geruntocracy is that a pimco turn?he word and i used it as a chapter in my book. >> i'm going to steal it, very good word. yes, you can do it. you don't have to do it in a way that is draconian either. we're not talking five years from now, we're talking 10, 15, 20 years from now. you don't have to affect economic recovery. >> the aarp doesn't help. you watch their -- >> they've not been very constructive, and grover norquist hasn't been constructive. you have to ignore the shouters in the corners. >> i think i'm a member, too. >> you probably are. i am, too, probably. >> you are a charter member. >> my wife wanted me to wear pink and i said i can't do that because they'll think i've come to the dark side and become touchy feely. you're wearing pink and i could have worn it. >> i wear right to left to the closet, and i try toy find a tie. >> hindsight. >> quickly did you sign governor norquit's pledge? >> no. >> thank you very much. >> i presume they did, and i presume i said no. >> you don't remember? >> i actually do

of pimco. >> tom: a big change today for america's immigration policy. president obama announced new rules allowing certain immigrants to be spared deportation. immigrants affected are those who came to the united states illegally as children. >> effective immediately, the department of homeland security is taking steps to lift the shadow of deportation from these young people. >> tom: it could affect up to 800,000 people. if they qualify, they would be allowed to work and live in the u.s. for up to two years and could be eligible for extensions. republican presidential frontrunner mitt romney said he preferred a legislative response on immigration. >> susie: a high profile former goldman sachs and proctor and gamble insider, rajat gupta was convicted today. he was found guilty of conspiracy and securities fraud for sharing confidential information and making millions in the process. the conviction marks a big win for insider trading watchdogs: gupta faces up to 25 years in prison and will be sentenced in october. >> tom: looking at just the price action

"outfront" tonight, a valued member of our spike team, bill gross, ceo of pimco. bill, good to see you. i was waiting all day to get my lovely menage a trois example into the broadcast. >> i can't top that. >> you're an investor who's looking at europe. do you think francois hollande will keep the extreme promises he's made on cutting the retirement age? >> well, i think that was vote-getting. you mentioned some of the extreme measures. and that's typical of elections, is it not, in the u.s. as well? but i think clearly and this was an anti-austerity vote in france and it elevates the socialist pro-growth, higher deficit agenda as a model for euroland. angela merkel has been snubbed by the french in this election, which i suppose won't be the first or the last time. but it's going to have a consequence in you'reland fiscal policy for a long time now. and we're going to see what hollande's agenda is. >> you've talked about being worried about france and its fiscal balance. it's one of the few countries in europe that you do have money. you do still, don't you? >> y

pimco's been out of euroland basically with the exception of germany and france for about a year and a half or two years. i think what euroland needs, what they want, what these measures are trying to do is to entice private investors such as pimco, china and associated agencies back into the market, so to speak. will they do it at 6% to 7% yield? i don't think that's enough relative to the risk. and so it will be up to the ecb, again, their federal reverse, to continue to write checks. and that might amount to hundreds of billions and perhaps, as you suggest, trillions of dollars. >> bill, today "the wall street journal" had a survey saying the top issue for americans who are getting ready to retire was europe. there were three issues up there and europe was one of them. what could the u.s. be on hold for? the fed is intimately involved in all sorts of ways of providing easy money to europe. but how much money could the u.s. be on the hook for? i know it's a hard question because you don't know how much europe is going to need. but this is the crucial question for taxpayers. >> well

i couldn't sell neel kashkari of pimco, ruu.s.capita plenty of liquidity and cni loans are rising. is there a bank play here? >> absolutely. once again, back to valuations. jeff was talking about if profits are just okay which i think they will be. i'm not talking about economic rebound. just grudging movement upwards slightly through the end of the year. banks are trading. start with jpmorgan, the 3.4% yield and the 5 multiple. these are crazy numbers. as you said, they are heavily capitalized. they are in stronger shape than they have been in our lifetime. richard fisher can weigh in to that. i believe this market will be led to the upside over the next couple of years by the financial stocks. >> you have two optimists there. i don't feel that optimistic, but i appreciate what you're saying. >> we're an endangered species, larry. >> both great friends of the show. >>> folks, last week the federal reserve announced it was exte extending operation twist to counter the weak economy. here is dallas fed head richard fisher who has sp

let's just flash the pimco 800 number. >> look behind me, you can see the writing on the wall. >> neelen bonds, if we're in an inflationary environment, you don't want to buy a ten-year. >> same 800 number. >> if you do, right. >>> stocks on the move. we're going to head to the exchange. ♪ let's get it started ♪ let's get it start indeed here ♪ >>> ready or not. you're st. we'll have the stock of the day. you're watching cnbc. ♪ welcome to the world leader in derivatives. welcome to superderivatives. >>> welcome back to "squawk box." jim and david coyne us now. is the q-man out for the whole week? >> i believe so. i think he's taking a much deserved restful vacation with the family, joe. >> excellent. happy father's day. i don't know whether i was able to tell you that before the weekend. >> you too. >> it was pretty good. and the greek thing, we got what we wanted, but boy, that was brief, wasn't it? >> that didn't last too long as so often seems to be the case in this ongoing crisis. the windows of opportunity are very short. >> this was about 66 minutes, right? why we ever thought t

one of the most prominent market watchers, mohammed el erian from pimco. his firm overseeing $1.8 trillion in assets. great to have you on the program. >> thank you, maria. >> what was your take on china cutting interest rates? >> you know, china and other central banks seem willing to do something to counter a slowdown and we are in the midst of a synchronized global slowdown, that's the good news. and the market welcomes this news. while central banks can do something, they can't guarantee good economic outcomes. that's why you have this tug-of-war. we get all excited as the market that the central bank is going to move and then start realizing that they can be willing and able to move but they are not going to deliver effectiveness and that's the kind of war that we're stuck in. >> of course, they are moving but moving for the wrong reason. they are moving because things are really weak in the united states, with all of the stimulus and in china moving because things have actually slowed down. do you think that was part of the turn in the market sentime

bring in special gegs bill gross, founder of pimco, founder, chief investment officer still with us. mr. gross, bill i'm not going to call you contestant two. i will ask you this, ahead if the fed has to take some action today what will it do. >> well, monty, i mean brian -- steve, you're not a good contestant, you need a costume and something more lightening to bring you into the panel. you need to make a choice. i'll make a choice. door number twois t is the choi. kick the can for a month or two in terms of additional qe. wait to see what the eu will do in terms of fiscal policy to buy spanish and italians bonds and make a decision in august. so door number two. >> very good. made a selection. charles reinhard, do you think a, they will take action, and b, what? we think that lines up with our views. acknowledge growth has slowed a bit, inflationary pressures are more subdued than the last time. later today when we see their forecast we'll take on their forecast and that will justify the federal thanks tas place today. >> charles, what will it do anyway. they extend twist, they do

it's going to affect our economy. >> pimco has skin if the game when it come to debt.ies like moodies take a hit to their reputation when they gave high ratings to junk mortgage backed bonds during the financial crisis. moodies has been on a bit of a downgrading spree lately. is this part of a broad rehabilitation effort or should we acknowledge that there is no value to listening to what they have to say about credit risk? >> to start with, there are a lot of investors around the world that have to listen to these credit agencies. they have funds where everything has to be aaa, aa, something like that. and when the credit rating agencies downgrade them, they got to kick them out of the funds. these are big pools of money, pension funds and other big insurance companies. and so it's very significant what they do. now why are they doing it? there's no question that there's more vulnerability. you have to call a spade a spade. they can't just sit there and keep all their ratings the same. now some people say why these banks? why not are there other banks? why do they do

we asked the ceo of pimco, the world's largest bond fund manager. he joins me from newport beach, california. when you talk about -- when you talk to investors around the world, where do you tell them it is safe to put their money? >> we tell them there are very few places that are safe right now because of a couple of things. one you just mentioned, the european debt crisis has gone from bad to worse. second, the world as a whole was slowing down. we are in the midst of a synchronized slowdown. we tell investors to be defensive overall and only selectively offensive. to the defensive by holding the highest quality paper right now. >> when you talk about a synchronized slowdown, is it a slow down where one thing is causing a slowdown, a triggered slowdown, or is something else going on? >> two things -- phase one, for individual reasons, every major part of the world is slowing. europe is slowing because of its debt crisis. in fact, europe is in a recession. the u.s. is slowing, china is slowing, india is slowing, brazil is slowing. phase two is whe

one of which is the us dollar what you could call the cleanest dirty shirt to quote our friends at pimco now as far as fights are concerned officials including european commission's top economic official only red is reportedly warning that the eurozone could crumble without one and she gets stronger crisis fighting measures and tough fiscal discipline now the head of the e.c.b. mario draghi is out saying the central bank we can't fill this policy vacuum now that sounds a little like ben bernanke he talking to congress if we're looking at trends but also he's pushing for some countries to forgo national sovereignty pushing for centralized bank supervision and regulation he says that's the big takeaway from banking disasters like banking now let's bring mike shylock in to talk about this though because he's going to bring us a dose of reality amidst these calls from euro kratz technocrats whatever you want to call him now mike said look better known as misha's investment advisor for sick of pacific capital also writes the very popular blog is global economic analysis so mission thanks so m

using the euro are numbered a greek departure from the currency would inflict collateral damage says pimco at worst it could spur sovereign defaults in europe as well as bank runs credit crunch is a recession's that may spark more euro exit greek exit at worst means more money printing for the banks and they've already priced that into their stocks and their bonuses what they're really afraid of is that a country finds its inner gonads and decides to become politically independent that's what they're fearful of a country standing up for and so they want iceland to be just contained they don't want greece to stand up for itself they don't want ireland to stand up or so because then they would tell the bankers to stop it that's the real problem they threaten this financial terrorism which is full so it's false these are false attacks it was a false attack in two thousand and eight it was a concocted over cooked attack on nine eleven it's a false. well j.p. morgan chase estimates a one percentage point slump in the euro countries economy drags down growth elsewhere by point seven percentage p

a good day for the biggest holder of those notes, which is bill gross over at pimco.ord is a widely held credit and now looking for a new home. investors are looking at other potential rising stars. i spoke with the head of credit stratet barclays. he says cit group is another story that in the long run will likely become investment grade as well. charter communications also a good example of a bb name that treats like a low risk credit with high volume. volume is key here because there's a so-called buyer strike for anything but these top credits, meaning the lower you go, the more thinly traded the credit and the higher the inherent risk there and potentially exiting those securities, other high volume napes that a lot of traders seeing get snapped up, community health, hca, and mostly in the near-term maturities. >> joe. >> just talked about this at the top of the show. >> the etf world. jnk or hyg, which is what i own. intel is in there as well. i agree. >> the most widely held credit right now in the high yield space is sprint though. >> which is in there as well

but around the world is pointing to this in the words of mohamed el area and of pimco. we seem to be in a synchronized slowdown the message that should go out to politicians around the world is get your act together because you're losing control of the situation. now let's step back and this is particularly alarming because the global economy has been on life support with central banks the world over the ring everything plus the kitchen sink at financial markets with negative real interest rates with quantitative easing with fiscal stimulus what exactly is left for them to do buy stocks i mean c'mon now contrary to popular belief we believe the bailouts of two thousand and eight were less about the money spent by governments and more about their confidence inspired by the notion that governments and central banks could through their open market operations and helicopter money drops prevent or even reverse the economic contraction that was then well underway now that confidence seems to be eroding at an alarming rate the markets have already left the equities party hey n

for some people -- maria speaks with the top world decisions who have a huge impact on your money, pimco'sel-erian and charles evans and sam zell. you're watching cnbc, first in business worldwide. [ male announcer ] let's level the playing field. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. >>> okay. 3 1/2 minutes left here. the market knows all and it's sensing something right now. let me show you what is going on here as we head towards the close. we had a pretty good rally going today. the chinese rate cut, bernanke comments. there was hope for that as well. here's what we're talking about the last half hour where we started to lose power. let me show you some of the other indicators right now. the yield on the ten-year was rising any way but we're lower. p

. >>> >>> seconds away on "the kudlow report," pimco's global strategist tells me why he sees a slowingomy, negative economic numbers, especially coming out of china. and the supreme court slaps president obama twice and the third one coming later. my exclusive one on one interview with senator marco rubio. with an anemic economy and deflating prices, i ask

from short-term stocks to long-term bets on bonds, we welcome back bill gross of pimco and a friend ofstreet signs." always good to have you back on the show. >> thank you, mandy. >> i have in my hand your forecast or 2012. for the viewers, what is the most important line or message in that investment outlook today? >> it's that america is the cleanest, dirty shirt in terms of financial markets and where money is moving towards, mandy. out of euro land. out of all of the risky peripheral countries because america is a safe haven. everything an investor desires. relatively low debt. a reserve currency status. domination of the global military stage, et cetera. but the message is well just to conclude the point, you know, suggest there may come a time and the king has no clothes that where the king's cloak revemove reveals a body struggling to stay alive with the steroids and we have seen it last couple of years. >> when do you think that time will be? >> the world has to invest in something and as long as the united states maintains the status suggested, talking several years at least.

larry will be back with exclusive interviews with dallas fed president richard fischer and pimco's neel kashkari. the political >>> welcome back. i'm tyler mathisen filling in for a convalescing larry kudlow who will be back on monday, his back fixed. what's the difference between outsource and offshoring? president obama attacks mitt romney over it. eamon has the details. >> the obama campaign woke up to what they must have seen as a big gift on the front page of the washington post. a story analyzing how bain capital and mitt romney were some of the early investors in companies that participated in the outsourcing of american jobs. in many cases overseas. the president speaking today to an audience in florida took full political advantage of the story. take a listen. >> let me tell you, tampa. we do not need an outsourcing pioneer in the oval office. we need a president who will fight for american jobs and fight for american manufacturing. that's what they plan will do. that's why i'm running for a second term as president of the united states. >> this afternoon the romney campaign fi

kneel kashkari, a managing director at pimco, one of the world's largest bond fund managers. more than $1.7 trillion. what that means is these guys invest in debt at home and around the world so they know a lot about europe's cash crisis. neal is also the former assistant director of the treasury. you remember he ran t.a.r.p. ken rogoff is here as well. i want to make something clear right now. i hear americans saying america is on the path to becoming the next greece. the u.s. will never be like greece. the american economy is dynamic with flexible labor laws and designed around a common purpose. richard, the u.s. is not greece. am i wrong? >> you're right up to a point. but then you conveniently overlooked -- yes, you may not be greece, per se, but you have the fiscal cliff. you can sleep walk towards it, and if things don't go exactly according to plan, you could tumble over it. in an ideal world, things go according to plan -- but, these things go wrong usually by asking, as we discovered with the debt ceiling last year. a deadline missed, a decision taken wrongly, and al

bernanke with the fed chairman delivering it tomorrow and how you should be trading it, tony from pimco breaks it down. there's a lot of trade today, so let's do it. stocks are very much in the green. we'll find out what the traders think is behind all of this. joe, what is this? this is the beginning of what some suggested a rip-your-face-off rally? what is it? >> this is short rally representing ancestry.com in the financials, bank of america, morgan stanley, groupon. those are the names rallying today. secondarily, i go back to yesterday. the services number we got domestically says the u.s. potentially, the fundamentals are not slowing down. you know know that the federal reserve is going to help the consumers more. it goes back to the overall theme of 2012. this is how you want to be invested. who has the triple assets globally? the united states, that's the theme and that remains the way to trade. >> mike murphy, we are at the highs of the day. the dow is good for 207 points. how are you trading today? >> it is simple. you have to take some profits. this market, what's been workin

mohammed, pimco is the lowest bond investor, what do you think?rates, a blessing or a curse? >> i feel like i'm going to put on my blue helmet and say you all have a good point. first, interest rates are low for the wrong reasons, and we'll be lucky to get 2% and the fed is in major experimental mode and we're here for the wrong reasons. this is a window, but weir not using this window properly. you'll only borrow if you know a couple of thing, one that you'll enhance the growth potential and two, that you'll be able to pay off the debt in the long term and we no longer have growth-enhancing measures and nor do we have a medium-term fiscal plan. the risk is that we waste this window and we find ourselveses with lower growth, low debt and more political polarization. >> you're right. you did come down on this entirely and you're saying take the low interest, use the money if you can prove that you've got growth and the ability to pay it back. what would you, because you were the rubber hits of -- and you would invest. what would convince you that t

another move on the horizon for pimco?asuries are the cleanest dirty shirt. what you want as an investor, be high in quality across the board, whether it's equities or bonds. and second, you want the optionality to pick up cheap investments because you going to have that opportunity going forward. >> all right, mohamed, it's andrew. we were talking earlier about the politics going on in germany. get inside the head of merkel for a second and walk through both the calendar and the elections there and the way you think ultimately she has to play this. >> yeah, mrs. merkel has two issues and i think we need to understand that. one is holding her coalition together ahead an election next year is really difficult. secondly, the people on the street don't feel the euro crisis as yet. germany is doing well. now, it's starting to slow, but it's doing really well, so the average german doesn't feel there's a crisis going on. so, it's very hard for mrs. rkel to get way ahead of her coalition and way ahead of her citizens. >> do you

he's the global head of pimco's corporate bond management team.ade corporate bond fund. you're understandably right now in your sort of overall view of bonds are underweight europe. i get that. i understand why. what would change your view of that so that you would become overweight europe? >> well, i think a more bold move by policymakers, particularly governments and central banks, to buy, for example, italy and spain. when you look at italy and spain trading 6%, 7%, that's not sustainable in a world that's -- europe's heading in recession. the problem is that a lot of banks own that sovereign debt. that's leading to a credit contraction in europe. so europe, the headwinds are pretty significant. we would need a much more all-in policy response. >> do you expect that? do you see anything that leads you to believe that's coming? >> we don't. because it ironically encourages moral hazard. i think we're going to see europe be pretty weak for a while. >> bounce along the bottom. >> bounce along the bottom. that's why we're favoring other areas. >> y

. >> we were talking to pimco earlier unless you get spanish bonds down 5% we haven't done anything.e haven't and the away from the danger zone. what's the likelihood of that happening? >> first of all they asked for financial assistance and sign an mou. the stigma is not necessary i guess twifs biggest sticking point. but certainly from a debt stability standpoint you need lower yields in italy. but to the point that was made earlier you saw it through the numbers earlier this morning in terms of bank loans and credit to the economy, these are getting down again. so we have a significant great squeeze on and been extremely difficult to grow. >> what action will we get from the ecb? it may be irrelevant if they cut rates. >> they will cut 25 and we think additional liquidity is due in third quarter with collateral loosening if necessary. >> thanks for that. nice to see you. >>> joseph will stay with us. talking inequality and its impact on the global economy. >> see you in a few minutes. acceler-rental. at a hertz expressrent kiosk, you can rent a car without a reservation... and wit

you have seen a lot more people, ead of pimco has been talking about this, ben bernanke is talking abouthis. the longer we wait, more uncertainty we have. the irs was preparing two types of tax reforms. people will say, it makes more money to hold on to my finances and sit it out. the sooner we resolve it, the better it will be for the economy. host: ben bernanke spoke last week in washington. [video clip] >> just the way that the programs are set up, the dollar amount associated with the tax cut expiration's including the payroll tax cut is larger than the spending cuts, as i understand it. putting all these things together, you have a substantial withdrawal of income from the economy that will affect spending and will affect the ability of the economy to recover in the short run. congress has to look it the long run. is the most efficient tax structure -- what is the most efficient tax structure? in terms of the fiscal cliff, it is the total of spending cuts and tax increases which has the impact that we have identified as being a concern. we will still be able to do open market operat

up next, we'll get reaction from pimco's head of global equities, neel kashkari will be here.the people in your life count on you. that's why we offer accident forgiveness... man: great job. where your price won't increase due to your first accident. we also offer a hassle-free lifetime repair guarantee, where the repairs made on your car are guaranteed for life or they're on us. these are just two of the valuable features you can expect from liberty mutual. plus, when you insure both your home and car with us, it could save you time and money. at liberty mutual, we help you move on with your life. so get the insurance responsible drivers like you deserve. looks really good. call... or visit your local liberty mutual office, where an agent can help you find the policy that's right for you. liberty mutual insurance. responsibility. what's your policy? ♪ >> coming up, another "squawk" news maker. thank god we had neel on last time. i said oh, you're crazy. neel kashkart. >> monday, on "squawk box," harry wilson. he'll sound off in his first interview since joining the board of y

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our guest host, pimco portfolio manager tony crescenzi. >>> plus, advice from the world's top fund managersn. ♪music plays throughout summer in new york state has something different for everyone to love. discover what you love. visit ilovenewyork.com to plan your summer trip now. >>> onyx pharmaceuticals is our stock of the day. indicated up almost 40%. the company received a positive fda panel recommendation for an experimental blood cancer drug. our guest host this morning has been ed lazear, former chairman of the president's council of economic advisers. to summarize some of the stuff you said already in the last two hours, ed, is that it's not 50/50 for a recession in 2013. but you have certainly gotten more wary of that possibility. would you say 30/70? something like that? >> yeah. >> much higher than we thought. >> definitely higher. >> it implies less than 2% growth. >> things are worse than last time i was on. >> there are some things to be optimistic about? >> yeah. in terms of long-run prospects for this country there are plenty of things we can think of on the policy side and

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which means a day -- fidelity and pimco, are doing things cheaper. that is a good thing for them. it allows corporations to issue debt cheaper and quicker. a large corporation wants to issue $5 billion? it can be done in midday are around the world. they get a better deal at a cheaper price. the liquidity in the market keeps the spread low and benefits investors and issuers. the secondary markets and the primary markets are directly related. if the costs are lower here, if consumers and investors are educated about companies and we spend $1 billion educating companies, then the issuers can do it. the investor is not fidelity. it is the person fidelity is investing four. those are retirees, mothers, veterans, state municipal plans. it is a good thing. the volcker rule had so many pieces to it. don't think of it as binary. think of it as traffic laws. some cars should go 65. some should not. some lights should be bright. we have the widest, the cheapest and best capital markets in the world. it would be a shame to shed that out of anger. all of these securities are different. if we