people that sort of put forward the bubble hypothesis like robert shiller even they tend to have difficulty pinning down when stocks are overvalued or undervalued and so i think what happens is when there's a big run up in prices let's say housing prices in america up to two thousand and six and then they collapse people retrospectively say it was obviously a bubble but you know there was also a big run up in house prices in canada britain australia new zealand and so on during the same period as america and they didn't collapse in any of those four countries so we had no way of knowing in two thousand and six that america would be the one of those five countries where prices would fall sharply so i think it's misleading to try to sort of time bubbles or gas when bubbles are occurring especially if you're public policy makers like the fed is sort of fun to do as an investor of course but i'm a little skeptical that policymakers can do anything useful with bubbles as an idea but scott didn't wasn't there a problem in the u.k. and housing market we saw that during that time now. there was som

people that sort of put forward the bubble hypothesis like robert shiller even they tend to have difficulty pinning down when stocks are overvalued or undervalued and so i think what happens is when there's a big run up in prices let's say housing prices in america up to two thousand and six and then they collapse people retrospectively say it was obviously a bubble but you know there was also a big run up in house prices in canada britain australia new zealand and so on during the same period as america and they didn't collapse in any of those four countries so we had no way of knowing in two thousand and six that america would be the one of those five countries where prices would fall sharply so i think it's misleading to try to sort of time bubbles or gas one bubbles are occurring especially if you're public policy makers like the fed is sort of fun to do as an investor of course but i'm a little skeptical that policymakers can do anything useful with bubbles as an idea but scott didn't wasn't there a problem in the u.k. and housing market we saw that during that time now. there was some

. >> to that point, listen quickly to a sound bite from robert shiller, who was on "squawk on the street" this morning, asked, of course, about market valuation, and here's what he had to say. >> i have a ratio on my website that's up to 26 now, it's over 26. historically, you know, it hasn't been that high very many times in history. it's been at 26 before. that's roughly where it was in 1996 when i testified. and unfortunately, i said i thought the market was high. it went up another, i don't know, 50% until 2000. so, i don't -- you know, it's really hard to forecast the market. it might continue this boom. on the other hand, it is looking a little high. >> this is a guy who won the nobel prize for measuring valuations. he's got a nobel prize and we don't. >> yeah, and i was just going to say that sam's right, sam's point as well, that you can b n at a high level of valuation or hitting all-time highs, and that doesn't preclude you from doing more and more of it. brian, you sum up the attitude of a lot these days when you say this is the most depressing bull market i've ever seen. coul

people that sort of put forward the bubble hypothesis like robert shiller even they tend to have difficulty pinning down when stocks are overvalued or undervalued and so i think what happens is when there's a big run up in prices let's say housing prices in america up to two thousand and six and then they collapse people retrospectively say it was obviously a bubble but you know there was also a big run up in house prices in canada britain australia new zealand and so on during the same period as america and they didn't collapse in any of those four countries so we had no way of knowing in two thousand and six that america would be the one of those five countries where prices would fall sharply so i think it's misleading to try to sort of time bubbles or gas when bubbles are occurring especially if you're public policy makers like the fed is sort of fun to do as an investor of course but i'm a little skeptical that policymakers can do anything useful with bubbles as an idea but scott didn't wasn't there a problem in the u.k. and housing market we saw that during that time now. there was som

robert shiller, the professor who created this index said earlier today on "squawk on the street" that we really shouldn't worry so much about prices. i'm going to beg to differ a bit. we were seeing prices inflay a lot over the past year, affordability weakening by a lot. you have to remember that even though we are well below the peak of home prices in 2006 we're not buys today the way we did back then. so homes -- >> not yet. >> not yet, but because of the mortgages we're using, homes are more expensive. so we could look to that 2006 peak number and say we're fine, we're below that. we have to look at what it is today and how much costlier homes are using today's mortgages. >> all i know is i saw fonzi selling reverse mortgages on television the other day. true story. >>> everybody is looking at the home building stocks, right? but when you have a house there's a lot of stuff that goes in the house. door nobody else, carpeting. armstrong worldwide, a big floor maker, mohawk industries, fortune brands, those three companies together can almost get you a house. >> that would be really

robert shiller did join us this morning. he wasn't too worried about home prices. take a listen. >> prices are more or less okay where they are. they went up way too high in 2006. they came down like 50%. now they're going up. they look about right. and you know, i hope people just don't get so worked up about them. think about other things in life. >> interesting take on it. >> i love bob shiller. professional shiller. only a university professor can, you know, get away with that. he's right. i mean, he's right in the sense that there's a lot of noise. there's a lot of data. i think you had an earlier guest who described new home sales report as, you know, noisy. it absolutely is noisy. the reason it's so noisy is, it's mood from a national real estate story to a local real estate story. you have some parts of the story like manhattan and the bay area, 20% year over year and other parts of the country like the midwest that are flat to down. what's driving these different markets now are inventory levels in each local microcommunity. if there's negative inventory,

robert shiller on the case schiler numbers. >>> what to expect from trading action with the countdown to opening bell, and the exclusive ceo with adidas, capitalizing on the world cup. look at futures here, moderate weakness as europe is having trouble getting traction this morning. much more from "squawk on the street" from the nyse straight ahead. making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies. >>> just about seven minutes before the bell on this tuesday, bringing in the director of floor operations, great to have you. >> honor to be here. >> we like to think things always happen in the market, always exciting. you said that yesterday traders needed a box of no doze. >> yes, as you remarked, it was the narrowest

so, it kind of reminds me a little bit about what robert shiller was saying the other day, which is that, you know, you can kind of look at how remarkable valuations are or how the market has been on a relative basis and could see it still has room to grow here. >> the punch bowl is still there and the punch bowl is being filled by the accommodation from the fed. the fact is, as you look out to the second quarter earnings expectations, ex-financials over 8%. look at the third quarter, ex-financials are going to be burdened by litigation costs, mortgage charges, over 10% in financials. but for the full year, looking at about 7% growth from a record level in 2013. so, you look at valuations a year out, and our 12-month -- actually, our targets were 2015, 2,100 on the s&p 500. as well as earnings keep going, the stock market should be edging higher. >> and it's not just the fed. 56% of the global economy is operating at a zero-rate environment. >> wow. >> any rate hikes that happened are incremental. there's no ratcheting up. i mean, in may of 2013, we went from two on a ten-year to three a

shiller,quote robert can you stay in this market not loaded up with $65 million startups?ng the high-quality large-cap stocks, there is still a lot of value there if inflation and interest rates stay low which i think they are likely to do. i don't know if i would go pioneering on some of the smaller cap stocks right now that the shock is reducing. >> we talked about skyhigh valuations. what does that mean for alibaba? which was ad.com successful ipo but sets a great environment. the cash flows are positive, they are delivering huge growth numbers. i'm pretty optimistic. >> what about the cloud, where is it in five years? >> it's been around a long. you are seeing more marketing of it but it will be the sophistication of technology. a lot of the startups doing well are cloud-based. the new microsoft ceo, everyone is talking about the cloud. it's just a change of delivery system. >> thank you so much, gentlemen, for being with us. forex report.ick and the next hour, fashion designer nenette lapore is here to discuss how the american dream inspired her to create american dec