>> live from new york where business never sleeps this is squawk box. >> good morning and welcome to squawk box on cnbc. i'm becky quick. take a look this is a live picture outside of the greek parliament this morning. it's a very differ scene than we saw last night in athens. things got violent with protestors clashing with riot police. the greek parliament approved an austerity bill. it passed despite a significant level of descent from the governing leftist party. former finance minister was one of several prominent members of tsipras's ruling party that voted against the bill. this crisis is far from over. today the ecb is gathering for a regularly scheduled policy setting meeting. we'll have a live report in just a moment but first let's take a look at the u.s. equity markets.

yesterday markets didn't hold on to the morning gains. the markets down for the fifth day in a row. you can see things picking up this morning with the dow futures up by 85 points. s&p futures up by 11 and nasdaq up by 37. >> flat yesterday? >> down by about five points for the dow. >> yeah. >> let's tell you about some stocks to watch. >> barely down but ended down for five days in a row. >> you know the dow is one thing. comcast was up. i just happened to see it. not that it matters. >> a couple of stocks to watch. intel with better than expected quarterly results. growth in it's data center business that helped offset demand for pc's that used the company's chips. we'll talk to an analyst about all of that. also netflix shares are up sharply. company adding more subscribers than forecast in the latest quarter helped by overseas expansion and that stock rocketed yesterday afternoon and ebay nearing a deal to sell

their enterprise business for about $900 million. they're lead by mara and sterling is in there and next -- is it next monday ebay and paypal officially separate. >> but we have seen so well insurance companies, health insurance companies are are fairing under obamacare and all the deals and these horrible mergers and scale you have written about. there's a lot of mergers forced by obamacare which is an unintended consequence. but unh trading on a high anyway. it's a dow component and the company reported $1.64 moments ago. well above $1.58. revenue was also ahead because the estimate was for

35.6 billion and instead they were able to post 36.2. the company is also raising it's full year view to 625 to 635 and that is versus expectations of 626. analysts are already in that range but now we're at the high end of the range above where analysts have been but not that much above given the second quarter and there's a couple of other metrics they're talking about about. revenue was 13.6 billion and cash flow from operations they also raised to 8.4 to $8.6 billion. it's actually trading lower. looks like this morning but you can see it's had a great run. now back to the big global market story and that is greece. ecb policy makers meeting in

frankfurt right now and julia is there -- let's see -- i think it might be afternoon there. good morning julia but you have to say good morning back to me. it's weird. >> good morning. i'm okay. i'm good at that. we had a positive last night. ecb sandwiched in the middle. speculation that mario draghi is going to increase the liquidity to the greek banks. i think he is going to need more guarentees that this third bailout deal is even going to go ahead. still don't have a signature on the dotted line. while i've been meeting here i have met a few germans that aren't happy with the way that the german finance minister handled the negotiations. we have protestors outside the ecb. the grim reaper walking around. making yet more rude gestures apparently at the germans too.

i spoke to one of the protestors that said that the german government has been lying about the greek people. that they're not lazy. but that's what we're being told today. she wants him to open the greek banks and write off the greek debt and give them lots of cash. a lot of expectations surrounding the meeting today. back to you. >> good morning. >> thank you very much. good afternoon back to you and we'll see you soon. despite last night's vote in athens the greek crisis is far from over. here's what larry fink told us on squawk box yesterday. >> after greece parliament passes it then you're going to shine everything on to berlin because you're go to have to have the germans pass this and they promised by friday. so we'll have this rolling tension as each government has to approve this new loan package and then probably the most important issue that we have not focused enough about it is the bridge loan. it's essential because it will

take time to approve the new package. greece needs money next week. >> we have seen the latest stuff you saw. the euro area said to aagreed in principle on the loan. >> but there was something else i saw that sounded like they wouldn't be extending the credit to the banks immediately. that's a huge question too. those bank versus been closed about 2.5 weeks at this point. that is one of the things they have been waiting on. >> they need six parliaments here but apparently at this point -- this is coming from mark grant who the last thing he wants to do is -- >> inflame things. >> say it might work because -- >> he's been very vocal. >> it's stuff that makes it look like it's not going to happen. >> i always go back and see the rest after i see those things. we've been watching the futures this morning and as we showed you a big move to the upside this morning. dow futures up by 85 and the

nasdaq up by 36. watching what's happening in europe at this hour also green arrows there. the dax in germany is up by 1.5%. same story with the cac in france. ftse up by half a per centcent. overnight in asia remember what happened the day before with shanghai. it was down about 3%. last night it closed up by .5%. similar story with the hang seng and the nikkei in japan and oil prices, check this out, crude oil yesterday settled down 3% to 5141. that was the lowest settlement since april 9th. things picked up a little bit. a gain of 1%. check out the ten year note. at this point it looks like treasury yielding 2.387% and the dollar was the big story yesterday too. it was the euro ended the day at 109. that was the lowest level since june first. this morning it's falling even further. 10898. dollar is also up against the yen and gold prices are down by

$3.60. $1,143.80 an ounce. the 5th annual delivering alpha conference bringing together the most important players in asset management to try to tackle the critical issues facing investors in today's economy. it was hosted by cnbc. we were all there but in case you missed it kate kelly has the highlights. >> good morning. it was a great day packed with interesting ideas. one thing that made an impression on me was bearish thinking about various points in the world. certainly china, not saying that they're headed downward in terms of the economy which is still growing at a slower pace and stocks had a rally in recent days but there's a lot of concerns about what the stock market givebacks and government controls might be triggering or indicating. greece an area of concern, puerto rico, energy continuing to be troubled. looking for another big leg down

in the future's prices and equity prices and low growth in the u.s. and the question of whether the environment here will be jermaine enough for janet yellen to hike rates as she indicated she's going to do. there was an interesting commentary on what if you take a step back you would see when it comes to the u.s. economy. >> if you had just been off on mars and came here and looked at that one chart of gdp you would say gosh i wond for the fed is going to ease. you woen be talkuldn't be talking about tightening. but the fed wants to get off of zero. i can see why but the economy hasn't really been able to corroborate the hope they have been feeling. >> against this backdrop i didn't hear a lot of generic bullish sentiment like i really like consumer stocks or everyone should be buying energy stocks or a sector like that but there

was stock pick. often based on you know assets like real estate. one example would be macy's. jeff smith unveiling a situation that resulted in a huge pop in the market. one of the issues is the enterprise value is $30 billion. 20 plus of which is real estate and he thinks the company should split up. a few similar ones on an ethan allen stock pick. they talk about platform specialty, nomad and valiant which isn't thought of that way. those are all ackman names but he likes them too and finally on the distressed bond front richard perry among others said they like paper in those areas. one of my favorite bits of dialogue was on andrew's panel where he got into it with richard perry about puerto rico. let's hear what they said.

>> you look at detroit and michigan and it has the lowest percentage of 25 and under that have a bachelor degree and it has the greatest flight out of the state. so you have a decreasing population that's going to be able to pay taxes. that's the worst place in our country. puerto rico is worse than that. if you continue to have a shrinking population base those debt to gdp ratios need to be funded by somebody. >> they're not leaving. that's the misunderstanding. they did leave detroit. they're going to the warmth and that's what's happening all over the world. >> so if you think about puerto rico, it was talked about in a recent op ed in the new york times. there's part time opportunities,

weakness of the government. >> so do you think richard perry just thinks that long-term it's like florida. people will ultimately get there? >> well he had an interesting point which is these general obligation bonds are are a super safe name to be in and they're protected. >> talked about the triple tax. >> sure. that's a reason to get in but he's probably -- >> triple tax benefit does you no good. >> right. the thing about puerto rico. it's a mull lay wrered situation. 16 different issuers and i think he's right that the geo bonds are probably a fine place to be. jamie dimon wants to look at it through infrastructure. >> he's involved with the energy plants there because the energy plants don't run efficiently. it's twice as expensive to pay for electricity there as it is here in the continental united states and he thinks that's a safer way to go at it. he himself said he wouldn't go into the general obligation bonds. >> i noticed that.

so he also said he thought greek bonds would trade at par and quantitative easing. >> i thought mary's view on china was interesting. >> she had her hair on fire. >> she said understand china. i couldn't tell if that meant don't touch china -- it was unclear what ultimately you were supposed to do about it. >> i agree. i talked to her recently and she thinks china is important as a catalyst. maybe their issues will remain contained but when you start to see a stress point like that and you see the concern it creates within broader market sentiment you could see unwinds elsewhere. she sees it as a buying opportunity but the question is where to buy. there's such divergent point of view on japan and whether it's a great opportunity or not. he likened it to the u.s. in the mid 1980s and also said he thought china was an interesting place to be on the long and the short side but i couldn't tell

whether he was recommending getting in or not. what did you think on japan? >> it's been a descent trade so far. the question is whether it's like -- i think it's going to be tough to next place. >> the question is your duration. how long are you going to stay. >> thank you. >> good to see you after a long day yesterday. >> a good day, productive. >> great day for cnbc. when we return much more from delivering alpha including donald trump's finances and hear from ted cruz. we'll do that next but first here's a look back at this date in history. ♪

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how do we deliver alpha in government? do we think washington is performing the way it should? or could it perform at a far better level? my number one priority in office is economic growth because it's foundational to opportunity and number two i would say income mobility. if you think washington is going great, that we just need someone to fiddle around the edges, then i ain't your guy. i like donald. he's bold. he's brash. he speaks in a way that i wouldn't speak but i think that it's important to highlight

illegal immigration. in 2013 -- >> even in that way? >> it's not the way i would have done it but it's interesting that all the republican candidates smacking him for saying that every one of them has been a vigorous proponent for amnesty for many years. i disagree with them on that. let's be clear i'm running to win. i expect everyone to collapse. at the end of the day i will readily plead guilty to that. >> john harwood turning things political at yesterday's big delivering alpha event. he joins us on set this morning. did you have your breakfast thing with cruz already. >> yes. >> did you ask him why he wanted to meet with the donald so much? >> i did. he said he tries to be cordial with all of his republican candidates. become friends. >> it wasn't sort of a --

>> well no it is. ted cruz believes that we're having this little summer sensation around trump. it's going to fade. he's going to go away but where the votes going to go? the 10% of the vote he's drawing in national polls and he wants that vote and by defending trump on these immigration comments and by signaling that he thinks he's glad trump is saying what he's saying. bold and brash like he said here it shall i presume that meeting went forward yesterday. >> did you read andy's piece today? >> i did not. >> he just talks about the gop is going to end up like panam. in a world that has left it behind. right now conservative hispanics will vote for hillary clinton. right now conservative gay people are going to vote for

hillary clinton and this is what i complained about last time. listening to people that want to be fiscally conservative can't join the stupid party because it won't come into the 21st century. >> it's a huge problem for republicans that the power of the people donald trump is speaking too and ted cruz is trying to ingraciate himself with prevents the party from moving and modernizing. every party trying to compete nationally goes through period where is they're not. democrats had a long period where republicans dominated presidential races that period is now over but the only reason that democrats were able to do that is bill clinton came along and many other democrats realized we have to change the way people see us and republican versus to do the same thing.

>> it should be the demographic shifts in that piece that puts the current democratic make up of the country on previous elections from al gore would have won. you cannot get elected with white men in this country anymore. it's not going to happen. >> when ronald reagan was elected you had 90% of the electorate was white. more than 20%. now we're looking at 70%. so 30% is going to be nonwhite. that is an overwhelming edge for democrats and republicans have to do something about it. >> we should all have to read arthur's book too. >> the conservative heart. >> did you see any of his interview yesterday? he's so eloquent about to who present what conservatives are

trying to do. >> what you're talking about and all elections are about trying to win the vote. >> first trying to get the nomination unfornlttunateunfortunately. >> there's been complaints about the primaries. >> watching hilary turn into bernie sanders and republicans turn into -- >> interesting thing on cruz and bernie sanders ted cruise was trying to position himself as the candidate of average people and entrepreneurs rather than wall street establishment types and he said the democrats haven't become populous they're the party of the rich. >> can you explain to me this view that somehow trump is going to fade? what is going to be the trigger that's going to fade him? because i'm surprised he's doing as well as he's doing now. >> and he has given up and said here's what i make. a lot of people thought he would drop out before he had to say here's how much i'm worth. >> do you believe it? >> i don't know what to believe.

>> the reason he is going to fade. he's not going to be president. he's not going to be the republican nominee or a serious factor when we get deep into the race and the reason is when we get to actual voting -- when you move from this summer season of having fun and listening to people and the michelle bauchmann, hermann cain phase people look at someone and say could this person really be my president. no one is going to -- no decisive group of republican voters is going to look at donald trump and say he should be our candidate. he's going to be our president. it's not going to happen. >> no matter how much you want it to andrew. >> so when that moment comes and does it come in october after we've had a couple of debates? does it come in december or january. >> were hermann cain or michelle bauchmann ever leading in the polls? >> they were in certain places.

michelle bauchmann was leading in iowa and won the iowa straw poll which has been cancelled this year. in part because she won it and when we get close to them donald trump is not going to be in the finals. >> so fragmented and if 6, 7, 8 people have 3%. >> that's the challenge. >> and so multiply that the 17 -- i like donald trump. he's a loyal friend of mine and christie said that yesterday. had a very successful show for nbc as well but i don't think necessarily -- i'm not even sure -- knowing the donald -- people thought he would never even -- he's threatened to do it before and i guarentee you he's enjoying -- even though he's lost some business stuff but he's enjoying what's happening and i'm not sure it's hurting

the trump brand. >> there will be more business when this is over if he doesn't get there. >> and that would be an ego thing to lead the field even though you probably aren't going to get the nomination but to have people and to have the things he's saying resinate in a certain way with certain people. both sides are starting -- and then the weird conflunence. it's weird. >> i asked him yesterday what are you going to do if you don't make the cut in the debate. he said i'm going to make the cut. ted cruz. but his campaign put out a letter yesterday to call on fox to have better criteria or clarify their criteria because everybody is concerned about getting cut out. interesting response from the fox vice president. he said i'll be very happy to

see when ted cruz is president and he wants to tell all the television networks how to do their business. >> do you think that ted cruz has a better chance than donald trump? >> i think their chances of winning the republican nomination are equal. >> they're about equal. >> but you just said you din think there's a chance that trump could do it. >> that's what i mean. >> he covers politics and he knows how to be political. >> ted cruz's chance of winning the republican nomination are not zero but they're not very much above zero. >> thank you. >> you bet. >> there we have it. >> when we come back we'll get to more of today's top stories. plus neil young says no more streaming music. we'll explain why. yesterday was the first time in five days that the markets closed lower. you can see the morning things are popping back with the dow up about 90 points. squawk box will be right back.

♪

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and andrew ross sorkin. neil young the latest artist to ride the antistreaming wave. he said he won't allow his music to be streamed anymore. took to facebook yesterday posting i don't need my music to be devaled by the worst quality in the history of broadcasting or any other form of distribution. he's been a critic of i think mp3. >> doesn't he have a company -- >> it's a -- it improves the audio of any of this music and that's what he has been heavily invested in. >> taylor swift with drew her catalog from spotify last fall saying the business shrunk her album sales. young made the decision not because of the money but because he didn't feel right about selling his fans such low quality music in terms of the audio and then we know that he got mad about -- about people borrowing his -- >> about trump por rowing his

song. so my whole idea of squawking in the free world. if we were to use that -- >> not sure he'd sign off on that or not. >> sing it. take it away. >> but we have been playing it all morning long. he never got mad that she sang rocking in the free world when she was nine. >> that's because she's so cute doing it. >> sehe got a lot of views at this point. >> how many. >> 8,000. >> go blake. >> let's tell you about other stories front and center. we're going to be hearing from citigroup. goldman sachs coming up and ebay and black stone among others and then this afternoon google is the name to watch and on the economic front weekly jobless claims at 8:30 eastern time. in europe an ecb decision expected at 7:45 eastern and we'll hear from mario draghi at 8:30 eastern time. we'll be monitoring what he is saying and among the stocks to

watch this morning, look at united health earnings and revenue because they're topping estimates. the company raising it's full year out look. mrs. quick. >> were you on hs trading. >> i did not mention it. >> we showed the quote at 124. it's bidding 128 and asking 129 after a 12586 close so that will be well into all time high territory. united health care is up 3 this morning. >> our guest host this morning is roger altman. thank you for coming in today. >> good to be here. >> we have been watching the tick by tick for greece and the rest of the eu for months at this point. it looks like the deal passed the greek parliament even though there were riots that broke out in the street. you turn around and it looks like the euro area saying this

morning they agree in principle on an additional bridge loan. that's pretty important news. where does that leave us at this point? >> you'd have to say the chances of this whole thing going forward are better than if they don't. meaning this 86 billion euro rescue actually comes to pass and the conditionality as the lenders call it on the greek side or austerity is implemented but i don't think it's a certainty because this is so rickety all around and broadly speaking it's unfortunate. yes it's good that greece is staying in the euro. that's a good thing. we talked about that together on this show before a couple of times and i expressed that point of view before and ultimately it would stay in the euro. i'm happy about that. >> if both sides want to stay in the euro they'll stay in the euro. even you saw teesipras clearly wants to stay in the euro and he said, you know he talks a good

game but he's sort of been good cop bad cop. merkel i think wants greece to stay in. she doesn't want to preside over the first crack in the euro zone, right? >> right. but what i think is unfortunate is the right way to solve this would be austerity -- round three of austerity on the greek side but debt relief on the creditor side. it's evident. the imf has been very clear about this not being ultimately solvable without debt relief. >> more than reformulation, you want a hair cut? >> i think it would have been the right way to go. now they're not going down that road and this is better than the alternative. >> and they couldn't step back. >> i've personally been involved in a number of situations and

when you do have debt restructuring you typically reduce the debt in exchange for concessions or corporate situation in exchange for equity but you have to cut the debt town. that's what happened and all the big rescues in the united states. general motors chrysler and so forth that's what historically has happened either in other government situations so i just think this is better than the alternative. it's good that grace is going to stay in the euro. this deal probably gets implemented all the way down the line. it's not the best overall. >> in a true union the players all say we're all in this together but it's still germany and it's still greece and the germans are saying no they lived beyond their means and the greeks are saying the germans are -- >> it's past the point of having lived beyond your means. >> but it's not a real union. it's not like we're all in this together. >> they have 19 separate members of the euro zone. each is sovereign.

each with it's own legislator and executive. so the german public is obviously hard over any concessions of this type or debt relief and that's driving the hard line german position. >> explain one thing to me on this. we spoke to richard perry yesterday on this panel. he said he thinks three or four years from now that this deal will be a great deal for greece and that actually all of these bonds will trade at par. do you -- by the way there were other people on the panel that did not agree with that at all. where would you stand on where we are three, four five years from now. meaning does this plan work? >> first i would think it would take longer than that for greece to begin to truly move up but if you do look at ireland and you do look at some other cases, you see that very often, eventually

labor market reforms and pension reforms and other reforms do eventually unleash some animal spirits, market forces and these economies recover so i think four to five years is too optimistic. it's more likely to be 10 to 15 but will there be a stronger greece? there will be. >> some reforms in greece still hasn't been done in germany in term of the labor market. >> but if greece truly did restructure -- that's a great place. i mean it could be great. >> none of these situations are directly analogous and none of the greeks would say we're like the irish or irish like the greeks but they were in a debt storm and it's not roaring back like some house on fire but it is recovering but the types of steps they took are analogous. >> the irish will say they

embraced the program. >> they're suffocating socialism in greece. >> and four to five years is way too optimistic but we'll see. >> i don't know. it's pretty nice. those islands. shares of netflixs up strongly on survivor growth. the view from the street coming up next.

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>> welcome back everybody. inobstetrical beating the street on the bottom and the top line saying that growth in key business sectors offset a challenge in the market. alex covers the company for jmp securities and this is a report that impressed on all levels.

that stock was up by 8% yesterday. what happened? >> well becky, i think coming into this call most of the street was expecting a miss. certainly jmp securities was. this was a bit of a relief bounce here but what we're pointing out is all intel managed to do is exceed missed expectations. revenue is declining. inventories climbed on the quarter. the company brought down full year expectations. gross margins are contracting and that's not the kind of environment where we think investors should be running toward this stock. >> wow. that's some tough talk especially after the surprise on the street. i will grant you that the company has tough numbers to live up to. it's promising to continue to cut costs. what would actually make your change your mind and say never mind. i think this company is doing all the right things. >> well we'd have to see a fundamental change in the

landscape. intel is ceding market share and doesn't have a strategy working in mobile. it appears to have abandoned it's activity rather than forging ahead with a foundry strategy. we'd rather see capex going up rather than down. it tells us that intel has concerns about it's own intermediate term out look. that's why they made such a desperated by for altera. >> thank you for joining us this morning. great talking to you. >> thank you, becky. >> netflix stock this morning. that stock on a bit of a tear. however, it's worth noting these folks are spending a lot of money. i mean a lot of money. so strategically you have to be betting that this is all going to workout. why is everybody so

enthusiastic? >> well i think what we're see as good that netflix has created a product that people like as much or more than pay tv so it's priced below that. they have a lot of room to grow revenue per subscriber, so grow subscribers domestically and internationally and they don't face a lot of pressure to grow their content as aggressively. what we saw in the quarter is evidence that what we were seeing in survey data is playing out. sub growth was better than expected. the margin with were better than expected and expense outlook was better than expected so we're taking up our price target 10%. >> any disappointment that they aren't planning to increase prices in a meaningful way? it seems to be that as you get high resolution they'll be charging more for that but otherwise not.

>> i think what they're doing is the right way and not the wrong way. the right way is to put in a price hike that people don't notice and becomes an annuity that grows 5% a year through all kinds of less noticeable ways. charge extra for hd and multiple streams and perhaps overtime clamp down on the writers out there. they have easy ways to push up pricing at a mid single digit plus pace and each dollar tropical waves $700 million to the line. each subscriber drops 100 million. they have limited profits right now but tons of margin as they get paid for t you know basically what they put together. >> barton, one of the other things analysts were noting yesterday, maybe less about netflix and more about their insurance in the marketplace especially when it comes to washington is the role they're

playing in this charter deal with i'm warner cable which is to say that they are behind it. explain why they were behind that but not the comcast deal. >> what charter agreed to do is appear in connection with netflix without an extra charge for a number of years. that's something comcast didn't want to do. so this concession in netflix's view is what they want for their business but they think is good policy in terms of an open internet that has lots of content accessibility and not pipes leveraging their advantage. it's also helpful for the netflix story. >> we're going to leave the conversation there. we appreciate your perspective this morning. >> thank you. >> coming up fed chair janet yellen heads back to capitol hill today to face a senate panel including our next guest. pat toomey will join us when

squawk box comes right back. ♪

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fed chair janet yellen will testify on capitol hill for a second day. this time in front of the senate banking committee. senator pat toomey joins us now. i saw the big headline everywhere. hands off the fed. don't think about any rules

based legislation for the fed. where are you on that whole issue, senator? i don't know whose seat the pants are flying by but there are some seat pants flying at the fed at times, isn't there? >> oh, you think? it's just unbelievable. i guess my biggest question would be when in their lifetimes will my children see a normalization rate or is that too much to ask for? maybe in the next century if not this one. it's unbelievable what's been happening to me. i've long felt that a rule would make a lot of sense. this completely subjective moving the goal posts -- i mean the fed -- chairman yellen makes a big deal in her testimony about transparency. yeah, there's been some transparency. but the point of transparency is to provide useful information. the fed no longer has credibility. and you can see that.

the i did vengeance between the futures markets and the fed's own projections about what they're going to do about interest rates. this is a huge problem. i don't see how a rule would be worse if we pass legislation imposing a rule they'd have to explain when and why they were doing it. i think that'd be much better than what we have now. >> you know republicans don't like collectivist government where you get 100 smart people and they make decisions. we need 550 people involved in the decision making of the fed? i mean sometimes it's better to have someone that actually has -- you know can make a decision quickly and effectively. rather than kicking it around. we've all seen what you guys have been capable of for the past -- >> i get it. i get it. and i've never been wild about the idea of giving congress control over monetary policy. but after seeing what this fed has been doing for these many years now, i'm not sure it'd be

any worse. in any case, i'm not suggesting congress get up every money and sed the funds rate. >> who gave them the dual mandate? which is basically anything goes. >> that's what it's become. >> since they're kind of different, it's like if one's not -- you know if you satisfy one because you're always working on the other and if you satisfy the other, there's more work to do on the other. so you're in constant control of -- it's like the economy depends on the fed for everything instead of vice versa. >> and we should be learning by watching what's happening around the world how dangerous that is. it'd be interesting to see what ms. yellen thinks of the chinese experiment here. right? nobody's been more aggressively interfering there. their monetary policy there goes further all for the purpose of inflating assets. i think it's very dangerous.

i think it's reasonable to ask the fed to adopt the rule. tell us what the rule is but follow that rule except under very unusual circumstances. i think we would have more predictability and maybe we wouldn't have these dangerous experiments. >> senator, good morning. it's roger altman. let me ask you this. let's look back for a moment at the lehman moment and the role the fed played in the immediate aftermath of that. how would a rule whereas you just said the fed would have to come to congress and explain why it wanted to deviate from that rule have applied in the circumstances of 2008 where ultimately the fed supplies $13 trillion of credit support to the economy and without the fed we would have collapsed. >> yeah. i think there's a role for a central bank to be a lender of last resort. i think it is better if that is limited to the actual banking industry. i think we have -- one of the problems with lehman made it clear we didn't have an adequate

mechanism for the complex financial institution. i've got legislation that would change the bankruptcy codes so hopefully we could handle it in bankruptcy and not have to have the government come in and force taxpayers to do a bailout. but i think a rule for monetary policy providing a general guideline, that monetary policy is going to be set is a good idea. then if there are extraordinary circumstances as i said as the lender of last resort the fed can step in. >> i noticed something real quickly. in our conference last year, we -- the martian analogy is big. last year it was you look at unemployment, you look at all these different things and then you see that the fed's at zero and you'd be shocked. this year was you come from mars and see a 2% gdp and you'd be shocked we were thinking about raising rates. i mean, one man's, you know depending on where you are in the aisle i don't know what you do. i don't know how to make a rule

all the time when people have opposed the view on what the fed should be doing even now. >> there's a wide range of views. but i don't know how negative rates could make sense. >> senator, we appreciate it. thanks. good luck today. have fun. >> thanks for having me. >> take some no doz or something. "squawk box" will be right back.

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earnings alert. results from blackstone ebay and goldman sachs all expected this hour. we'll have the numbers and the reaction from the street. protesters gathering in frankfurt for today's ecb meeting. the latest rate announcement due in just 45 minutes. we'll tell you what to expect from mario draghi. and hackers fly free.

united airlines has awarded miles to hackers who help uncover vulnerabilities. details straight ahead. 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 becky quick along with joe kernen and andrew ross sorkin. among our top stories at this hour, protesters clashing with riot police late last night in athens. the greek parliament approving an austerity bill. it passed despite the syriza party. varoufakis was one who voted against the bill. eurozone finance ministers are reportedly making progress on short-term financeing for greece.

also the ecb is gathering for a regularly scheduled policy meeting. we will get the latest interest rate announcement at 7:45 a.m. today. followed by a news conference by mario draghi. and "the wall street journal" is reporting that apple is in talks with iranian distributors to sell products there. that is contingent on the iranian nuclear deal that would remove sanctions with iran. couple of stocks to watch this morning. united health care above forecasts. also raising outlook for the year. as a result you can see now they've -- wait a minute. up by -- yeah. up three and change. and that is of course helping the dow this morning. netflix shares are up sharply. the company adding more subscribers in forecasts in the latest quarter. helped by overseas expansion. huge move for netflix.

intel posted better than expected results. helped offset demand for pcs that use the company's chips. we've known that for years and years now. they've been offsetting. let's get back to the other story that is front and center. that is europe. we're waiting for the ecb's latest rate increase. that's expected the bottom of the hour. for more on all this we've got steve leisman. >> how are you? the ecb is going to meet. first of all, now the greek parliament has accepted this bailout by the eurozone. all that's left is just about everything. but it seems to be going the right way. today the ecb agrees on the bank funding level. that's what we're waiting for. they could go either way on this. they could decide the collateral is worth more, give them some money. but first of all there's no assurance that greece is getting any additional money. and they have no assurance on

additional capital. they could go from 60 euro to 200 euro. that's something they have to work out to keep the money from leaving the country. next the euro group on -- friday the german parliament votes. this is to give merkel the authorization to this deal here. and there's a longer term issue of the debt writedown. germans saying no. the question is are they really having a semantic argument over lengthening the term of the debt. again, the eu source saying the progress is being made in the short-term financing talks. let's take a look at spreads. a sign of how much risk there is outside of greece. and you can see it's come down quite a bit here over the past month beginning the early part of july. it had blown out to 160. this is between the spanish and the german 10-year. with all the progress being in spain. so we don't have a con today

gent issue. in fact, the market kind of picked up on there not being con todaycon contaigon issue. >> were we to judge that these elements did create substantial risks or were changing the outlook in some notable way then a change in the outlook is something that would affect monetary policy. as we've said all along, we have no judgment about at this point about the appropriate date to raise the federal funds rate or judgment about that will depend on unfolding economic developments developments. >> here we go again. we've got the two big guns coming out. mario draghi and the janet yellen. andrew? >> thank you steve. we will be getting back to you as the day progresses.

we will hear what draghi has to say in a bit. let's get back to our guest host roger altman. i guess steve's gone. i was going to just engage him too. but i guess we'll never know roger. steve said no contagion. we never really saw what he was looking at indicate that there was going to be contagion even when we weren't sure whether this was going to get done. i guess there were some moments. i always sort of thought it would get done but there were some moments it got a little dicey. but would there have been contagion if the worst case scenario had played out? >> no. because if you just watched the spreads throughout the process and even at the worst moments the day of the referendum -- >> is that because they knew it was going to happen? because they knew it was going to be successful? or either way -- >> either way. >> really? >> the situation has been so heavily discounted. in other words this crisis has taken so long to unfold in such

a public way that i think everyone in the world, just look at the exposure of the other main european banks to greece that have been cut down so far. so i think either way there wouldn't have been contagion. it was really evident in the trading levels of the spanish securities the italian securities. i don't think there would have been contagion on any output. any outcome. >> while you're here and you've been to china. you know about what's happening there too. when you can have a bank like the people's republic of china and it provides money to one that buys stocks could it become so great that china could lose control of the stock market? >> first of all, implications and the stock market crisis is much bigger and more concerning than any moment in the greece

drama. and that's because of course the size of china, the degree to which china moves markets. >> but do you buy into the notion that there are china bulls that say they can handle this. they've got enough wherewithal. it's still a communist country. they can do whatever the heck they want. could they lose control? >> well i think in terms of what this all means for the chinese economy right now, the answer is very little. because if you look at the data only 15% of household assets in china are invested in the stock market. only 1.5% of total assets in the banking system represent margin loans. it's pretty contained. what i think it really means is it raises questions about the grip of the chinese leadership on the situation. because they panic, they lurched all over the place and trying to stem this. and the whole idea of china which is the smart technocrats are in charge is undermined by this. so i think it probably is a

deterrent. >> is there a flip side argument to be made that they've learned a lesson in this and they may not do it again. or they may shift. or do they sit around and think they're actually pulling all the strings and it's working. they can't think that. >> i doubt it means they're going to suddenly decide let's just let markets work. that's not the chinese way. secondly i don't think they think this has been a good overall moment. it's been a bad moment. >> still way up though. >> but right now you have no ipos no big inside holders able to sell shares. and other restrictions. i believe it's still a third of those trading on shanghai and shenzhen have closed. it's a bad moment for the chinese leadership and for the whole idea of china. >> do you think that -- you don't watch "the walking dead" -- >> yes, i do watch it.

>> you do? okay. you know how if enough zombies are on the fence and they keep coming yaoou've got to leave. >> poke them in the eye in a stick. >> one at a time. but you know what i'm saying. or the dam bursting ingbursting. is there going to be so much pressure built up that they will have a market crash? i don't see that happening. >> i don't think what you really fear in a crash which is that it spreads throughout the economy and -- >> not that. just the stock market. just the stock market. i don't think they could lose control of the stock market. i think they can keep -- >> one assumes if they had to they shut the entire market. >> right. >> so i don't think they will lose control by your terms of the stock market. but i think it's -- this has sent a signal that the chinese did not want to send. is this a positive for foreign

direct investments. >> does that spill into other markets. is there a contagion risk? does that send it into other markets? >> not yet. because the situation is contained. and my guess is that it will begin to calm down. but no one really knows. i just think it -- you know when xi jingping came to power, there was a series of hints that market based capitalism would be able to move forward under his leadership. now at the first real threat they've fallen over themselves to impose government control. it's not what they wanted. this is actually the first real blemish on xi jingping. i think it's a big deal in that regard. so not what the chinese leadership wanted. not a confidence builder for china. not a boom in terms of investment in china and certain

other things like that that require external confidence. really a pretty big deal. >> so i thought it was not ironic but i thought it was kind of -- guy used to work at cnbc. >> hi. >> what? >> yeah. we'll take a break. when our markets, they put in the additional controls and they shut down all those stocks and they stemmed this -- remember there was a snapback and our market was up like 300 points that day. we watched china control its markets and totally manipulate it. we said yes and bought our stocks. i mean is that normal for us to -- we're almost playing along or enabling them to be -- we don't care why the markets stabilized over there. >> that was a very short-term bounce. i think the -- if i were a money manager and i'm not capable of doing that but if i was i wouldn't consider this a big confidence builder.

>> okay. i'm going to buy stock on president obama's birthday. because we should be able to close -- that was the big thing. the chinese market went down on xi's birthday. and that should have never happened. could you imagine if we had those signals over hoo erere? >> the chinese authorities made the mistake of saying it's ratifying the china dream. i think that was the word. the china dream. now the market has reversed and they've fallen all over themselves, they have nothing to say about it. it's a big blemish. >> all right low pressure we'll continue this conversation. when we come back the u.s. equity futures. when we come back we'll talk about the dow component goldman sachs reporting at 7:30 a.m. eastern time. we will bring you the numbers and reaction from an analyst. plus the ecb set to release its latest rate decision at 7:45

eastern time. and we just heard from roger altman on china. as we head to a break, here's what our delivering alpha speakers said about china yesterday. >> i think china is a bigger global threat by far. >> must understand what's happening in china if you are going to be a global investor today. it is irresponsible not to understand what's happening given the impacts on global gdp. >> you can't trust the chinese numbers. that's a good sense of how much the chinese economy has slowed down. but that has a much greater impact on the region than it does on us. >> you look at the chinese financial system you look at the shadow banking, look at the amount of leverage and how desperately they've worked to get their stock market up. if it doesn't look like -- it looks worse to me than 2007 in the united states. much worse.

welcome back to "squawk box" this morning. among the companies posting quarterly results this hour blackstone revenues. the key measure of economic net income per unit both missing estimates. you're watching that stock now down marginally in the premarket. fed chair jan elet yellen facing heat on the hill. here's blackrock's larry fink at the delivering alpha conference yesterday. >> i would be surprised if they don't raise in september.

i think this is -- they said they want to raise it. they've talked about it. they've already said if the data comes out in the zone that we're in they're going to raise rates. they want to begin that path. >> joining us now, allison deans. alex young. and of course our guest host this morning roger altman. and allison, alec welcome to both of you. alec, what do you think? we know the fed is now kind of talking a much tougher talk. do you think they will actually raise rates in september? >> we're a lot more focused on the pace rather than when liftoff comes. we've been a little more dovish. my guess is it probably pushes. the trend is the street continues to -- >> december or 2016? september, december i could understand. not a big difference between those two. >> probably december. but our focus is more on the pace. we've taken a look at how does the market do when you have a gradual pace of tightening. it does pretty well. 12 months out it averages 11% gain. when you have a quick pace of

tightening, the market will tend to lose 3% over the first 12 months after liftoff. >> though we heard from others the longer they wait the more they would be forced to raise rates more rapidly. if you don't start early or didn't start six months ago, you could be in a position where by waiting you force yourself to raise faster. >> we're not worried about that. we think because there's just not enough growth or inflation in the world to justify it. those are born out of the legacy cycles people are used to. so far the doves have been right. people have had to push back and push back. and i think this idea that if they start a little later it means they have to move more aggressively. we're very confident that those views will be proven wrong with the lens of hindsight. >> if that's correct, you could be looking at the funds rate in 2016. >> i think unless you have another type of greece

situation, it would do more. i think people start losing confidence in the market and economy if the fed doesn't step up. so i think they have a risk of getting higher. in some ways that could be good for the market. >> what is good for the economy? what is right for the market? what do you think? >> i think what's likely here is a very slow rate of ascent. if you look at the broad measures of market conditions, they're fair but not strong. wage growth and so forth. >> but the headline number is still -- >> i understand that. but that's not what the fed primarily focuses on. they remain pretty slack. so i would guess this point about the federal funds rate being 1% in twx2016 or end of 2016 is nothing like that. i think we'll see a slow ascent. i think markets will be more comfortable with it as you said. and it's going to be slow.

>> are you surprised around the terms of the dollar and the increase. but it hasn't played things up when yellen has spoken the last couple of times. >> part of it is -- when you say play things up you're talking about rising rates. i think they're trying to send out a signal that might get the markets prepared for it. as roger said the economy isn't strong enough employment trends aren't enough to scare the markets. yes we might do something because people are worried about liquidity and inflation. but we're not going to do as much because this is a gradual improvement. >> and there's no evidence at all that the greek drama has had any impact on any element of u.s. gdp. none. >> another factor with this has been such the most widely anticipated rate hike in history. so the markets have really already adjusted to yields that backed up considerably.

>> alec alison i want to thank you both for joining us today. hope to see you soon. coming up hackers fly for free on united. the airline playing out on its bug bounty program. we'll explain that next. ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea. aaaflaaaac! in just one day, we approve and pay. one day pay, only from aflac.

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welcome back to "squawk box" this morning. hackers flying for free on united airlines. the company's now paying out at least two awards worth 1 million miles each to hackers who have uncovered network vulnerabilities. that's worth dozens of free domestic flights. the awards are part of united's bug bounty program. to be eligible the hackers can't disclose the types of vulnerabilities they've uncovered. >> doesn't this come after the other hacker said he tried to do

this and is being prosecuted? >> there was somebody who went -- i don't know if it was on a united flight. did it through the go go flight service to see if they could hack the cockpit. >> by the way, i'm not in favor of them trying this on live planes. i do not want to know you're going to be rewarded for that. >> i don't think this hacking is supposed to hack -- i don't think these guys are supposed to be trying to hack the cockpit while the plane's in the air. i think they're trying to hack their network reservation and all of the stuff on the ground. or i hope. >> that is a key distinction. >> i hope that's the case. the question with the miles, though is whether the blackout dates are there? otherwise they're worthless. coming up goldman sachs set to report. we're going to have the numbers and reaction from an analyst next. plus ebay expected to report. the company looking to sell its enterprise business. we'll talk to bill schmidt in a moment. "squawk" returns just after this.

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welcome back to "squawk box" this morning. earnings front and center. philip morris posting better than expected earnings and revenue. company continuing to battle though, the impact of the strong dollar. then there's shares of garmin this morning. they are getting hit hard. the company's warning they will miss estimates. pressuring prices and they make a couple of pretty cool products but you're right. there's now so many people in this space. dominos earnings topping cob census. the pizza change saying they opened more stores but international growth was hurt in part by foreign currency impacts. and domino's changed their sauce or something. >> a little fancier? >> it's a lot better than it used to be. in the meantime, let's talk about ebay. expected to post before the opening bell. the company also reportedly nearing a deal to sell its sbriess business for about $900

billion. ebay is the holding for smead capital management. ebay makes up more than 6% of the firm's portfolio. they hold about $70 million worth of ebay. and the ceo and cio joins us now to talk about it. bill, let's sort of preview the earnings. maybe more importantly preview the impact of this potential transaction that was reported getting rid of the enterprise piece of the business before the spinoff of paypal which is going to happen i believe, on monday. >> yeah. thanks. what you see here is the rearranging of the furniture as you prepare to be the best possible online payable company in the world. and you become an e-commerce

base who is going to be interested in maximizing their core business and reinvesting capital into succeeding in online commerce rather than being the business that feeds capital into the online payment processing. >> are you a bigger fan of ebay stand alone ebay or do you think you will become a bigger fan of stand alone paypal? what will you do once the split happens? >> we subscribe to warren buffett's theory when it comes to trading. we like to keep our turnover low and keep our frictional cost down. joe greenblatt wrote a book and said the stepchild of the spinoffs has a tendency to get abused when it first starts to trade. for example, we just had gannett split. and we just kept the pieces. but the stepchild in that case

is gannett. in this case the market place business is the stepchild. so the likelihood is people are going to sell the market place if they were in ebay's stock to get a paypal success. so the history is over the first couple of years the stepchild after the initial selling outperforms the market in the following two years pen and paypal has a bright future. we're not growth stock investigationers per se but it is one of the most exciting companies. and then lastly both of these companies are coveted by i think five or six other major firms that either can buy one or the other with very high pe ratio stock that their stock trade at or sit on massive piles of cash and have failed miserably in either online payments or in the market place. >> you got to assume that someone knows what they're doing in picking who's the stepchild

and who isn't. remember cbs and viacom? it never works. i remember baby bells versus the big at&t when that happened. people don't know which one's going to do better. if they knew you know it wouldn't be working for a living. >> that's right. and again, the tendency is there'll be some selling of ebay just as there was selling of the stepchild gannett. and when all the dust settles awe you look up two years later, once you get rid of the hot money sellers there's a tendency for those stocks to start out very much undervalued. remember ebay has 45% market margins. the marketplace business of ebay has way more free cash flow than amazon. and we like to think about these companies as if we own the entire company. and if you went out to dinner with the owner of the entire amazon company and went out to din we are the entire marketplace -- ebay marketplace company. the market place owner is more

likely to grab the check because they've got way better free cash flow. >> i want you to help me with one piece of this. there may become a premium. a deal premium on both of these companies. because they are potential takeover targets. you think about an alibaba who might want to enter this space either. what are the rules? it's 18 months? two years? these things can't be sold to somebody else on a tax efficient basis after something like this happens for how long? >> well it's a little different than that. provided there haven't been negotiations of any kind between buyer and the would be spinto before the spin anyone -- a buyer can come in -- >> at any time. >> at any time. i remember when sendant years ago was split up. two of the four new public companies have been sold within a year. by the way, mr. smead is right.

after the initial indigestion that comes about when a spinoff occurs and some of the people who receive the new spin. after wards, these spincos do well. had to hold them for three years plus, that would have performed well. so he's right about that. joe's point that sometimes the expectation that good co and bad co. autonomy breeds focus. >> but that's the -- people think the spinoff is not going to do as well and they end up doing better. that's going against the grain, right? >> there's smart investors who have studied the data. >> that's right. >> most of the time you have a spin co which is the obvious smaller part.

>> a lot of times out of slow growth businesses so there are other -- >> all i'm trying to say is the new independent companies after a period of indigestion tend to perform relatively well in terms of the market. >> do you have any sense of what percentage gets sold? >> a relatively small percentage gets sold. there are more spinoffs than you think because we all focus on the great huge ones like this ebay splitup. there's actually a lot of them. i can't quote it from memory probably not more than 10% of them get sold within the first couple of years. but in terms of their question as long as there's been negotiations it can get sold. >> and is there a disclosure requirement in terms of as the spin happens? in terms of whether there have been negotiations? >> well anybody who wanted to buy this post-spin knows the rules and doesn't show up to talk about it beforehand. >> exactly. that's where i was going with this. >> goldman's posting $1.98

versus expectations. they have litigation provisions reduced earnings by $2.77. >> if you add that back up it's $4.75. >> why don't people know about litigation provisions? >> i don't know. but reserve judgment on all of these numbers right now. blankman is saying they're pleased with performance for the quarter. uncertainty weighed on the level of conviction. you're right. i'm wondering what's wrong with this. >> $1.45 billion in net provisions for mortgage-related litigation and regulatory matters. that's a big number that you know, you would think -- analysts would have thought they had some kind of head up on a number. >> i wonder if it wasn't included in the estimates for some reason. the stock -- briefly i saw it down at 210.

at this point it looks like it's relatively flat. it closed yesterday at $212.96. >> we back it out, but i guarantee you when the journal has it in -- how many points are there? >> ten points. >> they're going to say they fell blah blah blah to $1.98 because of a huge litigation -- >> if you add it it's $4.75. >> still fell because of the huge litigation expense. why isn't everyone else still putting provisions in for mortgage 37 related litigation? >> may be late to the party. >> i have to call someone to have an opinion on any of these things? >> the answer is they are. >> didn't see recently. that big? >> no but these costs are coming down. they've done a good job of taking the legacy cost down. >> jpmorgan that we reported about the other day we said

lower litigation expenses boosted jpmorgan. we joked the lawyers were the only ones who -- now the lawyers are making it all up on goldman sachs. >> i don't know. >> do we need to go to break? >> yes. >> in general is goldman sachs' business strong? the answer is yes. >> they posted weaker results, that's the headline. second quarter profits fell sharply as the investment bank booked litigation provisions and increasingly volatile markets. >> the question is what do we know that they don't? >> they made $1.05. but the provision was 1. -- or what they made $1.05 billion but the litigation is $1.45 billion. that's no way to run a business. >> the bid is now down at

$210.60. >> what's happening mortgage related for them? >> it's always so long ago. i don't understand. >> i don't understand either. we're going to do a little work. >> can we also thank bill smead by the way who's been hanging out in seattle listening to this conversation the middle of this ebay conversation. we interrupted him. >> i think you predicted 1.45 in litigation expense didn't you? $1.45 billion? no? >> i don't think so. >> you got any insight here. roger's right. let the mistakes made by a different set of employees and a different set of shareholders and a different set of borrowers back in 2005 2006 disappear. three or four years from now we're going to wake up and

everybody is going to be stunned how much these businesses are making. >> bill, thanks for joining us today. >> thank you. >> so we can't -- most of the law firms aren't publicly traded. we cannot do a spread here can we? >> no. that would be a nice idea. >> what was that one guy that like, stole someone's business card? >> in canada. >> dreier. he's in prison now. >> love that guy. the paragon for the whole magnetic business card throwing industry. >> we should go visit him on a weekend some time. >> as the ambulances go by. all right. when we come back this morning we'll have much more from our guest host roger altman. and we'll be talking about an analyst with an analyst about goldman sachs report. plus the ecb news will be out in minutes. we'll tell you what to expect from mario draghi's news conference.

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we've been waiting for results from ebay. now we have them. the company reported earnings of 76 cents per share. that's 4 cents above estimates. revenue also below -- revenue was below estimates. ebay announced an addition of $1 billion to its share repurchase

program. so far we don't have anything on the enterprise deal. >> we should also tell you the ecb just out is keeping rates unchanged. that is what we expected but there's a press conference coming from mario draghi later this morning. that could be interesting. we'll be listening to him for any hints about what's to come. let's get back to our guest host roger altman. andrew, let's -- >> try to understand what's going on. >> previous firms have had similar situations. they've already settled some of these. and it relates to the way some residential mortgages were -- >> i think they talked about what were between $2 billion and $3 billion. citigroup paid more. so huge numbers. and i think what's happening here -- >> goldman thought 2 to 3 -- >> and now i think but i don't know this new reserve suggests maybe they were low on their early estimates. >> and they have a good idea

where it's going to be. >> maybe they know more than they knew before. but they had been out -- back in february they estimated it was going to be $2.5 billion and raised that to about $3 billion. so maybe that's what this is. >> now the headlines are reserves hit goldman but underlying numbers good. so -- >> that's reflected in the stock. >> yeah, but down a little. $212. that's a dow component. forgot about that. they mess me up with the dow component. nike -- >> apple. united health care. >> yeah. forgot about apple too. >> the big point is the underlying business is strong. i may be wrong, but i think the market will look through this pretty quickly and look at the underlying business and conclude it's strong. i noticed revenues were up pretty strongly. so i think the underlying message is going to be strong not weak. >> and even the comment from blankfein about improving conditions and healthy client activity. >> some people saying navigating

through uncertain market conditions. but blankfein said the uncertain market conditions had people asking for more advice as well. >> right. >> so it can be an opportunity. >> though he did admit it weighed on investor's levels. it created uncertainty. >> uncertainty is generally good for a firm like goldman sachs, not bad. because it produces more volatility and that facilitates good trading results. >> so roger, we're now no longer in the 3% 2015 total gdp world. remember at the beginning of the year again everybody said we can do 3%. i think the fed, that was their forecast. >> the underlying rate right now, second quarter number is probably going to end up being about 3%. that's the latest estimate i've seen. obviously the first quarter was a washout. we're probably growing in the 2.7% range around now.

i think that's pretty solid. and i think you've seen the comments from yellen which are more positive otherwise about the economy. referred to factors clearing themselves away and sunlight appearing in effect. i think the message on the underlying economy is solid. is it spectacular, no but is it generally pretty good? the answer is yes. >> you're seeing the way, once again the election is setting up versus the -- hillary's talking about income inequality. she's a champion for the middle class. but the -- >> notice that she said we have two goals here. one is growth and the importance of growth and she emphasized that. i was happy to see that myself. and the other is fairness. it wasn't all about, you know fairness and what -- if you'd see what bernie sanders has been saying he's been saying i don't agree with hillary. it's not about growth.

>> whether working with government action around the margin for the minimum wage is the way we solve this or whether eventually companies start doing a little bit better which allows them to start competing for workers that are in command and then we see the way it's worked in the past where wages start going up again based on a demand for workers and the way it's supposed to happen. because you're not going to solve it by raising the minimum wage. >> you're right by definition. because the percentage of total workers in this country would be affected by a national minimum wage. >> it's a wedge election issue they use to try to garner some votes. >> there's a huge debate about the pros and cons of the minimum wage. what i think is most interesting is some -- as we all know some companies walmart is an example have decided to raise compensation because they think it's better for retention and they want to improve the

efficiency of their business. >> i mean you're not -- you've served, obviously, but you're not a political animal. do you ever sort of get -- i mean, when i saw the working more hours the way that it was obvious that the clinton camp distorted that for political ends. and people need to not be part-time. there's a lot of people that want to work more. and the part-time employment picture we have right now is really hurting this country. and to say we need people to work longer and then to totally distort it and turn it around and make it sound like it was -- >> my guess is jeb bush would like to have those words back. wu what he meant, apparently -- >> what do you mean? that was the last sentence. they should have -- be able to work for longer. >> everybody can agree on that. i mean that's the difference in the u-6 rate and unemployment rate. we have too many people that are working part-time that would like to work full-time or who have given up looking for a job

that would like to have one. that's why labor markets need more slack here and putting more hours of work into the economy, that's the right thing. >> remember when romney said if my insurer is giving me a bad deal or charging me too much i'll fire my insurer. i'd like to fire people that aren't doing -- he likes to fire people. jeb bush says americans are lazy. i mean it's just -- it's a dirty -- >> americans aren't lazy. >> that's what i mean. but to come out and say that in response to what jeb bush said -- >> every one of them is going to get held to the shorthand that fits the narrative.

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xçó0 dow component goldman sachs out with quarterly results just minutes ago. joining us now on the squawk line marty mosby. can you help us marty. was the previous estimate that goldman had for settling this mortgage issue, was it less and that's what this $1.45 billion of additional reserves is? >> that's correct. so they've had to adjust given the developments that they've had in you know the settlement proceedings. that's what you have. and timingwise you don't know what quarter is going to pop into. we actually put this kind of spread out throughout the year because you never know what quarter is going to pop up.

as long as your net earning money, you're adding to capital. that's what we said. these are covered with earnings. >> which, who was everyone paying this to? >> doj. >> the doj. okay. so they can tell that the people that are shaking them down in this case are getting a little bit more active about what they want? there were signals that they wanted more? is that what happened? >> well when you get into the negotiation, it's a fact pattern. so what you're looking at is what are the facts and the discovery. goldman would have felt like they had done things they were comfortable with. and there was something that eventually happened that made them feel like you know kind of the power shifted to the other side of the table. >> marty, there was some comments about uncertainty in the world and clients being uncertain. you say the results underlying are good? >> oh yeah.

if you look at the litigation because it is a capital, not earnings sue. we're moving toward record high earnings of around $22 which is what we expect which is significantly above what the market consensus has been going into the year. one of the only banks that has an increase in their bank. so they're continuing to show momentum. >> that's the music, marty. we appreciate it. thanks for your quick analysis. >> hey, roger, thank you for joining us today. >> pleasure. >> we'll see you again soon. when we come back we've got citigroup set to report. we will bring you the numbers and instant analysis from wall street. "squawk box" will be right back. when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about.

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clashes in athens as the greek parliament passes tough austerity measures in an effort to secure the third bailout. this morning the ecb's decision on interest rates and comments from ecb president mario draghi. we'll have the latest from europe and what it means for the investments. larry cantor will join us in just minutes. is there a private tech bubble and could it spill over to the public sector? scott cooper joins us for the hour to talk innovation ipos and whether or not the sector is

overvalued. and citigroup reporting right now. we have the numbers and analyst reaction minutes away as the final hour of "squawk box" kicks off right now. live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. the market will open in about 90 minutes. goldman reporting was down about a dollar. we now have citigroup reporting $1.51. if you exclude cva and dva, it's $1.35. the estimate was $1.34. the revenue of $19.1 billion -- >> $19.5 billion. >> oh. that's above. that is above expectations. now that stock as you can see is

up 95 cents or so. i'm uncomfortable with that one number there. got some other net interest margin margin. year to date return on asset ises averaging 0.13%. okay. the profit soars. i don't understand these for loan losses. it's a huge number. >> they're what goldman is on the opposite. >> yes. that's true. >> we're seeing the big banks who have already gone through litigation experiences. citigroup paid $7 million last year on this stuff. i think what we're seeing is that. jpmorgan. they paid it out. bank of america. same story. who hasn't?

goldman sachs. what we're watching over the next quarter we'll see what the settlements turn out to be. but they may be more expensive than folks like goldman had reserved. >> here's that allowance for loan losses. that number $14.1 billion at the quarter end. that's 2.25% of total loans. that compares with $17.9 billion or 2.7% of total loans the end of the prior year period. >> they're down from $17 billion. okay. all right. we're going to talk to an analyst about citigroup as well in a couple of minutes. citigroup as you can see there is helping. it's up $1.24. >> roger altman said he thought some might look through. >> that's really $5.70 because they had to do the reverse split. >> let's tell everybody about some of the other stories investors will be talking about today. the ecb keeping its key interest

rate unchanged. mario draghi will begin the question and answer session with reporters at 8:30 time. and we've got united health posting earnings and revenues both ahead of estimates. the company raising its four-year outlook. and revenues beating the street at goldman sachs. but they were hurt by legal expenses and weak bond trading. a few stocks on the move this morning. netflix helped by overseas expansion. and intel posting better than expected quarterly results as well. growth in its data center business helped offset the demand for pcs that use the company's chips. the greek parliament approving the bailout plan but not before protesters clashed with police in a battle of molotov cocktails and fire and tear gas. set to share his perspective is larry kantor at barclays who has

not been enthusiastic with the prospects of overall gains for 2015. >> right. still the case. >> okay. >> i think in the near term things have gotten a little better. chinese economy looks like it's stabilizing if not even rebounding a bit. they've got a solution in greece which, you know i guess in the short run is okay. i'm not so sure. it's more of the same really. doesn't really solve the situation. >> small country. >> and then oil prices have dipped. so i think things look pretty good in the short-term. but i think at least for u.s. mortgage we're sort of neutral here. >> the only reason you could be that way must be from valuation. because the backdrop is excellent in terms of low interest rates and low inflation and an improving economy. so you must have a bug up your butt or something to be negative at this point.

>> not negative. it's just we see better prospects elsewhere. >> really? where? >> like in europe. you know joe, you talk about valuation. the question is whether, you know, with our prices they're expensive. and the big thing is earnings really. we're on the verge of the fed hiking rates. usually the stock market does pretty well in that environment. usually they're earning double digit. >> when i talk about neutral on the s&p, i'm talking about the whole market. that's part of pit. and we get the market going up. >> you said it's expensive. with interest rates at zero it's expensive? >> almost every metric you look at whether it's pe or adjusted pe price to book it's on the expensive side of historic norms. not ridiculously so as you sometimes see before a crash but

it's on the expensive side. the only metric that's not is when you compare earnings yields to bond yields. and then stocks look relatively cheap compared to bonds. so they're more attractive than bonds. but what we're saying is the market is fully priced here. in the near term probably goes up a bit. you're saying europe sounds counterintuitive. you've got qe in the early stages there which is a plus. the economy if you look around all the noise of greece is actually getting better. you don't have any oil producers in the euro area. currency is a lot weaker. so the economy if you look through everything is actually getting better in europe and earnings look like they're going to grow faster. we think double digits. we think prospects are better there. >> and stocks don't reflect that yet in europe? >> no. in fact, they've gotten hammered through the greece thing. and so this really is an

opportunity, we think. >> what about japan or elsewhere? >> japan looks pretty good. the story's a little different there because japanese stocks have done a lot better. but the thing there is that corporations finally are giving more back to shareholders in terms of dividends and buybacks. we think that's in its early stanls stages. so we're positive there as well. >> how would you buy -- if you're an average client of your firm, how do you tell them to invest in europe? what should they do? >> i think buying stock indices are the way to go. >> in europe. >> yeah. oddly enough this is going to sound weird, but i think on a greek exit medium term it would be more positive. this thing has been hanging over markets for five years. and if -- and this is a big if. if greece had exited and europe took that as a signal for faster and stronger innovation in other words let's batten down the hatches and support italy and spain, single banking system, ecb front loads a lot of

purchases, i think they would say finally we have an answer here. what's happening in greece is more of the same. it's yet another bailout. the imf is right. in fact, we didn't think they could pay the debt before. now it's a lot worse. because gdp has gone down and the debt's going to be a lot bigger. there's no way they can pay this debt. this is again kicking the can down the road. >> two to three years it's going to be a failure? we talked to richard at the conference yesterday. he thinks it's going to go to par five years from now. >> the question right now we have a situation that's simple. they can't pay the debt. there's two options. you either restructure it in some way or keep subsidizing. >> the question is does this restructuring program work or are we back in the stoop a couple years from now? >> oh i think we're back in the soup. the radical government is the country saying we can't take any more. i mean nobody would design a

currency with greece and germany. >> you have to ask the bigger question whether it's a threat to the eu. whether it's a threat to -- because greece is too small. the economy is minuscule. >> it's tiny. you're exactly right. >> i don't care if it comes back as long as the eu stays. >> that's right. >> did you throw your hat in the ring at barclays? i mean what's going on there? you would have to take a pay cut, though right? >> have to move to the uk and they would probably have restrictions. >> you'd make less money and it'd be more headache. >> it's a pretty tough job running any bank these days. it's a tough environment. >> you don't want to go over there. >> i don't to. >> isn't that the thing though? everybody would have wanted this job. this is what you would have wanted to climb the ladder and get to this role. and now you don't even want this job. >> right. >> it's amazing. >> right.

you've had something to do with that. and, you know the people that totally -- you know the -- >> i have nothing to do with it. >> you and your organization that has vilified every ceo. >> i have nothing to do with this. >> then in the uk it's even worse. >> you should -- people think that i'm on the other side of this. >> bernie sanders thinks you're on the other side of this. >> it's all relative to you, my friend. >> thank you. it's great to see you. when we come back this morning, are we in a private technology bubble? and will it spill over to the markets too? we're going to ask a tech investor scott kupor of andreessen horowitz. mario draghi set to make a statement on the eurozone in a few minutes. we'll be right back. and the incredible rush of the mercedes-benz you've always wanted. but you better get here fast... yay, daddy's here! here you go, honey. thank you.

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the problems people are solving are mostly very, very first world problems. and so they're dealing with the problems of the 1%. >> i don't want to take a taxi. i want a black car. >> yes. how do i find friends to go to

the concert with on thursday night? but my app does tuesday night. so it's completely different. there are more sustainable problems like food logistics. internet of things out in the real world. not just on rich people's wrists. at the seed level, there's way too much level going into completely kind of redundant, imitative start-ups. >> that was esther dyson at the delivering alpha conference. and your next guest was on that same panel. joining us right now to talk all things technology is scott kupor. he is managing director at andreessen horowitz. he's also our guest for the rest of the hour. >> thanks for having me. >> one of the issues we've been trying to figure out is whether or not there's a tech bubble. you may not see it on the public markets, but when you look at the private markets, it seems some of the euphoria is now in some of these valuations before a company ever goes public.

what do you think about that idea? >> i think there's a couple things going on. i think using the word bubble probably kind of conflates the issue. because bubble -- the bubble we had in '99, 2000 was a bubble. if you think of it in terms of ipos pe multiples. >> in the number of retail investors who got sucked in. >> right. so using the word bubble kind of, you know is probably a bad way to even frame the issue. i think what's happening is you've got a bigger structural issue happening in the market. there's two things happening that i think is causing later stage valuations. number one is the timed ipo is dramatically extended. but if you look over a 35-year period, it's been about seven and a half years kind of average, kind of founding a company to an ipo. last year 11 years for the 2014 ipo class. basically from 2001 to 2014 you've seen a very significant lengthening of that time. >> i can understand why companies don't want to go public. particularly when you could get

the cash from private investors and not have to shell away things. but there was an interesting article in "the wall street journal" from andy kessler. he pointed out we could be doing a disservice by allowing these extended timelines. a bubble he thinks could be building simply because there are no checks and balances. when you don't have the companies coming out and having to disclose we don't know what's going on. >> right. so i don't agree with his conclusion. there's no question there's a difference between obviously being a public reporting company and being a private company. but if you look at the types of investors who are going into later stage deals, there are public investors, right? the level of kind of diligence or the work they're doing to understand these businesses is pretty significant as if they were investing in a public company. you're right. what you don't have is a report card and say what's happening with this business. but i do think there's quite a lot of activity actually happening in terms of those public market investors looking at the financials of those

businesses. >> is there a point where you've looked at anything and thought that's too much? we had esther dyson on the show yesterday and she said no. that seems like potentially a fair valuation. >> we're not an investor in uber. we're an investor in lyft. so i don't know the numbers on uber. there are many things we look at and say we can't get with the prices. >> is that why you invested with lyft over uber? >> we've been an investor in lyft over two years. >> but did you choose it because of the difference in valuation between the two? >> no. at the time we liked the lyft model. they're very different businesses. uber is certainly an incredibly successful business. but really focused on a black car replacement model. lyft is trying to think about what i would almost call democratizization. >> if i'm wrong, i thought one of the reasons that the uber deal didn't -- that you were not in uber was there was an opportunity and there was all sorts of stuff that happened?

>> yeah. there's all kinds of things that always happen on all the deals. i'm not going to comment on that. but i think uber's done a tremendous job. >> did you see this? i think they're new. the commercials locally uber drivers. >> yes. >> i've seen the ads. >> and say de blasio is blocking us out. it's weird. >> i've seen cabs or maybe buses. >> no on tv. individual, like uber drivers. my wife said maybe she should become an uber driver. i said why are you constantly trying to get a job? an uber driver? no. >> i think that would be a great opportunity. >> inherently in just the way the private market deals go in the past people have watched exorbitant valuations and go that's possible. then they become public and it was cheap. they've got tho mind-set.

but by definition if you're only selling a little bit of something in the private market you have the same supply/demand. it's in such tight supply that by definition you'd be paying too much. you shouldn't extrapolate the whole company from a small slice of it being sold. >> i think that's a fair comment. i think -- and we have had -- you're right. we've had some ipos that have gone out at the last round of private financing. >> i think that would happen a lot more -- if you're not in the sweet spot where all these things actually pay off. >> right. it hasn't happened that often. we had box that happened to. so we had basically three or four enterprise companies where that's been the case. for the most part what happened is -- i think the good news in those cases was it was a little bit of a case of if you liked it at a billion dollars, you're going to love it at $160

million. which was not quite the plan but at least it worked out. >> in terms of some of the private valuations my old pal just wrote an interesting piece about how so many of these companies are still losing money on every order. there was a company called home joy. >> i do know home joy. >> in san francisco. >> yeah. >> i don't know if you're an investor. >> we're not. >> they're losing $12 every time they go in to do it. at what point do we see them break? meaning some of these companies that have been financed nicely capitalized, but they've been losing -- where all of a sudden we say okay this doesn't make sense anymore. >> you've got to distinguish between the different parts where they're potentially losing money. if you're losing money at the unit economics level, at the gross margin level, that's an issue. you've got to have a good story for what it's going to take to get it to make sense. for most of the later stage companies, they're not making money in op-x. they're going to invest in a sales and marketing perspective. uber we're not investors in but

if you look at what they're doing, running huge losses. but part of that is they're trying to win in china, india, all o efr the place so i think people say gee, we're willing to deal with that. if the economy turns you'll slow down sales and marketing but the economics are healthy. >> all right. stay where you are, we're going to continue this conversation. when we come back, citigroup reporting moments ago. we'll see what to take away from that report. take a look at futures at this hour. right now you're going to look at green arrows. dow up 78 points. nasdaq up 35 points. s&p 500 would open up 12 points higher. we're back in a moment. ♪ ♪ ♪ it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you.

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welcome back to "squawk box." citigroup posting better than expected earnings and revenue. joining us now on the "squawk" newsline to figure out what this means jeffrey harte. your headline, sir, this morning? >> my headline is pretty good results out of citigroup. revenues were not disappointing though there were some unusual things in there. but i think importantly expenses were good. and that's really a big part of the story for citigroup here is getting the expense base down. expenses were a little bit higher than we were expecting but that was offset by higher than expected legal. the expense story is looking better than i think was expected which is a positive.

so good strong results out of citigroup. looked like they had some real estate sales gains that helped inflate the revenues side a bit. but pretty good results out of citigroup. >> what do you make of the legal reserve issue? >> we know it's going to be going down a lot. it's a matter of how quickly does it go down. we were looking for $385 million. came in at $421 million. so i mean it's moving in the right direction. whether it's $100 million higher or lower in any quarter isn't so much a big deal to me it's the direction. >> and what about loan loss reserves? >> they did release more reserves than we thought. so got to maybe dig a little more into that. i mean, the coverage ratios and the allowance still looks good. similar to legal costs. loan loss reserves have been a benefit opposed to a head wind. those are decelerating as well. they did have a nice loan loss

reserve to it. but i think that's going to continue going down and kind of -- let me say it this way. it doesn't change our outlook. things are still pretty good. >> jeff real quick, your 12-month target on the stock? >> citigroup should be you know, north of $60, $62. to the extent they keep delivering -- >> that doesn't seem like such a great deal. >> it depends. we've got to see how things react out here. there's nothing more romantic than a spontaneous moment. so why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure.

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welcome back to "squawk box." this is jim iuorio. we are breaking down the first data points since we heard from the chairwoman yesterday in the form of jobless claims. 281 from expected 285. better than expected. last month revised to 296. continuing claims also 215. last month revised to 2327 which is also better than expected. remember what she said yesterday is that she expects the data to get better based on that expectation she plans on tightening. this is important because it is

a little better. the stock market should like this a bit. and it stays about what it was up eight handles in the s&p. back to you, becky. >> thank you very much. we're watching that activity. 2.381% is where we see the 10-year. in the meantime the greek parliament voting to approve a bailout plan for the financially troubled country. but again not without last-minute drama. we've come to expect this at this point. ecb president mario draghi is ready to address the situation in athens. we're monitoring his comments as we speak. this is just beginning in the last minute or so. but joining us right now on the cnbc newsline is mohammad el-erian. things are difficult. you pointed out yourself this is not going to be an easy step from here. >> yeah. the short-term becky, is going as planned. so the political process is ongoing. the greek parliament approved.

europeans are getting together on a loan and enormous pressure on the ecb and imf to come back in line. so short-term it's as planned. beyond that it gets really messy. greece doesn't own the program, so implementation is going to be tricky. the financing is very challenging. and the institutional aspects are really hard. so short-term relatively smooth. beyond that it gets really messy. >> you were at the imf for 15 years. were you surprised by what the imf came out and said this week? throwing a bomb into the process before the greek parliament even passed this? >> not really. the imf has been under enormous political pressure to do things it shouldn't be doing. which is to lend into a situation where there is no debt sustainability. so they are pointing it out over and over again. look guys get your act together. provide greece more debt relief. but they're conflicted.

remember, greece is already in payment to the imf. the only way they're going to get paid is if the european put more money. so they are conflicted. at the end of the day they will go along because of political pressure but they'll be breaking their rules again. >> what does that mean down the road? anything? >> what it means down the road is the credibility of the imf is going to be eroded once again. and that's why they're trying to make a stand here. and other countries are going to continue to build little pipes that go around. you've seen china do this. you've seen the brits do that. expect that to continue. >> you know, austan goolsbee made some comments to ben white at politico. he said basically it's incredibly important to see what happens. there's not much you can do in terms of trying to help greece out at this point. the debt load is going to be basically unsustainable. there aren't many moves you can make. once greece is out, then the

same thing happens in portugal and spain in the next couple years. would you agree with that dire assessment? >> i agree with what austan said in terms of there's only four things you can do. and greece isn't going to be able to do the four things. what i disagree with him is that you can extend that analysis that he has to other peripherals. i think the baseline scenario is still that greece ultimately exits the eurozone. my own view is not only can the eurozone manage that exit but it could actually emerge stronger after greece exits. >> how long of a process is it you think before greece actually exits? >> it's hard. they had to restart the economy. we've been all paying attention to the political process. meanwhile the economy continues to implode. it's going to be very expensive to restructure, recapitalize the banking system. and you need a functioning banking system. so let's not underestimate the challenge on the ground.

and i think that it's just a matter of time until all this issues all start imposing themselves again on the political process. so the situation on the ground as michelle has been reporting is getting worse and worse. and it's not going to be easy to restart that economy. >> mohamed, would you buy debt in greece right now? >> not right now. i would wait. i think that we have events coming up, but at that point there will be lots of greek assets that will be attractive. remember countries aren't companies. countries don't go bankrupt and disappear like companies do. countries reset and can come back. and i think there will be a lot of attractive opportunities in greece, i just don't think it's right now. >> mohamed, thank you for joining us today. >> thank you. >> talk to you soon. coming up next one of the biggest concerns among one of america's biggest companies. cyber security. that's where the company comes in.

the ceo will join us to talk about how they're securing information from hackers. we're monitoring the situation in europe this morning. we'll bring you updates on what ecb president mario draghi says. speaking right now. "squawk box" returns in a moment.

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a company's mission is to enable company with the tools to react quickly to the attacks. one of the first was titanium which can search anything related to the internet in 15 seconds. on average takes 230 days to conduct the same process. ryan is the cofounder and president and cto of tanium. >> we're proud to be associated with ryan. >> here's the real question. you guys are taking the approach you're going to get hacked. then the question is what do you do once you get hacked. how is that different than basically building a wall on the outside? now you're building a wall on the inside? is that what's happening here? >> yeah. that's a fair assessment. many are deciding the idea of a perimeter around their network is dissolved. they've got cloud environments virtualization. the concept you can build a wall

on the outside just isn't realistic anymore. >> what does that mean? multiple hurdles inside? that weren't there before? zblit >> it means that every asset you own, so every computer or every laptop or vm needs to be protected itself. really what we think is critical is you need to know exactly what's happening on every one of those assets right now. and to be able to compare what's happening on those assets to what you want them to look like. so, you know, you look at things like heart bleed was a big event recently. many of our customers took months to figure out where they're infected. with tanium they can figure out in seconds and fix the problem. many of our companies have hundreds or thousands of sometimes tens of thousands of ways into the network. they just can't secure them all. you have to secure the asset itself. >> ryan, this is scott. good to see you. question for you. when we talk about security why is it such a big deal now?

security's been around forever. what is it? the presence of sovereign countries now. is it the number of end points that people have? why is it all of a sudden we're talking about security on a regular basis these days? >> to i think there are a couple things. the first one is people are just realizing that they're being attacked more. they've probably been attacked for a long time and the tools are starting to catch up with kind of the volume of attacks people are seeing. so we're hearing about it more because people are finding out things are happening that probably have been happening for awhile. the second thing that we're seeing is that attackers are getting way more sophisticated. it used to be we had attackers who were basically trying to make a point by releasing things out to the internet and seeing where they landed. today we've got nation states and we've got criminal cyber rings that are going out and attacking people because they either want to make money or in the case of attacks like sony because they want to make a point. the point b they're making a very destructive in many cases.

i think many of our customers are starting to wake up to the fact that they are, in fact targets specifically from attackers that have way more sophistication than they did five or ten years ago. >> when you think about the cyber warfare, do you see the moment that ultimately companies are not only going to have to defend themselves by establishing a perimeter or maybe multiple perimeters and multiple barriers inside but will have to be the aggressors. that companies are going to have to launch their own attacks in a way to avoid the next attack. >> yeah. i'll be honest with you. most of our customers, we work with 50 of the fortune 100. i've never heard a cio say they'll do that. the simple reason is it's like someone breaking into your house. the right thing to do is call the police. it's not to try to find the

attacker yourself or find the thief yourself. and exact justice. the reality of the situation is you can't win. if you're a large enterprise you've got billions of dollars of sas assets to predict. there's an asymmetric quality to that war. and what we need is our government and our law enforcement to take a stand on this in an aggressive way for us. >> and what is your take on all the sort of white hat hacker efforts? we talked earlier on the program about united which i guess just announced they're giving out a million miles to hackers who have successfully gotten into some of their systems. sounds like a good idea but i assume those white hat hackers could turn into black hat hackers pretty quick, right? >> theoretically, but anybody who would disclose to a company that they see a problem like is that is probably strongly on the right side of the law here. there is a lot of money to be made from these vulnerabilities. if you look at kind of the gray

market/black market for vulnerabilities, it's alive and prospering. so we really should encourage our smart kids and the people who can do this to stay on the right side of the line. >> before you go can you explain that? people say that all the time that there are these exploits that they can buy online. if you know where to go online some message board. i don't know where to go online to find and buy these exploits. but if they're so easily findable kwhie are they not finding them and destroying them effectively? >> because there are hundreds of millions of lines of code. and it's really hard to find all of them. companies like microsoft spend inordinate amounts of effort. but yet there are tens of patches released every month that close very critical vulnerabilities. and as an enterprise or as a government institution, if you can't actually figure out where you're affected by those quickly and actually fix them quickly

then you really don't have any prayer of stopping these large scale criminal enterprises or nation states from getting into your environment. and that's why we tackled this problem with tanium. we didn't see a solution when you're a large enterprise to dealing with this. many of them take literally years to figure out a vulnerability exists. >> thank you for joining us. we appreciate your time this morning and getting up early. >> absolutely. pleasure. thank you. coming up next jim cramer's thoughts on yesterday's big delivering alpha conference. plus what he's watching at the open today. and mario draghi's news conference is underway. highlights are just ahead. "squawk box" will be right back.

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you didn't tell me this would be a therapy session. >> i can tell you if you get outside of manhattan to the rest of the country, illegal immigration is consistently at or near the top of the list. and the reason is -- >> wait. is there a country outside of manhattan? >> all these industries are a good stable businesses so

they're, i think, they're safe to own. you don't have to worry about somebody waking up one day and deciding nobody is going to eat oreo cookies again. >> you want to sum up this race in one simple meme reagan-omics. you start a business in your parents' garage. obama-nomics, you move into your parents' garage. >> those are some of the highlights from yesterday's delivering alpha conference. kind of left out humorous there. anyway, those were some of the humorous -- let's get down to the new york stock exchange where jim cramer joins us now. you never know. sometimes the things that aren't intentionally humorous end up being humorous. knowing you, you really try to find out things that are going to help you make some decisions somewhere. what was -- was there one

overriding theme that made you either think differently or confirm something that you've been thinking? >> well i just didn't hear anyone like the two largest groups in the s&p. i didn't hear anyone really like technology differently. >> i didn't hear anyone like technology or the nas. that's a huge chunk of the s&p that people don't want to touch. it is very important. it says you have to start looking fort love in different areas. we are just not it getting what i want to hear about tech. it reminds me again about ibm and warren buffett and whether that is going to prove to be wrong. people are just so scared of tech. they don't want to touch it. finance, we are seeing really good bank earnings. no one wants to be there. there is a very limited number of stocks people want, industrial consumer package good retail restaurant. i keep coming back to it. >> you have written a few books. if you ever write a book on the

five most important things to be really successful as there anything you saw in common that occurred to you yesterday with all the great investors that they do differently? >> absolutely. they do not look at earnings per share, estimates and model, in a much more creative fashion, not the fashion that traditional analysis that we were taught at these brokerage firms. they are taking a company and saying, none of those things that we value stocks on matter. here is the concept. we are going to go sell it to the ceo. if he doesn't buy, we will sell it to the board. if the boredard doesn't buy, we will get to to the people. >> we have to get to steve liesman steve liesman has been monitoring comments on the state of the euro zoe. what have you picked up? >> they are saying that the conditions have been reached for

the european central bank to raise emergency funding for the greek banks. he didn't say when or by how much but made note of the various votes in parliament. the statement that just came out from the euro group. there will be some additional funding. some on the ecb thought they should bring the ela down to zero, which would have caused the greek system to go insolvent. they have reached a decision to grant a three-year stability support to greece. i think that's the short-term funding but i'm not sure. i am waiting to hear more precisely. basically, greece has no money. he was just being asked about a payment due to the ecb on monday. the first shoe. the idea they will raise the

financing for the greek banks. there is the statement. a decision to grant in principle a three-year stability support to greece subject to the completion of relevant procedures z i am just looking at the headlines. it sounds like that move is effective as of today. ecb says emergency credit to greek banks has been raised today. >> de say by how much becky? >> no, still waiting to hear. >> all that translates into whether they can raise that 60 billion euro on withdrawals from the greek system. we'll monitor that. >> steve thank you. >> sure. >> when we return, we will tell you about that ebay deal we talked about, the enterprise business, over $925 billion that just crossed the tape. rocker neil young, says no to streaming details after the break. here are the futures at this

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♪ neil young is the latest artist to ride the anti-straeming roadanti-straem anti-streaming road. he said he won't allow his music to be streamed. he said, i don't need my music to be devalued by the worst quality in the history of broadcasting or any other form of distribution. taylor swift, as you know withdrew her catalog from spotify last fall saying the business had shrunk her album sales. young says it is not about the money but because he doesn't feel right about selling his fans such low quality music. i don't know the details. i know there is some alternate to mp-3 that is better and he has something to do with this. do you know about this? >> they are higher quality format but that's a different issue. >> i will only say this.

i don't know about facebook and i am not on uber but i have alpha muse he can. i am thinking like a millennial. it has really changed what i do. whenever i am not doing something, i have something to listen to. >> you should be proud i'm finally. >> welcome. >> you may have to rethink that. >> should i throw away my walkman? the cassettes still work? >> sell it on ebay. >> sdotcott, while you are here you talk about streaming. does apple kill spotify? >> i was a member for three months free. >> i think you would never -- i don't think you want to bet against apple. it is going to hurt hard space

to make money because of the role of the record labels and how much they control from the copy copy right perspective. the artists are complaining they don't make any money. does anybody? >> the record labels. that's going to change i think that just isn't sustainable over a long period of time. that's probably the place in the industry that's going to be the most affected by streaming. >> tell us the sector if you will, that nobody is paying attention to a piece of the private market that you are not focused on. that's the next hot thing. i think people are paying attention to it in the venture world. in the public world, they are not paying as much attention. we love to talk about lift and u uber. there is a whole host of marquette cap, square and a lot

of the new companies. >> i'm talking about the private space, around new networking companies, new storage companies, all kinds of things. >> scott, thank you for joining us. >> that does it for us. right now, time for squawk on the street. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. we are in the thick of it. earnings from goldman, netflix and more. stocks the best week for months. yellen takes to the hill for a second day. claims in good. oil up a touch. the ecb, mario drag gi speaking in frankfort saying the central bank will turn on the funding apps for greek banks.