there, d-11! d-11. what's d-11? >> i think it's the 11th all things digital conference. >> the 11th year of the all things digital conference. >> ooh! >> that's what it is. let's talk about it. apple's ceo tim cook kicking things off at the all things "d" conference, sees more changes, says apple will continue to innovate, but he stopped short about talking about specific products. he was also asked about wearable technology, something we talk about often. take a listen. >> i think for something to work here, you first have to convince people it's so incredible that they want to wear it. because where you two guys are wearing watches, if we had a room full of 10 to 20-year-olds and we said, everybody stand up that has a watch on, i'm not sure anybody would stand up. >> yeah. >> i don't see it. >> and cook was also -- >> are you wearing one? >> i don't. >> i'm wearing one, but it's not set. >> i don't have one. >> let me see what the date is. >> i'm not wearing one. sometimes i do wear one on the show. >> is it the 15th? >> no. >> no. >> yeah. >> what time does it have? >> 3:45. >> so basically you wear it like jewelry? >> jewelry for you. >> it's a nice decoration. >> it's a self-winding that i take off when i get home, so you know, it doesn't stay wound, so it stops. >> i am wearing wearable technology. >> yes, you are. >> right here. >> you don't have your watch on, either. >> not today, but this is the jawbone up wearable technology, tracking -- >> many times -- >> you've turned off some of the functions, though? >> i've turned off the sharing function, so i can't share with people who can see my -- >> you're wearing it on your right wrist, and that's a lot more sharing than anyone needs to know, but it throws that thing all off. i mean, it just -- >> yeah, i can't believe it, either. i can't believe you're wearing self-wound watches. >> it's on my left wrist. >> self-winding. self-winding watches should work! you know what? >> this awkward moment has been brought to you by joe kernen. >> you know what? all right -- >> i will take a little bit of responsibility. >> here we go. there we go. i'm never going to have that problem again. okay. let's talk more about what tim cook was up to out of california. >> speaking of -- >> cook was pressed again about apple tv, called it a big opportunity to offer a better experience. cook also talked about product strategy with walt mossberg, especially about creating an iphone with different price points. take a listen. >> it takes a lot of work, a lot of really detail work to do a phone right when you manage the hardware, the software and the services around it. >> cook -- >> malt wasberg? who is malt wasberg? >> did you really say that? >> i don't know what i said, but i probably did. >> are you making that up? >> it's 6:03 in the morning. let's just get to the last piece. cook also announcing that apple has hired lisa jackson. >> oh, perfect. >> it's an interesting interview. you can watch it online. >> i watched it on twitter and people were using this breaking news. >> but it was hard to decipher. to me, it was great to actually be able to see him, because you very infrequently see him. >> right. it was late. i was in bed. i was watching from my -- >> that was the value, but i don't think he said anything. i think he did a brilliant job of saying very little. >> i'm trying to think of the tweets that caught my attention. there were some things about talking about how more people buy things over their ipads than all of the android technology put together. >> yep. >> which i guess is an indication that people spend more time, they're more comfortable in the apple interface. >> and also because they have the apple store, because you can literally just -- >> and the apple store. it's all part of it, yeah. there were some things that were catching my attention that i had questions about. >> i'm fascinated by it. >> when you're watching just by the headlines, it's a little difficult. >> i'm fascinated by him because you don't get to see him that often, so any time -- >> tim cook? >> i am. >> he was just in front of congress last week. >> right. >> but that's like -- >> these are rare -- that was -- >> very rare when you get a chance. i think the more he gets out and has an opportunity to talk in the public -- >> you know, he's not steve jobs. he's the guy after steve jobs. why are you fashicinated by tim cook? >> because the succession is fascinating. this is a global company, what's he like? what's going to be his imprint on the company? i want to know these things. >> particularly with the questions come the stock market, this is a good time for him to be out talking. >> you know, allen krueger you don't see a lot and allen is leaving. >> now you won't see allen krueger as much. >> no. i said it when i was talking on taping, something that we hardly knew you. allen krueger just, he hasn't been there really long. has it been two years already? >> it has, and that's why he has to go back, he'll lose tenure. now, he must have been there -- >> chicago has been a better tenure deal. >> i think tenure is, number one, none of us know what -- none of us have experienced that. >> but if we could, i would take off for it, too. >> it must be very powerful, because you can't lose your job. but you would think that you have to earn, that people would want you to come back. >> you would think princeton would allow a longer leave. >> i can't believe if you're serving the president, i have to go back. i might lose my tenure at a school. so, allen krueger is going back to school and the chairman -- i'm kind of happy he's going to go back and be an academic. that's where he belongs. the council of economic advisers is leaving that post, heading back to his professor post at princeton. krueger took the job in 2011. all right. >> by the way, just one comment on goingcademia? most of these guys, to the extent -- they don't really -- i think they care about the tenure because they care about the position and the title, but most of them have consulting businesses and all sorts of things outside of being the professorship. >> in princeton -- >> i don't know if he does, but a lot of them do. >> jason furman, who's been on the show. i think of him as a young guy, just because he's got a baby face, but he's been in a lot of administrations, been around a long time. he's got a ph.d from harvard in economics. but that's okay. we'll overlook that. and he's going to replace krueger, current principal of the white house national economic council. and hopefully, we'll get him on at some point. krueger used to come on after certain numbers came out, i guess jobs numbers on certain fridays, so we didn't get him because usually -- because they need to think about it for a while after it comes out at 8:30, right? "squawk on the street" was on -- >> that's right. >> allen krueger. let's get a check on the markets this morning. futures are under a little pressure, but remember, this is after the dow had a triple-digit gain yesterday, up by about 109 points at the end of the day after some better-than-expected housing numbers that came through. right now the dow futures are down by about 64 points, s&p futures are down close to ten points. oil prices this morning are down 42 cents, $94.59. we have the big opec meeting coming up on friday. the ten-year note yesterday touched its highest level since april of 2012. right now it's yielding 2.19%. so, that yield continues to push higher. dollar this morning is down against the euro, which is trading at 1.2887. it's also down against the yen, which is at 101.70. and gold prices this morning are up just barely, just over 4 bucks to $1,383 an ounce. it's time for "the global markets report." karen cho is standing by in london. karen, good morning. >> good morning, becky. we've got selling across the european markets today, so we're giving back some of the gains we enjoyed across the european markets yesterday. in particular, if i can show you some of the individual markets, we've got the uk, the ftse peeling back from some of the highs that it's been changing of late. we're down a little bit on the trade. and you can see across on the markets, 6,679 is where we are in the uk, down 1.2%. you'll notice across these charts that the core is actually underperforming today. the likes of uk, france and germany are seeing a steeper selldown than the ftse mib, down just 0.5%. when it comes to germany, we're tracking the unemployment numbers today, the jobless rate nudging higher. 21,000 positions were lost. we saw that anything up to 2.96 million unemployed, the jobless rate at 6.9%, but we are going to see a focus shift to progress policies. this is the big story out of europe today. we're waiting to see whether brussels gives the likes of france, spain, the netherlands, more time to reach their budget deficit target of 3%, which would signal a move towards growth and away from austerity. i want to show you across what we're seeing on some of the bond markets in particular. the ten-year german bunds are now above the 1.5% mark. becky referenced what we saw in the u.s. treasury market. well, we have seen a creep higher on the german trade as well, so the core is moving north. on italy, we had an interesting auction out this morning, but it was on short-term paper. this was on six-month bills, and we saw a nudge higher in the yield to 0.45%, but 8 billion euros worth of issue. in spain, higher on the ten yield, 4.32%. the trade has been one of a softening u.s. dollar, just not to the australian currency. we saw a bit of a melt lower today. 0.958 was the number traders were looking for and we've crossed that and the momentum is to the down side since. this is a currency very much caught up in the cross winds about when the fed starts tapering. dollar/yen rates also very active, below 102. notice there was a rally of more than 1% in the session yesterday that got us through that handle, but today the trade is going in the opposite direction. also on some of the currencies over this side of the world, we have seen some strength. euro/dollar rates are bouncing 0.2%. i can't help to think this will be a link to what we're seeing out of brussels today, this expectation that we may see this leniency. this has been the big story, because for so long, we keep saying we're kicking the can down the road, we're pushing these economies deeper into recession. but we see a little bit of a lessening on some of the mandated targets from brussels. this could be a positive story for over here. sterling/dollar was a little firmer earlier on, but now we're tracking weaker, at the 1.50 mark on the trade. that's the latest from european markets. back to you guys. >> great, thanks. here in the u.s., there is something about tuesdays. triple-digit gains helped the dow close at a record high for the 20th consecutive tuesday. it's like the odds are small for that to happen. here with us now, christopher wolf, chief investment officer, not for all of merrill, but for the private banking and investment group at merrill lynch wealth management. so, who else is there setting policy at merrill lynch, chris, besides you? >> right now it is a team of us, and so -- >> who are they? >> so, it's myself, maryann bartells, a number of people in our investment management division. we work in the investment management group serving investment advisers at merrill lynch, so we work in partners p partnershpartnership with -- >> with all the fas? >> that's correct. >> so, is there a chief investment officer for the whole firm like there used to be, like a charlie clow? who is that? >> so, there is a research department where we have -- >> who's the head of that? who's that? >> michael hartman is the head of investment strategy on the sell side. >> okay. >> and we work on the investment management side. so we work as partners. >> are you an important fellow there? i'm just trying to decide how much we should -- that's for us to decide? how long have you been -- how long have you had this position at merrill? >> since 2006. >> since 2006, okay, great. where's tom lee now? >> tom's at jpmorgan. >> jpmorgan, okay, all right. >> so, a quick number for you. private bank has $160 billion in assets. >> that's a good number. >> a lot. >> up from -- okay, so, what i can tell, you still think that equities are -- we should overweight equities here? >> well, i mean look, the big picture for us is this -- the next five years, we're all about a transforming world. the world's going from a place where we're worried about debt, deficits, worried about depression. economic reality is that we're on kind of a low and slow recovery path and we have durable profit margins. yeah, they'll revert some over time, but for us, that looks the story that's more compelling around equities than it is around fixed income. add to that bond volatility, which i think is starting to be a bit more frightening at this level, and we get to a place where we think the trade-offs more clearly reflect in this kind of transformation something that favors equities, and we are overweight equities. >> you're fundamentals, obviously, but you also look at investor sentiment, which there's still a lot of skepticism. every day that we get another move, someone else steps up and says it's too high. i mean, there's always someone there to take that role, to put another brick in the wall. >> totally agree. i think there's two viewpoints here, and let's not confuse this short term and the long term. short term, things are disconnected. we have quantitative easing, monetary policy pushing markets higher, we have a bunch of economic data that's come in weaker, and if you plot them, they look really disconnected. totally get that. bond markets telling you that growth will be lower than the stock market's anticipating, at least in the short run. understand that. but if you look out the next three or five years, you'll end up with things that look like energy independence, things that look like margins, as we talked about, kind of relatively durable. a low growth world means not a lot of hiring. we see lots of capital investment coming over the course of the next one, two years, and that's got a propelling feature for economic growth which we think keeps the rally alive. we'll get to periods of overvaluation, but we want to be buyers of equities instead of sellers. >> becky? >> let me tell you, the shares of smithfield foods are up sharply at this point. dow news is reporting that the hog and beef producer is in a deal to be sold to china's shineway with the deal said to be between $4.5 billion and $5 billion. this is a company with a market cap of $3.6 billion yesterday. >> that's a real number. >> that stock is taking off at this point. we were watching this in the last few minutes as this came up on pt originally it was trading at $27.50, but now you can see $31.99 is the trade in the premarket. >> we'll see about this. >> there have been questions brought up recently. that stock is already about 40% off of its 2012 low. there have been some questions brought up just about what's going to happen to the cork sdri because of issues that are coming up. >> well, you're being nice. >> yes. >> the key -- >> the key is -- how do you say that? >> we didn't let cnook buy -- we can have some of -- they can have some of our oil if -- >> our pork chops and our bacon. >> they're going to take our beef. they don't have it over there. so, andrew, is this lik like yo? why should we sell them? >> do you consider this a strategic -- >> if they're going to take it all over there, not leave any beef and pork here, yeah! you know, they do love -- they love pork, sweet and sour pork, all that. >> yeah. >> the only thing i'm confused by, and this could be my own ignorance, so i'm sure a viewer's going to know more than i will on this. china's shineway i thought was a pharmaceutical company. they did different pharmaceuticals and medical things and they were sort of more in the health industry than in the food industry. >> but what was that -- >> but i believe they also make -- >> well, it's shineway, but -- >> -- agriculture. >> what is it, there's some edict about foreigners buying some of our stuff. what is that? you have to go through -- >> you have to go through cfius, right? >> you have to go through cfius. let's call those guys back. let's call those guys back and take a look at this, because i like beef and i like pork, and you know, i don't like -- >> do you think they're just going to take all of our -- >> i don't like vegetables, i don't like rice. >> -- our chicken. >> global acquisitions globally have driven up. companies with little margins would look to expand on that. >> and we know china's buying resources around the world, but it's usually natural resources they're hoarding. >> gas. >> but food, i can't eat copper. >> or gold. >> yeah, stuff like that, but anyway. >> we've got to find out more. >> there's more, sure. >> i think 2.1% own a ten-year. you look at that as a positive or a negative? i think that's a positive. >> it's a positive. >> near-term might be negative. >> it means housing prices are low and slow. >> it means housing might be up 10%. it means things are happening that make the ridiculously low bond yields. if there's economic activity, they can't stay down there. >> from a perspective of investing, ten-year at 2% or 2.2% where it is now is not the right price. it either reflects very low growth and we've misjudged the active cycle, or it means there is lots of manipulation of the bond market in some form or another. either way for us it doesn't provide real returns for our clients, and that transforming process we're talking about means balancing the risks rising in bonds with what we understand to be the equity risks. and i get it that the kind of valuation here is fair, maybe a little stretched relative to some of the fundamentals, but from our perspective, these things will be moving in cycles over the next several years. >> do you have someone at the firm that speaks for what an s&p target is at the end of the year? there used to be someone. who's that? >> yeah, the firm's official target is 1,600, driven by an analyst on our investment research team. >> you need to maybe tell him we're at 1, 660 mention it. >> she knows it's there. >> she? what's her name? >> suvita . >> because that's above 1,600. why are you bullish? did you tell her you were going to come on and say you have to invest in a stock market with -- does she have a ten-year estimate for the end of the year? >> no, she doesn't do that forecast. >> is this the only one she has? >> she works on the equity side. even though you have a price target of 1,600, market's stretched, doesn't mean you don't have opportunities. energy companies are on sale -- >> do you think the market is stretched? >> i think the market is bifurcated, at least underneath the surface. >> so you do think it's stretched. >> well, because the defensives have rallied away, staples and others, very expensive valuations. you have a lot of the cyclicals that are on sale, so buying the market's buying that kind of stretch defensives, but underneath it you have some opportunities there, and that's part of how we're thinking about this market going forward is that you're going to have to be more nimble. >> all right. so, you're bullish, but the person that's setting the firm policy thinks we're above where -- is she going to raise the target, do you know? >> the valuation for target prices happens of course as the year goes on, so make another estimate for -- >> when's your next meeting? >> target prices aren't likely to be touched until later in the year, and we don't hang everything on a target price. >> why set them? >> they're used as guide posts and they were set a year ago. >> you're above your guidepost. >> fair enough. >> what's her name? >> suvita. >> talk to suvita, tell her, it's like 5% above it, right? >> about that. >> if it keeps going, you're going to start feeling. >> we'll continue to invest in areas that we find undervalued, industrial cyclicals, energy and the like that still look relatively attractive. >> for sure. all right, thank you. great. >> do you guys know what ractopamine is? apparently it's a food additive used in pork in the united states, and as a result, big buyers like china and russia have restricted purchases of pork from the united states because they don't like ractopamine, and that's why exports from the u.s., pork exports have been down about 14% in the first two months of the year. >> are they going to do something different with the pork once they -- we're going to think. >> i haven't seen anybody else reporting this. >> one quick note on this, we've been spelling it shineway and i got confused. that's why i was talking about shineway pharmaceuticals. it's shuanghui, and they are the largest meat producers in china. they also have a joint venture with goldman sachs. makes a little more sense. coming up, more severe weather for the midwest, including tornado threats. we're going to get the national forecast next. and find out what caused the evacuation of mickey's toontown in disneyland. we've got a lot more coming up on "squawk box." i want to make things more secure. 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[ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ welcome back to "squawk box" this morning. looking at futures, dow looks to open off about 71 points, the nasdaq would also be off about 16 points and the s&p 500 would open off about 10 points. the nts sbnk investigating a csx train derailment outside of baltimore. that happened yesterday afternoon and caused an explosion and a fire that led to the evacuation of the nearby area. the train collided with a truck, injuring the driver. no one else was hurt. there were also some big concerns at disneyland yesterday. mickey's toontown at disneyland reopened last night, but earlier in the day, tourists were cleared out after reports of an explosion. now, disney says that toontown was evacuated in an abundance of caution to allow local authorities to investigate. what police apparently found was dry ice in a plastic bottle that exploded in a garbage can that created a loud boom, and there's a lot of stuff on twitter last night about this, too, but all clear. everyone was allowed back in. let's talk a little weather here. severe weather expected in parts of the country today. let's get the national forecast from the weather channel's alex wallace. good morning to you, alex. >> good morning. and unfortunately, again, another multiday severe weather potential here for us, and we're going to focus in today in the middle of the country. here's some of the ingredients coming together. we've got the jet stream, those fast upper level winds driving in from the west. then we've got that moisture coming in from the south, and all that's going to combine to have these storms rotating, and those rotating storms could spawn tornadic activity, and that's where we have the greatest risk here in the plain states. damaging winds and hail also going to be a risk, but again, tornadoes are something we're going to have to watch out for anywhere in this red shaded area. and even parts of the northeast have the risk for some severe storms. a good chunk of new york state working into new england. main threats here will be those damaging winds and hail. the other thing we'll also be watching is heat, really starting to warm things up. this past weekend, if we remember memorial day weekend didn't feel like it for many areas. there were highs that were in the 50s. well, we're going to be watching things warming up here for this midway and towards the end of it. look in d.c., 91 degrees for the afternoon. close to that mark in and around philadelphia, and we continue to warm as we head into tomorrow. in fact, 90s the entire megalopolis, including boston getting up to 91 degrees. so, a very hot time expected for us over the next several day. and it will stay hot. d.c., your forecast, look at the 90s through at least your saturday, and then we start to cool down heading into early next week. guys? >> all right, alex, thank you. like that combo? i got a pretty -- i'm out there, too, today, with my shirt-tie combo. you've got to admit, right? i'm trying to conjure up some warm -- >> i like it. >> did you see yesterday? what a miserable, disgusting -- >> yes, that's why i wore long sleeves today. it was so cold. >> friday and saturday -- >> but thursday it's supposed to get back towards the high 80s. friday i think 90? >> where it's supposed to be. it's almost june. >> there you go. coming up, the home buying spring season is heating up, meaning tons of paperwork for home-buyers, but there is a 27-year-old disrupter who's working to change all that. find out how. and then at the top of the hour, we have a special guest. congressman and chairman paul ryan. everything is on the table, from the budget and taxes to all of the scandals. that's at 7:00 a.m. eastern time. as we head to break, here's a look at yesterday's winners and losers. >> live long and prosper. 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[ male announcer ] today, men with low t have androgel 1.62% testosterone gel. the #1 prescribed topical testosterone replacement therapy increases testosterone when used daily. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer, and women who are or may become pregnant or are breast-feeding, should not use androgel. serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. in a clinical study, over 80% of treated men had their t levels restored to normal. talk to your doctor about all your symptoms. get the blood tests. change your number. turn it up. androgel 1.62%. good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. checking the futures this morning. after another great day yesterday, we're indicated open down. giving some of it back, down about 73 points or so. it was a pretty sessionay, we were way up, then we got back to single digits, but then accelerated into the close and ended up over 100. in the headlines this morning, smithfield foods is reportedly near a deal to be sold to china's shuanghui group for up to $5 billion. that's according to sources quoted by dow jones. the report says a deal could be announced as soon as this morning. citigroup has settled a lawsuit that had accused it of misleading fannie and freddie. the suit centered around the sale of $3.5 billion in mortgage-backed securities to the two agencies. details of the settlement weren't disclosed. and walmart will pay a fine of nearly $82 million after pleading guilty to improperly disposing of hazardous products. the fine puts an end to an investigation that lasted nearly ten years. it involved pesticides, fertilizers and other products that had been pulled from the store shelves, and then, i guess, they weren't disposed of properly. >> okay. the markets get some strong economic data. home prices and consumer confidence are both moving higher. joining us right now to talk about the markets and the economy is joshua fineman with deutsche asset and wealth management. he's their chief global economist. josh, you are right, we are seeing a lot of strong economic numbers that keep coming through. has this been a surprise to you or do you expect this drum beat of strong numbers to keep coming in? >> well, i think it's certainly been encouraging, especially given all the fiscal drag that's been thrown at this economy, the tax hikes at the beginning of the year, the sequestration spending cuts, and yet, through it all, the economy has been, you know, able to keep its head above water and actually do a little bit better. so, i think that's a testament to the underlying improvement that's going on here, the headwinds, so to speak, that have been restraining this recovery, from housing to household deleveraging and credit restraint and on and on. those headwinds do seem to be dimini diminishing, and it's evident in the recent data. >> you know, that's great news, but when do you think it's enough of a trend to actually convince the fed that it's time to start tapering? >> i think we've got to wait a little while longer. first of all, you know, we've seen some false storms in this recovery before, you know, times where it looked like the economy was ready to step it up, and then it kind of petered out. so, i think those false dawns are going to make both the markets and the fed a little cautious and they're going to want to wait a little longer for more convincing signs. i think it's going to take a few more months, at least, of data suggesting that the recovery really is shifting into higher gear, that it's getting past the fiscal drag to convince the fed. so, i think you're looking at the latter part of this year. september would be the earliest. and you know, fourth quarter, perhaps. >> but you think fourth quarter perhaps or fourth quarter likely? most people aren't looking until at least 2014 and some people not until 2015. >> i think if we get these signs that continue to say the economy has really gotten over the hump, and also, the inflation data, which have been on the weaker side. if the inflation data shows signs of at least stabilizing, not moving any lower, i think those are the things that would be necessary to convince the fed. and yeah, i think by the latter part of this year, you probably get that. >> okay, so, good news on that front, but do you worry that the fed risks overshooting with some of the stimulus that's out there because, you know, because we've been burned the last three years as we got into this situation where we didn't think the economy would actually take off? do you think they can still pull it back in time? >> i do, i do. and i think they're going to be moving cautiously. the other thing is, even if the economy does shift into that higher gear convincingly, we still have a lot of spare capacity. i mean, you know, it's going to take years to repair the damage from the great recession, particularly in the labor market. so, it's not like the fed is on, you know, on a knife's edge here. they've got plenty of time, so to speak, so they can start tapering slowly and then, you know, maybe end the qe at some point next year, and then you're still looking at a couple years down the road before they even think about starting to actually raise short-term interest rates. >> josh, what do you think the unemployment picture actually looks like right now? >> i think it's getting better. you know, it's a slow process and it's a frustratingly slow process. it's not that the economy isn't generating enough jobs. it is. it's just, it's generating jobs at a decent pace. it's just that we lost so many jobs in '08-'09, we created such a deep crater that, you know, even if the pace of decent job growth that we've been having recently, it's just going to take a long time to repair that damage. >> josh, thank you very much for joining us today. we appreciate your time. >> my pleasure. coming up, we have a disr t disruptor, disrupting the way people buy and sell homes at the age of only 27 years old. the ceo of dotloop is going to show us how he's shaking up the real estate world. find "squawk box" online and on mobile, too. twitter, @squawkcnbc. like us on facebook, and of course, visit our show page squawk.cnbc.com. lets you talk face-to-face and share whatever's on your screen. blackberry z10 with bbm video. built to keep you moving. see it in action at blackberry.com/z10 man: how did i get here? dumb luck? or good decisions? ones i've made. ones we've all made. about marriage. children. money. about tomorrow. here's to good decisions. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. ready to plan for your family's future? we'll help you get there. welcome back, everybody. the u.s. equity futures are indicated lower this morning. this comes after some big gains yesterday where the dow was up by about 109 points. it looks like it's going to give most of that back at the open, at least if things stand where they are now. dow futures are right now down close to 90 points, s&p futures are off just over 12. we'll continue our "disruptor" series this morning. buying or selling a home involves plenty of paperwork, but to make it easier, our next guest is disrupting that process. bringing it all online, austin alison is founder and ceo of dotloop, which is based in joe kernen land. >> yeah. >> right out of cincinnati. >> skyland. >> you guys were discussing restaurants, cool places to hang out. >> how about the boat house? >> the boat house is a classic. >> how about the ribs? >> love the ribs. >> ice cream. there's a lot of great things there, aren't there? how about the reds this year? >> i'm a big fan. >> mae, too. they're hurting from last year, winning the first two at home. maybe this is the year. anyway, i digress. anyway. >> no, no! tell us about dotloop. what is it? i understand that it takes paper out of the system, but for the audience that doesn't know, what is it? >> sure. so, dotloop is a transaction network that enables collaboration. we help real estate agents and buyers and sellers do deals more efficiently and real estate companies run better businesses. >> but what does that mean? does that mean in terms of taking the paperwork out, when you close a deal, for example, i remember sitting in a room with -- >> i know, piles and piles. sign here, sign here. >> and the lawyers say sign here, put your initials on the corner, and you think to yourself, this can't all really be hang. >> yeah, the part we disrupt is the process of actually negotiating the transaction and getting the deal to the closing table in the first place. >> so, i still have to go to the closing table? >> you do, unfortunately. >> can you fix that? >> those days are going away as well. really what we learned about the real estate transaction is that in almost every deal, you have multiple parties, people are always in different locations, and in order for a home to be bought or sold, people have to work together and reach an agreement. and what we've done is, essentially, enabled people to come together and work better together through this concept that we call loop. so, instead of faxing and e-mail and scanning documents -- >> it's like the one industry where you still have a fax machine that's used constantly. >> hard to believe, isn't it? >> yeah. >> so, you were 17 years old, you were a broker? is that how this all began? >> i bought my first house at 17. and that gave me the itch. >> how did you even do this legally? your parents let you? >> in my parents' name, and that inspired me -- >> what part of town? >> about 30 miles north of downtown. >> you probably paid $100,000? >> $40,000, if you can believe that. this was at a time where you could buy a home with $4,000 and a stated income to give you perspective of where we've come from. >> you can buy a pretty nice house in the queen city for about half. >> absolutely. >> what was your thought to flip it, fix it up and turn it around for profit? >> yeah. so, i bought it as an investment opportunity and that gave me the itch in real estate. and that was the first moment where i learned what most buyers and sellers learn, which is that the real estate transaction is terribly inefficient. and the gap between what we expect as consumers and what we actually get when we work with a real estate agent has never been further apart. and i -- >> i can't think of another industry where they use fax machines like they do in real estate. >> it's unbelievable. and you'd be surprised how many people still use fax machines, believe it or not. >> yeah. i just refinanced recently. same thing. can't believe, fax, fax, fax. >> how old were you when you started dotloop? >> 24. i sold real estate through college in my first year of law school and i decided to pursue the dream in 2009. so, the real estate market was, you know, at an interesting place at that time, and i saw an opportunity to help brokers, you know, save money and run better businesses and once and for all close this gap between what consumers expect and what they receive when they work with real estate companies. >> so, how many people work for your company now? >> about 120 and growing now. >> wow. and how much money have you raised? >> we've raised 10 million bucks, and we launched in '09. today we have about 600,000 professionals that use dotloop. we've got over 10 to 12 million buyers and sellers and total subscribers, and we're growing by double-digit percentages month over month. >> what is the value of the company now? or how is it valued? >> unfortunately, we're a private company, so i don't need to disclose that, but -- >> what? >> we've got to ask. >> how do you value a private company? >> oh, no, he just said he raised $10 million -- >> but you're not thinking of someone like -- do you think it's a $100 million valuation? >> are you comparing to when you were 27, see how much dealbook was valued at? you think you accomplished a lot. you're not going to give us any -- can we do a multiple to cash flow or something? i mean -- >> we can't. >> can't. >> okay. >> try, though. >> so, austin, do you go after the small realtors or do you go after larger houses? like, i'm trying to figure out who would be more inclined to come -- >> it's across the board. so, every real estate agent and every real estate company can benefit from our service. so, really, the value proposition to a consumer is that it makes the process more seamless, more efficient and more secure. for a real estate agent, it enables you to manage all your business online and close that consumer experience gap. and for real estate companies, like many of our partners, from keller williams realty to remax to exit realty, we have partnerships with nearly every major brand. it helps them to run a better business, both locally, regionally and nationally. >> how much do they pay you? >> it's a premium model with the upgrade or the option to upgrade to premium at the agent level and then enterprises pay us on a monthly recurring basis, depending on the size of their enterprise. >> now, since you started, has anybody else tried to do what you're doing? >> we compete against a combination of point solutions. so, what we're displacing is three or four different technologies that were required in the past to do the same job. so, instead of requiring a fax machine, scanners, cloud storage, you can do everything in one place on dotloop, and there are plenty of people out there trying to digitize these point interactions throughout the life cycle. >> where'd you go to high school? >> i went to little miami public. >> you did? >> did you go to little miami, too? >> no, i went to jesuit. >> okay, west side guy, huh? >> west side. >> sorry to hear that. >> yeah, no kidding! very funny. it's like a microcosm of the country, isn't it? >> it really is. >> people on the west -- you know who grew up on the west side in sailor park? my man, pete. so, you're either similar to pete or you're similar to -- >> or maureen dowd, no, i'm sorry, gail collins. >> i don't know. she definitely rebelled. maysonet's gone? is there a great restaurant in cincinnati? >> yeah, there's a lot of great things happening in cincinnati. >> not just in northern kentucky, anymore. over the rhine's happening? >> over the rhine's unbelievable. there's a lot coming into central downtown into the financial district. >> awesome. >> it's a good place to be. and the start-up community's fabulous as well. >> is it really? >> there's a lot going on. >> it's so livable. like, traffic in cincinnati is like two cars at the light. really, honestly! it's so much easier. sporting events? i mean, it really is a great lifestyle. >> austin, final question. i may get in trouble for asking. do you ever think of moving your company? >> i don't. >> to california or to a place where people -- >> you haven't been to cincinnati. >> no, i know, but i'm just saying, there have been a lot of people who decided to uproot their company and either go these days to the valley or increasingly austin, texas, and places like that. >> yeah, you know, i mean, every company like dotloop faces that question. and the path that we chose to take was to take the best of both worlds. so, we opened up an office in san francisco, and half of our management team is out there and half of our management team is in cincinnati. and it's actually become a huge advantage for us, because it broadens the talent pool that we have, that we're able to tap into, and we benefit from all the other things those cities have to offer. >> you'll laugh at this, but there's seven hills in cincinnati. i think there's seven in san francisco. people name them in the same breath, right? then you've got mt. adams, which is up there, it almost looks like san francisco. >> absolutely. >> yeah. >> i want to throw out the perfect pitch. >> thank you for coming in. >> if i do that, i'll let you know. >> that be great. >> throw out a pitch. maybe i'll wait until the playoffs because they look good. did they play last night? >> i didn't follow it. >> thank you for coming in. appreciate it. beat up on cleveland. coming up, all eyes, all eyes -- we're going to go to the chairs. i'm just going to see who wrote this. this morning we're going to explain that story. and we have two "squawk" headliners on the way at 7:00 a.m. eastern. congressman paul ryan, chairman paul ryan, who was also a -- well, i'm not telling you anything, he was a vice presidential candidate. then at 8:00 a.m. eastern, blackrock's larry fink. an incredible two hours ahead. you can only see it here on "squawk box." ive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? 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[ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ ♪ welcome back, everybody. we're in the chairs taking a look at some of the stories that have caught our attention. one that caught me this morning is a story in the personal journal, just look me the eye already. it chronicles how we are losing the art of actually making eye contact with one another. apparently a new study that says adults tend to make eye contact, direct eye contact, like looking right at you, looking right at you, looking right at you, making eye contact, we do it apparently 30% to 206% of the time, but we should be doing it 60% to 70% of the time. and they're blaming social intersections and the internet for these problems. they say when you're texting, fear of missing out on what's happening, so you may be having a conversation with somebody but you look down at dinner to check the scores at the baseball game or checking on twitter. you're telling people i'm not very interested in what i'm doing with you right now. i'm going to see if -- >> i was called out on this. >> good. >> just on saturday night. >> that happens a lot. dinner, friends of ours. >> yeah? >> yeah. they said we know you well enough to be able to say -- >> it's rude. put it away. >> it happens with husbands -- at home either, you know, penelope will be doing something or i'll be doing something. that happens a lot. what happens when you get the google glasses and pretend you're listening and not listening at all. looks like you're looking at someone's eyes and, what, what? weiner is -- >> the bell, thank you. >> the post i think is missing it here. they're just talking about he's cruising for interns. so their whole thing is going back to the whole weiner thing. what's more interesting, i'm sorry this motley crew, all you need is name recognition. here's who he's up against, john lew who we had on here. >> yeah, we had john lew. >> bill thompson and then christine quinn. that's -- so no wonder he's like in second place. >> it's a crowded field. >> and same thing on the republican side. no one wants this job? it seems like a great job. you get to, you know, be king, do whatever you want and get all this power. >> i'm surprised there's not stronger candidates. >> but weiner -- listen to me. i love it. but weiner -- you get what you deserve, but weiner very easily could be. and now i'm having a flashback. >> you did better in the last polls. >> it was crazy enough the whole weiner texting, but i didn't like his politics. blow hard, smug, loud mouth, as liberal as the day is long. >> what do you mean was? there was a report of him on the campaign trail beating down and calling somebody a bum because they said they disagree with his tactics that he believed with on health care. and they say he turned around and said to them someone died so you had the right to say that to me. >> do what i say, not what i do, is i can't say. but he may win. real quick, i don't know how you feel about this. you know how you can rent your house out to other people, they want to charge tax so -- as if you're competing against a hotel. someone was just fined $2,400 for renting out their apartment in manhattan for back fines for rent as if they're competing as a ho a hotel. >> i wouldn't anyway because of the insurance things. >> would you rent your place out? >> no, and for your house, the liability on the trapeze thing in the bedroom and all that. no, i would never, i would never do that. your liability insurance would be through the roof, right? there's all kinds of stuff. >> we've got a great guest coming up. we do have a guest coming up. we're going to change gears right now. congressman paul ryan, the chairman of the house budget committee is here. he's on the set and ready to go. we're going to talk budget, irs scandal, and much more. 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[ male announcer ] so come trade at the place that's all about options and futures. optionsxpress. open an account today and get a $150 amazon.com gift card when you call 1-888-280-0154 now. optionsxpress by charles schwab. good morning, everybody, welcome back to "squawk box" on cnbc. and the futures this morning are decidedly weaker. in fact, a the this point, the dow futures are down by 106 points, almost giving back everything that the dow picked up yesterday. it was a gain of 109 on tuesday, that made it the 20th straight tuesday in a row of gains. it's wednesday and now it's giving those back. in our headlines this morning, apple ceo tim cook isn't tipping his hand about future product releases, but he did hint that wearable products could be among the future innovations. apple would release several more game changers among its upcoming offerings. alan krueger is departing as the chairman. president obama has nominated long time economic adviser jason furman to replace krueger. also, iac interactive is putting "news week" up for sale. "news week" stopped putting out a print edition last year. we spoke to iac chairman earlier this month and asked him what went wrong with his plans for "news week." >> i did not realize what an elective for advertisers a one off book published every week was. and essentially, you did not have -- no one had to advertise in "newsweek," not like in "vogue," you've got to be there. no one had to be in "newsweek." we were begging for advertising and begging is not a sustainable model. >> iac bought "newsweek" back in 2010. >> makes it harder to sell something like that. if you're a buyer and heard him espouse the great virtues. >> and sold last time for a dollar. what would you sell it for this time? >> 50 cents? >> that may be where this all goes. keep going. >> ask paul about that. i don't want to sell. smithfield foods is in a deal to be sold to china. we didn't want to sell more oil, because they were going to keep our oil from us. >> chicken and beef? >> i think it's beef and pork. >> they don't do chicken? >> smithfield? they might, but it's mostly beef and pork. i don't know, will they let us have any back? will they take it all? i don't know. we need to see. i mean, i want to get paul ryan. >> we've got him right here. we'll get to him in a second. cisco systems is asking an eu court to annul the approval of the purchase of skype saying regulators were wrong in allowing the creation of a monopoly. cisco's challenge follows the european commission's approval of that deal back in 2011. microsoft was not required to make any concessions for buying the internet, video and voice messaging company which cisco argues has given microsoft an unfair advantage. the markets this morning as we mentioned, the futures are considerably weaker. if you've been looking at oil prices, they have come down slightly too. down about 48 cents to 94.53. opec says it will need to pump more oil than previously thought to balance the market in 2015 and expects global consumption to be much higher for this year. the ten-year note, the yield at this point, 2.133%, that yield has dropped slightly from yesterday when it reached the highest level that it's seen since april of 2012. the dollar is weaker this morning. it's down across the board. right now the euro's at 1.2966, gold prices have been slightly weaker. actually, they've turned around. at this point, up by about $10. and our next guest really needs no introduction, but he's making his first "squawk" guest hosting appearance since the 2012 election, paul ryan, chairman of the budget committee, former vice presidential candidate. i was just saying, you're more famous than weiner at this point. >> is there a ring for that? >> yeah, there's a ding. >> you have a bell. >> you're huge now. you're a top gop like player. >> that was part of my mission in life -- >> more famous than weiner. you went to university of miami. we're talking about pork and you went to university of miami and you brought me this. >> i did. i didn't expect you to talk about this with the young guy -- >> you didn't even know montgomery rib sauce. i'm friends with evan anders and he sends me ribs. i haven't seen ribs in a long time. >> they're fantastic. i went there in college all the time. >> this is not a blatant attempt to get him to send me ribs. how much is this worth? >> it's gold. like liquid gold. >> yeah. anyway, they are phenomenal. >> i went to ohio and spent a lot of time in ohio this last fall going through cincinnati and every time we'd order montgomery inn ribs. >> i was shocked you could carry ohio. >> we thought we were going to win. thanks for bringing that back up. appreciate it. >> what i do -- >> i want to know how he's on his diet -- >> i work out. >> he always looks good. >> i like -- fine, quick story. i didn't -- i wasn't sure i was going to get picked. i didn't think so. one of my buddies, a guy i work out with said you think romney's going to pick you? i said, no, but i think i've got it covered because i'm going to buy one of those smokers, the really cool smokers. and so when mitt asked me, i called jenna up from boston and said i'm not going to be able to get that smoker which was sort of code for, you know, i'm going to join the ticket. and my buddies in congress bought me that smoker. so now i got a cool smoker and i make ribs and put this barbecue sauce on it. >> and you heat it up a little bit. >> kevin mccarthy i was hanging out with him at the msnbc party we were hiding from ed schultz. i thought he might sit on us. anyway -- what's wrong? >> nothing. >> here's where i want to start. yesterday, we had someone on that said -- i was shocked, journalist, so not hard to see where it's coming from. the austerity that not just europe has gone through but what we've done to ourselves here, the austerity in terms of cutting government spending. and this person who should know better have said we have actually cut deeply government spending in this country. have we done anything other than slow the rise of government spending? >> true. >> where would somebody who knows better -- >> where would somebody -- i'm going to keep my tongue on that one. if you just passed our budget, which everybody says was so dour, so tough, we would still grow federal spending by 3.4% each and every year instead of 25 5%. we think we'd have a surplus approximately in the tenth year in our budget well on our way to paying off the debt. the point is, when you do entitlement reform, we're not doing tough, hard core austerity. these things kick in later on down the road. the kind of spending cuts we're talking about right now aren't cutting spending, just slowing the growth of spending increases. and by the way, we haven't cut much spending here in the days. you've had the sequester which deals with a small part of government, 2% of spending overall total government. we still have had massive spending increases. >> and yet we've seen -- >> there's a perception that the deficit has come way down. >> well, the deficit has come down because of other factors. fannie and freddie cut us a check and go figure, capital gains went from 15% to 23.8%. and their behavior adjusted to it. >> we think it's -- it's one off. >> yeah, we think it's a one off. we got a rush of revenues because of tax policy and rush of revenues because fannie and freddie cut a check to the government. and more importantly, if you look at the projections, we still have deficits that are approaching $1 trillion by the end of the decade. >> and the bigger question is, are you -- given what's happened with sequester, are you much more concerned about the long-term than the short-term? >> i am more concerned about the long-term than the short-term. i'm concerned about the entitlement explosion, the bankruptcy of these programs, and i'm worried that if we keep putting our head in the sand, then it will be austerity. what we're trying to do is preempt and prevent austerity. austerity is cut programs that current people live on, the safety net seniors after they've retired in realtime to respond to the bond markets. that's what we don't want to have happen. what our programs say is, you know, change benefits for people who are like me, 55 and younger when we retire. all of our entitlement reforms are gradual and phased in so they're stable and protect people in retirement from any changes in their lives. you won't be able to do that if you have the credit markets turn on you. that's what austerity is. we're pushing pro growth. tax reform, energy policy, and comprehensive entitlement reform that makes these programs solvent, pays off the debt over time and doesn't affect current seniors. thatst the opposite of austerity. that's preempting austerity, which is what we're proposing. those folks who -- some in journalism see with these kinds of proposals, they think it's european austerity. raise taxes, cut benefits to current seniors, slow down the economy. that's not what we're talking about. >> people who argue against it say it's unnecessary cruelty. >> medicare is going bankrupt, social security's going bankrupt. it's not a sinister thing, it's a demographics thing. >> they're -- when, in fact, the bond markets over there are -- >> i don't think -- >> that -- >> nasty, nasty germans and now looking to break free of the austerity. and you know what break free of austerity means, exceed all the budget -- you know, to listen to you continue -- it's almost pre-election, talk about all the things we need to do when i don't think we're going to do anything. we've got these scandals now and i think the republicans feel this gives them an opportunity to vote no on everything. >> we do not see it that way. look, we have a constitutional duty to do oversight of the executive branch. and these scandals, especially -- >> how long are they going to take? they're going to take until a lame duck already. >> i'm in the middle of the irs investigation. but that doesn't mean that we're just going to do that. we can walk and chew gum at the same time. we have to do good policy. our job is to do good policy and do oversight at the same time. >> we need to know -- >> you need to tell us something. >> what we're trying to do is get tax reform. >> you need to tell us something we don't know about the irs. >> just between the four of us. >> just whisper it to us. we just had a guy, we were talking cincinnati, in fact. where are you? where is that leading? >> sure. let me finish the point, which is, we are still going to be fighting for good policy. we still want to do tax reform, energy reform, pro growth economics, a budget deal that gets us entitlement reform that gets us the debt and deficit. >> you can talk about -- >> the point is, we're not going to be dropping our efforts to get good policy and grow the economy because we have scandals, we're going to do our legitimate oversight functions and do these at the same time. >> is it counterproductive? can you work across the aisle? >> sure, i'm working across the aisle on immigration reform while working on the irs investigation. >> handicap this. immigration reform, real immigration reform before the next election and let's throw corporate tax reform in too because that seems to be something where people seem to have a bipartisan -- >> agreement. >> they suggest an agreement, i don't know if there is. >> i do not see these scandals as derailing those things. corporate tax reform is not sufficient to us. 8 out of 10 businesses in america are pass throughs, their effective top rate is about 44.8% as of january now. we're not going to lower the corporation tax rates and keep these individual tax rates really high. 90% of wisconsin businesses are in the individual category. so we are not going to throw overboard, you know, what we call the sub s corporations, which are the engines of economic growth and job creations. we need to lower all tax rates across the board. the ways and means committee, we're going to be doing this. we hope max baucus works well with us on this. >> is there a point where you say we're going to do this in incremental pieces, or is there no way? >> when it comes to tax reform, we think it's very important that we don't have a massive difference between the 25% and successful small businesses are pushing the high, mid 40s. we don't think that's very good tax policy. where i come from, we compete against canada on a daily basis. and they lowered their tax rate to all of their businesses to 15%. we're going to have our subchapter "s" corporations pushing 35%. we think we need to get all rates down. and you can do this on a revenue neutral basis. that's the process we're going to go through, that's the process we're working toward this fall. that's the process we have senate democrats that agree with us on that we're working toward. but to your point, we're going to do -- we're going to do our job on the irs. we're going to do our job on doing our oversight. and what we've already learned is just chilling. it is really amazing. i see it as the arrogance of big government. >> what do you think really happened? >> well, there's four things we already know right now. we know that the irs targeted people based on their political beliefs. and not just tea party groups but religious groups, as well. >> do you think these were rogue employees? >> no, beyond the cincinnati office. we know that. i'm not going to draw a conclusion and speculate until we get all of the facts. >> republicans should not be talking -- it cheapens it to talk about a special -- >> i agree with that. >> congress should look -- >> yeah because then eric holder appoints somebody and they come back in two years after spending $20 million with some kind of conclusion. we think we should do our jobs in congress. so the point i was making, we know the irs targeted people based on the political beliefs, they intimidated and harassed donors to conservative organizations, we know they leaked sensitive taxpayer information to the public so that donors could be harassed and the irs misled congress. the reason we know about this is because congress two years ago asked the irs about this. we were getting the reports in the ways and means committee. we sent letters and had hearings with the irs saying we're getting reports that people are being targeted unfairly and singled out because of their views in the tea party and they said, nope, nothing going on here. >> let me ask you a different question. the treasury department apparently knew about this or at least was briefed on this in june or july of 2012. darrell issa was also briefed. >> he's the one that asked for the audit from the inspector general. the inspector general never told us the nature of the audit, only they were working on it. asked for this audit. this is an audit, it wasn't an investigation. and he cannot say he wouldn't interview with an investigation for do nothing. the inspector generals do audits all the time. and if they tell you we found this problem, you have every reason and right and obligation to go do something about. so when political people at the treasury department find out this abuse was happening in june, they have an obligation to do something about it, not to ignore it. they can't hide behind the fact that the inspector general was auditing and found this bad behavior. you should pick up the phone and say is this still happening? if so, stop it. they didn't do that. they sat by and did nothing. >> arguing the information was ongoing. >> it was an audit, it wasn't an investigation. now there's an investigation that's occurring. that doesn't mean you don't do anything. if you're running an agency and you find out they're doing something illegal, they're doing something that's inappropriate, if you find that information, you should do something about it. you don't say i'm not doing anything about it because the auditors are still auditing. >> didn't know the nature. >> didn't know the nature. issa, his committee asked for this audit because we were getting reports that this was happening. didn't know the outcome. but he knew in june 2012 the nature of this. you think if we in congress knew the nature and specificity that this targeting was occurring, you think we wouldn't do anything about it? look, we're the ones that asked for this investigation. we're the ones who had miller, the acting commissioner come to congress in july in 2012 and to testify about this and he misled us in suggesting there was no targeting happening. >> steve miller? >> no, that's a rock star -- >> no, i was calling for audio. >> the question becomes if he knew about it, how far up the chain? >> i don't know the answer to that. >> and i don't know if you think that's a grand assumption. they find out about this and then the question is, do you believe that information's passed on to other people inside either treasury or inside the administration? >> i'm not going to speculate. i'm going to let the facts. as a person part of this investigation, meaning doing my job in congress, it is wrong to try and try to speculate where this goes. we're going to follow the facts. what i'm saying now are the facts we already know about. and those facts are damning in and of themselves. >> we want to know the facts. >> i know, we're going to let the facts take us to. you guys speculate, we're going to do our job. >> you're close to saying, you think obama knew and actually orchestrated this? that's your next question. that's where you're going. do you think the president actually thought this up? >> it's only us four, might as well. >> but it was steve miller and he's gone, right? >> well, no, he's still there. actually -- he's still there. >> you don't have to answer. >> they asked me to give him a chance to cue it up. >> i do believe he has misled congress. he was briefed in may 2012 of the specificity of this. he came to congress to the ways and means committee and misled us into thinking nothing was happening. >> and we got the woman in charge of the obama care. we've got that going for us. >> which is good. >> which is good. go ahead. >> chairman ryan will be with us for the rest of the next hour. we have a lot more to talk about with him. but up next, a severe weather alert. the plains in the midwest getting a one-two punch of rain activity. still to come, we have blackrock's larry fink joining us at 8:00 a.m. eastern time. we'll find out what he sees for the markets, the fed and the economy. much more "squawk" after this. ♪ 'cause you make me feel so right ♪ ♪ even if it's so wrong ♪ i wanna scream out loud ♪ boy, but i just bite my tongue ♪ ♪ this one's for the girls messin' with boys ♪ ♪ like he's the melody and she's background noise ♪ [ volume decreases ] thanks, mom! have fun! you too. ♪ ♪ welcome back to "squawk." we do have red arrows across the board. dow looks like it would open off about 11 points. the s&p 500 off about 14 points. let's get a cheg ck on the national forecast from alex wallace. >> good morning to you, and again, we're going to be starting with severe storms for today. all the way back down through texas. we include dallas, up towards des moines, minneapolis with that threat for damaging winds, hail, and even tornadoes or something we'll have to watch out for today. and along with the threat for heavy rain. this storm system that's moving through is going to be very slow. even by the time we get to our sunday, we're going to be dealing with storms in the middle of the country dumping a lot of rain in these areas. we're talking a good 3 to 5 inches in that orange zone from kansas city to st. louis, up towards chicago. we could even see some locally amounts getting up into the 7-inch plus range. that could lead to some flooding. that's also going to be a risk we have to deal with. and heads up in the northeast for today, severe weather threat for us, as well. joe, back to you. >> all right. alex, the futures look horrific today. do you think there's any -- >> bull run gets a solid footing. >> i asked for a five-year dow chart. >> you think they're calling the top on "usa today"? >> no, but bull run gets some solid footing, 6,000 in '09 to 15,400. bull run finally gets going, put a little bull up here. it occurred to the "usa today" that the market's been going up. i'm not saying it's calling an end to anything, but you know, in the past -- in the past things like "usa today" -- >> contrary indicators. >> they're so asleep -- media. so asleep that bull run apparently the market's been going up from 6,000 to 16,000. 6,000 to -- bull run, this is for you. >> thanks, i'm going to frame it. >> all right. coming up, tim cook -- thank you, "usa today." tim cook making comments about apple's tax rate. we'll ask this morning's special guest, paul ryan, about offshore taxes and what the effective rate should be here in the u.s. 15% in canada. 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"squawk box" is coming right back. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] welcome back to "squawk box." in our headlines, reached a deal with u.s. regulators to settle national security concerns over their proposed takeover deal. the government's going to have veto powers. anyway, softbank has a deal in place to buy 70% of sprint. dish network also has a bid on the table. rumors of a low-cost iphone are resurfacing once again. according to digi times, apple will be introducing a low-cost version of the iphone 5. and the new phone would supposedly have hardware to the iphone 4s model. we'll have more apple news coming up in a moment. and digi times has a so-so track record. we should probably note that. also, we're going to be continuing to watch shares of smithfield foods this morning. dow jones reporting that smithfield is near a deal to be sold to china's shinouwa. and as joe's been pushing, you would like to see a review of this strategic asset of ours here in the united states. >> would you like ribs? >> also, a large shareholder -- >> is there a chance that we would look at this. and i like to stir up sentiment, all that stuff. >> we have congressmen on the set. we could ask them about that. >> is there a chance. >> i really just don't know. i can't imagine. but -- >> i can't imagine either. >> that -- >> oil was more strategic. >> it's fundable. i stirred up those sentiments too. >> it doesn't strike you? >> no, not big enough, only 5 billion. >> the biggest deal china's come up with. aig is trying to sell. and that does have to go through approval. >> canada blocked that deal for a fertilizer. >> right, right, right. potash. >> that was a huge deal too. we might be able to stir up enough sentiment in the heartland. >> yeah. >> we do want to export our products. >> we do. we do. >> and we have -- we want to make food -- >> we want to buy over there. >> exports have dropped in the pork industry by about 14% because china and russia say they don't want this food additive. we feed this forget the name of it. >> this is why we want trade, 5% of the world's population is here and 95% in other countries. we want to export things. trade agreements. >> we talked some about that, and we also talk about what you thought we should be doing with corporate tax rates. it was brought to the forefront by some of the things tim cook did. why don't we listen in to what he talked about when he was on capitol hill. >> our effective rate is 30.5. i don't know where everybody else is. there's not a ranking of the sort of thing. my guess is, it's one of the highest effective rates. we pay $6 billion. that is the highest in the u.s. we pay more taxes than anybody. we're not in there saying we should pay less. we may wind up paying a little more. what we would get for that is unlimited ability to pull our capital back offshore. and i think that would be great for the united states. >> that was tim cook last night at the all things digital conference. parroting what he had said last week when he was before congress. and paul, that brings you some real issues to start talking about. i know you said you want to make sure this is a fair rate across the board. but is there agreement on both sides of the aisle to try to get something done on this front? >> there is. i agree with tim cook, i think that's a poster child for corporate tax reform. repatriation ought to be a daily event at a company's choosing. >> not a one-off holiday. >> i helped write the last one-off holiday when we had a 5.2% rate to bring it back at one time. we had this bizarre worldwide tax system that nobody else has in the industrialized world. we put it at a huge competitive disadvantage. we need to get our international tax system to be competitive and get our rates down. and so we really think this is incredibly important for growth and for international competitiveness and for making it america a place to park your capital. not to keep it away. >> hang on one second, it's actually happened, it's official. just a couple of details here. it's $34 a share in cash. you can see it moving 25% in the premarket, already at 32.50, well, it was much lower before. it's all cash. valued smithfield at $7.1 billion in total. i'm assuming that includes the assumption of debt. we've got to look at the ultimate debt number is. that's a premium of about 31% over smithfield's closing price as of yesterday, which was the last trading day before the announcement. >> it does say, no mention. closing the transaction is subject to certain conditions of course including regulators and they do mention. we may be seeing that. do you expect the transaction to close in the second half of 2000? >> i could definitely get started. china's hoarding natural resources. they're not going to beat us in, you know, militarily anymore. they're going to beat us economically. that's how they're going to finally achieve their ends. i can get all of this started. >> and you're off to a good start. >> off to a good start. >> not just all the things that becoming scarcer and scarcer. >> they're trying to say here, make people feel a little bit better about this. >> oh, they are. >> we'll sell you -- >> it will be business as usual only better. >> uh-huh, really. >> we do not anticipate any changes on how we do business operationally in the united states. >> still sell you some stuff -- >> they'll become part of an enterprise that shares and our commitment to the highest standards of product, safety and quality. yeah. >> we'll feed our people first, there's only 3 billion of them. >> pork grinds aren't so bad. >> you don't look like you've ever had a pork grind. >> i don't eat those. why don't we make ourselves energy independent? take all this oil and gas that we have recently discovered with all the new technology in north america and use it. >> so you would say don't export natural gas? >> no, of course not. i'm a free trader. >> okay. but that's different. >> the point i'm trying to make is we have learned because of our new fracking technology, which has increased 30 fold in effectiveness in footprints meaning we've reduced the footprint because of horizontal drilling. we've got all of these new fields we've found. woodford, barnette, bakken, we could make ourselves energy independent by the end of the decade. we should actually -- >> this is one place where i say maybe we don't export. we've gone back and forth, we've argued back and forth about this. look, there's guys like charlie monger who say use all their energy first and then we'll have all ours to use ourselves. >> there are some industries who say let's keep it here to lower our stock. i don't think we should get in the business of picking winners and losers in the federal government, but open up our federal lands, make sure we don't overregulate this thing with state regulation. the point is because we have new discoveries. on how we could be energy independent by the end of the decade. >> i'd rather let us use it ourselves. i'd rather take that stuff and make sure we're making our utilities start using these things rather than exporting overseas. >> win/win, becky, which is we need infrastructure like keystone. when it could do 2 million a day. there are things that our government is not doing that is preventing this from happening that we could do to get oil and gas out of this country instead of overseas. think of what it would do for our foreign policy. >> and you're not a central planner. we spent so much money of the stimulus on this. meanwhile, the private sector showed you how markets work and in four years, it transformed everyone's thinking. all of a sudden we've got -- but it's a case study. but no one. >> my point to becky. why should somebody in the federal government say no, do not export. let's just open up. and let's open up -- >> it's a natural resource. and there are some places where i think you can hold back. >> yeah, like pork and beef. >> and also, you know, they say business as usual. what is the subheadline of the press release? greater access to large and growing chinese market. >> they plan to expand in shanghai. >> you could say great to export to china. but ultimately this company's controlled by the chinese government, right? >> yeah. >> that's what it is. you decide. >> no more ribs for us. >> no more ribs? >> you can have some pork ears. >> yeah. >> some of the stuff that goes into hot dogs. it's ground up. it's hoof, you bite -- >> every time you join us, chairman ryan, there's a big deal. last time you were -- >> yeah. it was cyrus. >> yeah, that was a tough one for caterpillar too. >> you can start a hearing right here. >> we already have. we already have. >> he brought me this. am i going to drink this? i've got nothing to put it on. >> we'll have this deal blocked. >> is apple losing its cool? tim cook insisting it's not at the all things digital conference. we're going to hear more about what he said or didn't say. the 11th one i hear. the other ones went so fast. there are the futures down about 91 points, improved a little. "squawk" will be right back. jus. they wonder how much faster this thing could go? what if i took it down that hill? what if it weighed less or turned sharper? they know that things can always be better. we count ourselves among those people. introducing the quicker, sleeker, smarter, best civic si yet. made possible by honda. lets you jump backwards and forwards in time to capture the perfect shot. blackberry z10 with time shift. built to keep you moving. see it in action at blackberry.com/z10 how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ welcome back to "squawk box," tim cook facing the billion dollar question at yesterday's conference. is apple in trouble? cnbc's jon fortt with more on his answer to that and more. jon, good morning. >> good morning, andrew. tim cook's not going to announce a new iphone or anything like that. it was a little bit of a struggle. he did say a few things, though, dropped some hints about product and strategy. one of the things he said when challenges we do apple he was talking about have a few game changers left in us. he was asked about samsung coming out with a lot of funs. >> i don't have my head stuck in the sand. that's never been -- that's never been the corner stone of apple. >> he did make a bit of news. tim cook said that apple has hired lisa jackson, the former epa chief to oversee environmental efforts for a high-level position, he didn't have a title to offer, but did say she would be reporting to him dealing with product and strategy, facilities all the way down. he was asked about things like wearable technology. the iwatch that's gotten a lot of buzz. here's what he did say about some of the considerations to making something like that a hit. listen. >> i think for something to work here, you first have to convince people it's so incredible that they want to wear it because where guys are wearing watches, if we had a room full of 10 to 20-year-olds and said everybody stand up that has a watch on, i'm not sure anybody would stand up. >> yeah. >> i don't see it. >> he has a point. i haven't consistently worn a watch in years and i'm over 20. i won't talk about how much. he also said a little bit about iphone. he asked him, you've got a variety of new ipods that come out with every cycle. but only one iphone. why wouldn't that work? he said in effect, there's nothing to stop us from coming out with multiple iphones. so sort of hinting at that low-cost iphone that a lot of people have been looking for. also, i asked him got the last question in about the app strategy on ios. i talked about how they've got ilife for the mac, a whole suite of different applications. cook said they've been focused on content creation on the ipad as far as ios goes. making sure people know that tablets are good for more than just viewing content. do they need to do more he said? yes. some interesting exchanges. not a ton of news. no product announcements, but interesting hints about where they're headed. >> all right. thanks for the update. when we come back, paul ryan, the chairman of the house budget committee. still to come, also, he runs the world's largest money management firm. larry fink is in house with us. that interview is coming up at the top of the hour. we'll have larry fink along with paul ryan sitting down together at the top. only something you can see right here on "squawk box." ♪ bonjour ♪ je t'adore ♪ c'est aujourd'hui ♪ ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx. ♪ je t'adore, je t'adore, je t'adore ♪ ♪ ♪ s'il vous plait [ male announcer ] this is the pursuit of perfection. let's get back to our conversation with paul ryan, chairman of the budget committee and former vice presidential candidate. we just showed tim cook and started a conversation about corporate taxes. one of the great lessons, the kpet i haveness of which other countries have lower rates and as a result, it makes the rate for a company like apple look as low as it does. not necessarily here in the u.s., but sort of effective tax rate. but if there's a race to the bottom, meaning where canada has this rate and ireland will get you down to 2%. can we ever make our rate truly competitive? and we had -- was it cote who said, make it zero and do it as a pass through to the individual and raise that rate. >> but they'll still leave it over there. >> ireland's 12 1/2, canada's 15, the rate's 25%. we're at 35%. >> what's the impact -- if we go from 35 to 25, does that change the equation truly for tim cook when he says -- >> i think it does. i've talked to the people at apple. we've had these hearings on ways and means. which is because we had such a high statutory rate and a leaky rate, some companies have an effective tax rate of much lower than that. some have higher than that we are picking winners and losers based upon loopholes, based upon, you know, who do you know? we want it fair across the board. and more importantly, we had this awful worldwide system that tells if you make money overseas, you better keep it overseas. >> if even you drop it to 20% or 15%, the point is i could borrow the money at 3.8%. >> we want to get rid of this system and get us on par with the rest of the world. that is not working. so what we want to do we're soliciting public comment on this. we have an international tax system in sync with the rest of the world so you can reinvest here in america which we think is good for growth. >> absolutely, but the question i'm confused about, if i'm a business owner and i have a company where i can get taxed at 15% or 25%, i still take 15%. i don't see the advantage of taking it back to the u.s. >> so you're suggesting that we -- >> no, i'm not. i'm trying to figure out how we can at a minimum revenue neutral basis, i'd love to get additional revenue to the country. just on a revenue neutral basis how you can do that and make it work. >> well, so that's exactly what we're trying to do this whole summer. revenue neutral basis and this is why we also have individual tax reform. >> is it where you start at 25% and now i need to get to 15 because that's what canada's rate is. >> i'd love to have that debate. love to get to 15, but we're at 35. look at how far away we are and look at how bad the kind of system we have which is worldwide versus the other territorial systems in the industrialized world. if you're saying you wish you could get to 15%, is that an ideological view. i'd love to -- >> it's a competitiveness view. how do you make that revenue neutral? >> okay. our budget's around $3.5 trillion. we raise about $300 billion from the corporate tax system. >> right. >> we do about $1.2 trillion total? >> in income tax. yeah, but in a good year on the corporate income tax about $300 billion. >> yeah. >> the point is, it's not a great revenue raiser for the federal government, but it's a massive distorter of economic growth. it distorts decisions in the marketplace which puts american companies at a competitive disadvantage. and so this tax policy does a lot of damage to jobs. by the way, i think we'll get more revenue. there was a great study that shows if we lower the corporate tax rate to 25%, we will probably get more revenue because we'll have more economic growth. >> they don't need to go outside. they can build all their facilities in japan and pay -- whatever it is and pay 13. >> i'm trying to recruit a fortune 100 company to wisconsin. this is a successful company with a lot of cash on their balance sheet. >> who? >> i'm not going to tell you which one. they say you know what, i'm building factory overseas, i'm going to ireland. lower the tax rate. >> are they in illinois? >> i'm not going to talk about who they are. but i'm saying we're trying to get well. a lot of illinois businesses are moving to illinois because it's better -- >> your girl, she's retiring from the next door state? bachmann? >> yeah, i heard about that this morning. >> she can't win? >> no, michele's a great high-energy congresswoman. i didn't talk to her. i heard about this -- >> you don't have any insight? >> chairman paul ryan is sticking around. when "squawk box" returns, we will add another news maker to the set. larry fink is here. we have a lot of ground to cover. stick around, "squawk box" will be right back. i want to make things more secure. 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>> we thought about it. >> we have more from larry in a second. first, andrew has your morning headlines. >> take a look at futures. red arrows across the board, dow looks like it opens off about 115 points. and the nasdaq also off about 25 points. if you look in asia, the hang seng was off about 1.6%. and we had a mixed picture elsewhere. and in europe as we flip that board around, you can see we did have red arrows across the board there, everything off about a 1.5%. alan krueger is stepping down of president obama's council of economic advisers returning to his teaching job at princeton maintain his tenure. he took that job back in 2011. president obama's nominating jason furman to replace him. he's currently principal director of the white house economic council and been an adviser since the 2008 presidential campaign. also this morning, apple ceo tim cook isn't tipping his hand about future product releases, but he did hint that wearable products could be among apple's future innovations. the all things digital conference that apple would release several more game changers among the upcoming offerings. i thought he was sort of against those wearable watches. >> right there. >> i'm sorry. >> not malt -- that's what i said in the 6:00 hour, for those who missed it in the 8:00 hour, here we are. also, the big deal of the morning. smithfield food agreed to a deal to be sold to china's shuanghui. a 31% premium over yesterday's close. and it is china's largest pork producer. and this is the largest deal in the united states after that amc theaters deal. and joe is now the chairman of the review and we've been doing -- we've been having the hearing here on the set and decided to deny this transaction only an hour after it hit the tape. >> you eat salads. some of us like ribs. >> i like ribs. >> they're buying all the natural resource companies around the world. now they're going to food. >> you didn't complain when they bought amc, that's the export of our culture. >> didn't you read what they want to do eventually? you know they're going to pass us eventually. now they're going to -- this isn't happening. >> he should've bought them. >> he should've. you can come in now. >> you have the pork, i'll have the beef. >> there you go. >> our guest host for the next hour runs the largest money management firms with assets totaling over $3.9 trillion. also, representative paul ryan who is the chairman of the budget committee former vice presidential candidate is here. and larry, thanks for joining us at the table this morning. >> nice to be here. >> it's great to see you. >> i thought you were asking me to opine -- >> that's what i got out of this show, which is go stop this. >> go stop this. this is not a good transaction for america. >> it would be -- you know, we're joking about it, but you never know. in the heartland, remember what happened with yoplain? >> no, it was danon. >> in wisconsin. >> they said that's what they wanted to keep it pronounced. >> and they didn't sell it. that wasn't a huge deal either. >> yogurt. it wasn't greek yogurt like you like. >> anyway, larry, it's great to have you here. and this was an accident to have you and paul on the set at the same time. it worked out that way. but you two both have one thing in common and that is trying to make sure that people are prepared for the retirement. i know this has been a huge message for you, it's something you've spoken with us here in the past, but you've gotten more pointed about this because when you look at the numbers, you're worried about what you see. how are americans prepared right now? >> they're not prepared. i think the biggest issue we have today, bigger than the tax policy is the whole retirement issue. the average american only has $25,000 of savings. >> which means they are -- >> during the retirement. >> only 65% of americans who have -- who can't participate in a defined contribution plan participate. so we have a whole group of americans who are just not saving for tomorrow. so security was never meant to be a savings plan. it was meant to be a plan to hold over americans during their retirement age and now we're living longer. and so even the highest earner only receives $24,000 from social security. and yet, 70% of americans income during retirement comes from social security. because they're not saving that much. and now the problem is even more enlarged. because if you actually put your money away in bonds 10 or 20 years ago, you enjoyed very good returns. for those who were -- who are continuing to put their money in bonds earning 2% or 3%, they're not going to even get close to their needs unless they start contributing, you know, a much greater percentage of their disposable income, which would have pronounced impact on our economy today. so even the asset allocation issues have to be addressed. and they need to be addressed today. and so i'm sounding the alarms today because i don't think anyone else is. and if you add this whole concept of elongated life, if we don't start addressing it now, the elongation of life which we're all spending time -- sometimes, but we're doing that because we want to -- we intend to live longer. we want to see our grandchildren and hopefully our great grandchildren. we're spending so little time on making sure that we have the financial wherewithal. >> what's the answer? >> well, you'll have to be nice to your kids because you'll have to live with them. i don't mean that in any joke. that is going to be probably a response that you're going to see greater and greater. maybe we're going back where we were 100 years ago where children supported their parents and their parents lived with them. but i don't see any other outcome other than that or we are going to have to start thinking about ways of creating a different type of mandatory savings policy which i believe we need to do in the united states. >> it's a numbers game. and paul, you've talked about -- >> one of the down sides of qe, we have destroyed the savers. we heard the insurance companies are trying to prepare and we're pushing people further out on the risk curve, stretching for yield and that creates the own set of asset bubble problems. but to larry's point and larry and i have talked about this, he's one of the few people sounding the alarm about this income security problem for people in retirement. don't forget in 2033, we have a 25% across the board benefit cut to social security. once we run out of the social security ious, then the law current law cuts the rate, the benefits across the board and that's about a 25% benefit cut coming in the middle of people's retirements in 2033. so even social security as small as that benefit is for people gets cut by a quarter in 2033. and every year we go down the road of not fixing the problem next year will be 2031 or 2032. it's a problem that the political class in washington is not getting ahead of these proble problems. >> that goes farther than what social security is today. >> the problem is -- >> pay as you go system. >> social security, the problem is as an individual, we all are contributing 6.25% of our income. and your company's contributing 6.25% of income. >> then it's capped. >> yeah, it's 113,000, i believe the cap. so 125.5% of your income. if you calculate how much money you're putting away and you intend to retire between 65 and 67, you're not going to get your money back until about 85. and that's with zero return. >> that's right. >> it is not -- it's never meant to be an investment scheme. it's meant to be a calamity scheme or backdrop. it's supposed to be a supplement. >> an insurance program. >> and it's a great insurance policy basically. you have the full faith and credit of the u.s. government that you're going to get this money and it's -- it is a form of savings plan. that's what it is. but it's not -- it's a nonearnings savings plan. you juxtapose what's going on in australia. and the individual contributes nothing. but at this time now, and that plan was started in 1992 and began at 3% up to 6%, now it's at 9% in 2018 goes to 12% of contributions. the australians per capital have the highest retirement plans in the world because this is an investment scheme. you have an opportunity to invest in four or five different types of options. great things for the men and women who are working -- >> the investment firm with the size and scope to manage all this. >> to be able to manage something like this for the country. a blackrock or -- >> maybe. >> but the federal thrift plan, it's a great model. >> it is a great model and the model that people like me who have written reform bills have said we're taking 12% of our wages and we're putting in a system that andrew and i, we're going to get a 0% rate of return, my kids will get a negative rate of return. my mom about 6% rate of return. the younger you are, the worse you do, and go to a full-fronted system, away from this pay as you go system and let people take a portion of their payroll taxes and put it in a thrift savings plan, like the one i have as a member of congress and federal employee so my money's working for me so it's compounding and growing and i have something there that's part of my property that i can -- >> people will say look at 2008 and 2009 when the market got -- >> by the time -- >> you look at it, though -- what do you care? so, you know, you were talking about the headline where the markets are. so look at what happened in '08 and '09, and if you kept your money invested in high-quality stocks you would have been fine. >> right. >> if you're a liability in 30, 40 years, why do you focus on that? >> it will be an issue that is raised and people shout about. >> i love people to raise it now and the proof is in the pudding right now where the markets are today versus where they were. i'm not trying to suggest i was not a calamity, i would not suggest if governments did not react quick enough, we would've been in worse shape. i'm not here to be blind what actually happened. but the reality is if you are a long-term investor with 30 or 40-year liabilities, these type of movements and severe as even '08 was it has proven that it wasn't significant in terms of your outcome out 30 or 40 years. >> the thrift savings plan has its default life cycle funds. so adjust per your age. if you're near retirement, you're not even in stock market by the time. you're in fixed income by the time you're near retirement automatically adjusting. there are ways of designing these full-funded plans near retirement. >> what is mind boggling is that we aren't taking into account the way that knowledge is increasing right now in terms of health care and there are people that think by 2030 we'll have cured most -- not only most cancers, but even some age-related -- by 2040, we may all be living to over 100. and health care's going to be expensive and no one's going to die. >> because we have created -- >> that's a good thing, but -- >> we have made terminal diseases chronic diseases. >> that's right. but we may do better than that. >> we may do better than that. so far we have not changed much in -- >> we're on the cusp of how much knowledge we know. hopefully, but that makes a bigger problem. >> in most treatments, cancer, we have -- we made some cancers chronic. >> on the singularity that will occur in 2035 and 2045. we may get to the point where your cyborgs and your brain is transferred into a machine and you don't die. >> are you going to play keanu reeves? >> similar to the matrix. won't be any rib eating. >> we don't have ribs now. they're going to leave the snouts. >> that's it. >> the ears. they'll take all the good stuff. >> given joe's expectations, how do you change social security in terms of the age? >> well, age indexing. what i've advocated, what we did with respect to medicare, age indexing. replicate so it moves up with longevity, that means it goes up one month every two years. and it's hardly draconian. what we've been saying long, for a number of time is republicans is these programs are never designed to last as long as they are. when social security was designed, life expectancy for men was 63 and the retirement age was 65 and life expectancy was 63. the numbers were great in those days. we're saying reflect longevity. >> let me be a little more additive for a second. if you're a couple 60 years old, statistically one of the couples will live over 90. so, you know, when you do these age tables, it takes into account all the, you know, young people who have died from some cause, traffic accidents, other causes. it even takes into account, you know, men and women in military deaths and things like that. and so actually, when you're 60 years old, you have a high probability of living to 90 now. and that's a big change. >> you supported president obama. why have democrats not -- >> you did too, by the way. >> why -- >> why is -- >> why -- why do you think the democrats have not been more supportive of some of these -- of what seemed like common sense solutions? >> you know, i don't know. i've discussed this with republicans and democrats of this whole concept of longevity. i do believe if we bring the concept of longevity to the american people, you could have a sensible conversation about entitlements. you can have some sensible conversation. but if we don't educate about this whole concept of elongated life, then it's hard and emotional to talk about the changes. and so to me, and this is one of the reasons why we are speaking out a lot more about it, i believe we have to educate. we have to inform. and then i believe that dialogue is -- can move down a more sensible path. >> i wish you didn't have to leave. but i love having larry here. i printed this out for you, larry. i wish you didn't have to leave. >> yeah, sorry. >> where do you got to go? >> you're kicking me out? you guys are making me leave. it's not my choice. you're making me leave. >> that's not even true. they're yelling at me you have to go. >> you'll be back again, right? >> yeah, absolutely. >> thank you very much. >> we're going to -- >> i'll hold you to that. >> larry fink will be with us for the rest of the program. >> thank you, larry. >> thank you, paul. >> good to be here. >> it's me? 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[ static warbles ] iac corp. rumored to be looking for potential buyers for "newsweek." >> i think they're publishing -- >> and now they've merged. >> they're online. >> are they online? is there a print? >> i can't remember. is "variety" still print? >> i don't know, but they merged. >> i thought the plan was -- >> and guess who is an investor in that? dan loeb. there you go. >> don't get her mad at you? she's the best, smartest, beautiful. iac bought a stake in "newsweek" in 2010. the news magazine stopped print publications last year and moved to an all digital format. and relaunched this earlier this month as newsweek.com. we spoke to iac chairman barry diller earlier this month to ask him about what went wrong for miss plans for "newsweek." >> i did not realize what an elective for advertisers a one off book published every week was. and essentially you did not have -- no one had to advertise in "newsweek." not like "vogue" you've got to be there. no one had to be to "newsweek," we were begging for advertising and begging is not a sustainable model. and as soon as i realized it about a year late or about a year -- no, ten months later, we acted. >> i was going to say barry diller making an emphatic, you know, sales pitch there for his magazine and how great quality that it is. let's get back to our guest host this morning, larry fink is the chairman, of course, and the ceo of blackrock. and the last time you were here, you made an argument for equities. you made an argument against bonds. >> are you still in the same place? has anything changed for you? >> no, not really. obviously we've had a big rally since then. but corporate earnings have kept pretty much pace. i mean, we have s&p is around 15 1/2, 16 times earnings. that's, you know, that's in the fair value. it's a little more expensive than it was. there's no question in my mind that equities remain fairly cheap. getting back to this longevity issue, though. i believe the biggest problem we have is there's a duration gap between what we are putting into our pensions, in terms of maturities and what our actual needs are. and you're not going to want to get your duration in 30-year bonds today at a 3% rate. and that's one of my fundamental views, one of my long cycle views, and as a result of that, i believe you're going to get duration through equities. >> on the short-term last week, bernanke and the fomc minutes came out and people started thinking, he's going to take his foot off the gas, what will that mean in the short-term? >> well, i believe the fixed income market is going to 2:00 respond with higher rates but not arguably, you know, very high rates. so you may see a 50 -- may see 100-basis point move in rates as a result of this. but that's still supporting an equity market. you know, at the same time, the federal reserve may take their foot off the pedal and we still could debate when that will be. whether it's september or whatever you believe, actually it'll be later. i believe the chairman also said he's focusing on employment. he's not focusing on data. and the data he's actually mixed. you have consumer confidence much higher, a lot of the manufacturing data slowing down and things like that. also, you know, you had a higher unemployment rate in germany, so you don't have a solid footing in the world. but so at the same time, the federal reserve takes its foot off the pedal because of the sequester, because of our economy doing a tad better than budgeting. we actually are going to see a shrinkage of treasury issuance. and at the same time, as we speak about it, you still see private sector deleveraging going on. so at the same time the fed may be pulling back on their purchases in which, you know, they've been enormously supportive buying $85 billion. taking out really 90% of the supply. so i'm not trying to suggest they have not been, you know, largely influential in the marketplace. but at the same time, you're going to have treasury issuance decline, continue to have deleveraging and so i actually believe when you talk to the other investors, we can't find enough good investments. >> do equities take a hit when we hear he's pulling back on the gas pedal? >> you'll have knee-jerk reactions, but i'd look at that as an opportunity. >> one would think so, the economy, basically they're saying the economy is stable without us. >> if you ever added unfunded retirement and unfunded health care, do you have a number? >> i don't know. >> it's over 100 trillion? >> yes. >> maybe $200 trillion. especially if we live longer. >> and that's the duration gap. >> i know. but if you add health care, it's probably $200 trillion. >> that's a lot of money. a lot of money. >> you know, the reality, the reason why the economy feels better is, you know, the consumer confidence is rising. if you look at the consumer debt to their income levels, we're back to the average. so we spiked up after '05 and now the deleveraging is occurring. we're back to the last ten-year average. we're still above the '90s. >> david cote was talking about how difficult it is to increase the top line. >> his stock has more than doubled while he's been talking and market rewards. >> the market's rewarding it. >> right. >> there's an underlying economy issue. >> the economy is not at full throttle. this is another reason i'm not as -- i don't believe the fed is going to take the foot off the pedal any time soon. i'm in a different camp. but i believe the economy is actually improving. >> right. >> but there are some companies that have top line growth and -- >> and you say equities keep -- i mean, joe thinks this is a long-term bullish market equities. >> i think it's a long cycle move. no different than we had the 2000 decade cycle of an equity decline. you know. and so i believe we have another five to six years. we're not going to have 18% compounded growth on equities. we have 8 to 10? sure. >> we have to go, but are bonds dangerous? is it more than just you're losing opportunities? >> dangerous if you have needs before they mature. bonds are never dangerous if your needs are -- are complete at the maturity of your bond. >> larry, 8% to 10% over 6 or 7 years puts us at 30,000. >> yeah. that sounds pretty good, doesn't it? >> does sound good. >> larry's going to stay where he is. continue the conversation. coming up, more from our guest host, larry fink. chairman and ceo of blackrock. stocks on the move ahead of the opening bell as we head to break. take a look at u.s. equity futures now down about 92. everybody has different investment objectives, ideas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally different. ishares core. etf building blocks for your personalized portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. it's lots of things. all waking up. ♪ becoming part of the global phenomenon we call the internet of everything. ♪ trees will talk to networks will talk to scientists about climate change. cars will talk to road sensors will talk to stoplights about traffic efficiency. the ambulance will talk to patient records will talk to doctors about saving lives. it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. the next big thing? we're going to wake the world up. ♪ and watch, with eyes wide, as it gets to work. ♪ cisco. tomorrow starts here. welcome back to "squawk box" this morning. take a look at stocks to watch in today's trading. the big one, smithfield foods, it is jumping, yes, sir on news it's going to be bought by china's shounghui international. joe's going to block it in the review. we'll be talking about that. also, the business of death this morning, a little morbid. two funeral home and cemetery operators are joining forces. services corp. international buying stewart enterprises for $13.25 a share. that's a 36% premium over tuesday's close. 11 cents above estimates. revenues in some same store sales soared. 37% from the year before. i haven't bought anything in a while. >> i don't think i ever have. but a huge rollout business. may become less great. people still die, but it may become, i mean people are living a lot longer. >> mash grc margins in that bus shockingly high. >> funeral homes have more income. >> that's true too. >> float. >> it's a float. >> it's a float industry. >> actually, we're going to get back to our guest host larry fink, chairman and ceo of blackrock. and that is a lot of smart people. you feel this is not a cyclical recovery. we had quite a move from 1982 to 2000. and earn says, please let it happen again because i squandered it all the first time around. but people have been saying that for 10 to 12 years. people are not that excited or long-term believers. >> also, when you think about the tech rally in the late '90s, we were talking about. >> and if you look where the p/es are, they're in a reasonable level. very different than it was the last big equity rally. >> just here or elsewhere? >> well, i think if you want to be more diversified build multinational companies that participate in the world. so one of the things we've seen, though n the big equity rally, if you look at the markets. the emerging markets haven't rallied that much. people going in the equities, they're going in the equities that are more stable, they're looking for equities paying higher dividends. they're not looking for equities that have much more upside. they're looking for equity returns, but not with a high vol. they're looking for equities that have lower volatility than norm. and this is one of the reasons the u.s. has done so well and our company's performance has done well unlike some of the emerging world. i would tell you today's emerging world equities are probably pretty cheap relative to where you were. >> i don't know if you wanted to be in administration or treasury secretaries. that's -- let's assume that you were right now. >> we're interested or were what? >> no, let's assume. i'm going to make you treasury secretary for a day. >> great. >> would your next pressing issue be what you've been talking about this morning? would you be looking at something else like infrastructure or stimulus or tax reform or -- what would you be doing? what do you need to do government wise? >> well, i think the role of any governmental official is trying to respond to the needs in the short-term. and the short-term is stimulating some type of infrastructure buildout. trying to find ways to finance more infrastructure in this country and elsewhere. >> would you just borrow like larry summers thinks? it is cheap, right? >> you could do it through that, public/private, or some form as you focus on tax reform. maybe you make any investment over 10 years to have, you know, long-term capital gains tax. so you could -- you could make a tax scheme, a tax program that would be a carrot and a stick. maybe you change capital gains from one-year anniversary to a 30-year anniversary of ownership. and maybe if you own it where infrastructure is you have some tax advantage type of -- >> you think we're missing out on doing something right now? we're not doing anything, we're not going to. >> there's no question we witnessed another bridge problem because of -- >> something hit it, though? >> something hit it, but things generally hit bridges but -- the lack of repairing our infrastructure is at a crisis now. >> what do you think of keynesian stimulus? >> there's a role for a governmental plan in stimulating the economy. but i do believe in many ways the federal reserve has been playing that role through their quantitative easing. it's not like we have not seen any stimulus. we've not seen -- >> you would do more? >> i think there's a combination of spending that is necessary for infrastructure today. i believe there's great investor appetite for infrastructure debt. so if you can get ten plus year debt that's paying you a fairly good return, you could have huge, huge interest. insurance companies would be interested in it. the real issue is where the equities are going to be coming from for infrastructure. that's a bigger issue. you know, we do have a big infrastructure fund. our problem is finding the appropriate investments today. so if you were in government today, you should be focusing on short-term issues. you definitely have to start sounding the alarm. as i said earlier, i don't believe you're going to get anything done unless you start educating americans about the elongation of life. and once they understand what is happening in terms of life and getting prepared for this, then you could have a sensible dialogue. but at the same time, when we -- >> such an angry conversation right now. >> well, it doesn't need to be. that's what i'm trying to say. we need to educate first. >> we had the head of the aarp on. and we pointed out about how things have changed and how social security was set up originally and what we could do differently. the only thing he was willing to say you should take the cap off social security. it should go up for people and that would solve the whole problem. >> social security's not -- is not a structural problem. that could be changed very easily. >> it's the entitlement -- >> it's an entitlement issue. >> he was not willing to say you should retire a year later, 40 years from now. >> listen, i'm not worried about the retirees, i'm worried about the young people not putting money to work for retirement. i'm talking about the 230, 35-year-old who is not preparing for retirement today. 2:00 there are ways of mitigating issues for those you make promises whether it's social security or health care and medicare and those things and those promises in some way or fashion if we don't educate our participants they have to be met. they're an obligation of the u.s. government and i could understand our views on this. what i'm trying to suggest, though, we have a lot of men and women who should have the ability to have more choice. where you could build up, you know, an investment vehicle where you have more for retirement. >> larry, the ten-year hit a 14-month high and then backed up -- >> 2.2? >> 2.235. and then it backed off to -- and it said buyers came in and immediately pared its losses because buyers came in at 2.235. there will be a 3% again some day. >> maybe. but the issue is we haven't begun seeing the rotation. >> right. >> that may happen, though. >> yeah. yeah. maybe even from higher levels in equities. >> that's when it'll happen. it'll happen when you have greater losses in bonds. coming up, much more from our guest host, larry fink. but first, though, a new study showing more american mothers are bringing home the bacon for now, bringing home tofu. that story next. tdd#: 1-800-3450 when i'm trading, i'm so into it, tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies, tdd#: 1-800-345-2550 spot patterns and find opportunities more easily. tdd#: 1-800-345-2550 then, when i'm ready... act decisively. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 with the exact same tools, the exact same way. tdd#: 1-800-345-2550 and the reality is, with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 ...until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-866-516-0492 tdd#: 1-800-345-2550 and a trading specialist tdd#: 1-800-345-2550 will help you get started today. welcome back to "squawk box," everybody. here is another changing trend for you. turns out that america's working mothers are now the primary breadwinners in 40% of households with children. and that is up from 11% back in 1960. that's according to a new study by the pew research center. most of the households are headed by single mothers. a growing number are families with married mothers who bring in more income than their husbands. among the factors driving that trend, declining marriage rates, higher rates of education and financial hardship from the recession. when we come back on "squawk bo box", we will continue our conversation with larry fink. and a programming note, don't miss "squawk box" tomorrow. we'll bring you the jobless numbers. and first quarter gdp. plus, we'll continue our disruptor series with the founder of flip board. we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ ♪ [ male announcer ] how do you engineer a true automotive breakthrough? ♪ you give it bold styling, unsurpassed luxury and nearly 1,000 improvements. the redesigned 2013 glk. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. through mercedes-benz lets you jump backwards and forwards in time to capture the perfect shot. blackberry z10 with time shift. built to keep you moving. see it in action at blackberry.com/z10 a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome back, everybody. let's get back to our guest host this morning. larry fink the chairman and ceo of blackrock. one of the things we've talked about recently that you had brought up when we were talking off camera is just how investors look at things with a really short-term mentality. how that's changed over time and some of the damage it's done just in terms of how ceos now manage their company to respond to that. >> well, i think everything that we're faced today is more -- whether it's the news 24/7 news cycle. if you look at the dynamics of how the markets behave, most players in the markets make money on the velocity of money. and they're trying to, you know, talk about quick trades and option trading and all this other things which all studies show it has negative outcomes for most people. and yet we perpetuate ideas like that. and then you have things even from corporate governance issues. from my perspective, some of our more too short-termism, the annual election of board members. board members are needed when you have problems with companies. and so the question when you have -- you know the desire of having annual election of board members strikes me as something totally against what you need. you need board members to be there, not worried about their annual election trying to focus on the needs of shareholders and the needs of -- >> what would make sense? every four years? >> going back to a board of sort. or make it every three years and not stagger it, but you need to have some form of some form of elongation. everything we do now is more short-term news cycles and all that. one of the big issues is confidence. we're sitting with $1 trillion in money. even more than that in terms of money market funds. and corporations. confidence is still weak, another reason why i like the market until i see confidence really strong, i may change my view. one of the big issues in america today, we're not investing as plants and equipment. we're not hiring as fast as we used to. >> well, you were talking about how that's a problem because ceos, what's the average term? >> five years. >> why would you invest in plants if that's not going to be something that will be completed after you're gone anyway? >> well, and most ceos are looking to have elongation of their career too. they hope to be longer than five years. yes, you see behavior changes that are more short-term in their behavior. so the whole world is about short-term. washington, we can't focus on one long-term event, tax or retirement or deficit reduction. it's all about the moment. washington is as guilty as anywhere. >> you just were selling the government short-term things not long-term. sort of, that's the only thing we can focus on, right? infrastructure, things like that, not entitlement. >> at least that's a start. yes. >> the actual investment is long-term. >> if you were treasury secretary were mostly short-term things, right? >> i would start a larger debate on these longer term issues. i do believe we need to have that education and debate. >> larry, i agree with you 100% on the short-term issue, having said that, there are people on the other side going to say shareholder democracy has helped make real sizable changes, you saw p & g last week change the ceo. it's perhaps the result of pressure from shareholders. you saw -- i don't know what you think happened to jpmorgan on the flip side where the shareholders say they made a big stink and it was over nothing. >> shareholders did not make a big stink. >> larry, blackrock is the largest shareholder of jpmorgan, correct? >> we are. >> and proctor and gamble. >> and you're like the one, two or three in about every major company. >> right. >> so those two issues. >> well, i think shareholders spoke loudly on jpmorgan. >> right. >> i think shareholders said jpmorgan with jamie dimon is a better outcome than without jamie dimon. or a jamie dimon with two titles versus one title. i think it was a proxy services organization that really spoke more about these issues. so i don't think shareholders did speak up that loudly. >> but what i was suggesting they spoke up loudly on the other side. have a vocal minority. >> maybe shareholder democracy in this case worked. >> i have nothing against shareholder democracy, i think on those events having less pressure on board members you'll have better outcomes. that's all i'm suggestth. >> what about the procter & gamble -- >> there's no question procter & gamble under bob's tenure underperformed its peers, underperformed -- underinvestment in emerging markets and the board was looking for a renewal of its growth, and so they brought back the past ceo, and you know, i think -- i'm not sure what shareholders were forcing to change, they were probably stirring within the company itself. from what i understand, morale is quite low within the company. when you start comparing yourself to key competitors then you're watching your key competitors doing better. the enterprise is aware about those changes, and i believe the board was aware of it. one thing you didn't say is procter & gamble has a very good board and jim mcnerney played a very important role as lead director. >> we will continue in just a moment and when we come back, jim cramer is fired up and ready to go. we'll go to the new york stock exchange right after this. ♪ ♪ fly me to the moon ♪ let me play among the stars ♪ and let me see what spring is like ♪ ♪ on jupiter and mars ♪ in other words [ male announcer ] the classic is back. ♪ i love [ male announcer ] the all-new chevrolet impala. chevrolet. find new roads. ♪ you chevrolet. find new roads. the math of retirement is different today.ek. money has to last longer. i don't want to pour over pie charts all day. i want to travel, and i want the income to do it. ishares incomes etfs. low cost and diversified. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. that's fine. let's get dunn to the new york stock exchange. this is good. that's quite a pair, number one, for the ladies. what's happening, dudes? bros? >> do you know how to say schwong way? >> i am up in arms about this. you know they'll take all of the good stuff and leave the snout and the scalded stomachs and tripe. you're not going to have anymore ribs. should we get cfius on this, faber? >> i was joking, but in the heartland there could be a dannon type of response to this. >> eric cantor's district is smithfield. >> it's flowing in rivers in china? >> i didn't bring that up. they're replacing that 16,000 pigs that were rotting in that river. i didn't think it was politically correct to bring that up, but you did. >> i do believe just like yum accidental though there was the talk about chickens, just like yum, the seal of approval of the u.s. department of agriculture is something the chinese live for, and i just think that eating, you know, pork fried rice over there has become quite an experience. >> yeah. >> they bought natural resources everywhere, and now this is a signal that they're going to -- >> i don't know. i was just making all those points sort of tongue and cheek, and i wonder whether people take this seriously. they will claim that this has nothing to do with national security, joe, but we'll see. in some ways, even though i know you're joking there is an element to this that is very real. >> this is our food supply, and it would not be surprising. >> the swine before pearls. >> they're hacking us, too. >> does anybody else come in for this thing at a 34% premium. >> it's a big premium, andrew and it's a worthwhile question you're asking. i don't know. continental rain was there. the nominee deadline was very soon and we'll have more on the big hog deal with china. >> it was awesome. >> this is larry, do you know if this company is a government-owned company or is it a private company. >> shine way is not a state-owned company. the sum of its parts is shareholders. >> then this will be approved. >> all right, guys. we'll be watching. you'll talk about this. up with america. >> all right, guys, we'll see you in just a minute. our guest host has been blackrock ceo larry fifrpg. we'll give him the last word. m. because things can always be better. we like those people. they think like us. introducing the best civic sedan yet. made possible by honda. 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[ static warbles ] dave's always wanted to do when he retires -- keep working, but for himself. so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school. go dave. when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far. >> welcome back, everybody. we want to thank guest host larry fink. we didn't get through half of what we wanted to talk about. would you come back? >> it would be a pleasure. >> good luck with the shareholder meeting tomorrow. >> it will be a fun one. >> that does it for us, right now it's time for "squawk on the street." good morning and welcome to "squawk on the street." i'm david faber with jim cramer live from the new york stock exchange. carl quintanilla is on assignment. after another record-setting day for the dow we are seeing a decline as you see it there and a significant one in futures across the board. let's take a look at europe. you'll see the same picture there. that's a painful day in europe, which as you know if you've been listening to jim kraemer has bottomed and ,

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