Transcripts For CNBC Squawk On The Street 20120706

that are creeping up above 7% in spain. >> no surprise, though, what is leading the roadmap today, june jobs numbers, a letdown. 80,000. what is the impact on the economy, the fed, q.e. 3 as well as the elections? >> remember that relief we got after the eu summit? it's gone. spanish yields back to 7% as the imf prepares to cut growth foeshgs and finland b may be the first to exit the eurozone. >> nomura is blaming weak aluminum pricing. >> and yahoo!'s ceo job hunt still going on. the two leading candidates,. >> and joining us is dennis berman. dennis, great to have you back with us. what a change from yesterday, we were all giddy, we had yan who turned his number higher. the economy is a slow-growth economy. when you see the type of growth coming -- deficits coming down in china, when you see the major restructurings going on in europe, we want instant results because we're in an instant result world. these macroeconomic shifts are going to take longer than that. >> the jobs report, 80,000 jobs for june. the economy has averaged 75,000 a month. one-third of the amount created in the first quarter. people looking for some silver linings, looking awfully hard, workweek up just a tenth of a point. if you're looking for even construction jobs, even with all the housing starts we saw in the spring and construction did contract in march through may, but flat through june. >> are robots building these houses, obviously because people aren't building them. >> you take a look at the slowdown from the first to the second quarter, that's who heato stark. it went down to 75,000 per month in the second quarter. in manufacturing, what has been a bright spot so far in terms of job growth, that also slowed severely from the first quarter to the second quarter. second quarter is now up 10,000 a month. that is down from 41,000 a month. when you take a look at that, that's a very difficult slice to digest. let's get more market reaction to these numbers here, bring in robe our guest. does this change how you view the stock market for the rest of the year? >> no. it's a confirmation of the weak economic reports, especially the manufacturing reports we've been seeing lately. some of these manufacturing reports, the labor aspect of these manufacturing reports were indicating that companies were still hiring. and you could either say, well, either they're behind the curve or they believe it's temporary. but i believe this weak nonfarm payroll report is a confirmation that the economy is slowing down and these regional and national manufacturing reports are going to start reflecting the whole thing. it's a reverberation of what's going on in europe. it's a slowdown there, a recession there. it's affecting china. it's affecting the other parts of asia and it's affecting the united states. >> in terms of investling -- it's interesting the set-up of the jobs report to earnings season which starts on monday. does a bar go even lower when it comes to earnings season, given this report? >> if you read the reports out there, a lot of people are seeing the expectations for earnings still a little bit too high in that they have to be revised lower. there was just an article in the paper, i think it was on monday, which said the earnings estimates are still too high and have to be taken down. so you headed the earnings season with a very cautious approach. why sort of step in front of a moving train if you really don't have to? we're trying to to be propitious in her report and opportunistic. we're allowing the opportunities to come to us. >> bob, the question hanging over the markets is how the fed reacts to this sort of information. where do you think this pushes the fed one way or the other? >> with an 80,000 jobs number, it doesn't necessarily push them immediately right to q.e. 3. but the market's going to be looking for it. if you take a look at the bond market. the reaction in the bond market is certainly looking for it. but the answer from the fed isn't real quantitative easing 3. it's not going to solve anything. you're going to get a pop in the market, you're going to see a risk-on trade occurring. but what's going to happen is that trade is going to fade off. we don't have a liquidity issue, it's a solvency issue. we have a crisis in europe with the slower economy affecting the rest of the world. i think what the fed really has to do is start to encourage banks to actually make loans to people. how do they do that? start reducing the amount of money that they actually pay on excess reserves at the federal reserve. if they were to do that or even charge for excess reserves, you could see the banks actually being pushed into making loans to people. >> bob, does the number today suggest guaranteed q.e. on august 1st? >> no, i wouldn't suggest that it does. what i do expect it to do is maybe either increase or even intend again operation twist. i don't necessarily think we're at q.e. 3 yet. but the market is going to be expecting it. >> and there's some discussion this morning about -- not the decoupling of economies between the u.s. and europe but the decoupling of risk appetite. you see high yields in europe. but investors here still want to bet on either china responding to a rate cut or europe not going into freefall or the notion that the jobs number would have confirmed adp. why do people here still want to make a bet, even if you think it might be misguided? >> i think people are under the expectation that q.e. 3 will actually help their portfolio. so they want to bet on those sort of hard assets, some of those -- gold and copper and steel. i think if they see a potential for q.e. 3 being a positive for their portfolio, they say, why not, let's take that chance. but i don't necessarily see it happening, especially for the long term. they're looking for the short-term pop essentially. >> even though we have seen month of long reactions to the last three rounds of easing, you don't think that that's going to happen -- it's going to be much more short-lived and fleeting? >> you know, i think it's the law of dmining returns. eventually you're going to see less and less benefit to these ging things. the money is out there. it's a matter of getting the money to the people who could use it and who would spend it. the banks don't want to make those loans yet. >> bob, thanks so much. one day after the ecb cut interest rates to record lows, more jitters surrounding the eu debt crisis, the yields on the spanish ten-year bond trading above levels not incidence seen since before last week's eu summit. christine lagarde saying the imf will lower its global growth forecast in ten days because of the problems in europe. she'd already taken down some of her numbers for the u.s. saying fiscal cliff and the eurozone. but the notion they would take down their numbers for the world at large, not a huge surprise at this point. >> the remarks from the finnish finance minister bears some examination. if we think about greece saying, we don't want to be part of this trade, finland's on the other side of the trade saying, we don't want to fund your deficits either. those are stark comments out of finland. >> the quote, by the way, was, we're prepared for all scenarios and finland will not hang itself to the euro at any cost, which was one of the more dramatic -- we know they've been exasperated to some degree. but the rhetoric is getting a little more heated. >> what's amazing in europe today, the surge in spanish ten-year yields back to 7%. peter boockvar sent this note out early this morning. think object how long that eu summit rally lasted, the rally here in the united states, the rally over in europe. and you saw the ten-year before the eu summit news was 6.94% and went back up to 7%. it lasted about one week. >> and then there's germany, industrial production, industrial output managed to get back some of the losses in may. merkel's approval ratings are -- >> very high. the two-year interest rate on german bund has gone slightly negative this morning. the spanish industrial output has dropped every month since the beginning of 2011. there are massive tinkerings going on in these markets in europe. >> all this sets up for earnings season. that gets under way after alcoa releases its reports on monday. wells fargo cutting earnings estimates on caterpillar after what it calls a lackluster channel check. shouldn't be a surprise that nomura, they're just the latest of the analysts advising lower. consensus has moved to about half in the past two months. that's that's the set-up for alcoa. caterpillar, the same way. the stock has not been acting very well for the past couple of months at all. so the expectations are also quite low there. >> people were giving wells a hard time on the caterpillar call saying, what climb have you climbed out from under to say that caterpillar is not seeing good undermarket demand? but it's not only bad but it's unlikely to get better before 2013. if you're hoping for a rebound in the second half, you're probably dreaming. >> and it still underscores -- the underlying worry that europe is going to be what brings down corporate earnings here, that there's a contagion effect we're going to start seeing in the second quarter and it's going to increase. we've heard it from nike, caterpillar and many other companies. >> this is a bigger concern for a lot of exporting companying is if chinese growth goes from 8%, 9% down to 5% or even 3%, china's the largest buyer of anything we sell. caterpillar is on the leading edge of that. if china comes down, i think the consequences -- the market's recognizing this, are graver than a european slowdown. >> puts an even brighter spotlight on every rate cut they make. we've had two in two months and people say they're not done. look at what ppi did in the uk, lower numbers than expected. even though they extended q.e. yesterday, it's probably not the last of it. >> don't you maybe wake up in the morning saying, how much lower can all these banks go? we talked about it yesterday. what is the real catalyst for a secular psychic or emotional change? in my mind, it's politics in the u.s. if there can be an agreement on tax policy or harmony going on in congress, that will change the world's mood. short of that, i think the central bank movements are diminishing reports. >> and bob's point a minute ago, there might be a trade in it very short term because people know you get a good headline out of the summit, it's good for seven days. and that's about it. one job that we know is not going away is the job to lead yahoo!. company reportedly considering h the hulu ceo. also interim ceo ross elevenlev. is it a coveted job at this point? >> you have to ask the question, what is yahoo!? is it a video platform, an information platform. they've pivoted so many times. scott thompson wanted to get in line with more video. so we'll see. but i think i'm stumbling about what yahoo! is because no one knows what yahoo! is. >> how do you cast the role of the ceo if you don't know what the strategy is? the fact of the matter is it is ross leavensohn's job to lose at this point. a change away from ross could be a little bit of a disruption at this point, given so many management changes. >> and interesting that jonathan miller, also up for the job, he backed out so he could let his buddy levinsohn go through. i don't think we've seen that much chalkvilivalry. a lot going on today. we'll get the first reaction to the jobs number from the obama administration. we'll talk live with chief white house economic adviser alan krueger. we're going to take a spill on that jobs number. not just the month itself but the trend for the second quarter, a third of that for the previous quarter. a lot more "squawk on the street" is back from post 9 in a moment. it's very important to understand how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity. here's a look at the future this is morning. down 69 as we continue to take stock and read the internals of what is largely considered a disappointing jobs number for june. ahead of the opening bell this morning, britain's serious fraud office has announced it will investigate the libor rigging case. samsung reporting a quarterly profit. the results were driven by surging sales of the company's galaxy smartphone. htc reporting a weaker-than-expected 58% drop in second-quarter earnings. they've been losing market share to apple and samsung. today's job number, 80,000 nonfarm in june. we've asked you to tweet us your predictions. if you were first to nail the number, you're going to receive a water bottle, something very nice. >> don't laugh! >> we don't need the anchors to laugh. our staff diligently going through all the entries. we'll announce the winner later this morning. signed by faber, cramer, santelli. >> it's a pretty fine water bottle. >> means you can never watch it. >> there's a downside to everything. but we can find ideas for gifts on every month. >> right. balls. >> hoodies. >> lots of great merchandise. >> check your tweets as our producers may be trying to reach out to you. if you win, congratulations in advance. we'll see if we can get -- >> you nailed the number amongst our staff. you said 81,000. >> i said 81,000. i didn't tweet it out because i'm chicken. coming up, goldman sachs chief economist jan hatzius' reaction to the jobs numbers. let's take a look at how we're going to open on this friday morning after the jobs report. down 73 on the dow. much more "squawk on the street" straight ahead. a living, breathing intelligence teaching data how to do more for business. 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>> so much worry about jpmorgan yesterday, whether it was -- whether you believe their part of the libor club, whether you believe this trading loss is going to be $9 billion. talking about not wanting to step in front of the train. >> that's down 20% from when we first saw the whale surface above the water, as it were. >> it is down by 1.5% today. be interesting to hear jamie dimon speak about the downwinding of the loss. that will be top of mind for many analysts on the bank conference calls. we should check on shares of caterpillar here. caterpillar getting the estimates reduced down 2.5% at this hour. wells fargo, of course, saying lackluster channel demands. even north america, a bright spot. that may begin to falter. trouble even here in the strong market. on the back of the weak jobs report, take a look at some of the headhunters. mww down 1.5%. >> obviously we heard the news from ford a few days ago, the international sales were weak. bmw which had a pretty safe market in the premium area, numbers -- the slowest numbers of the year. 4% in june. china, 13% in the first half, china was 31%. beginning to see maybe some of the problems, international sales, especially in china. hello, nike. >> 10% stock hit last week for nike. that's what we were talking about earlier. china's the last marginal buyer of so many goods. if we see a shrinking there, it's my belief that so many companies here in the west are going to take that hit. >> interesting analysis on seeking alpha this morning of r.i.m.'s cash burn, which i thought was interesting. they have $2.25 billion in cash, largest they've ever had. but they say the ten is going to burn through a billion of it in the next three quarters. >> the ten is going to burn through it -- >> any restructuring is going to burn through cash. >> don't forget that they said -- r.i.m. -- the blackberry 10 is not coming out until after christmas. they lost their largest sale opportunity. fascinating to wonder, what is the patent value, the trademark value of blackberry if you extract that cash? i think it's higher than what the market is giving it credit for. seeing so many patent wars for the nortel patents and some of the motorola patents. >> that's net positive for r.i.m. >> it is, if you believe it has scrap value. the worst thing in that scenario is to see r.i.m. keep going, losing money and not selling. >> right. let's check in with mary thompson on the floor in for bob this morning. mary? >> hey, melissa. a weaker open, dow down triple digits. the s&p 500 off just about 12.25 points at 1,355. telecommunications as well. energy stocks leading the decline there. and of course the nasdaq composite weaker down 22 points. traders saying the jobs number was the worst case scenario in large part because while it was weak, it wasn't weak enough to prompt the fed to take immediate action. we continue a bit in this holding pattern. if there was a positive, one trader pointed out it was the increase in the workweek. if you get lower gasoline price, that puts more money in the pockets of consumers. of course, we didn't see that during the month of june where retailers recorded such disappointing sales numbers in yesterday's session. these are the groups we're keeping an eye on. we're watching the manufacturers, as melissa was talking earlier. wells fargo lowering its estimates on caterpillar. in early trade, it is contributing significantly to the dow's now 1220-point decline. we're watching other manufacturers in the wake of that, too. banks in focus as well. next week we'll get the numbers on the trading loss from jpmorgan. that is going to be a focus. and, of course, concerns about this ever-expanding libor scandal affecting this group. oil stocks are under pressure today. all you have to do is look at the price of oil. it is down about $2.52. having a ripple effect throughout the energy sector. this will be one we'll be watching throughout the day. a couple of individual stories, leapfrog, the maker of children's games and video games. a little bit lower in premarket trading because of news that its cfo is leaving to pursue other interests but he won't be leaving until october. down a bit today. seagate yesterday after the bell reporting disappointing fourth-quarter preliminary sales numbers in large part because it's being impacted by slowing demand for personal computers. right now, the dow down 122 points. carl, back to you. >> mary thompson here at the nyse, thanks. the jobs number for june coming in weaker than expected, nonfarm payrolls rising 80,000. below the forecast of 100,000. want to get the reaction from the white house. "first on cbnc" alan krueger. good morning to you, alan. >> good morning, carl. >> taking stock of all the characterizations today. i've heard people call this number pathetic, some say it could be a lot worse. how's the white house characterizing it this morning? >> we look not just at this number, we look at the other data coming in. we look at the pattern in recent months. we now have had 28 months in a row of private sector job growth, 4.4 million jobs added in that time period. that's moving in the right direction. we'd like to have faster job growth. there are step that is congress can take right now to strengthen job growth, strength tennessee economy. >> do you count it as positive job growth if it's not enough to account for new entrants? >> we have different surveys. the household survey is the survey that captures the new entrants. the share of the population employed stayed constant in the household survey. but the bottom line, carl, is we need faster job growth. we weren't creating enough jobs before the recession. the recession just made the jobs gap much bigger. and if congress were to act on the president's proposals to help state and local governments retain teachers, firefighters, policemen, also to invest more in infrastructure, we could put more americans back to work quickly. >> alan, when americans take a look at the average increase in jobs, 226,000 per month on average in the first quarter versus 75,000 per month in the second quarter and they see that slowdown and they hear you say if congress had only acted, are you saying that that is the primary driver behind the slowdown in jobs that we've seen? >> well, as you know, melissa, recoveries don't move in straight lines, there are ups and downs. a bigger picture here is that the economy has continued to expand. we've continued to add jobs. the president proposed the right medicine for the economy. he proposed that we invest more money in our infrastructure, improving our roads and highways. the unemployment rate is way too high for construction workers. state and local governments are struggling and we lost 14,000 local education jobs last month. that's the kind of medicine that would strengthen this economy. >> alan, can you understand that from the average american's perspective, they can hear you say that recoveries move up and down, but when it comes to job growth and the pattern we've seen so far this year, it seems to be down and now flat. even when you take a look at a bright spot in job growth in the past, manufacturing, the average number of jobs created per month has also gone down. >> melissa, we would like to see faster job growth. i think the american people understand that the problems that the economy is facing built up over a period of decades. it's going to take some time to address them. but it's also the case that we're on a better path now than we had been. we have 28 months in a row of private sector job growth. manufacturing has added 500,000 jobs over the last 29 months. that's the best job growth in that sector since the mid 1990s. we are digging our way out of this whole started by the financial crisis and the recession. >> i speak to a number of ceos and they say this administration just doesn't get it. ceos don't speak in the language of creating jobs. they speak in the language of creating profits and jobs are only an outgrowth of that. how would you respond to that idea, that the administration just doesn't get it? >> we certainly understand that our objective is to create an environment where our companies can thrive and where our workers can thrive. corporate profits have been strong. corporate profits have increased in most of the last few years. but we are working our way through severe problems that built up over a period of decades. i think corporations realize that, too. the number one problem they cite is they don't have enough customers, they don't have enough d. demand. families were overleveraged. they borrowed too much. they're working their way past the debt that they accumulated. a number of homeowners are under water. and we're trying to propose policies and put in place policies to address these problems that are holding the economy back. but i think that over the past 28 months, it's clear that we're on a better path than we had been on. that the economy is gradually healing. and as a result over that period, we've added 4.4 million private sector jobs now. and last month while we would like to have seen faster job growth, there was an increase in work hours. and these are signs that the economy is adjusting and we're working our way past many of the problems that built up over a period of years. >> we have a lot of business leaders on the network and they rarely say, you know what would help, if congress would only do more. i've heard the european excuse that business is weak in europe and because of that they're holding back on capital investment and hiring. but do you really believe corporate america is hungry for more action from congress? >> no, i think there are a combination of factors affecting the economy. you touched on europe. and i think that has been a shock to confidence in the u.s. i think that's one reason why companies may have expanded hours last month instead of adding more workers, permanent hires last month. but there are a number of factors. and we should try to address the ones that we can address. that's why i've emphasized the president's proposals to help state and local governments keep teachers and firefighters on the payroll as well as his proposals for infrastructure investment and assistance to help homeowners refinance their houses. lastly, i'd add, next week, the senate should be holding a vote on tax cuts for small businesses, which the administration has supported for some time. allowing businesses to expense 100% of their expenditures as well as lower taxes for companies that are increasing employment. these are the kinds of step that is independent economists have said can help speed job creation in the short term. >> average for the first quarter was 226,000, as melissa said. second quarter average, a third of that at 75,000. do you believe the average for the first quarter will end up being the high for the year? >> i don't want to make a specific forecast like that. as i told melissa, recoveries tend to not move in straight lines. we have ups and downs. not every month is going to be as strong as some of the previous months. but we are on a path of 28 months now in a row of private sector job growth. i think it's most important that we do take the step that is we can to ensure that this growth continues to try to speed economic growth and speed job growth. >> you've alluded to the tension between politics and macroeconomics. what if in the end there's little that a president or a congress can even do that forces -- or are even bigger than the presidency that are guiding our economy one way or the other? >> my job as the president's chief economist is to give him advice about the steps that the administration and the congress can take to strengthen the economy. and there are certainly market forces that are beyond our control. we saw that with the spike in oil prices, for example, and the president did what he could to clarify our energy policy, to take whatever steps we could to try to bring down energy prices and our job is to try to take the steps that we can take to strength tennessee economy. that's why the president proposed additional support for investing in infrastructure, for keeping teachers on the payroll and helping families we finance their homes. >> alan, you realize that the message that the average american will take away from this interview is you're doing what you can and at the end of the day, it's not enough when it comes to the jobs picture in the u.s. is that the message you want to convey? that's what it sounds like. you're saying it's up to congress at this point to act and we're doing what we can at this point. >> no, i think the american people understand that the problems the economy is facing, has been facing are the result of problems that have built up. the middle class has been shrinking even before the recession struck and the recession made those problems much worse. i think people have a pretty sophisticated understanding of the problems the economy is facing. i think they see that we are pressing congress to take the steps to help job creation and we are taking the efforts we can on our own, the administration would take on its own to try to strengthen the economy. >> alan, thank you for your time. we appreciate it. >> thank you, melissa. let's get out to rick santelli at the cme group in chicago. rick? >> hi, melissa lee. i think the markets can pretty much tell us what they think of the current data points this morning. if we look at ten-year note yields, they're down a bit. but it isn't only here. as you've pointed out and peter boockvar wrote so eloquently as expressed by the next chart, we're at a two-year low on that euro versus the dollar. haven't been here since the summer of 2010. we have that teeter-totter effect with the euro currency when they're underperforming. we're tethering that type of relationship. but if you really want to get a different type of view, consider the ten-year here and the bund overseas. their flight to safety which was underperforming for a bit. bund yields were biased to be moving higher. not the case anymore. as a matter of fact, we've widened out that spread in our favor. it's over 20 basis points now. and we want to pay attention to that. i think investors down in this trading floor really, really can relate to the guest that we just had on. it seems as though the political class isn't up for the challenge. listen, 80,000 isn't optimal. but get used to it. back to you. >> rick santelli, thanks so much. we should note the markets are down by 1% across the board. with mcdonald's the only dow stock in the green. you just heard the obama administration's side of the story. it is the romney camp's turn to respond. we'll hear from staples co-founder and ceo thomas stemberg who's backing the republican presidential candidate. and take a look at this morning's bright spots. there are some out there on wall street. 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[. >> you wanted to discuss this fascinating wardrobe shuffle. >> one of the greatest corporate hijackings in u.s. corporate energy, that's what was said about the duke energy situation, if you read our story in "the wall street journal," also an excellent story in "the new york times," both describe how the ceo of this company, $26 billion deal, was ousted a day after that deal closed by the person who was supposed to be supporting him. the ceo of duke energy came in, had friends on the board and threw out the ceo of progress energy, the ceo of progress energy, bill johnson, had no idea it was happening. it was literally, from what our reporting shows, was a blindside attack. and you really never see this sort of coop go on in boardrooms these days. people should pay attention to how duke is treated by regulators. it was down after this boardroom coop happened. >> normally you would have this conversation prior to a deal consummating, right? >> they had 18 months to figure this out. so the day after the deal closed, they threw out the guy who was supposed to be ceo. and that was the condition of the merger for the regulators. so the regulators are upset, they're saying, we signed on to a deal that you reneged on. >> and now the question is, how long does a duj enerke energy c? >> jim rogers is now the ceo. >> what's the succession plan there? >> there is no succession plan as we point out in "the journal." it's odd to see an incident like this happen, one that bears further examination. the shareholders of duke energy should be asking, what happened to the $1.5 million we paid in additional severance to the ceo who was ceo for probably 24 hours, right? >> they could have gotten rid of him under the old compensation plan and paid less. >> yes, but they probably didn't have the regulators' consent otherwise. you could probably call it a bait and switch. >> between that drama and chesapeake's, there's something about corporate corner offices in the energy sector, just crazy times. >> amazing to see mclendon has hung on. reuters's done excellent reporting and shown problems there. when we come back, jpmorgan's chief u.s. equity strategist thomas lee with the jobs number now in the books, we'll find out how he thinks we should be investing now. take a look at this morning's biggest s&p 500 losers. back from post 9 in just a moment. the calcium they take because they don't take it with food. switch to citracal maximum plus d. it's the only calcium supplement that can be taken with or without food. that's why my doctor recommends citracal maximum. it's all about absorption. looking for a better place to put your cash? 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thank you for coming in. >> more metallica, please. that's my only request in the future. i really enjoyed it. >> dennis berman of "the wall street journal." when we come back, a "squawk on the street" exclusive with jan hatzius. what is the jobs number telling him about the state of the recovery? keep it right here. 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street." want to get the roadmap for the next hour. the markets taking a big leg lower after another disappointment on jobs. u.s. employers add a weak 80,000 in june, while the unemployment rate held steady at 8.2%. what's next for the markets and will the data force ben bernanke to make a move? goldman's jan hatzius joins us for his take. and mitt romney will have reaction to the jobs data. he's expected to make a moment live in a few moments. and we'll sit down with tom ricketts. that's in just a matter of minutes. june's jobs number disappointing the street once again, just 80,000 jobs were added, far lower than what the street was looking for. goldman sachs revised its forecast to 125,000 late yesterday on the back of that optimistic adp data. we're joined now by jan hatzius, chief economist at goldman sachs joins us here at post 9. great to have you with us. >> nice to be here. >> adp -- actually, jan, we have romney who's making comments about the june jobs report. >> met with families in their homes, cafes and restaurants and in break rooms, american families are struggling. there's a lot of misery in america today. and these numbers understate what people are feeling and the amount of pain which is occurring in middle class america. not only is the 8.2% number unacceptably high and one that's been in place now for over 41 months, but in addition if you look at the broader analysis of people who are out of work or have dropped out of the workforce or that are underemployed in part-time jobs needing full-time work, it's almost 15% of the american public. and then there are those that are working but are working in jobs well beneath their skill level, are working in multiple part-time jobs, kids that are coming out of college not being able to find work, veterans coming home not being able to do anything but stand in an unemployment line. these are very difficult times for the american people. there are other numbers that are troubling, the manufacturing reports of the last several weeks indicate that manufacturing is not growing either domestically or in our exports as we would have expected at this stage. and, of course, that's a long-term trend that's very disturbing and troubling. the president's policies have clearly not been successful in reigniting this economy, in putting people back to work, in opening up manufacturing plants across the country. the heartland industries where manufacturing occurs are struggling by virtue of policies on the part of the president that have not worked. the highest corporate tax rates in the world do not create jobs. highest regulatory burdens in our nation's history, those do not create jobs. trade policies that have not opened up new markets for american goods, particularly in latin america, those don't create new jobs. failing to effectively crack down on china for cheating and stealing american jobs, that has not helped. the president's policies have not gotten america working again. and the president's going to have to stand up and take responsibility for it. i know he's been planning on going across the country and celebrating what he calls forward. well, forward doesn't look a lot like forward to the millions and millions of families that are struggling today in this great country. it doesn't have to be this way. the president doesn't have a plan, hasn't proposed any new ideas to get the economy going, just the same old ideas of the past that have failed. i have a plan. my plan calls for action that will get america working again and create good jobs, both near term and long term. it includes finally taking advantage of our energy resources, building the keystone pipeline, making sure we create energy jobs and we convince manufacturers that energy will be available and low costs in america. it means opening up new markets for american trade, particularly in latin america where the opportunities are extraordinary. it means cracking down on china when they cheat, making sure they don't steal our jobs unfairly. it means bringing our tax rates down, our marginal tax rates down and cutting out the exemptions and deductions and loopholes that are unfair in many cases. in other cases, we're going to limit those deductions and exemptions so we maintain our revenue through growth and through limiting of these special deals but bring our tax rates down so they're competitive and attractive for jobs to come back to america. it means having a government seeing its role as encouraging enterprise rather than crushing it with the burden of new and unnecessary regulation and without regulations that haven't been cleaned up in years and years. and finally it means having a health care plan that focuses on bringing down the cost of health care for american families, not just adding new expenses and new taxes to the american people. this is a time for america to choose whether they want more of the same. whether unemployment above 8% month after month after month is satisfactory or not. it doesn't have to be this way. america can do better. and this kick in the gut has got to end. happy to take a couple of questions. >> governor, [ inaudible ] -- >> i don't say much to critics. i put out 59 steps for how i'd get the economy going. i don't think i've seen any from the president that show what he's planning on doing. going through mine one by one, taking advantage of our energy resources, opening up federal lands for drilling, doubling the number of permits and licenses to take advantage of oil, natural gas, coal, stopping these extraordinary regulations and energy that are making those in the manufacturing sector fear they can't rely on low-coast american energy. opening up new markets in latin america, the president hasn't done that. in 3 1/2 years, no new trade agreements. at the same time, cracking down seriously on china, not just at the edges, but finally going after them aggressively and saying, look, guys, you can't continue to steal our jobs. how do you go across pennsylvania and ohio and not talk about being serious about creating jobs through manufacturing policies that make america more attractive for investment and growth? tax policies, i want to bring down the corporate tax rate from 35% to 25%. and the individual marginal tax rate, 20% across the board. those kinds of specifics i'd like to see coming from the president. >> president obama said in an interview with the newspaper in ohio that you were effectively abandoning your principle concerning the individual mandate. [ inaudible ] what would you say to that? >> i've spoken about health care from the day we passed it in massachusetts and people said, is this something that you'd apply at the federal level? and i said, no. i said the right course for the federal government is to allow states to create their own plans. by the way, the proof is that i was right because obamacare is costing jobs in america. >> you're listening to mitt romney commenting on the june jobs report from wolfeboro, new hampshire. he's emphasizing energy jobs and specifically the creation of the keystone pipeline as potentially helping jobs. we will, of course, be talking to the co-founder of staples, tom stemberg, for direct reaction. there you have it. mitt romney's reaction to the jobs report. jan hatzius, chief economist over at goldman sachs, you raised your forecast based on the adp report. why were you so willing to raise the forecast yesterday? >> there were a number of indicator this is week that was a little better, adp was a little better. the online help wanted advertising numbers were a little better. and even the ism reports, which were both pretty weak in general, were actually okay as far as jobs were concerned. but it was the wrong signal. it was a pretty weak report. it's a modestly, below-consensus expectations. not dramatically but it does reinforce the signals of slowing that you've seen in other areas. if you look at our indicator, our current activity indicator which basically tries to summarize the data flow, that's running 1.2% only in june which is another slight step down from where we were in april and may. >> is this a recessionary data point? >> it's not a recessionary data point. but it's a data point that's slowing the economy is growing at a slow pace. certainly not enough to absorb people back into the workforce and over time, in fact, probably consistent with slight deterioration in the labor market. i wouldn't say it's a recessionary data point. but it certainly makes you aware and very focused on additional signs of slowing. so, for example, if we were to see further deterioration in the business surveys like the ism and similar indicators, that would definitely be a warning sign. >> you've been pretty vocal on your call for the fed -- that they will do something soon. i think you probably thought they would have already done something f your call had been correct. does this mean q.e. 3 comes in august? >> they did do something. they did ease at the last meeting. and i would agree that it was an easing step. it wasn't quite as aggressive as we thought. we still think there will be additional easing, although i think it's much more likely later in the year. that would be the pattern that we saw at the last meeting as well. one purchase program ends, in that case, twist, at the end of this year, twist 2. and then there's another purchase program that's the most likely outcome. >> given the data points we have now, the revisions, et cetera, do you see gdp forecasts coming down in the second half? >> i think gdp forecasts will probably come down a little bit. but we're at 2% for the second half of the year, 1.5% in early 2013, basically because of an increase among the fiscal drag -- there's an enormous amount of uncertainty, what comes out of that entire fiscal cliff discussion. but i do think the risks are on the weaker side. again, if we were to see more deceleration, especially in the rufrs, that would be revised down. >> people look at the workweek as a very, very slim silver lining. are those numbers compelling to you at all? >> the reason we say it's a below-consensus report, the payroll numbers were weaker. some of the other indicators were a touch better. and the two you mentioned, workweek and average hourly rates, are bright spots. but overall it's a little below expectations. >> threw some people for a loop. people had been looking at housing doing fairly well, starts have been okay, construction jobs were flat. was that all a head fake? what's going on with housing, which people are using at a potential leader out of this trouble? >> i think there are two positives in the economy, broadly speaking. housing is one of them. and i do think the housing recovery is ongoing. it's not the sort of housing recovery that maybe you got in the mid 1970s or early 1980s coming out of very deep recessions. that's unlikely. i do think we're in a healing process. the other positive is the drop in energy prices which should help the household sector -- help households spend a little more. >> do you think we've had the best nonfarm payroll numbers already this year? we put it in the book, so to speak. you mentioned the fiscal drag, that can only create more uncertainty when it comes to corporations hiring later on this year. >> yeah, we were running in the mid 200s. my forecast is that we don't get back there this year. my expectation is we'll be closer to where we are now than to that kind of number. i'd say 100,000, somewhere around that is consistent with my forecast. >> is it clear to you that this is a problem about policy in congress, the way the white house suggested to us in the last half hour, or is this more about european uncertainty? i know you're not a mind-reader. but there must be some empirical data that leads you to what is causing jobs to be so tepid. >> the hangover after the bursting of a big asset and credit bubble and especially the housing bubble, tends tor very protractive. i think that's the number one reason for why in general over the last few years, we've seen a disappointing recovery. i think in addition to that, there are some sort of specific drags. we've seen some drag from the fiscal side, mainly on state and local so far. not so much on the federal side although that's now starting. and i think some spillover from europe as well. but the overriding reasons, really, that the hangover tends to take unfortunately quite a long time. >> jan, thank you for your time. >> thank you. >> jan hatzius of goldman sachs. we just heard mitt romney's reaction to the june jobs report. right after the break, we'll talk more about his comments with surrogate tom stemberg, the crow founder and ceo of staples. from around the world... s ...with the best math scores. ...the united states would be on that list. in 25th place. let's raise academic standards across the nation. let's get back to the head of the class. let's solve this. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. the markets are just about at session lows here. seeing severe weakness when it comes to energy stocks, materials, the homebuilders, technology also being crushed this morning. take a look at the euro because against the u.s. dollar, we're seeing the euro also reach 1.23. there you have it. 1.2304 is the level right now. down .7%. it's hitting record lows against a number of major currencies here. the euro pretty much at session lows for the morning against the markets. we just heard governor romney's reaction to the jobs number. joined by a surrogate from his campaign, tom stemberg, the co-founder and former ceo of staples. tom, always good to have you. good morning to you. >> carl, thanks for having me. >> governor's comments mince no words. kick in the gut is how he described it, says there's a lot of misery in america today. what were your take on some of these numbers? >> i share the governor's concern. we've had four years of economic malaise. the policies of the current administration, which include taxing more and regulating more and making it harder for guys like me who try to create jobs to do what american entrepreneurs do best, which is to create jobs. it's really a failure of leadership and it's time for a new leader in the white house to try to bring america today. >> alan krueger telling us from the white house, it is a repeating theme that it's up to congress to do something. we tried to pin him down on how much of this stems from general, european, global, chinese concerns. can you put those in a hierarchy for us? >> i want to make it clear. when you're the chief executive of an organization, whether it's a corporation or the united states of america, it's your job to bring the different constituencies together, to overcome the obstacles. a great example is president obama who when he came in showed such promise, created the simpson/bowles commission. they came up with a bipartisan plan to address america's severe issues in terms of deficits, entitlements, taxes, the tax structure, et cetera. many of the issues which governor romney has been speaking about. the president's own commission comes up with a great plan. what does he do? he just simply ignores it because his special interest in the unions and trial lawyers didn't particularly like it. and that's not leadership. that's a failure of leadership. we need a new president. governor romney, to bring this country together and let it achieve what it's capable of achieving. >> what alan krueger had pointed to, tom, along with the other members of the administration, is congress. and congress' inability to act and if congress only acted we'd have many more infrastructure jobs, we'd keep firefighters and teachers on the payroll, et cetera. do you think that could help the margins in addition to some other measures? >> i think it's always easier to spend more money. the problem with spending more money -- and we've been running now year after year after year of trillion-dollar deficits -- is somebody some time has to pay for it. and i've got children. and i worry about the debt that president obama and his policies are going to lay on our children. and quite frankly, if you think about it, if we continue on this path, we're barreling towards becoming france and on our way to approaching greece. and we have to face up to our problems as americans are capable of doing and we need leadership to help get us there. >> tom, recently in the past few days, rupert murdoch, jack welch, out pretty vocally on twitter, at least, saying the romney campaign -- and i think in murdoch's words, has to start hiring some professionals to run this campaign. welch, i think, was disappointed this morning that maybe you weren't on earlier following the number. is the campaign not tough enough to win this race? >> you know, i've gotten pretty familiar with people running the romney campaign. i feel very good about the direction they're taking. and they're not going to try to do fancy things like the obama campaign, focusing on negative irrelevance mitt's going to focus on getting the economy rolling again, creating jobs, addressing the 23 million people who are unemployed or underemployed and helping them get back to work. and not get into the nonsense the obama administration seems to want to focus on. >> last point, tom, the governor says there's a lot of misery in america and some suggesting today that it will be his job from here on out to sort of sell gloom. stocks, though, still up year to date. we know companies have a lot of cash. we know in the view of many that u.s. stocks are still the best choice of any investment right now. do you overlook those things? do you disagree with them? >> no, i think our market is up a little bit this year. but the fact of the matter is it's still well below where it was four or five years ago before the lehman crash. you would think by now we would have gotten it back to a positive footing. we talk about, gee, we're doing better against the euro, it's only 1.23. i remember back in the bush years, there was 80 cents euro to the dollar. we're off by about 50% on that measure. and currency is a measure of the stock price of a country, our stocks are down quite a bit in the obama years. >> tom, appreciate you coming on. >> thank you very figure me. >> tom stemberg joining us from boston. still to come, stiting down with the chairman of in capital and tom ricketts to talk about how to invest in this economy, jobs and much more. "squawk on the street" is back in two. 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let's trade the globe. in terms of the rate cuts we've seen around the world, how does that play into your view that emerging markets may be a better choice? >> em tends to bottom first. it's outperformed slightly since may. i think playing that pair is interesting. to buy em blindly here, though, i think you need to at least know what you want to do on the other side of that trade. for example, brazil and mexico is a place where people need to look very bullish on brazil. 5.3% unemployment there which is record lows, unlike this country. the growth is there in brazil. mexico's totally outperformed due to elections. u.s. macro, we call mexico southern texas. get long brazil, do ut through the, west,z and do it in a way that gets you downside protection. the bottom line is emerging looks very different against developed. >> everybody's looking at the slowdown in china, that second rate cut seemed to fuel the notion that perhaps things are slower than had previously been believed. at what point do you get concerned about investing in some of these latin america markets, or is it an insulated consumer-driven market? >> it's absolutely not insulated. brazil has two concerns, macro policies is a problem. i think it will continue to be weak with china being under the microscope of growth. but a lot of this has been priced in. the real at 1.55 when a lot of this started was a much more expensive currency than it is now at 2.05. brazil's a much cheaper economy, much more competitive economy, i should say. and exports to the rest of the world are interesting. but if china is falling down, brazil will still feel that pressure. >> in terms of a specific stock pick, yesterday you had your trade of the day on "fast," that was cdb. is that your top pick? >> we like, t tsu, broadband ise nature of their business. they and vivo are consolidating this industry. this is a fantastic company. look at the consumers. look at the banks. that's how i'd play brazil. >> tim, good to see you. >> thank you. >> of course, you can catch more from tim tonight on a new edition of trading the globe as earnings season begins, how will the global scene change? that's tonight at 7:30 p.m. eastern time with tim and mandy drury. 30 seconds to breaking news. want to go over to brian shactman who's at the nymex this morning. >> hey, carl. the only green on my green is volatility today and the u.s. dollar. before we get to nat gas inventories, last week, we had a build of 57 bcf. the expectation is for 41 bcf. right about 2.90. breached 3.00 to the upside earlier before the jobs report came out. like everything else, it's turned tail. but when it comes to nat gas, the bulls are still in control. we see a quick pop in the price as the inventories come out. we see a 2.90 bcf. we see the price action moving into positive territory, headed back towards three dollars. looks like traders are looking for any chance do buy natural gas right now. fascinating considering where we were a few months ago, now up about -- headed towards the highs of the session. back to you. >> brian, thanks so much. when we come back this morning, jpmorgan's chief u.s. equity stat gist, tom lee, on set to talk about job, the economy and a lot more. still to come, we've given away a mug and this tote bag thingy. then there was this fancy hat, and some golf balls. heck, we've even given away a hoodie. this time, it's a water bottle. and we find out who our lucky winner is. if you were the first to nail the number on june's jobs report, it's all yours. find out if it's you later on "squawk on the street." in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max. ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? 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[ all ] i'm with scottrade. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz. jobs, jobs, jobs, as you've heard, the unemployment report falling a bit short of the street's expectations. who better to bring in for a wrap-up on the number than our senior economics reporter, steve liesman. steve, what was your general take on this? >> i thought it was disappointing. and most economists said the same thing, a very disappointing report that showed the job market and the economy have slowed. but they disagree pretty strongly over what this means for the fed and ben bernanke. here are the numbers here. 80,000 -- we were looking for 100,000. a bit below expectations. but nobody would have been happy even if we hit expectations. unemployment rate changed at 8.2%. the revisions not helping us at all. the good news is hourly earnings and hours up. that's the best of the silver linings you could put together. looking at the report, manufacturing up 11,000. services, not doing what it's supposed to do in an expansion, just up 71,000 with retail down. temporary help, a good sign. but maybe it's a sign of lack of confidence with employers bringing on temporary help and not permanent help. and education services, that's from the private sector. overall, job growth has slowed to 75,000 monthly in the second quarter. that is a third of the level of the first quarter where it was 225,000. but the market doesn't seem to be united on what this means for ben bernanke and the fed. here's some of the commentary we've gotten. dan greenhouse saying, we find it hard to believe that the fed whatever the cause of the slowdown will stand idly by as a generation of workers see their lifetime earnings potential eroded by unemployment, underunemployment and/or stagnant wages. but our equally good friend writing, we do not see this report as being weak enough for the fed to push the q.e. 3 button nor strong enough to take it off the table at the september meeting. eefr at credit suisse, saying, odds of the fed q.e. 3 before the november elections are going up, the best argument for august 1st is, what are you waiting for? and bob bruska says, this report will not push the fed to do more, it will keep the fed on the sidelines. i tend to side with the ones who say that it's not enough just yet. i think the fed would want a little bit more evidence. we've got jackson hole, end of august, where ben bernanke could make a speech, melissa, that would lay out the case for q.e. 3. i would just point out the fed just did extend operation twist through the end of the year. they feel like they have at least some response in place to the existing weakness out there. >> do you think that jackson hole could be an opportunity for ben bernanke to jawbone things instead of an actual formal easing? >> good word, melissa. he's got to jawbone his fellow members of the fomc and the federal reserve as well, some who are reluctant to do that. every year it happens, especially since the crisis began, august and the jackson hole meeting have set up as absolutely critical. and i think we're heading that way already. they could steal some of that thunder if july 31, august 1, that meeting they were to end up announcing q.e. 3. >> steve liesman, thank you so much. >> my pleasure. markets sliding across the board following that weaker-than-expected june jobs report. tom lee is legal equity strategist. you came out with a note in july saying you expect a second half of 2012 acceleration. do you stand by that at this point? >> yeah, we do. i know this was a disappointing payroll report. may was disappointing as well. but the s&p was 1,270 a month ago. it's 100 points higher today. and the reason we see acceleration in the second half -- one of the things -- a lot of people are overlooking is the fact that oil's dropped so much, we could be looking at $3 gasoline by the end of the year. that's really big stimulus for households. i think the story in housing continues to be one of real secular improvement there. it's not -- with the labor markets obviously not helping household formation, we're starting to see rents rise, making housing an attractive option for people to buy. >> in terms of the housing-led recovery here, that's sort of the traditional recovery that we've seen in the past. you see that panning out given the differences, given the fiscal cliff we're facing at the end of the year and what's going on in europe, that's still going to play out? >> i think when i think about what a homeowner decision is and i don't think he's really being swayed by europe, i think that those who are working still have some decent job security. so they're really starting to think about the fact that rents are so high, bank credits beginning to ease and starting to see home prices go up. you have to remember every point rise in a home today is $250 billion of equity value. that's delivering to households. >> we just had governor romney on. he used the word misery to describe the state of america, a surrogate used the word malaise, something that's often associated with president carter. is that how you would describe our economy at this moment? >> yeah, there isn't a lot of visibility. i think it's really going to affect how companies think about expansion. but you have to remember, when we think about november elections now, employment is going to be a pretty big topic. and for those who are really looking at markets, markets are going to be embracing the notion of a romney victory. so as the labor markets struggle here, it's probably helpful for november. >> how do we accelerate -- i know the notion of decoupling is still debated. but how does the u.s. accelerate in the second half if europe does not? does that mean in turn that you think europe will as well? >> well, i think it's going to be very tough for the u.s. to accelerate if europe's deteriorating. i think europe needs to be stabilizing, which i'd say that that's the state we're in. europe isn't really solved but i think there are some steps towards stabilizing the situation. and then when you look at the u.s., we have to remember, the manufacturing slowdown is going to slow down until we've gotten through an inventory correction. i think we're getting through that. and then we're starting to see households get that real purchasing power lift. we have to remember, inflation is dropping along with gasoline prices on an absolute basis. and even in this labor market report, hours worked increased by a tenth, that's about 300,000 jobs. you have a lot of things in place that could be accelerating the economy. >> are you concerned, though, at the data points that we're hearing and the data points we'll get when earnings seasons starts about weakness in europe and how that's impacting sales? we heard it from nike in terms of china. we heard it from ford specifically about europe. we heard it on a downgrade on caterpillar today. the evidence is mounting that europe is a much bigger impact. and in that second quarter, you can make the case it's rearview mirror kind of stuff. but has it been factored? >> that's a good question. we're still going through the numbers. i think companies with exposure to europe are going to be facing a pretty big shortfall. some sectors have 20% of their sales coming out of europe. but for the s&p overall, it's less than single digits. the real transmission mechanism for europes is financial markets. to the extent the s&p can get its footing, we're limiting the global contagion. >> tom, good to speak with you. >> thanks for having me. >> tom lee, jpmorgan. looking at a live shot this morning out of poland, ohio, as we await the president, set to speak on the june unemployment number. later on this hour, we'll take you live to the scene, right after this. new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. high schools in six states enrolled in the national math and science initiative... ...which helped students and teachers get better results in ap courses. together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students. let's solve this. and so too is the summer event. now get an incredible offer on the powerful, efficient c250 sport sedan with an agility control sport-tuned suspension. but hurry before this opportunity...disappears. ♪ the mercedes-benz summer event ends july 31st. ♪ in here, every powerful collaboration is backed by an equally powerful and secure cloud. that cloud is in the network, so it can deliver all the power of the network itself. bringing people together to develop the best ideas -- and providing the apps and computing power to make new ideas real. it's the cloud from at&t. with new ways to work together, business works better. ♪ ttd#: 1-800-345-2550 let's talk about market volatility. ttd#: 1-800-345-2550 in times like these, it can be tough to know which ttd#: 1-800-345-2550 way the wind is blowing. ttd#: 1-800-345-2550 at charles schwab, we're ready with objective insights about ttd#: 1-800-345-2550 the present market and economic conditions. ttd#: 1-800-345-2550 and can help turn those insights into ttd#: 1-800-345-2550 a plan of action that's right for you. ttd#: 1-800-345-2550 so don't let the current situation take you off course. ttd#: 1-800-345-2550 talk to chuck. ttd#: 1-800-345-2550 wouldn't it be nice if there was an easier, less-expensive option than using a traditional lawyer? well, legalzoom came up with a better way. we took the best of the old and combined it with modern technology. together you get quality services on your terms, with total customer support. legalzoom documents have been accepted in all 50 states, and they're backed by a 100% satisfaction guarantee. so go to legalzoom.com today and see for yourself. it's law that just makes sense. impact impact nsting, putting money to work for profit and social impact, is in its infancy as an asset class but can shift practices. it connects investors with underprivileged communities. incapital's investment has raised more than $160 million, created more than 200,000 jobs in this country and developing countries. tom ricketts is the chairman as well as the chairman and owner of the chicago cubs. joining us here at post 9, always a pleasure. good morning. >> good morning, carl. >> where are we in the narrative of this actually being a strategy, a legitimate strategy for people to do good but to mor importantly make some money, too? >> it's gaining a lot of momentum recently. there's a lot of different ideas out there floating around. we've been working with the calvert investment program since 2005. we like it and incapital likes it because we see real impact. every dollar that you put into a calvert investment goes into a community. everyone who's ever put a dollar into one of those notes has gotten it back. it's got a great track record. and the way we help them is putting them on incapital's platform, means you can buy them through any broker dealer. you call your broker [ [ -- >> it's a retail tool, long term -- >> it's an option. if you're looking for something to do with your cash that gives you a little more than just a pure financial return, it's an alternative. >> is it sort of like microlending? are you extending loans to communities or is it direct asset and you own an asset? >> the majority goes to community lenders in the u.s., people helping to find options for affordable housing or investments in challenged neighborhoods, those sort of investments. but the calvert foundation website will have all that on it. >> would you characterize it as low risk, low return or something more aggressive? where does it fit in the risk pattern? >> it's difficult to gauge the risk. but there's been no defaults thus far in the eight years that we've worked with the calvert foundation. but that's not to say that that's always the case. but it's fairly low risk. in terms of the return on investment, it's anywhere from 2% down to 50 basis points, which everything's low right now. so it's right in the range of other fixed income products. >> we had a trader talking about bond returns right now. he said he compared it to jumping off of a snake's belly. his argument as to why equities have withstood damaging data this week. >> rates are low. if you were going to consider this kind of an investment, the opportunity cost hasn't been this low in a long time. >> is it mostly institutionals investing in this at this point and your hope is to expand it to retail? >> no, no, everything we've done has gone to individual investors. there are some institutions that support calvert foundation itself. but it's generally just for individual investors. >> do you ever see institutions making a big play in this? >> they do. they make their contributions in larger amounts directly with the foundation. and there are some really strong supporters there. >> want to turn your attention to jobs, if you don't mind. i'm sure you've seen the number out today. we just had tom stemberg on as a romney surrogate. the president is going to speak in a little bit. characterize it for us. you look at the average for the quarter versus the previous quarter. it's dramatically weaker. but there's some argument to be made that it's stabilizing month to month to some degree? >>. >> i'm not an expert on the jobs market. it feels like just generally the economy is going sideways. i'm not really certain what it takes to get us out of that. >> you were pretty vocal in terms of your support for the romney campaign. is there anything you think he needs to do differently or is the data and sort of where we are economically going to be a tailwind -- at least for his political aspirations? >> i haven't been very vocal on any political campaign, to be honest. it's a big part of what members of my family are doing this summer. it's very much something they're working on very hard. and honestly, in terms of the -- in terms of politics, what i hope is, whichever candidate ends up prevailing in november, that we get the right direction that gets us going out of this kind of sideways markets that we've had for so long. >> incapital has a lot of products through financial advisers. i'm just wondering what you're hearing from them in terms of investor sentiment and investor confidence in the market, yet another black eye in the industry with the libor price-fixing investigation that could even spread to these shores in terms of banks' involvement. are you seeing another glitch when it comes to investor willingness to step into this market? >> we're really not. i think the kind of products that we -- that incapital distribute are very steady, very safe, kind of core products. and market noise and various things you hear about, like the libor price-fixing, that fixing, that doesn't affect the proubts in your portfolio. for us, staef steady as she goes, people blocking and tackling and doing as they should. >> you look so professional but i did notice a cubs logo. >> i'm going to the mlb fan cave after this. had to wear my colors. >> thanks, tom. >> good to see you. >> online retailers fab.com looking to do well, over amazon. we'll still down with retail ceo jason goldberg in just a few. first, rick santelli, what are you working on the next hour for "squawk on the street." >> what numbers mean. we have some of the best economists from the best business schools in the country, didn't hear a lot of solutions. at this point after a recession we should be burning things up in terms of a recession but we're not. smell smoke anybody? 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it is good to be here. everybody have a seat. it is good to be here in poland. couple of people i just want to acknowledge. first of all, give dan a big round of applause. he's august. [ applause ] he's outstanding. [ applause ] >> your congressman, tim ryan in the house doing outstanding work. one of my favorite people, former congressman is here. give him a round of applause. youngstown mayor is here. writes chuck? there he is right here. and all of you are here. i'm excited about that. hey, so i hope everybody had a good fourth of july. >> how about you? >> i had a great fourth of july. we had some folks over to the hou house, had a little grillin' going on in the backyard, a few fireworks. it gave us a chance to say thank you to the incredible men and women in uniform. we invited a whole bunch of military families over. they do such a great job. [ applause ] >> it was malia's birthday on the fourth of july. she's now 14. >> happy birthday! >> and you know, it used to be i could get away with telling her the fireworks were all for her. but she's a little old for that now. she doesn't believe me. but she says hi, michelle says hi, sasha, bo, everybody says hi. and i think malia has got some friends over, and michelle decided unsupervised 14 years old was not a good idea. now, as you may have heard, we're on the bus in ohio. we've been traveling through. we went to parma and sandusky and now we're here. oak harbor, akron. i've been eating a lot. and people have been commenting i need to gain some weight. who said that. yes. well, you'll be happy to know that i've been eating. and in between the eating, we've been talking a little about politics. now, you know, you guys are getting bombarded with all kinds of nonsense on tv. so i know sometimes politics can be discouraging and sometimes washington politics can be discouraging. it can seem small. it can seem petty. but the choice in this election could not be bigger. the stakes could not be higher. this year is going to be about more than just two candidates, or even two political parties. what's at stake this time is two fundamentally different visions about how america moves forward. two ways of thinking about this country. you know, when i think about america, i think about my family. i think about my grandfather who fought in world war ii, and my grandmother, who even with a baby was work ongoing a bomber assembly line. when my grandfather got back home, he got the opportunity to go to college because of the gi bill. and i think about my mom, single mom. my dad left when i was a baby. so she had to raise me and my sister with the help of my grandparents. it was tough sometimes but she was able to do it and get her own education and then ensure i got a great education because she was able to get student loans and grants. then i think about michelle's parents. her dad worked at the water filtration plant, blue-collar worker in chicago. mom stayed at home looking after the kids. then when the kids got older, she went to work as a secretary at a bank. she worked there most of her life. when i think about both michelle's family and my family, what i am reminded of is what made america great was this basic idea, this basic bargain that all of you experienced in your own families. your parents, your grandparents, your great-grandparents, maybe some of them immigrated here from someplace else. but the idea was here in america, you could make it if you tried. you know, it doesn't matter -- [ applause ] >> it doesn't matter what you look like, where you come from, what church you worship in, the idea is that if you were willing to put in the work and take responsibility for your family, just like dan was talking about, if you were willing to stick with it and tough it out when times got tough sometimes, that ultimately hard work was rewarded and responsibility was respected. and you didn't just look out for yourself, but you looked out for your community as well as your family, and your country. you know, nobody expected to get fabulously rich, although it was great if people got rich. when i think about my family or michelle's family, what made us rich was spending time together. and the idea was -- the idea was that if our families were of good character and had good values and you were willing to work hard, then you could find a job that paid a decent wage and eventually save enough you could own a home. and you knew you wouldn't go bankrupt when you got sick, because you had some health insurance. maybe you took a vacation every once in a while. it wasn't necessarily some fancy vacation at some fancy resort. best vacation i had when i was a kid, my grandmother and my mom and my sister, we traveled around the country on greyhound buses and on trains and we stayed at howard johnson's. i was 11. so if there was any kind of swimming pool, it didn't matter how big it was, right, you'd spend the whole day there. then you were real excited to go to where the vending machine was and the ice machine and get the ice. that was like a big deal. and you just see the sights. stop by a diner someplace. so you'd have that chance to take a little bit of time off to spend with your family. then when you retired, you were able to retire with dignity and respect and you were part of a community. that basic bargain is what built this country. that's what made us an economic superpower. that's what made us the envy of the world. not the fact that we had the most billionaires or billionaires, but the fact that our economy grew from the middle out. there were ladders of opportunity for people to get into the middle class, even if they were born poor. and the reason i ran for president, the reason i ran the first time for a state senate seat on the south side of chicago was because for too many people that bargain, that dream felt like it was slipping away for too many people. we've gone thank you decade where people are working harder and harder but they didn't see any increase in income. and profits were going sky high for a lot of companies, but jobs weren't growing fast enough. the cost of everything from health care to college tuition to groceries to gas kept going up faster than people's incomes. so a lot of folks felt like that idea that we not only could live a good middle class life, but more importantly we could pass it onto our kids, and they could succeed the way we might not have imagined. they could go to college and do some things that we couldn't imagine doing. that felt like it was slipping away for too many people. that's why i got into politics. that's why i ran for president. that's why in 2008, a lot of you came together and helped support us. and we didn't even realize then that we were going to be getting hit with the worst economic crisis, the worst financial crisis, in our lifetimes. obviously the hardship that occurred because of that made that dream even a little bit further out of reach for too many people. you know, we came together, and it wasn't just democrats, by the way, it was independents and republicans who wanted to figure out how to put that basic bargain back together, to grow the middle class not from the top down but from the middle and the bottom up. that was our idea. now, we knew from the start in 2008 that turning that around wasn't going to happen overnight. it didn't happen overnight, so we weren't going to reverse it overnight. but we've been steady. we've worked hard. i know all of you worked hard. dan's story is typical of so many people i meet, who had to make adjustments and deal with some disappointments but came back stronger and came back tougher. that's what america and ohio has been doing. so over the last several years, what we've seen are people who go out and retain for new jobs. small businesses have to adapt. sometimes the owner doesn't take a salary just to keep folks on the payroll. i met a woman yesterday in parma who i had met a year earlier. she had been out of work for two years and gone back to community college at the age of 55 and retrained. i saw her in the rope line after my speech. she had just been certified and was starting her new job on tuesday. [ applause ] and after having done two years at community college. so those stories are duplicating themselves all across ohio and across the country. but it's still tough out there. we learned this morning that our businesses created 84,000 new jobs last month. that overall means businesses have created 4.4 million new jobs over the past 28 months, including 500,000 new manufacturing jobs. that's a step in the right direction. [ applause ] >> that's a step in the right direction. but we can't be satisfied because our goal was never to keep on working to get back to where we are back in 2007, i want to get back to a time when middle class families and those working to get into the middle class have some basic security. that's our goal. so we've got to grow the economy even faster. and we've got to put even more people back to work. we've got to tap into the basic character of this country, because our character has not changed even though we've gone through some tough times these last few years. it hasn't changed our character. it hasn't changed what made us great. it hasn't changed why we came together in 2008. so again, our mission is not just to get back to where we were before the crisis. we have to deal with what's been happening over the last decade, last two years, manufacturing leaving our shores, incomes flat lining. all those things are what we've got to struggle and fight for. that's the reason that i'm running for a second term as president of the united states. i want to move this country forward. i want to move this country forward. [ cheers and applause ] for more years! four more years! four more years! >> thank you. now, here is the thing. remember i told you this is a choice we've got to make, because what's holding us back right now is not that we don't have good answers for how to grow the economy faster or put people back to work. the problem is we've got a stalemate in washington. we have two fundamentally different ideas about where we can take the country. we're trying to put congress to work. this election is about how we break that stalemate. the good news is it's in your power to break the stalemate. in the power of people in ohio, everybody who lives in poland, everybody who lives all across the midwest. all those folks out there, whether you're punching a clock or starting a business, you've got a chance to move the country forward but you're going to have to make a choice about which direction we go in. now, my opponent, and his allies in congress and the special interests that support them, they have got a particular idea of how you grow an economy. it's actually a pretty simple idea. their basic idea is that if we spend trillions of dollars more on tax cuts, most of the benefits going to some of the wealthiest individuals in the country. so the average millionaire gets a $250,000 tax break. even if we've got to gut education to do it, even if we've got to cut job training programs to do it -- >> took him about eight minutes and change to finally mention this morning's jobs number. that is the president speaking in poland, ohio echoing what we heard earlier from council of economic advisers, job creation in the u.s. is going in the right direction. clearly the white house not satisfied with the pace of job growth in this country. want to bring in cnbc's john harwood for a wrap-up and reflection of what, at least from my standpoint, a winding leapup to the actual mention of jobs, which was in passing, really. >> it was in passing because the news was weak. so the president tried to frame it in the context of his broader economic argument. you saw him sort of slip those numbers in as part of the 4.4 jobs created over the last couple years, not emphasizing 80,000 and the disappointment the white house is feeling over numbers this small. they had hoped to get over 100,000. the adp report had suggested, as you know, carl, well over 100,000. that was simply off. we've got another summertime disappointment after a promising second quarter of the year. this quarter was weak. >> are there any clues in what we just heard from him as to how the political argument will go from the white house if numbers like these continue? >> i think the political argument is going to remain as it's been. he's going to hit the republicans in congress for blocking the ideas he had sent them on expanding jobs and hit mitt romney for both his personal experience as somebody at bain capital, according to the president yesterday was involved in outsourcing of jobs, while president obama was saving the american auto industry. talking about mitt romney being out of touch with middle class concerns. as you just heard, saying the modern republican answer is simply cutting taxes, cutting regulations. in the president's view that's not a way to build an economy from the bottom up and give the middle class opportunities to move up. he's going to say the economy mitt romney envisions is one that people with advantages can do well in but not the average person. he is calling on americans to break the stalemate between his vision and that of the republicans. november is going to be their chance to do that. >> john harwood in washington giving us some color after having broken those numbers for us on cnbc today. long day four, john. thanks a lot. for some more reaction, get to chief economist of rbc capital markets, brian westbury with first trust advisers. good morning to both of you. >> good morning. >> tom, i love what you wrote today talking about the number. you said bernanke may have been holding out hopes the numbers were an aberration but this solidifies the slowing is real. what does this mean for us? >> qe3 on the table, august if not september meeting. in our view, a blunt tool. they don't want to be sitting on sidelines. high odds. efficacy of qe, we don't see it at this point. >> how severe would you characterize this slowdown, if that's what this is? >> i would say we're moving to the point now where economic activity is certainly slowing down. i don't think -- you could certainly try to spin the data one way or the other. if you look at the preponderance of data we're slowing down, slowing down on a challenged second half of the year, whether elections, dip downgrade, europe, all these factors will conspire in our view to put continued downward preb. we're not calling for an outright recession, even with our reasonable bearish view it's hard to get there. nonetheless, it's a conversation that at the very least is worth having. >> brian, i know you've been trying to find silver linings for a long time. it's getting tougher, month after month. >> first of all silver lining has been the right view for the past several years, carl. the economy has grown, 28 straight months of jobs. we had a slowdown in 2010, we had a slow down in 2011, we're having a slowdown today. the question is is this some fundamental weakness in the economy tea us deeper into a hole, another recession, or just another slowdown. we think it's just another slowdown. we call this, by the way, the plow horse economy. it ain't going to win the belmont but it ain't going to keel over and die either. these aren't 1980s or 1990s numbers but the economy is growing and we don't think that's going to stop. >> you think the percentage likelihood of a recession later in the year is nil. >> well, not nil, but it's always about 10%. we don't think head winds from europe will drag us into a recession. i look at this slowdown just like i did in 2010, 2011. i think it's temporary and i think we're going to accelerate in the second half of this year. by the way qe3 has been on the table for a long time. this number today is kind of interesting. it wasn't weak enough to tip the fed and allow them to be qe3, in my opinion. >> some say sub100 number would have been the bar but go ahead. >> but it clearly wasn't strong enough to knock it off the table. so qe3 is still out there. no doubt about it but the plow horse continues. there's kind of two ways to look at this economy. one electric an investment point of view. the economy is growing, corporations are profitable. we're investing. productivity is up. it could be better but it's growing. then there's the political point of view. that's where the fights are. it's terrible. it's awful. i just won't allow myself to tip into that political argument. i want to stay where investors are. where investors are, the economy is growing. >> yeah. >> it's okay. >> it's going to be a harder viewpoint to defend as we get closer to the election but i hear what you're saying. >> absolutely. >> brian wesbury, tom porcelli. back after a short break. . the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. be the fourth consecutive jobs number the s&p responded with a 1% loss with more. let's go to rick santelli to discuss the jobs data and economy at large. hi, rick. >> hi, carl. before we get to that, there was two charms of the economic advisers. we had austan goolsbee. we had the current council of economic advisers and he had something to say i would like to you listen to, viewers. can we run the clip. it's not playing? well, all right. i'll play the fiddle instead. i will read what he said. he said, they certainly understand the objective is to create an environment where companies can thrive and where our workers can thrive. my guest, congressman joe walsh, 8th street tea party elected. do we have an environment companies can survive. >> we're dying out there. someone said before i came on, it's not that bad. it's not that bad a number. we're doing okay. they don't get it, rick. we're so far down in the weeds. the country is dying. we have everything sitting on top of us out here. >> i guess you're going to need my fiddle. we watched niro's fiddling. let's forget politics for a minute, congressman. here is what i want to know. when i look at today's jobs report, what jumps out at me, the higher the level of education, the lower the unemployment. >> god yeah. you need a higher educated public to get to work. right now we don't have that. i've got to tell you, rick, small businesses are dying. >> let's stop, keep it on track. you know where i live, not too far from your district, an illinois resident. i pay a lot in property taxes, a boatload, where is it supposed to go? is it supposed to go to education. >> the lion's share is supposed to go to education. >> let me stop you there. you are extreme, you don't compromise. i did my tax bill and paid probably de los $1,000 a month that goes to education. so my question is, the lack of compromises, raising taxes versus spending cuts. why in god's name when i'm already paying a boatload the education isn't keeping unemployment down, why should we compromise on things like taxes. tell me. >> we're $16 trillion in debt. that's about a million dollars on the head of every taxpayer in this country. we didn't get that way because washington fought. we got that way because washington got along. republicans and democrats held each other's hands and said i want to get re-elected. to do that, they kept promising people things. 30 years later we have a government we can't afford, kids and grandkids are screwed. this administration doesn't get it. we've got to get government out of our way. >> previous administration didn't get it either. hold on a minute. i don't agree with austan goolsbee, what i don't agree with is, if somebody shoots me 40 times, i would think the coroner isn't going to say, is it number three that killed him, number seven or number ten. the fact is you're dead. we need to move beyond this. bush didn't do great. spending a lot of money, bad accountability there. >> both parties. >> let's get down to it. tell me a solution. tell me what these voters are supposed to do in november to stop the gridlock but not the gridlock on spending versus taxing. what we really need is to shuffle the deck. >> absolutely. rick, this is not just an election. look, nothing is going to happen between now and november, and it shouldn't. this country has to get up off its butt and decide what kind of country they want in november. either they want everybody sucking off of government and we will tip over or they want a free society, you know what, rick, where you and i are responsible for their own lives. this country needs to make that decision this november. >> i understand and some people sometimes need help. we went through a horrible crisis. you know what bugs me? when you start giving help, it needs to have a sunset. we all have helped people in our lives. we've all had relatives. these things need to sunset. when people less fortunate get used to help coming in in the form of money, food stamps, whatever it is, it's difficult to extract that. how can we help them but help them in a way we don't keep handing money. >> the problem is you don't get to keep much of your money now. used to be in this country you made a buck, you kept 90 cents of that. the deal was you took care of your family, your parents when they get old, you start a business. now you make a buck, it's not your money. the government takes about 60 cents of it and you said to hell with it. the government takes care of everybody. it weakens awful us. >> all i know, there's a model for what you're describing doesn't work. it's called europe. my opinion what the election is about, do we want to sing a french song or america the beautiful. back to you. >> the close there, problems with spanish yields back above 7%. we'll walk you through that when "squawk on the street" comes back. now get an incredible offer on the powerful, efficient c250 sport sedan with an agility control sport-tuned suspension. but hurry before this opportunity...disappears. ♪ the mercedes-benz summer event ends july 31st. ♪ i went to a small high school. the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us. the close the close in europe for the week, just about 14 seconds or so away up in the uk and across continental europe, weaker than expected u.s. jobs numbers here. some worries about the eu debt crisis taking -- there's a look at red, posting big losses, spanish yields above 7% a week after the eu summit. earlier yields on ten-year did rise above the psychologically 7% mark. euros one-week lows falling below 123 mark. we'll talk more about that and what's happening in the states as well. mary thompson on the floor at the exchange. good morning. >> good morning, carl. as european sessions close, hitting a session low. jobs data today was really the worst case scenario because it wasn't strong enough to get excited about and wasn't weak enough for the fed to take any action. the result the broad-based decline we're seeing today. it is dollar positive but negative for the euro as you pointed out, carl. also negative for commodities under pressure today. there you see the euro dropping below that 123 level. take a loot dow movers, broader mark, big story is the selloff we're seeing in tech along with the tech we're seeing in industrials and materials. turning to the sector movers putting pressure on the s&p 500, as i mentioned, tech stops, warnings impacting that group. industrials, caterpillar had ratings cut by wells fargo on concerns about demand going forward. materials under pressure again because of the weakness overall in some of the commodities. also concerns about growth or slowing growth around the rest of the world. that group under pressure for the last couple of days followed by telecom and health care. one of the reasons soog weakness, in formatic, a, downside is why it lowered earnings forecast. take a look, down 29%. tera data swilling over. some of its rivals, ibm and oracle today. sea gate, disk driver, seeing less demand in large part because of weakening demand for pcs keeping on its rival, western dinl tal. if there's an area with a bright spot, discount retailers, they are moving to the upside today. one bright spot, carl, was the fact we saw an increase in average hourly earnings and increase in average wages. the workweek some saying that could put money in consumer pockets in the weeks ahead. dow off 179. back to you. >> a lot of people saying the income and workweek mary were the only things that kept this from being more of a disaster. thanks very much. mary thompson, nyc. down down 181. as if the jobs number wasn't enough, some big tech companies are beginning to say not so good things. samsung with the revenue that was light and guidance that was light. >> samsung optimistic about smart phones still nonetheless. they have got galaxy s3, a big deal for them. keep it in context. tech overall pretty strong over the year. if you look at the heartbeat of silicon valley, venture capital, startup there, number particular in cloud mobile doing well. yeah, it's not sunny out there. >> why is there no discussion in silicon valley that, look, may not look like it from our neighborhood, but the large -- broader economy is slowing. does that bring up worries about financing, about small companies looking to be funded in the near future? >> i'll tell you what, the biggest thing a worry in silicon valley was facebook ipo, the pipeline. that seems to be easing. part of the reason why there's not that much concern, a couple of transformative things happening. mobile, people moving from pcs to mobile. we see that negatively impacting companies like sea gate. they don't do flash as much as hard drives. there's also the cloud happening. and there's this local commerce thing happening that we're seeing affecting the latest versions of the operating systems of apple and google. take care, that's what startups are doing. >> interesting that facebook, which some called ultimate counter-cyclical name, market down, trades up. in fact, it's up today in the face of a miserable nasdaq. meanwhile u.s. stocks slipping on the soft jobs number. concerns of a global slowdown continuing to grow. how should you be investing. chief strategist at jpmorgan funds and he joins us. hey, david. >> glad to be here. >> what was your take on the job number. >> predictably disappointing. >> why predictably. >> predictably because we've seen this weakness in unemployment claims in the last few weeks. we've got a weak number on manufacturing ism and employment component of that. our models telling us something around this number, 100,000 jobs, we got 80,000 which is not great. it's where we are. the bad news, it's kind of like you're on a plane in laguardia with 35 planes in front of you on the taxiway and you're not going anywhere. that's the bad news. the good news is you're not stalling off because you haven't ever taken off. the u.s. economy is moving slowly forward but steadily forward. i don't think it's going to crash here. >> you think pentup demand for cars and homes a marginal positive here. obviously lower oil, if we can ever got savings into the hands of the consumer. >> sure. >> characterize those with the larger problems it offset. >> those are very big positives. particularly housing. what we're seeing is a pick up in home prices in the last few months. i know that hasn't hit the radar screen all over the place. very important, if home prices go up, increases in obviously home equity, improvements in confidence, improvements in bank lending of housing revival is very important. lower gasoline prices important. american consumers have delevered. they aren't spending as much financing existing debt. that gives them money to spend more. we worry a lot about europe but we don't actually devote much gdp for producing for europe. europe is 2% of exports, european exports 2% of gdp. mostly about u.s. economy. i think it's moving forward slowly but steadily. >> one quick point, david, show you deutsche bank on your screen. we're seeing headlines the financial regulator in germany investigating deutsch in the libor probe. saw the stock move lower 5%. people wondered why. this become a quick headline as the club of banks expected to settle with regulators by the end of the year is growing. i will keep a close eye on what db does later today. david, where does the jobs argument leave the fed? do you think the tone of the august meeting changed as a result of today's data? >> i think we've got ben bernanke's testimony in two weeks. i think that's also important. i hope they don't do anything more. the problem is that they are sapg confidence. what they need to do -- indeed, what washington needs to do, lay out a path back to normality. federal government needs to tell us how to get deficits down in a gradual way to a sustainable level. federal reserve needs to tell us how to get interest rates back up to a normal level. all this morphine drip of monetary easing doesn't help at all. i hope the federal reserve underreacts to this number. >> i hope they underreact. would there be anything better than the economy than some sort of early solution/compromise on this fiscal cliff? >> no. that would be a huge bonus. it's not just -- you need deal with the fiscal cliff. we have a deficit 7.5% of gdp. if we can get that down to four over the next three years, that will solve our fiscal problem in the medium term. if politicians can agree on that, some spending cuss, that would be a huge positive for markets. >> before i let you go, david. is it too early to predict whether or not we've seen the highs in terms of monthly job growth. >> i think we'll do better than this later this year. >> really? >> yeah. i think by the time we get these lower gasoline prices, pick up in housing, i think by the end of the year things will be looking a bit brighter than they are right now. >> david, have a great weekend. thanks for your time today. as always, david kelly, jpmorgan. when we come back latest internet startup helping students study for exams on their cell phone. the company raised $6 million in financing. ceo of bench prep will join us live right after this practice. after this break. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. 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[ all ] i'm with scottrade. wouldn't it be nice if there was an easier, less-expensive option than using a traditional lawyer? well, legalzoom came up with a better way. we took the best of the old and combined it with modern technology. together you get quality services on your terms, with total customer support. legalzoom documents have been accepted in all 50 states, and they're backed by a 100% satisfaction guarantee. so go to legalzoom.com today and see for yourself. it's law that just makes sense. so go to legalzoom.com today and see for yourself. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. the top of the hour, it's a zombie economy. mediocre job growth with little hope of qe3. have no fear fast money traders have an idea how you can still make money. time to get short doug cass reveals four reasons why you should be beg against the market. a top analyst will name top cloud plays. libor story affecting those shares as you just mentioned. >> scott, i'll take it. education startup benchprep trying to convince books aren't necessarily the best way to learn. licensed textbook like princeton review, mcgraw hill converts them to mobile courses. they plan to push forward with aggressive growth plans. ashish rang ne car. we are adding what textbook can't offer. there is a lot of good content. content is not a problem. any subject, hundreds and hundreds of books. the issue is when the book reaches the student they cannot engage wit. we are in the business of adding all those elements that a 16-year-old kid studying for math would actually engage in. >> how would you compare with you're doing with what can cad any is doing. >> a great guy, great model. we still view what he's doing as a content partner. we actually work very closely and use a lot of their content but we layer a lot of more interactivity assessments on top of it. there's a perfect combination. there's a lot of people good at building content and us who can actually take the content and bring it to life. >> so ashish, when you look at the total education mark, i've seen numbers that say it's a trillion dollar market. but this segment you're playing in has got to be a bit smaller than that. what's the size of it. are you competing with the likes of a kaplan, how do we size the opportunity long-term for you. >> absolutely. it's a trillion dollar market. u.s. government spent $900 billion last year on education, $300 billion of which was actually spent on instructional and supplemental material. but only 10% of that was online or on digital services. we are actually playing in a market that is 30 billion as of today and which is growing at a rate of about 90% year on year. so this is a market where the growth is going to be over the next five years. yes, we are competing with kaplan but i think the real combination is the new style of learning, digital and online learning and the old style of learning, which is essentially books and classrooms and such. so the biggest competition for us is education students, educating teachers, educating parents the digital learning, online and mobile learning is the more efficient way of learning. that's how we see our role in the next five years. >> ashish, you're joining us on a day where the jobs number was no good. we've got politicians out everywhere talking about the economy being good or not good enough. i'm wondering as a small business guy, although fast growing, does it feel like you're operating in below trend economy and if not, why aren't you feeling it? >> suggesting that education specifically is kind of i would say recession proof. if you look at the impact of jobs on education, technology market, we actually would do better when people are looking for a job. i'm not happy to say that. essentially anyone looking for a job would need some kind of incremental certification or need to get better and validate their talent and their skills. >> it also has an impact on financing, on people's willingness to invest in your company and be on the board and become a customer, does it not? >> the funding aspect has been tight. raising the bead on the funding has been difficult. we've actually seen that impact. but luckily we were at a point where we could actually prove customers are willing to pay for this. that actually worked well for us. >> thanks, ashish, for joining us. it will be interesting to see if it's not only recession but slow growth proof. >> tough time to be a business owner in the country. when we come back, a man with a hand in startups, mozilla and board observer at tumblr watching in the world of tech. back in a moment. and there's lots of cool stuff happening with progressive mobile. great! tyler here will show you everything. check out our new mobile app. now you can use your phone to scan your car's vin or take a picture of your license. it's an easy way to start a quote. watch this -- flo, can i see your license? 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>> i don't know. it's an interesting and dynamic time in the market. everybody is moving up to cell phones, smart phones, which really are more like little computers in your pockets. amazon is good at building things that deliver content to consumers. so i guess we'll see. >> one of the things you've said when you're looking at things to invest in, it's got to be good enough to displace something on your iphone home screen. what's going to be the next big trend. we see social, mobile, local making a big impact now. what's the next thing that we should be looking for? >> yeah, obviously instagram made a big impression on me when it replaced camera on apple's home screen for me. it was more important to share what i was doing than take pictures. for me when i look around, what's interesting to invest in, interesting things happening in education, interesting things happen in how you interact with businesses. we see businesses themselves changing the way they work internally. a lot of different trends are happening. >> one of the things we seem to be seeing is mobile displacing the pc legacy. not just in hardware but also in terms of ad models, facebook obviously grappling with that, among others. how does that play into where you're placing your investments? how much is of it is mobile leaning companies versus traditional web leading companies. >> for me personally, i plan to invest primarily in mobile for my whole career, really. i think the speed at which -- we all know this, the speed at which mobile moments is replacing pc attention is amazing. most sites are seeing a third or half their time by mobile impressions. i think you're right that there are developments that need to happen to figure out what the right sort of advertisements are, right type of monetization is on mobile. i think that will come quite quickly, really. >> a guy invested in a lot of apps but former mozilla ceo, i'm curious what you think about html 5, moses im, a working on os for mobile, potentially replace what's out there. many people saying it's not there performance wise or standard wise, being ready to serve the market as well as ios or android. what's your thoughts on that? >> the right way to look at it, look back in history when you had pcs and macs, in 2000, easier to write the frame works. the html 5, the web got better and better at delivering rich immersive experiences. the value of being connected and sharing and networked, that stuff all became so huge that the web finally caught up with apps and in many senses replaced them. right now we're in the early days of mobile where we've got ios, android, maybe oss kind of in the background. i'm hopeful the web over time will become good enough. i think we're seeing the emergence of that now. mozilla has firefox os coming. >> john, you've been quoted recently, asked about first filter when it comes to new investments, what sort of things do you look for first that hit you in the gut. you say you obsess about whether the product could be one of the 20 icons on your iphone home screen. i'm wondering if that test changed over time, you find it limiting in any way or does it lead you to certain thematics in investing? 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customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense. you want to save money on car insurance? no problem. you want to save money on rv insurance? no problem. you want to save money on motorcycle insurance? no problem. you want to find a place to park all these things? fuggedaboud it. this is new york. hey little guy, wake up! aw, come off it mate! geico. saving people money on more than just car insurance. welcome back to welcome back to quaukt "squawk on the street." shares taking a big hit after forecasting second quarter earnings will be much weaker than anticipated. they are projecting a loss of 1 to 2 cents a share, shares down more than 16% in response. carl, back over to you. >> courtney, thank you very much. we've been telling you all morning long, after hundred dollars of tweeted entries to mail our sweepstakes, tuesday nailing nonfarm number of 08,000. this month's winner randy bennett. randy could not be reached this morning, probably working. congratulations from all of us from "squawk on the street." he'll get an awfully nice water bottle signed by us. >> hopefully he is working. we need people working. >> we absolutely do. take away from rick santelli friday morning, rick, you'euro 12288. >> euro hovering on a basis of two-year lows, extending that as we speak. interest rates, we know jobs report was weak. if you look at interest rate on weekly basis, we're down 10 basis points, 164 to 154. europe, the boon, 158, now 132, a drop. i think that's very telling. i think even though we haven't talked about europe a lot, for obvious reasons with employment, we need to start looking to europe for the trade next week. >> thanks very much, rick. have a fantastic weekend. chose links out with jon fortt. is it good, bad, indifferent? 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