Transcripts For CNBC Squawk Box 20140630

Services, pmi, International Trade and ism nonmanufacturing numbers that day as well. Forecasters say the economy probably added 218,000 jobs in june to make five straight months of job gains of more than 200,000. Thats something we have not seen since the end of 1999 before the dot com bubble burst. The bulls are looking to close the books on a successful first half of the year. The s p 500 is up more than 6 this year following a jump of 30 in 2013. If the market closed the year at current levels, 2014 would be the best threeyear run for stocks since the 1997 to 1999 period of time. Its weird. Its like a weird goldberg thing the way they do this. Sometimes if it was the first or second of the month with the first friday, they may do it the next friday. They do it weird. Other times we have been here on fridays when some markets are closed and the stock market is closed good friday. Its a lesson here, the only people at cnbc that have to come here joe is winding you up for when we walked in this morning. Hes like, im not coming in on friday. Its just i want to be there. Its not so much friday during the day, its that thursday night. I want to be able to enjoy thursday night. Barbecue or something instead of having to go to bed at 8 00 or 8 30. And this time its a jobs survey and a claims number. Which we are excited about. We are excited its not friday. We are excited for the number, too. It is an important number because have you seen the big argument among all the twitter people about whether we are in a recession. And a lot of them there are people that are sort of aligned with my thinking on why the economy has been weak, and thats because of the government activism or the fed or the obama administration. And they all are so sure that government causes us to be a below par recovery. They are so sure that they want it to be a recession. So its not a recession because the employment number has come down to the mid60s, but then they have an answer for that saying its the Participation Rate. So they are saying you dont want a bad number on thursday. No. I always want a good number. But they are basically saying that the economy is much weaker than the governments letting on. The market looks like its not that indicating the economy is not that weak because its so high, but they attribute that to the fed. Then you have the bank of International Settlement saying the reason the markets are at these levels doesnt make sense with what we are seeing around the globe. They say because of the Central Banks, and they would argue what we have seen with the market is because of what the Central Banks around the world have been doing liquiditywise. I saw something on some economists saying there was a bad day of reckoning coming. This was a it was that crazy fight night guy that wrote something on zero it did sort of it was kind of depressing and just said, look, when youve got governments awarding, you have government workers awarding themselves pensions, which is what happens when you have Government Union because you are negotiating with yourself and no one there to take care of the taxpayer, so when you have unproductive workers allowed to give themselves their own Retirement Benefits for 35 years, everything is breaking down, who do you blame . The high end and get into the class warfare and the whole world gets into sort of a civil unrest story because of the wealth income disparity. I was reading one of the original investors of amazon that has clearly done well. Was this in preparation for the documentary yesterday . No, this is just something he had written. I burned the popcorn again. I did dvr it to watch. I was reading this guy from one of the early investors in amazon saying they are coming with pitch forks if we dont do something to change the quality issues. But it shouldnt be that the people that have earned success and got to a certain point are suddenly the ones with the pitch forks are after. It is not them, it is usually Government Policies that have skewed things to the left or right. You cant blame people for doing well, can you . No, but i think you cant blame the most productive part of society where all the wealth income or all the wealth is being built. You cant hold it against them that it is basically what we are doing right now. Anyway, among the other major first half market themes, a surge in m a activity. Year to date, the global deal line surging to 1. 8 trillion from 75 a year ago. And thats the highest level in several years. The firm is being fueled by cashrich Corporate Giants with strong Balance Sheets. And it is not necessarily a lot of stock. A lot is being used with cash and people would argue that when you hear from efron you were here for that. Who was the other guy . Ralph. Ralph, right. They didnt definitively say it was all great. Some of sit is looking to cut costs in some way. Well look at the other stats. Companies have raised half a trillion dollars selling shares so far this year. Thats the highest total since 2007 before the financial crisis. And among the catalyst companies, original high markets and private firms are looking to sell out of investments they have made before the crisis to get out of those things. They had to hold on longer than they normally would. I was looking at the vicks on pace for the fifth consecutive month for losses down 39 over that period. Yeah. So less volatility. Yeah, less, less, less volatility if you really look at it. In Corporate News for you, the Justice Department is expected to announce a settlement with bnp paribas over u. S. Sanctions violations. The board met over the weekend to give final approval to the settlement. Its said to involve a record 8. 9 billion fine and a guilty plea. Also, ken feinberg is said to announce the terms of the gm recall Compensation Plan today. Hell be outlining what the automaker plans to pay victims from crashes caused by bad ignition switches. Ceo mary barra says theres no cap on payments saying they could go into the hundreds of millions of dollars if not billions of dollars. President obama is set to stayed Bob Mcdonnell as the new secretary of Veterans Affairs. It makes you wonder who would want that. Hes got a military career from west point. Joining us with more on this development, senior washington correspondent, john harwood, had a long career at proctor gamble. At the very end he was kind of i dont know, there were activists involved and people didnt like how proctor and gamble was going, but he had a pretty good career there and in the military. Why do you think someone takes a job like this . Well, i think this is a west point graduate who served in the army who left his job at p g earlier than he had expected to. And he wants to make a contribution. This is something that clearly is a huge management challenge. When you run a big company like png, thats pretty good preparation. Now hes got to trade barbs from bill ackman for barbs from congress. I dont know if thats a good or bad trade, but he appears to be willing to take it. For what has come out about the v. A. Is it fixable . A lot of the stuff thats come out recently is that its really a systemic sort of i dont know how it snuck up on us because remember it wasnt more than six months ago paul crudeman and other liberals were talking about how Government Health care can work. Look how good this wealth operates when it finally starts working. And then we saw the tide come down and realized it was closed. But its been a quick turnaround. This has been a youre right, this has been sneaking up on us for quite a long time in slow motion. Sort of in plain site. Everybody is known with the return of flooding from iraq and afghanistan, the health care itself at the v. A. , veterans like it and its the problem with getting into the system. And it has been an antiquated time. I think the president is hoping someone with Bob Mcdonnell can get that done. Do you like the fact that he reached into your hometown for the guy running that company . I dont know a lot about Bob Mcdonnell. Its a conservative company. Hes giving money to republicans including mitt romney. Yeah. Hes a west point grad and theres a lot of people that would like to beat the v. A. Its the those are the guys we really owe. John boehner who knows pg e very well since it is close to his district praised the pick yesterday. Everybody who has been on the participating side of this discussion took an approach yesterday of saying, Bob Mcdonnell is a great guy, we want to hear what his plans are. Bernie sanders of vermont said we need more doctors and we need more resources at the v. A. You have boehner and jeff miller who chairs the Veterans Committee in the house saying, we need other reforms for the system. And weve got to see whether the president has empowered mcdonald to implement those. I think sanders is its the same kind of rationing, if we keep losing doctors for whatever reason in the overall system, were going to feel it with our overall system. What do you expect, they are overworked . They are working how much now and you cant double the patient load because there are not enough hours in the day. Therefore, it takes five, six, seven weeks to get an appointment and how do you fix it without any more dogs, john . Funny how it works with supply and demand. We learn it again and again. Actually, we dont learn it again and again. What else is going on . We have to go, john, but im trying to think of anything else happening. Summer is different with soccer and i cant believe that the United States is grinding to a halt. Joe, i think you have a perfect time for the game against belgium. Forefought on tuesday. If it is tuesday i didnt get to watch any of them yesterday and they were both although i did see dennis mill who are u er who used to be a colleague here. The penalty kicks is like settling the masters with a windmill hole. One playoff hole will settle who wins. Thats a great compareson. Joe, do you buy the ann coulter argument about america watching soccer . Ill tell you what i understand. And i said this last week, you know, i am comfortable and like the world. Im not saying it takes a village to raise a child. But you need to watch competition. Its like the olympics. There are some companies that dont have the infrastructure for where there is going to be a great golfer or theres so much equipment needed. Sounds like you are secure enough in americanism that you can enjoy this without getting the heebiejeebies from it. You dont have a problem with soccer, you love it. Becky, you love it . I love it. I played 13 seasons. I love it. You played 13 subpoenaeasons . This is like that commercial where that girl asks grant hill, you play basketball . And he says, yeah, i was a pro and because you were a pro Soccer Player . I didnt realize that, joe. Joe, i dont think you can even the score. How much have you played . I have never played soccer. Thank you. This is like me talking to grant hill. Becky, what position did you play . Whats that . What position did you play . Right striker and center half. So you were a scoring player. Its not field hockey. Did you play in college . No, no, i played in high school. And i will admit i played rec because where i graduated we didnt have a girls team. Next argument we have on the show is going to penalty kicks. And joe, ill see if you can stop becky from scoring. Did you see the columbia goal . You saw that goal . Everybody did. Which one was that . Well, the other Team Columbia was playing uruguay, and the uruguay guy headed it back to a columbian guy and then it went back in and the club columbian guy headed it here and then it went in. That was beautiful. Almost as good as the one there have been three or four great ones. You have no problem admitting you love it. I like it, i do. But like i said, its like the olympics. Just dont bite anybody, joe. No. As the guy said, suarez said, these things happen. I mentioned that, someone said, have you ever felt like biting someone . And i mentioned andrew. I think you said that, actually. And i biting, hitting, kicking, something, yeah. Hes not here. If you ever get the impulse to bite him, just think about it and rub his feet instead. Thats a good idea. The corky ceo is rubbing his feet. John, thank you, great to see you. How are the nationals doing . They are barely above. 500, john . Well, they are a half game out. The reds won again, but you dont have anyone like the brewers. We are chasing the brewers. We are above. 500 now but still like hey, joe . Yes. Did you see bryce harper hit three home runs in his stunt two days ago . Is that on the minor League Nationals team or something . Yeah. Thats more detail than im following. I think hes ready to come up. John, thank you. See you soon. Lets get more on the markets as we kickoff the holiday shortened trading week and find out if there could be fireworks ahead for stocks. Joining us is the chief investment strategist at raymond james. And with us is Michelle Girard at rbs, the chief economist. I want to ask you about the lead story in the Financial Times today. They are suggesting that the Capital Markets, they are calling them euphoric Capital Markets are not up to snuff with financial reality. This is a warning from the bank of International Settlements, what do you think . I have to say that i am concerned that you were speaking about a day of reckoning to some extent. I think thats something well be facing over the near term, but i look at what is going on and some of the markets. And i look for the fixed income market with the tight spreads and highyield bonds. Very little additional yields for buying some of the companies. The debt of some of the companies versus a treasury. I think that there are worrisome signs with the fed to some extent janet yellen is speaking about Financial Stability. I think this is an important issue and a day of reckoning when it is time for the fed to reverse course because i do think that the markets are very complace complacent. The central bankers are responsible and is what the International Bank says, so what do you think . We just had our policy meeting and people on the fixed income side are bearish because of the tight spreads and all the people on the equity side are bullish because the evaluations dont look that opaque to me at this stage of the cycle. I think we are in the a bull market and i think its got years left to run. We are nowhere near you. I have to keep telling them earnings have tripled since 2008. Things are going better and thats really all the equity markets care about, are things Getting Better or worse . Things are Getting Better. You make it sound like the Central Banks are not responsible for any of this . You dont think the Central Banks have tried to push investors into further risk down the line, a little bigger risk positions than they might have taken otherwise . I dont know if they attempted to push them into it butits been at the margin to have liquidity in the system. The fed did the right thing back in 2008. We dont think the fed should have bailed out the banks. If we did, we wouldnt be under a depression, but if you travel around the country and travel around the world, things are Getting Better and the equity markets are reflecting that. Yeah, i do want to be clear, again, im not a strategist but even from my economic standpoint and a macro standpoint. The fundamentals are there in. Making money in the modest growth, all of that, im not saying the stock market is elevated because of fed liquidity, but i do think theres a focus on the economy and trying to bring down the rates low and not have a focus on this is setting the stage in some areas of the Financial Markets where ultimately there will be a cost to be paid for all of the liquidity. Yeah, just in terms of the inflation picking up down the road . Well, it may be the pricing it has been for the last two. The capital requirements, theres the ability of shock absorbence in the future. Some of the Companies May have provided a buffer in the future in case this happens again. Jeff, thats an interesting point. What do you think . We are in a secular bull market. There are things to put headwinds in it with the Economic Data. I think what my friend talks about is for real. Theres political change in the wind and to elect smarter policies over the next five years. I think theres a lot of things going right. Michelle, let me just ask you before we let you go with the jobs numbers on thursday, what are you expecting . The truth is, we all fill cheerful it is 200,000 for five straight months. You know, we are slowly improving and need to see job growth at 250,000 to 300,000 if you want the economy to accelerate sustainable to a 3 growth rate. Does 2,000 leave you in a comfortable position with the fed but not so much that the fed is willing to help out. Thank you for joining us. Great talking to both of you. When we return, do higher paid ceos do a better job in we have the results of a new study. And facebook playing with your emotions. The social networking could be social net work using millions and millions of users. Is it a billion yet . Welcome back. Time for the executive edge. Facebook users reacting today to news that the social network manipulated the news feeds of over half a million randomly selected users in 2012 as part of a mood experiment. Facebook changed the number of positive and negative posts that users saw with the goal of trying to examine how emotions can be spread on social media. Joe, today people are not too happy about it learning they were manipulated. What was it again . They put positive and negative stories in their news feed and they would flip it around for different people to see how it would alter their mood. Every day it selectively puts positive and negative from the new york times, they completely manipulate what i read. Maybe its a big science experiment that they are doing just to test you. Maybe. This was not the new york times, this was facebook in this case, right . This is one big oped section. The reason people found out about it is they were doing it for studies. Researchers just posted the results of the study and people said, wait a second, you were manipulating us through that time . You were guinea pigs. Without realizing it. Thats why its good to stay completely objective. I have no idea what youre talking about. With facebook . Yeah. And you lost your microphone. And twitter becomes less and less youre still on twitter. And i watch how other people use it. Faber was like promoting his documentary. But what would i use it for . Well, i use it to find news. I mean, i dont know you watch your feed. That doesnt mean your tweeting but you may tweet out some news. Sometimes i do but more often as staying abreast of whats happening if you are out and not near a television or computer. If you are just following twitter, thats actually how i found out about the boston bombing. I was somewhere where i couldnt be doing anything else. Well, i watch the 100 people that i follow. Its almost like selective, the people that watch the people that watch msnbc watch msnbc. Do you follow me still . I follow you, i think. And then there are people that just want to watch fox and watch fox. And there are people that watch if you want to know where the plane is, you would watch cnn. Or what about the whale. What whale . I dont know. One of the whales at sea world was mistreated or something. Right. They did have a documentary on that. A new study says higher paid ceos tend to perform worse in the long run. Companies that pay their chief executive in the top 10 are negative at normal returns over the next few years. Ceo pay has risen 725 since 1978. During the same period, the paid average price for employees is up 10 . Boy. Waiting for commentary. This is our ceo compensation. Thats one of the things with the whole income inequality. We are sure that its caused by ceos. Thats where all of it and if you do the math, thats not what you can tax every ceo at 100 and it wouldnt do one in fact, you could tax the top whatever percent that youre looking at. All of it at 100 and it doesnt solve the problem for the economy not growing. It doesnt. And the envy part of looking at the whole. Any democratic system by definition is going to have some people that have more and some people that have less. And just, you know, firing up class warfare and envy is not the way to do it. Education is a problem as one of them, having the ability to get an education like you did in the past. College is much more and it is tougher to get the loans. Its always been tough and there are ways that some people are able to what is really tough is that the people that we, this administration is helping, are the ones getting hurt the most right now. By some of these policies, yes. The middle class and the lower class have done poorly in the past five years because of growth coming out of this last recession. If you want to blame someone, wage income and all of it. When we come back, well talk about the president s pick to clean up the v. A. Mess and the other stories buzzing around capitol hill for the second half of 2014. Ben white will join us from politi politico. And zillow is getting a big apple partner. Thats coming up next in the next half hour of squawk box. Stick around. Okay, es it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. If yand youre talking toevere rheuyour rheumatologistike me, about a biologic. This is humira. This is humira helping to relieve my pain. This is humira helping me lay the groundwork. This is humira helping to protect my joints from further damage. Doctors have been prescribing humira for ten years. Humira works by targeting and helping to block a specific source of inflammation that contributes to ra symptoms. Humira is proven to help relieve pain and stop further joint damage in many adults. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Take the next step. Talk to your doctor. This is humira at work. Good morning. Welcome back to squawk box here on cnbc. Im joe kernan along with becky quick. Andrew rosssorkin is off today. The High Court Said the Video Streaming Company violated copyright law by using tiny antennas to broadcast tv content online. Scalia talked about what the actual law is for copyright and how it dictates. Back in ten years ago when the dvr came through, and by one vote it was deemed to be acceptable to be okay. And that this one theoretically was a tough one for some of the conservative justices that were ready to let it go and the liberal justices said no. It was a 63 vote, right . Yes, 63. Scalia, thomas and who was the third . Probably alito. But in other words, saying the copyright law as it stands, maybe you shouldnt allow it but it is not precluded under a the copyright law. It is not for the Supreme Court to continue to fix if theres something wrong with the law, they shouldnt be interpreting it so that the end should be done by the Supreme Court. The congress should write a law rather than it go to the Supreme Court. That could go either direction. People werent ready for what way that was going. Hes right, within three days, there you go shutting down service. You were a subscriber . You were trying to rip off our accountant . Well, i also forgot my user name and password and couldnt use it anymore, but i did get the email saying southeast and desist, cease and desist. I come up with a combination of pets names and birthdays and you never remember them. Superheroes nobody watch this. Im skinner in now thanks to the joe kernan diet. Its tough, isnt it . Its tough love. Is that and insult . What did you say. I said i am working at something now, monitoring calories. You are like okay. Im monitoring all my body functions to see why i look like this. Im like, its from the food it was actually its from the food push yourself back. Lets be precise. It would be a device to count the number of calories in. And you were like, its too many. Theres a device called a mirror. There you go. It is what you said. By the way, you look fantastic. You are like a vampire. Do you show up in the mirror . Not like this, you dont. Not like this. That has nothing to do with this. All right, youre welcome. Ben white is here to talk about some of the washington stories that have been out there. Its been a couple of weeks now that Hillary Clinton has been taking a beating for what shes been saying about wealth or not being wealthy or where it comes down. How much of an impact does this have on her potential candidacy . It impacts it in a couple ways. At the margin she could think about whether or not she wants to go through this. All the questions about how she made her money, how much money her husband has and how much money her husband has and how they made it. But this is going to be a brutal fight all along the way, but Elizabeth Warren would be the model for this but shes not running. Speaking to other specialist groups, shes amassed hundreds of millions in speeches. What does she say to them . Is she going to give us the kind of reform we want or is she the person of how she convinced the left. Its a good piece and we are told theres a lot of enthusiasm for hillary. But the more democrats that talk about it and being a hypocrite theres no way in her dna its possible for her to not run. I tend to agree with you. She doesnt have one iota of the ability to not run. That could be. Move to new york to become a yankees fan. And then to serve as a senator. And then to the other guy, the husband dont you think its the copresident . If she gets through a challenge on the left and gets the nomination, the democrats who are worried about the policies to help the rich arent going to the republican candidate. What is the number of democrats who say they like her . It is very high. Its like 90 or something. But republicans respect her for making all that. Some of the comments she made, i think its defensiveness about it and the fact she dps being among the truly well off to pay lower tax rates on capital gain and income. That distracts people as disingenuous and that she has not embraced her wealth. And the other question is how she made it. People will respect a wealthy candidate who earned ways through creating jobs and business. She made it through speaking fees, book fees, whatever other means, but i is traditionally how people get healthy. If theres a challenge in the general, it could dampen enthusiasm for her and republicans will run a ton of ads saying shes saying one thing about dealing with economic equality but look where she stands in the universe of the economic inequality. Run ads with her speaking at goldman sachs. Shes a hypocrite. On the ranking, book fees and speech fees are above the business that you started with private equity. Thats the flip side. You can certainly make the case that hell have bigger money issues than hillary will. He got unfairly vilified for just like all of them. He made 104 million. If not hillary then who runs for the democrats . I think the country needs to move further left. And i think this country is ready. I think the country is ready to move further left. If hillary decides not to go, hes there. He popped up saying im a course coarse man. This is a in a moment in history where having a lot of money is a problem. Ben, thank you for coming. Talk to you soon. What the dow could look like 25 years from now. And transforming the box office. How much did the latest sequel rake in this weekend . Find out, next. Thank ythank you for defendiyour sacrifice. And thank you for your bravery. Thank you colonel. Thank you daddy. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance can be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. At the weekend box office, transformers age of distinction earned more than 201 million from international territories. You still cant say robot. Is shia in this one . No, this is marky mark. You saw shia chasing a homeless guy around for a mcdonalds bag. First he offered to give him 10,000. I know. He was drinking some kind of margarita all afternoon, among other things. He was smoking pot in the theater at cabaret. I have never seen pot cause someone to chase someone around. Actually, for the fries. There you go. It all makes sense. Now im connecting the dots now. Now its making sense to me. You might pay 10,000 for fries. Anyway, when we come back, a Powerhouse Partnership in new york real estate. The largest broker hooking up with zillow. Find out what this means for sales. Squawk box will be right back. O 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 porter was so incredibly. Careful. Careless. With our bags. And the room they gave us it was. Beautiful. A broom closet. But the best part but the worst part was the shower. My wife drying herself with the. Egyptian cotton towels. Shower curtain. Defined that whole vacation for her. Dont just visit new york. Visit tripadvisor new york. [ male announcer ] with millions of reviews, a visit to tripadvisor makes any destination better. Really . New yorks largest residential Brokerage Firm Douglas Elleman is coming to the with zillow to form a marketing partnership. It will streamline and enhance the home search process for millions of customers world wilde. Joining us now, not just some agent or something its the president and ceo of Douglas Elleman dottie herman. And this is number one in new york. Yes. By number of agents and 10 million plus listing. Number one on long island. Which does that include the hamptons . Well, were in new york, brooklyn, hamptons, wherever in california, florida. There, too. Yeah. You got all these so you know whats happening here and you got this new thing with zillow. And i immediately thought, if you cant beat em, join em. Is this were they disruptors and enemies initially and now youre working together . No, they were never disruptive. You hear a lot because people sometimes dont embrace the future. But really ive always focused to what the Consumers Want and Consumers Want information. Yeah. And we give a lot of information at our Douglas Elliman site. However zillow is the Largest Technology data site in the world. So, their information is not as accurate in new york because theres no mls in new york state. So you can provide that . Yeah. We teamed up together. Took us about a year and a half of talking. Were any of your competitors trying to do this with them . You know, you hear a lot of stuff. I really was just focused on what was good for us. Zillow is pretty cool. They are. I get the snoop and i see what peoples houses are worth. It is. A lot of times you got pictures. I dont think its always accurate. It isnt. But people like it. All right . I do. I use it. You cant fight what people like. People like and then you argue with it with yourself like oh, thats worth more. My house is worth more than that. Theyre wrong. I hate them. Right. But what were doing at Douglas Elliman is everything is branded, and we update it. We feed it every 15 minutes. Wow. So anything that youre getting, and they have 82 million unique business per month. Every 15 minutes were doing live feeds. So youll get our information, if theres a price break, you know, in 15 minutes youll get it. Wow. So weve taken it to a whole different level. Than just information. And also, you know, we say if youve ever gone to webmd and you put in your symptoms, all right, then you want to call the funeral director. Right. Because so theres a lot of information. But one thing about real estate is its not like a car. Every piece of property is unique. Its different. Especially new york city. You really have to know how to navigate it. You take the data, the information, combine it with experts in the area, and you got a home run. So still new york is better than the bedroom communities around new york, right . Oh, yeah. Is it foreign buyers . Why is it still why the bifurcation, usually they move in tandem dont they . New york never got hit the way the rest of the country did. It did take a beating but it didnt get killed. A lot of it is because toy have a lot of coops so with the whole financing thing, even if a bank would give you a mortgage with no money down, the coops wouldnt let you in. Yeah. So it really didnt get hit as bad. It is projected to be the number one Universal City in the world by the year 2024. If year all around by then. If its not under water. Were you ever a broker . For a short time. For a short time. Do some of your brokers make more money than you . Oh, yeah. I tell them buy me drinks. Thats cool, isnt it . Yeah. Because its a whole different its a good way of doing it. I have a lot of great successful, successful people. And people really, its a profession of choice. Now they have masters degrees, and what you have to know today. Yeah. Is really a lot. So when i come to you, you know, and finally think i need to be a metrosexual like andrew and move to new york, you can find the right place for me . Yeah. Is it expensive . List going to be expensive, isnt it . Its not cheap. But its choices. You could move to omaha. Whats wrong with omaha . It would be much cheaper. Shes saying something about omaha. Dottie, thank you. And do you have a card . Oh, sure. Okay, good. Youll set me up with the right broker, right . Ill take care of you. Will you help make me broker . Probably. You got it. Thank you. When we come back, what will the dow look like in 25 years . Will there be 30 different stocks or will Companies Like general electric, disney and boeing stand the test of time . And by the way on his way to the set right now our guest host today Gary Kaminsky. Vice chairman at Morgan Stanley wealth management. The fastest i. The fastest i. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Could help your business didavoid hours of delaynd test caused by slow internet from the phone company . Thats enough time to record a memo. Idea for sales giveaway. Return a call. Sign a contract. Pick a tie. Take a break with mr. Duck. Practice up for the business trip. Fly to florida. Win an award. Close a deal. Hire an intern. And still have time to spare. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business. Built for business. 3 1 2 trading days get ready for all the fireworks leading up to the grand finale thursdays big jobs report. Is amazons battle with the publisher just business as usual . A critic of the e commerce giant sounds off ahead of a very public hearing. And what will the dow look like in 25 years . Will there be companies that stand the test of time as others fade away . The second hour of squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernen. Andrew ross sorkin has the day off. Our guest host this morning is Gary Kaminsky, vice chairman at Morgan Stanley wealth management. Welcome home. Good morning. Good morning, joe. Kaminsky. We had a guy we had a guy yeah. You have a big family, right . Was there a one of your brothers used to work, you its you. You have a beard. Youre a blank finesse k today . Well who wore it first . Oh, look at that they had it ready to go. You guys do look sort of isnt that crazy . That is spooky. That is a little scary. And youre no slouch, but im betting on the guy on the right in terms of pure monetary here we go. It took its 7 01 35 and were already there. Dont you know that all journalists are a little bit envious of guys like you, and blankfein . You know my love for you is endu enduring. It is. I like the beard. But its not what is that . For 20 years, for 20 years much history i bring doughnuts when i come on squawk box. Dunkin donuts. I dont want to say the brand. Why . You dont get paid you dont want to say the brand . You know, i just you dont say anything without but as i was saying it back, my wife lori has worked in a bakery and they make very good stuff finally said to her why dont you bring your very own stuff. Were going to indulge on this. What is in there . We got to open it up. This is organic, healthy, gluten free, but tastes delicious. Oh, god. Lets just try it and then were going to say whether or not we like it. Im afraid to open that, its going to be a jack in the box or something. All right, here we go. Read the prompter ill open the box. July fourth coming up. Its true. Push back. He pushed back from the set. While theyre opening this let me tell but the futures. Take a look. Youre going to see right now that after we look like were on track for gains once again for the month. Dow futures look like theyre indicated a little lower today down by about 39 points. S p futures off by close to four points. And the tenyear note at least at this point looks like it is yielding 2. 5 , well below 2. 6 . In our head lines this morning, president obama will nominate former Procter Gamble ceo bob mcdonald to be the next secretary of Veterans Affairs. The official announcement is expected later today. Mcdonald graduated from west point and served as a captain in the army. He would replace Eric Shinseki who resigned in the wake of widespread problems at the veterans administration. Also, details of gms plan to compensate Crash Victims will be announced later today. Theyll be announced by ken feinberg who hase administered compensation funds in high profile situations. Mary barra has said there wont be any limits on payments. 13 deaths have been attributed to faulty ignition switches. Payments could run into the hundreds of millions of dollars. And the Justice Department is expected to announce a nearly 9 billion fine against bnp paribas today. That will setting u. S. Sanctions by frances largest bank. Cnbcs 125th anniversary all day we will be featuring what the markets could look like 25 years from now. We start by looking at which stocks might be the biggest names over the next few decades of dominic thats the thing about predictions. Theyre very difficult. Youre going to try here, what i like is that we you know, even though i cannot tell you what the weather is going to be like tomorrow, we do know what the climates going to be like in 100 years, 50 years, 30 years. But anything else is really hard to predict, except for that. But whats the dow going to be like in 25 years . Youre absolutely right, joe. I have no idea what the weather is going to be like or what the dow is going to look like. But we thought we would take the progression from 25 years ago to today to maybe what it looks like 25 years from now, just to give you an idea of what things could look like. Now, 25 years ago, its interesting, because we know the dow is a constantly evolving index. Companies move in. Companies move out. It evolves with the times. But just to show you how far its come, 25 years ago the biggest stocks in the dow were, i mean, ibm. Fair enough. Its still there right now. But look at this, International Paper on the paper side of things, corrugated products, that kind of thing, a huge member of the dow. Navistar in the trucking side. At one point it was a huge part of the Dow Jones Industrial average. Kodak and goodyear. Goodyear is still around. I think ive got a car with those tires on there. Kodak not so much around these days. Didnt really evolve with the times. You fast forward to today. Heres what it looks like. 3m, ibm is still there. All right. Then you got visa, because payments are such a huge part of the Global Economy now. Visa is up there. And then chevron and goldman sachs. These are some of the most heavily weighted companies in the dow today. So things have evolved. 25 years from now, here is at least some of the speculation and some of the things that we got in terms of thoughts from experts that we spoke to. Now, apple, highly publicized stock split maybe puts it in that kind of realm for what the dow is going to look like in 25 years. And its price today means it could go in, maybe even sometime soon. Thats big. Visa still in there. Because we talk about bitcoin, crypto currencies, all different kinds of alternative Payment Systems. Visa could be a huge part of that picture, and visa, remember, is a big player in it today and has the Balance Sheet to evolve and maybe be a big part of that Payment System in the future. Amazon. Com. Were not saying its going to be the next walmart. But with the way that theyre going right now, walmart is a 250 billion company. Amazon is worth about 140 billion, 150 billion. Its catching up and it could be the biggest retail irin the world at some point on the retail side 25 years from now. Celgene is interesting on the health care side. Its going to make up a huge part of our Gross Domestic Product in 5 years. We asked jim cramer whats going to be the Biggest Health care stock . He thinks celgene is going to cure more diseases in the coming years than any other company out there. So thats why he likes celgene. It does a lot of cancer research. And then ibm. The reason why ibm is still in there, guys, is because its a tech behemoth. Its going to survive the times. But we also think that they could be a big player, maybe, in cybersecurity. Its not outside the helm of possibility for big blue to take its Services Computer business, and make it so that it involves cybersecurity. So thats going to be a huge theme in 25 years. We think ibm could be one of those ones that really leads that particular industry 25 years from now. Guys. Back over to you. We we were at the at t. Mmhmm. We had those gentlemen on talking about the future, and none of them were comfortable going out more than five years. Three to five years. They said even five years impossible. Its interesting, i would argue that maybe at least half if not more of the companies in the dow 30 years from now or 25 years from now are probably not even in existence today. I was going to say would you have guessed 25 years ago that nike would be in the dow . Absolutely not. Or even vase. And u. S. Steel. Things like that. Which is no longer in the s p as of next month. I mean a lot of them. Its 25 years, i plan on being an avatar on a grid with, you know, with manufactured organs. In 250 years . Youre not going to need manufacture ed organs in 25 yea. Im going to download my brains. 25 plus 14 is what, 39 . It is. 2040 is when the singularity is expected. So i plan on being far along towards living as long as i want. So think of the, you know, its going to be a totally different world at that point if were not all under boiling water, dom, which is something we have to think about. Thats your prediction, right . Yeah, yeah, you see it happening. See it happening. Lets get to our guest host. Thanks dominic. With a Midterm Review of the markets. Gary kaminsky is vice chairman of Morgan Stanley wealth management, and we normally dont immediately talk about big heavy serious things when i see you. But i am going to start you out with, where the heck we are in terms of all the Central Banks, and the conjecture that the vix and the lack of trading and the lack of volatility is all because were in this weird manufactured world thats now controlled by central bankers and that the real economy itself and the real fundamentals are still still not in great shape after the recession, and with all the structural problems that we have. And that were living in sort of some kind of almost a manipulated environment where things really arent that good, and the market doesnt accurately reflect the fundamentals. What do you think of that . I agree 100 with everything you just said. You do . You just raised Interest Rates have been manipulated. They are manipulated not just i mean we say ours our low here because theyre low in europe. But theyre manipulating there is a central coordinated effort to make money easy. With the hope, and i use the word hope, because thats what it is, that there will be a trickledown effect as a result of the easy money and its as simple as that. I reflect back on the midyear, if you came into this year and you thought okay the economys going to get stronger, Interest Rates are going to go up, as a result of that, earnings will accelerate, equities will be the best place to be, bonds are going to collapse, you went in with a consensus opinion, in january, you havent had a spectacular year, you havent had a pretty good year. In fact if youve taken the opposite approach, which was that large caps would outperform small caps, that bonds would be a good place to be and have a balanced account, which is something that we tried to preach internally to our advisers and clients at Morgan Stanley. At Morgan Stanley. Has been the right decision. Its not because i had an idea what would happen. Its that we have taken the approach that Interest Rates are going to stay low for longer, its not a unique approach, its not a novel approach but thats the fact of where we are in the world. And so you know, its like, if you want to try to fight it because intellectually it upsets you, that this is what the Central Banks are doing, it has been a bad investment decision. Gary, did you readed druckenmiller warsh piece . I did not. Basically, you know, theres Balance Sheet man lags, and theres income manipulation. And all the fed really has been able to do is Balance Sheet growth. And until you get actual productivity, and investment by the private sector, and Income Growth across the board, until you get all that, just getting a wealth effect is never going to actually be the engine of growth for an overall economy that you need to move forward. Well, i dont disagree with that. But when i asked a number of people whats called the decisionmakers of this policy, especially last fall, i came on air from singapore and spoke about it, i asked them specifically about that, joe, i said doesnt it offend you in some respect that this is what the policy is. And this sort of, you know, couching of it was, well, you know, theres nothing else we can do. In other words, this is the only thing we can do. Make we shouldnt be angry at fiscal policymakers, and congress, maybe we shouldnt be angry at them for not doing anything. We should be angry at them for giving the excuse to the fed that because theyre gridlocked and its all the onus is on us, and the fed as an excuse says this isnt perfect, there may be negative effects to qe but were the only game in town but were going to do it. Maybe if the fed would have behaved differently if congress was actually even if congress was doing stupid stuff, at least they wouldnt have had the excuse. Weve given them by Congress Acting the way i know my colleague was here last week, right . Harold yes. And harold, who will sort of tell you, will say you know, about the maturity of congress and thats the word he always uses. The fact is, by the immaturity of whats happening it gives the fed the pass to do whatever they want, and say we have the ability theres three branches of government. Yeah. And as you know, the immaturity in congress has been you dont think its been matched tit for tat by a couple of other branches . Are you out of your mind . Have you watched joe, im not saying. You mean government. You dont mean congress. You mean government. Im not saying what i think. How about this new petulant you say theres have you been watching the comments coming from the white house . You say theres three branches of the government, and if you speak to the largest institution in the world, they tell you theres four branches of government. And the fed, its the fourth and the most powerful. So you know thats something that clearly goes back to the introduction, thats the world we live in. As an investor the important thing is you cannot like the way it smells. You cannot like the way it looks. But if you have not participated, youve hurt yourself. You know the expression you make your bed you sleep in it. Congress is elected by people that looked at the first four years, whatever and said look there was a reason why theres all this acrimony. Theres plenty of reason to go around. Thats why when you think about november of this year its like game on. Lets see, you know, game on. Elections have consequences. Absolutely. As someone famous once said that. Gary will be with us lets try to eat healthy. Im not eating did you bring any gruten . Come on. Can you add gluten . Add gluten. Im not eating it. Up next, is amazons battle with the publisher just business as usual . Amazon critic bob coen, attorney and founder of emusic. Com will give us a preview of the public panel looking at the companys impact on the publishing industry. Stick with squawk box. Well be right back. In a world thats changing faster than ever, 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. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Welcome back, everybody. Tomorrow, the New York Public Library will host a panel to address the very public and still ongoing battle over contract negotiations between amazon publishing. Joining us is a guest on that panel bob coen who is an attorney and founder of emusic. Com. Bob, thanks for coming in today. Sure, good to be here. We talked a lot about this dispute between amazon and herbate. It has certainly garnered a lot of attention. My concern. Amazons done a lot of good. I saw the documentary, amazon rising. But the question was asked in the documentary is at what price . So i think whats happening with amazon is that theyre taking advantage and trying to break some rules in order to win this winner take all game. What rules specifically do you think theyre breaking . They started off by predatory pricing. I mean they were buying a book for 13, and selling it for 9. 99. 3 below marginal cost. When you get 90 market share, and you sell below market below marginal cost thats predatory pricing under the u. S. Supreme court case. From a consumers perspective its hard to argue thats a problem. The consumer has an interest in new books in the creation of new books. What amazon is trying to do is delete the copy right law not just in the book industry. Theyre trying to do it to Warner Brothers on the dvd side and motion pictures. Meaning. Specifically how are they trying to do that . What theyre doing is a conflict here. When you have power to lower prices which theyre trying to do, lower the prices of the goods that theyre buying, you can bring a digital good like an ebook down to the price of zero. I mean just throw it into amazon prime and dont pay anybody for those Digital Goods. The copyright law is enacted to get the price of ebooks and music and films above zero. So, the idea is to compensate authors and producers and writers for their well, if amazon continues to give things away essentially for free or below hat it even costs them obviously thats a Business Model that wont work indefinitely. Oh, no. Because its not going to work for the public, either. Because the publics interest well it wouldnt work for amazon either. You cant buy something for one level and sell it below that and expect youre going to make money. Eventually theyre going to try to charge more. But when you have 90 of the market and you go to authors, even selfpublished authors and say, we dont want to pay anymore, where are you going to go to get your book published . If amazon has 90 share theres no place else to go. A lot of the specifics in the heshette publishing have to make sure with saying youre not going to get this overnight. Were not going to put it in prime. Were not going to let you order in advance. Those are specific things amazon has brought to the public. Things theyve created. How is that different than walmart saying look youre going to have to play by our rules if you want to get goods space on our shelves . Theres a difference between vegetables and fruits, and wheat and toilet paper. Thats not all that walmart sells. Walmart is the Largest Electronics retailer. Walmart is the largest toil retailer. The difference between books and music and films is a lot different from these other kinds of goods. Why . Because you can take a digital good and get the price to zero. Walmart and amazon can get other get suppliers to reduce their price to below to marginal cost or some low cost. But a digital good can go to zero. Okay. So the public has an interest in the creation of new works of authorship like new books. And you cant get new books without compensating authors some price above zero. Sure. But let me point this out, i mean amazon may be doing a service in that they are sometimes Fat Industries where you can cut out a lot of the middle men and you can cut out a lot of the things that have been built up as the guys who are the surveyors in the middle. Weve seen a lot of industries that have gotten decimated like that. I mean if amazon eventually does something, does a service to cut out some of those middlemen why is that not thats not a bad thing. Cutting out the middlemen as my company emusic did it before itunes did it, basically getting the Digital Goods and cutting out the middleman. The problem is, is that if amazon is in a position to have 90 market share, using their Network Effects and the copyright industries, they dont have to pay anything for those goods. Thats not good for the consumer. The consumer doesnt have an interest in low prices. They have an interest in efficient prices. And if you dont have an efficient price for copyrighted goods youre going to have an underproduction of copyrighted goods. So the public has an interest in getting more books out there. And without more books, well, youre going to have an effect on free speech. Youre going to have effect on the marketplace of ideas. Books are different than these other kinds of goods. Thats the important point to make sheer. This sounds almost like a snooty argument. A what argument . Snooty argument. Were different because were authors. I say this as somebody who provides content and is an author myself. I write a column. I want to get paid for my column. Of course but the constitution provides a right gshs it provides congress it empowers congress to create the copyright law. Congress didnt have to be empowered to promote fruits and vegetables or wheat or toilet paper. But they had to have the power to create a copyright law. Thats why its different. Otherwise there wouldnt be the creation of these books to begin with. You have to compensate authors at some price above zero in order to promote the creation of books. Books and music drgs but your argument is they want to compensate everyone at zero for digital books . Eventually. Why not . In but they dont right now. Theyre not compensating people at zero right now. Well, thats what why predatory pricing is wrong. At the beginning, you sell below market cost. You try to lower the cost of the price of the things that youre buying. But once you have 90 market share using the Network Effects, using Network Externalities to get everyone into your ecosystem, everyone signing up to amazon prime, why not tell authors you want to get red, you got to be in amazon prime and we dont have to pay you anything. Isnt the frustration really though the fact that the Public Markets are willing to let amazon run their Business Model the way they are . The frustration isnt necessarily with amazon per se, its the fact that amazon is a unique company that doesnt have to produce a certain profit margin, whereas every other business has to. I dont have a problem with the way theyre running their business in that respect. But when they go over the line on the law and start selling below marginal cost and have 90 market power and have the power to reduce copyrighted works down to zero, thats the problem. And the problem is not what amazon did, its what the department of justice didnt do to investigate amazons, you know thank you very much for coming in today. We appreciate your time. A programming note for you if you missed the premiere of david fabers amazon documentary last night you can watch it tonight at 7 00 eastern time. More squawk right after this. 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. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Still to come this morning the dollar and crude in todays trading bloc, and a Market Strategist whos been dead right about the moves in the tenyear. Really. So our business can be on at ts network for 175 dollars a month . Yup. All five of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. Introducing at t mobile share value plans. With our bestever pricing for business. [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Welcome back to squawk box everybody. Shares of mankind getting a boost this morning. The fda improving the company es inhaled insulin. It acts more rapidly than the injectable versions of the medication. That stock is up by 15 . Currently owned by p e firm lion capital. It could be valued at 1. 5 billion. A top sony executive says the company is confident that et struggling tv division will move into the black in the current financial year. The head of sonys tv unit says this is possible even if the company falls short of its volume sales target. Check on oil and the dollar this morning joining us from houston is carl larry oil outlook and opinions president from new york boris schlossberg, bks management managing director. Weve got a jobs report on thursday, boris, and you know weve, weve, you know the last three months or so its been all about Interest Rates and currencies and down 2. 9 on the gdp, and suddenly the ecb is accommodative. Where are we . You know, i think the market is really torn between like you said, the horrid numbers in q1 gdp and the much better Economic Data than weve seen most recently. Maybe this week is going to be the resolution. If the nonfarm payrolls prove to be much better than expected they could provide that lift to yield that weve been talking about. I think ultimately the conversation is going to have to change away from job growth to wage growth. Thats really what the bond market is watching. Thats why the bond market is utterly complacent about inflation worries. Thats why youve seen the yield at 2. 5. If we start to see average wages begin to percolate higher that could be the signal the fed will tighten. Thats when the dollar will finally catch a bid. I heard that you know we got the lowest Participation Rate ever but the good jobs they cant find the people they need so they might be. Might have to pay a little bit more to induce the talent to come which is right. Is there slack in the labor market, or like yellen says or is there not like Freddy Kruger says . I think yellen is clearly, you know, driving the bus at this point. Her argument that theres slack in the market is whats weighing on the bond market because she is looking i think not at jobs, but at wages. She wants to see wage growth on a sustainable level. Only then will the fed begin to move. Thats why youve seen such complacency in the baond market. You had a teaser about a guy who calls the bond market very well. If he tells me what the tenyear is ill tell you what a dollar will be three months from now. Whos right about what finally happens with the economy . Is it going to snap back . You cant guarantee that. And if it did if there was some kind of negative externality, some kind of i dont know, plenty of hot spots around the world where something bad could happen. Theres train terrorists that are trained in the middle east but have european passports now and can come in here no problem if you want. Something bad happens do we look to to prop up the economy when we know that the feds probably got nothing left. Theres not that many actors left. Thats why you dont want to have a shock now. We are relatively vulnerable to that. Thats impossible to forecast and kind of hard to see. The bigger question is, are we more like japan . Is this just another series of endless false dawns. Or are we going to just actually finally snap out of it in a real fashion. And again i think the snapping out of it in real fashion would be a function of wages. Boris, look at what happened. Down 2. 9 , the Global Warming causing all of that snow. Yeah. Its not the great lakes freezing and all the warming causing the freezing, thats not its not Global Warming. Its climate change. Its volatility. No, no. Its Carbon Dioxide making things warmer. Right. But were making things warmer in the long run but it creates volatile temperatures which create these massive why does 100 parts per million because apparently 95 ascientists across the world feel thats enough of a margin to create change thats a myth. Looking at individual scientific papers and trying to discern let me go to carl. Tell me about oil and how all this plays in to where oils going to go. Well, you know, heres the thing. I mean, you know, unemployment no matter if theres a Participation Rate or not we keep adding 200,000 jobs every month. Thats 200,000 people who are probably driving more likely than anything, to and from work. And weve seen it reflected in auto sales numbers. If we get another four or five months. This is the fourth or fifth month of 16 Million Units sold domestically, i mean, more cars, more workers, more oil priced. It just keeps going up. And its not a reflection of brent or iraq, or you know, what we have now. Its more demand. I mean its as simple as that. We dont have to have a 12 an hour paying job to drive a car no matter what the oil prices are. Were still paying gasoline because thats what we do. You know, throw out the whole myth about fuel efficiency when you put 16 million cars on the road every month, more cars, you know, more demand. What about were seeing it now, the its very confusing. The Syrian Rebels are now making gains because of isis in iraq, we like the Syrian Rebels, i think, but we dont like its very complicated. But what is finally going to happen with the supply of oil from the middle east . Well, heres the thing. This is not 2003 iraq where you know were afraid theyre going to blow up an oil field or blow up a refinery. When the rebels took over the refinely in baiji a couple weeks back, they were careful not to kill anybody, not to disrupt any kind of production. They wanted to make sure they take the production over. And i think the same thing goes with the oil fields. They want to take the production. They want the money. They dont want to stop anything. They dont want to halt any production. They want to keep everything going. Its a lot like venezuela back in 2000, 2001, 2002, i should say. They want to keep everything moving. They want to put their people in and make that money for them. Now i dont know about foreign oil investment. I think that will pull out. They dont want to be where its going to be so unstable. But its definitely its definitely a different situation now. I dont think were going to see stoppage of flow at all. All right. All right, thank you, carl, and you know, i told boris my prediction was for a cool, wet, warm, dry, year characterized by droughts, and floods. And that probably all those will probably be happening anyway, gentlemen, thank you. Thank you. You wrote up that list cool, wet, warm, dry, characterized by droughts and floods. With a 50 possibility for precipitation. All right. When we come back this morning. He was dubbed the doctor of doom of the greek crisis. One of the first to call the financial crisis, too. Now his call on the tenyear note has been right on so far this year. Find out why you should be listening to mark grant. As we head to a break check out the tenyear this morning. So far its been yielding well below 2. 6 . I think the last check was 2. 525 . Squawk box will be right back. Welcome back, everybody. Joining us right now is mark grant, managing director at southwest securities. Also, weve been joining by alberto ottas. Mark we have you on this morning, because you emailed me last week and reminded me that you had predicted 2. 5 . Sure enough, thats where we wound up on the tenyear. What do you think happens now . Youve been right all year long on this call. Yeah, becky. I think we have more to go. I think were going to go down to 2 , and maybe less than 2 . And thats grounded on three principles. One, the fed 4. 75 trillion dollars that they invest. Theyre going to keep pushing rates down into the best interests of the country. Two, germany, 1. 25 on their tenyear. France 1. 7 on their tenyear. Faux economic reason the United States is where it is. And three continued troubles in the ukraine and middle east that will send money back to the treasury market. Were also joined on set by Gary Kaminsky of Morgan Stanley. Gary you talked a little bit earlier about how this is also the call that youve been telling a lot of people. Morgan stanleys been telling people. Me personally, i agree with mark. I did agree with mark. Mark, i would add one thing to that which is that you still have the generational shock of the last 13 years, that is ingrained in peoples minds, so the over allocations of fixed income will continue. I want to ask you one thing, you were right about the direction. You were right about the price. But a lot of people feel that what we see in the First Six Months of this year was the fixed income funds that were wrongly positioned. That were positioned for higher rights. Repositioning themselves. Now that that has readjusted its 168 where do we get that move from 2. 5 to 2 if all of these, i dont want to say it, closet index funds hat are traded the benchmark there are properly positioned. How do you move that down now . Well, gary, i dont think they are properly positioned yet. I think their key indication is the tenyear treasury, which is on special, which means its very hard to borrow, and i dont think the other funds are positioned yet. And two, the fed the 4. 75 trillion they have is invested either in treasuries, agencies, or agency mortgages. And i think its in the benefit of the country that we have lower Interest Rates that will help real estate, employment, everything, and three on a relative value basis how do you justify 2. 52 on the u. S. Tenyear, and france at 1. 7. Makes no economic sense. Right. And i guess thats a huge part of this. Central banks around the globe are responsible for this. You think that this is going to be there for a long time to come . Yes, i think its going to be there for years. I think the feds going to say, we need to keep this pile of money in case of any problem. And i dont think were going to see any back up in rates for years. Weve been watching volatility plummet. In fact i think the vix has been down for five months. Down about 39 over that period of time. Do you expect that volatility to still be capped by the global Central Banks . Yes, i think that the Central Banks are in control of a great deal of the Financial Markets at this point. Certainly, look at what the ecb has done in europe, lend being money at 0. 15 . Encouraging the banks to buy the sovereign debt of the nations there. And its been a help to their economy, and it will be a help to ours. I would encourage the fed to keep pushing rates down. Its a boom for americans for mainstream america. So, what does this mean longterm for the stock markets . I mean, its good news for now. Is there a time that you have to pay the piper . No. As a matter of fact, becky, i would make the opposite argument. I would say as Interest Rates grind lower and people dont want to live off of the 2 tenyear youre going to see money flowing back into the equity marxates as a way to get appreciation when yields are quite low. And what would concern you, mark . What would make you think that, okay, weve got some issues . Because today the lead story from the Financial Times is about how the bis, the bank of International Settlements is warning that these markets are too exuberant and its not paying attention to what they think is being propped up by the fed . Well, the point of disembarkation in my mind is when the fed starts to deleverage. Meaning when the fed starts shrinking their Balance Sheet, it will be them that were going to see higher Interest Rates. But until that happens, which i dont expect for years, i dont think were going to do anything but go down in yield. That might never happen. You could see a fed, there are been comments that bernanke has made and some of these offtherecord comments where hes said, hey, we could just ride it out and let these things expire. Let it go through the entire length of all these bonds. Well, even if they mature, becky, theyre not leaving the money sitting in the drawers, so theyre reinvesting it, back into the markets, look, becky, the u. S. Treasury market is 12. 1 trillion dollars. The fed has 4. 75 trillion dollars. Thats 39 of the market. They can control if they so choose. Thats why everybodys been so wrong about Interest Rates. Mark, what do you think about other nations, stock markets in europe, stock markets in some of the emerging markets . Well, becky the ecb has been incredibly objective with lowering the sovereign rates which has helped spain, france, the periphery nations. Its also helped their equity markets. So i think both for europe, and for the United States, were in for a prolonged period of lower yields, and money coming back out of the bond market, into the equity markets, as people cant live under 2 , or tenyear. Shinzo abe wrote an opinion piece himself. He wrote his own oped today in the Financial Times and he is trying to make the case that he is on track for anybody who has questions about whether that third arrow of his reforms is going to come through. Hes saying they will. Will that help japan . Or do things look too good in the United States and europe for them to be able to compete . Well, in terms of relative value, their Interest Rates from their sovereign debt are close to zero, about where switzerland is. So that only augments may thought that money thats free, thats not mandated to go someplace, is going to come back in to the u. S. Markets, and put more pressure to lower rates, lower the tenyear and its great for business borrowing. Its great for mortgages, real estate will go up because of it. Im positive at this juncture because of the low Interest Rate environment were in. Mark, with your scenario, is your strategy, your investing strategy here then to be buying bonds right now . You know, at the 2. 5 yield. Is that what youre basically suggesting . Gary, what ive said is you know i just deal with very large institutions, and some of the biggest on earth. What ive said to them is go out as long as you can possibly can. I said thats just january. Ive said anything you can find with some yields and just ride the waves down. And a number of them have called that strategy and it turned out to be quite productive. All right, mark. Want to thank you very much for joining us. Its always great talking to you. Im sure well see you again, soon. You, too, becky. We were expecting to be joined by alberto ottis. We had some difficulties with that. When we return on squawk box, a sex tape emerges, adding to the mark of glaxos china scandal. The details on that right after this. And early fireworks for the market ahead of the july fourth weekend. The june jobs report will be out on thursday. It will be the number of the week for investors to watch. So will the markets end the week with a bang . 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. [ shutter clicks ] hi there [ laughs ] im flo i know im going to get you your rental car. This is so ridiculous. Were going to manage your entire repair process from paperwork to pickup, okay, little tiny baby . Your car is ready, and your repairs are guaranteed for as long as you own it. The Progressive Service center a real place, where we really manage your claim from start to finish. Really. Easy as easy can be bye 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 Corruption Scandal involving glaxosmithkline in china just got even more bizarre. The company says Senior Executives were sent a secretly filmed sex tape of the companys top manager in china. Video of mark riley with his chinese girlfriend was apparently filmed in the bedroom of his shanghai apartment using a covert camera. Maybe a gopro. Installed without his knowledge. Glaxo says the tape was sent anonymously by email along with allegations that the company was paying kickbacks to doctors and officials for using glaxo drugs. How does the sex tape even come into it . Is he married . I dont know. None of the reports that i read said one way or another. Sex tape always he might have been pill popping viagra which is made by a competitor. Exactly. Which would be embarrassing for glaxosmithkline. I still have not figured that out. Does glaxosmithkline have an e. D. Medication . I what was that . Champagne . I dont know the answer. Ask me something gary, lets save you. That narrows down the number of questions, doesnt it . Weve got to ask you something you know about . Oh, my gosh. Gary kaminsky is our guest host today. He is vice chairman at Morgan Stanley wealth management. I want to ask you about a story i was reading this morning in the wall street journal. This has been a really unpredictable market. Its been a tough time for stock pickers. Even though we constantly have people saying this is the right time for stock pickers, they say this year so far in 2014 more actively manage mutual funds or trailing market bench marks than in any full year since 2011. More than 74 of actively managed funds that invest in shares of big u. S. Companies are lagging behind the s p 500 index. Thats up 50 from last year. What do you think is happening . Why such a confounding time . The story is right that its been a difficult year for stock pickers, again gravitated towards index huggers. However, if you pick sectors. In other words you emphasize those sectors in the equity market that benefit from lower Interest Rates, the mlt space, the high dividend paying stocks, the Real Estate Investment trusts and the bond equivalents, if youre overallocated sectors on the Interest Rate trade youve done spectacular. So the difference is, its been difficult for individual Stock Selection versus the s p at 7 . But sectorwise youre up between say 12 and 15 versus the s p if you overallocated the low Interest Rate sectors, if you made that bet. So its about the sectors that have benefited from the lower Interest Rate scenario which again consensus had totally wrong. Do you agree with mark grant that this is something that lasts . This low Interest Rate environment for a long, long time to come . Hes talking about years. Yeah, i do. Unfortunately, i do. You know, id love to see Interest Rates go up for the right reasons. And id like to see the stock market going back to what joe was talking about earlier in the hour. Id like to see the economy and the stock market benefit from rise interesting rates. People forget that 65 of the time stocks go up when Interest Rates are going up. Historically. We dont know, you know, one of the questions we ponder all the time is we dont know when the fed stops this manipulation of Interest Rates if that will hold true. You know maybe when Interest Rates go up this time the economy is not improving the way it should. So id like to see that lack of manipulation. But i do agree with mark and i think you have to position yourself, what i tell clients, what i tell our advisers is you might not like it but you better position yourself for this for a long period of time. Mark doesnt necessarily think the economy is in shambles, and thats why were seeing lower Interest Rates. His take on the whole thing has been that look, youve got Central Banks that are manipulating things, youve got crazy low Interest Rates in europe and some other places and that all comes back plus the safety factor looking at us as a haven. Weve benefited from all of those things. Do you think we can get a strong recovering economy and still see low Interest Rates . Well, yes, doubt i dont think were having a strong economic recovery. I dont think were having certainly theres not a ceo that ive spoken to in six months of this year that are expanding their hiring, spending, or using their discretionary capital in any way more aggressive than they would have in december. So its impossible, its kind of the peter lynch mentality. How does the economy expand when those people that actually hold the trigger to expanding the economy say theyre not going to spend the money . Its getting more complicated than that. Garys going to be with us for the rest of the program. Weve got a lot more to talk about. I would be worried about a sex tape. You know for me . No, for anybody. I would just hope that, like, it was a good night for me. You know what i mean . You know when you send an email of a video, you know when you send an email, there were times when it says no you got to cut this down. Youve got to get what if this didnt need to be cut down at all . What if it just heres the 12 sends, and this is the sex tape . What if that was the beginning, middle, end . You suggest that it was edited . But what if what if you didnt even need to edit it to send it. Youve been thinking about this. Ive been thinking about i would hope that like i said, that i was having a good night if someone was going to, you know what i mean . I mean would you be comfortable with a someone seeing the just say yes, gary. Ten seconds. Coming up, coming up, the master of disaster ken feinberg set to unveil gms Compensation Plan for the victims of the conditions ignition switch woes. Were going to preview that payout and talk autos when we return. Eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. And our luggage was immediately. Taken to. Stolen from. Our room. The Hotel Manager was clearly behind it. He was such a. Kind man. Con man. My husband wanted to. Hug him. Strangle him. And to this day were still in contact with. The manager. The police. I wish we could do that vacation all over again. Dont just visit paris. Visit tripadvisor paris. [ male announcer ] with millions of reviews, a visit to tripadvisor makes any destination better. [ male announcer ] with millions of reviews, 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. Today, limitless data, trading from anywhere, redefining the dollar, reinvents wall street. Reports throughout the day on cnbc. Fireworks coming early to wall street. The friday jobs report has been moved to thursday, so its a thursday jobs report, thanks to americas birthday. Were going to preview that jobs number and the second half of the year. The master of disaster is back. Ken feinberg holds the Purse Strings to gms big compensation payout for its ignition recall. Well preview todays announcement and talk autos. And is tech too frothy. We talk Venture Capital, facebook, twitter and more. With Founders Fund partner jeff lewis. As the final hour of squawk box begins right now. Welcome back to squawk box. Here on cnbc. First in business worldwide. Garys headed to amsterdam. When . This weekend. This weekend. To celebrate the fourth. Watch some football. You know for a fact these types of things go on there. Of course i do. Im joe kernen along with becky quick. Whoo. Andrew ross sorkin will be back tomorrow. That was g2, wasnt it . With johnny our guest coast this morning, Gary Kaminsky. Vice chairman of Morgan Stanley. Wealth management, a renaissance man, in so many ways. World traveler. A neuberger investing genius. An onair talent for years at cnbc. Par excellence. And then now back to vice chairman at one of the premiere investment banks on wall street. Becky, if i had known this was going to happen i would have promised, i would have told my mother to watch the show, right . Did i say anything, speak out of turn or anything there . It was a simple description of your a lifelong friends. Yeah. And original and original squawk box and as we approach the 20year anniversary lehman bought neuberger . In 2003. And i retired in june of you were like 30, which is, you know, anyway. Yeah. And now you just do it to because you can walk around and say im a vice chairman of Morgan Stanley. Do you draw a salary at this point. I do it because i love being involved in the investing world. Working with clients. Being part of the best Financial Institution in the world right now. Cnbc. Well thats the best Financial Media institution. Oh, okay. You know, so yes. All right. All right. Garys going to be with us for the rest of the program. We do have more to talk with with him. In the meantime lets get you caught up with some of the headlines. President obama plans to nominate former Procter Gamble ceo bob mcdonald as the next Veterans Affairs secretary. An announcement is set for today. Also the Justice Department is expected to announce a settlement with bnp paribas today over alleged u. S. Sanctions violations. The bank is set to pay a record 8. 9 billion fine and plead guilty. And Global Market news an organization representing the worlds main Central Banks is urging Central Banks to exit loose monetary policy. The bis, the bank of International Settlements, is warning that dangerous new asset bubbles are forming even before the economy has finished recovering from the last round of financial excess. Weve been talking about that a lot this morning. Lets get a check on the markets, see where they stand. So far for the month the markets are looking like they will post some gains. Right now this morning it looks like we see some red arrows. Dow futures down 25 points below fair value. S p futures off by two points. Overseas in asia overnight the nikkei was up by about 0. 4 . The shanghai was up by close to 0. 6 . And in europe, you also say that in the early trading right now things are barry moving for most of these markets. Although you do see a decline of about half a percent in italy. Between last weeks disappointing consumer data and this weeks jobs, there will be plenty for investors to digest ahead of the july fourth weekend. Joining us john riding chief economist at rdq economics. I see a a see a tension between two different notions about where we are, and one has to do with gdp number. And whether it was just a oneoff. And the other one has to do with how much slack there actually is in the labor force. And whether we really do have a good jobs market, good enough to get some wage gains. Or whether theres just a lot of people that need to be brought back in before theres any pressure. Where is this economy . Well, i think first of all, we should pretty much set aside last weeks gdp report. I think that measured decline in gdp borders on the nonsensical. If we look at other indicators of Economic Activity that dont go into the measurement of gdp but correlate very well with overall Economic Activity, like industrial production, like jobs creation, like the isms of which we get another reading tomorrow, they show an economy probably growing closer to 3 than contracting 2. 9 . Gentlemen the First Quarter was hit because of the weather but the overall reading on gdp i think pretty much was meaningless and the markets are set to decide and i think thats right to do so. However the question about slack is very important. Because thats the primary determinant of when the fed is going to finally pull the trig iron raising Interest Rates for the first time. A lot of indicators suggest to me theres less slack than the fed might think. Particularly we saw the increase john, were that was a 60 minutes thing. That was cool. That was like a full silhouette. I think we maybe should do it that way. Sort of the unknown economist. The unknown economist. Maybe my accent would give it away. I think wed know it was you. But coming back, we saw a big increase in job openings in the most recent data for april. Which puts job openings back in september 2007. And a lot of labor market indicators now, not the unemployment rate, but a lot of other indicators look like september 2007. So, yes theres a group of people that become marginalized from the labor force including the longterm unemployed. But for everyone else the indicators look like a middle of an expansion. The question for the fed is can this other slack be addressed by monetary policy, or, as i think, it should be tackled by other means . Fiscal measures. Well, theres two ways of looking at all the accommodation and qe2. We just had mark grant on. A lot of times he sees conspiracies everywhere. Or at least he sees trouble everywhere. But in terms of low Interest Rates he just says absolutely, great. For consumers. Great for the economy. Great to keep Interest Rates low and get Business Activity percolating. Then you got the other side that says the fed has been pushing on a string with a Balance Sheet attempt to stimulate the economy. Its not going to work and theres going to be a day of reckoning, after at some point trying to slosh up all this excess liquidity. And when no ones there to buy the bonds anymore. What do you think . Well, i rather was interested in the bis report that becky just referred to. A very interesting report that shows potential buildup in financial risks. And if you think back to the last expansion theres a parallel except this ones a parallel on steroids. So we had Interest Rates being cut through 2003. Okay on a hold at 1 through the middle of 2004. And then Interest Rates rising only very slowly. And that in my opinion, and according to the bi sichlt, led to a buildup in financial risk that eventually burst and gave us the great recession. John, i worry about what they said in that, too. But i also wonder if this is kind of an irrational exuberance moment when the warning comes years before the actual collapse of any of the stuff. Well, the thing is policy needs to be forward looking. So were not talking about taking Interest Rates back to 4 tomorrow. That no, but if youre an investor who is trying to figure out what you should do with your money, do you listen today or do you continue to watch for signs . Youre right if this is something trying to tell the policymakers that this is the direction we go but if you are an investor trying to read into this maybe you should take a different message away. Maybe you shouldnt. Maybe the investor is looking at equities. The bis report i think much more was once again looking to put risks in the Banking System and looking to put risks in the debt market and looking at some of the risks in emerging markets. I think that toes risks have health up because of that policy. And i think that it would be, when you look at inflation which is back at 1. 8 on the feds measure, the employment rate is at 6. 3 , and these Financial Stability risks, you have to ask the question, why are we still at zero percent . And why even though were slowing the expansion of the Balance Sheet are we still expanding the Central Banks Balance Sheet . It seems to me out of tune with the three indicators that the fed is most committed to. So as a result, the market says the feds not doing anything. Volatility comes down. And as you say, financial exuberance rises. John, if i say football to you, do you see do you know what a quarterback is . I do know what a quarterback is. But when i hear football, especially the world cup going on, i think of the remaining teams in the competition. Sadly, england went out. Bitter pill. Very. But there has been some fabulous games. Two games yesterday that were just terrific games, with costa rica improbably now advancing to the quarterfinals. Yeah. I know. And like brazil, is that destiny . I dont know. Its in brazil. They did you see that it hit the cross bar. It hits that a lot, didnt it . I mean they would have been out, right . Yeah, and brazil has been struggling, and historically the statistics show being the host country is worth twothirds of a goal per game. The only time england won the world cup was in 1966 and england were the host nation. So the host nation does have an advantage. Five times. Five times the host nation has won. An awful lot of pressure given the social conditions in brazil. Theres an awful lot of pressure for the Brazilian Team to do well. And they seem to just be squeaking by. Yeah. So, do you belgiums not as good as germany. But do you are you a u. S. Fan now since you live here . Im a now that englands eliminated im a committed u. S. Fan for the rest of the competition. Thats big of you. Do you pay taxes here . Yes, unfortunately for the last 25 years. Unfortunately. A lot of taxes. But i do think the u. S. Has a good chance of advancing against belgium, the way theyve been playing. They need too take it back like they played against, who did they play the first time when they looked, that horrific tie. They beat ghana. They tied with portugal. And they didnt lose by very much to germany. And that was enough thats soccer for you, didnt lose by very much. I think as they go at, one of the themes of this competition has been if you are organized you dont need the superstars. Its not the superstars who are winning the competition. Its good organization. Yeah. And under clintonsman the u. S. Seemed pretty organized. Im quite optimistics. It will be great for the sport in this country if they could have a run and at least get to the quarterfinals. You cant say that about the broncos that they didnt lose by very much to seattle. Anya, thank you john ryding, well see you leader. Thanks a lot. Up next, gms plan to pay victims of crashes caused by a bad ignition switch set to be revealed. Ken feinberg likes to have an open wallet and will preview todays big announcement and fine out what it means for gm. Check out the squawk box market indicator. It still looks like wed be set to open a little bit weaker on the equities markets today. Stick around squawk box will be right back. [bell rings] time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. Could help your business didavoid hours of delaynd test caused by slow internet from the phone company . Thats enough time to record a memo. Idea for sales giveaway. Return a call. Sign a contract. Pick a tie. Take a break with mr. Duck. Practice up for the business trip. Fly to florida. Win an award. Close a deal. Hire an intern. And still have time to spare. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business. Built for business. Welcome back to squawk box. Futures at this hour are been kind of right around the flat line for most of the session. Were now down about 21. Making head lines, safety regulators are investigating complaints that the carpet cover trim panel is causing unwanted acceleration in nissan and versa cars, and preventing drivers from braking. The national Highway Transportation Safety Administration says its received four complaints that the cover in question on those vehicles had trapped the edge of the drivers shoes, and felt things sort of like that one time. You got to make sure that the rug at the base. The cover is pauled back so that its not neared the accelerator. These are crazy things to happen. And then, you know, human error in some of these things you never know whether its human err are or something the car company did. Right. And it can happen again and again and again. I mean, we look that was the toyota deal. We look deeply into acceleration, and sometimes elderly drivers, you know what i mean, between the accelerator and the brake, i mean some of the accidents are attributed to hitting the wrong simple as that. Its really hard to know at times whats going on. Ive add issues myself. Floor mat issues. Ive had issues myself if im wearing heels. Sometimes i kick those off. Thats happened to you. No, but i saw somebody go like this and put the car into reverse and go into the front of the store and say i put the car sometimes youre just not thats going to be on the highlight reel at the end of the year. What . What do you keep doing . When you go the shift. Okay. You know like lets get out of here quickly. What were you doing before . Youve got the steering wheel, you take the shift, you go into reverse. I know you drive a stick shift. Been awhile since youve been on tv. He forgets, i think. Take anything out of context. Show me what i did. No. No. No, she wont, either. No way. No way jose. Lets get you back to another story. Gms Compensation Plan for victims will be revealed later this morning. Phil lebeau joins us from washington. What should we be expecting . Well, i think were going to get some definitive numbers in terms of what type of compensation General Motors, at least the attorney ken feinberg who is working on this for General Motors, what kind of compensation he believes that the victims of those faulty ignition switches should receive. Well get some parameters in terms of dollar figures, and also more importantly going to find out how many victims he believes are linked with these faulty ignition switches. Remember, General Motors said it is 13. Almost everybody who worked on this case said huhuh, its far higher than that. Lets bring in lance cooper, one of the attorneys who represents a family of a victim of one of those faulty ignition switches. Lance you represent the meltons. Their daughter Brooke Melton was killed in a chevy cobalt which had a faulty ignition switch. Have you had a chance to talk with ken feinberg as hes been putting to the this plan . And what are you expecting to hear today . Yes, ive had a few conversations with mr. Feinberg. What were expecting, obviously, is a plan to come out. Were hopeful its not the final plan, that there will continue to be discussions in order to, as miss barra said, get gm to do get the right thing for all of the victims of these recalled vehicles. Do you have any idea in terms of parameters for the dollar amount for those fatalities that are linked to these faulty ignition switches . Are we talking 5 million . 10 million . What is it youre expecting that hes going to say. Well, initially, the question is going to be the scope of the vehicles. My concern is the conversations ive had. Gm is tying mr. Feinbergs hands. And theyre only going to allow him to consider less than half of the recalled vehicles as part of the Compensation Plan. So the scope we need to listen to, but the scope likely is going to be far too narrow. As far as the compensation is concerned i havent seen the final numbers, but my main concern for the compensation would be, this is unlike what mr. Feinberg has ever done before. Because you have a significant punitive component here. In other words, not only is gm at fault for what happened with these victims. But there could be punitive damages awarded because of the egregious pate of their conduct. Which then brings up the question, will people opt in for this . Because there will be some people who look at this and say, threats throw a hypothetical number of 8 million per fatality. Some people will say this is not about the 8 million, if i go to court i can get some punitive damages here not just about the money but i want to really put some sting into General Motors. Is that a potential issue here that some will say, not enough . Yes. And really, thats probably the best part of the plan that ive heard of so far. And it allows victims to opt in or opt out. So there will likely be some victims and some families who make the decision we want to be involved in the plan for our personal reasons. But it gives other victims the opportunity to say no, i dont think the plan does enough here so im going to go to court and hold gm responsible in front of a jury. Lance, have the meltons actually have a conversation with mr. Feinberg or will they talk with mr. Feinberg if they decide to opt into this plan . They wont opt into this plan. Its my understanding the plan does not even include them. In other words, they would not be part of the plan. Gm is taking the position 59 least at this point that the meltons dont want to be part of the plan. 55 ultimately they want their case to go before a jury. Explain this to me. Brooke melton was killed in a chevy cobalt with a faulty ignition switch why would that not be covered in the Compensation Plan . Theyre taking the position, at least at this point, that the melton case had settled. We settled the case last year, but weve opened it back up because of the fraud committed on the meltons during their case. However, gm continues to take the position that the case is over. What fraud was committed . Im confused by that. Ultimately in the melton case in the melton case, during the case, they told us that they had never changed the switch. Their engineer testified under oath and the lawyers sent documents showing that. Wow. Ultimately its come out since the recall they did change the switch, and so what the meltons are saying is, you didnt shoot straight with us, we want to have our day in court. Right. Lance, one last question. If they have pretty restrictive parameters on the number of vehicles that are covered, how hard do you think the outcry is going to be from the families of victims saying, wait a second . Mary barra has talked about lets come clean. Lets do the right thing, if they tie ken feinbergs hands i mean isnt this really a dog and pony show then . Im afraid so. Weve seen the information from the melton case that the post07 switches in these vehicles still dont meet gm specifications. Yet gm is trying to narrow the scope in order to limit their exposure, and like you said, tie mr. Feinbergs hands. So i think that that will be, if it comes out the way i understand its coming out, that will be the most significant criticism of the plan. Lance cooper, attorney for the melton family joining us from atlanta, georgia. I know youll be watching today, lance. And guys we will be watching, as well. 10 00 a. M. Here in washington, attorney ken feinberg will reveal the details of the gm victim Compensation Plan. Of course well bring it to you live on squawk on the street. Phil, thank you very much. Youll be interviewing ken feinberg . Immediately afterwards. His first live interview immediately after he announces the compensation will be on squawk on the street so you dont want to miss that. Thank you very much. Coming up, an Emergency Landing for a toou united flight in wichita. How much are you willing, conversely, knew, to pay at the pump. You like that . Yeah. Emergency landing did you hear what happened . No. Wait until you that is a separate story, and no an outlook for gas prices just ahead. And make sure you tune in to squawk box at 7 30 eastern time. Thats tomorrow. Chris christie will be our very special guest in studio. Were in new jersey. And hes going to come in studio. Squawk box will be right back. [ male announcer ] dont just visit miami. [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better. Welcome back to squawk box, everybody. Pictures that you have to see to believe this morning. Emergency slides opened indeed the cabin of a united airplane yesterday. It was a flight from chicago to los angeles. As a result, the pilot was forced to make an Emergency Landing in wichita, kansas. The first thought i had is gosh i hope theres no one in the rest room because theyre not getting out for some time. But fortunately the flight attendances were in the aisles and no one was in the rest room. Just filled the whole area back there up. That would be a heck of a ride if you were trapped in the rest room. No one was hurt. The plane did not lose cabin pressure in the incident. Airline officials have not said what caused that slide to deploy. When we return, before you leave for vacation, make sure you check out the squawk Summer Travel forecast. Find out how much you can expect to pay at the pump on your road trip. Right now, though, as we head to a break, take a look at the u. S. Equity futures. Weve seen some red arrows but things have been moderating a bit. The dow futures down by 11 points. S p futures down by 1 point. vo rush hour around here starts at 6 30 a. M. On the nose. But for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Welcome back, everybody. Contract negotiations covering dock wokkers at 30 ports on the west coast continue today. 2. 5 billion dollars a day could be at risk. Its if a prolonged shutdown actually occurs. Jane wells joins us right now with the latest. And, jane, where do things stand right now . I think jane may not hear us. Again, this is jane wells, whos standing by in los angeles. Were going to try and make sure that she can hear us. I know that she was having some questions about whether or not we could actually hear her. We were talking about this dispute, gary, last week. There is the potential for it to chop about 2. 5 billion a day in commerce, productivity in the United States. Cut it out of the gdp, if this lasts for a prolonged period of time. I think the last time this happened was when, 2002 . Am i right . I think thats right, yeah. 2002 potentially. This is something where the dock workers are demanding and its today. Today is the day. Today is the day. The dock workers are demanding more promises that they wont be fired, and i think looking to not pay more for some of the benefits that they are guaranteed right now. Yeah, and again, just taking it back to the fed. The Central Banks, and basically anything like this that creates uncertainty in the economy, you know, continues to give the central bank the likelihood that we stay easy for long. Its every one of these series of developments, when you think about investing, puts you back in the same direction. Youre talking about exogenous shocks that we would not be able to try and soften the blow . For those who are watching. John ryding was talking about when youre back to economic cycles in history, these type of things would happen, youd have, you know, youd have booms and busts and youd have cycles. But the big question, i think thats the question for the rest of this year for all investors is, are these type of oneoff events, you know, a dock workers issue on the west coast. Is that just in the minds of the fed something that creates uncertainty, and a period where the fed has to manipulate Interest Rates with the hope, and i emphasize the word hope, that it keeps the economy on safe footing . Remember we havent spoken about it yet this morning. The biggest fear the Central Banks right now, which is geared doors inflation is not inflation at all, its deflation. That is whats driving the thinking around the world. So Something Like this is an indirect correlation with possible deflation. I think were going to talk more about this with jane in just a moment when we get that connection fixed. In the meantime we have another story. Gasoline prices hovering near recent highs but thats not stopping travelers from hitting the roads this holiday weekend. Johning us is John Ike Berger of the association of Convenience Stores which represents three quarters of all the gasoline sold in the country. Whats the lately, john, its been inching up a little has it not, with the situation in iraq . Or where are we right now around the world for regular . Yeah, we seeing right now regular is sitting about 5 to 10 above last year. Thats interesting because in june the last couple years weve seen prices decrease during the june time frame. But weve got crude oil up about 16. 5, and retail trailing it behind. The tough thing for retailers right now we know our customers are a little upset about retail prices. In the first three weeks of june retail margins dropped 20 . So retailers are a little concerned about whats going to happen in the next few weeks. Its always hard to explain to people what happens and simple supply and demand. It can be right around your area. Things can be you drive from one townty to the next and the supply demand dynamics can be totally different. Thats the way its explained. Its not gouging, right, john . I would agree with you. Its not gouging. Every retailer has a different cost structure. Depends on what your supply contract is. With summer upon us, things are looking much better inside the stores. The last couple years weve seen between may and july, instore sales have gone up 10 to 15 which means customers are excited. They like summertime, even though prices go up, customer attitudes at the store seem to be pretty positive. Can you tell me how the rest of business is . I mean its mostly Convenience Stores. They call it is that the front end, the other stuff that Convenience Stores sell . Or in pharmacies theres the back and the front. Theres the drug counter and then everything else. Is it similar at Convenience Stores . Or is it mostly gas . We refer to the gas island as the forecourt and gasoline accounts about 70 of overall sales but only about 30 of pretax profit. Most of our profit making opportunities are once the customer comes inside the store which is when we look at summertime, customers are out a little longer, theyre having a good time, theyre enjoying their summer expurgss. Thats when retailers at the convenience level see a much bigger uptick in overall operations. What percentage are the hot dogs . Ive always asked you tat. Is it part of the 30 . Is it 5 . And the margins are great there, because they never really you never really throw those out, right . I mean they will be sold eventually, right . Were not going to talk about that, joe. Come on you know we keep our items fresh. We want to make sure our customers have a very positive experience. Every single Convenience Store those are you guarantee my wiener is going to be fresh, john . I cannot i cannot talk for every single store in the country. However, i can tell you that the industry as a whole wants customers to have a positive experience to enjoy the food, everything they buy. You know, food service is one of our Fastest Growing categories. It is accounting for about 20 of our instore sales and thats something we take very seriously. Youre actually going to see a lot of changes in Convenience Stores over the next several years. Just announced a campaign with united fresh to increase the sale of Fresh Produce in our stores dramatically over the next five years. So youre seeing Convenience Retailers really trying to answer the concerns of the customers and provide them the items they want. Freshly. Youve been on a bunch of times. Do you have notes that said be ready for the wiener question . You do, dont you . I am ready for questions about hot dogs. Im ready for questions about vanilla bean shortages in manila. Anything you want to throw at me. He watches the program. You are totally he had the beef jerky percentage ready to go, joe. Right, john . Yep, absolutely. Its funny, you bring me in to talk about gasoline but i know it always goes back to food inside the store. Joe i think youre one of our best customers. We appreciate that. Thank you, john. Touche. Thank you. Thanks, guys. Have a good day. Lets get back to jane wells. Shes standing by at the port of los angeles, and jane we explained before about the potential for a strike today. What that could mean. Where does it look like things stand right now . Does it look like we might actually see a shutdown . Well, becky, well, no. Not yet. Ive got good news and bad news. The bad new is no one expects there to be a contract before it expires at midnight tonight. The good news is no one is expecting a strike or a lockout right away. If you look at the wall graphic, i think you alluded to this earlier, the strike are the ship operators, Port Terminal operators at 29 ports involved in negotiations with about 20,000 port workers up and downs west coast, including the top two container ports in the nation, l. A. And long beach. Oakland is seventh. Seattle is 11th. About 40 of the container traffic in the country comes through here. Heres the deal. We heading into prime stocking season for back to school. Analysts believe many retailers have already moved in some goods in early. The fear of course is while the animosity and rhetoric always kicks up as the contract here expires, that it might actually lead to action like it did in 2002. When we had a tenday lockout. There was some estimates at that time that that cost the economy about 15 billion. Others say that was very much inflated. Retailers are now saying this time, if theres a strike or lockout, it could cost 2. 5 billion a day. Again, many say that that is inflated, including Jack Oconnell of beacon economics. But he says if we did end up with a strike or a lockout we really would start to feel it after about four days. As for using alternatives like maybe rail lines which many ag farmers might want to do instead of going by ship, put it all on the rails, he says thats going to be more difficult now. Theres more competition. Listen. Theyre having trouble getting attention from the railroads because the railroads now are making a lot of money by moving oil, petroleum from north dakota and other places. Increasing amount of competition for locomotives, and space on the rail systems in the west. Thats coming from a brand new source. Of course, this volatility is never good. Canadas been busy promoting since 2002. Our ports are more reliable. Becky, as you know, the panama canal is widening. Could be ready by the end of the next year for bigger ships. The big question is how much are they going to charge and could the west coast still be competitive . Jane, thank you. Part of the question,if people were anticipating this problem, if some of its already been averted, if that stuff has been sent by other directions, as you mentioned, for the backtoschool goods too. Or sent early. We got another ship coming in here right now. I think . Was a lot of preordering as retailers were anticipating this. We always talk about everybody was getting ready for this. And then if it happens everybody was caught off guard like oh, my god i didnt expect that to happen. All right, jane, thank you. When we come back well be talking technology with Venture Capital guru jeff lewis. Is staying private longer helping Companies Reach bigger valuations . Well ask him about that and get his thoughts on facebook tinkering with your emotions. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Marge you know, theres a more enjoyable my mom works at ge. Way to get your fiber. Try phillips fiber good gummies. Theyre delicious, and an excellent source of fiber to help support regularity. Wife mmmm husband these are good marge the tasty side of fiber. From phillips. Welcome back, everybody. Our next guest has a land in running one of silicon valleys most power. Vc firms. Joining us is jeff lewis a partner at Founders Fund. Its great to see you today. Good to be here. You know, weve come to you from time to time just to get a feel for whats happening in the valley. And David Einhorn and other big investors have raised concerns about whether or not there is another tech bubble thats building. Hat do you think about that . Well, i do think that we are at the we are at a stage where there is there are perhaps some Early Warning signs. So, one of the interesting dynamics with the valuations for a lot of these Tech Companies is, nobody actually knows what the company should be valued at. A lot of the comps actually arent very good. These companies are often creating entirely new markets. And then, incidentally, end up disrupting existing players. And i think that typically, private investors are more willing to buy into a future oriented narrative of what the company could be worth down the road. But, we are now starting to see the Public Markets get involved, obviously gopro last week. A big part of the story there is a future business line around media and community that doesnt really exist yet. So i think there are some Early Warning signs that perhaps the public is starting to get in on on some of the more speculative action at high valuations. So we are trading cautiously. I dont think were there yet but there are certainly a number of blockbuster ipos on the horizon over the next 12 to 18 months. All it takes is probably one big one to really burn the public badly, and then we could be in a very bad place. Do you question gopros ability to do that . Or is this just more of a warning sign because you see the froth from Retail Investors jumping in on this . Well, i think Nicolas Woodman is perhaps one of the most talented marketers that has ever existed in history. I think it is absolutely mindblowing the brand that that company has built. I do believe they have a brand monopoly among Outdoor Adventure athletes. I think thats something very powerful. You can leverage that in all these different directions. The technology is commoditized and all of the trends from, you know, technology standpoint, are its the wind is not behind their sails. So he is going to have to pull off an incredible an incredible trick of building an entirely new business line off of that community. I would not put it past him and the team. I think they have an incredibly talented team. Its possible. Im not buying right now, though. Okay. Jim you said its hard to get the comps. And i didnt quite understand what you meant. Are you saying theres a lot of private companies that are looking at Public Market valuations and they dont agree with the comps . What did you mean by that . I think when youre dealing with hypergrowth companies its very hard to figure out, you know, what the right comps are. You know, a lot of the businesses are somewhat different so one could argue that, you know, the right comp for air b b would be sort of various hotel companies, travel companies. One could also argue it would be Something Like ebay. Its often very amorphous. I mean are there thoughts out in the valley that some Companies Think that theyre worth more than they would be in the Public Market right now, and therefore theyre now coming public . I think oftentimes it does take time for these companies to grow into the valuation. So i think that is i think that is part of it. I also think there are just all of these really annoying things a company has to do once theyve gone public. For companies that have a really compelling vision of the future that believe a lot of their value exists 10, 15 years out into the future, it makes sense to not have to deal with the demands of going public and focus on innovating, bidding the company and given the availability of capital at growth stage at the private markets companies dont feel the pressure to go public early as they did in the last cycle. I want to ask you about facebook. I know Founders Fund was an early investor in facebook and theres a story in the wall street journal today that says that about 700,000 facebook users back in 2012 were part of a psychological experiment that the company had allowed people to move things, putting things in their news feed, manipulating the news feed. Either putting in more positive stories than putting in more negative stories and seeing how they reacted. It was part of a social experiment that nobody told the users they were part of. And i just wonder, this is something that has sparked outrage as an investor you think this is a smart move . Well, i cant really comment on facebook given my colleague peter thiel is on the board there, havent read the story. Its quite early out here on the west coast. I will check it out. I will say that companies oftentimes do testings with users. Thats not uncommon at all. What kind of testing is it . A. B. Testing. So you would test placement of various things across all sorts of different Consumer Internet companies do this all the time. You would test where to place an ad unit. What items you prioritize in somebodys feed. This is a very common practice, thats how Companies Optimize their uis and so i dont think thats an unusual thing. This is research that was published in the march issue of the proceedings of the National Academy of sciences. It sounds like this is something thats a little beyond just seeing if ads work. Obviously you havent read the story so you cant comment more on it. Lets put it into hypotheticals. If you are allowing other scientists to come in and test your users and check out things, maybe do a cool psychological experiment that you wouldnt be able to do if you didnt have such massive number of users, it seems to me like it would be in the best interest of maybe letting your users know and decide if they want to be a part of that experiment. I think it makes sense to sort of see what all the data is there, and i dont have any of the data. So cant comment on that. Let me ask you about lyft which is another one of hur companies. Sure. Weve been talking about this lawsuit in california where uber has been saying they shouldnt have to insure their drivers when theyre not necessarily on the clock. Maybe if theres a passenger that they have, but if you have turned on your applications and youre in the process of accepting rides, should a company like a lyft or uber be responsible for picking up corporate insurance to make sure that anything that happens on their watch is covered . What do you think . I think that that is something the companies are working to do. And i believe that is something that is going to be part and parcel of both of these companies. Down the road. Its somewhat hard to make work but yeah, i do believe that that is the right thing. And certainly, certainly believes in protecting their drivers and building that community of drivers and i know this is an Important Initiative for the company. Kind of falls into the same realm with air b b. The whole idea of regulatory sphere, where those companies should fall . Should air b b be paying taxes like a new York City Hotel room does. Is it better off to embrace some of those regulations so you dont get forced out later . You know, i generally think most regulations are very bad and should not exist. But at the same time, you know, at the same time its probably not feasible to escape into an island with no regulation. Right. So one does have to deal with some of these regulations. And certain ones like the taxes are regulations where, you know, it probably makes sense to deal with them. Other regulations that sort of prevent fair competition i think are very bad and i think its very good that these companies are fighting them. Okay. It sounds like a broader conversation. Well have to get you back in here to talk more about it in the future. Jeff, thank you very much for joining us today. Thanks for having me. Coming up. More from Gary Kaminsky. Up next, well head to the New York Stock Exchange and get a read on the shortened trading week with the peripatetic jim cramer. Squawk box coming right back. Chocolate is very individual. White chocolate lovers dont like dark chocolate. Milk chocolate lovers dont necessarily like dark or white. Before we couldnt really allow customers to customize their preferred chocolate. We needed a scalable Cloud Solution allowing them to select what they are looking for. Now there is endless opportunity to indulge. Customization is made with the ibm cloud. The porter was so incredibly. Careful. Careless. With our bags. And the room they gave us it was. Beautiful. A broom closet. But the best part but the worst part was the shower. My wife drying herself with the. Egyptian cotton towels. Shower curtain. Defined that whole vacation for her. Dont just visit new york. Visit tripadvisor new york. [ male announcer ] with millions of reviews, a visit to tripadvisor makes any destination better. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. York stock exchange. Jim cramer joinses now. You didnt know that word . I remembered it. It was did you hear it . Peripatetic. Peripatetic. I kind of like peripatetic, as long as its in the confines of engaged. Yeah. How about the word engaged. And mad money eponimous. To a degree, i dont think anyones quarrelled with na. I liked your shots, jimmy. First time there, i havent been. Your first time . Yeah. Budapest probably vienna, budapest, prague, budapest off the beaten path. Youll see currency is cratered. You get dinner for nine bucks. Good differe good dinner. Prague. Youve been to paris. I think prague is much more dealable than paris. By the way they love us. There isnt a place you can go where people like, americans, americans, we love americans. Hungary, its hard to they love you so much. Kaminskis going to amsterdam. If i showed you his itinerary you might blush. Europe is as weak as we read about it. Really . Theres just you just get the sense you gave it a jolt, you gave it a jolt, cramer money. I threw them some they got some when you go there, by the way, from viennahungary, theyre saying be careful, its a back water. But go to places, theyre hardly backwaters and put the cold war behind them but economies are weak. Floyd mayweather or you, did you have you had 50, 60 people. How many people . Your group . We didnt have we didnt have the biggest gate ever in vegas. But it was just a lot of fun. All right. Anything else just really gets you that our viewers need to know or watch you . Amazon rising. I think its the take overs. Ppg buys komex, a paint company and its soaring. As long as we get soaring news on the buy its all about the deal. Thank you. Welcome back. Coming up oh. Coming up what . Nothing. Im ready to say your name. Coming up, Gary Kaminski oh boy on the fed, the markets and his trip to amsterdam, i think. Godfather ii. Squawk box will be right back. For 175 dollars a month . Yup. All five of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. Introducing at t mobile share value plans. With our bestever pricing for business. 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. Back to our guest host, Gary Kaminski. Bottom line, gary, we are in terms of where we were in 2007, looking at dislocation caused by the housing bubble, now were the fed and Central Banks around the world have been very, very active. Have we deleveraged . Are we in a better position . Is it night and day compared to where we were back then and where we are now, or like some of the dooms sayers say, that were setting ourselves up for a bigger fall in the future . The quick answer to that the difference between now and 2007 lower Interest Rates are not creating right now crazy speculation. It was then. So the stock market its pocket the stock market corrected a certain sector that has significant speculation. Earlier this year, it did not impact overall market. Which sector . Momentum stocks, as they called them in the media. Right. Gary, we want to thank you for coming in. M a, you think this is the year . Cramer hit it on the head, absolutely. The difference is if you announce a deal stock goes up, you can talk about Interest Rates, talk about economy, talk about politics, at the end of the day ceos are like us, if they do a deal and the stock goes up, they like the deal, more deals are coming. Were going to have a very busy m a. Good to see you. Come back soon. That does it for us today. Join us tomorrow, right now its time for squawk on the street. The boys are back in town as we welcome jim back from vacation. Great to have you back. Thank you, buddy. Good morning, welcome to squawk on the street. Im Carl Quintanilla with cramer, david faber at New York Stock Exchange. Close out june, second quarter, the first half of 2014 today. What a year so far. S p up 6 . Well talk to jim about the second half play book later on this morning. Ten years right around 2. 52. Busy week for data. Chicago pmi, dont forget the jobs number thursday, because of the fourth of july thursday