's exceedingly unlikely. it would only occur most likely in the northern part of the hemisphere. the thing that creates the northern lights is what you're talking about. exceedingly unlikely on the broad part of the united states. >> how exceedingly unlikely was it that a tree falling in ohio could actually -- >> can i offer something to reassure? >> yeah. please. we need the reassurance. >> sorry. i want to offer something for the american who are watching. the threats are serious. one of the things we have going for us is we're the most dynamic country in the world in terms of generating new technologies to meet challenges. the reason i'm speaking to you

this morning in al ber kerbuquerque is i'm here to visit our labs. our lab here is doing pioneering work on cyber capabilities cyber capabilities to ensure that we have the cutting edge capabilities to defend against any threat. we're working hard to ensure that whatever comes our way, we're working to meet it. >> thank you for joining us this morning and for working to keep us safe. thanks. >> great to be with you. >> you don't want wifi to ever go down for my rids or something. >> that would be a disaster. >> i mean, if that ever happens. >> my point was how exceedingly unlikely was it that a tree could have brought everything down here. >> that is a market structure problem. that's a little bit provocative in the united states. there's two kinds of markets in the united states. i think those markets that deregulated for make move and

sell moved to their disadvantage in terms of availability. that's where that happened. >> when we come back we'll catch up with jim cramer and get his thoughts on yesterday's big slide. volatility is the name of the game. we've been watching the futures and the dow is up by 112 points. s&p up by 15. ♪ every auto insurance policy has a number. but not every insurance company understands

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let's get with jim cramer. market is looking up over 100. do you attribute it to people just sort of hoping that something comes of at the last minute from greece or did they decide, you know, no matter what happens, the market was buyable? >> i think it's more of the latter. there's always been some optimism mistaken about these talks. i think the greece government seems to be bent on giving up nothing and you forgive two-thirds of the debt and we'll stay with you. the greek government very unrealistic, seems to not have a backup or drachma in place. they talk a big game.

i think the people in greece don't like the fact that the atms don't work. to me you have an opportunity to do some selling. we're not out of the woods yet. i think we will be. but at the same time, it's one of those moments where we seem to be too optimistic about what's going on there and then after everything falls apart, we can pick up the pieces. the euro will be stronger and things will look good. >> all right. we'll see you in a couple minutes. >> when we return tom fanning's view of the energy industry and what it will look like ten years from now. 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.

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our guest host today tom fanning is the ceo of southern company. we were talking a little bit about the future off camera of the industry, what do you think? >> it's fascinating stuff. in any element of corporate strategy you need offense and defense. i think we will have what people call distributed generation coming to the floor. >> what does this mean. >> traditionally it has been make, move, and sell. make generation units. move was transmission distribution lines and sell is

meters. i think the future is smaller dispersed pieces of generation, whether it's a solar panel on your roof or a panel in your basement. then there's storage, electric charging, kind of equipment. you might have this. we're in a joint venture right now with nest. they have an adaptive thermostat thermostat. we think they may evolve to a server to your home, anything in your house, asset value $100 or more will have one. it will be the next quantum leap in emergency efficiency. we're trying to invent our future and not be driven by it. >> it's a pleasure to have you today. >> great being with you. >> then the whole thing can be hacked, right? talk about hacking the grid.

>> you can't be scared of that stuff. >> he's a good ceo. see why he makes money? >> you can continue this conversation offset. >> thank you. that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ >> good morning and welcome to "squawk on the street." we are live from the new york stock exchange. the latest s&p case shiller price report has been released. you can see the results at the bottom of the screen. let's look at futures this morning. we are looking for a positive open after that hit yesterday. it got worse as the day went on. how about the ten-year note yield. yields coming