Transcripts For CNBC Squawk Box 20140516

Not much. Do you have a tattoo . I do not have a tattoo. You dont have a New York Times i dont. Can those be removed . Do you think shes going to did you see the cover of the post. Long three hour. See the cover of the post. You used to be scared to talk about her. Ding dong. Shes gone. You can talk about her now. I prefer jill has been very good to me are you going to look at this. That is her there she is. Her subway token tattoo. Ive never seen you completely naked and so i cant say whether you have i know ive shouted about do you have are you unequivocally saying you dont have a New York Times tattoo. Not in a visible area. How about that . So you leave and all hell breaks loose, sorkin. Its really the last week you were gone we had every merger i timed it perfectly. This time i timed it perfectly because this is something i prefer to the to talk about, as can you imagine. No, i cant imagine. Shes gone. Youre still afraid . In the same way that i would never write about the inner workings of the great family that is nbcuniversal in the New York Times pages i wouldnt talk about the inner workings of the New York Times on this was your chance to be for us to have an insider and that is true. To know what it was like in the newsroom. How about this i dont know. I dont have enough information. How about do you know him good guy . Hes a great guy. Jill was great too. Thats why im not im like a bad guest. Instead of a bad anchor, youre a bad guest. I might get a peacock. Pretty much. For your yard . No, for a tattoo. She said for a at that time too. Although i i dont have a peacock. You dont. Theres not a whole lot to do in prison. Youre not connecting. Desecrate your flesh, is there . Exercise in reading. Spent 14 years. Anyway, the markets because, you know what, i would not have digressed if there was a huge followthrough. See whether there is today and, you know, i was reading yesterday something from jim paulson about all the technical troubling technical things that converged yesterday in addition to closing at 2. 49. Were up a little talking about the tenyear up a little above 2. 5 . But thats how the stock market reacted to worries about Global Growth concerns and, you know, we did have higher Inflation Numbers in line, but if you put slow growth together with high inflation or rising inflation, theres a name for that and people dont like that. In the past when weve had it, its been really bad for financial assets. No one saying well get there yet. You know, inflation is obviously well behaved. But with the eurozone, the 18 country eurozone growing at 0. 8 annually and youre reading more and more people today in the lead story in the journal saying 3 , if people are counting on that for this year and, remember, weve been talking about it for awhile. Whats the tenyear telling us . When you have what were the german bonds in the one and changes. We cant be at 3 when germany is at 1 and change so we are being dragged down by whats happening on the continent. But it certainly isnt saying were just growing gangbusters over here. What does that mean the fed needs to do . Comments from rosengrin. He wants to do a lot more. What are you laughing at and smiling about . Your smile. Nice to see you. You missed my smile. I just, you know we were like where is andrew . Yes. Where is andrew with this andrew, youre an insider at the the New York Times. Was she mercurial and difficult like everybody said . You can say shes mercurial. That means shes just introverted. I think well just turn i heard that when rob portman did a chicken, i heard huhuh peered on another network. He wasnt ill do the sound of a chicken or get his sound. Oh, you could do a chicken. Because you are a chicken. Im a happy chicken. Im a happy chicken. You know, what youre back im finished. Im not going to ask you anything about the New York Times and youre use also. India, the guy won. I know. No, it should be great. Should be great. Straight to there and the results of the democratic elections in and india will have a new Prime Minister. We have more on the victory from new delhi. Good morning to you. Reporter his name is Narendra Modi and leader of the bjp and they swept to victory today. The count is in. Thought only did they secure a simple majority of 272 seats, which are needed to run a workable government here in the lower house of parliament, you can see over my shoulder, but they did so in style. It was a resounding victory. Landslide victory, the saffron surge theyre calling it securing well over 300 seats. If youre talking about a super majority here, the markets rejoiced bench market sensex powered on to new highs today. A little profittaking but similar story for the indian rupee as well. Multimonth highs, 11month highs against the u. S. Dollar. What the markets here are banking on that the government will speak with one voice and speak with one voice on the need for structural reform. They should not be in theory any impediment from the fractious nature of politics since they won such a resounding victory. No need for horse trading here. Thats what the markets are happy about, but its going to take time to turn around the indian economy. Theres no panacea. No Silver Bullet here and i think the bjp recognize this. Their supporters recognize this, in fact, we were out not too far from here a few blocks away which is where the bjp delhi headquarters are. There is a carnival atmosphere. Still partying. People letting off firecrackers and theres even elephants and the elephant is a very useful analogy here. This was a jumbo victory by the bjp but its an elephantine task to turn around this economy. A lot of a number of challenges they have keeping a lid on inflation, eradicating corruption and also attracting Foreign Direct Investment in a bid to try to improve the capital the current account deficit. Thats where we stand at the moment. Back to you. Okay, sri, weve been waiting for awhile yes. Because elections take a while and this was the outcome that was that people thought and even better then people thought. Way better. You know whats weird the way well bring in our International Correspondent Michelle Carusocabrera but sri spoke about elephants. The universe is weird because at 6 0 well talk about elephants again in a different context. Real elephants. Yes, again. Not republican elephant. Not republican elephants, no, no, no, but in terms of feld entertainment, the circus prevailed completely and well have ken feld on to talk about extracting 25 million from the Humane Society and from the Animal Rights groups that paid a plaintiff to make up false claims about elephant treatment. Really . Yeah, hes going to be on. Just weird. I cant wait to see it. Talking about elephants twice in a half hour. I love that. Not i love elephants. Theres two kinds, though. Asian and african. Yeah. Did you know that . And republican. And republicans. Very aggressive. But your symbol is an ass which seems i dont know. Donkey. Here to talk about the indian elections and what is going on with the eurozone. A move away from socialism under the nehru gandhi family. If you think there was a political dynasty, they have nothing on nehru gandhi in india. We go from socialism to a promarket, probusiness leader in the country. What has modi promised . Massive buildout in infrastructure. How its going to get paid for, unclear at this point but did it in the home state where he was the leader since 2001. More private competition in the oil and gas sector which has been dominated by the state and then for the Stateowned Enterprises better governance and less political intervention into their running and actually more kind of typical running them like a business which should be more efficient. If you could just do those things it would be extremely helpful for the economy which deserves to be doing far better than it has now for the last few years. Lets move on to the eurozone because yesterday and were seeing it again today in particular with greece. The periphery yields rising focused on the United States on our longterm yields going down. Well, greece, spain and italy have gone up. Take a look at greece in particular. Okay, with all the debt they have and its not even at 7 , thats still pretty good, but when you see these charts once again were worried about whats going on . Why, in the last 24 hours weve gotten bad data which really puts a crack in what the ecb has been saying. It hasnt acted much to the complaints of many people because they said, well, we do have a nascent recovery, one, two, we think that Inflation Expectations are anchored. Well, guess what, in the last 24 hour what is did we learn . The gdp recovery is not so good. Italian only in germany. Exactly. Italian gdp went down. France was worse than expected and expectations about inflation went down again. The ecb has signaled they will act in june but a lot of people think its way too late. Why are you so worried about deflation in europe . Primarily because of italy because they have so much debt. Remember, they come after japan and the United States. And yet theyre a much smaller economy. When you go to a closing and you owe 100 grand on a house thats worth 80 grand you have to bring 20,000 to the table. But if you can get inflation going whether its for good reasons or bad reasons and your house rises to a value of 1 to thousand and you make money. You can spread that across an entire country. What weve done here, devaluing the dollar to pay back all our exactly. If you get inflation it helps out utley dramatically. Even the form of capitalism that theyve had for look what the strides india has made. Think if you do unshackle the when you lift the lid of economic oppression even a teeny bit, the changes are dra mat sdmrik should be exciting. Good, fun to watch, i think. I hope so. All right. See you later. Got somewhere to go. Thank you for coming in so early in the morning. Shes been sitting here the last two days while youve been god knows what youve been doing. Hobnobbing. The biggest investors on the planet have been hobnobbing unveiling what theyre buying and selling. Dominic chu has some of the big highlights here earlier. Dominic. I am here early and my producers were here crunching numbers late. Heres the interesting part. Manage more than 100 million bucks you have to make a quarterly filings. Caveat as always is that its a snapshot from the end of last quarter so its already about a month and a half old, but it can help shed a little light on bigger investing themes so lets start with one of the biggest, warren buffet, of course, not a lot of changes to his biggest positions like cocacola or wells fargo but Berkshire Hathaway has a sizable stake in verizon of all companies. Its 11 million shares worth, half a billion and berkshire decreased positions in General Motors and boosted its position retail giant walmart so a big theme there. Next theres Hedge Fund Manager dan lobe. The firm he manages took a stake in verizon. 3. 5 million shares. Small theme. One of his Biggest Holdings is verizon and took a new stake in american airlines. Those stocks have been up big. Americans up about 50 . Then theres yahoo he liquidated 8 million shares he had left and loeb has been winding that down and john paulson he made a new position in verizon. Again, another investor in verizon. Speaking of american airlines, paulson upped his stake by 3. 5 million shares and bought a new stake in media giant cbs so those are three whales. Next hour we have three more including david tepper. The man who doesnt want to be too frickin long this market, john. Over to you. Youre going with the hard k instead of the g. We didnt know if it was frickin or friggin. 4. 4 yield. I didnt do it as a k. You do it as a k. Yeah. Funny that the way we are, isnt it that Everybody Knows what the word is and its implied but you cant say it. Its just weird. Everybody knows what youre saying. Theres another version that have you cant say. Ill tell you about that. When you look at you know what you missed yesterday. I dont know whether you saw this. I feel like i missed you. I missed so much. I know you did. But mostly you. You wouldnt have been you wouldnt have gotten anything because it was just for me. What was that . Im just wearing something in and out of work. A murse. The two of us the proof strutting our stuff. Did you bring that in this morning . Its in my drawer. I didnt bring it home. I wore it up the steps from the set to my desk and that was about can i call it a satchel . You could call it a satchel. Wasnt satchel rowan farrells real name yeah. Then he stopped using it. What about satchel paige. Call it a fannie pack and call it a day. A front. All i carry is an iphone. My makeup is here so i dont need to carry that around. My compact i leave it here primarily and, right, i dont need to carry it around. You can borrow my murse. There was no bro in it. A legal battle under the big top coming to an end talked about this earlier. Feld entertainment ceo used to go to the circus there were protesters about the elephants there and my kids are like, what are they doing it didnt ruin it but, anyway, the ceo will tell us about the big win for ringling brothers against Animal Rights groups and first a great murses in history here. You got a couple of good looks here. Tom brady, thats a good one there, and right in the middle you can see john and me showing off our murses. Back in a moment. Vrj there is an end to feld entertainments case. Other groups have agreed to pay almost 16 million to settle a suit over the companys treatment of asian elephants in the ringling brothers and Barnum Bailey circus. We have the chairman and ceo of feld entertain many. Thanks for joining us. Not a National Nightmare but your nightmare is finally over. Its been 14 years, so almost a quarter of my life spent in litigation and we won the case in 2009 and won two appeals and this was where these Animal Rights groups sued us and what they actually did was they found the plaintiff was a paid plaintiff and found to have no credibility whatsoever and the case was thrown out. They finally settled so they sued us and they wound up paying us with the hsus and the aspca and these other plaintiffs, they wound up paying us over 25 million which was actually what we had in attorneys fees over this time period. So that basically covers your attorneys fees and thinking about the way this is going to be portrayed and we all have a pretty good a favorable opinion of the Humane Society. Who doesnt . Who doesnt want to protect animals. Who doesnt want people watching to make sure that those that cant sort of speak for themselves are treated right. You wont see this vindication in the huffington post. I look in the New York Times i seriously doubt youll see it there either because youre a corporation, youre making money and exploiting these animals. Thats going to be the narrative from there but it doesnt make it okay to pay someone to say youre mistreating animals if youre not. Thats for sure. They really misused the Justice System and they got found out and they paid the price for it. But it dragged us through this the court system for more than a decade. And for us, you know, were focused on entertainment and were focused on the welfare of all of our animals. I mean, its really their agenda, their Animal Rights activists, we are Animal Welfare advocates and practice that 24 7 every day of the week and in addition to what we do on the circuses for these animals, we have a center for Elephant Conservation in Central Florida and we also have programs since 2008 in sri lanka which is has the most asian elephants per square mile of any country on the planet. And theres a huge animal elephant Human Conflict and weve come up with several ways to resolve that. So were doing all this good work. Well continue to and well practice our Animal Welfare. They will, im sure, continue their legislative and let me ask you this. And it is sickening that this went on as long as it did with them. Just because its funny. You wouldnt want to root for them but in this case its awful. What they did to you in this case. Where are they going to come up with the money . Thats what i was going to ask . Well, they came up with the money they came up with the money. Its all paid. These organizations, the hsus, the aspca are collecting hundreds of millions of dollars annually through donations from people. So they had to end up using the donations to pay its just ridiculous. I mean im not saying its not ridiculous to pay you. Ridiculous if youre a donor. How bad to you feel if youre a donor that the money youre giving them to help the animals is now going because they had a specious lawsuit, right . I mean, thats well, thats right. I mean it really, i think, should be a warning shot for the public to really look into where their money goes when they contribute to charities and 501 c 3s to make sure its going to what they think its going to. Where are we, while we have you here, where are we on your view and that this economy is a 3 plus gdp economy based on what youre seeing at your operation . Well, we have various operations. Its not just ringling brothers and Barnum Bailey so we have a motorsports business, we have we operate disney on ice, disney live and we have a new show coming out marvel universe live, so what we have are special events. They come to your city once a year. We found out our business has been quite good. On a scale of one to ten, is it a seven or a three . No, i would say its up about a three. Its not what we thought it was going to be. But its still good because people want to go out. I mean, what really hurt everyone, theres no denying the First Quarter of the year with the weather, people couldnt get out. There was one weekend i think we canceled five or six different shows and different cities because the snow and the weather was so awful. So that was a hit but thats an anomaly and that stuff can happen. So it has picked up since. Our business is strong and our International Business is very strong. Europe has been great for us this year. And we are now in japan which has been very good. And we have our full summer tour there. South america has been pretty flat the last year. How many global are they independent contractors . How many actual feld employees are there . Do you know . We have about 3,000 associates all over the world. So all our performers are also employee. Yeah, weve had your daughters on eye few times and always ask them. They were born into the circus. Did at the want to grow up want to run away somewhere else because theyre well, i mean they could have wanted to run away and join the home, right . Thats whafs thinking. No, they all three of them and i was really surprised wanted to come and join the family business. So they represent the Third Generation and, you know, its the greatest thing every day to be able to go to work with your daughter. Greatest show on earth. Have you brought max and henry yet. We havent yet. Next thing to do. Weve been to the other one. Big apple circus come to the greatest show on earth. The greatest show on earth. Next month in new york. Im a threering circus kind of guy. It is my favorite thing when they go on the motorcycles insi inside the scary. Accidents happen. I know we had some video but things are going to happen when people are doing thrilling things from time to time and i though that this a month ago or so, i know that it was on may 4th, yeah, but for the amount of stuff that goes on at the circus, that its amazing it doesnt and i hate to say it but the part of the thrill is, i think there is a lot more nets being used now. We dont need to press the issue with no nets all the time, do we . No, i mean but what you have to understand is these people are extraordinary and theyre perfecting an eightminute act that they will perform eight to ten times a week. Really for the sheer pleasure of the audience and, you know, theyre really true athletes. Real superhere rose of today. I see them walking on the ceiling of the united arena and it just kills i mean sometimes i have to leave. I cant youre nervous. About heights and for some reason im up there with vicariously and it just anyway, ken, we appreciate your time and okay. You got your money back at least on the litigation fees and the good news is its a big victory for the elephants and we will continue to really go ahead and lead the way in elephant Animal Welfare. Okay. Thank you. Appreciate it. Thank you. When we come back, whats next for the markets in this current environment . We got that discussion when we return. Then the china factor. Reality check on the countrys economic slowdown as we head to a break. Take a look at yesterdays winners and losers. Life in the fast lane the Performance Review. That corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right . You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. I want to know. Good morning and welcome back to squawk box here on cnbc. Oh, my god. I thought it was phil lebeau out of the corner of my eye. Im not sure do you know anything about appeals or loans never buy the one i want. Both important. Both important. We do need to talk im always in the middle seat by the bathroom. You dont limit chicago phil is here. Di see him. He is here. Im joe im joe kernen along with andrew ross sorkin. Becky is off. Fresh read on the housing report. 8 30 eastern they come out. Economists are looking for a 4 rise to an annual rate of 984,000 units. Housing start were up 2. 8 back in march. Consumers are snapping up new video game consoles but ott as entuesday as tick about buying the actual games on those console. What are they doing thenny. Its about a hot name. The ones you cant use the old games on the new one. Streaming services. And npd says sales are up 76 compared to the same month last year. New consoles from sony and microsoft helped out there. Sales of new games fell 10 from a year. All about titles. Sharz of verizon are rising. Berkshire hathaway and paulson added new stakes in the dow component. Watching the sort of some of the rotation in the market, its been a way from the growth names to dividend and income names and now you see the filings of things that already have happened and purpose wondering what was happening they moved. Thats what was happening . People were moving into those and whether that is a commentary on the prospects for whether we are upticking overall in economic growth. I mean you buy dividend stocks verizon one is interesting. Verizon do you think theyre not going to be able to pay the dividend and continue thats a tollbooth forever. Getting 2. 5 on a tenyear note and 4. 5 on verizon, but people will point out it doesnt take much for you to wipe out a 4. 5. One day if, you know, you get a selloff. These telephone you know, theyre funny businesses. All they need to do from a strategy perspective decide theyll make a big Capital Investment in something and then all of a sudden the market whacks them. S. E. C. Stuff like which happened yesterday which im sure its amazing. You look at the New York Times take on the whaler and went 32 with the two republicans saying no and then the journal says its way too much regulation and the New York Times says neutrality is dead. Its unbelievable in this world how it depends where youre sitting for how you feel. Sit in the middle. You do . I do. Oh, yeah. I put this paper over here and put this paper over here and i try to stay in the mid. When i think of you, i think middle. Thats what people say to me too. More on the markets. Joining us is jeff saudi at Raymond James and drew mattis, senior u. S. Economist. Ubs. Jeff, when we hit 249 yesterday on the tenyear i got a lot of tweets that said, wow, we have and we have. Weve been beating this tenyear to death on squawk box since it broke below 2. 75 and wondering what it meant and all along people have told us dont worry about it. It was a crowded trade. Its europe. Its this, its that. Is it indicating were not going to do as well for the remainder of the year gd wise in your view . I dont think so. I think youll get a pickup in cap x and be at 2. 5 or 3 by the time we get to december. I do think the trifecta of bad news is what hit the markets yesterday. You had teppers comments overnight as you point out and the below 2. 5 yield on the tenyear and had military drill, if you will on the ukraine and i think thats what broke the market below 1880. And a weak a growth number in europe too so add that in, thats like four things, right . But the people i talk to in europe, joe, tell me there are less head winds and spoke to a number of pms yesterday and was in montreal earlier this week. I i think there are less head winds and europe picking up. 2 1 2 well get to a 2. 5 , 3 for the year. The market already ahead of itself hoping for 3 or will that be enough to satisfy the equity market . We gave away the First Quarter to a large degree due to the weather. I would point out what we got was a flash gdp report at plus 0. 1 . I think that will be revised upward but revised downward, they say its going to be revised downward because they didnt import export numbers. No . Yeah, i lived in washington, d. C. Well see. All right. Drew mattis will be advised up or down. Looking down but wouldnt surprise me. Economists take three runs at the number. By the time they can usually be right with three, up, down or im usually wrong all three times. Its hard. You do the unexpected. But they get three shots up, down, and i think, though, if you take a step back, you know, ubs views are rising rates are good, volatility is good for the economy longer run. First half will average around 2. A little over two. Second half of the year will average a little over 3 so the trajectory is in the right you just said rising rates are good. Rates are rising and going down. You know, the break point is three. Everyone has three in their head. Probably not going to get do the math. Didnt you say well, yes, but youre moving in the right direction and second half is going to be where you want to be. The First Quarter, i mean, you know, look, what are you going to do . Blame the weather. It was the weather but at the same point theres no way to get it back, right . If you couldnt get to get your hair cut there should be and couldnt get it in february you wont get it cut three times in march. Did you just say rising rates are good. Yes. Rising rates are good because they encourage people to make decision. Theyre not rising. But going to be. The expectation is that the fed is moving higher. Theyre going to be. Are you telling me that that people made a lot of money in the first five months being long bonds and people have been saying theyre going to rise but for you to say for you to say rising rates are good assuming theyve been rising they havent been rising so falling rates are bad then. If you want to sit on a tenyear note and the fed looks like theres a lot of stupid people willing to do that. Theres always a lot of stupid people in the market. The bond market usually isnt stupid but the people following it. Well see. But well see. I dont see how you can use that as a positive that rising rates are good when rates havent been rising. People are looking at the fed moving towards a rate hike cycle in the middle of next year. Its that expectation, right. If they dont rise the rates in they dont do it then youre in the if janet yellen chickens out joe tepper theres a problem. Im with joe. She tapers but then you think she raises. Middle 2015 theyve been saying it for three year. All right. If you go back and look at the number. All right. Jeff, thanks. Hes mustacheless. Is that a seasonal are you going to grow it back . I mean we my wife wont let me. It was a onetime weatherrelated your wife makes decisions in your family. You bet you. What do you mean you have to talk to your wife . We used to put a wedge in between decision anyway, my wife makes decisions too, jeff and im man enough to admit it. How about you, drew . My wife makes every decision. Well, you know what andrew, it goes without saying. You know who runs my house. You cant she wouldnt let me wear a murse. When we return we have a big documentary coming up this sunday night at 10 00 p. M. Eastern time. You wont want to miss it. Sneak peek at failure to recall. Investigating gm right after the break. When folks think about what they get from alaska, they think salmon and energy. But the energy bp produces up here creates Something Else as well jobs all over america. Engineering and innovation jobs. Advanced Safety Systems technology. Shipping and manufacturing. Across the United States, bp supports more than a quarter million jobs. When we set up operation in one part of the country, people in other parts go to work. Thats not a coincidence. Its one more part of our commitment to america. Tdd 18003452550 can take you in many directions. Spark your curiosity tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. Tdd 18003452550 at schwab, we can help turn inspiration into action tdd 18003452550 boost your trading iq with the help of tdd 18003452550 our live online workshops tdd 18003452550 like identifying market trends. Tdd 18003452550 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. Tdd 18003452550 sharpen your instincts with Market Insight from schwab tdd 18003452550 experts like Liz Ann Sonders and randy frederick. Tdd 18003452550 get support and talk through your ideas with our tdd 18003452550 trading specialists. Tdd 18003452550 all with no trade minimum. And only 8. 95 a trade. Tdd 18003452550 open an account and earn 300 commissionfree online trades. Call 18886282419 to learn more. Tdd 18003452550 so you can take charge of your trading. Gm is under fire, the iconic automaker is a subject of a criminal probe by the Justice Department and a regulatory investigation by the nhtsa. Do you call it nhtsa . Everybody who covers the industry calls it nhtsa. And the focus on the faulty ignition switch. What did gm know, when did they know it . Phil lebeau joins us now. It was it was a report was needed. Yes. For you to do for cnbc. And what stands out as we put it together over the last month and a half. A lot say these were accidents back in the early 2000s but is it still happening . We found people who drove those vehicle, still drive those vehicles and as you can imagine for these people when they are out there driving, to have them lose control of their car or lose the ability to control their car is easily as it should be controlled, well, its every drivers nightmare. Jessica justice was the kind of young driver General Motors had in mind when it debuted the chevy cobalt in 2004. I was driving to work and the car just lost power, like it just shut off. No power steering. I couldnt accelerate. There was no brakes, nothing. Reporter she had problems right from the start. The same ones that some other cobalt drivers would also experience. You know, it would take me a couple seconds kind of to realize that the car had shut itself off. Jessica justice, she is one of the people featured in our documentary failure to recall investigating gm, shes not alone. Weve talked with other people. People who have the cobalt now and a couple of things stand out, one, some of these people even despite the publicity and efforts of General Motors to contact them about this recall, we found one guy who is like, nobody told me. Nobody told me at all. I had no idea and whats interesting is when you look at how this was discovered, it was not discovered because of General Motors and the federal government saying, hey, folks, we found something. It was discovered because of a very tenacious family of a victim and their attorney and when we come back in a couple of hours and show you guys a piece of that. Does your knee have came unraveled. Does your knee have to jiggle the ignition . Does witt to jiggle the ignition . Theres a couple of things that can happen. One, your knee could bump it. Two, you could be on an extremely bumpy road. If Steering Wheel absolutely lock . No, it does not look. You lose power steering and we tested one and its not easy. As you know without power steering. All right. Okay. Yeah, well see you in an hour or so. You dont want to miss what phil has been working on. Cnbc original called failure to recall, investigating gm 10 00 p. M. Eastern on sunday night and pacific as well. Debunking the myths about china. Does the asian giant have any room for growth ahead . Well break out that discussion when we return. At delta were investing billions of dollars, improving everything from booking to baggage claim. Were raising the bar on flying and tomorrow well raise it yet again. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. All stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Why did g. M. Wait so long . It angers me it took over a decade to correct. Go inside the scandal rocking an american icon. Phil lebeau reports. Should g. M. Have caught this sooner . They probably did catch it. Welcome back to squawk box this morning. Our next guest on s on a mission to cut through the mythology surrounding china. His hot new book age of ambition, chasing fortune truth and chain a new china. With us is the author of the book. A staff writer at the former china correspondent. You were there eight years. Eight years in beijing. It is a hot new book. Age of ambition you can check it out here. I still think theres advice to be talked about. I love to talk about whats really going on. Money laundering society. Yeah. You could say that. More importantly you say chinas slowdown is real. For our audience, that matters. Yeah. You say that because of what . When you say it is slowing down it slows down to what . We are all accustomed to what happened the past 30 years, which is this Enormous Economic growth. It has doubled size. That period is coming to a close. And we can talk about the shortterm and the medium term. It is an incredible debate on both sides. The reality is today you have more people over 65 than you have under the age of 5. Thats the first time that has happened. The fund memory demographics in the labor force is changing. Do you believe the numbers in china . I believe there are some of them. There was a lot of statistic al analysis you can find whatever number you want to support your hypothesis. If a viewer is looking at numbers, which do you read and go thats real. And which should you completely disregard . The primary of the country, before he took that job, he said i dont trust gdp numbers. What i trust is the number of cars moving through on the rails. I look at elect usage and i look at loans. If i can use those three measurements i can get a real sense of the economy. The gdp are for political benefit. For a while it was watch sales. You knew the Corruption Campaign was actually starting to bite in. It didnt occur they would eventually have this type of effect . They felt like they were facing they had an urgent economic crisis in effect. They said if we dont do something were not going to have enough to feed all these mouths. They were coming off a famine. They were trying to figure out what they could do to get the country on its feet. Knowing that young people need to take care of the old people eventually. If its a burgeoning, aging population. It is an experiment. What are they now . It is hard pull off. We have the short seller on our show frequently. He often loves to show us pictures of the go cities. Is that a real concern . Would you be short klein that like him . There is a world he is describing. You see ghost cities, ghost malls. But it is also a twospeed market. You go into the cities big cities in china where families, only one in three has a kitchen or a toilet. This is really in need of redevelopment. Where they have put capital in areas where they shouldnt be, you end up with these decisions. Google, facebook, will they ever able to . They see them as a political existential threat. And alibaba, is that a company you have a lot of faith in . Its a Pretty Amazing place. What he has been able to do, and you know this company well, they have tapped into eye change of chinese life which is incredible power of choice. This is the thing thats happened the last 10 years. You dont need an estimate of the capital thats been missal indicated. Its been a problem. How much capital has been misallocated . I think there is an entire element that is very hard for us to evaluate. There are places where people got around the rules for years. Its only now beginning to come do the surface. This is a period of reckoning. With didnt even talk about as they move into Everybody Knows everything now. Everybody knows about the lifestyle we have over here. Thats going to be hard to keep. Although the people realize you have to keep order. Weve got to run. Age of ambition is the book. Come back. Whats ahead for the market . With growing concerns about growth here and europe, mark okada will be on. [ female announcer ] theres a gap out there. Thats keeping you from the healthcare you deserve. At humana, we believe if healthcare changes, if it becomes simpler. If frustration and paperwork decrease. If grandparents get to live at home instead of in a home. The gap begins to close. So lets simplify things. Lets close the gap between people and care. Ohoh, oh, oh, la, lala, lala, lala nanana, nanananana some things just go together, like auto and home insurance. Bundle them together at progressive, and you save big on both. Oh, ohoh, oh, oh hey, its me [ whistles ] and theres my dog [gasps] theres my steps i should stop talking. Perfectly paired savings. Now, thats progressive. A selloff for wall street. Concerns about growth here at home. And worries about the eurozone putting pressure on the market. Should investors brace for more selling . Which stocks are getting snapped up or dumped by the most famous investors. Want to get away . Time for Million Dollar homes, the summer edition. Shore house, lake house, ranch in the mountains. Well look at all of those and figure out who is going to make the cut with the real estate guru. The second hour of squawk box right now. Good morning. And welcome back to squawk box on cnbc. Im joe concernern along with andrew ross sorkin. Becky is off today. Shell be back monday. Our permanent guest host mark okada will be here every day now. He is the cofounder and cio. We have a morning job, kind of. No, we do. We work all day long with sources. I cant even describe the amount of work. Very complicated. Exhausting. Down 22 points on the Dow Jones Futures right now. That has gotten a little bit worse. But i dont like fridays because they lead to mondays. After you hit that selloff yesterday, which a lot of technical areas were breached, if this were to get out of hand, you worry about monday. Ill never get over what happened. Friday gets nasty. Then people worry all weekend long. Lets look at the 10year. If it goes to 220 it might get scary. Its at 2. 49. Thats a big move. 249 is a big move. Where do you want to hang out over the weekend . I assume people going into this weekend. Might flat ebb out a little. The whole week has been crazy. You call your broker. Youre a little anxious. Whole world buying yield stock. Theyre not buying tesla or netflix or amazon. Maybe they should be. Well talk to mark about that too. You know who is also being bought . 20 move in jc penney. J. C. Penne . I like that. Fancy. Is it me . I believe its you, joe. You cant pronounce j. C. Penne correctly. Nordstrom. Both jumping. Look at nordstrom. Wow its not up as much on a percentage basis. Walmart and other retailers, kohl anticipates didnt go as well. This morning jc penney reported a smaller than expected loss and a 6. 2 increase from same store sales. 6. 2 is still thats not bad, though. I think walmart had five straight quarters of lower sales. Penne is actually doing better. Thats pretty good. Second quarter in a row meanwhile, nordstrom reported 72 cents. I used to play a piano. The thing is moving. I know. But theres a couple places where they have those pianos where the keys move. They had them at nordstrom . If you are a kid and you see that, its awesome. What is it, replicating piano . Prosecutors are seeking a six and a half year sentence in the case which involves tips odell and vidia. Thats more than what was initially even suggested, which was i believe four and a half. And thats going to be the debate today in court. New opposition has arisen for pfizer bid to astrazeneca. Everybody except everybody in d. C. They say if the bid comes before shareholders, they should reject it. Officials are worried about the 5,000 jobs that happen to be in that country. Its based in the uk. It has roots in sweden. Having been formed in 1999 from a merger. So astra was british and zeneca swedish. The biggest investors on the planet are unveiling what they are dying and selling. Dominic has been going over some of those. He has the lights. Last hour we told you about some of the highlights from warren buffett, john paulson. A couple of interesting themes, how these like verizon stock. Other next three starts off with a man that may have given a nudge to the market down turn after Hedge Fund Manager app look sa said not to be too freaking long. He notably sold out of verizon. He made interesting trade in the higher growth momentum stocks. He took a position in facebook as well as Online Travel company expedia. He got completely out of computer storage emc. Next up, george soros made an interesting theme attic trade in large cap financials. Like citigroup, bank of america, jpmorgan chase. He got rid of those from his portfolio. And omega advisers has been performing well. This time around he made interesting trades. One of which is Dollar General. And ebay. He got completely out of tmobile usa which is still in the headlines and news for possible deal discussions with sprint. Maybe not. Interesting themes developing. Next hour, guys, we will bring you some of the more interesting themes. Normally Dollar General is not what you buy when you think the economy is going into high gear. Who knows in there may be other reasons why he is looking at other things. Normally you wouldnt. Those do well low end when money is a little bit tight. The market has been all over the place. Lets go back. Someone worked really hard on this. Lets talk more about the 10year yield and yesterdays selloff with our guest host mark okada. Im chief Investment Officer of highland capital management. How much do you have . 19 billion. How do you feel about that when you go to sleep at night . Its hard to sleep at night sometimes. You have to stay up late. Youve got to work hard in these markets. The market has been all over the place. And you look at that 10year move, right . I came out in january and said the market has moved hard. At some point we go to the 3. 50. We just keep going lower. I dont know what it means. The only theory coming to me is the markets are bigger than the fed in the shortterm. So technicals, right, the technicals could be driving this. We have a lower deficit. The sequester. We have lower military spend. Lower health care. We have qe still going on. Yeah. We still do. Its a little bit of a supply situation. Gosh, i would love to see them. We still have 45 billion coming in, right . Right. So that demand for treasuries is still high. But the supply may be shrinking. Are you, as manager right now, one of the things tepper sort of indicated yesterday was there are times when youre looking for a return on your capital. And then theres times when you are looking for return of your cap tl. Is this a return of your capital phase . Would you be happy over the next could you do 6 for the remainder of the year and be happy . Easily. You would be happy with 6 . Those would be nice returns. We have no inflation. 6 is a good number. If you remember what we said in january, we said this market was going to have a tough time going up after 13. Right. Fantastic year. 30 . Thats one for the history books. And its happened. And its been a little bit of this calm and storm from the big indexes. If you look under the hood, you have all this rotation. You have a lot of small stocks. Anything that is liquidity challenged. 6 from here on out or 6 for the year. You have to get the s p is 20 points above 1850 which is flat. But you have to remember, im a credit guy. 6 in my world from what weve done historically and what we try to do every day, thats doable. Thats not going to give you money. I can get 4. 5 in verizon. Hold on. Thats doable by buying the index or hustling . You have to be active. This is the whole difference. It is sell away, tradeaway. You have to work to do 6 for the year . Is 7 a better number for you . No. 8 . No. Wow. Youre greedy. I want my money to double in six or seven years. I need 12 a year. Most people who are sitting in indexes who hustling are going to be sitting where at the of the year . Im not calling for a bear market. But i think we have a consolidation. Maybe this is a risk off. Did you buy any bond funds . What are bond funds up . Three something. Is that all . If you have a leverage, you could be up 10, 15, 20 . The short etf is down 20 this year. That hurts. Some people make more money in bonds. Oh, absolutely. Absolutely. Thats the only place anybody has made any money for the most part. Did anyone say that . No. No one. Thats the point about this market. It is very hard to call this market. All right. Big kudo if you get 6 . Hes really lowered. We will slip in a quick great. Mark okada here. Coming up, Million Dollar homes for rt summer. Given what mark is saying, i dont know if people will be able to afford them. Well quick off todays real estate challenge. And the impact of todays Election Results on one of the biggest global economies and what it means to us. Well talk about that. And find out whats going on behind the scenes at squawk box. Was it freaking, fricking ofrigin. Plus, joe got a new murse. This can only mean the latest version of talking squawk the blog. Cnbc. Com is where you can see it. Welcome back to squawk box. India has a new Prime Minister just as polls predicted, the the decisive win by Opposition Leader modi could a significant economic shift. Our next guest says it is likely modi can change things in india. Young sus the founder and group ceo of ambid holdings. Michelle carusocabrera is also with us along with mark okada of highland capital. For those of you who didnt see in the 6 00 hour, give us a quick briefing what this all means. Landslide victory for modi. This is a pivotal shift from dominance by socialism under the naru gandhi dynasty that dominated for so long. Now a probusiness, promarket government for the first time, which should hopefully help their issues. He has hurdles, lots of things to get through. A dramatic shift pushed the stock market to alltime record highs. Does it makes sense that the market is as high as it is now . Or are people estimating things . There is a little bit of expectation over here. Modi is decisive and a clearthinking leader. He should be able to resolve several outstanding regulatory and policymaking problems that have been ailing the country for the last two, three years. Having said that, there is no magic wand. He isnt going to be able to come and change things. Because he needs time. And he needs, you know, ability to be ale to put a Team Together to resolve these issues. So when you say there are certain regulations and other things hes going to change, just tick off a couple of them. There are three or four critical things he needs to address. He needs to encourage manufacturing. There are barriers in setting up manufacturing businesses. He needs to ease the regulatory environment. There is a significant amount of angst on tax issues in india. He needs to take a firm view on those issues and address them once and for all. And i would say he needs to come up on a clear policy both in retail as well as generally. Because thats low hanging fruit that can bring a lot of dollars to india. We have seen a big in flow in the last six months in particular. The previous government tries to impose retroactive Corporate Taxes for years. We dont do that in california. Do you have a problem for that . Competitive bidding on government contracts has been done for many years. New to india. Low hanging fruit that could be done. Mark, would you invest in india right now . It is so difficult to get your money in and out of the country. Hes right. That is their issue. Look, theres a global pot of money out there. It tries to figure out the best place to go. It is vet difficult to invest your money. It has to stay for a certain amount of time if you invest. And the primary pay system is all messed up. In the u. S. , we know if were secured, if were equity, where we are supposed to be. How quickly can this happen in in terms of our expectations . Some of the changes dont need big bank policy. In some ways the significant bandaid he has been given remember, this is 30 years that any one party has been given a single majority which effectively means he doesnt have to rely on coalition partners. So hes been given the mandate. And i think hes a decisive individual. Some of these things can be easily implemented. The tax issues, for example, leads a strong message out to the tax regulators to say, hey, listen, we do want to collect taxes. Only fair taxes. Lets not impose taxes because we have budget requirements to get there. I would say some can be done quickly. When you look at the market, is it all priced in . Does it now sell on the news . Its been a huge rally. I think todays results, despite what anybody else will say, will be a surprise. In egypt, they had 333 mandates along with coalition partners. Thank you very much. Michelle, how did you kpaeurbgize it . After years of socialism more probusiness, more promarket. Any way it could reach the United States, for example . Where we would elect someone. We are relative to where they a are. Is there any way it could happen here some day. Coming up, getting a loan in the Housing Market. Ceo of quicken loans gives us an update from his end of the spring buying season. Football season just a couple of months away. Woody johnson, jets owner, gives us offseason playbook. Im selfish. I wanted to bring Johnny Football here. Woody knows best. A read on the draft and the president ial field for 2016. More squawk next. Time now for todays aflac trivia question. Which city has the most billionaires per capita. The answer when cnbc squawk box continues. Aflac. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. E my mom works at ge. Financial noise financial noise financial noise financial noise now the answer todays aflac trivia question. London has a total of 104 billionaires. Coming up, what kind of summer home can 1 million get you . It depends where be, obviously. Well unveil the first two houses in the competition. And judd gregg will join into the Corporate Tax discussion next on squawk. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . What is this place . Where are we . This is where we bring together reliably fast internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system. Only from xfinity. Tv and internet together like never before. Welcome back to squawk box. We are about an hour away from the latest on Housing Starts. They are looking for a 4 to the an annual rate of 984 units. Thats the number to watch for. Also out today, the university of michigans early may reading on consumer sentiment. You can get that at the exact same time as anybody now. Nobody is getting that joke. And use of adobe Creative Cloud sweep has been hit with an outage. Many customers have been unable to get into their accounts. Joe has been struggle to go get online with that. Adobe working on that issue but did not say when full service would be restored. You dont know what im talking about . No. Donald sterling is not planning to go quietly. You had to expect this was coming. His lawyer threatening to sue the nba in an attempt to oust him as the owner. Stellar said he would not pay 2. 5 million. That was a fine assessed by the league for the comments he made. Sterling would have little chance of winning the chase but a lawsuit could delay the process. And this story is just getting started, ladies and gentlemen, i think. I dont. You dont . No. I think its going to be a long litigation. Years. A long litigation, but not top of the column. What more do you need to know . Pfizers efforts to move for greener pastures. Joining us to talk more about that is former senator and governor judd gregg. We had congressman frank on. We had a calm reason to date. Thats boring. I know. I couldnt get beyond there are clear differences here. I will tell you some of the points that i made to him. And i want to have you address these two, too. The president doesnt want to do anything until we can be revenue neutral or raise Corporate Tax reform. I showed congressman frank a study that was done provided by aei that shows if you do a curve because of globalization it used to be higher. 36 might have been a good place to be. But the entire world is below us. Were 40 if you add in state taxes. So the ultimate rate was 26 . And they made an argument to me that economic activity, in sources, Investment Capital flowing here that it would be not just neutral you it would really generate a lot of additional revenue. Because with our 40 rate that we have right now, we collect less than anyone else. We collect collect less than 2 of gdp. Its not working. Barney said no way lowering rates ever raises more revenue. You are absolutely right. There is no question that if we straightened out our tax laws we would generate revenues. We would get more revenue everywhere if we were to follow the Simpson Boles proposal. You know, the only time a democrat will quote Alan Greenspan is the one time he said, its theoretically possible that cutting taxes could generate additional revenue, but i have never seen it happen. Supposedly he said that. The post 86 tax cut, which was the last really major tax reform method which we did, showed that revenue grows when you create an atmosphere where people invest. Its just logic. If people are investing for return versus investing for tax avoidance, you get a much more efficient use of dollars from investing for return. And therefore you get more revenue. You get more jobs. You get more opportunity. You get more economic activity. If you invest to avoid taxes, thats in efficient use of capital. And our tax laws force people to invest to avoid taxes. It is especially true in our International Tax laws. Because were not a territorial system unless you have all these major corporations. Huge amounts of cash overseas, which in order to utilize the cash have to buy Companies Overseas and create jobs overseas. Were seeing it happen. Heres what we were finally able to agree on. This is what he will do for me, congressman frank. We will cut the Corporate Tax rate. It doesnt need to be within the corporate sector. We cut Corporate Taxes. As shareholders make more money as corporations do better and as Corporate Executives make more money, we tax them higher. We get more from them but unleash the corporations. Is that anything republicans would do . I would hope not. We already have an extraordinarily progressive tax law. 86 of your taxes are being paid by the top 5 of your income makers. If you live in new york city, your tax rate is probably 60 rate. I could even get you to sign off. You would do that . Totally. But then you end up with a situation where you no longer incentivize people to invest efficiency. You dont have to pay for the tax increases. You have to pay revenue increases. Theres by big difference between raising tax rates and revenues. So the left, possibly the far left looks at repatriating on a tax hole day. This goes straight to the piketty the rich getting richer. They look you didnt read feldstein yesterday. I did. The numbers are wrong. Dividends in shareholders, not in the form of infrastructure, spending, new jobs. The question is how do you to the extent youre dealing with a perception problem, if you think thats what it is and its not on merits, what do you do about it . The perception problem should be this. Did a company like pfizer or apple, which has hundreds of billions of dollars overthe seas. Absolutely. Is not willing and not able to bring that money back here to create jobs here but is willing to buy a company in italy or ireland or singapore and create jobs there. Why do we want a tax system which encourages that from American Companies which would rather bring money here. Im not going to dissuade you of that. How do you persuade the left that you are right. If a Company Brings money back, whether they put it out in dividends, stock repurchase or build plants and add jobs, it all adds to economic activity. The astrazeneca deal is tax driven, at least in large part. Having said that, in an environment where we are growing 2. 5 . If im the manager of a Global Multinational Company im looking for opportunities where the gdp will be more than 2. 5 . I might use that internationally anyway. This is the argument on thor side of the case. Absolutely true. But the point is there is no better place in the world to invest than in the United States. Our future is so much stronger. Because our structure problems are so much less than what the the other Major Industrial countries have. And they havent invested recently. Why should all this money be left overseas . I understand theres an a atmosphere in the left which say people shouldnt benefit from profit essentially. Thats basically what they are saying. Think about who is benefiting. If you pay a dividend it goes to a pension fund which is probably the stock in that pension fund is reflective of the savings of somebody who is andrew, i also tried to get congressman frank. I even suggested and i dont know whether we should bring him back, the repatriated money into a publicprivate infrastructure. People got mad at me on the right. Dont the we need you wouldnt go infrastructure spend something. I would. But i wouldnt do it by saying if you bring your money back you must use it to build capital. It was a moment of weakness. If barney and i got together. Hes smart. Hes smart and he wanted to govern. Same thing as ted kennedy. There are people who want to govern on the left. You want to do all the wrong things. We need some leadership. We need fiscal leaders. We didnt get to talk about your nuclear stuff. Thats why im here. I know it is. And the salt conference is going on. Is that what it is out in las vegas . No. They are not trying to disarm . Isnt russia there . Isnt that the salt treaty . I wonder by scare muchy was involved there. Different salt . Why call it salt . Alternative. Skybridge. We need more nuclear. We need a field. It represents 20 of our energy supply. What we are seeing is some nuclear plants, about 20 to 30, are at risk for being closed because of the dynamics of the time. They are not being given credit for sustainability. Carbon dioxide . Do you have to say carbon too . You give me so little time that i have to shorten my answers. Grit to have you here. Its a pleasure to be here. We have to bring him back. I work with him every day. Its going to affect me eventually. Were in the middle. Thats something. Youll be back, right . Come back and guest host. I feel like you need to shake. Like the godfather. Im waffling. You do remind me of sonny. Im johnny fontaine. Cfr. For 2. 9 billion. Thats not the council on Foreign Relations . No. Some think it is the most evil group in the world. Its weird. I dont know why. Headquartered in santiago, chile. It will double its presence in the latin america drug market after the deal. Coming up, g. M. Still deal with the fallout of the massive recall that led to 13 deaths. Phil lebeaus special report this weekend. Its a documentary you do not want to miss, 10 00 p. M. Sunday night. Were back in a moment. Really. So our business can be on at ts network for 175 dollars a month . Yup. All five of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. New at t mobile share value plans. Our best value plans ever for business. On car insurance. Everybody knows that. Well, did you know that game show hosts should only host game shows . Samantha, do you take kevin as your lawfully wedded husband. Or would you rather have a new caaaaaar say hello to the seasons hottest convertible. Ohhh. And say goodbye to samantha. [ male announcer ] geico. 15 minutes could save you 15 or more. 13 deaths, 31 accidents. An an investigation to find out what g. M. Knew and when they knew it. A switch that took too long to uncover and then a recall. A documentary report is coming out this weekend. The one question i get is how was it uncovered . It festered for years and how was it discovered . You have to go back to the case of brook milton, 29yearold woman in georgia who drove a chevy cobalt. She lost her life as a result of g. M. s faulty ignition switch. Her parents were determined to get to the bottom of what happened to their daughter. And their lawyer made a shocking discovery. T t the. They asked us to investigate further, knowing we may never know the answer. Cooper hired an engineer, mark hood, who started testing cobalt ignition switches he fought from junk yards. When he compared older switches to newer ones he discovered something shocking. When he put these replacement switches through the test protocol he found they were almost three times stronger as far as the difficulty to turn the key. He said, lance, youre not going to believe what i found. And i said what . He said they changed the switch. Cooper and hood realized g. M. Had changed a part, quietly. You do not want to miss the cnbc original. Failure to recall investigating g. M. This sunday, 10 00 p. M. Eastern. That segment with the meltons, their attorney, a lot of people when you watch it say, are you kidding me . They went tie junk yard. They did the gum shoe work of going out and finding out what the problem is. But when lets say any issue in a car, you find out you get reports trickle in theres a problem, they the dont always do a recall. A lot of times they will just fix the problem. If you go back, you will see hundreds of complaints about stalling g. M. Vehicles. And thats why they switched because of complaints from that . Welsh i think ultimately we dont know for sure because General Motors has not said why this part was changed. But you put together all the document. Is that the part . Not to get too technical. When you start your ignition, if theres not enough pressure from the plunger, it can slip back into accessory position if it is jostled, if theres too much weight on the keychain. Which is why people say use a single key by itself if you still has this car and it hasnt been fixed yet. They made a better plunger. They made one that they could have made originally and then they went back and did it. They definitely did that . Yes. Wow. I dont envy any automaker at all. When you watch the special youll see how all of these pieces were there. And nobody connected the dots. And it took the meltonss attorney sos, hey, this is what happened. And then ultimately you find out what was done and more importantly what was not done by General Motors and the federal government. Enforcement. For sure. All right. 10 00 on sunday night. 10 00 eastern. What happens if youre in the middle of the country . Time zone learned to think an hour behind everybody else. Or ahead. In your view, they are about an hour slower on most issues in the middle definitely. Up next, a Million Dollar vacation home. Dolly helps you get ready for summer. Great properties made for relaxing and entertaining. Find out what goes on behind the scenes at squawk box. Only certain things can we really let out. Interpreting tepper. Was it fricking, frigging or freaking . And my new murse. I have two words, indiana jones. Squawk. Cnbc. Com. Look at him. Cnbc Million Dollar home competition is back. Seven homes. Which is the best bang for your buck. Since we are just weeks away from the summer season, all the homes are located in popular Summer Vacation destinations. So heres how it is going to work this morning. Two 1 Million Dollars homes will move on. To make it more fun for the reporters, theyre not going to say where everything is. Were going to figure that out after we get a look for this round. Check it out. A summer getaway, this spacious contemporary is two acres of gorgeous river front. Sail from your own on backyard. A scenic beach is just a short bike ride away. This custom built home offers 3,500 square feet of open living space with riverviews from almost room. Cooking wont feel like a chore even on Summer Vacation. The master bedroom has a master bath with a big soaking team, sitting area. And plenty of space for visiting family and friends. It is all about nature and the mag jif sent water views. Fish, sail to the ocean from your own dock. This piece of Vacation Land can be yours for 950,000. This traditional style home sits on a secluded 1. 5 acre lot. The wraparound porch overlooks the massive yard making it an ideal spot to watch the sun rise and set. This 4,200 square feet features a bright eatin kitchen. A living room and den, Vaulted Ceilings and wide open floor plan that leads out to the backyard where you can host fabulous summer parties. In 5 bedrooms, 4. 5 bath features a finished basement with a home theater where you can kickback and relax after a day at the beach. Start off in a heated poll, early tee time at the golf accuracy, go to a local winery, and end the day with your feet in the sand. All this summer fun for 1,050, 000. The second one is on long a land somewhere. Yeah. The windows on the first one through me for a loop. The formica. Its only a Million Dollars. Just only. Youre right. It is long island. On the river . Bettiford, maine . You muff u cheated. I love it. Well, both houses are terrific houses for their locations. Right. Long island house is in the north forecast. Thats kind of a starter area for the wall street gang. This is the Million Dollar area for the wall street gang. Im buying that house first. Much more value than the house in maine. I like the river and the like maine. Maine is terrific. But there are lots of houses for a Million Dollars in maine. Thats a lot of money for maine, i have to tell. You a little house for a lot of money. Its going to be a tough sale. Its really nice there. Its great there. However, there are a whole bunch of choices. In the hamptons, there arent all those choices. Location, location. It rents 60 grand for the season with that house in formica. I will get my money back on that house with formica. You cant get to the hamptons. Chopper. Youre renting . Yeah. Youll take both . Ill just rent it. Youre the winner. Long island. North fork. Vacation rental, exit strategy, everything about it. Does it come with all the long island accent, though . It comes with long island accent. You saw that other house and you thought chiggers, bugs, outdoors. Theres a deep water dock. You dont need fish, worms. They have comes of off. And the sunscreen. You put a tent in a four seasons room if youre roughing it. Latte or au lait . Cozy or cool . Meow or woof . Exactly the way you want it. Until boom, its bedtime your mattress is a battleground of thwarted desire. Enter the sleep number bed, designed to let couples sleep together in individualized comfort. Hes the softy. His sleep number setting is 35. Youre the rock, at 60. And snoring . Sleep numbers even got an adjustment for that. You can only find sleep number at a sleep number store. and right now all beds are on sale. Yep, all beds, starting at just 649. 99. Know better sleep with sleep number. Will markets recover ahead of the weekend . A closer look at what yesterdays selloff could mean for stocks and treasuries . High prices and low inventory keeping buyers out of the market. And Woody Johnson jones us on set. Well talk about the jets draft and who will be the starting quarterback this year. Plus, where you can learn more about joes murse. Yes murse. I carry a purse. The third hour of squawk box begins right now. Welcome back to squawk box here on cnbc. First in business worldwide. Im joe kernen alongside andrew ross sorkin. Becky will be back on monday. Mark okada has been with us for an hour. Right now andrew has your morning headlines. I will give you those headlines. Indias parliamentary elections, the opposition and date won. Modi ran on clean efficient government. His win is considered to be a positive for business and Foreign Investment in india. Bombay began rising sharply as exit polls indicated a victory by modis party. Were watching shares of j. C. Penne as we have been seeing. Loss of 1. 16 a share. That was smaller than analysts expected of 2. 8 billion. Comp sales rose 7. 4 . Ceo said no major changes on the horizon. He returned as ceo last april after j. C. Penne ousted johnson. Red lobster sold to Golden Gate Capital for 2. 1 billion. P. E. Firm. It is a private equity firm. 1 billion in Debt Reduction to darden. A new Share Buyback of 700 million. Just didnt fit in long term with the darden plan . You know, there was talk they were e going to start looking at selling certain assets. This is the beginning of that. I need to look through the release. I will venture a guess that you have never been to red lobster. That is completely and utterly untrue. I completely love fried shrimp. There is a red lobster on the corner of 7th and 41st street, a block from the building. I have been there several times. Years and years ago i went in westchester on central i cant think near yonkers. Caldors. There was a red lobster. Maybe long john silver. There was was an all you can eat shrimp. Ever been to walmart . I have been to walmart. Mcdonalds . I love mcdonalds. The biggest investors revealed last night. They are buying and selling their latest. We have new highlights for us. Dominic . Can i just say right now before i start this, im with sorkin. Some of the fondest memories i had as a child were going to red lobster with my family. Thank you. We went there all the time. We couldnt eat meat on friday so we went to red lobster. Different between going with your kid. Cheddar baked biscuits are still good. I think i have gone in the last six months. That is a total crock. Ill give you a credit card bill. That is what you will need. My treat. We will go in yonkers or something. They have fried shrimp. That is very, very valuable. Sometimes unlimited. You remember that. Along the seafood lines, investor trades developing out of this season. Just a handful here are the ones someone caught our attention as a news desk as we pored over all these numbers last night. First, its a company trade. Its been in the headlines for all the wrong reasons. Were talking General Motors of course. The recall issues, the investigations. Im looking forward to phil lebeaus documentary. We are talking about big names. Berkshire hathaway, cooper mans omega. Meanwhile, a man who has made a lot of money for david tepper is actually adding to him g. M. Stake. A nice trade going back and forth there. We take a look at the two biggest sectors in the s p 500. Financials one of them. There are those who think banks are a buy right now. Like dan lobe. He has put on a new position. 2 million share stake in citigroup. Like we said last hour, hes on the opposite side of the trade from george soros who sold completely out of citi, completely out of bank america and completely out of jpmorgan. That brings us to technology. The biggest sector in the s p. But were looking at new tech stocks. These momentum growth type names. One that specializes is tiger global. No secret that high growth tech stocks have been hit hard the last couple of months. As of the end of march, tiger sold completely, completely out of its stakes in both amazon. Com and netflix. These are larger positions for this fund. It did, however, add new positions in Online Real Estate Companies like zillow and trulia. Real estate a big theme all day with our Million Dollar home stuff. All day im tuned in. Guys, over to you. Have you ever heard of it referred to that . It is Warren Buffetts shop. It is Berkshire Hathaway. It is Warren Buffetts company. It is an investment vehicle. Shop. How about shopping cart . Thank you, dominic. Youve got it, guys. You can always tell someone with because we talk about all this ridiculous stuff that is meaningless. Someone wants to play along. Dominic. He didnt say i have stuff to get to. Come over, dominic. Hang out for a little bit. Bring some fried shrimp over. You can hang with us for a while. The reason i love you guys and this show is because we get to talk about all this stuff i never get to talk about. Im buying red lobster is my treat for all of you guys. Have you ever seen a place called seafood broil senator. No. How about sushi . Sushi is different. Hes going upscale on us. The producers are livid. Dominic, im sorry. You can stay. You got it guys. Talk to you later. Well talk about the action in the market this week which started getting a little scary on wednesday. Then it got worse on thursday with some of those tepper comments. I cant remember what it was on wednesday. All of the not all the economic numbers have been great. This whole 3 gdp and the uptick in the economy. Everybody is worried, wonder tpg things are going along as planned. It is whats going on with the 10year. I think theres a bunch of things that make it an easy read. Its about the ecb in europe. Yields so low that there is a trade where you sell your german bonds, go long. Its not an indication of growth at all. Thats the real story. What are german bonds. 1. 3. And they were growing 3. 3. Thats much weirder than us. And at the sevenyear later, you can get them at the same level as spain and italy. We were talking about spain and italy going out of business. Theres no yield partnership in that credit. There is a lot of carry trade that explains this. Equity investors are saying never bet against the bond market. You never know. The inflation data, and i dont think we have an inflation threat. If you start to see inflation pick up, that could make people lets bring bob michael, head of Global Fixed Income for jpmorgan. That makes sense to me. If its not our fault, it is europes fault that it is doing these weird things. Is our economy still great and we are growing at 4 for the second half of the year . Its always the bond inves r investors fault. When you look at the it recently, it has been stronger. Its a pricing we cross through 2. 5 . I think there are a number of reasons for that. I think first credit, if you want to give credit, foes to janet yellen and the fed. They have done a very good job of keeping the markets calm and using forward rate guidance to suggest they wont do anything damage to go Interest Rates over the near term. The second reason, i think the biggest reason, theres a new breed of bond vigilantes there. Back in the 80s, they would come in and sell the market with when the yields got too low. You have massive pools of dedicated buyers that are coming into the market and any backup in yields. It is Pension Funds looking to derisk as their funded ratio has improved the last couple of years. In the front end, youve got hundreds of billions of dollars of Corporate Cash in the tech and phrma industry trapped offshore that is tired of collecting zero on deposits. So thats coming into the front end of the market. And i agree with jonathan. Theres a lot of foreign money comeing into the intermediate part of the curve because suddenly treasuries at 2. 5, 3 , is the high end. The regulators have also told the banks to move towards treasuries as well. Theres a whole tsunami of reasons why there is a bid. Who would be crazy enough to buy them at 2. 5 yield. His comment about Pension Funds is a good one. Pension funds are very longterm beasts. If they are 95 funded they will be rotating out of equities. It makes a lot of sense. There is someone who would be crazy enough to buy the bonds. Is this the beginning of the 10 waiting for stocks . I dont think so. Look at this earnings season. Beat by 6 . Corporations just underestimated how strong the environment was in their guidance. What do you take on volume . The activity, liquidity in the market has been fairly low. Four days in a row, 6 billion shares a day. We havent seen a ton of trading in here. Yeah. As a strategist, i dont really look at the trading act. Okay. Everybody approaches it differently. Im looking at the fundamentals. You know, companies are delivering a lot more margin than anyone thought they would. I dont agree. The fund memories really dont say this is where we should be. Technical can. The liquidity has been light in there are technicals too where liquidity is pretty00. Coming into the start of the year a lot of bond managers were short duration. They were expecting higher growth and inflation. And what you have seen the last few weeks is people being squeezed into the markets. And i think reluctantly so. Do you remember this guy . Ralph agampora. We used to have him on all the time. Yeah. We waffle to call him ralph i can make you poor. I Vice President seen him in a while. It is technical. All right. Gentlemen, thank you. Are you leaving . I have to go catch a plane. We will see you on monday . No. I have to go back to dallas and make money. Cnbc the best network. Low inventories and high rises are keeping potential buyers out of the game. Quicken loans bill emerson next. And Woody Johnson will talk the jets, the draft, how everyone else did and whether geno is the starting quarterback or whether it could be somebody else. You probably know xerox as the company thats all about printing. But did you know we also support hospitals using Electronic Health records for more than 30 million patients . Or that our Software Helps over 20 million smartphone users remotely configure email every month . Or how about processing nearly 5 billion in electronic toll payments a year . In fact, todays xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. With xerox, youre ready for real business. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond 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. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back. Futures down 16 points. Which is not that significant given the potential for more weakness after yesterday. Were watching the shares of darden restaurants. They sold shares of red lobster to Golden Gate Capital for 2. 1 billion. The move to sell red lobster had been opposed you asked whether this was something we knew. They had already announced to sell or spin it off. And there had been some commotion. Without commentary yes, sir. We mentioned some of the buffett stuff. He bought in verizon. Its not him probably. It would be weschler. 11 million shares. They must like verizon. Whats the total price . 524 million. That is something ted and todd could have done without warren. Its possible. But we asked about ibm because of the uneven results and the revenue. Light way of putting it. Wondering whether he would stick with it. He said, oh, ive been pwaeug it in the First Quarter. Now we know 233,000 shares. So you can say ive been buying it, right . Not dumping it. He added to it. Huge show of support of enthusiasm. Remember, chevron, he said that was a big mistake and he got out of it. Well see what happens. The First Quarter for housing was a chilly one. Is that a reference to the weather . Will the spring thaw heat up the market . Numbers at the bottom of the hour. We are joined by bill emerson, ceo of quicken loans. Give us a snapshot where the Housing Market is right now. I was looking at some of the notes from the conversation i think you had before the program. Your sense, and i dont want to put words in your mouth, is there is still such a lack of inventory we dont have a good accepts where the market is. Well, actually, i was listening to you guys. I think it is all about who goes to red lobster. Home prices have gone up. Inventory is tight. I think people thought early in the year as we came out of last year the purchase market was going to start to pick up. Its down 16 year over year. Inventory might be part of that. I think folks being able to qualify for a mortgage is part of that. The first time home buyers, typically 40 of the marketplace, they are now 25 of that. A lot of factors go into the purchase transaction and the purchase market. On the other hand, as you guys were talking about the 10year, Interest Rates have dropped the past two or three weeks. When you think about a 15year fixed, 10year adjustable below 4 . Theres still a great opportunity for people to buy. I think people are nervous about the economy. Theyre not putting their homes on the market. When that happens, unless you get new construction. Housing starts come out today. It makes it difficult for the Housing Market to recover. Rates have gone better the last couple of weeks. A, does that continue . And perhaps more importantly, when do the people wake up to that if you start buying stuff this summer as a result . Well, how long it continues is hard to say. As you were talking earlier, the other piece, its a global economy. What happens overseas matters now. Unrest in europe causes quality. The longterm trends would tick up. I dont think they will tick up a tremendous amount. I think the fed is doing a good job to try to control that. I dont know that Interest Rates drive someone to buy a home. Either theyre feel good about their economic situation, which will cause them to do so. People are out there. A whole lot of people havent taken advantage and they still qualify. Still amount of activity in the Mortgage Application process itself. On the larger debate over fannie, freddie and what that means to the Housing Market, you are where . So fannie and freddie, reform has to happen in my opinion. The status quo really cant happen on a longterm basis. Theres no capital in the companies. Its all put back into the treasury. Explain to us whats going to happen then . I think right now given the momentum and whats happening, it is possible to get something done. I dont think you will see a lot done in the next 12 to 18 months. Thank you. Great to be here, guys. Coming up, new york jets owner Woody Johnson. The latest read on the strength of the real estate company. We will get the numbers hitting the tape at 8 30 a. M. Eastern. We are back in just a moment. Financial noise financial noise financial noise those little Cialis Tadalafil for daily use helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. It is officially a public company. We were screwed. I dont know if i bought or sold. The share wasnt a lottery ticket. Glitches or no glitches. Its not the kind of day most people expected. There is a sell already on facebook stock. This is the mother of all ipos. Were just a day away from the preakness stakes and california crump. You can watch coverage of the preakness live on nbc 4 30 p. M. Eastern tomorrow. And then id have to go. And the belmont will be run on june 7th. Now, if California Chrome wins all three, its the first horse to do that since affirmed back in 1978 when you werent even born. 78 i was born. I was 1 years old. You dont remember anything . Seattle slew . I cant remember anything at 1. How old were you at your first memory . Its hard for me. I remember things very healer, 3. I remember 3 too. The nuns were raising me. I have a fear of penguins. I did not know that. I was at an orphanage. We will talk that and also Housing Starts data after the the break. Economists expecting a 4. 0 rise. 984,000 the number to beat. We know were not the center of your life, but well do our best to help you connect to what is. Welcome back to squawk box. Seconds away from Housing Starts tore april. Rick santelli has the numbers. Rick . Here we go. 1. 072 million on starts. Hey that is definitely a nice number. Last month had a very, very subtle revision. 946 to 947. Thats 13 plus. If we look at permits, its a Million Dollar handle. 1. 080. That is pretty much better than expected. Although we were looking for the million on that. Looking for under a million on starts. That puts that up close to 8 . Primarily, primarily its 8 because we had a positive revision last month as well from 990 to 1 million right on the nose. So this is fascinating. Most of the data doesnt auger for this. Most of the experts that we talked to are ambivalent about the positive tail winds emerging in housing. So this is going to have to factor in. And the market is acting logically. We see we are back over 250 in the 10 year. Many believe that the only dynamic is flows or positions. It is still definitely tracking economic developments in the u. S. And globally. Back to you. Definitely we have decided it is europe. Rick, if you can short the german 10year, go long. I think we were the first to talk about the 10year spread when it shot over 100 base points many months ago. It was. Because i had a bet with becky about what the 10year would do. 2. 873. All of a sudden it got to 2. 6, i thats not supposed to happen. That was not supposed to happen. And we got to 2. 49. Steve liesman join us now. Global chief investment strategist at citigroup. It looks like the bulk comes from multifamily. Single family, 649. But only from 644. We had growth in all the regions of the countries, double digit. The south was 1. 5 growth. 30 in the northeast. 42 in the midwest. 11 in the pest. Housing has been lackluster. This is the only stable reading thats useful in the Housing Starts report. The bottom line, i heard from from an earlier conversation. New singlefamily home buying. Home buying intentions is really low. The oil industry, the gas industry in the United States, absolutely booming. Overall employment is growing above 200,000 per month. Im sorry, but the housing industry is not keeping up with that. They have to focus on the whole economy. We cant try to stimulate different sectors. Steven, i put together a list. I really want your comment on this. I looked at all the april data, a little bit of march data. More april data. It has been so mixed. It has been mixed. After i called my betterbetter, worseworse list. Betterbetter, payrolls, jobless claims, nfib, ism manufacturing, services and empire state. On the worseworse, industrial production, retail sales, gdp, nahb, home builder survey, and vehicle sales. I would like a bunch of stuff on the right. When you talk about the volatility of the market, it makes a lot of sense. Whats your take on this list and what it is telling you about the outlook for growth. I think the macro data tprb better. And the ones disappointing have real reasonable excuses. Take a look at the unadjusted data for the month of april. You looked at the unadjusted data. It was markedly stronger. A boom in march. And settling down in april. None of that is for real. Insurance claims are the best realtime indicator of whats going on in the economy. To plunge through 300,000 is a good coincident indicator of activity. It doesnt mean we will grow like this forever. But we will have a strong Second Quarter. Let me show you what that means. Moodys analytics, two tracking surveys. First quarter and Second Quarter tracking. They couldnt be more track. Minus 0. 4 for the First Quarter and 3. 7. A good economist would average the two together and came up with lame growth at 1. 6. The problem is the consensus is to strong. This is a problem for markets that getting upside surprises when the estimates have now picked up has become very, very difficult. Where are you through Second Quarter . 3. 5 growth. You hear everyone talking 4 and 4 beyond. Right. I think we can do 3 for a good period of time in reality. All that growth, that negative number, which may not end up negative, thats all negative to you . There is a shift in activity for that. Some of it is permanent loss. We had an extremely disruptive winter. Some was in the fourth quarter. January as well. That shifted activity. Rick, sorry to keep you out. Im just groaning about the weather. I know housing numbers arent bad. They have really been bad. We havent had the jump. Season ality had much of it. I see 16,000 four handle on the dow. We better have some leading to the better, better camp. To me the issue is so plain. We have a sector in the economy that most people consider synonymous in the form of equity markets. They have been performing extremely well. No surprise that the data better get better. The asterisk the bond market is telling us is true. Far fewer in the worse worse. Sustainability. We are learning in europe, manipulating and managing rates is not fixing economies. Boy, i agree with joe. I have been saying it all along. Stabilization without reform is just a hiccup. Everybody agree witness stand that. Thanks, rick and steve. Better better. Better better. I like that, steve. That was good. I have a thing to go with my thing. Better butter bought some butter that was bitter. Would you do it in the camera at the break . If you paid me. Coming up, we will see how many times we can say that sentence. Well take you inside the nfl owners box. The new york jets Woody Johnson is here. Hell talk the draft, the upcoming season. Find out what goes on behind the scenes at squawk box. Was it fricking, freaking, friggin . It can only mean that the latest talk in squawk blog is out and published. Check it out on squawk. Cnbc. Com. E financial noise financial noise financial noise financial noise today is friday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. The nfl draft is over. For the new york jets, the question thats been dominated not just social media. Theres more to life than social media. The papers, everybody is talking about. Who will start at quarterback . Chairman and ceo of the skwroets Woody Johnson joins us now with more on theup coming season. Always great to have you. Joe montana was short. Watching Johnny Manziel and seeing you guys saying no, i just didnt know what i liked it. Did you think about just bringing him here for the heck of it and giving it a shot . We was an exciting college player, thats nor sure. We went right down our board and calvin was our guy. Calvin pryor. Johnny was exciting in college, no question about it. I heard jerry jones do you think there is anyone who will regret . We dont know yet. We dont know. There were a lot of stories floating around. Thats the nature of the draft. Okay. Now we have to decide. Geno had moments of brilliance. Is he the guy . Geno looks good. He has been spinning ate at camp. He is a lot stronger. Why get michael vick if hes not startng. Hes pretty good to have in the room. Were definitely going to have competition. There was nobody this is the guy you wanted. There was nobody that got picked ahead of you that you were going to pick . No. Theres a few you knew you were going to be go gone. Yeah, theyre gone. We didnt think we would get pryor. Hard hitting good leader on defense, he will be great in the secondary. You will have to account for him as an offensive coordinator when youre playing the jets, thats for sure. Do you feel the worth of nfl and the jets. Have you ever been more interested in the draft . It is incredible. I think from the season end of last season, theres just really nothing. As we get older, our lives arent quite as interesting. Maybe yours is. I crave content, sports content. Can we talk another sport, don sterling. You heard he is now going to contest the situation . I think the good news is im going to focus on the nfl. Its a complicated issue forrer sure. I think the commissioner did what he thought he had to do for that time. Was that the right call . Thats up to the nba. Youre going to leave it there . We have to focus on what we do. It is going to go on for a long time. The franchise itself with him owning it people arent going to go to the games. He cant be the owner anymore i dont think. But then again, in this country you say you need to sell private property because were telling you to. Whats the rule of the nfl . Whats that . If there was an owner in the and this situation happened, could they effectively be voted off the island if you will . We will have to approach that if it came. Lets hope it doesnt happen. There is a certain decorum in the rules. It is up to the commissioner and the League Owners to determine the outcome. Did you know sterling at all . No. Thursday night is going to be big this year. Its a oneyear deal. The other guy played for the wrong time, didnt he . They broadcast and selected cbs. Who is the broadcaster, bob kraft . Theres a number of us on it. Wait. Youre on it . You voted for cbs. We did. We thought it was the best opportunity with the talent and producing the preseason game. Its only one year. What happened . Why did you lose then . What . Dont say lose. You said you voted for nbc. No. Cbs. What . You were shaking your head for the wrong reasons. He was confused. I thought he was congratulating me. No. You thought they were better. Even with the success of sunday night. There was a lot of good bids. That doesnt mean in a year we wont look at that again. You can look at it again. When does it go digital . Its not ready he yet. You tell me. Two or three years i could see a package. Two to five years. Three to five years. Well, you know, when roger he seems to have a really good goodell seems to have a really this is shiny. You dont want to squeeze it too hard. Chris farley. Remember that . Tommy boy. He realizes how precious this is. Too much can be a good thing. Thursday will be good. It will be a destination. Slowly roll it out. Yeah. Because youre in a sweet swat. You saw the olympics. Unbelieve be. You cant dvr. Right. You want it live. Yes. Giving you the handshake back, woody. Thank you. Are we done . Jeb, christie, rand paul. Any ideas where this is headed . And i should say you are a romney guy, a republican general. There are a lot of good candidates. Nobody has emerged as a definite leader tip. Well find out on. We dont know who is running yet. Do you think christie has a chance . Maybe his associates thought its not even comparable. It doesnt the even come close to any of these. Do you know who will make it come close . You and your friends. Right . The mainstream media. Chris christie was the second coming. Now because of that are you serious . Thats not my argument to make. Absolutely has a chance. You cant live in a world where did you loved him before i think theres a real question. Whats the question . The question is whether the public will support him. That is absolutely true. And coverage does sometimes benefit one party more than another. To the extent that he was supported people thought he was in the center. You take the coverage of hillary and the coverage of christie with the liberal media. See any difference there . Im together to not comment. Call jill. Shell pick up the phone. Thats not nice. Thank you, woody, for being here. Coming up, jim cramer will wrap up the week on wall street. Take a look at the futures, by the way. Its almost up marginally. Squawk will be back in a moment. Customizable charts, powerful screening tools, and guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. What is this place . Where are we . This is where we bring together reliably fast internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system. Only from xfinity. Tv and internet together like never before. Welcome back. Lets get down to the New York Stock Exchange where jim cramer is hanging out this morning as he always is. Jim, red lobster, darden, do you have a view . Complicated transaction becauses theres also a Real Estate Investment trust involved to give them money. This is a money loser. I think this saves clearance otis job. The buyback coming, get this thing losing money off the sheets, its a win and its a lot more than they were going to get if they just spun it off. Congratulations. I think the move has been pulled off. Keeps his job. Stock might go higher. Broader question about the marketsp people always get jitt jittery. Nobody knows whats going to happen over the weekend what do you do given the way the week has panned out. The tepper story resonates. Dave tepper is a great manager. We have a housing start today which says if you thought that this the bonds are going up, Interest Rates down, because of mortgages, maybe rethink it. I think that this number is going to make people feel like you know what, this big rush in the bonds, which is really whats causing the weakness, may be more about a bond shortage. High quality bond shortage than weakness in this country. Jc penney and nordstrom to the mix, maybe walmart is executing badly. I think you put it together its not so bad. I wouldnt be so concerned. Who would you start if you were woody, were you watching that . What do you think . I go to Training Camp every year, i watch vic in action and know vic, and vic is exactly what he said, which is good to have in the room but vic has lost a step, he would argue with me on that, and geno is the quarterback of the future and surprised to hear there was going to be woody said a quarterback controversy. No way. Vick is not a good starter. He gets hurt. We will see you on squawk on the street. As we go to break, real quick, the Defense Department and nhta holding a news conference, say theyre going to make a major announcement regarding the investigation into gms ignition switch recall. Also summer blockbusters brought in 5 billion at the box office. How will this years offering stack up . A preview of his summers hyped movies. [ female announcer ] working together means working efficiently. And a lennox home comfort system may just be the perfect example. Its air conditioner works together with the furnace, and that works together with the air purifier, and that works with you by saving you up to half off your heating and cooling bill. Call now to get up to 1,700 dollars back or special financing on select lennox home comfort systems. Offer ends june 13th. Plus download our free lennox mobile app with an energysavings calculator. If your Current System is 10 years or older, start planning now and take advantage of special financing. So call now to get up to 1,700 dollars back or special financing on select lennox home comfort systems. Offer ends june 13th. And download our free lennox mobile app. Lennox. Innovation never felt so good. The summer movie season has arrived. New offerings this weekend are headlined by a mega munster reboot. Cnbcs Morgan Brennan joins us now with more. I hear theres a munster on brian cranstons head too in this movie. There is. If i had to sum up the box season in three word, they would be apocalyptic, scifi and superhero. Take the weekends big release. Thats godzilla. Accounting for over 90 of fandangos weekend ticket sales, on track for 65 million in the u. S. This opening weekend. So a solid start for the Warner Brothers distributed remake. So far this year, Box Office Ticket sales are up nearly 5 to 3. 5 billion and that momentum bodes really well going into the summer season. May through august accounts for nearly 45 of annual Box Office Revenue in the u. S. So the number to beat, 4. 7 billion. Thats last summers record total. This season its all about marvel comic book characters. The film license belongs to different studios even though disney acquired marvel in 2009. 21st century fox has the new xmen installment, sonys sequel which is out has raked in 153 million domestically and after breaking records in april with captain america disneys got guardians of the galaxy and ma live sant a new take on Sleeping Beauty and viacom, fourth installment of transf m transformers expected to post big numbers here and china where it shot certain scenes and the last one pulled in 1 billion worldwide. My personal favorite oh, no, no. Whoa. Chill. Just a mask. Okay. Thats teenage mutant Ninja Turtles one of the most li lucrative franchises. Sold more alsoed toys last year than star wars. Back to you. Okay. All right. Thank you very much. I guess were done. We got to go. The director of godzilla protecting the planet against global warming. We got to run. Have a great weekend. Join us on monday. Squawk on the street begins right now. Did you know that . Good friday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber at the New York Stock Exchange. Looking for some relief from yesterdays tumble. Worst day for the dow in five weeks, futures are stable on the back of a good beat in Housing Starts. Consumer confidence this morning. Tenyear is right around that 2. 5 level. A level by the way that bill gross says seems fair for now. Well talk about