Transcripts For CNBC Squawk Box 20150526

Nasdaq down by about 20. Lets get to the other story of the morning. Charter communications buying Time Warner Cable for 195 in share in cash and stock. That deal is about 55 billion. They rejected charter last year instead going for the comcast transaction. Todays news comes after months of speculation and after contrast dropped its 45. 2 billion merger agreement over antitrust concerns. That transaction was blocked but time warner looking like theyll get the better deal in all of this. We all looked at the comcast deal and said are you crazy youre going to get nothing when this is all over. 2 billion break up fee. But more than that you get a much higher price and a much greater likelihood that this deal will go through although rich greenfield had a very interesting comment this morning, i dont know if you saw it which suggested that while everybody thinks this will go through if people know im going to get it to airlines joe so watch out, if the government was wary they allowed them to get bigger and bigger and bigger and people knew they were getting credit check to some guys if you dont want to ever allow that to happen you go and block this deal. So im not sure this is going to pass so quickly either. They said much better. Much better chance than before. Chances for comcast was 90 when it started. So theyre saying its much better. They said the same thing about the comcast deal. The comcast deal was a slam dunk right from the very beginning until it wasnt. All im suggesting is this deal is much closer to a slam dunk than that deal was because what youre creating is actually the good news would be to have competition for comcast on the broadband side. That would be the value proposition. That would be what people werent considering when comcast first announced the acquisition. It was about the Cable Properties didnt overlap so it wasnt going to be a problem. I dont listen to what people say about whether its going to be a slam dunk or not. That was supposed to be a slam dunk too. This is a slam dunk. Nobody knows and i think that all the people with horses in the game ought to start saying no no, no. Except wheeler said there may never be any more mergers and they called to say if you guys want to do this doesnt mean were not going to let anything happen. They put this together almost. I still dont understand the other story. Hes calling all the different parts here and saying dont assume were against all of these things because its probably in the best interest for broadband and for the delivery. Youre stuck with Time Warner Cable though. So yeah so the lousy part is im in new york and by the way, charter, not so great. From what i know. Nobody loves their Cable Company. You dont deserve comcast and i hope you never get it. Thank you, joe. Youre welcome. Charter does not have anything like x1. Woif liked to try that in my home. Youre going to. I have it on ten different boxes. Youre trying to make me jealous. Its spectacular. Theyre real and spectacular. Nice. Yeah like he said. Me oh we have a programming note. You dont want to miss Charter Communications ceo thats going to do that at 7 30 eastern time. Among the other stories that were watching today, twitter has reportedly been engaged in an on going talk to acquire flip board. A deal would reportedly value flip board at more than 1 billion. It effectively takes all the content and its customized to you. Tweet deck. Thats owned by twitter. Flip board is a different product but would put them into the display Advertising Market in a big way. What happens is you flip the pages and you can see little tweets headlines. Thats different than the display advertising model. Yeah and the guy that runs flip board is a very well respected guy. Some people say he could take over later. Theres been questions about whether he should be running the company or not. I think hes been a pretty good ceo in a tough environment. Theres some things to do. There were certain people that said lets just chill on the electronic crap. I didnt tweet all weekend. I tried not to look at tweets. Its a beautiful day. Go outside. Do something. So i dont know. What magazines . Twitter . Flip board. And this is the tie up its an app. We called this tie up tuesday. Like 50 shades of grey. Whats wrong with takeover tuesday. We can do takeover tuesday. Takeover doesnt imply. Wedding wednesday. Wedding wednesday. We already did that. We said we couldnt figure out what thursday was. Fusion friday. Fusion friday. Becky came up with throw it together thursday. It sounds like it didnt have planning into it. But many of these dont. Depending on the deal it might work. General motors is going to Face Criminal Charges over an ignition switch defect linked to more than 100 deaths. They still need to discuss key issues with gm including whether theyll need to plead guilty. Greece threatening to default on loan repayments it owed the imf. The greek interior minister says theres not enough money to pay pension and wage bills next month also to reimburse the imf if a bailout deal isnt reached with kredcreditors. Some day it will come down to the wire. Were there. Were there. We can barely get by on the 100 Million Euros they owe on a daily basis. Quickly after that well quadruple. Youre talking about big payments happening in a number of days. Im surprised the markets havent reacted more strenuously. The summer is coming. Im feeling summery. Memorial day does that in addition to making us all you cant really say happy memorial day either. Its a solemn holiday. It is. But we were fortunate to have amazing weather. At least in this part of the country. A number of key economics are due. Also home prices new home sales and Consumer Confidence and no day is complete without a little fed speak. On the docket jeffrey lacquer talking about Financial Stability in an event in louisiana. Also in Washington News the Supreme Court will be announcing decisions later this morning at 10 00 eastern. Were waiting on a number of verdicts including one on obamacare. By the end of next month. I like very interesting the way its being characterized. I love the huffington post. Republicans got a big problem. Big problem. Big problem if the Supreme Court goes with the republicans that want to defund obamacare but if they do win they have big problems because they have already given the entitlement to 11 million people. How about we saw the news last week showing that many of these premiums were going to double. But if you look at people that arent subsidized they have already gone up. Why dont you think its a big problem . Why oudo you think its a big problem for republicans . They want to defund obama. 49 is for obamacare. Once this happens youre going to have to deal with the pr of these people losing the entitlement. Theyre saying we gave the entitlement out to make sure that you could never go back on this and now if you do try to go back which is what you voted 50 times on in the house, if it does happen the media is getting in concert with the liberals that want to make sure i thought that this was the New York Post saying this i said huffington post. Oh i thought it was the New York Post. Everybody is saying it but the lead story, is republicans got a big problem if this happens. So they better hope it doesnt. So the Supreme Court better listen and better not do this because theyll only be hurting the ones that they love. Lets check on the markets this morning, the futures. Futures right now down 38 points. Not sure why were feeling a little bit today. I think that maybe it has something to do with european markets. Well check those in a second but down 38. Nasdaq down 18. Theres whats happening in europe at this point. Only greece is doing better but in the low 800s. I heard the most important market i heard 109 today. Is that the euro . Theres two of those. Theres the asian markets. I saw one person that did not decide to take a twitter holiday was jim and i saw him saying this morning whats the deal . Why dont we ever key off of european markets early in the morning . Lets look at oil thats been around. Sort of seems like its comfortable around 60 as far as west texas goes. The ten year after some strong numbers that we saw on friday got back up close now its back down to 217. I thought it was up above 220 but its on 109. See, 10904. In your direction. I think 95 is a good target. Depending on what happens with greece you might get your wish. Youll see but 109 is better. That does put things on sale right now over in europe although some weird stuff was happening. The eiffel tower was closed down. Did you see that . I didnt. It was some bizarre reason. I saw that. It was bizarre. It was a security thing. If you go to europe you better keep your. Youre wearing a fanny pack right . A special belt thing. What about that murse that ive never used. Youre a fanny pack guy. Those around your waist. Put it right here. Or you can put something around your neck. Pick pockets havent found a way to do this. Well youre more likely to notice. There was a protest, a strike by the workers at the eiffel tower because there were too many pick pockets. Right. It was a strike by the workers that ended up shutting the whole thing down because they felt there were too many pick pockets at the eiffel tower. Were they pick pocketing the workers . Or tourists. I havent visited the eiffel tower so im not aware of the specifics. The pick pockets are going after the tourists. No the workers. They were pick pocketing the workers . Yes but probably after the tourists but my understanding is there was a band of these pick pocketers pocketers. Ill get you more information. Band of pick pockets at the eiffel tower prompted workers to close the monument. Why would they pick pocket the workers . Its a stupid tourist Walking Around, a fat american tourist Walking Around getting pick pocketed. And tourists but workers too. Three and four. We have to study up on this. Why dont we talk about the u. S. Markets getting back to business after the long holiday weekend. What can investors expect for the year ahead. . Lets ask the chief Market Strategist at American Financial and global head of Investment Strategy at Barclays Wealth and investment management. I want to ask you, there are a number of things that i was thinking about over the weekend. First was whats happening with greece which seems like its sneaking up on us even though we knew the deadline was coming. Second will be the massive premiums being paid for some of these deals at this point. Charter paying a 23 premium over what comcast was going to be willing to pay for time warner. I heard about private equity deals where private equity guys are saying forget about it. Were not going to play these markets anymore. How do you feel about things as we head toward the summer . Theres certain parts of the market right now overall the market seems to be fairly fully valued or the u. S. Market. There are pockets for sure that are bubblelike, certainly in the private equity space. But there are other parts that for a stock picker would still be interesting. We moved from a beta play now to more of a sock pickers play. Were in that part where were transitioning. With respect to greece the real question is games up. Is it game over . And the fixes are pretty straightforward here right . They need to cut a deal. And without a deal its over right . Theyre out of cash. Right. Well compaq to some of those stock picks that you might like in a little bit. But lets focus on greece right now. We know the deal has to be cut. Where do you think the market stands in terms of expecting a deal or anticipating things might fall apart at the last minute . The base case is that a deal gets done. It probably wont resolve the major issues of labor reform and pension reform. It will probably be an interim deal that buys them more time. And i think you see that reflected in the rather come place complacent equity markets in europe right now. Yields are moving higher particularly in greece so its starting to make some people nervous but were going to find out in the next as you pointed out earlier in the next two weeks these big bills are coming due so well find out what happens. I think a deal gets done an interim deal an it postpones the day of reckoning a little bit longer. David interesting that you point out whats happening in the bond market. Particularly whats happening in the greek bond market so the yields have gone up but they still arent near the highs in april. Theyre nowhere near the concerning levels we saw a few years ago and theres an article this morning that points out that maybe its really hard to get a read off of the bond markets at this point because only about 10 of it is private investors when looking at the longterm bonds. The rest have been picked up by the public sector. Theres not a lot of volatility there and i wonder if its as effective of a way of reading the markets as it has been until recently. You raise a good point and thats exactly correct and youre seeing some strain there but not in the equity markets at all. Theyre following more the direction of the euro which has been pushed back down by the accelerated activity of the ecb last week. Pushed back down by Janet Yellens comments on friday that were probably going to get a rate hike this year. She reminded us all so i think that, you know thats really what is driving euro zone markets right snounow is the euro. Its saying greece is the issue but not the major issue. Let me ask you both if we dont get a deal on greece as you mentioned, the market is probably expecting at least some majority of the market expecting well get a deal. If we dont get a deal where do we see the fall out . Only in european stocks or european bonds . Do we look at the u. S. As a safe haven at this point or does this erode confidence . I dont think its that issue but you will see a tremendous flight to safety reflected in bund yields and coming down in the u. S. As a safe haven but i dont think it is nearly to a laymen type event. I dont think its a systemic issue for the euro zone. Even the weaker partners beyond greece are in much better shape than before. Greece is only 2 of the euro zone economy. So it will be a problem. It will be disruptive in the longterm but not that type of event. What do you think happens if theres no deal with greece . If theres no deal yorks think much. It will be a flight to safety. Treasuries will benefit. Dollar will rally. U. S. Markets probably this probably wouldnt be the catalyst for major correction and they probably get hit shortterm to the extent that it would have a spill over effect. I dont think it would be material. You know policy makers are already looting a two stage or two tier euro with greek being eurolike if you will so i think the euro zone of 2011 is not the euro zone of 2015. Very quickly, an area where you think maybe stock pickers see value. A place where you see value. If were right about the geopolitical backdrop especially in the middle east Energy Shares look particularly interesting. From an economy perspective, 60 to 80 based on the core economics and geo politics i dont think its priced at this juncture. Especially when you look at whats happened in and around saudi arabia over the last 30 to 60 days. Thank you for coming in today. Its great to see you too. Thank you. Coming up when we return the race for the white house is about to get even more crowded. John harwood is going to introduce us to a man hoping to give hilary a run for her money. But heres a look back at this date in history. Its part adrenaline and part adventure. Its part geek and part chic. Its part relaxation and part exhilaration. Its part sports car and part suv. And the best part . The 2015 gla. Its 100 mercedesbenz. Welcome back. John has been catching one the candidates in his series. He sits down with Bernie Sanders. We have taken over this place a little bit, huh . A little bit. Good to see you. Good to see you. Where are you sitting . People on wall street people in business, some have even likened the Progressive Democratic crusade to hitlers germany hunting down the jews. What do you think when you hear stuff like that . Its sick and i think these people are so greedy. Theyre so out of touch with reality they think they own the world and the idea that anybody like me or anybody else are challenging them. Maybe theres something wrong with 99 , oh this is hitlerism. What a disgusting remark. If you have seen a massive transfer of wealth we have to transfer that back. Radical socialist dwight d. Eisenhower was president and the highest marginal tax rate was 90. It was 90. When you think about 90 you dont think thats too high. Hillary clinton and bill clinton in the last 16 months made 30 million making speeches. What does that kind of money do to a politicians perspective on the struggles you were talking about. Theoretically you can be a multibillionaire and very conservative about working people. When you hustle money like that you dont sit in restaurants like this. You sit in restaurants where youre spending hundreds of dollars for dinners and thats the world youre accustomed to and thats the world view that you adopt. Im not going to condemn hilary and bill clinton because they made a lot of money. That wealth has the potential to isolate you from the reality of the world. He kicks off his campaign from a rally today where he once served as mayor. I talked to a Hillary Clinton Campaign Official said that he has a ceiling. But he says we take what he is doing very seriously. So well see how this develops and how aggressively he makes the case against Hillary Clinton. Are they just being generous, john . No i dont think its just being generous. I dont think they believe sanders can beat them for the nomination but when you get a candidate challenging an overwhelming front runner to the extend that they build up a following that they can put pressure on the candidate they can effect the conversation and their options. But when you argue that Elizabeth Warren is going to effect the conversation more than sanders will running. The two of them together are making similar arguments and, in fact one of the things that we talked about with Bernie Sanders was trade and the fact that he and Elizabeth Warren are on one side of the issue. Obama is on the other and Hillary Clinton is on the side and hes campaigning as an ally of Elizabeth Warren there. Also joining us this morning is ben white. Contributor to cnbc. Lets talk about the republican field for one second because one of the things thats going to happen over the next month and a half is theres a little bit of survivor going on. Who is going to get voted off the islands ahead of this big debate. So ten get it. Top ten get to participate in the first debate coming up in august pretty soon. Who is getting kicked off the island . The question is does carly make it into the top ten. You dont want your only female candidate getting booted. Theres a question about that. Rick santorum could get booted. We have more people that havent declared yet. Chris christie very likely to get into the ground. Theres a great ground swell. But i dont think he would make the cut. So youll have ten. The republicans basically dont want what they had in 2012 which was over a dozen candidates on stage all getting their turn in the spotlight. Theyre trying to limit that and its the networks making this decision. But because the network gets to make the decision and not the gop party itself how rig cud make it. If if you decide you want to have a woman for example for whatever reason whether hes going to win for real or not. Right. No you cant just say were going to have the top ten plus carly fiorina. That would be odd. But basically he will decide who is in and who is out. Well people on cnbc will decide for the cnbc debate as well. The hope is she catches a little bit of fire which she is doing in iowa. Theres a story showing she is gaining traction there and she will get into the top ten and very well may do that. They may not face that problem but for a lot of republican candidates they want to spend more time here in studios like cnbc, fox news elsewhere to get in the top ten rather than go to iowa and New Hampshire in. Must be gaining a little bit of tension because the left has taken some hits and you saw id rather go to iraq than work for they found the staffer, a former staffer and wrote a big article on it that said id rather go to iraq than work for her. Youd find somebody that would say that about any boss. But are you allowed to use the bossy word against her . You are. No. Youre not allowed to use the b word . No. I guarentee you theyll use it. Different question, both of you are the washington watchers of this. We have the big transaction between charter and Time Warner Cable. A lot of it think of the slam dunk. But theres a couple of people that have come out already this morning and last night suggesting if you thought the Cable Companies were too big to begin with that maybe you actually wouldnt allow a transaction of this size to happen. John dourks john, do you have a view . I dont know how to analyze the legal issues but i would expect its going to get a lot of scrutiny and i wouldnt regard any merger as a slam dunk. Not a slam dunk but if its coming in smaller than comcast already is its unlikely to me that its going to fail to pass with the fcc and justice department. It gets approved but theyll look at the impact on broadband and a lot of the question about consolidation but i dont think its enough to stop the deal. It would stop comcast and time warner. You cant stop Comcast Charter i dont think. Thank you for joining us with mr. Sanders this morning. Thank you for joining us and bringing your beard along. Beard in the making there. Time warner. Tweet at me if you dont like it. Time warner charter. Correct. Coming up the fbi looking for the person behind a series of threats phone in against commercial airlines. Details of the hoax is coming up next. When youre not confident you have complete visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. With Innovative Solutions that connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. Time upon a once people approached problems the way same. Always start at the starting. And questions the same asking. But that only resulted in improvements small. So weve got some ideas new. Garbage can create energy. Light can talk. Countries can run on jet engine technology. When you look at problems in ways different you new solutions find. The fbi looking into a series of phone in threats. They scrambled to escort them into the airport. Nothing hazardous was found. Thats one of ten flights yesterday that were the subject of telephone threats. The calls apparently came from the same person. They were passed along to the airlines and they looked into it. Officials say the they were directed to escort the air france line after the offices were closed in the u. S. And in france they were closed for the holiday. And thats why its on that particular plane. So a little bit of a scary moment for just a moment. But becky back to you. Andrew thank you. When we return today china Slashes Prices on foreign luxury goods. The details next. Plus new information on some of the worlds wealthiest. Stay tuned. Squawk box will be right back. Hi, im Henry Winkler and im here to tell homeowners that are sixtytwo and older about a great way to live a better retirement. Its called a reverse mortgage. Call right now to receive your free dvd and booklet with no obligation. It answers questions like. How a reverse Mortgage Works how much you qualify for the ways to receive your money. And more. Plus, when you call now, youll get this magnifier with led light absolutely free when you call the experts at one reverse mortgage today, youll learn the benefits of a governmentinsured reverse mortgage. It will eliminate your monthly mortgage payments and give you taxfree cash from the equity in your home and heres the best part. You still own your home. Take control of your retirement today if youre just waking up this morning, Charter Communications buying Time Warner Cable for 195 in share in cash and stock. Time warner rejected charter last year. Todays news comes about a month after comcast dropped the 45 million merger agreement over antitrust concerns. We got a quick programming note for you. Charter communications ceo tom rutledge is going to talk about this transaction and what it means. A new study out today gives us insight into the worlds 1300 billionaires. Wow. Robert frank joins us now with more. Really. Wait until you see how that number has grown. More than 900 billionaires have been created worldwide over the past 20 years but a new report says the billionaire boom may be about to end. The billionaire report says there are now 1300 billionaires worldwide totaling 3. 6 trillion. Most made their money from Consumer Products finance and tech. The report says billionaire growth comes in cycles with the guilded age ending with a 50 year billionaire drought between 1930 and 1980. The current cycle could come to an end from slowing Economic Growth and government moves against inequality like higher taxes and regulation. Most of them are over 60. The rich have been getting richer. Especially for last 20 years but we dont think these things happen in a straight line. Its more of an s curve type of a phenomenon. Now the report noticed that new innovations like bio tech ai and nano tech could offset any declines. But just for perspective in 1982 there were 13 billionaires. Now there are more than 500. What theyre saying is this number wont grow to the sky and if you look at all of these governments facing inequality with higher taxes, it has created most of those and its logical it will slow down. So we need we basically need ten times your money to get the first trillion nary i guess. Well gates is nearing 100. Next 25 years were looking at will it be possible to get a trillionare. Who was the first billionare. Probably rockafeller. He was real. That was adjusted. No he was real. But not 60 billion but the richest guy when the forbes list debuted in 1982 was Daniel Ludwig worth 2 billion. So there was a period of time where theres wasnt a lot of Wealth Creation at the very top. It was very heavenly distributed. Also making headlines, china is slashing prices on foreign luxury goods. Eunice joins us from beijing today. What time is it here . 12 hours difference. I know that but 6 42 a. M. Here so 6 42 p. M. There. 6 42. So youre working overtime. Good for you. We appreciate it. Yes. Well i guess sort of. Its 6 42 p. M. Over here but what was interesting the whole day today is that the hottest trending topic on social media was the phrase tariff cuts and thats because the Chinese Government decided to cut tariffs on certain imported foreign goosd. This will happen on june 1st and foreign goods are really expensive here. Estee lader night repair cream costs 155 but in the u. S. Its 92. So theres a lot of excitement that this was going to help things along. In terms of the tariffs theyll effect daily commodities so skin care as well as diapers. Luxury handbags and super luxury goods will not be on the list and overall a lot of companies in the International Community are really trying to assess what this tariff cut means for them and as you guys know the Chinese Government has been trying to transition the economy from an investment in expert lead one to consumptions lead one and theres been a lot of criticism about the high tariffs for quite a long time. A lot of people have been saying the tariffs needed to come down to boost consumption and a lot of people here in the public are very excited. In fact there was one woman online that summed it up pretty nicely. She said lets buy buy buy in june. I thought diapers were expensive here. But 18 for newborn typediapers there. Is this intended to get to the point where were talking about some of the essentials in some cases cases. Definitely. Theres people talking about theres luxury goods on the list that include maybe furs or suits if you consider that something thats more luxury but at the same time. And trying to bring down the prices so some essentials and skin care and other items. Make up is not on the list. Its considered a luxury item. We talked with Procter Gamble about it before because they look at china as a big booming market for Something Like diapers because whats the percentage of people that actually use disposal diapers in china. Children, baby. Children i dont know the whole break down but i know that on average for a lot of goods here its about 20 more and theres been a lot of International Companies trying to bring down the prices and pampers, that was on the list like you said Procter Gamble product and so were really seeing a lot of these International Companies trying to find out what that break down means for them. There was a government researcher today that says well have to watch closely if retailers bring the cost savings to consumers. Thats obviously what the government wants to happen but at this time theyre saying the fact that theyre bringing the tariff down the next step is for the retailers to pass the cost savings down to the consumer. Thank you appreciate it. Coming up in defense of wall street wellknown squawk box guest he fights back against critics of the identify mansfinance minister. Stay tuned, squawk box will be right back. Seven out of ten Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. Vilified as a cold heartless institution but our next guest is defending the industry. His new book is called my side of the street why wolves flash boys you think of the older. Yeah. The hairy legs with the overcoat. Or with just the pants taped on at the knee that go down so no one knows. Masters of the universe dont represent the real wall street. I think maybe not. But in the back of peoples mind dont they think there is a fun capitalition capitalism. Most people say it is a Necessary Evil but necessary. You see more of that because youre dealing with people who are in this business all the time. I start this book and i say on the sidelines of my sons lacrosse game and we Start Talking to one of the fathers about what we do for a living and he said i just saw wolf of wall street. And he said is it really like that with the drugs and the women. So far from wall street. You wish it was like that. Im sorry, ive missed out on all this fun. What i do is pretty boring. Thats a little bit of the justification of writing it. Twothirds of it is a memoir. Ive been in the business 25 years. So, im hoping it is a Halftime Report of my career. Part of it is a memoir of everything that i have seen and another part is defending how critical it is. Why i feel very strongly. The u. S. Is the u. S. Because of the deathbt of its capital markets. If i wanted to have a movie to show the dark side of wall street, i wouldnt pick an overcriminal organization like stratoak mont. There is plenty to go around if you want to go back and use your own narrative on the financial crisis. Go back and do go back and do the guys if youre looking for. Those guys were no better than the aluminum siding or the operators in any business. Any guy that knocks over a liquor store. Its the same thing. I like the white collar. Guys pushing the envelope right . Yeah, no im with you. Whats funny about this. Were talking about todays period that there is more information than ever and less nuance and, so, if youre talking about too big to fail or youre talking about all of these things there are very wellwritten, very well thought out explanations to what happened. And yet the short hand is always that its just a bunch of greedy bankers. See, the other part of the book too. Bernie sanders said that. Disgusting greed. I started out on wall street in brooklyn. At Morgan Stanleys back office operations. Those guys work on wall street. But the point is there are hundreds of thousands of people who work in this business. Its a very important business for this town. It is. Tax revenue. Not everyone is out there. All that other stuff. Thats a little bit. I started way down here and, you know youve even seen the progressive politicians finally realize that. Bloomberg ran as a republican but he eventually developed a respect and maybe he said a couple things about wall street and then said you know what maybe thats not so smart considering the amount of tax base it brings in. Even deblasio is not going to overtly trash wall street. New York Stock Exchange im getting these numbers wrong. At the peak 5,500 guys on the floor and theres 300 now. Those are wellpaying jobs. A lot of good guys. And its not necessarily, this is destruction of capitalism. You dont want to kill the goose that lays the golden egg. It would be nice if we could be the Financial Center of the Capital World and you dont want to kill the goose that lays the golden egg. We like finance and we care about it. Having said that, there is study after study and i just wrote about one where theyve done surveys of people in the industry and when they look at ethics and some of these issues. Its unclear whether industries seem to have the same problems that financers do. Not to suggest that other industries dont have problems, they have lots of problems. They might not have the same size and scope of the problems. Do you think theres something funny about this particular business in terms of the type of people it attracts or something that happens . Thats a good question. I would agree with you that every business has its bad guys. Every business has its good guys. I think theres something about wall street which is for the lack of a better word sexy or interesting. Tends to attract people to talk about those stories more than lets say a guy who was selling auto parts. Big story about the, auto parts. Go to any Auto Repair Shop or have the plumber come into your house and decide you need to a new water heater when all you needed to do was tighten a bolt. Im not defending doctors set up their, they have the clinical testing business over here and they ask for 50 tests that they dont need. Then we have the lawyers. It may just be that its much easier on wall street or that the magnitude and size of it is what becomes the issue. Dont you think human nature is consistent . Why wouldnt you think human nature is consistent across industries . Human nature is consistent. The plumber who rips you off for a couple hundred bucks than the broker for several hundred thousand dollars. Gretchen morgenson has no interest in auto parts repair guys. Im saying the magnitude of whatever the crime is if you will is at a different scale. I dont know im not asking the question. Were all part of the same hypocrisy hypocrisy. Thank you, senator. Were doing the best we can. You know what that is from . Congratulations on the book. Thanks. Coming up this mornings top stories, including Charter Communications. Big deal to buy Time Warner Cable. Well talk about when squawk box returns in just a moment. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Hey, can i help you . Yeah, were interested in the iphone. We promised one to beth for her birthday. You know mobile share value plans now include rollover data, so the data you dont use this month rolls over to the next month. Wow, even better. So what are you gonna do with your old phone . Im giving it to my sister emily. She gets all my old handmedowns. Oh im into bedazzling too. And you admit that . Yeah. I. I used to be into bedazzling. Ill go get your phone. Get the iphone 6 with rollover data to share. Only from at t. The fed official says quit obsessing about the timing of the first rate hike. Why the timing matters so much to the markets. Charter communication striking a deal for Time Warner Cable. David faber is here with the details. A disappointing weekend for George Clooney at the box office. Disney tomorrowland falling short of expectations for the hollywood weekend. A senior media reporter from weighs in. The second hour of squawk box begins right now. Announcer live from the beating heart of business new york city. This is squawk box. Welcome back to squawk box here on cnbc. First in business worldwide. Im joe kernen along with becky quick and andrew ross sorkin. Checking the futures after a long weekend, not much. Now were up six on the dow and the s p is still in the red. Down 2. 25 and the nasdaq down about 5 so far. Among our top stories at this hour. Eight states are on high alert this morning following heavy rains and historic floods. Texas and oklahoma are two of the hardest hit. Eight people are dead and 12 are still missing in connection to storms in the region. More than 30 million americans are now being told to brace for more dangerous thunderstorms, which could bring additional flooding, hail and possible tornadoes. Officials in greece say they want to make good on debt obligations, but the country urgently needs aid to do it. A 300 million euro payment is due to the monetary fund. Greece has to repay three loans to the imf in the month of june. In the last half hour the greek finance minister says there will be a deal by the time the payment is due. Of course how the deal comes about is still anybodys guess. Amazon will start paying taxes in a number of European Countries where they have large operations. Instead of funneling all of its sales through luxenbering. A European Base because of its low tax rates. Countries like germany and france are critical of the tax strategy and have been investigating amazon and other companies over their tax agreements. Striking a deal to buy Time Warner Cable for 1 5. 75 per share in cash and stock. Its a 55 billion transaction. Remember Time Warner Cable in the comcast deal was only 158. 20. Mr. Marcus looking pretty smart. He is. Deal with Time Warner Cable. Well see how shareholders react today. 195 a share is something that even a couple weeks ago with charter was going to enter these talks or was going to enter them was still a surprise with how high that price has gotten. The comcast deal was worth more towards the end and you had the big spread and it was going to fall apart anyway. I think the presence of this french company, as silly as it may have seem that may have been to the benefit of time warner. Certainly used that in negotiations. For charters part they have been around this for two years. Two years almost to the day they almost had it but started at 132. They, of course, lost it to comcast. And now they have the second chance. This time they didnt seem to screw around in terms of price. You know theres john malone wait wading around in the weeds and the government doing his dirty work for him. Here he is. Thank god the government saved us from comcast to allow john malone to get back into and put these two together because hes always so nice to consumers and to customer. Its beautiful, isnt it . They will be a roughly between a 20 and 25 shareholder in the combination. That would be liberty, of course. That would be run by tom rutledge ceo and chairman. In fact he called him up and i think he was like wow, we do want some condollsation and service and we want things to happen. Gosh, maybe lets call these guys and who will be okay with you . When i speak to people in the industry theyre still frankly trying to figure it all out because comcast, timewarner cable diverged. So you set some sort of a limit here in terms of broadbound penetration. Obviously, they would have been at 57 market shairre. 24 million households and this is almost as large as as comcast. Lotnot as large. 24 million households almost the same size as comcast. A 2 million break fee this time around. Last time around Time Warner Cable got nothing. Do you still have Time Warner Cable . Yes. Youll continue to have it. And same with you. Thats the one saving grace for me. Im anxious because charter is not known. Be careful what you wish for. The question is do you think regulators will really approve it. Rich greenfield was talking about this idea that its like airlines. Sometimes the government has had misgivings about the size and scope even though they thought they were trying to create a check on some of the bigger guys. So, in this case, if you were going to allow this deal i am creating a check, if you will for more competition on comcast. But if you thought comcast was too big to begin with im not going to allow this deal to happen either. Reporting of this. Of wheeler at least saying im not against all consolidation. From netflix and all of this. All the content players going to scream. It seems hard to imagine another deal was stopped. To your point, they have not said specifically, this is the limit. We wont let you pass this amount of broadband market share. Do the deal already. He said we wont look at consulidation. Im not sure he told them. To be in the activist role of making that phone call speaks volumes. Well, because there were a lot of people wondering, in fact, if they would allow anything. By the way, you have to assume if charter does get this done. Theyre done. Consolidation. That call to be made proactively by the government to them. Im not sure that is the case. There is this weird back channel thing that happened. Wheeler isnt sure what to think because he hasnt heard from obama yet on this. Were not sure. I said that last week and ill say it again. Is brighthouse still definitely going to go through . Something that will potentially if regulators raised a question about it. I think thats part and parcel the deal. Them rolling in. Thats how you get to almost 24 million and then all these percentage ownerships. Comcast have a weird block on that. I thought time warner did. Time warner did with comcast, though. I know time warner had right of first refusal but that, obviously, is clearly gone. My understanding is that is part and parcel of the deal. And will happen. Well see, this will obviously, take a little time. One will expect that there is no further consolidation if this one is allowed. The question is what does comcast do next isnt . Do you think it is international. The french bought sudden link and now buy cable vision . Malone got out and what did he miss . Does he want broadband . The demise of this whole business has been great. If malone is getting back in this business has a few years left. You think . Dont you think . Then the question becomes, youll start to hear really what youre bringing is a video signal to people delivering it and you need to own wireless. That will be the next chapter. Well suddenly start to see that as a possibility. You mentioned one company before we go cablevision. Where does cablevision get left in all of this . They were always the perfect partner for timewarner cable. They have been in it. The stock went up sharply when we saw that sudden link deal because if they roll up in the u. S. What is there and james dolen came out and had a conversation with himself saying im for sale. Im for sale. If he is serious, that company is really interesting to watch. Theyre already so highly leveraged. Hes a malone protege the guy that runs that company. Hes a malone protege. Hes borrowing extraordinarily low rates and borrowing this thing. Significant company over there. But long answer i guess, you got to assume that theyre the potential buyer here if you want to try and do something since nobody else can buy anything. Cable vision closed at 24. 98 on friday. Indicated at a new high today. Somewhere around 25. 50. But the problem there has been the overbuilt from fios. They compete with fios in a lot of their territory. Thank you for coming in. Well see you with tom rutledge at 9 30. Hell join us on the 9 30 hour of of the new potentially combined time warner brighthouse. There you go. Enjoy your xfinity. I was hoping my cable bill was going to get paid at least part of it. That was a sad moment. You know there are a lot of reasons to look at whats happening in the last year and kind of laugh at it but the most satisfying thing, you two will never have x1. We havent talked about that at all. Any Competitive Pressure on comcast because of this. What do you mean . People talk about this deal being a check, what will it do to comcast . I think comcast, listen theyre not going to be necessarily the single player. The most powerful player. You do wonder. There is a limit. I think you can get eight free as an employee of comcast. How much of your bill is subsidized. Almost all of it and i have x one which is all you do is just press in letters and whatever it is youre pressing in like with the numbers on the phone and it comes up and you click on it and youre done. Its just great. Yeah. You should come i will have you ever just so you can play with my x one. Just to see what youre in fact ill have you over so you can play. Thats a big deal. We could just walk over to the comcast building over here they might have it for us. The vice chairman of the u. S. Federal reserve says its misleading to give dont move. Do not move. Do not move. Because theyre going to take a shot of these guys. I wasnt leaving. I wasnt going anywhere. I was just taking my mike off. Anyway. Too much importance Stanley Fisher says to this first rate hike. Easy for him to say. He said that yesterday that the return to normal Interest Rate level is a process that will take a few years and a move from zero to 0. 25 is nothing. Still amounts to easy Monetary Policy. People have said that but you know how markets react. Joining us for more david, chief economist. Not a chef hes an economist and David Deutsche bank. They also say, david, its not rosy. Its not tightening. Its not. They said the end of qe wasnt tightening. But the markets take it as an Inflection Point. The second derivative. Theres no way to massage it and to talk markets out of it. I think heres the problem, joe. Its been nine years since the last rate hike. You have hundreds of thousands of people trading bonds, trading stocks and managing money that their whole professional lives have never seen a rate hike before. This is a fed that is bent on communications and market concerns. I think right now thats one of the reasons why we have the jitters in the market not just success of valuation, but is the fed going to move in september or not. Thats the critical thing. If they dont move in september, thats a 2016 story because it is the only meeting outside of december where there is a press conference afterwards. No question that janet yellen will want to get in front of the crowd to explain why they finally moved and also i thought it was interesting in her speech on friday, wasnt so much are they going to raise int september, basically she said even after we move no preset course what theyre going to do therefore there after. A knee jerk reaction of pricing in a whole series of rate hikes. Remember back in 2004 good luck convincing the street of that because if youre the guy who believes everything they tell you right now, youre going to be the one that gets left behind. At the same time, becky, heres what ill say. The take was hawkish on friday. I read it so differently. So many cavuates. So many ifs, ands and buts. She mentioned inflation for this fed is still far too low and that the labor market has been healing, but not fully healed. I get a sense a very good chance that the market right now if theyre concerned the fed will move in the fall my sense is that, look theyve shown how patient they can be. This could end up being a 2016 story. David, other david . Most investors we speak with think there is a good chance that the fed cannot hike rates and the risk is that longterm yields start climbing more rapidly and the market has itself in a dangerous position for the umisser. Trying to keep investors safe during the Summer Season and two risks facing the market. Longterm yields and weighing on the elevated p es at a time when the fed perhaps delaying on hikes and another central bank staying and strong dollar weighs on earnings and climbing longterm yields away on the p e. Caught in a different spot and Interest Rates are rising. Anyone who has watched squawk box knows that you are a longtime guest and dwesguest host and there was a time when i think your main concern with the markets, which caused you to be overly negative was on the consumer continued to be weak and that the Mortgage Market didnt improve like it should have. And you thought maybe there were chickens that needed to come home to roost a couple years ago that never came. I think its because did you just fundamentally underestimate the power of the fed to sort of set market Prices Higher based on i dont know what it is qe obviously. But animal instincts. Did it finally work . Have the fundamentals caught up with this sort of lifting things up through Monetary Policy . Well you know do you feel more bullish now . I have been more bullish, probably, for three years now. I was late to the party. But, you know im with you, though shouldnt we assume that the fed could orchestrate this with hocuspocus . It is interesting in the back room and the words that came up, dont fight the fed. I started in this business on the street in october 1997. Who caused that really . Greenspan comes and replaces you started that day . Sounds like i know who caused that. Im your lucky charm. So, look the greenspan comes in and raises rates, flattens the yield curve and drains liquidity and market collapses. Who comes in and infuses the market with liquidity and saves the day is the fed. If you go back to every bear market, the feds thumbprints are all over it. No question that we have experimental policy in terms of quantitative easing and all the chapters of this book havent been written. But youre 100 right. The fed is a partner with the markets when it comes to valuing assets. No question about that. My mistake was i actually was in the double dip cap. This is a situation where, look, you go into a recession. No matter what the fed is doing. You get the compression or the multiple and earnings going down. And, actually the Inflection Point for me was looking at when you think about it more optimistically. Look at the series of shocks the economy has faced. Since the financial crisis obama care. Huge shock and dodd frank and reregulating the financial sector. Then 2012 to me or 2013 was a huge Inflection Point between the sequestering and between the tax increases. Those tax increases are huge. And the economy withstood it. The economy is weak but there is some firm underbelly here that is preventing it from contracting because every time in the past we had fiscal withdrawal of that magnitude. And well talk about whats really causing the economy to be weak right now. We have excessively tight fiscal policy. Take a look at the numbers. Revenue growth. Uncle sam is bringing in 14 revenue stream and putting only 2 back. If we had a more neutral policy which the economy would be going closer to 3 right now than 2 . I dont know david. Double dip. We didnt have it then but there are people that are worried that if we have a slow down the globes monetary tools are right now no time to be running a surplus and cut taxes. Some good insights and look back and two things that surprised most investors. The tremendous rebound in s p profits. Strong Global Economy and past year and not two year and the best outlook is slow investment spending and much slower Global Economy. I think the earnings outlook is a much more tepped than it was in the years recovery for the s p and what we were surprised about is how high the p e got. This is why i think were entering a new phase for the s p of much slower Earnings Growth and not as much fed support. We have to go. The two daveiddavids. Thank you. Well see you again. When we return this morning, a jp morgan banker turned author is out with a new novel that tackles ipos, sex scandals and highstakes deals. Michelle miller joins us on set to talk about her book. And later a squawk market master rer talks stocks and valuations valuations. Stick around, squawk box will be right back. The design evolves the engineering advances. But the passion to drive a mercedesbenz is something that is common. To every generation of enthusiast. The 2015 dream machines, from mercedesbenz. Todays icons. Tomorrows legends. Visit the dream machine event today for up to 3,500 towards purchase. When you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. With the tools and the network you need to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. Welcome back to squawk box. Online dating apps and the cut throat world of finance. Using her experiences in a new novel oout today with. Michelle miller is the author of the underwriting. It was first released online as a serial with episodes posted weekly accompanied by custom play lists and artwork and in addition to that optioned as a tv series. Welcome. Thank you. Tell us about it. This is like the back story is there is like a tinderlike company. Can we say its a tinderlike company. Its a tinderlike company that is going public. Its going public. The story is a thriller that follows the ipo of a dating app through six characters who are involved in the deal. You decided this banking thing just wasnt for you. How did it happen . I was really curious about portraying the human side of wall street in silicon valley. So many characters not portrayed in fiction that felt honest to my experience. Did you start writing this while you were at the bank secretly at night. At the bank i was writing and doing some other projects under pseudo pseudonyms. I did a series of young adult novels under sydney hayes. When did you have time to do this . I didnt have a social life basically. I thought you worked hard at the bank. I was an associate at the palo alto jpmorgans private bank. Why did you decide to do it online first . I was really curious. I love the serial form. Its how dickens published. So i was very interested in reviving that form. We had a conversation earlier this morning whether wolf of wall street was a fair characterization of wall street since this was a bucket shot and didnt have anything to do with wall street. Coming from jpmorgan people will say, what is wall street really like . Give us a sense, i know this is fictionalized. Based on experiences along the way, what is it really like . I wanted to portray it from the perspective of the under 30yearold and the analysts. I think thats what often gets missed in nonfiction. We look at the executives and we see their wild lives, but i think a lot of my friends who are analysts who are working 120 hours a week and just really grinding and feeling a lot of pressure that maybe that i just wanted to create empathy and passion for that experience. That maybe you still dont like some of these people but you understand their contex at little bit better. Do your friends in the industry like this book or do they look at themselves in this book . Every guy that i know think hes todd kent. Its been a lot of fun. Any blow back . I was just reading this weekend the wife bonus. Apparently the whole group of women who helped her with that book are now furious. Oh. I didnt know. Are there people in your life or cant believe you have outed me doing this . No one has gotten upset yet. But it comes out today. So theres still lots of time. How many more are planned . Im planning to do five in the series. Five in the series. Working on the sequel right now which will be out next summer. Good luck with that. Thank you. Coming up this mornings top stories including threats that were made against planes flying to u. S. Airports. Plus ride sharing apps like uber taking a bite out of the traditional taxi business. Kate roger has those numbers, nextpetp. Time upon a once people approached problems the way same. Always start at the starting. And questions the same asking. But that only resulted in improvements small. So weve got some ideas new. Garbage can create energy. Light can talk. Countries can run on jet engine technology. When you look at problems in ways different you new solutions find. Welcome back to squawk box, everybody. Among the stories front and center. Charter communications buying time warner. Remember Time Warner Cable was rejected charter last year that was a much lower priced deal though. Todays news coming about a month after comcast dropped its 45. 2 million merger agreement with Time Warner Cable over antitrust concerns. Programming note for you, dont miss Charter Communication ceo tom rutledge joining davingeid faber this morning. In washington the senate will return. At issue u. S. Spy agencies american telephone records. They are due to expire on june 1st. Senate muajority leader Mitch Mcconnell is calling the senate back on sunday to replace it with a program of failed. The fbi is investigating anonymous telephone threats against commercial airliners yesterday. Those calls targeted International Flights arriving in new york and new jersey. Authorities say the threats did not appear credible but the planes were searched as a precaution. U. S. Military jets escorted an air France Flight into jfk airport after claims of a chemical weapon onboard. That plane was later cleared. And Ride Hailing Companies uber and lift the taxi owners are suffering in a big way. Kate rogers joins us with more on that story. We knew this was going to happen eventually. Didnt seem like it was happening and all of a sudden. Theyre definitely getting nervous. Taxi and limo drivers are feeling the pain. We met an independent medallion owner who bought his medallian for nearly 600,000 in 2009. He says he was thrilled to see medallion changed hands for more than 1 million apiece in 2011. Investment in the long term okay, it would help me raise the family and take care of the kids and pay the rent and stuff. And later on it would work as my you know i would save enough by then. Along with working. So, there was a plan. But since then he says he sees the medallian as liability. His Monthly Expenses are around 5,000 a month just to break even and he says his lessee on the car is having trouble making payments. His fears are warranted. Medallians have been sold for an average of 800,000 in the First Quarter and nearly 20 fall from that 2011 peak. Medallion financial a company that finances loans to medallion owners have taken a hit of 20 in the last year. It trades in thin margin and the company says 90 of its earnings come from outside the taxi industry. Hes hopeful that the industry will be saved by a familiar nemesis, an app. Introducing something with the yellow cab and well have you know even uber or any other company and i can compete then. But he says if that doesnt work out, hes always willing to go and drive for uber. Who is the they . The tlc. Its on them to save it. There hasnt been an app that has taken off in a major way the same way uber and lift has. I dont think it will work. The reason you want to have the cab so you can hail it and grab it. My problem is i dont know if you use it this way. I arbitrage the uber versus the taxi. If i dont see a taxi and if i can grab a cab within five minutes, i cancel. Ive done that before as well. There was halo and apps that never caught on. I dont know if will work either. A new one for 5 or 10 anywhere in new york city. Arent you like the worst customer ever . He probably has a bad uber rating. No apparently you cannot rate the customer unless theyre in the car. I had a bad rating and didnt know why and i saw maureen dowd write about this. I think i was late coming out for the ride. Kate rogers. Thank you. Not all memorial days are created equal, according to Variety Media reporter. Well look inside the box office and squawk box returns with that and a lot more. under loud music this is the place. Their beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. Wellsome back to squawk box. Memorial day weekend numbers were lackluster with tomorrowland debuting with a disappointing 41. 7 million. A lot less than projected. Burt lang is here and senior film and media reporter with variety. A great line in one of your stories last week. Not all memorial days are created equal and this one was not. A very disappointing memorial day. Traditionally one of the biggest movie going weekends of the year. This one was down 16 year over year. If you look at that tomorrowland opening it ranks 22nd on the list of fourday openings. Doesnt open to bad numbers. He tends to be more of a prestige film actor. He has an older crowd that comes out for him. They showed up to this but not enough teens came out to this particular film. Brother where art thou. Gravity was a fairly large hit. Sandra bullock movie more than George Clooney. The ocean movies and perfect storm. Didnt they have brad pitt . He is a name. He gets on magazine covers and it shows the problem that hollywood has right now. Diminishing star power. The name above the title was enough to guarantee a big open. Right now with the possible exception of brad pitt and Robert Downey jr. And even will smith is looking a little shaky. Its a real issue and a real issue for original films. This cost 180 million. 100 million to market this film. This film needs to make about 560 million to break even. Cost 180 million to make it. 280. To do that if you figure out that studios get about half of all ticket sales, its going to have to double that all in and youre going to have to get about 560 before youre breaking even. Well unfortunately, its International Numbers were not that strong. Its in about 51 of territories. Thats a fairly weak opening. Still has china. Now, china could rescue it. It rescued pacific rim a few summers ago. Is there a boss whose job is on the line here . If you look at it disney is probably the most secure of any major studio. Basically a super power. They could take this kind of risk. Theyre one of the studio im not sure it is quite that bad. But it is going to hurt. Not yet. When you look so the other film that is out this weekend mad max. Fairly strong hold. Pretty well. Ive heard good things about that film. Other problem is this is a very expensive film that cost 150 million to produce this film. A lot more to market. This is another film that has got to do really really well before you start to make money. What about Pitch Perfect 2 i cant imagine that movie costs what these movies costs. Some of the most enviable profit margins. Theyre a juggernaut. Theyve got minions and Jurassic World and a really really strong summer. Some good people there. Some good people. Fast and furious. Little partisan. When you look out over the summer what are the movies we should look for the big winners and maybe some of the big losers . I think Jurassic World, suggesting to do 100 million or more. Excited aboutthat one, too. Minions looks like a very big hit. Spy the Melissa Mccarthy comedy coming out and train wreck amy schuller film got a big buzz. Is she a big enough star to open. On the loser front, anybody you want to announce this early in the summer . Tomorrowland is looking like a big loser. Entourage in terms of tracking. Coming out next week . Two weeks from now. I want to go see entourage. I am over those guys. That was like three years ago. They may have waited too long. I dont care what theyre doing. Okay. I will go see that film. Will you go see that film . Maybe. How did sex and the city track after its first debut . Sex and the city was a phenomenon phenomenon. I dont think entourage. Chris pratt is in jurassic. Did you see his before and after. A preapology. Did you see it . He is going on a worldwide tour and he says i just know that im going to Say Something that is going to be politically incorrect and everything is in parentheses. I just want to say when it does happen that i am very sorry and i wasnt thinking and i apologize and its like three paragraphs of preapologizing before he says it because he knows it is going to happen. But its just funny because i think we need an amendment. How many amendments do we have . 22, 23 26. Whatever. You want to add one. I want to add one. Everybody has the right to live their entire life without being offended by anything. I think we need that. I think we need that. Microaggression is running too rampant and i dont want to be offended by anything. I hope you havent been offended. Not at all. Start the petitions. Ill send you this. I read it at home. Its funny. Good sense of humor. Thanks for coming in. Thanks. When we come back this morning, well Talk Technology stocks with a squawk market master. Stick around, well be right back. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. Verizon say neversettle. Tmobile agrees. Never settle for verizons overpriced gimmicks. Try the uncarrier riskfree for 14 days youll love it, or well pay for you to go back. What if there were only one kind of dog . Then it would be easy to know everything about that one breed. But in fact, there are over three hundred breeds of dogs. Because no one can be an expert in every one. An app powered by ibm watson will help vets tap Specialized Knowledge in the cloud for every breed. And whatever else walks, flies or slithers through the door. Ibm watson is working to make medicine smarter every day. Tech bubble bursting. People worry why private market valuations are soaring, overall tech deals. Cofounder and managing partner at winblad. Platinum portfolio picks. Ann, thank you. I think a person of your stature. Im glad youre participating. It raises the entire exercise i think, for us. Thanks. Have you changed anything . What three were you riding with and have you kept them . Yeah, i was riding and still riding with sales force, google and linkedin. Last november i changed from amazon to linkedin and i mentioned that i was hopeful that amazon might segment their revenues which they did in april much to everyones positive surprise. So, i obviously missed a huge run on the amazon stock. But im sticking with my three picks. When we like im thinking about, lets say if people had bought these when they obviously are doing well. And as far as a bottoms up analysis, i could understand how you would pick those. But does it enter into your thinking that maybe you need to look at just valuations across the board because of private market valuations. Uber or whatever. Ive seen some Small Companies valued at just multiples to sales and it reminds me of the late 90s a little bit. Im an Enterprise Software investor and theres a little bit of a difference. Actually huge difference between the enterprise and direct to consumer deals. Uber and lift are a marketplace by themselves and thats looking like a huge money battle to me. And if there is a winner take all of uber and there is going to be a blood bath for someone. In the Consumer Sector im not a fan of zingas as private or public companies. The Enterprise Software sector is quite a bit different. Its very discriminating on ipos and the newer names, work day, splunk are all fantastic companies. And our Enterprise Software companies are private still at 100 million or more of revenues and approaching profitability. So these are companies that are raising later stage rounds from Public Market investors and anticipation of ip oz oos, but theyre real companies. Theyre 7 to 9 years of age before they go public and i think were seeing the results of very strong, new entrance in the Enterprise Software market. Thats i mean your take on this is you know is very nuance in terms of just focusing on enterprise which already has pretty good foundation. Its not like some of these other ones. But if it was uber and lift lift doesnt have nearly the, i mean it couldnt be that big of blood bath because it wasnt valued that much. So, that was interesting for you to say that. Should uber be valued where it is right now, ann . Its hard to know. They need the cash and fighting a lot of battles with competitors worldwide and fighting political battles and, you know theyre trying to own the last part of the turf which is the airports. Thats an expensive battle in itself. They are able to convince investors on every round that theyre gaining in value. Well see how long that lasts. They havent disclosed their numbers. Im assuming they have pretty substantial revenues. At least they have a lot of my money, uber does. So its hard to know the valuation. Marketplace is kind of a new space. Its not like a work day, a spl splnk and service now and its hard to value and its a consumer stock. Consumers love that kind of stuff. Its facebooklike, but certainly not facebook. So lets say in three years. Because in five years, god knows what well be doing in five years in technology. So everybody says mobile. Im looking for the next social. In fact i still dont really believe that its going to be very big facebook or twitter. I dont know, maybe it is. Maybe ill have to reethink that. Whats next . Mobile. Health care. Being hooked up and your doctor figuring out everything you need from afar. What is the next thing that we are all going to say i didnt know we had this three years ago. The effects of what we call big data and im not a big fan of that term but the ability to harness all this data showing up in Financial Technology, health tech and were seeing some new frontiers being carved by microsoft and google and imbm and this next generation of Artificial Intelligence. Really actually making the data more valuable letting the machines think for us. I think this is where well see sort of some startling nuances in Predictive Technology and true Artificial Intelligence in the next five years. We waited a long time for this and venture capitalists had three bites and most have been bad bites and now with google acquiring every neuro scientists on earth. Microsoft also doing deep research here and ibm with watson. I think were going to see some really interesting plays across health care and Financial Technology with intelligence. Do you remember a Company Called symbolix . Oh, yeah. Ill date myself by saying yes. That was a long time ago. My clients were fortunate enough for me to involve them in symbolix. Anyway how did that do . Yeah ann, its been a while. I thought it was going to happen in 1985 86. It didnt happen ann. Is it time finally . By 1950 well carve i want to download myself and live forever. Thank you, anf. N. See you later, thanks. Bye. Coming up when we return coming up stocks to watch ahead of the opening bell a list of movers next. Plus, more on this mornings big media deal. Well talk to an analyst about charters deal to buy Time Warner Cable. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount welcome back everyone. A statement just in from fcc chairman tom wheeler on the proposed Charter Communication acquisition of Time Warner Cable. He says that the fcc reviews every merger on its merits and determines whether it will be in the Public Interest in applying the Public Interest test in ab absence of harm is not suspicious. How they would benefit if the deal were to be approved. Some stories we heard that he actually contacted these companies to say just because we turned down comcast doesnt mean well turn down you. If malone can pay 10 billion more than comcast, why is it you are not assuming that consumers will fair even worst when he gets his hands on Time Warner Cable . You said it. I didnt say it. Why isnt that what people are saying if theyre even going to have to squeeze more out of the combined companies. Lay off more people. Just to maximize their profits. Look at you. Im just wondering. Why is everyone saying that . You and burnieernie sanders. No one has thought about that. They have even more diabolical plans to put these two together than comcast had. Ryanair. The president will block it again ryanair out with earnings this morning. The Company Offers flights for about 50 bucks. The ceo says fairs s fares will go even lower. Joins us on the squawk set after a quick break. At book club they were asking me what youre doing now, janice. Blogging. Your blog is just pictures of you in the mirror. Its called a fashion blog todd. Well, ive been helping people save money with progressives discounts. Flo, can you get janice a job . [ laughs ] you shouldve stuck to softball i was so much better at softball than janice, dad. Wheres your wife, todd . Vacation. Discounts like homeowners multipolicy i got a discount on this ham. Ive got the meat sweats. This is good ham, diane. Paperless discounts give it a rest, flo. All yeah, flo, give it a rest. The network that monitors her health. The secure Cloud Services that store her genetic data the servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. A cable connection. New this morning Charter Communication striking a deal to buy Time Warner Cable for 55 billion in cash and stock. But will regulators give it a green light . Taking flight. Soaring 66 to top estimates. The always straight talking ceo of ryanair will join us in studio. A developing story. Deadly storms bringing heavy rains and historic floods from texas to oklahoma. More than 30 million americans now being told to brace for more dangerous weather today as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box, everyone. This is cnbc first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. Some exciting news for samsung this morning. Galaxy s6. The device comes with the signature color scheme of ironman with the matching wireless charger. Well talk more about the smartphone wars a little bit later this hour including interesting new stories about what blackberry executives first thought about the iphone when the apples device was introduced back in 2007. The ceo saw it when he was on the treadmill for the first time. The chairman said dont worry about it. Its the beginning of when things went wrong for blackberry. U. S. Equity markets, earlier this morning weakier than what you see right now. The dow futures are indicated higher this morning. Up by five points. And the nasdaq is down by about 2. 5. Check out the dollar this morning. Still, continuing its climb against the recent climb, i should say, against the euro. Its at 109. 03. We got a couple other stories investors are going to be talk about this morning. Charter buying Time Warner Cable in cash and stock. Well talk to an analyst about all that and what it means. Twitter reportedly has been engaged in ongoing conversation in an allstock deal that could value flipboard at more than a billion dollars and recorded that news says talks are stalled right now. General motors likely to Face Criminal Charges over an ignition switch defect linked to more than 100 deaths. Story came out first in wall street journal and federal prosecutors need to discuss key issues with gm including whether the automaker will need to plead guilty. Toyota paid 1. 2 billion. So well see what the key issues. They were key issues that we are talking about. About the keys wasnt it . About the key turning off. And then some other auto news gm was approached by chrislerchris chrysler ceo about a possible merger in march. But gmcm barra was not interested. Priceline invest 250 billion in seatrip. Com and astrazeneca psoriasis linked to fears. But amgenhas dropped out of following this development. Amazon reportedly going to be changing its european tax practices. This came from wall street journal saying this comes amid regulatory probes. They used to run a lot of their money through luxenbering and that will no longer happen. The heartbreak of psoriasis. I have eczema on my finger. Nobody wants but eczema it was the p that through you. Why put it there . Why do they do that . I dont know why. Its annoying. Its annoying. It is. Lets get back to our big corporate story of the morning. Charter buying Time Warner Cable for 55 billion. Matt, thank you for joining us today. Thank you. So lets talk a little bit about what we just heard from the fcc. Tom wheeler putting out a statement basically saying its not enough to show a sense of harm that theyll be looking at this deal. How likely do you think it is that it meets Regulatory Approval . You know we have pretty high degree of confidence. I think that you know wheeler certainly wasnt saying lets make a deal. When you look at the u. S. Cable industry its a bit of a crazy quilt apart from comcast. These Companies Competing with directv and at t merge. That will be a formidable competitor and other companies, as well. You want to emulate the product road map that comcast has with x1 like offerings and mobile maybe even beyond wifi. Business services. So, you know this has to create additional additional product for the consumers certainly. And i think it could be conceived as procompetitive. Certainly offer more diversity of choice. What do you think about the price on this . Its a 23 premium to what comcast was going to be paying for Time Warner Cable and thats a big premium from what charter agreed to buy the company for for two years ago. Its really interesting. I think rob marcus and the team at Time Warner Cable the Customer Account and all that were looking at this year. You know Time Warner Cable. So you just breathe on this and the valuation flies around. Certainly there will be some synergies here. But when you look at where it was a year and a half ago when it was really bleeding. You were absolutely dead in the water on broadband. You know i think probably 140 or so was the right price. A lot of risk. Some of that perception of risk has dissipated. Certainly could not be going awai. Before the competition heats up even more and i think that charter has a tall task. Continuing to turn this around. But it certainly looks better than it did and, again, the valuation is just very very sensitive. So, you would tell people to buy Charter Communications here or you would tell them to steer clear . I would certainly be a buyer of charter here. I think they along with comcast are perceived as the best operators and i think that even though you do have some lagging consumer surveys, for comcast as far as a Brand Perception i think that charter feels that they have made progress turning things around perception wise and just really streamlining the operations. I would certainly expect them to do the same with timewarner cable. Weve seen cablevision shares appreciate that maybe there is a bidding war for any Cable Company out there. Would you buy those shares that look like theyll open above 25 a share this morning. If rome is the eternal city i think it makes a lot of sense as jimmy dolan said at the cable show in chicago to roll new york under one moniker. I think the optimum brand name has a lot of power. Rutledge and john malone may not be enthusiastic about competing with fios. Cablevision is the acquirer from Time Warner Cable. You know certainly, theyre a mature company, but a lot of their operating parameters. Their revenue is a lot better than Time Warner Cable. I think thats a wildcard possibility. I think its implausible that cable vision gets acquired immediately. I wouldnt think that altese would be a buyer here either. Roll up that new york market in one form or another. People have been talking about this literally for a quarter century at this point. Matt i want to thank you for joining us today. Thank you. By the way, folks, a programming note for you. Dont miss Charter Communication ceo tom rutledge. Now ryanair reporting better than expected results. Celebrating 30th anniversary this year. Profits jumped 63 year after year and the shares of ryanair at this hour are indicated up around 68 a share. Now on set Michael Oleary ceo of ryanair. How do you do 66 . Anything special in there or does it have to do with the dollar . How do you do . It helps when you start out with profit warnings in the previous year. What changed . Customer demand last year was weak and remarkably strong this year in europe. I mean, driven by the fact that weve been moving into primary airports and taking huge waves of traffic on lower fares. Is it an overstatement to say its as simple affof the european economy the european economy is weak. Theres no doubt. You can feel it that its better. Definitely degree of recovery going on. Still a structural change. A move away of consumers from the legacy carriers. The highcost legacy carriers. Restructuring in favor of the lowcost carriers. I cant figure out how the dollar affects you . How does the dollar being so strong versus the euro. Not great for our business in general terms. If youre trading in euros because youre buying your aircraft and fuel and were very strongly hedged out for the next two years. At 1. 35 to the euro. But your fuel is flat. Your fuel charges were flat arent they . Few have fallen significantly. Most of the European Airlines tend to behedge on a tenmonth rolling program. Roll into early 2016 we start to pick up huge savings from the current hopefully pass those along to customers as oil goes down because 50 is for a one you should be able to do it for 25 then. Were down to how doo you you do that . You have to wear a diaper. You have to pay for a toilet there. Not true. You didnt charge that . No no no. Your number one and number two. 3 for number one and 10 for number two. Nope. The health club where i am. I want to ban them. I couldnt afford to join the health club where you are. Back in europe where the poor people live they still want to travel. They are traveling in huge volumes but switching away from the highfare carriers to ryanair. Just seems impossible to have a 46 fare. Southwest has been doing it for years. Their fares have risen significantly. But we have bigger aircraft. How many people can actually get thats the average. The lowest fare is 10 who are you taking . Who is going for 9 euros. Families will go midweek and you get families people going on holidays and increasingly in the last 12 months the business has been a huge win for us as we move into more primary airports in cities like brussels and rome. You must drive the Legacy Airlines crazy . I sane i think. We drive them into the downtown regulators in brussels so a few more road blocks or regulatory to try to prevent the advance of low fare air travel in europe. How big of a threat is that to getting the regulators coming in and telling you, you cant do that here . I think its receding as a threat because the regulators realize. We carried 90 million passengers last year and this year 100 million passengers. The demand for our low fares is something the regulators cant even hold back. Weigh in on a debate in the United States that has to go with whats happening in the emirates. A big debate among american airlines, not aa about whether some of the airlines in the middle east flying back and forth arguably subsidized should be able to do that. Where do you stand on that . Absolutely four square with them. Youre with the u. S. Based airlines on that. Im with the gulf carriers. Youre on with the gulf carriers. The same debate in europe. The legacy carriers who have been charging high fares for years and delivering a service and block consumer choice. I say let them have it. Im all for competition. But do you care about how, how the economics work for them . Which is to say their economics are a lot different in part not simply because of the business aspect, but because the government is actually subsidizing. Always beware when you have incumbents against customer choice. You take the american carriers they have monopoly on slots. They have been screwing consumers for years. Particularly on connecting traffic. We say and the european legacies making exactly the same arguments. Its complete rubbish. They made the same arguments 30 years ago when southwest tried to move out of texas. No one argued the end of civilization as we know it. Airlines cant fly for less than 50 bucks. Studies show it takes 250 bucks. Dont believe them. Incumbent carriers always want to lobby against competition. Do you think this market is a fair market right now . I think it could be more fair. No, the incumbent carriers have a stranglehold over the main hub airports that are feeding more and more people across those airports. And the increase in airfares the last couple years. Youve seen him come on. Im not a fan of getting sent through these hubs. I dont know how the business model. I still cant figure out how you can charge 9 with jet fuel and maintenance and aircraft costs and everything else. I dont know how it gets done. It seems Senior Management joe. When there were price wars here we didnt even have a viable industry. We had a 20year period where the return on equity was zero. Because a neighbor kept eating up any of the gains. Now, i think in recent years, labor has gotten much more rational and reasonable. The airline has significantly improved and ryanair is transforming air travel. You should be able to fly across europe for 10 or 15. I cant believe your labor is not more. If you look at it in europe. Were creating 1,000 new jobs this year. Charging 9 a ticket. What are you paying your pilots . Up to 150,000 euros. Theyre good pay. But you look around the legacies. Theyre cutting pay, theyre letting people go. But they pay more. They pay much more and do very little work for it. But all of that is being restructured. I cant help but listen to you and think of the same argument that we were talking about earlier with uber coming in and kind of crushing the taxi medallion value. As regulators get pulled into the middle of those issues too. Is that the way of the world these days. Regulators should put the needs of the consumers first. Increases competition, thats what regulators are there to do. The difficulty is and the history of Economic Development is regulators always get captured and they finish protecting monopolyiesmonopolies. Thats why the u. S. Majors have been so terrible for so many years. Promote competition and put the consumer interest first and fire the regulators. There you go. There you have it. Go, joe. Come on. Right . Candid honest. Smart. He has a horse telling it like it is. Come to ireland. Weve legalized gay marriage, were were boosting tourism. Great golf. We have good golf too. Expensive booze, but very good golf. Thank you for coming in. My pleasure. Nice to see you. Welcome back from jersey. Enjoy the delta shuttle on your way to boston. Coming up leaving wall street for silicon valley. Ready to head to the finances of the world of google. Starting today, so what will she do with the companys growing power of cash. Well search for that answer when we return. Welcome back to squawk box this morning. First day on the job as chief Financial Officer of google. She is going to earn more than 78 million in that role. Ivan covers google or tigress financial partners. What do you want to see her do with all that money lying around . She has a lot she can do. Googel is a very inquisitive company. Google could have bought Time Warner Cable. Google is laying out fiber. They want to be in the communication business. They are a communication company. She has close to 80 billion in cash and about 32 billion in cash flow. So thats a lot of money to manage to invest in r d to build the company. A lot of talk about the signal that her hiring sends to the street. Which is to say that she knows the street. Theyre now serious about the street in a different way. Do you buy that . Yes. I think on two levels. Its good to see additional women in Senior Management, especially in a company like google. I work in a women owned and operated firm. We have seen many positive results. When you have diversity in population it leads to diversity in thought. Which is a powerful driver in corporate america. But you expect her ascension at that company will mean more mergers and acquisitions . Will mean more buybacks or what . First of all, based on the amount of cash they have and the cash flow. They have to invest in the company and investing in acquisitions to grow the company. Dividend policy and they dont currently pay a dividend. Stock buy backs and make decisions on how they will return this cash or create value for the sharholder. A lot of speculation about the value of twitter and one of the usual suspects and over the weekend a news report that mentioned this as well, that google would like to or be possible acquirer of twitter as a shareholder of google would you be happy as an owner of twitter . Were neutral on twitter. I dont think it would be that much of an incremental increase because they already do compete with twitter. And i think they have as good if not better a brand name than twitter. If they could buy three things, what would you want them to buy . I think they should continue to extend mobile video and advertising. And continue to invest in their search dominance. In their mobile platform and in their communication. Widjajaould they buy aol . Should they buy yahoo . I dont think these things add a lot to where they are already dominant. Thats the thing. They have to really, to me the best place for google to continue on investor money is investing in r d. What about a car company . No. Ivan thank you. Appreciate it. Coming up Severe Weather ripping across much of the country. Eight states on high alert after heavy rains and historic flooding. Well get a live report from texas, coming up next. By the time Police Arrive on a crime scene they could have little to go on. A vague description. A single piece of evidence. A partial plate number. With an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. Ibm analytics helps one hundred thousand officers work smarter every day. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Eight states on high alert this morning following heavy rains and historic floods. Gabe gutierrez joins us this morning. Good morning. Andrew, good morning. The death toll in texas and oklahoma is now up to eight over the past few days. And oerbvernight some historic flooding in the houston area. That area is now under a flash flood emergency. In houston several hundred basketball fan husband to stay at the Toyota Center following the Houston Rockets game because of the heavy flooding in the houston area. Also in austin just a few hours earlier, there were multiple water rescues. Here in wimberly texas, the search is on after the massive flooding. Texas governors has expanded to include 37 texing counties. Back to you. Gabe thank you very much. One question people have is what the weather is expected to be over the next several days. Is this area set to receive more rain . Well thankfully were getting a little bit of a break from the rain here today in the wimberly area at least throughout the morning. But more rain and Severe Weather is expected in the dallas area and more rain is expected in houston later today. Really this historic event is just continuing at least here in texas, guys. Gabe the water behind you, what does it look like on a normal day . Is that an incredibly swelled river bank youre standing in front of . This is the blanca river that crested at 33 feet over the weekend. Flood stage is normally just 12 feet. Incredibly it tripled its flood stage over the weekend. Yesterday it was rising slightly because of some of the rain we were getting and now because of the break this morning, it does not overflowing its banks as you can see behind me but this could be a very Dangerous River if it were to rise. Thankfully things this morning are getting back to normal. Again, the search for the missing continues here. Gabe thank you very much. Again, thats nbcs gabe gutierrez. We are just about a minute away from the durable goods data for april. Actually a minute and a half. If you see what is happening with the futures this morning. Things have not moved a lot over the last couple hours. Looked like the dow futures were indicated down by about 40 points. At this point it looks like they were indicated up by about 7. S p futures are still indicated lower by 1. 5 points and the nasdaq is down by 1. 25 points. Also keeping an eye on the dollar this morning which continues its march higher. Right now the euro is trading at 109. 24. Also been keeping track of whats been happening in the bond market and right now it looks like the tenyear is yielding on the low end of that range. Its been for quite a while. 2. 188 . The main thing weve been watching also is what is happening with some of the european markets. Big questions about what will happen in greece. You can see this morning the Greece Market is up by 1. 3 and that belies what is happening over the weekend. Under extreme pressure yesterday. You can see its trading around 824. But deadlines for greece is approaching. June 5th is when the next big bill of over 300 Million Euros comes due and thats when the questions really begin. The days after that youll see that number close to double in terms of what they owe. There is a lot of talk that an agreement will be reached. How we get to that point is still unclear. In the meantime back here in the United States, again, weve been waiting for the april durable goods numbers. Steve liesman is here on set to talk about all of that in just a moment. Rick santelli is standing by at the cme at chicago. Rick, again, given what the fed has said and what yellen said on friday. These numbers become ever more important. Take it away. Ever more important she should have mentioned cpi 4 1 2 hours before her speech when it came out. Durables are down 0. 5 . Which is exactly, exactly what analysts were looking for. That doesnt make the sting of it any better though. Definitely a lot weaker than a revised 5. 1 which is the headline durables last month faired after being reported at 4 . Lets go through the xs, shall we. X transportation. Its up 0. 5 . Which isnt bad. Its slightly lower than last months up 0. 6 . But that was reported as a slight negative number. If we look at the proxy for investing by business so were looking at capital goods orders. Nondefense. Thats actually up 1 . Thats much better than we have been expecting. About 2. 5 times more and its 1. 5 comped last time. That number also just wildly revised from originally reported 0. 5 . As you go through the data one thing you realize every x, x transportation and the goods, shipments, orders they were all upwardly revised. That makes the comps a little less aggressive and points out that these numbers are not highly accurate. Rates went up and i guess if you look at this its kind of a mixed bag. Headline weakness and strength under the surface. Well continue to monitor. The dollar is just having a spectacular day because all the europeans are somewhat getting whacked whether its votes in spain. Whats going on with the british pound which is actually reversing a bit coming off with a vengeance right now. We want to continue to monitor all the markets because what starts out as volatility today become Interest Rates problems of the future. Back to you. Rick thank you very much. Steve liesman is here on the set with us and he has more on that number, as well. Steve, what jumps out to you . I think rick nailed it before we analyze the number. The high variability of this rate. Let me read you, minus 3. 4 and now plus 5. 1. It goes up and down a lot and incredible and part of this report is just the report on boeing. Thats all it is right . When you talk about nondefense aircraft and parts. Plus 40. 7 in march now minus 4. So take a step back. You can kind of take a breath and how is it going . When you put together two good months in a row. We did put two good months in a row of Business Investment. Went up 1. 5 in march and up 1 . Thats okay. Okay steve, right . But let me just tell you the whole story that were minus 5. 1 back in february. Looks like were setting up for a slight perhaps upward revision to that really negative number for the First Quarter and maybe Business Investment will add a little bit to the Second Quarter rather than being a drag. Very quickly. Talking about what yellen said on friday. We had is some people say, look she sounded hawkish and some say she sounded dovish. I have been of the opinion that the fed wants to raise rates this year. It is waiting essentially for the smoke of the deflationary impulse in the economy to clear, which comes from the stronger dollar and lower oil prices. I think they think thats going to happen. I think thats their best guest. Relatively upbeat on the economy and i dont think she will raise rates precipitously and i think thats whats going to happen. I think thats what they want to do. Steve, thank you. Coming up Mohammed El Erian will talk about fed rate expectations and a lot more when squawk box returns. The Technology Changes the design evolves the engineering advances. But the passion to drive a mercedesbenz is something that is common. To every generation of enthusiast. The 2015 dream machines, from mercedesbenz. Todays icons. Tomorrows legends. Visit the dream machine event today for up to 3,500 towards purchase. Welcome back to squawk box, everyone. You saw a look at what has been happening with the futures mark market market. Joining aahead of the opening, chief economic adviser and mohamed, thank you for being here today. Thank you becky. I think were all kind of wondering what to make of greece at this point. These deadlines are aproching very rapidly. Im not sure what the market is expecting, although my guess is that most people expect a deal to get done. What do you think . I think the muddle through, what the imf called the quick and dirty, if you like piece meal approach is getting tougher to sustain. I think its more likely in terms of probability distribution that you get an accident. A few weeks ago i told you that i thought my probabilities were 5 that we get a good resolution. 45 that we muddle through and 50 that we get an accident. I think the probability of an accident is now somewhat higher. I dont think we can just muddle through forever on greece. When you say higher are you talking 60 , 70 , 80 that were talking about. I am talking 55 to 60. The positive outflow continues. The economy is back in recession. The ecb is under tremendous pressure because its the only institution putting money in. Capital controls are likely. The government is likely to issue an iou in order to meet its payments. You are starting to see everything we saw in argentina in october and november 2001 and very difficult to control things on the ground. I wouldnt underestimate the probability of an sdpntaccident as they call it. If there is an accident can you tell us what you think the spillover effects would be not only in greece but beyond . The good news and you covered earlier in the program, this is not 2010 this is not 2012. The euro zone has done a lot to contain the risk of contagion. It doesnt mean it wont get some. Yes, you will initially. A lot of legal uncertainties and this is not threatening the euro zone as was the case back in 2010 and 2012. Not threatening the euro zone but arehere implications for the european stock market . Are there implications for what happens in the United States . My question has been do investors look at u. S. Stocks as a safe haven at that point or do they start to think that there is some sort of a lack of confidence in the system . It sounds like you think the latter. I mean the former not the latter. I think the Immediate Impact will be felt in European Equity markets. Will be felt in a further weakening of the euro. Will be felt in a further addressment of spreads in european markets. Thats where the initial impact will be. Some spillover to the u. S. But the main impact will be in europe. Then i expect the ecb to respond. The ecb to loosen even more Monetary Policy. And to try and protect the periphial economies. The twostage process. The first stage will be a disruption and then youll see a policy response. Mohamed. I guess i try to figure this out because stocks are fairly valued at this point and correction overdue and we havent seen one in a long time. The catalyst that causes a pullback in u. S. Stocks. If its not greece is it Something Else or impossible to know . It always surprises us. Simply cash. Cash thats coming from corporate balance sheets. Its going back through dividends, share buybacks and m a and that is no longer being held. Second, the central Banking Community as a whole is still ultraloose. Yes, the fed may raise in september, but china is getting looser. Europe is likely to get even looser on its Monetary Policy. These two things are highly supportive of stocks. How you get a correction is either a market accident overextends and i think steve was, rick was absolutely correct when he said look at the effects market. Thats where the volatility can come from or a policy accident. I dont think youll get a policy accident. Its really volatility that creates the correction that everybody is worried about. It creates the correction that everybody is worried about. The other question that comes into play is what the fed does. Is the fed somehow going to be responsible for a Tipping Point when they actually decide to start raising rates or just the liquidity that is out there. The bubbles that have been building in certain areas. What happens . How do you see this playing out . So were getting very clear messages from the minutes, from yellen and the latest from vice chair fisher. Theyre telling us the following. Yes, were likely to hike this year, most probably in september because the weakness in the economy is transitory and were not too worried about inflation either on the way up or on the way down. Secondly, dont obsess over the timing of the rate hike because what happens is the path. And the path is highly conditional. This is not your hike at each meeting. This is a stop go hikal measure. Third, the terminal point. The equal librium rate. Bottom line becky, theyre telling us this is the loosest tightening in central banking. Therefore, theyre saying dont get too excited about the first hike and dont get too excited about the path. Were going to normalize in a fashion. Thats the message coming out of the fed and thats what theyre trying to do. You sound pretty calm. I just wonder is that an accurate description of how you feel about things and what if anything, worries you . What worries me is fundamentals at some point have to validate valuations. That we cannot go on forever with this muddle through and get driven by just cash that is coming back out. At some point fundamentals have got to validate valuations. Thats the key issue and the key call over the medium term. So, you know for longterm investors, this is a time to be much more barbelled. Be careful of the heavily traveled Public Markets. Take a bit more in cash and take a bit more in opportunities that are harder to get to and, therefore, less crowded. That is the key issue over the longer term. Mohamed, real quick before you go. Your friend bill gross over the weekend in an interview that i have done in the times magazine said the end is near both for the stock and bond market. I just wanted to get your reaction to that. So you sat with him. Im not quite sure what it refers to. I think there is a more general point he think theres is a bubble both in the stock market and the bond market. I think since 2008 we have been muddling through and we have been powered by policy ultraloose experimental Central Bank Policy and money coming back from the corporate sector. At some point, if that doesnt get validated by fundamentals, then were going to find that we have pushed Public Markets too far. I think thats the key point. Focus on the longerterm valuating valuations otherwise quite a big air pocket. Why are you so nice . Off the record you say you spent all your time cleaning up his stuff and you know after working with him, he couldnt get a correct call on the stock market if his life depended on it. Why dont you just say what you know mohamed . Look joe, finally the Anaheim Ducks won in overtime game. Ask you about the mets. Did you think they were going to win all their games at one point this year . No. I tweeted this is not going to last. I was worried about it. People got too excited. Guess who has lost nine in a row and they have done theyre never going to win another game the reds. Fundamentals have a way of reasserting themselves. And then the cubbies. I thought the cubbies. I thought maybe theyre only four games above. 500. Some things just never change mohamed. Thank you. We got to go, someone should get a shot of this beautiful little baby right out here. Just incredible waving at us here on squawk box this morning. Take a look at that. Hello. Little squawker right there. Coming up when we return forbes out with its list of the worlds most powerful women. She may become one of them. Among the top five. Head of state, ceo, a central banker and a philanthropist as well as a politician. Well reveal the names. Youre lucky that wasnt a woman. Verizon say neversettle. Tmobile agrees. Never settle for verizons overpriced gimmicks. Try the uncarrier riskfree for 14 days youll love it, or well pay for you to go back. When we return jim cramer is on todays big cable deal on the shortened week ahead. When youre not confident your companys data is secure the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. We monitor Network Traffic worldwide, so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount. Down at the new York Stock Exchange. You were talking about this deal. I see a lot of different sort of angles to it jim. One is just malone waiting in the weeds and watching regulators do his work for him. Wheeler standing up for consume others and malone just waiting and here he comes, man. Biggest player in cable again. Yeah. I thought i still dont understand why comcast was rejected. It was such a windfall for malone. I think we are tired of seeing the winds fall for malone. It just goes his way. Its a great deal for him. This stock is going higher because thats the way it is. I think the consolidation, there was no need for more than a couple of Cable Companies. Just joking around i said theyre paying 10 billion more. Consumers are going to fair worse in this deal. Maybe they rationalize more operations . If they can afford to pay more and make a lot of money, maybe consumers werent going to fair so badly with the comcast. We were hoping comcast because the bill would get cut. We were hoping comcast could get it so we could get no more outages, more consistency to the way it works. That doesnt matter to the feds. Where do you spend most your time out in the house i know about . You have xone at that house . I have time warner in new york city and comcast and fios in the jersey place. Then you know. You can see how great it could be. I heard of fios. Happy tuesday. Its tuesday. Did you know its tuesday . It is. All day long folks. That explains the mood. He would we come back, well unveil forbes list of the most powerful women. One name that fell off the list lady gaga gisele and amy pascal. Control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. In the us, three in ten College Students drop out. But how can you spot whos at risk . The one who lives far from campus . The one who works the night shift . The one with new responsibilities . One thing cant tell you, but the right combination can. Universities are using ibm analytics to understand pressures in and out of the classroom some expect to cut dropout rates by twentyfive percent. Ibm analytics is working to make education smarter every day. Welcome back. Just out this morning the annual forbes rankings of the 100 most powerful women. Lisa crowell is assistant managing editor. Lets just talk about the top five. Same as last year. Same number one. Same number one angela merkel. She will be hard for anybody to take the place of unless hillary gets elected in the 2016 i think we are looking at angela at the top one. Hillary clinton number two, Melinda Gates at number three, which i believe is the same as last year. Janet yellen at four and mary berra at five. Why did janet yellen move down two slots . She was number two last year. I was thinking you might ask that. Its more to speak to how much of an influence hillary had this year. She is back in the limelight and on the rise. Many people think she will be tough to beat for the democratic. Obviously Melinda Gates continues to have huge global influence, a lot more so. Janet, obviously centered in the u. S. I was going to say this could be the year she raises rates. Yes. Everybody is watching then maybe next year she will move up in the ranks. A little surprise she moved down. Top corporate person is maria berra. Who is six seven and eight. Christine lagarde is number six. Yes. She moved down a little bit. Dilma rousseff. Very few corporate names. Sheryl sand berg. You start to see more of the tech ceos the pepsico ceo, but sheryl cant berg at number eight and Susan Wojcicki at number nine. Why mary berra in terms of the top corporate woman there . Youve got meg whitman. Hewlettpackard is a 63 billion market cap. Why mary berra above those others . Again, i think we take into account several different factors. Its not just revenues. Also the amount of buzz they had. Gm has been in the news a lot. Shes been having to be in the middle of the fire and shes been handling that pretty well. So those are some of the qualifiers that go into it when we add up the different metrics and look to see where people place. What surprised you the most . Obviously, the fact lady gaga gisele some of the big names slipped out of the ranks. More interesting is who climbed in. Ruth pratt who starts at google today. Go check out the issue of forbes. Squawk on the street starts right now. Good tuesday morning. Welcome to squawk on the street. Hope you had a great memorial day weekend. Im Carl Quintanilla with jim cramer and david faber. Charter buying Time Warner Cable. Futures in the red as the dollar strengthens this morning