Transcripts For CNBC Squawk Box 20140623

Know, immelt goes over there, and the only way to get the deal done is the french minister says give me a piece of the action. It was less cash, but i dont know, i read some other commentary over the weekend that it would be less profitable near term right. Than it would have been for General Electric, but they wanted it badly, and General Electric and ge, jeff immelt, wanted to get the Ge Financial Services part of the business below 30 , and this does that in a much more but now your partner is the government. Right. Officially. I mean it was sort of unofficial to begin with. You know what, andrew, if you look at, and remember jeff, a republican yep. Signed on early to the Obama Administration because you have ge has to deal with governments everywhere. And people call it crony capitalism, but we certainly have this isnt the first government that ge has obviously dealt with. And you have to, especially when you are a big conglomerate getting a lot of government contracts and Everything Else. I mean, they get government contracts in europe and when in rome, or in paris, in this case. Right, but i guess cramers point is that the ge has been mired in this dont know whats going to happen. Right. Now that it has happened, you dont necessarily get the catchup, all of a sudden, and now it goes, okay, now were done, its out of the way, it was successful, now it goes up. Who knows . It hasnt been a horrible performer. 27 is a far cry but on a relative basis to what happened it was 6 bucks in 20082009. Got to 6, so. Right. I dont know why i know it so well. Maybe its because, well, they gave us we had a few shares when, obviously, ge owns nbc. And stocks are coming off another recordsetting week. The dow is now on its first sixday winning streak since december, but its been small moves, and we were talking about it last week. All the new records we set were only up 6 and weve had like 22 new highs. So, its been sort of incremental. Volatility is at historic lows. U. S. Equity futures this morning, we will have Jeremy Siegel on later to talk about all this, but thats sort of par for the course, up about six points premarket. Well see what else happened. I wasnt here friday, but i thought miller and morriss piece was spot on. We talked about the piece to great length. Well have a nice segment with kevin on later this week as a guest host. He is so smart. And of course, you will have mr. Druckenmiller coming up on the 16th, i believe. Coming up on the 16th. But it was just set forth in such clear fashion how, i mean, when all you can do is manipulate the Balance Sheet and not the income statement, the people that have the stuff are the ones that are going to participate, but it doesnt build for the future in terms of Capital Investment and growth. And thats why were mired he was not on to debate the point, but as you know, later in the broadcast, or maybe during commercial break, you came over and we talked about it. There is an argument to be made on the other side. Steves not talking to me, because i sent him the piece on friday. And you know, the entire piece, the link to it. And i said, you should memorize every word in this piece, and then i said, in fact, you should put it under your pillow, so maybe it can slowly seep into your brain. Osmosis. And he never answered. Never he comes out on the other side of it. And you know what else i did . I ccd santelli with what i sent liesman youre such an instigator. Santelli didnt take the bait, either, but it was a great piece. Were hearing more about it, because were still at 35 billion a month and were going to stay at zero forever. I thought what was interesting about the piece is its not just affecting the savers, its affecting everyone who cant get a job now, because theres no income statement. It is income inequality. Well, well talk about, when we get to soccer okay. Well talk about soccer in a little bit. A sport that you follow, that you will watch. I got into it. I mean, with it makes sense to me. Its egalitarian. Every country has a team. Its like obamas sport, because you know, all countries think theyre exceptional, but the United States with its football and its baseball, all countries are and you can tie. You dont have to win. You dont have to be so u. S. Centric to like soccer. Like, pekingeekingese favorite has got to be by far soccer. And it ends in ties where no one has to feel bad, no one earn success. Everyone feels like explain this to me, and file like i was watching zoo animals or something. What was it angered me that you were watching, and i tweeted because it was a jinx you were watching. You finally decided to watch the sport and look what happened. Can you and i asked you, what happened . You couldnt find beaches . It wasnt on any tv sets anywhere . Isnt it on netflix . What about steel magnolias . You can rent that there was a coldplay concert to go to. I was mack maing my jean shorts. We rehearsed this in makeup, this whole bit. What about fried green tomatoes . How about that new b when this guy scores, he starts sucking his thumb. Yeah. Thats because he had a baby, andrew. Then the other one puts the ball under his shirt, did you see this . As if theyre having a baby and theyre doing it for their baby . Is that whats happening . What is that . I will tell you one thing the guys sucking his thumb on the field. I think we were going to wait to talk about this, but after that first goal, which really hurt, and the guy, you know, it was a mistake with cameron, whatever his name is. Right. He made that and that hurt a lot. Swrrks so empathetic. No, that was very bad in the first five minutes. Yes, it was awful. The u. S. Took control of the game after that. They really did. They looked great. They had a lot of scoring opportunities. 15 seconds left at the end did you see the one bradley almost scored . Yep. And then, a lot of people were making fun of rinaldo. Now, watch this. My take on that, rinaldo is so good, i dont even know if that guy saw the ball. He bounced the ball off that guys head into the goal. It was so perfect. You think the guy that headed it in im exaggerating, but the pass was so perfect that all the guy had to do was and rinaldo, thats why hes that good. And hes hurt, probably. I think hes only at about 80 . Something that you may not know, if you werent watching that closely yesterday whats that . You know why his name is rinaldo . Tell me. His father named him that as a middle name. Thats his middle name. Huge fan of Ronald Reagan. Honest to god. Really . Yes, honest to god, even over in portugal. Well, in europe, he would be a fan. What about the guy who looked like mr. T. . Did you see him . I did. I saw people talking about that they stole his trademark or something. Its were all bandwagoners, you know what i mean . We dont even know what were watching. My view is that if we had been down 21 and then tied it in the end, wed be very happy. Wed be very happy to have four points. If they told you after the first two games, youd have four points versus ghana and portugal, wed be very happy. Your point is that germany and the u. S. Can just not even play. Im only listening to the commentators who say they could literally go to sleep on the field, just take a nap. Right. They could lie on the field and they would advance, which makes no sense. You know what the greatest thing about all this is, is that Nbc Sports Network now has premier soccer league, and every guy have you seen the commercial . They say who theyre playing for now and then who theyre in the premier League Playing for one of the teams, so at least were building up so long as they allow ties in the premier league, ive got a problem. Ties are fine. Ties are okay. You cant keep playing and playing now theres no more ties. You of all people, where no one has to feel like a winner or a loser. Its egalitarian, everybody wins. Theres no you know, i have two boys, twins, and they both want to beat each other. Theyll be running somewhere and someone wants to win and we try to let but competition and capitalism and someone wink and someone losing, we dont need that in this day in age. Its much better to have ties, andrew. I figure if anyone would love a tie. Right. Lets tell you whats going on in the middle east because we cant have a tie there we were supposed to do it later, but the producers wanted us we were going to do something different. In geopolitical news this morning, markets continue to pay close attention of course to the situation in iraq. Secretary of state john kerry is in baghdad today. He plans to press the prime minister, al maliki, to form a more inclusive government. During the weekend, sunni militants took strongholds along iraqs western border, strengthening supply routes from syria. I dont know if you saw Richard Engel tweeting about this this morning. Take a look at oil prices this morning based on some of this news over the weekend. Wti crude now stands at 107. 04. If you were maliki at this point, and you know, kerry shows up after i mean, maliki can read newspapers, right . He knows what we we basically pulled our support completely, not that he deserved support at this point, but i dont know. Its a mess. Then your paper, which ill talk about a little bit. I had a couple of things that irritated me over the weekend. You know, i always do have things to bring up mondays never a good day. But the front page sometimes is sort of okay. The unlikely to turn the theres no way theyre taking back these cities. Air strikes probably arent going to help that much. And its, you know, so i dont know what exactly but thats accurate, iraqs military unlikely to be seen as turning the tide. Thats what im saying. Youre giving the New York Times credit, thats good. Im saying its a piece thats depressing and probably true. The part that got me over the weekend i was irritated about was krugman. He whenever he wants to just look at something thats factual and say that its not true, hell just say its a zombie idea. So, and he uses that with us. Hes copyrighted zombie ideas, which, theyre ideas that seem like they may like capitalism is good and profit incentive is good. Those are zombie ideas. This was about the va. And this time, he was saying that the real disaster is the Current Health care system. The va is actually great, but now were hearing the zombie idea brought back up. Right. That the va is no good, where he says it provides great health care. But, so, hell look you right in the face and say, you know, orange is black or two plus two is five. Are you going to comment on your good friend, Hank Paulsons op ed piece . Well, i told you in makeup, it looks like another crisis. Hes totally overreacting to. This isnt the first this is the piece of hank paulson on the front page of the sunday review about Climate Change. Look, hes an environmentalist, obviously. And he has little st. Simons, a beautiful place, a bird sanctuary. But if you read the piece, he said right there, i dont know anything about science. Im a businessman, but the climatologists tell me this is true. Right. Its the kind of group think that everybody has right now. So, i dont hes just a good citizen. If someone told you that the world was going to end but thats where i am. I dont know the science. We have talked a lot about the science. The reason we werent going to talk about it, because its faithbased now. And you have faith in what the climatologists are saying, but you havent really looked at it yourself that closely. Im assuming that there has to be some chance that the carbon is a problem. Carbon dioxide. Carbon dioxide. Thats the whole thing. They dont even call it carbon dioxide, they call it carbon. And they dont call it Global Warming now, they call it Climate Change because it can go up or down. Andrew, its group think. Look up orwellian group think, and anyone that i apologize because im stuck in part of it. You know whats going to happen, pitch forks and people are going to be outside cnbc. Im not arguing anymore. Its faith hshqu babased. I dont argue with faith. You can have your faith, but i dont want them protesting outside, you know, the mobs, because any dissent is not tolerating. How much lower can u. S. Treasury yields go . Our next guest sees the tenyear hitting 2 . You see the report that the u. S. Has been cooling, that they fudged the numbers in the independent, they had a piece over the weekend about fudging numbers. Thats the piece you sent me. People have a lot of reason to want it to be true. Anyway, with us now is mark grant, managing director of southwest securities. Ill bet you mark is with me on this, but i am not going to get involved because weve got to talk about other things. Mark, did you like that druckenmiller piece last week . Did you see that . Well, i was in israel, so i didnt have an opportunity to see it. Im going to send it to you. Just basically that, you know, you keep rates this low and you, you know, keep the qe and you will engender a Balance Sheet recovery, but a Balance Sheet recovery, you know, i think 26 trillion additional wealth to the asset holders, but it doesnt really create jobs, it doesnt really its not earned success. Its government fiat that ends up, you know, it does raise animal spirits, i guess, and it does make people that own assets feel wealthier, but it really doesnt help in terms of investment, and we wont get it above 2 gdp using this method. I think thats probably right, joe. I mean, ive said all along since the beginning of the year that the quantitative easing and the tremendous addition of assets to the feds Balance Sheet helps wall street, helps businesses, but does very little for main street and for the general economy. Yeah, and small businesses. It helps big businesses, helps the people that own the assets, but i think only half the people in the country own stocks in any form, and only a third own houses. So, if youre not in either of those asset classes, it just leaves you behind, which is what weve been seeing. Thats right. I agree with that. All right, so now, everybodys come down. What are we going to do for the year . Everybodys come down from 3 again, but the stock market doesnt care. So, now were at 2 , 2. 25 . Were back to that . Is that good enough . Well, it depends. In my opinion, honestly, given where the european rates are for the sovereign debt, like france is about 1. 78 when i looked at it this morning, United States is 2. 6 on the tenyear, i think were going down to about 2 , and i think then that will have a significant effect on the main street economy. Borrowing costs are less. Mornings are less. It wont goodbye for the savers, but i think it will flow through to main street and to the general economy as a whole for the United States. So, i think its a very good positive. Hey, mark, front page of the Financial Times this morning, big story Central Banks to cut Debt Holdings move to protect against likely fed action. They say Central Banks plan to cut their exposure to longerterm debt to protect themselves from losses when the fed ends its bond buying this autumn. It says a survey of managers who own 6. 7 trillion worth of this stuff said they would likely adjust their portfolios in preparation of this tighter monetary supply. What does that ultimately mean . Well, i read the article this morning myself. I think that your some ways out from that. You have to look at the timeline. The fed is going to have about 4. 75 trillion. That equates to 39 of the u. S. Treasury public market. And i think taper, not taper, nothing is going to happen in terms of higher Interest Rates until the fed starts to deleverage, and i dont see that happening any time soon. Mm. Its like we just keep prodding along. I mean, its not the worst scenario that were in right now in terms of the stock market and people like us. Were doing pretty well. And i guess that will continue, or were talking about 17,000 on the dow right now. So, its almost like i dont want to call it goldilocks for people that own assets, but it just doesnt seem like were moving forward en masse as a country. And i think people feel that, and thats why theyre so disconsulate. Well, i think thats why the fed is going to push down Interest Rates. I mean, theyre not going to come out and say it. Youre not going to see hilsenrath make some announcement about it, but i think Interest Rates, the tenyears going to well next time, can you just say liesman instead of hilsenrath . Sure, liesman. Sorry. Sorry, steve. Thats cold, man. Thats cold. He knows what network were on, right . Yeah, 2 on the tenyear and that will be good for the country, and i think that will be a positive for the equity market, unless we have a big blowup in the middle east. You know, if youre steve, you might actually like it that way, because he doesnt want to be you dont want to appear to be doing press releases for yellen. [ laughter ] oh. He might have a problem. Im just saying. Its a little late for him to be worrying about that, i would say, andrew. I have utmost admiration for steves reporting. All right, really . Okay. That got a belly laugh out of me. All right, yeah, that would never happen. Mark, thank you for joining us. Coming up, from the drama on the field to the drama in the markets, the dow and s p 500 on quite a run. Records falling every day. Will it be full steam ahead, though, for investors going into july . Also, check this out, harleydavidson are going electric. The most iconic name in motorcycles rolling out project live wire, and its made its way to wall street on this fine summer morning, but does it still have the wow factor . Check it out when squawk box returns. E financial noise financial noise financial noise financial noise [ female announcer ] we love our smartphones. And now telcos using hp Big Data Solutions are feeling the love, too. By offering things like onthespot data upgrades an idea that reduced overcharge complaints by 98 . No matter how fast your Business Needs to adapt, if hp Big Data Solutions can keep wireless customers smiling, imagine what they can do for yours. Make it matter. Welcome back to squawk box. Todays executive edge goes electric with harleydavidson. Were going to get to morgan brennan, whos outside the New York Stock Exchange with livewire this morning. Good morning to you. Reporter good morning, andrew. Yeah, were standing outside of the stock exchange. Joining me is harleydavidson president and coo matt lev ditch. Were going to talk about the company and talk about this new electric motorcycle, but first, meet project livewire. The bike is right here in front of us. We are going to power this up. And this gentleman here is going to take it for a test drive. So, were going to be showing you that as we talk about the company. Take a look at that. Awesome. I love it. Reporter all right, so, matt, thank you for joining us today. Thank you. Reporter i think the first place we have to start is the sound of this bike. Now, harleydavidson, you can hear a harley coming from a mile away. Right. Reporter you guys have even tried to trademark that potato, potato, potato sound. This bike, as we just heard, doesnt sound like that. How will customers react . First of all, its all about looks, sound and feel at harleydavidson. So, the sound of our traditional bikes is an outstanding part of it, and livewire by design has a really cool kind of turbine wind, kind of like a jet engine. So, when youre on it, you really feel like youre on a rocketship. Its awesome. Reporter who is your customer for this bike . The target is probably more like the young adult, urban rider, so someone thats living in the city, like new york city, that wants to zip around, have the nimble responsiveness that this electric bike delivers. But in cities all over the world. And as we see urbanization being a growing trend, and obviously, appealing to millennials, livewires in the sweet part of that. Reporter and talking about livewire and young adults and urbanization, and you targeting that, thats the bigger story for investors, that you have a new motorcycle, the prototype, but also, your two bikes coming out this year are street bikes geared towards the millennial audience. Thats different from your core baby boomer, white male audience. What does that mean moving forward . We have an approached product development, we invested heavily in a touring platform last summer. The street models that you mentioned, the young, adult, urban customer, and now li livewire, which is a ways away. Were just doing demos, looking for feedback, but appealing to the next generation of riders looking for a great harleydavidson ride. Reporter what does it cost to make this prototype . And given the fact that lithium ion batteries are still so expensive, theyre still, as you talked about before, the charge anxiety. How do you make this costeffective, especially for the millennial demographic . Cost of the components is a big deal, as you mentioned. So, the cost of all these motorcycles is already in our financials. Weve built the fleet. Were going out to get customer feedback. And as technology continues to evolve, which it is, we expect prices to come down, too. So, as we get that feedback, we watch technology, we improve the product, get the cost down, well have a product that people can afford and buy in big numbers. Reporter one more quick question for you. Do you team up with a tesla in a gigger factory . Well, tbd. Weve got a lot of opportunity to get with key partners, and launching livewire is a part of telling the world that were going electric. Reporter great. Well, thank you for joining us today. Thank you, morgan. Matt levatich from harleydavidson. Were going to keep checking out this bike as the day goes on. Back to you guys. All right, morgan. I saw that, 92 miles an hour on a bike, just, that scares me. I dont know. It just scares me doesnt it, andrew . 92 miles an hour on a bike . Could we does it come with a side car . Could we get one . Its a bike. I want to get a side car for a harley. On a harley, but this is just an electric bike. I dont want to go that fast on a bike. Coming up you can only go 53 miles, right . Thats the range . Right, but it can get there quickly. Coming up, glittering gold. The precious metal getting some of its shine back, but will it return to its former glory or are stocks just too attractive right now . Thats next. And the race for world cup gold. The u. S. Could have punched its ticket with a win over portugal. Now the match versus the highly favored germans becomes even more critical for the u. S. The drama and the business with our friend that we have, our expert sports guy from nbc. 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For instance, a family of four gets 10 gigs of data, with unlimited talk text, for 160 dollars a month. Good morning and welcome back to squawk box here on cnbc. Im joe kernen along with andrew ross sorkin. Becky is off today. But making headlines, the board of alstom backing a tieup now with General Electric. The deal received the necessary nod from france after the french government secured the option to buy 20 of alstom from a parisbased Construction Group. Crony capitalism is the way of the world. Horrible. Its something weve got to get rid of at some point, and its not just france. You know, people think that all conservatives and republicans are probusiness. Theyre not pro crony capitalism. Theyre not pro it doesnt work right. You have to be able to fail. You have to be able to earn your success. So tell me what you think of the next story. Bnp par dias another french company. Reportedly close to a settlement of 9 billion with the u. S. Over violations of u. S. Sanctions. You dont want Money Laundering in a country that can sponsor terrorism in sudan, right . Bad idea. Bad idea. If i was the government, since i was negotiating with the u. S. Government on this and on the alstom deal, i might have trying to put all the i might have put bnp and alstom not together, but i would try to make one big deal. Did you see france play, how good they looked, too . I mean, how does all this relate to the world cup . It was a good game. I cant get over the fact that, apparently, for us to advance, we can just lie on the field. Thats not going to happen. We can. We can literally germany and the u. S. Can take a nap on the field but that would mean both and they would advance. Teams dont collude. Theyre not going to collude, both of them. Talk about crony capitalism. U. S. Authorities are investing and you know what, its on a day where there are on some websites, they talk about soccer games being fixed. You shouldnt be talking about that. Thats true, actually, right . Its on some websites. Anyway, authorities are investigating whether the french bank evaded u. S. Sanctions. I just said that. Related to sudan. But i just said it again, did it for emphasis on the syllables. Go ahead. Im very excited about this next transaction. Googles next labs is buying home monitoring camera startup dropcam. We have one of these in our home. The companies didnt confirm a price tag, but recode, one of our partners, reporting its about a 555 million deal in cash. Joe, do you know about dropcam . No. They let users monitor homes and offices through cameras and hardware and software. It goes over wifi. The deal comes as google expands new markets, including the socalled smart home. And i can literally from my iphone look at the kids. Thats nice. Thats good. And you can watch them from anywhere, which is kind of cool and also kind of scary. Its also not that expensive. 99 bucks and they have a monthly monitoring fee, which you can do. You can tivo it all, so you can go back and look and see whats going on. You can its pretty amazing. You can monitor, i mean, the entire staff, right . We tried to exnay on the staff. You can put them all over, but you know right. What does your man do after youre gone . Does he have other things to do he has other responsibilities. You know, pressing the shirts. Yeah, hes got its got to be right, whatever youre going to wear when you get home, your robe and Everything Else. Your hef you have one of those hef and your pipe. Yeah, lets talk about some other deals real quick. Oracle reportedly nearing a deal for microsystems. By the way, that guy, who runs oracle yeah. I think hes got one of these guys. Oh, yeah. Hes got a couple. He does. And that deal could be announced as early as this morning. God bless him, too. I love larry. Mr. Ellison should be wearing a robe at all times. The journal says a takeover values micros at about 5 billion. Microsystems makes point of sale hardware and software for restaurants and hotels. How many jobs hes bought a lot of companies, obviously, but in his lifetime founded oracle. Hes been a net positive for society, has he not . You wouldnt think so, based on your paper and when they out people, they out larry every time theres a right . I mean, hes on there every quarter, right . He is on there every quarter. Along with morgan whats her name . Anyway, lululemons founder is looking different than Walt Mossberg and morgan stern . Morgan stern does Movie Reviews for the wall street journal. Okay, this is morgan sin. Yes. Okay, just want to make sure. Because i like the movie review guy. Did he like your movie that you saw . I dont recall the one that you cried . I dont recall if he you were balling like a baby. Which one was that . I think he did like it. You have to like that movie. Its impossible not to. You were balling like a i was. More or less than beaches . I have a thing for bette midler, as you know. I was at dinner with her. Shes nice, very funny. Anyway, shaking up the yoga retailer, chip wilson you know why hes no longer there . Hes the guy who said some had some comments about the sheerness and the body which didnt seem as bad around lululemon. Right, which didnt seem as bad as the guy at abercrombie, who said we dont like things that arent cool. Except he made the fact that there are people who shouldnt be wearing lululemon. Right. I think everybody should have a chance to wear whatever they want. Its just, but thats just me. Anyway, hes seeking dont you . Is that the right answer here . Thats the right answer. Okay. Hes working with Goldman Sachs as he seeks changes on given that you have views on other things where you dont care about the right answer but there are right answers that i care about. The wall street journal reports wilson may consider options, including a proxy fight or joining a private equity firm in a buyout. Youre the one that wants to throw all the babies off the plane. Im not one for that one. Lets talk about the tensions in iraq, coupled with the feds resistance against raising Interest Rates, is now pushing gold higher for a little bit of an outlook on the gold market right now, lets get to our next guest, marcus grubb, a World Gold Council managing director of investment strategy. Good morning to you. Thank you for being here. Good morning. You dont have a target on gold. You dont have an actual number, do you . No. Youre not allowed to . I represent the organization, were not regulated so were not allowed to have a price target. Higher. Higher. But its always higher. Its not always higher, but as i used to joke with friends of mine in the investment community, if i didnt believe the fundamentals for gold were good, id go and do Something Else. Are there points where youve said its too high . There are points where we thought the market might try to youve kept that to yourself, though. No, not necessarily. We can talk about our views on the balance of the market with investors. Where is it . Is it going to tread water now or its heading well, no, i think as youre seeing now, youve got this jobless recovery, youve got a fed that is very dovish. Youve got the issues with the fed Balance Sheet. You know, i think that the issues now going to be how do you run those assets off . What do you do with the soma port folio, where is the federal funds rate going to end up in this tightening cycle . All of that isnt necessarily bad for gold, because when you look at this recovery, its very different from past economic recoveries. On the other side, youve got a lot of risk, too. We were on one side of accommodation in qe. Yes. That would have seemed like a good time for gold. Now were on the other side. Why would you still i mean, at this point, id say were on the other side of what was a good time for gold, no . I would agree with that. Okay, but you just said its still good for gold. Well, yes, only because if you look at what happened in previous economic recoveries with previous tightening cycles, this is much less negative than previous economic recoveries and tightening cycles, so the downward pressure on gold is likely to be less. And europe is just now entering. Europe is entering it, yeah, and then the geopolitical risk rising again with iraq and the ukraine. So, all of that is adding up, i think, to a situation where gold should do quite well. Thats the worldending scenario, why people are buying gold. No. Give me the supply side, demand side story. Thats the wedding season around the world when you think of china and elsewhere. Thats the other big untold story about gold is really, people know about the seasonality, they know about asian demand, but its really the rise of china thats so important here and the way that is flayplaying with the geopolil balance as well. Chinese consumers love gold, the central bank likes gold in china. Its a very different culture. So, effectively, you have asian consumers and government organizations on the bid in this market. You made a comment that in india that youre looking to see if modi is an indian factor. Whats that about and why is that so important to you . Absolutely. Because of course, with the major victory by the bjp, everybody is looking for the july budget and what mr. Modis going to do in terms of policy in india, and many are looking for him to roll back the previous policies of congress. So, hes potentially going to sell public assets. A lot of the economy, parts of it, anyway, are still owned by the indian government, so theres a lot of asset value that can be liberated there. And equally, theyre looking for more economic reform to kickstart barrons calling him the reagan of india. Saying thatcher and reagan are the same. Therefore, everybodys going to buy gold . Its about the demographics, its about wealth. If you get gdp back up to 8 from 4 buying stocks in india. People are already buying stocks, too, and thats a good call, but i think gold will go up too. It is likely they will take off the import restrictions from last year. Thank you for your time. I want to ask about the bitcoin. Well do that next time youre here. Thank you for being here. Pleasure. I saw the wink go by. You did. Certainly did. Theyre a striking pair. I mean, they are. Anyway, werent they . You were hanging with them . Yeah, sort of, a little bit. Thats what you do. The table next to me. I saw you eating with some cool, the picture of you with who . John legend. He also watches in the morning. Vossen consulting group. Penn. Went to penn with my sister. Got into harvard, but i think we should have him on tomorrow, dont you . Absolutely. Married to a model, too, did you know that . Chrissy teigen or something . I didnt. Check it out. Or dont. Next, big pharma versus big insurance. The battle is over Prescription Drug prices, something that can impact everyone from main street to wall street. Find out whats at stake next. Squawk will return in just a moment. Well, now they mean nothing. Welcome back. Big pharma and big health insuresers about to go head to head over drug prices. Meg is joining us now with more. Thats right, the drug pricing issue has been weighing on the industry and it really goes across all therapeutic classes, diabetes, asthma, rheumatoid arthritis, but one of the areas of focus is hepatitisc. A new drug that came out at the end offer, had the biggest firstquarter launch of all time, 2 billion brought in in the first quarter. But of course, there is competition coming and the question is did it compete on price . There are drug combinations coming from abbvie, merck and bristol myers, another one coming later this year. The question is, can they undercut that price to get market share of 84,000 for a 12month course of treatment. Thats drawn a lot of consternation from Health Insurers and the government, but another issue is the macro degeneration. Now, this is a kind of war between roche and regeneron. They have two drugs that almost drew 2 billion in annual sales, but theres an interesting twist. Eye doctors are using another drug from roche, avastin, a cancer drug that works in a similar way to these two drugs. Some analysts are saying this actually has 50 of the market in Macular Degeneration because its a lot cheaper. Its 50 for a dose of avastin in this indication versus 2,000 for lucentis and eylea. So, theyre pressuring doctors to use avastin and theres a lot of concern on that and weigh on regenerons stock price last week. Avastin, that was amazing what happened. And it was all after it tries to prevent the vascularization of cancer right. So, its hard for it to ma taste size, but thats similar to what happened with Macular Degeneration. Because you have it growing behind the retina. So, how it should work, other companies should in in and compete to bring down the price, because the Drug Companies will argue how expensive it is to develop it, and its also, if you treat hepatitisc, its a lot cheaper than a liver transplant down the road. Exactly. So, if you can prevent things with taking a pill, theoretically, it should be better. Weve got to get our patent stuff together, make sure we have all the incentives to keep developing the drugs, but not allow people because people dont understand how a pill, which costs 3 cents to make, can cost 84,000. Thats true, and then the question there is who blinks first . You know, is it everybody keeps prices high and keeps raising them, but if somebody wants to capture more market share, they can do that by lowering the price and getting in a better spot in the formularies and insurers will prefer them, use their drug first. And around the world, since theyre global drugs, youve got totally different situations in every country in terms of caps on the pricing and Everything Else. So right. Its a mess. Its hard to figure out, and its one of the reasons why health care in this country, costs continue to rise so quickly, but you dont necessarily want to blame the innovators that need that seed money. Its true. Its a really big, complicated issue but one that people say needs to be solved. Whats your beat . I can see you think about this a lot. You need to. Yeah. Do you have answers . You dont . Im not sure anybody really has you have questions, no answers. A lot of questions, as any reporter does, yeah. Same as me. Thank you. Thank you. Coming up, a bull for all seasons. Squawk market, and andrews pointed this out, squawk market master yeer Jeremy Siegel, the professor. Its paid to be bullish i am thrilled about this. Okay, all right. Hell give us his forecast for 17,000, which is only 50 points away. Thats pretty aggressive. But first, the drama builds in brazil. Portugals equalizer versus the u. S. , it was even in the time that they added for stoppage. Just seconds i think it was the last person to touch the ball, really, was that guys head. Anyway, it kicked up the intensity level a couple of notches. Netherlands today at 11 30. Will it kick up the ratings and soccers popularity . Obviously, yes, because were talking about it nonstop. Thats next. E moving our company to new york state. The numbers are impressive. Over 400,000 new private sector jobs. Making new york state number two in the nation in new private sector job creation. With 10 Regional Development strategies to fit your Business Needs. And now its even better because theyve introduced startup new york. With the state creating dozens of taxfree zones where businesses pay no taxes for ten years. Become the next business to discover the new new york. [ male announcer ] see if your business qualifies. Just moments from advancing, the u. S. Allowed a lastminute goal and was forced to settle for a 22 draw. Very dramatic against portugal. Joining us is dave briggs. Im not always half full im always kind of full of it. Im definitely half full on this. Im really psyched that were all talking about this. Psyched that i looked forward to the game yesterday, watched every minute of it, and i need more content. I need more sports content, when things slow down. Im just happy were all watching. Im happy im looking forward to chile and the netherlands at 11 30 today. So im happy. It was gut wrenching, i admit. But we would have settled for a tie when we were down 10. And we would have settled for four points before the world cup started after the first two matches. Right. We would have been thrilled, youre right. And gut wrenching is the best term to explain what happened yesterday. Because going in, you would have thought we get a tie of that game, we are thrilled. And as it went, we outplayed argentina the fourth ranked team in the world. Basically throughout that game. And then you see one of the best balls weve ever seen in the extra stoppage time. But yeah, you have to be thrilled if youre a u. S. Soccer fan, if youre a supporter of the game that its clearly growing. I think youre going to see no less than 15 Million People watching a soccer game on espn and youve got tremendous social media numbers, it was trending throughout the day and night and even this morning. So look, its a win no matter what. Theres still an 86 chance that they advance beyond the group stage. I mean, jones, that was awesome. And dempsey, who was right we totally kicked their butts for the whole after that real disaster in the first five minutes, that didnt go through his legs but almost looked like it. So that was great. And you know what else . Ive said that at the end, and ronaldo did nothing for he obviously looks hurt. And people were tweeting about what a loser he was. And he was going to be doing lowkey commercials in the u. S. And they should have shut their mouths. I said dont wake the sleeping giant. That was the most beautiful pass, id say that he bounced it off the guys head. The guy didnt even have to head he hit the guys head that went in the goal it was so beautiful. It was a thing of beauty. And he incites the masses more than any athlete maybe in the United States. The closest thing we have is lebron. You dont understand why it is people hate that guy so much because he goes out there and wins and looks pretty doing it. But that ball was absolute perfection. Again, we were we outplayed one of the best teams in the world. Definitely. And its a tremendous win. That is a good omen. And hes named off Ronald Reagan so you got to like that. Yeah. I actually watched the game last night, as joe was saying earlier, beaches wasnt on so i needed to fill my time somehow. Steel magnolias. I think that might have been on. So what happens now . All these commentators are saying literally that germany and the u. S. In this next round could literally just like lie down on the field for the entire time and take a nap and they would still advance . Well you know whats funny about that . Theres actually a growing chorus for just having an arrangement with germany, where, yeah, we literally just agree to tie, both teams go on advance beyond the group of death. And Jurgen Klinsmann said last night im absolutely not talking to them, there will be no arrangement. But this is soccer. This is one of the more corrupt games in the world, match fixing goes on on a regular basis around the world. But i think it will clearly not happen. Jurgen klinsmann not only played for germany, won a world cup, he managed that team in a world cup. He wants to go out there and show a hell of an effort. And who knows. Try to make something happen. He had a good attitude. I kind of have his attitude. Okay it happened. Lets move on. The way it happened was painful. Well, hes a little angry at fifa. He said that germany got a much easier path having to play a day earlier than the u. S. Two other head lines i didnt even see michelle wie play but god bless her and pinehurst, she finally did it winning a major thats cool. And maybe the biggest sports story, the reds hit. 500. I think for the first time this season. 37 its been a long road. Go reds. That is huge. Well lets not forget tiger woods back on thursday. Back a little early because of the tournament that benefits his foundation. So that should be interesting. Hope he doesnt rush back. We need him healthy for golf. Anyway, dave briggs, thanks. Congrats on your reds. Thank you. Hes always hes on point. Coming up another guy who is on point, were going to be talking about big issues buzzing in washington, and the world, but wall street doesnt seem to be overly concerned about the crisis in iraq. And shakeup in the gop. The notebook was not on. You guys are too good. Our guest host always on point this morning, hes walking towards us right now former congressman and Morgan Stanley managing director, the one and only harold ford jr. He loves all these topics and more on squawk when we come back. Tant when youre running a business. Century link provides reliable it Services Like multilayered Security Solution to keep your Information Safe secure. Century link. Your link with whats next. Means keeping seven billion ctransactions flowing. G, and when weather hits, its data mayhem. But airlines running hp endtoend solutions are always calm during a storm. So if your business deals with the unexpected, hp big data and Cloud Solutions make sure you always know whats coming and are ready for it. Make it matter. [ girl ] my mom, she makes underwater fans that are powered by the moon. [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] my mom makes hospitals you can hold in your hand. My mom can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] my mom works at ge. My mom works at ge. Time to take care of business with century links Global Broadband network and Cloud Infrastructure. We constantly evolve to meet your needs every day of the week. Crisis in iraq. More cities fall to sunni militants, as secretary of state john kerry arrives in baghdad. Michelle carusocabrera is back with her tale of the crisis. The dow pushing towards 17,000. Are stocks in the danger zone, or is this just the rally with no respect . I dont get no respect from my wife or anyone else. The second hour of squawk box begins right now. Good morning and welcome back to squawk box on cnbc. Im joe kernen along with andrew ross sorkin. Becky is off today. Shell be back tomorrow. Guest host our buddy harold ford jr. Former tennessee congressman who is managing director of Morgan Stanley. Good morning. You were guest host you were i wouldnt mention that other organization. But you were a guest host on squawk box 15 years ago. Absolutely. Because of you. Right. One of the early guys. And you have done a lot of this on your own. But we we arent responsible for your entire career. But you have done very well. You could be a senator from new york at this point. Is that going to happen . Im pleased with what im doing right now. Politics remains important to me. But i ran in tennessee. I was unsuccessful. Moved to new york. Not long after that. And i got married and the most important thing in my life is my family. Your little one is so sweet and cute. Isnt it the best . It is. Unbelievable. How old now . Six months. Every month better drns doesnt look that tired, either. Hes a little grayer. Thank you. But looks good on you. Thank you. Obviously. But have you noticed my wife has remarked about it, too. So that might help if you do want to run. Because it adds a little gravitas. Or if you dont want to go, ive got a name i can set you up with my guy. And it can work with me . Our top story this morning, the markets marged towards 17,000. The s p no my guys people say color, too. They think i color my rug. Right, right. S p 22 record closes this year. Meantime the dow had 11. As for volatility, were still looking at historical lows with the vix 10. 10. 85. Thats quiet. Too quiet. The futures at this hour, also been quiet. Were now down about 15 points or so. But, 17,000 you would figure is something that we have a good chance of seeing maybe this week, on the dow. The tenyear has not been quite as much fun to watch. 2. 6. Were going to talk more about the stealth summer rally with squawk market master Jeremy Siegel who has stayed really sanguine and bullish about the prospects for equities. And why not considering theres not a whole lot else you can do with your money at this point. The best performing sectors this year, energy and utilities and our top corporate story this morning fits that trend. The board of Frances Alstom is backing the bid for General Electric. Ges investment in the transaction worth about 10 billion, lower than i think the cash part went down, didnt it . As the ownership as the control that they would exert on the company sort of went down i think the cash went down. Alstoms chief executive says he expects the deal to close in the first half of 2015, and ge is one of only seven dow components not to have hit at least a 52week high since january. I think 28 and change in the high. The other names that havent participated in just this years rally. Nike, walmart, p g, cisco, verizon, and ibm. And we forgot to talk about the most important corporate story of the weekend. You saw more on the American Apparel story . I did. The ceo saying he wasnt sending the naked pictures. He knew another employee was sending pictures he might have been involved with . I saw plured pictures of a naked man. Who was that . Was that him . I dont know what that was. You know my quota for naked men per day. I know what youre talking about. Yeah, thats a seinfeld line. So anyway. Not that theres anything wrong with naked men. No, no, no. And we have the goo goo lemon story. Just an economic report today. The first of several key snapshots of the housing industry this week. The National Association of realtors is out with existing home sales for may at 10 00 eastern time. This is not nearly as exciting as the American Apparel story. The pace of sales is expected to register a slight increase from april to an annual rate of 4. 75 million units. Tomorrow, of course, we get the case shiller report on home prices, as well as the governments look at new home sales. Also the price of gasoline edged higher over the past few weeks. The latest lundberg survey showing prices are up 1. 9 cents to an average of 3. 71 per gallon, and jeefs has been complaining about it for the past week. Most of the recent surge in crude oil prices has not yet been passed on to gasoline buyers. The American Apparel chart looks i dont want to say its like a penny stock. Its like three bucks. It didnt look good. Which would make you be less inclined to stick up for the ceo. There are lots of women who dont want to shop at American Apparel because of him. The question is whether that company would sort of have a renaissance. Oh, my god, 70 cents. Its they may have reason to fire him simply based on the performance of the company. And then when you go in to all of the pictures it gets more complicated. Its a 1. 19 company. Its all been naked stuff. In geopolitical news the markets continue to pay close attention to the situation in iraq. Secretary of state john kerry is in baghdad today so we can all rest a little easier. Michelle carusocabrera is back from iraq and joins us now on set. You there and back again was the name of the original did you have a kevlar . We brought kevlar and helmets, too. We were in kurdistan the northeast region where intense security there. Almost bordering on a police state in some ways. But we never put on a flak jacket, even when we went to kirkuk. I didnt feel i needed it. Neither did security. The kurds are probably our strongest allies. For sure. Should we hope it becomes a kurdish its hard to say if kurdistan becomes independent then their navive will end. Once theyre independent then theyll have the imf looking at them. Theyll have other places looking at them and then start to see, right, exactly and there are going to have to be a lot more transparents. I think were going to see a crony capitalist kind of place. But certainly, theyve got a lot more for them understanding the rule of law, making sure your contracts are with investors. Or ones they can be profitable with. Just was writing stuff last week, i dont know who we blame, theres so much blame to go around. Oh, yeah. This is depressing. Theyre never going to take any of that land back. Iraqi military unlikely to turn the tide. Right. What is in a threeway split the best Case Scenario at this point . Federalism, right . Governor kirkuk. What he talked about. You give a lot of power to the regions. Their own court system, their own systems of law,ate set rap. Do you want me to get to the video . Do you want to see secretary of state john kerry in baghdad sitting with maliki. We can roll that. Youve got it all ready. Weve got about 20 seconds of video were told that the message is that he needs to there has to be an inclusive government in iraq. Weve been told that over and over again. Some other data points to tell you about. Getting news from nbc producers in the region that are now a checkpoint on the jordanian border has fallen to the militants, as well. Jordan is to the west of iraq so theyve gotten most of the border with syria. The Iraqi Military has released video of air strikes in most up. We cant verify the timing. This is the video they released showing theyre bombing parts of mosul. Theres also video theyve released of fighting in baqubah, which is towards the east. If you dont know where these places are dont worry about them. Know if the rebels could take baqubah its like a direct path to baghdad. When i talk about the pr war, take a look at this video that comes out of mosul. I believe this was shot by journalists. This is not handout video. Members of the militant Group Islamic state of iraq are directing traffic on the streets of the city and distributie ini copies of the koran to passersby. We had a couple conversations with a gentleman in mosul who said that the reports of what was going on there were exaggerated. It spoke to this idea that the sunnis who lived in that city were very frustrated with the maliki government, and didnt necessarily see these rebels as the enemy. Did he bring up Climate Change . Im sure he did. Was that the first thing probably the second but pretty close. Hes walking a real tough balancing act. We saw it with the iranians, to try to suppress these militants. You obviously antagonize other allies. Did you get some sense on the ground as to where the kurds may stand . The kurds have had one relationship with iran. Certain sectors of the kurdish government. So, behind the scenes, whats going on in discussions there . I couldnt give you a lot of details. But certainly you can be sure, look, they sent troops to defend certain areas, right . So, its a real mishmash and the alliances there behind the scenes can switch very, very rapidly. Remember, talibani at one point. Seen kissing Saddam Hussein years ago. Alliances can shift dramatically over there. Hold that thought. Want to bring in another expert into the conversation. Director of the peace building and rights program, author of the forth coming book, a new map for the middle east. Good morning to you. You say us, us meaning the u. S. , trying to work with iran, is a mistake. Why . Iran is going to be a factor. It has longstanding ties in the region. But iran is only going to act in its own national interests. But if we think iran is going to do anything to help iraq or to advance what the u. S. Seeks to accomplish, thats just wishful thinking. And dont we need iran to actually get involved, or i mean, if they succeed, cant im going to go backwards. Why cant iran be successful in actually helping us . Irans already has members of its qods force on the ground. If things get worse theyre likely to bring in hezbollah. These are the kinds of allies that we want . A kind of shortterm expedient relationship with iran is going to backfire over the longterm. David, this is michelle here. I assume when iran claims they want to help, or we think that irans going to help, i assume their end game would be to take over, when we talk about iraq splitting up into three countries, theyd love the shia part of the country. And take that over. That would be, to me, their long game. So they already control baghdad. Prime minister maliki is their man. The government acts as their proxy. Theres a lot of energy and commercial contact between iran and iraq. So its not about iran taking over iraq in the future. They already have what they want. But the alternative . The alternative is to recognize that iraq is a failed state. That the western parts where isis is present is already a terrorist state. The u. S. Has only one friend in iraq and those are the iraqi kurds. We should just recognize that iraq is no longer going to exist within its current frontiers. Instead of trying to create this inclusive government which has been a myth for many years we should just be launching a salvage operation. Thinking about the circumstances under which Iraqi Kurdistan becomes independent and then working with it to secure its energy assets, and to create a prowestern buffer between turkey and an increasingly chaotic and sectarian iraq. I can appreciate what youre saying but were drawing a middle east map. Whats the expense . Whats the cost for us as a u. S. To do that . Wouldnt we need a broad set of allies to help bring that about and reduce the amount of violence and instability that would probably flow from the redrawing i think youre talking about . The map is going to be redrawn by iraqis. Not by the United States but the u. S. Cant be flat footed and react to those events. It needs to get ahead of them and help shape them. Of course this isnt going to happen without our ally turkey. Right now turkey has huge construction investments in iraq. There are pipelines that connect Iraqi Kurdistan to the Eastern Mediterranean port of jahan. If there is a new state called kurdistan its going to emerge under turkeys stewardship and protection. Before we let you go, can any of what youre talking about be accomplished without sending in troops . It was a mistake to withdraw our troops in 2011. To send troops in now is too little, too late. We dont need a Security Solution to the problem. We need a political fix, which recognizes that iraq is already lost and starts to salvage what we can from our friends who are the iraqi kurds. What do you make of the fact that ahmed alcohchalabi has sud reappeared on the scene . Hes always promoting himself. Hes being talked about as a prime minister. I suppose the person promoting Ahmad Chalabi for that job is ahmed chalabi. Professor, thank you for joining us this morning. Hes got a great book called losing iraq. You should read. Thats the book . Yep. Losing iraq. And hes got another forthcoming book, as well. I like the plan. I think you might need to have troops. He says you dont i think hes right. To accomplish it its going to take some american treasure and perhaps committing american lives to achieving it. Right. Next, the gop shakeup, what its going to mean for wall street, and its time to spark up the Corporate Tax discussion with grover, super Grover Norquist at 7 30 a. M. Eastern time. And then its deals and the future of the internet superhighway with former s. E. C. Chairman Michael Powell. She keeps you on your toes. You wouldnt have it any other way. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. 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 experiencing cialis for daily use and a free 30tablet trial. Welcome back to squawk box making head lines, today bank of america plans to announce it will be expanding its rewards program for existing customers, lowering the threshold for those who qualify for discounts on loans and other benefits. Clients who have at least 25,000 in deposits and investments at the bank will be eligible. Thats down from the previous threshold which used to be 50,000. Those will be offered lower rates on marts and home equity loans, higher Interest Rates on savings accounts, and free stock trades. Should also tell you that a multibillion dollar utility deal has just been announced. Wisconsin energy is buying intergys energy. I dont know. The way the letters are arranged. Shareholders thats how they the new company will be called Wec Energy Group which they did for me because it would be very easy to i try to use the way the words are actually arranged. The letters are actually arranged to decide how to thats just me. I have a problem with the alphabet. You watch it. The home state as well as michigans Upper Peninsula integrys has customers illinois, michigan, minnesota and wisconsin. Its more fun this way. Harolds here. It is. This is the way they want to intro this, harold. Ill read it. Immigration, gop leadership, midterms, all these things are and youre at Morgan Stanley. So you have to look at these things from the prism of someone who works on wall street. But i would say, just talking about cantor and you know this, ail politics are local. No doubt about it. That never changes. Its like the one thing we can count on. He left his for people that voted for him in his district, didnt see i dont think. That and a big trend whether youre democrat or republican if youre not focused on handling and tending to the blocking and tackling back in your districts you can run into problems. Eric has given autopsy of what he thought happened. Theres no doubt immigration probably played a role, which it was exacerbated because he didnt have that connectivity to the district. I think there were a number of conservative talk show hosts that came in and supported his opponent. But when you talk about where the Business Community i think looks at whats happening, i dont think a lots going to change. Kevin mccarthy, smart guy, came out with the same ideology but i think he and eric probably share a similar approach kevin comes from a democratic family. He was deli owner. Paid his way through college. What do you mean he doesnt share what im saying you dont share his political thats what im saying. Tile try to get Immigration Reform done. Hes going to do that too. Will but probably try to do it in a different way. I want to do budget reform. My only point is i dont think much is going to happen between now and the end of the year. There have been one or two other names that surfaced, had they been elected the majority leader perhaps there have been some different feelings. Mainly wall street, but that being said, kevin will be fine. From a republican standpoint and i think that hell work hard to try to get some issues moved on. But i dont think theres a desired appetite to do a whole lot. There may be less. Id love to see tax reform first and foremost. I know grover is coming on shortly for a variety of reasons. Im talking about the war. We talked about immigration. I think tax reform in the eyes of the Business Community is probably more important in the immediate shortterm than immigration. You go to the valley all they talk about is Immigration Reform, more so than taxes. Theres no doubt im not saying anyone is opposed to it. But i think tax reform, in the eyes of easier or you think the democrats can do tax reform now . Sure they can. But what youre saying do they have the political will to do it . On the democratic side to do Immigration Reform, frankly, than there is more of a willingness for republicans to do tax reform than it is Immigration Reform. And democrats obviously want to make immigration more so than taxes. But you look at the inversions and other things, an appetite is big enough some democrats are going to raise taxes in certain areas which i think would probably meet a lot of chagrin from republicans. All this is a great conversation. I agree with your original point. I dont think much is going to happen if anything and the shakeup in the gop leadership did not slow that down nor will it accelerate anything. Its going to keep things the same. Stuff like a blue dog. You always were a blue dog. Yeah. And you think we ought to be taking advantage of the energy play, and that we shouldnt talk negatively about energy and thats still what we hear in this white house. Im going to do keystone. For purely political reasons the president said as long as it does not aggravate our carbon foot print hes willing to go forward with keystone. Report after report said it would not exacerbate you mean jobs i mean the keystone right. But the Keystone Pipeline would increase tax revenue, it would increase jobs, the multiplier weve all seen it, youve talked about it. Its a big renaissance happening and the fat that the president has not stopped it is a good thing but they certainly could do more to help it. Very tactful. Anyway. Isnt he . Hes going to be sticking around. Were going to get a lot more tactfulness for the next two hours. Coming up the march to dow 17,000. The s p 500 inching to 2,000. Why sell in may and go away was at least so far not a good strategy this year. See what happens by the end of the summer. Also at 8 00 eastern time, squawk market master, Jeremy Siegel is going to join us. Ess. Century link provides reliable it Services Like multilayered Security Solution to keep your Information Safe secure. Century link. Your link with whats next. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Time to take care of business with century links Global Broadband network and Cloud Infrastructure. We constantly evolve to meet your needs every day of the week. Next sparking up the debate over Corporate Taxes with Grover Norquist. Plus the changing landscape of cable and telecom with former s. E. C. Chairman Michael Powell. And what it will mean for consumers and investors. Squawk box will return in just a moment. Welcome back to squawk this morning. Making head lines weve been talking a lot about ge getting the nod to buy alstoms energy base. Spains santander is buying ges Consumer Finance business in europe for 950 million. Santander has been looking to diversify away from the struggling domestic market. Also lulu lemons founder looking to shake up the retailer. Working with Goldman Sachs. Wilson may consider options including a proxy fight or joining a private equity firm. Chip is the same guy who made some of those comments that people werent so happy about about certain people who shutting wearing lululemon and others who may not be its not just yoga anymore. Its not just yoga but its tight. You got a yoga thing, right . Im not a yoga i dont i dont do yoga. We know where youre going with this. I dont do yoga. You dont . Ill tell you about a guy, joe, who does do yoga. We know. Sting. Sting does yoga and other things as well. Sting has a message for his children. Work hard because you cant expect to inherit my health is what hes saying. The rock star joining a list of super rich who have said passing on fortunes to offspring could do more harm than good. Sting said he doesnt want to leave his three sons and three daughters, quote, trust funds that are albatrosses round their necks. American enterprise. Earn success. And bill gates has come out and said similar things. As has warren buffett. People, if you have a job you love and make 50,000, 500,000, whatever it is, its the earn success that does it. I happen to agree with that completely. Dont you . I do. I do. I bet hes going to leave a little. You would think. I mean, youre where do you stand on that . Im more in the joe category. You take care of your kids, but you make them work. Yeah. What does that mean . You protect them. I think you give away the majority. Earn the success. Theyll be happier. Yes. I think its one of the problems in society. That we are graditing a bunch of smart, smart people from schools, but i think the work ethic in the country im not blaming on the fact that people are wealthy and passing it onto their kids but theres a way in which you can instill and reinforce at every aspect of society. We should do that. We always talk about staying with the tantric thing. He has six children . Not that good at the tantric thing is he . I mean he slips. Apparently. Right . Apparently. Oracle is reportedly nearing a deal for microsystems that could be announced as early as this morning. The journal says the takeover would value micros at more than 50 billion. Micros makes systems with email and stuff . Hardware and software for restaurants and hotels. And americas tax system not only driving corporations offshore but the country is seeing an increase in expats. Expatriates renouncing their citizenship and cutting their ties because of taxes. Grover norquist, rounder for americans for tax reform, joins us now with more. Good morning, grover. Good morning. Its all all has to do with, you know, corporations trying to do inversions, and ive seen some of this expat stuff. Someone was comparing, grover, expats to people that went to canada, right, during the war. And you know, i guess theyre saying that one didnt want to fight for their country, conflating that. But if youre willing to give up u. S. Citizenship youre the loser, right, in my view. If you give up citizenship in the greatest country in the world, if thats what you want to do, go ahead and do it. We dont want you here. Well, two things. We have to look at why this is happening. We used to have lower marginal tax rates for individuals and companies than the rest of the world. During the reagan years we took it from 70 down to 28 . And the rest of the world noticed. That there were advantages to being an american or an american company, you paid lower taxes. We also have a worldwide tax system. And the problem is the rest of the world started cutting their taxes. Canada, which you mentioned, has a 15 corporate rate. Were at 35 , plus about 4. 8 , almost 5 , at the state and local level. So about 40 of american Corporate Income is taxed away. Its 15 in canada. The european average is 25. Thats also true, unfortunately, for individuals, as well. And our government, if you are french, and you live in the United States, for a couple of years, you pay american taxes. As an individual. You dont pay french taxes. Because you earned it here. You pay american taxes. If youre an american and you live in france for 30 years, france taxes you, and we tax you. We make it very difficult to be an american, and to move around in a global world, either as a company, or an individual. I mean, these people decided for decades to keep paying american taxes, at some point it just got to be too much for several thousand. You know, grover, i can just tell you that that the left, and their friends in the media, will immediately tell you that no corporations pay 35 prgs, and theyll say that, in fact, that a blended rate is 12 . Now they fail to mention its because feel are moving operations offshore. So thats why its a blended rate. But thats the narrative that theyll give you and theyll be supported by the New York Times. And others, so that everyone comes up with that same conclusion. And, in this country, for whatever reason, in the last five years, people think that a punitive tax rate on corporations is not something that to really, you know, they deserve. To pay higher taxes, because theyre corporations. So its all part of the zeitgeist that we have right now in this country. But, while were on that issue, and your viewers are watching, when somebody talks about the average tax, nobody makes a decision based on averages. You can drown walking across a river with an average depth of two feet. What matters is the marginal tax rate, the additional last dollar that you earn or invest thats taxed at 35 , actually 40 if youre in a state that has state and local Corporate Income taxes. Not all do. But on average, about 40 . And then you say, well if youre a canadian company, it would be 15 . Do you not notice a difference here . You cant, you know, beat your dog and then decide wonder why he wants to live in somebody elses house. Were doing a lot of damage to our companies, and individuals. Grover, one of the things thats happened as we talked about is number of inversions over the past couple of months, and theres a real sense, you can speak to this probably better than anyone, harold, since youre Morgan Stanley, a lot of Companies Want to over the next 12 months were going to see even more of it. Yeah. In the immediate term is there anything that can be done realistically about this situation . Because there are some people in washington, and even on wall street, who say you know what . We should try to put some kind of temporary halt on this, as we try at the same time, try to come up with some comprehensive tax reform, neither of which i think is probably realistic but nonetheless. No, theres not some shortterm deal. The United States government has caused a problem by abusively taxing both individuals who live overseas, and companies that deal in international trade, and sell things and do business throughout the world. Global companies. We want that kind of leadership, and yet, we do damage to americanowned companies that france doesnt do to frenchowned companies. And stupider than france is not where you want to be on tax policy. Cut the rate down to 20 on corporations, canada did 15. We can do 20, because we also have that 5 state local tax, as well. To be where europe is on average, 25, we have to be at 20 nationally, and then theres the actual additional 5 that state and local governments impose. Okay. Harold, when you see people, a lot of people like to raise taxes on corporations. They just want to do it. A lot of them on your side of the aisle. They dont see the connection between corporations and jobs. Does that ever get to you . Do you ever see that, and wish you could change . I do. I have been an advocate when i was in congress, and ive been out for lowering the rate for the reasons, grover and i would agree on everything but the sentiment and instinct he has around this i happen to degree with them. If you want to renounce your citizenship in the u. S. Because of this, you go right ahead. This is the greatest country in the world. Andrews idea is the leaven idea, now carl levin is the guy who put in all the loopholes for whatever reason that corporations use. They think, hey, lets just not allow them to move. Lets say you need 50 shareholders. A temporary not just temporary. But its just saying, youre stuck here and youre paying us no matter what. Its almost addressing the symptoms of the disease rather than the disease. And grover, right, grover . I mean, to just not allow these companies to move doesnt address the issue. But thats what they want to do. Okay. Not to overexaggerate, but at some point east germany noticed people were leaving east germany. Instead of deciding to treat People Better in east germany they built a wall. Building a wall is not what we want to do. Lets find out what were doing that is destructive to american interests and stop doing it. Somewhat difficult question for harold because youre in politics and also in business. Client comes to you says he wants to do an inversion, what do you tell him . I work for my client so we figure out ways to make it happen. From a broader reform point were not east germany. And i see where youre going with it. But these policies should be changed. To your point, temporary looking grover before we let grover go, one thing for him. He wants the redskins to be named off, do you know this . No. Your favorite person. Absolutely. Ronald reagan. The washington reagans. That is a great idea. Problem solved. That is a great idea. Grover, stick to taxes. He said that hes got to change it. I grew up a redskins fan. You dont want to do reagan . Hes pushing for reagan. Grover, thank you. If i can take care of the social issues, when does a blue dog like you finally come over and just say look, i cant take all the antiprivate sector stuff . When do the social issues i do the same thing when you come up with the social issues im with you on the social issues. But youre wrong with all the stuff on that side of the aisle. Not the blue dogs. Well, okay. When we come back, aereo could revolutionize the way we watch tv. The future is in the hands of the Supreme Court. Former s. E. C. Chairman Michael Powell will be here. I can pay my bill. Tap it here, Digital Insurance id card. And tap it here, boom, roadside assistance. Ontday ooklay, its axwellmay. The igpay . Otallytay. Take an icturepay onephay, onephay really, pig latin . [ male announcer ] geico. Anywhere, anytime. Just an aptay away on the geico appay. [ male announcer ] geico. Anywhere, anytime. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. Welcome back to squawk box. This week the Supreme Court expected to hand down its ruling in the aereo case. Joining us with more on this case as well as the impact of Net Neutrality, Michael Powell former fcc chairman and chairman of the National Cable and television association. Good morning, good to see you. So what do you think the Supreme Court is going to decide . Well, that case could likely come out today. I think the current betting is that the broadcast industry is liking to prevail. But i think way more important than the actual outcome is really going to be the delicate way that the court writes the opinion. Because the danger is that it could affect substantial amounts of critical innovation thats going on like cloud services, remote dvrs. Content on ipads. Anything thats distributed to anywhere devices. So i think the real meat is going to be in the particulars that the Supreme Court crafts in its opinion. So just to be clear, you are against aereo as a association, but for a lot of the other innovation. And so getting that sort of nuance is key for you . Well, to be clear, the association doesnt have an opinion on the case. But i think some of our critical members, who have broadcasting networks, do have exactly that position and i do think as a broader industry, we are very, very worried about those innovative components that you reference. Net neutrality is a big issue. Right now were in the midst of two big transactions, comcast Parent Company of this network with Time Warner Cable and of course at t involved with the directv deal. I was going to say the dish deal. Obviously now we have sprint and tmobile at the same time. What is your sense of the larger issue around control and whether you actually need the scale to work . Yeah, i think that the at least in the video and broadband industries, i think the problem that is increasingly driving these transactions is technology scale. More than anything else. Consumers are increasingly very demanding of wanting their Video Services and other services to have all the characteristics that are possible in a webbased infrastructure. You know they want better navigation systems. They want content on any device, anywhere. And i think the software talent, and capital required to produce that at scale is something that is not generally been available to the cable industry in particular, and i think that is a critical part of whats driving a lot of these transactions. Should we be bothered as consumers, from a policy perspective, the idea that there may not be as much competition as far as pipes to the home and when you look in different cities, where folks like google fiber and other competitors have wanted to come in and have strug theed because theres been pushback by the industry and the incumbent thats already there, what should a policy perspective be the answer to that . I think at least to say at the outset i dont think the transaction changed the dynamic of the number of pipes available to the consumers home. I do think that should always be a concern of policy to ensure that the market is robust, and competitive. You know, ads for whether local municipalities ought to have their own broadband networks, my opinion on that is the freely elected citizens of the state and locality can make that decision but they ought to make it with their eyes identify open because there have been disastrous examples of putting the taxpayer on the look for very expensive networks that require massive Capital Investment over time, that the political process simply cant us is train. So i think they should be careful about the way they want to use their public dollars but if thats their choice im comfortable with that. Harold ford good morning, chairman, theres some criticism the cable industrys come under for this notion of when to create fast lanes for traffic. Can you answer that and give some sense . What interest and incentive if any would there be for an issue along those lines . I think the interest incentive and ability is dramatically exaggerated. 95 of a broadband customers base, 95 of the time is doing things, surfing facebook, using other applications, that really wouldnt benefit from any kind of prioritization or fast lane capability. I think were a bit perplexed at the suggestion that were dramatically interested in creating that kind of world. We have not had Net Neutrality rules for 16 years. And there isnt one isb thats even attempted to create that kind of business model. We just dont believe there is much of a market there. There arent that Many Companies that would even be interested in such a service. And i certainly dont think any kind of service like that would come at the expense of the rest of the capacity. There would never be any dirt lane or slow lane in any case. Michael explains this to me. A Cable Company advertises high speed broad band. Sometimes even super high speed, and they charge a different price for the super high high speed, because you think you want to be able to get that high speed, and then, lets say you have netflix and it starts buffering and they say its not our fault, its the other guy. Yeah. Square that circle. Two ways to square that circle. First of all the s. E. C. Concerned about this in 2008 started doing a measuring a broadband in america study they just released results last week and concluded quite clearly that americans are getting not only what they pay for, but in the cable industry, 102 of what they paid for. So its quite clear that the isps are providing the broad band that the consumer is purchasing. Congestion is a complicated issue because it can occur in many parts of the internet chain. In the case of netflix, i think its becoming quite clear that most of the congestion was their responsibility. They elected to use congested routes, simply because they were dramatically cheaper than noncongested routes you do recognize customers who are paying the super, super high speed fee because they think thats going to help them with the buffering and then its not helping them with the buffering, and whos the beneficiary . Not netflix or somebody else, the beneficiary is the Cable Company. I dont think the beneficiary is the Cable Company. That complaint will come in to all our call centers that dissatisfaction will result in attaining our relationship and what consumers need to understand is they could not they could not be getting that capacity because their broadband rueter is poor. They could not be getting that capacity because netflix isnt managing its congestion well. There are many sources for that buffering to occur. We have to make sure we identify correctly where that congestion is coming from, if we want to improve the consumer experience. And maybe its as simple as he needs to buy a new router that can handle the capacity hes trying to put through it to his television set. So this is something we have to do a better job of educating consumers about. Chairman powell, thank you for joining us this morning. Thank you. Good to see you. Notebook. Buffering. Last night you ordered notebook on netflix and it was buffering. Is that what happened so then you turned the hockey game on or the soccer game on . I tried beaches. And that was netflix not fast enough . It was a not personal with you, isnt it . Trying to download it and its like a slow lane. Im a Time Warner Cable customer so im waiting desperately for comcast. Go for it. Because i cant wait. As a customer i think i feel like im living in the third world in relative basis to where im going to be when comcast takes over. Looking up the most famous like movies like that, and i didnt get the list fast enough. But notebook. I havent seen that. Once the buffer was i just started macraming the jean shorts and just decided all right coming up. The march to dow 17,000 continues. Will we get there this week . Lots to watch including housing data, and gdp. And squawk market master Jeremy Siegel will join us along with Jonathan Gallup of Rbc Capital Markets and talk about the stock markets. Squawk box will be right back. Up next on squawk box, dont start your day without knowing the names that will make you money. Joe has your list of stocks to watch, right after the break. [ male announcer ] if you cant stand the heat, get off the test track. Get the mercedesbenz youve been burning for at the summer event, going on now at your authorized mercedesbenz dealer. Hurry, before this opportunity cools off. Probably not going to run either. Look at some stocks to watch. You running for president . Condetemplating it. I want tv news to run that. On the record im probably not running. Only if you get an endorsement . I might. Youre kind of a blue dog, arent you . Ill take that. The new york youre a business guy. All right, Wisconsin Energy is buying you say it. Integrys. You say it. Integrys. Its great. Integrys. Energy. Interjies . Anyway, for 5. 7 billion in cash and stock the deal will unite the two utility companies. And its worth about 71. 47 per share, about 17 premium for integrys shareholders. Phil falcones harbinger capital is offering to buy central garden and pet for 10 a share. Harbinger is also offering an alternative proposal in which it would acquire only the companys pet supplies business for 750 million in cash. And that the demo, you know if this was pets mario, people go crazy buying stuff. People go crazy for pets. Pay whatever it is. Coming up a little more spelling bees. Joe will teach me. And what you need to watch when the opening bell rings on wall street. And sunni militants take another city. John kerry arrived in baghdad. Oil at sixmonth highs. Were going to discuss the impact of Higher Oil Prices on Economic Growth when squawk box returns. [ female announcer ] we love our smartphones. And now telcos using hp Big Data Solutions are feeling the love, too. By offering things like onthespot data upgrades an idea that reduced overcharge complaints by 98 . No matter how fast your Business Needs to adapt, if hp Big Data Solutions can keep wireless customers smiling, imagine what they can do for yours. Make it matter. Theyre the days to take care of business. When possibilities become reality. With centurylink as your trusted partner, our visionary Cloud Infrastructure and Global Broadband network free you to focus on what matters. With Custom Communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. Every day of the week. Centurylink® your link to whats next. The numbers are impressive. Y to new york state. Over 400,000 new private sector jobs. Making new york state number two in the nation in new private sector job creation. With 10 Regional Development strategies to fit your Business Needs. And now its even better because theyve introduced startup new york. With the state creating dozens of taxfree zones where businesses pay no taxes for ten years. Become the next business to discover the new new york. [ male announcer ] see if your business qualifies. The march to 17,000. Stock market master Jeremy Siegel and rbcs Jonathan Gallup will break down near mile stone for investors. The crisis in iraq. Militants take another city as john kerry arrives in baghdad. The latest on the instability in the region and what it means for oil prices. Plus cnbcs top states for business. Will your state make the list as the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc first in business worldwide im joe kernen along with andrew ross sorkin. Looking up something in the post . In the new york post. In studio Morgan Stanley managing director harold ford. Former tennessee congressman. Lots to talk about throughout the hour. At Morgan Stanley now making big decisions. Like a chairman or vice chairman . Yes. Not like a vice chairman. Im a managing director. Managing director of Morgan Stanley. You Greg Kaminsky and greg fleming. My boss. Making far reaching decisions at Morgan Stanley as gormans done does a great job. Anyway, first, talk about that, harolds comments on whats happening in washington and around the world. First andrew has im just reading about gisele on page six she was supposed to be at the cannes line on creativity but apparently she left to go back to the east coast. Isnt she presenting the world cup trophy to the winner . I did not know that. Very valuable things to know. Lets tell you about some news. After months of negotiations ge is buying alstoms energy business. The french government backed that transaction after securing the option to buy 20 of alstom from a parisbased Construction Group so now they are in business with the french government as well. In other deal news, shares of microsystems, that deal now official. Keep an eye on those shares right now. 67. 35. Because oracle is now buying that company, let me tell you about the price of that deal. Of course, with a point of Sale Technology company, that deal is about 5 billion and make oracle make oracles largest acquisition since it bought Sun Microsystems for 5. 6 billion back in 2009. Weve also been talking about this other transaction all morning or at least potential transaction, lululemon shares on the rise in premarket trading. A lot of speculation around whats going to happen. Founder chip wilson working with, i apologize to you about this, working with Goldman Sachs. Not Marken Stanley in this case and others in a variety of Strategic Options for the company. Thats according to the wall street journal. Those options could include a buyout of the company by a private equity firm and mr. Wilson, of course, sort of unceremoniously pushed out after making some insensitive comments. Lets just call them. Is that about pants. About pants. And who should wear them. And who should wear them. Right. And shapes and sizes. Drugmaker abbvie has raised their earnings guidance. From 3. 06 to 3. 16. That compares to the prior 3 to 3. 10. The street had estimates of 3. 13. It now says the positive trends its seen so far this year should continue in the second half. And finally the government is increasing security or scrutiny, rather, of Employee Stock ownership plans. This is a look at the wall street journals reporting. Authorities say some owners are selling stakes in their companies to Employee Stock owners or plans at inflated prices. Government says these trangz actions cheat more groups who rely on the plans as a source of savings. Joseph . Its weird. So they overcharge their employees . Yeah. The markets stealth rally that we have seen with, in fact, 23 of the 30 dow components have hit a new 52week high since january. So who hasnt . Here are the names, ge, nike, walmart, procter gamble, cisco, verizon and ibm. All of them have been unable to hit a 52week high this year. Also no telecom and Consumer Discretionary stocks are the worst performers so far since the dow hit 16,000. And if you follow the theory of sell in may this year, youre out of luck. Dow s p, nasdaq all seeing gains since the first of may. Dominic chu joins us now. We measured from 1850, dominic, on the s p and we were around 1850 at the beginning of may. Most of the gains have come since may. Yeah, absolutely. It was flat on that first quarter. Uneventful, kind of up, kind of down for some of the major indices. Overall you have some Big Name Companies within the dow. Depends whats really contributing to the upside move. You talk about like with the dow industrials year. The best yeartodate performing stocks in the dow. First of all you wouldnt think of caterpillar . Up 20 just so far year to date. Merck is up 18 . Then theres intel, Johnson Johnson and microsoft. They are all mossively to the upside by 25 just this year alone. That far outstrips the 4 or 5 gains in the broader market. Whats interesting is the biggest point impacts. The dow is one of those price weighted indices so if you look at the biggest point impacts, always going to be names like caterpillar. Names like Johnson Johnson, merck, cbx, disney. Those are the ones doing the best right now. If you look at the sectors in the s p 500 that are leading the way higher it really is, like you said, all about those utility stocks and energy stocks. Remember utilities and energy have been jockeying at least for a bit now over the last couple of months about whats been doing better. When you see utilities, one of the more defensive seconders leading the way higher you question whether or not the bulls are in charge right now because utilities you only buy them if you think things are going to go wrong. You want to collect a nice dividend check and dont want to expose yourself to the ups and downs of the overall economy. Now the interesting part about whats going to happen right now is you mention some of those losers. Among the biggest losers are stocks that have the biggest drag for the dow. Because, names like visa, names like Goldman Sachs, names like those ones, theyre the ones that tend to have the bigger stock prices in the dow and drag the most down here. But again, with telecom, financials, industrials not participating as much in this overall rally, you wonder whether or not the bulls are going to be in charge for that much longer. And thats one of the reasons why so many people have been saying that this is going to be a maybe nearterm top for the stock market. And of course, when we talk about stock market volatility, with you know, near 7year lows that also begs the question whether or not, whether or not things are about to turn. Remember when things are that cheap, it almost behooves people to buy insurance on the downside when things are that cheap. Because we havent seen these levels in stock market volatility in seven years. Its hard to draw any conclusions, caterpillar or nike. Caterpillar was 1. 15 in 2011. It dropped 75 or 80 in 2012 and their teen, got wushed for whatever reason. Nike in 2012 was at 45 a share. It went to 90 or whatever. So now its pulled back to 80 or so. It had doubled. Caterpillar and nike. Nike is not participating this year, but compared to what its already done, you know, its hard to draw any conclusions. Ibm cant get out of its own way. They cannot. Thats been one of the biggest drags. And of course walmart. You talk about the consumer. The walmart consumer is not the highly discretionary consumer. But walmart shares have been one of the biggest laggards so far this year. And thats a big drag on the dow. Youre talking about a very, very rural part of this country, and walmart might be a bellwether. Were very interested in ibm, arent we . Buffet because he took a big stage. Not making any money, says hes going to keep it. Its a tough turnaround. I still think an active iist that stack. On ibm. They did on p g. Just seems like one of those companies sitting there and unless they can really hit it out of the park for a couple quarters in a row, i think someone says theres something going on here. Its interesting plp all right david faber, nice comments during that interview. I thought it was pretty good. Some great comments. But i think theyre, you know a positive piece. A lot of people have said some positive things about it. The question is how long they have to get there. More on the markets. Joining us now is squawk market master Jeremy Siegel. Finance professor at the university of Pennsylvania Wharton School of business, and chief investment strategist at rbc. Jeremy just with what weve seen, you heard the discussion, and you know that the gdp backdrop is just positive enough to allow for low Interest Rates, and some growth at companies but are you at this point looking at the stock market saying, its not acting that well internally, and maybe well have a little bit of a respite . Well, you know, jonathan mentioned about the defensive stocks. Telecom, you know, is doing well. Utilities are doing well. But i think thats a yield story. I mean, yellen gave us the green light last week if i ever saw one that, you know, she is in no hurry to raise the rates. And thats why the socalled defensive sectors have done well because hey, ive been a buy yield if there aint going to be yield anywhere else. I dont see that as an internal sign of weakness in the market. Jeremy, okay, we got low Interest Rates. But you look at the vix, the volatility, you look at people saying that no ones trading because its like a faux market. We dont know, really, were not seeing price discovery, because the fed is involved so heavily. Do you have and you look at volume in the stock market, you look at the internals, where fewer stocks are hitting highs. Does it look like a time when maybe were ahead as andrew likes to say over our skis . You know its very hard to interpret the vix as a leading indicator. I think the vix bottomed out in the last end of 2006. Now it was nine months later when we hit the peak in october of aseven. But the alltime low of the vix was actually, i think was 8. 9 or Something Like that. And that was in 1997, and that bull market went for another 3 1 2 years. I think its because there hasnt really been so much surprise in the markets. I mean either with the fed policy. Most of the numbers are coming out pretty much as expected. There have been risks. I think iraq is holding back what i think would be a faster gauge in the market right now. Were waiting to see whether theres any interruption in that 3 Million Barrels a day. In the oil. But, you know, outside of that there really hasnt been any surprises, i think, one of the reasons for the low vix. How about you, jonathan . 17,000 next . 17,000 next, and then it will be 18,000. I think the big story here is that this economic recovery is sluggish, and thats going to cause it to be a longer cycle than normal. And what that means is that instead of this being year five of the seven year cycle i think were probably year five in a tenyear cycle which means this thing has far more to go, and your concern, you know, about the, some of these shorterterm things, i think is not going to be the important story here. Its going to be how far this thing could run. And as far as the vix is concerned, when central bankers get involved and they tell you theyre going to smooth out the bumps, what do you expect volatility to do . It should be lower, given their involvement. You listen to anyone at Morgan Stanley . I do. We have our forecasts on this. Who do you listen to . Vince reinhard, adam parker. Adam . Didnt he final think low in the towel and go bullish . I think hes going a little bullish. His analysis is as good as any. Really . He missed about this much. I have a question for professor siegel. Dominic just talked about walmart and the stock not rallying. How do you reconcile, we see some of these Consumer Confidence numbers, yet walmarts customer is an everyday hard working american who seems to think price points are very important to them. How do you reconcile that as the consumer and what walmart is doing with some of your bullish projections . Well, i havent had a walmart situation particularly, we know that earnings have lagged throughout the economy and even at the low level. You know, minus were going to get that gdp. I mean joe mentioned earl remember later this week its going to show almost minus 2 . For the first quarter. And that certainly isnt good. I think the bright side of that is that earnings actually only went down a couple in a real bad quarter. You know, were going to have looks like 3. 5 this quarter, hopefully thats going to cover in the second half, and thats one reason why i think the earnings projections are as high as they are Going Forward. And if those earnings projections Going Forward are reached, you know, this bull market, in my opinion, certainly has quite a way to run. I agree, i think cycles are longer now. They have been actually since 1990. And so i dont think were near the end of, you know, this particular Business Expansion at all. And jonathan, were not seeing the kind of exuberance or interest in the stock market that you would expect close to the top, are we . No. But you are seeing really, since the beginning of 2013, that the public is coming back. That, you know, mutual fund flows are stronger into stocks and thats mostly money that was on the sidelines during the downturn. It is coming back in. But theres a lot more to go. So i think that we really cant see that supporting the next leg up. Okay, all right gentlemen, thank you. Slow but steady wins the race. And thats what weve been seeing with the market. Okay. Coming up next, when we return, oil prices at multimonth highs amid continued uncertainty in iraq. The outlook, were going to talk about that when we return. First another look at the deal of the hour. Oracle is buying micros systems for 68 per share in cash. About 5. 3 billion total. Shares of micros systems have been halted on that news. And that deal is still not happening another deal still not happening, allergan rejected valiants unslised bid just moment ago. They said that offer grocery inadequate. We will talk about that and more when we return. The insurgency in iraq fuelling oil prices which remain close to ninemonth highs. Good morning to you, john. Help me with this. We havent had a real export problem. Theyre still exporting out of iraq. Theyre still exporting out of iraq. Therefore tell us what the risk is. Im sorry i interrupted there. Youre right, in fact, they are exports out of the south have continued and, in fact, the july Loading Program that the iraqis have released showed normal exports out of iraq. However there is a little bit of a cutback in the north that already had been a cutback because of the loss of the big pipeline that goes to turkey and with the loss of the baiji refinery, theyve lost also. So there is a little bit of a cutback in northern iraq. You know a couple hundred thousand barrels a day that doesnt sound like much. With a market thats been hit by so many outages, every last barrel lost matters. Out of the south, exports continue as normal. Give us a history lesson. Just walk us through a couple of situations that you think are similar to this, and what the result was, both the shortterm and longterm . Well, im ive been thinking a lot about whether theres been a similar situation where you had an oil country that sort of got partitioned. And the one that comes to mind, i think most recently and its still going on would be nigeria, where various parts of the country have not been able to produce for quite some time because of rebel activity there. The difference here is that locally, for the consumer, the partitioning of the country still leaves most of the oil on the side of the more stable part, whereas the northern part, the unstable part, is its resource rich but its not been developed yet. So the other situation i would say would be south sudan. Sudan and south sudan which was a legal partition, two separate countries and the greatest part of the oil was on the south sudan side and that has been shut in. Iraq seems to be a different situation because the Oil Production is on the side thats so far is safe. Tough to find a specific analogy but theyre out there. Right now, more upside risk or Downside Risk . I still think theres more upside risk. You know, the rebels have made gains. You have the Oil Companies pull out of pull some nonessential personnel out of the areas. Remember theyve just got Service Contracts there. They dont have like gigantic reserves that they book for their Balance Sheets. So if things get unsafe theyll pull out. I think the biggest problem with all this is that iraq was expected to be a major supplier of oil for the world. Really out to 2035 when you look at the iea projections iraq was going to be a big source of gains for a word that was going through more than 110 Million Barrels a day. Its hard to see with a country thats so split, and with a Resource Base thats now held by islamic fundamentalists, that youre going to make those numbers. So i think thats the biggest concern. And thats certainly an upside risk longterm. What john you predict, youve said that before, you thought the next 15 to 20 years would produce low cost all production which would obviously have a positive effect. Can we reverse whats happening now, and see that trend start back up . Or are you based on your last company do you think thats not a reality . The oil is low cast down there. Some of the new barrels theyre projecting were going to be less than double digit in cost per barrel, compare that to say the balkans up to 70 or 80 a barrel. As far as whether it can be reversed, i dont know that theres enough in the south, in the southern part of the country to offset losses that might be shut away in the northern part of the country. Lets remember that if you look at the history of the middle east countries, when all of them have had these huge political upheavals, whether its the shah in 1979, the countrys almost never get back to where they were preupheaval. Iraq earlier this year finally produced the same amount of oil it did before the iraqi invasion of kuwait in 1990. So you see how long it takes. So the idea were going to turn things on if theres some instability, thats very tough to swallow. That would be flying in the face of many, many years of history. John were going to leave it there. I feel like i have a better context. Thank you, john. Thank you. Still to come, senator ron johnson, a member of the Foreign Relations and Homeland Security committees will join us to discuss iraq, and secretary of state john kerrys trip to baghdad. Time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. You wouldnt have it she any other way. Our toes. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. 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 experiencing cialis for daily use and a free 30tablet trial. Welcome back to squawk box. A socalled private internet app is growing in popularity in iraq of all places. Its called fire chat. The Financial Times is supporting the app is being embraced in iraq where users can message either other without fire of the government shutting down access to the web. Fire chat was started by a startup. It is the second largest market behind the United States. Number three, iran. Coming up when we come back, john kerrys message to iraq and senator ron johnson on what america should do about the situation there. Plus were going to talk Corporate Tax reform and much, much more with the senator right after the break and before we do that, though, take a look the u. S. Equity futures. We have red arrows with the dow looking like it will open off about 13 points. Ans keeping sevn transactions flowing. And when weather hits, its data mayhem. But airlines running hp endtoend solutions are always calm during a storm. So if your business deals with the unexpected, hp big data and Cloud Solutions make sure you always know whats coming and are ready for it. Make it matter. Welcome back to squawk box this morning. Lets take a look at some stocks to watch. Ahead of trading on this mondays session, oracle is buying micros systems, 68 per share all in cash worth 5. 3 billion total. Micros stock had risen last week on reports the two sides were in talks. Oracle says it expects that deal to immediately add to its earnings. And shares of, joe . Im not helping here. Integrys energy. Yeah, yeah. On the rise this morning. Excellent. Its being acquired by fellow utility Wisconsin Energy at 5. 7 billion cash and stock. We should have harold do it, too. Anybody but you. Integrys at 71. How about dollars like that . Drugmaker abbvie has raised its earnings forecast. Theres been expectations that strong trends during the first half will continue in the second half. Abbvie now sees fullyear profit up 3. 06 to 3. 16 thats up from the prior 3 to 3. 10 estimates that had been i dont know i mean weve been talking about it a lot. But it must have been Something Else before. It was a spinoff. Abbvie is a spinoff from was it not from maybe it was from abbott. That would make sense. Will you look that up . Were going to talk more about iraq as it affects what happens in the markets and the crisis there. Also the fallout for majority leader cantors surprise primary defeat. Republican senator ron johnson is a member abbvie is abbott by the way. Member of the Foreign Relations committee. I think ron john right . They use that senator or senators really dont like nicknames, probably, right . Well, good morning, guys. Its already taken . Where do you want to start, senator . I mean we dont want to just hear your side of the aisles analysis of all the things that obamas done wrong in iraq. What i mean obviously, it was kind of broken before he got even in to office. So what do we do to try and fix it do you think . Well, it was stable when he came into office. Now our job needs to be to maintain any stability in the region that exists. Right now i think thats in kurdistan. So i think we need to do whatever we can for the kurds up in the north, to make sure that that doesnt get overrun by isis. Help those folks actually take their oil to market over time. Just what im afraid is going to happen here and i think what were seeing right now is as the wall street journal termed it the establishment in the state of al qaedastan very dangerous for the world situation. But we really lost what influence we had in iraq he we bugged out in 2011. So you know, we got to recognize our role in the world is to provide stability where we can. Right now, in terms of what remains of iraq, providing stability up in the Northern Region. Good morning, harold ford. Does that call for america to help provide stability for the sending of u. S. Troops. Different from the stability and back to the instability, one thing that was present when you talk about stability in iraq was that we had a big troop presence. Should we recommit more troops and be willing to risk american lives to create the stability you want in iraq . I dont think we can go on the offensive. Right now its about being on the defense. We need to protect the 5,000 americans that are basically in baghdad, which is going to help hopefully stabilize the baghdad region as well. We certainly dont want to see baghdad fall. If we have to send military advisers into kurdistan, the Northern Region there, i wouldnt be opposed to that. I want to do whatever i can to help president obama and when secretary gets when secretary of state kerry gets back, see what his report is, and try and be as supportive as possible to do what we can. But again, we lost our influence. This is a disaster. I dont believe it was a disaster that could have happened. This really is snatching defeat from the jaws of victory. Right now, whats the reality of the situation . Its not good. This is a pretty grim situation. We need to do whatever we can to contain the al qaeda forces that are establishing a pretty strong base, setting up basically setting up governance in these regions now. This is a tragedy. So lets switch gears quickly. Because you were a business owner, and i think weve spoken about this and gotten to know each other, and the tea party or some representatives, came to you with the idea of running and you won and now youre almost a seasoned vet at this point. But the way you got elected, versus whats going to happen in november of this year, and then in 2016, do you have a formula for what the Republican Party needs to do . Because you can have all these great ideas but if you dont get elected you cant do any of them. How do you win back seats in 2014, and how do you win back the white house in 2016 . I think we need to tell the American People what were for. From my standpoint we really do share the same goal in america. We want a prosperous america. We want every american to have the opportunity to build a good life for themselves or their family. I think the overall conception usually what we need to do is make america an attractive place for risk taking, business investment, Business Expansion and job creation. How do you do that . Well you have to bench mark your competitive factors with those of the rest of the world. We have to have competitive tax environment. We dont have one. Right now our tax system is driving American Companies overseas. Heres what i know all the private sector. I agree with all that stuff. I understand. During the debates. When the partys going to be fighting with itself about who the real Republican Party, what are the social issues. What do we do with immigration if the republicans want to get the hispanic vote at this point where do you come down with that . What do you do with gay marriage what do you do with these social issues that one part of the party sees as so important but makes it to other people thinks it makes it less likely to be able to have the entire nation vote for a republican. What do you do . I think were at a moment of triage in this country. We have to understand that were really mortgaging our kids future. Its really the fiscal issues. The Economic Issues that overweigh all the other ones. You need to respect people that might be a republican that might vote republican are going to want to know about those social issues before theyre going to vote for you purely on economic terms. So i mean i hear the far right say there was no senator or there was no president dole, there was no president mccain and there was no president romney because you ran moderates. But then you look at what happened to why harry reid is still a senator, because they ran, you know, someone unelectable there. You look at what happened in delaware. Whats the right mix for the Republican Party to garner the most sort of votes that it can . I think we first have to recognize that the social issues are going to primarily be decided in the states through democratic process and thats the why it should happen. Then ill certainly go with the judgment of the American People on terms of where they want to fall on, whether its abortion issues or gay merge or wherever. Let the Voters Decide that. Generally these things arent really decided on national basis. But you know from standpoint of immigration weve got a lot of Migrant Workers in wisconsin. Ive never had a Migrant Worker ask me for citizenship. They just dont want us to deport their moms and dads or husbands and wives. I dont think were going to do that. We need to actually solve the this this problem, we need a functional Legal Immigration system way to secure the borders is you eliminate or reduce all the ibsenives for ilLegal Immigration. You have to have a functioning Guest Worker Program and things like everify. We have to be concerned about the southern border in mexico because thats right now where most of these young people are coming from because of all the violence in places bake guatemala. These are huge challenges. This is a point in time where weve really got to concentrate on the big issues. Try not to let the other issues that really arent going to be decided by the federal government i know you want to avoid talking about the social issues but on gay marriage joe had a tough conversation with governor perry last week on that very issue, and it is a defining issue for so many people. I understand that. Again that would be and it already is working its way through the states. Youre having State Government after State Government you know, vote for gay marriage and in the end were going to let the Voters Decide that. I think thats the best way of doing it. On all these social issues these are arguments that should be taking place between individuals and you know, let people win the hearts and minds of americans and let the Voters Decide. Where are you on gay marriage by the way . Im pretty traditional guy. Almost 60 years old. I think marriage is between a man and a woman. But again if the Voters Decide that they want gay marriage im not going to oppose it. All right. I think that is part of the challenge that republicans are going to have. You said it best, joe, from the outset, they get in the middle of these president ial debatess and they have these huge fights about who can be the most from the 1940s and the 1950s. The countrys progressing. Not to disparage senator johnson at all, but the country is in a different place than a lot of the issues. Womens issues, or marriage issues, or immigration. Civil rights across the board. So until they can get comfortable there, and appeal to the mainstream, i think theyre going to this prosperity targ up the, most americans will tune it out. Blisten, what what americas looking for is security. And i think we need to point out that, you know, our ideas are going to provide them greater security, and lets face it, president obama, you take a look at his record, hes reduced our job security, our income security, our retirement security, our health care security. Now were seeing his policies are reducing our national security. So i dont want to totally run a negative campaign. We have to show the reality of the situation, how those policies havent worked. Weve got to show the American People were for it and how our policies will created opportunity, the types of jobs, the strong middle class that americans are craving. Last time, harold, it was not republicans, it was gingrich, trashing private equity, which gave, you know, the left a perfect inroad into how to defeat romney, basically, remember. And even, you know, senator booker now, having said it made him sick the way it was done last time. And a lot of people did not like the way business was sort of taking out to the wood shed just to win another election. I dont disagree with any of that. Probably some things ron johnson and i agree on when it comes to ways to pass policy to promote and encourage investment, innovation and growth. When you talk about security, senator, if you are a gay american and you believe the Republican Party doesnt want to protect you in your home thats a fundamental security for you. If youre a woman senator i know youve got to get to that issue. Im all about one we agree on. Lets figure out what it is we agree on and i think again we agree on trying to get a prosperous america, lets concentrate on that. Okay, senator, well interesting time to be an american in the political scene, isnt it . So well see. Its interesting no doubt about it. Because weve tried it this way for six years or so so well see, and the pendulums do seem to swing at times. Senator, thanks. We appreciate it. Ron johnson thats a surf shop. Were just going to have to go with senator. Senator johnson. Well go with senator now. Thank you, senator. Coming up next, the top states for business is back and this year its better than ever. After the break, a preview of this years list and break down who is in the running for that top spot. Were going to be right back. Also nelson peltzs daughter is starring in the new transformers movie. Ise financial noise financial noise financial noise in a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Oh, yes. Welcome back to squawk box. Talking about the dow marches toward 17,000. Were letting the dogs out this morning. Only seven dow components that have not hit a 52week high since january, ge, nike, walmart, p g, cisco, verizon and ibm. Youre going to talk to scott cohn now. I am. Who faber did that tweet about speeches. When i said why were you watching soccer was beaches not available . Scott cohn. It is now time, again i dont want to faber anything. Its time again for our annual rankings of americas top states for businesses. Senior correspondent scott cohn made his way to this years top state where he joins us now live to tell us how it all works. Made it all worthwhile, scott. Good morning to you, scott. Thank you for your favoriting of that. Hey, good morning, guys. Here we are. Were in the top state for business. Were not going to tell you where i am just yet. But i can tell you that this is a very exhaustive process. As much fun as we had with it in the promos that you showed before the break and Everything Else that we do over the next couple of days, weve really we think that weve developed the most comprehensive study around there about state competitiveness. Heres how we decide where we are. The competition is growing. This is Texas Governor rick perry. Growing nasty. When you grow tired of maryland taxes, squeezing every dime out of your business, think texas. Which states back up the tough talk . Why is our arizonabased company relocating manufacturing to upstate new york . We put all 50 to the test in our exclusive study. We measure the cost of doing business, including taxes, wages, utilities, and rent. The economy, where are the jobs going . Which states have the healthiest housing markets, and the healthiest Balance Sheets . Infrastructure, road, rails, ports and airports. Which state has the best workforce, and the best quality of life . We look at technology and innovation. Including scientific, medical and agricultural research, patents, and more. Business friendliness, including the legal and regulatory climates. Education from kindergarten through college. Which states have the resources, and the smarts . We measure the cost of living, and access to capital. So a couple of things that weve done differently this year as youve heard. Were looking at job growth as part of our economy category because we wanted to be a little more forward looking and there are a lot of states that are adding jobs so thats going to make things interesting, and in our technology and innovation category looking at, along with Everything Else that weve looked at for the past eight years were also looking at agriculture because there are billions of dollars going toward that and weve heard from a lot of states about taking that into account. So heres the plan. We will be live all day tomorrow, counting down the top five. And then on the closing bell tomorrow afternoon, well reveal where i am. Americas top state for business. And coming up later today, your first of many diabolical hints about where i am. So you can guess that. Talk to us on twitter using the topstates. And our special website, topstates. Cnbc. Com already has a lot on the issues of state competitiveness, and of course when we unveil the top state youll be able to see where your state stacks up. Guys . All right, scott. We got he cant hear us. So lets talk. I think, its just fun every year to try and figure it out. But if you did this same parameters every year you come up with the same like texas. Texas every year or north dakota or south dakota. Last year, i think it was virginia wasnt it . I think there were some things that made it virginia and theres a lot of positive things. Virginia is for lovers. But you heard the things that he said weve looked at a little bit differently. Farmland, agriculture. And he said job creation. So we should be able to get a clue why it wouldnt be virginia this year because they changed it enough around so that its that going to be virginia. But who i dont know. I want to say east coast. But that lake looked like looked like out west. That looked west to you . Looked a little west to me. Looked a little westy, too. Maybe he was in vermont. Vermont is never going to be the top state for business. It could be last state every year. For business with that they ee lerkt a socialist senator for good sakes. Its not going to be we will continue to watch and we will see scott and we will get the answer very, very shortly. Coming up a lot more i wasnt using that as a pejorative. He is a socialist. Former congressman turned Morgan Stanley managing director harold ford who is not socialist, he is a capitalist, tomorrow on squawk box were going to talk jobs, the economy and tech with two Business Experts on different sides of the spectrum. Former honeywell chairman, one of our favorites larry bossty and former Sun Microsystems chairman. Thats at 6 00 a. M. Eastern time. [ male announcer ] the mercedesbenz summer event is here. Now get the unmistakable thrill. And the incredible rush. Of the mercedesbenz youve always wanted. But you better get here fast. 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At a special site for tv viewers; peace of mind is important when so we provide it services you bucan rely on. With centurylink as your trusted it partner, youll experience reliable uptime for the network and services you depend on. Multilayered security Solutions Keep your Information Safe, and secure. And responsive dedicated support meets your needs, and eases your mind. Centurylink. Your link to whats next. Box. Jcpenney, rising premarket trading. Closed new 34. 25 billion credit facility. 1. 5 billion replaces previous line of credit, providing better terms and they get 500 million loan in all of that. Coming up more from our guest host, harold ford. Check the futures at this hour. Theyre down. But not as much as they were. Squawk box coming right back. Huh. Fifteen minutes could save you fifteen percent or more on car insurance. Mmmhmmm. Everybody knows that. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you fifteen percent or more. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back. Todays guest host, former senator harold ford. Hell spend more time with us. Since inside the Morgan Stanley world, we havent talked about m a and the animal spirits of deal making. What is going on . Weve got the best in the business, kindler and his team the softball, i lobbed it right up there. Going to attack him about allergan and valeant . We could, we could. Did you read those emails. I had my boys on, well talk about. Were the firmest position, what james has been able to do, what they have written about him, the firm, how hes repositioned the firm, and as a result, we hope to keep doing what were doing. In terms of the deal making activity and what you think that means to the overall market . Is it a lagging people say, deals are a lagging indicator, some people say, some people say, the a leading indicator. Where is it for you . I think it says theres a lot of cash, activity, things Companies Want to do. My concern, something dominique and jeremy were talking about earlier, everyday hard working consumer finds himself or herself. We didnt talk about the minimum wage increase, other things to increase wages. Where i agree with ron johnson, i hope democrat and republican candidates for Higher Office talk about ways to increase wages, ensure as youre talking about the number one state for business, how we ensure Education System from k through 12, adopt the common core, which republicans seem to be uncertain about, but republican governors are in support of. Where are you on common core . We dont talk about that a lot. Im trying to figure out whats i see the teachers unions and the far right aligned. Are aligned. Somethings amiss . There this does not compute. Im not just kneejerk opposed to. I dont know what the big deal is. If it holds, if its a way of increasing teacher accountability, im for it. I dont know, what does the far right say . They dont like they believe that its some federal intrusion. Im torn. President obama is a big fan, right . So are republican governors. Thats thats offputtingen bush is for it, so that you have a number of republican enemy of my enemy. Anything that increases produces better outcomes, kids being smarter, able to find jobs, attract jobs. But you dont want people to take tests that cant think either, right . Is that some of the criticism . Theres no doubt about it. If you are able to perform basic science and math challenges, work through them at a level, we ought to measure that. You get 1 Million People get an extra two bucks and 500,000 people go to zero on does that you and i have talked about this before, they ought to reduce taxes, particularly restaurateurs. The other no reason we shouldnt expand that. That encourages, promotes, rewards work on both sides. And generate jobs. The other point about tax reform, no doubt, immigration is high on the list, but tax reform would help in a big, big way, small, medium, large ways. Help me for 2016, hillary, whats go on . We had a book come out, this press tour. Some people said its a failure. Youve seen that. Theres a new another top ten. A new book raises all sorts of questions about her health and this and that. Its par for the course. They invite a lot of praise and invite a lot of contempt. Reality is, ron Johnsons Point about ideas and solutions, shes got to off air lot. The more she does that, not only secure the nomination but puts herself in a great position. How are you that she squeezes out some other potential candidate and doesnt run . Not much. I think its an open marketplace. In 2008 barack obama ran. 2016 its likely shell face some opposition. From. Intensity i doesnt know. But isnt that the issue . If she doesnt run. Someone from the left may run, weve heard typical names, biden runs, elizabeth warrens and others. Were you at Correspondents Dinner . I was not. Biden, he was hilarious. We know hes right on iraq. Look. What happens wrong with biden . The more out there, a positive thing. Mrs. Clinton, she would have to be expecting im not worried about the book. What im most concerned about anybody, including her, what are your ideas . What are the plans . What is the vision . What are the answers . You do that, you can win. Im backing biden. Joe endorsing biden. You think he wants that endorsement . You think jeb . I think he does. Maybe i should back hillary, that will mess it up. Maybe i should back her. Youll be back . I hope so. Promise not to do any other tv until you come back . Montgomery ribs and report back. No other tv, no other shows, especially in the morning. Join us tomorrow. Squawk on the street is next. Good monday morning. Welcome to squawk on the street. Im Carl Quintanilla with simon hobbs, cramer, faber are off today. We kick off the last full week of the quarter. Futures not too far from fridays close. A lot of housing data this week. Of course, well keep our eye on dow, 17,000. Ten years, a shade under 2. 6. Europe mixed as manufacturering pmis slipped for a second consecutive month. Chinas did show