Transcripts For CNBC Squawk On The Street 20140613

O out. France is 1. 71 and italy is 2. 799 . Thats what you get for lend your money to the u. S. Government for ten years. How about those oil prices, though . Thats the story over the last couple of days as we watch iraq perhaps split into three different sections, civil war raging. There is a look at wti and brent crude as of this morning. Lets get to our road map this morning, as well. We start with the markets. A lot to contend with trying to regain ground. The cow hitting its second digit in iraq. Intel raises revenue guidance on stronger business, pc sales. The pc is not yet dead. Several firms raise their price targets in reaction to the news. And table for two, priceline to buy opentable, 2. 6 billion or 103 a share in cash. A significant premium over a stock that has been fading at 7 bucks a share is where it was. Lets talk oil prices. Lets talk the markets here to start off the show. They are moving higher. You sour worries about escalating violence in iraq. Militants have captured two more towns northeast of baghdad overnight and are marching toward the iraq capital. At least they say they are going to. There are people joining militias now. Stock markets are keeping a close eye on all the developments in iraq. Major averages on track to finish lower for the week. We had a little bit of complacency and suddenly we learn about isis and the next thing we know theyre taking care of that to swap territories in iraq and its chaos. I was focused on the isiss pharmaceutical pipeline. I dont know if that would be it might be better. Certainly makes sense. Obviously, west texas and brent are major focus when youre not faefing on chaos. And i think if you ignore that, then youre back in 1990 when many people ignored during the month of august when there was lots of sign from the Oil Companies about the way it was going to be invited. In 2008, oil went to 145. You ignored those bare markets. So completely correct to focus on oil. Its not a distraction. Its for real. However, if it werent, and i know you would want to asterisk this, this is so much fundamental goodness, so many takeovers, that if you did not have oil, i dont know where this market would be, but it would be substantially lower. Well get to open table, of course. That headline is not a huge deal, but letting people know. Jim, what ive been waiting for, and ive been sitting here saying it and you know ive changed my tune over the last few months. Thats not because im making it up. Thats because every conversation i have with those professionals who advise on these deals indicates their workload has dramatically increased. And their prediction of whether or not what theyre working on will actually happen has also increased. Its not that there werent people thinking about deals in years past. For the same reasons weve been talking about so often, whether it be although Interest Rates or a good reception for those that skok once they announce the deal, its that level of confidence which is so difficult to quantify that seems to increase so that the deal has a better chance of seeing the light of day. Do you think that either oil or new discord in washington could cool that or is it one of those things that once it gets rolling . Animal spirits has returned to a certain sense of the merger and acquisition market. Of course you start to see more volatility in the equity markets. It affects your perception of value if youre using stock, it affects your ability to deliver the value you thought you could. If youre a seller, you may choose not to sell at that point. Youre not going to get the high price. No doubt when you start to see and if we start to see this happen day after day, it will cool. Thats not happening right now. But whats happening, there is the mindset and you correctly nailed it time and again. Im reading a city note today. Time inc. They like time inc. Why . Because its going to be bought next year. You can never write this piece of research. A lot of Research Analysts are focused on exactly m a as an event that is a predictor of future values. And i did a show last night on mad money, a segment where i wrap it every night because that bob evans farm is a logical acquisition for which got guilted on hillshire and youve got san did he ll in there. These are small. Opentable collectively theyre huge. Come back to me, though, to the bigger point before we move on to intel, which is this is not going to stop in iraq. And theres a great deal of uncertainty right now about what we can or cant do. Anything militarily from the u. S. Point of view. Is oil going to go another 20 higher . To 600,000 barrels of oil will probably be lost instantly. 3. 6 million, okay . So you take six times 600,000 off. Two things to think of pun one is that the oil workers will abandon, weve seen that. Oil workers will abandon the infrastructure. Which means you could have several Million Barrels more offline. Of course, the currents have already moved to the north where they can. Thats not going to come on. Theyre the most solid, right. But then the other thing is, david, i thought we would be pumping 5, 6 Million Barrels from iraq in the next three years. Why . The Great Companies have been going in there. People misjudged how unstable it was. That has pulled back. We are never going to get the 5 to 6 Million Barrels i thought we were going to go. The iranian republican guard, who is tougher . Isis or the iranian remember guard . This is not exactly a group of guys that we want to get in there. There is the world we live in now, that the iranians will come to the aid of the government in iraq because, of course, the shiites. You get okay. So then the bottom line is 10 increase in oil. All right. What about in 08 it was a very different landscape. 145. All the time, the permean, the backan. Were producing more oil than we did six years ago. But were producing a beautiful form of light, sweet crude, which is the best source in this. We set up our refineries for the Keystone Pipeline for socalled hippie crude. We have to export our oil. We dont have a place to put all the permanentan. We have through new pipelines to make it radically to reduce the logjam in permean. But permean could produce far more but we cant put it in our tank. It has to be sent to other countries. Otherwise theyre going to shut down permean production. Weve got the wrong crude and the wrong economy. We want to move on to a positive note this morning to one of the bigger companies. The oils largest chipmaker raises revenue guysance. Its up in a previous raij range of 12. 5 to 13. 5 billion. By the way, if you listen to Hewlett Packard and meg whitman, theyve been saying et over and over again in commercial pcs. Not in consumer where tablets really do seem strongest. But an upgrade cycle that was needed, that was coming, so the depth of the pc was certainly overstated when it comes to at least the enterprise. Chris at intel, a fantastic ceo, i had a good chance to meet him. Hes a gamer by background. Fabulous interview with him. You know this man is terrific because he has said we will cut back on our willynilly spending. We are about to have a cycle. They hit the holy grail. Andy grub told me its always where you need to be. The idea that this company is going to have a one quarter up and go back, intel sell. One of the nicest guys in the world. So much its frightening. Intel, by the way, jpmorgan has been a big bear. I have to give Chris Stanley credit, he upgraded correctly right before this complete major turn of the country. If they cut the cap ex down, youre going to see the real earnings explode here. The real winner . Michael dell. He bought at the low. He told us he was doing it and he did it. You know, jim, im so glad you brought that up. Probably making carl icahn a very mad man. But dell, from what im hearing in terms of the Free Cash Flow projections from the company, for what is the private dell now, they have to be going higher. Oh, geez, ive always liked him. Now that hes not public, i dont feel like im endorsing something. Hes private. And i dont mean to minimize hue let in all this. Here you have a piece, a strong ender price, a guy equal weighting Morgan Stanley. This is a very big movement for him. Upgrading to equal weight. This man hated intel. He hated joseph moore hated intel. Why upgrade . We have been underweight this stock for almost two years with these soft fundamentals. While they think this stock is expensive, its free cash do some work. Not true. This is exactly andy grove and gordon when i visited the intel factory that opened in ireland when i went to the opening, they told me what could happen when you get the gross margin at this level and when you get the yields right. And brian knows that. When i visited the intel factory in israel which by the way is open on saturday because its all robot, theres no people, you can see what happened when they get that yield up. When 100 of their chips work, you get the up demand, 64 67 gross margin, intel will cut the cap ex to 40. There. And i am jim cramer, i am an intel intelaholic. We have to get to phil lebeau. Another day, another gm recall. This is four new recalls being announced by General Motors. 20102014 chevy camaros. The recalls have to do with the ignition switch in these vehicles. If a short driver or somebody who hits it with their knee, it could thumb back into the accessory position. 511,000 20102014 vehicles. It does not appear this recall is directly related to the ignition switch recall crisis which involves vehicles sold between 2004 and 2008. Guys, i hate to be like this with this running total, but we have now looking at 38 recalls in all by General Motors this year covering 16. 45 million vehicles worldwide. Guys, back to you. Wow. Thank you, phil. Phil lebeau, 38 recalls, 16 million automobiles. Stock bottom at 0. 53 . Well leave it there right now. When do we do opentable . After the break. Theyll have a stroke back at headquarter. But theyve got i like that. I really do. Bristol myers . Coming up, priceline agreeing to an all cash deal on opentable. Shares of various Internet Companies are up as a result of that. Were going to talk about opentable right after this. Take another look at futures. Chocolate is very individual. White chocolate lovers dont like dark chocolate. Milk chocolate lovers dont necessarily like dark or white. Before we couldnt really allow the consumer to customize their preferred chocolate. We needed the scalable Cloud Solution allowing them to see all 800 products and select what they are looking for. Now there is endless opportunity to indulge. Dad hes our broker. He helps . Look after all our money. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at charles schwab. Priceline agreed to buy opentable for 2. 6 billion. A 46 premium to open tables Closing Price thursday. The deal is expected to close in the third quarter. There were a lot of people short this stock, too. Every time i had them on, the i recommended them. The hate mail i people would say, you idiot. You dont understand. What was the central part of the thesis . Theres two. One is theyve already expanded. The cloud version is much, much cheaper, yelp. Restaurants pay 100,000 for the legacy software. Seat me is only 1200 a year for an ipad. I have to say, for someone already in the restaurant business, opentable be king. People dont like to go to restaurants and find out they cant get a seat. And opentable, which jamie myers claimed because i said a great restaurant server this week just thinks opentable is terrific because if you have opentable at your restaurant, its a dead wait loss. You get to get those people in. Opentable is a brilliant acquisition. A year ago, priceline bought kayak. You have this combination of how to get there cheaply, which place to go, and can you get a reservation. And make your reservations. Yelp is up seven. The chairman of yelp is on the board of yahoo . That said, yelp whom i regard as a true vision anterior does not need to do that deal. He has seatme and he has a system to deliver. The idea has been that i had proposed was that yoohoo should merge yelp and merge grub hub for a seamless one app. Not going to happen. Not going to happen. No. Should yelp be up seven . Yelp is undervalues. I have not had a chance to talk to any of the bankers involved. Dont have the background of this acquisition. Opentable shares, while trading above the cash bid, why buyers. Youve got citi out with a note this morning after the deal, of course, saying or bringing up the fact that ebay might want opentable. And noting, remember how they took the hit for repatriating cash. They havent brought back they say highlights value in the online marketplace, booking or payment connection with buyers and sellers. Grubhub obviously yelp. Its possible at least the market seems to think you never know. Oh, my god, everyone is short these things. If i were trip adviser, which is a fabulous Company Given that kayak did that deal with priceline, if i were tripadviser, i would also be in trip adviser is a 14 billion company. Open table is going to be a linchpin for someone with an app that wants to be able to talk about going out. And that is a remember, your handheld is everything. Youre getting 40 , 50 of yelp. The numbers just keep going higher and higher. But what happens is when youre going out, you look at your handheld, you see where you can get a reservation and you go. Its another reason why your cell phone is so darn powerful. Raising numbers, apple, raising numbers google, raising numbers intel, raising numbers seagate, raising numbers western digital. Cutting numbers airlines, cutting numbers restaurants, cutting numbers iraq. Up next, cramers mad dash at the opening bell. Lets give you another look at the futures on this friday. Its been raining all week. We have more from squawk on the street from the nye. 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Estrogen should not be used to prevent heart disease, heart attack, stroke or dementia. Ask your doctor about premarin vaginal cream. And go to premarinvaginalcream. Com this is worth talking about. All right. Weve got about 6 30 before the last trading day of the week, a long week. And people should understand during the break, this is supposed to be a sleepy summer friday, of course, june 13th. During the break, we are literally scrambling to try to figure out which of the 12 stories that must be covered. And i think i have one that is kind of lost in the shuffle that im going to mention. Which one . Lands end, l. E. First public quarter turned out to be amazing. Edgar ubeare, he is brilliant, the ceo, but also, david, its this board. L elizabeth darst. Josephine linden, i say brilliant. Shes been out on her own for a while, shes on the board. The board is amazing. Youre talking about a guy like john mcclain. The former cfo of jones. David sycamore bought jones. Now, get this. Sycamore takes a stage in express. We see chicos putting itself up for sale right now. I am doing a rolloff of limit of le, express, jones, putting an order one half and being able to have power against the big retailers, the department stores. Lands end is back and its not its away from sears. Its back in one quarter. The Balance Sheet is better than i thought here. And the brand wasnt tarnished. And the team is extraordinary. So i think you have to look at it. Mr. White did not do a good job. You come on the show and theyve got a very difficult look. The miss there is 19 to 19 1 2. Youve got to make it a little broader. I didnt mean to be mean like that because mr. White is a great exec. Sycamore understands that this business is cyclical. Very smart. A potential acquirerer here. So i think its right. Now, they have two really, really bat bad quarters. But before that, they were flying high. This is a company that is historic like this. If you merge this with some other apparel companies, it could be powerful. We have to stop there because we have to make some time for the opening bell which is about four minutes away. A lot more squawk on the street and as jim said, a lot of news to cover when we come back. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. We are live where the opening bell is, to close out the trading week. Jim, we are very focused on goings on overseas. Never that easy to get a great read on what is happening on the ground in a place like iraq. And why are rates going up today . For nbc news, hes a great reporter, fearless, by the way. We all know colleagues at one point or another who have been in harms way and some who have passed away. Not the job i no. You see this . You see this . I do. This is about opentable. This is about opentable. Its the war of the app. And ten k opentable be allowed to be bought by priceline . No. No. Someone has to block this. Opentable is too powerful. Its the key to dining out. As danny mahr will tell you. Its the key to dining out. I dont even know what the break on this thing is. I dont know what the background is. I dont know if they ive got to find all those things out in order to either effectively rebut your assertion or say you may be on to something. Its a little company, but this is the beginning of the consolidation so many of us have been waiting for of all these companies that are about service, cloud based, remember, feedme is cloud base. Feedme, the yelp affiliate is cloud based. Yelp is not going to be part of this acquisition either way, okay . Youre paying yelp up seven, you better have a story that i dont have. Intel, look at this. It was up 1. 25 last night. People were so in fear of something, intel is going right to 40. Let me look at the people who ring the bell. Prinseo celebrated a recent public offering. And over at the nasdaq, Energy Company do you want to give this a shot . Abengoa yield celebrating its i love that show. I was watching some repeats last night. You can watch it over and over again. Isnt it terrible . Isnt that latex . It must be a competitor. Export import. Thats right. I forgot. Lets get back to intel and then i want to get to sprint and tmobile as well with a little bit of news there. What is the read broadly on intel . Business. Enterprise spending. And across other companies. Right. So, you know, like this is the type of thing that happened. If youre short Hewlett Packard or youre an analyst, youll upgrade monday. You will upgrade. If you are negative on intel, youre going to have to cover your shorts. Yields still three and change here. If you have a sell on intel, the pressure to upgrait grade is monumental and we have a lead er of old tech. The multiples in these stocks are very low. You have to dust off the play book. You have to dust off the mid 90s play book of what happens when intel gets it right. Its never been one quarter. Those who are thinking it will go back to being bad and think that theyll keep spending on cam ex dont know this company, dont know brian, they dont know what hes capable of. The salespeople no longer run the company. The engineers do. They will be in gaming, they will be in devices, they will be in tablets. They are back. Look out, samsung. And by the way, this is the time. Just call brian. I can put you guys together. I need these teams together. Youre making an interesting point here which is that the change in leadership at intel has revitalized the company. I dont want to be presume tuus. That man is a visionary. Its krzanich. He is a visionary. And you know why . Because hes from the andy groves school. Hes from the andy groves school. All right. A lot of Different Things to follow today. And craig barrett. Im slighting craig. Craig was brilliant. So im saying hes from the Brilliant School of intel. Andy groves, not that nice, very smart. If there hasnt been enough coverage in the deal that has yet to be announced, i have been part of that as have so much, never has a deal been reported on more that actually has not yet happened that this one. But i did want to add a couple of things as we move towards what appeared appears to be an expected announcement of the transaction in which sprint will acquire tmobile with the germans owning some substantial part of it. Its weeks and weeks away. Late july, early august, i cant tell you with any exactly. I can, however, give you a couple of new headlines, if you will, about it, which is that they have agreed on a breakup fee. They have . They are now at the 2 million level. No one knows that. No, thats news. Congratulations on that. A 2 billion breakup fee. Something ive talked about so many times and something were fairley certain of is going to come to pass which is if, in fact, this deal does get announced, the plan is that tmobile would be the brand they go with. And john ledgers Management Team would be in charge. Where does dan figure in . He doesnt. That will, of course, put more risk on the sprint side if the deal doesnt happen. There are many month believe the likelihood of rejection by the doj and the s. E. C. And their inability to get the deal through is high. So even more risk on sprint if you say, hey, were going to be adopting tmobile as our tmobile as a Management Team. But they are continuing to move closer to a deal. You have to remember, these guys have to put together quite a play book when it comes to figuring out how to combat the acquisition of the department of justice and the fcc. Theyve really got to sort of have that all in place as we continue to wait for what i still believe will be, as i said many times an announcement. Were not done with this. So hesse is sprint. But is hesse maybe not sprint . Because not his guy, hes picking ledger. He didnt pick his guys, he picked sprint. And perhaps he underestimated just how pad things were at sprint. I think theres a case to be made that the cost and a lot of other things may have been missed by mossa and thats why he needs this deal. Ledger is a they need this deal in a significant way because without it, neither Balance Sheet is capitalized properly to compete against these two. Thats a case that needs to be made. I can make it, you can make it, but regulators are not on board. Listen, hes been the interloper want. Everyone kind of always said, hey, you know what . Were in the cell phone business. Legere comes in and tears it up. He does. But he needs more capital. You know, everyone is always short american power. One, because theres always a story that maybe their books werent good. Nonsense story. American tower, i cant swear by anybody because its a crazy time, but ive loved minor tower. But you do not sell a tower stock because there might be a merger because Everybody Needs the antenna rent space. American tower has been one of my favorites as has Sba Communications and crown tower. Other stocks to keep an eye on. Opentable is about 65 cents above the bid price. And weve got a lot more activity, of course, we want to get to. First, to bob pisani who is on the floor and hell bring us up to date on whats moving. The important thing right now is all the social media stock res moving on the priceline deal. The russell 2,000 is outperforming. Want to put up the two big names this morning. Opentable is up, intel is up, as well. They rate the guidance upgrade at Morgan Stanley. Opentable, 103. 57. Look whats up on this here. So the story is very simple. More interest across the board in any app with any kind of local flavor. So yepp is up, groupon is up, grubhub is on the up side, as well. So all of those media stocks around local are on the upside right now. Priceline will probably help them drive a lot more intense Digital Marketing effort here. So apply in yelp and groupon there. Several analysts i talked to mentioned the International Growth theyre going to have, particularly in europe, and that priceline can help them drive that International Growth. But the real key is the very stable, very predictable growing cash flow in the u. S. And thats the real key to making this deal work. Lets move on here because markets are very active today. We had four yesterday, three today. The nasdaq, abengoa yield, this is another big reeled plays, renewable energies. Its a spanish company. They are power contracts for wind and solar, conventional energy. And theyre going to put that as a yield play out there. Current yield is 3. 6 . Theyre going to increase that yield with a price at 29. The price was 25 to 27. So yield is what a lot of people are still looking for and theyre paying up for that. At the nyse, we have a small deal right now that make pipe installation. They price at 11. That was below the range although the size was increased. Finally, also over on the nasdaq, d p memorial resource development, this is oil and natural gas play. Theyre sponsored by natural gas partners. Theyve done a number of deals this year, very hot right now, including rsp permian that just happened a while ago. And while im on it, the ipo for ecf, thats the Renaissance Capital ipo, Renaissance Capital the ipo company has been rallying recently. Were up about 10 today. But were up about 10 just in the last couple of weeks. And the ipo market is showing some signs of life. I want to note weve been talking about the low volume as an indication of the low volume that weve been seeing, take a look at whats been happening with etrade and charles schwab. Etrade reporting may numbers down 13. 8 from april, 9 from a year ago. Charles schwab reported their revenue trade for may down 12 compared to april. So there really has been a noticeable decline in trading activities. Thats now being reported by some of the big discount brokerage companies. Right now, the dow is up 9 points. Guys, back to you. Thanks very much, bob pisani. Now rick san at this teleat the cme group in chicago, good morning, rick. You know, i know conventional wisdom makes things so easy, right . Something happens geopolitically, something happens in iraq, were supposed to see a flight to safety. And many, stride there has been a certain amount of safety. But once again, i guess safety is on the eye of the beholder. Pretty much every second of trading, most of the rally is 30year bond auction yesterday. Look at a twoday chart, that was at 11 00 eastern. This morning, if you had no idea something was going on in the mid east in iraq, you would not notice it by the appreciatreasu. Open the chart up to february. You can see where the comp goes with this. But one of the main drivers, to much of the trade, you dont see and youre certainly not going to see it looking at a map of the middle east is the flattening trade. Look at five versus ten. Look at an interday, look at a two day. We are moving to fresh almost two year flats as we hover at 90 on this. Youll see how important this dynamic is. It offers a whole venue of trading and then that trading goes against skills and, really, its counter intuitive to a lot of the interday moves you see on the surface. Foreign exchange, the euro is still holding, but its giving back some ground as you see on the interday chart. Were still counting back to february with regard to the last time we had these valuations. But truly, the Foreign Exchange market, especially the dollar index has been relatively quiet. Its only after the ecb meeting that we see seem to be getting extra volatility. Lets not forget that we have the digestion process of all the supply. David, back to you. Thank you very much, rick santelli. Did want to get to another m a transaction this morning. Hes so man, he is i have an opentable and cloud offering theyre going to have. Were going to get to that. I did want to talk about another deal, potential deal and probably unlikely to occur, but certainly has been reported on this morning. And univision. This giant spanish broadcaster whose rating sometimes here in the states outdo those of the networks we all know. This is a 2006 2007 completed leverage buyout with a huge club deal that was done in valuations likes of which weve never seen and a leverage ratio for the likes of which weve never seen. The very top of the market by that group there. Club deals are out, doing deals that leverage rates. Incredible, 17 times ibtda. These guys have marked it down to about 10 cents on the dollar. No longer. Who you. Graphics are always going their way as we know with the hispanic population in this country increasing with their ability to spend money increasing. The demographics whenever the capital structure was to a certain extent, televista having taken advantage of that. Security, about 38 on a fully diluted basis, they got a 5 stake, but they also put in a convertible that will take them to that. Why am i talking about in this morning . Because they are trying to figure out on the private equity side Public Offerings for sale. From what i am hearing, it is more likely that univision will go public in 2015. Why would you do that . Because of the believe in the private equity owners. That said, time warner, cbs, and some other content companies are taking a look. Why not take a look . Preliminary conversations. But this is what is compelling. If you file 2015 to go public in 2015, theyre talking about between 1. 7 and 1. 8 billion is what im hearing. It is only increasing. Free cash flow increasing. You put a 15 multiple on that, 26 billion value on univision. They make that much money . Therefore, the actual i po would be a success. So while we may hear more and while it certainly may be an attractive asset for other programmers out there, its going to take quite auto high price, it would seem, to take it and prevent it from going public. However, when you have a buyout like that, it is preferable sometimes with private equity firms who are able to sell out entirely as opposed to going the private route and sell out over time. Univision is a key asset. Televista would love to own it route now, but its prevented from doing so under s. E. C. Rules. Its unclear whether that would change. One would think they wouldnt even be selling their stake. I want a piece of that deal given that ebidta. Do any of the other no. The growth there, is that the best growth of everybody . Cbs maybe . Im just saying that the channel obviously, the channel we have to have. Televista if they could get it done. Lets take a break. Were going to talk more opentable, as well. Wall street, key economic data. Breaking news on Consumer Sentiment is just a few away. Former yahoo president and coo jim mallette weighs in on the price line deal to buy opentable. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. You need to see this. Show em the curve. Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. Hammer that in. Nice. Wrench . What . Aflac so this is who you brought to help us out . Oh yeah, hes the best. He doesnt look like hes seen a tool in his life. Oh, he doesnt know anything about tools. Aflacacacacacacac but when i broke my arm, he lent a hand. He paid my claim in just four days. Four days . Wow find out how fast aflac can pay you at aflac. Com. Better. Opentable, theyre up 47 , about 50 cents from the price. Matt roberts is a terrific ceo of opentable not that long ago, november. Going over only 15 of reservations are online yet, so theres a big growth market. Their business grew 28 in north america. They are developing cloud offerings coming this year. Im not a beta tester because we dont take reservations. But i know so much about this darn industry. 30,000 restaurants. Im saying this is all about the handheld. And, you know, yelp, you look it up, this is where you go. And you go to open table. So people kind of think like, well, wait a second. I should go. Yelp is going to continue to what about well, all i can say is if im running google right now, rather than spend a gazillion dollars on a car that drives itself from here to across the street, just buy this, merge it with the gat, and then you have this kind of wholistic thats the word that roberts uses with me Wholistic Company where when a restaurant gives you a dollar, they get 43 in revenue. And you can lock this up worldwide quickly on your map. So you go to google maps, press a button, you get a reservation, find out if its the right place and bingo. Trip adviser, too. Very big company. Whats interesting, david, is you see zillow up today. Spencer, thank you, let me finish my comment before you tweet me. Zi zillow is another application. Theyre all heavily shorted. Every one of these stocks. The hedge funds say, you know what . Its all big joke. Weve got stock trading coming up with jim. Plus, breaking news on Consumer Sentiment when we return. Theres this couple in sydney. Worked hard. Raised two kids. Theyve never been to moscow. But they sent money there. Rented an apartment. All because, they have this 19yearold daughter who loves to dance. In over 700 cities worldwide, products and services that make a citi client anywhere a citi client everywhere. Fame, makes a man take things over fame, lets him loose, hard to swallow fame, puts you there where things are hollow the evolution of luxury continues. The next generation 2015 escalade. Fame bulldog i cant wait to get to imattress discounters because the tempurpedic bonus event ends sunday. Ill have first pick from the huge selection of tempurpedic mattresses. Then, ill get to choose 300 in pillows, sheets, and other free gifts. On top of that, up to 48 months interestfree financing. Hurry mattress discounters tempurpedic bonus event ends sunday. Mmm, some alarm clock you turned out to be. Mattress discounters thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Hewlett packard is enterprise pcs. What exactly did intel say is strong . Enterprise pcs. What has meg whitman told us all over and over again . There is momentum building. She has slashed payroll. Im talking about earnings leverage. Although the margins in the pc business as you well know are nothing compared to printers and their other business. No, thats true. Hewlett packard is a winner because theres more spending business. Its so interesting that the market is going to overlook cinizar, which is an Optics Company and i think a lot of it is the margin mix. What im saying is that old tack that is not connected to opt ib ices is on fire and you should buy them. And if you could buy dell, you would probably buy hes going to way a couple of years. Hewlett packard has to be one. Rick santelli is awaiting Consumer Sentiment numbers and he joins us from chicago. Thanks, david. Tick tock, tick tock. 8. 123. We have helpers. 81. 2 is the june preliminary read on university of Michigan Sentiment survey. It is shy of the 83 that we were looking for. If i put it in context, i look at the previous months final at 81. 9, you can see where it fits in. Since were talking about it, the High Water Mark at 85. 1 one year ago, july of 13 was the best number since 7 of 07. David faber, back to you. Thank you very much, mr. Santelli. Mr. Cramer. A net, anet, super incredible. Theres so much going on, its amazing. We didnt touch upon it because you have done a whirling derby. I have not done my job. What have we got coming up on mad tonight . Pinnacle. We did pinnacle . Weve got the Family Affair show where im going to reveal two names that i think must be bought monday morning. Theyve con come down nicely, so theyre terrific. We have a live show, an audience come in. The executive producer of loves tonight. I cant wait. I love it. Franky is not going to be there . Frank keith . From Family Affair . No. But i have briens cranston this weekend. What an exciting show. And so much more to go. Mad money tonight, have a great weekend. Take a deep breath. Im trying, partner. We have more on the turmoil in iraq and how the u. S. Should or can respond. More on the deal of the day, price line buying opentable. What does it mean for the internet landscape . Investors . Will there be another bidder perhaps showing up . Keep it here. At humana, we believe if healthcare changes, if it becomes simpler. If frustration and paperwork decrease. If grandparents get to live at home instead of in a home. The gap begins to close. So lets simplify things. Lets close the gap between people and care. Lets close the gap between people and care. Being able to pay as we go to is crucial for a start up. Deas. Having to fork out a lot of money up front was risky. We can launch a feature really quick, and if the feature doesnt work, we havent lost anything, and we can have something up and running in days. And this would not be possible without the cloud. We are now supporting over 25 million users each month. I make a lot of purchases foand i get ass. Lot in return with ink plus from chase. Like 50,000 bonus points when i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards, even cash back. And my rewards points wont expire. So you can make owning a business even more rewarding. Ink from chase. So you can. Our road map begins with tensions in iraq. Market is struggling. Oil prices moving higher on worries about violence in the country. Militants threatening to march on baghdad. Plus, priceline buying opentable in an allcash deal. The news pushing other names in the space higher. Social media and the like, find out how you should be playing these stocks. While most retailers reduce their physical footprint, one Ecommerce Company is actually opening more brick and mortar stores. Why hes doing that. We start with iraq, militants seizing two cities this week and vowing to march towards the capital of baghdad. Cnbcs chief Foreign Correspondent is in iraq. We are now about 30 miles from the city of mosul. The city is still held by radicals called isis. Just a short while ago, the mayor told us that the militant ves begun to impose islamic sharia law. Hard line sharia law in the second largest city in iraq. So much for the idea that this country would become a thriving democracy that would spread across the middle east. What happened . A militant came out into the city, he read a statement, he said no other armed groups would be allowed in mosul and as of this point women should be veiled and other forms of slam would islam would be prohibited. They say they want to topple the iraq city. They have moved to just about 40 miles from the outskirts of baghdad. The Iraqi Government is clearly nervous. The mosques in the city are telling people to gather weapons and to prepare for an assault. Richard engle, nbc news, northern iraq. We want to get more insight now on the crisis in iraq and how the u. S. Should respond. General Barry Mccaffrey joins us now, a retired fourstar general and nbc military analyst. Thanks for joining us, general. Good to be with you. Baghdad obviously bracing for an attack. More bad news overnight. Should president obama reengage . No, absolutely not. At the end of the day, we may have had as many as 90,000 iraqi soldiers and police took off their uniforms and ran for it, leaving an amount of equipment, including helicopters. They have maybe 450 million bucks in cash in hand. This is a disaster and the u. S. Power is not going to make a difference. First, tell us the scope. What is the state right now of the iraqi army and how powerful is their defense of baghdad . Well, its hard to imagine. Isis we think only has around 9,000 fighters. Theres a half million iraqi police and military. And in the city or of mosul, theres an excess of 50,000 police and army up there. They may have been taken down by as few as as couple of thousand of people. So the political will to fight for the government corrupt and confident generals being put in positions for their loyalty is coming apart. I cant imagine, though, that the shiites in the south, in baghdad, arent going to fight for their lives. So it will change dramatically as they get into the shiite areas. Why wouldnt the u. S. Take part in this . Dont they deserve some of the blame for this . Weve seen the Iraqi Military almost collapse, as you say, and the Prime Minister is having trouble getting support. Hes enlisted volunteers. Yeah, sure. Hes going to get a lot of support out of iran. All across the middle east, syria, lebanon, iraq, youre seeing these artificial entities from post world war i are separating along religious and ethnic lines. Holding together these nation states is a tough call unless its done by the brutality of assad and syria and saddam husain in iraq. I think were seeing the creation of a new order. And i doubt that we can reverse that with infectal employment of small amounts of military power. By the way, the administration has a problem. That thing in syria was threatening military strike. Hang on, general. While youre projecting the next ten years, lets not forget the last ten years. On the allies for what is happening here, you might not have liked saddam husain, but it was stable. We went in, we destroyed the stability and then we pulled out, leaving shari law. Surely the allies are culpable for the results that were now witnessing. No, i dont think so. By the stability of iraq, a sevenyear bloody million debt war with iran, it meant seizing kuwait, it meant gassing with poison gases occurred. Id hardly call that stable. But i think, you know, at the end of the day, we ought to recognize the limitations of foreign influence on an enduring religious civil war which is what were watching in iraq. By the way, its a nice preview to afghanistan where, again, an artificial state being held together temporarily with allied and u. S. Military power. General, what happens if al qaeda gains control of the country . Do you then have to act . It probably wont be al qaeda. It should be isis. Well, when it should be a law it becomes almost semantics, doesnt it . Im not sure sharia law is much worse than open civil war. But at the end of the day, this is not a good thing for u. S. And western interests. I couldnt agree more. I think we better start beefing up the fbi, the Border Patrol and the Customs Service because well see foreign fighters at some point with external terrorism. Right now, theyre focusing on fighting each other. One quick one, general, and i think this is what simon was alluding to. What if this group takes baghdad . What happens next . Well, who knows . I think we are looking at ten years of warfare in the sunn sunni shia split areas until we adjust to political realities. I doubt theyll take baghdad. If they do, its just another stage of a civil war thats never stopped. We had this debate internally to even call it a civil war. God, its ridiculous. Of course thats what were watching. I dont think the solution is going to be ineffectual use of military power. Thank you very much for your valuable perspective, general mccaffrey, good to see you. Good to be with you. The unrest in iraq is not having a huge effect on the markets at the present today. 1 1 points down on the dow. Lets bring in now jim stewart, cnbc contributor and a Pulitzer Prize winner. Good morning. Good morning. Whether we like it or not, this is not having a huge effect on the markets. Yes, oil has moved a little bit, but theres no great concern for investors at this stage. Not yet. You know, i do in this is a very interesting phenomenon, because a week ago, we were sitting here saying what could possibly go wrong . People were saying volatility is at an alltime low. Smooth sailing ahead for stocks in 2 wall street journal. And i thought that could be an alarm. Where did this group come from . I think there is a stunning turn of events. I think its potentially very serious, but i think the reason the markets have not reacted is we dont really know anything and apparently the state department doesnt know anything, the cia. And more importantly and were probably not going to get involved. Hes leaving options open. But i think that could be very sensible. Investors are kind of rate to take a wait and see attitude here. I think baghdad falls, what is iran going to do . How is syria going to react . How are the regional powers going to behave . Are we going to get the stocks back in . There are tremendous potential issues here. The price of oil has been responding over the last few days. Whats your sense at this point if we continue to see a rise in crude as to what it will mean for gas prices and, hence, the ability to well, its obviously a concern. This isnt going to cause it to go down. I think so far people are saying, oh, the Oil Facilities in the south, theyre saying. How do we know . Who knows. Youre seeing some uncertainty there. Obviously, potentially an oil crisis . Yes, its a terrible time for that. Its like putting a big tax on things. Europe is just getting out of the doldrums. But doesnt the United States have abundant oil and gas at home now . Arent those days of worrying less than not yet. We have it there. Were doing a lot better, but you suddenly turn the spigot off on what percentage of the worlds oil supply and the price is going to go up. Its not going to go through the roof, its not a catastrophe, but its going to have a serious impact. We are more energy dependant, but were still reliant. Prices move on supply issues and its cutting iraq is the second largest opec producer. It doesnt have to move as it does its a knee jerk reaction. Maybe over time, but were not seeing that yet. Again, i think its interesting that the transport has to get so heavily, the airlines. The fear of higher oil. Theyre saying, well, maybe theyre not so dependent on that any more. But the knee jerk reaction is these things are going to go down. General mccaffrey was talking about the tenyear view here. The question is how do investors contend with a world where potentially the terrorism threat is higher for the entire region . Well, i think this is always a tough one for investors. Its not directly a business issue and trying to filter that through the lens of predicting the future is virtually impossible. My advice is monitor it, but be calm. Sit tight. Dont make any radical changes. Tweak things maybe a little bit. But the fact is, do any of us really know about terrorism in the markets . I think the answer is no. What have you got for the column this weekend . Well, im saying up judge reycoff this week. As you talk about here, the court of appeals botched his ears and said you cant demand litigants plead guilty or admit the facts. I think they went too far. I have donned the imaginary judicial robes and i wrote the opinion in which i think they should have done. And i said you cant ask a judge to approve something when they have no idea what happened. I am concerned the regulatory agents fundamentally need judicial oversight. Not just to make sure the guilty are held accountability, but to make sure the regulators dont shake down these banks when they really didnt do anything wrong. Good to see you, jim. Nice to see you. Up next, priceline buying opentable in an allcash deal. Simon has been very busy this morning. Well talk about what it means for price ldz lines future. But then you grow up and theres no going back. But its okay, its just a new kind of adventure. And really, who wants to look backwards when you can look forward . E financial noise financial noise financial noise financial noise welcome back to squawk on the street. Check out shares of express this morning. The retailer stock moving with a private equity firm. Sycamore said it might be interested in buying all of express. Its shares trading up 19 at 16. 24. Steeple saying express could go private for 24. 50 a share. Lets check out and see how the rest of the Team Regionals are doing. Initially they were moving higher on the news. Urban outfitters the only one showing a loss. Back to you, simon. Thank you very much. A big deal, big news this morning with a 2. 6 billion cash price tag. Priceline buying the opentable. Opentable currently trading over the cash offer of 103 a share. You might have seen this coming. I dont know. Pricelines ceo darren houston was on sh show it seems like days ago. Everything we do in the acquisition front, we look for medium to longterm gain. We think about it strategically, how it would fit in the Worlds Largest portfolio of Online Travel sites and thats house we assess these things. Another rationale for what is going on here, he is arguing he can take opentable worldwide. Theyre almost in 200 countries and territories. Beyond what is a u. S. Operation, a bit in germany, a bit in the uk and japan. Deal with the currency around the world, the language translation, that seems to be a major rationale for the deal. Houston says theyve been talking to opentable for a long time. Presumably, that was in play when we spoke to the ceo of opentable, matt roberts. What is your strategy on negotiating with people to maximize shareholder value in the event that youve taken over . Well, we dont comment on any speculations around m a. We are just focused on creating an amazing business. You pointed out some of the attributes of that business. Were really proud of what we built, but were mostly focused on this Transaction Company to an experience company. Joining us now, marc may. He joins us on the news line. What do you make of the deal . What do you make of the price . Thanks for having me on, simon. I like this deal. Since upgrading Opentable Babb in early april, weve been highlighting the strong Strategic Value of opentable as an asset was especially as were moving more and more into the mobile world. Where transactions and the convenience of apps and transacting with local mer chapts is you really start to extract the value there. I think this deal will benefit open table. Thief done well in the uk. Outside the uk, they struggled a little bit. Theyll benefit a lot from price line. Its really helped them expand internationally beyond just the uk. So i like this deal from a valuation standpoint. I think its a reasonable valuation, especially when you consider what significant operating and cash flow margins that opentable generates. Its synergy opportunities that are available. Its more than that, mark, isnt it . On the conference call, they were quite clear. This is about technology. On the one hand, the revelation that open table is moving increasingly to a cloudbased system and, therefore, autos houston put it, its footprint is less heavy and you can take it around the World Without having actually the wait of the frut arguably for the restaurants. And more importantly than that, and i think this is really important, the way that he was so impressed with opentable for paying your bill in a restaurant, which is trialed in San Francisco and theyre promising to roll that out and the argument that the ceo of priceline makes that that technology would be important for owning the space of how people behave in their hotel rooms. They could settle their hotel bill, they could buy trips. This takes them potentially to a whole new level, doesnt it . I couldnt agree with you more. Opentable had a reputation years ago as not being the most Technology Innovative company. Starting about 18 months ago, we did see a real change so things like payments and cloudbased services have been, you know, what theyve been focused on for the past year. And i think youre right, its made them a more valuable business. I know in your notes this morning you mentioned the possibility at least, if im reading it correctly, that ebay might be interested here. Google might have interests. I havent seen nor has anybody the contract at this point. Dont really know the background as to how they got to this deal. Do you expect there might be some others who might consider trying to top pricelines bid . The one thing i would say is we think that ebay probably was a losing bidder in this process. When he he when they announced repatriating offshore cash, we think they were looking at this deal or deals like it. Well find out more when the tender documents are filed. The board has unanimously approved this deal. So were gathering that well, courts always approve deals before theyre announced, mark. That goes without saying. Why do you believe ebay may have had an opportunity to look at this thing and pass . Well, we think that what ill say is ebay and the paypal business, there are a lot of synergies and it would make a ton of sense for paypal and opentable to be together. There are a lot of synergies there. And ebay through the announcement of repatriating cash to give them more flexibility to do things like that, were putting two and is two together. I dont know if ebay has made a bid or is planning to make a bid, but the Strategic Synergies here make sense. In the meantime, a lot of this space is higher today. It presumably opens the gate to other deals being done now, not least after that huge volatility that we had on these, the potential acquirers, the big momentum name and the idea that they could still do a deal and offer potentially in cash at this time. That is a game changer potentially of sentiment, i imagine. When we look at the online marketplace business models, grubhub, i think this transaction helps hi lights the value in those kinds of businesses. And, you know, the valuation being paid here is 26 times next years ebitda. I think that helps provide valuation support for those companies. Good to hear from you, mark. Priceline acquiring joep cable. Up next, intel getting a boost after raising its guidance on strong pc sales. So is there life in the pc market after all . Well back after a quick break. . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. Its calledew way truecar. Car. And truecar users save time and money. So when youre ready to buy a car, make sure you never overpay. Visit truecar. Com today. 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The president of the nyse, joeser ladderman, Joseph Brennen of the Vanguard Group and steven quirk, the Senior Vice President of the trader group at td ameritrade. So an interesting list of people testifying here. Weve got exchanges and exchange critics. What i dont see though list are any twan High Frequency trading firms. Guys, remember, this committee on investigations in the senate is famous for digging into things for months and if not years and bringing new investigative details to the table. No indication of what they have if anything for this hearing next week. But you all remember, sara, carl levin at this committee talking about Goldman Sachs and their lousy deal, except he didnt use the word lousy. Well wait and see what he says. Good point. Thanks for bringing us that news. Meantime, intel is getting a nice pop after raising its Second Quarter guidance on the heels of an upgrade to even weight for Morgan Stanley citing a stronger pc picture. Jon fortt, when was the last time you heard signs of a stronger pc picture . Well, theyve been talking about it pretty much for the past couple of quarters. Intel stocks, meanwhile, is up about 6. 5 today. A tenyear high. When we think about that, we have to think about what kind of betts people are placing. To put it in perspective, intel raised the top of its range about 500 million. The bottom of the range around 900 million. They said this is about the corporate pc refresh. That is stronger. Keep in mind, a windows xp going out of style because the support is not there. Intel says that was part of the reason why corporate was strong. Last quarter where a consumer was not. They said they expect the consumer to be relatively weak, though it was stabilizing a bit in emerging markets. Theyre saying the mid point of the gross margin range is going to be up one point. Im cautious for these reasons. We dont know how much of this is the xp refresh and how far that has legs. In another quarter or two, that could be mostly done. Samsung just came out with a new line of tablets. Apple is going to come out with more at the end of the year. Thus far, they havent done the job. New products might need more of a push. Microsoft office now available on ios. Yes, intel is doing very well right now. Theyre cutting down r d expenses. Theyre basically laying off engineers and their margins are looking better as a result. They havent solved mobile. They have a lot of work to do to turn this company around. I love that you brought up mobile. I would point out, john, were not just seeing the impact in shares of intel. Hewlett packard is up 3. 7 . Microsoft shares are up 2. 5 , roughly. Last quarter, hue let park yard, the last couple of quarters has says were seeing more signs of stability and strength on the corporate side of pcs. Yeah. People bet against the pc market a little bit more than a year ago. Theres a lot of inventory out there. And so, you know, intel and others didnt benefit from that because inventories were being brought down as people and companies bought pcs. Now those inventories still low. Any up side you get, people surprised about the strength of the corporate pc mc. Thats going to go right to the top line and thats part of what were seeing here. Theres not a lot of slack. But the big picture here is that semi condishths should be a lead indicator, the capital sxens expenditure through the economy. Thats why people were buying them in anticipation that this was a shining point. In your view, just the windows xp caveat negates the fact that this could be a lead indicator for the rest of the economy . We dont know enough yet is what im saying. And in the past quarter, on the earnings call, Brian Krazanich said its not all xp, but xp has a lot to do with it. We dont know how much of that upside has to do with extra strength, the refresh versus possibly something else. Dont assume this is part of a wave thats going to continue for several quarters. In other words, we dont know yet if its a refresh of Old Computers or that its a whole nut bfrt of demand. Isnt the bottom line here that theres continues strength in pc demands from corporations even if not consumers . We know its a prefresh. We dont know how long that burst of demand is going to last. Corporates have been holding off on buying new pcs longer than usual. There was pent up demand, but we dont know how much that has left. Jon, thank you very much. Straight ahead on the program, oil prices spiking this week because of that unrest in iraq. We will tell you what it means for oil stocks ahead on the show. Thats crazy, his boss said. Leaving the firm . Moving across the world . To join a start up. So he sent money and rented an apartment in a new land. Thats crazy, his boss said. What fun is life if youre not,he said. In over 700 cities worldwide, products and services that make a citi client anywhere a citi client everywhere. Could help your business didavoid hours of delaynd test caused by slow internet from the phone company . Thats enough time to record a memo. Idea for sales giveaway. Return a call. Sign a contract. Pick a tie. Take a break with mr. Duck. Practice up for the business trip. Fly to florida. Win an award. Close a deal. Hire an intern. And still have time to spare. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business. Built for business. Fear rising in iraq as sunni militants vow to march on baghdad after capturing two more cities overnight. Sending Oil Prices Higher for a second day in a row. Cnbcs National Correspondent Michelle Caruso cabrera has the latest. Video from today shows the streets of the capital city nearly empty. Regions telling reporters that they are fearful of the violence. U. S. Secretary of state john kerry making a statement this morning in london. He was appearing at a global summit on Sexual Violence with angelina jolie. Take a listen to what he said. Given the gravity of the situation, i would anticipate timely decisions from the president regarding the challenge. As mentioned, the price of oil in the United States and in london continue to move towards their highs for the year. This even though there are a number of Market Participants who believe actually maybe even more oil could come online to the marketplace because the kurdish region in the north may seize this moment to start shipping their own oil, which the Central Government of iraq has vehemently opposed. The occurreds have taken over the city of kirkuk after it was abandon by the iraq army. They did not rule out the possibility of maintaining control of kirkuk permanently. We have gone their primarily to protect the population because, clearly, the iraqi troops cant do so. But youre not ruling out beyond here . We have to see how the situation unfolds in iraq. There are three very specific kurdish oil plays, all listed in london, so youd have to pay in pounds. Janelle, Gulf Keystone and athens. As we roll through the oneweek charts, they got punished earlier this week and have recovered some of these losses as the kurds took occkirkuk yesterday. Thank you for setting up that situation there. Lets go to charles max well, we have him here. American dg Energy Chairman on the cnbc news line. Hes been in the Energy Industrial since 1957. Charles, thanks for joining us. Thank you. So what is the immediate threat to oil supply, if any, from iraq . Well, the immediate tli threat, fortunately, is not very much. And that would be about 400,000 barrels a day, which would be less than half a percent of the world oil supplies originates up in the kurdistan area and goes into the mediterranean. That would be about 400,000. And in a world of about 90 Million Barrels a day. And so thats not very serious. But the worst is that to the south, big production is growing in southern iraq and if the sunnis take over baghdad, there is no certainty that iraq will not break into three parts. Kurdistan, sunni areas and the shia areas and that would stop all Oil Development for quite a while. Based on what youve read so far and the knowledge of the region, whats the likelihood of that at this point . Greater every day. 1 out of three today. Maybe in a week or so well have better odds than that. I dont think the sunnis that are coming in from the desert will be successful in taking baghdad. So i think well get a little relief on that. But whats happening here is that the way the middle east was set up with its borders under the agreement of 1921 is now coming under great strain from every side. The turks are not sure what their boarders are going to be. The syrians and the iraqis are talking about what happens perhaps getting together, at least on the sunni side. The saudis are intervening with help to certain sunni people. This looks like its going to be a terrible turmoil and it looks like it has legs. These battles have been going on on the sunny shia said since about 750 a. D. They havent been resolved yet. The trouble is with modern weapons, a lot more damage can be done than at any time in the past. What weve got is a turmoil that will give us some months, im afraid, before it will be resolved. Its not like the arab israeli wars that weve seen in the past that are over in a week or so. Charles, in the past, wars have been fought in order to secure oil supplies. What do you think the correct response should be now from europe and, obviously, from president obama . Well, for one thing, on europe, that is difficult because there are so many different views coming from europe. But, obviously, from obama, there are things he could do such as the approval of the pipeline coming down into the United States that are critical now to the ability of the United States to continue functioning with a full supply of oil if certain large sections of the middle east supplies are cut off. And there is a reasonable chance that will happen. Just to be clear, your analysis here is that the white house, rather than turning outside its own borders to respond to this should effectively look internally at boosting oil and gas supplies here . That is the correct response, in your view . Yes, it is. And its the one that should have been thought through by the white house some long time ago. Its sad that its taken this long. Thanks for joining us, charles max well, the chairman of american dg energy. The worlds most retails are reducing their physical footprint. However, we have one Company Expanding into brick and mortar. The companys ceo will tell us why when he joins us live after this break. [ girl ] my dad, he makes underwater fans that are powered by the moon. [ birds squawking ] my dad makes airplane engines that can talk. [ birds squawking ] my dad makes hospitals you can hold in your hand. My dad can print Amazing Things right from his computer. [ whirring ] [ train whistle blows ] my dad makes trains that are friends with trees. [ train whistle blows ] my dad works at ge. I research. I dig. And dig some m trader more. Search. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade, our passion is to power yours. Are the largest targets in the world, for every hacker, crook and nuisance in the world. 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Thanks for pointing that one out. Bonomos is expanding its guide ship opening a brick and mortar store in dallas. He joins us first here at post nine on cnbc. Andy dunn, good to see pup. Thanks for having me. So its a big day. Youre doing the reverse of what most retailers in this company are doing. Opening brick and mortar. Why not . Were excited about offline retail. When we started our brand, our brand was built around amazing fitting mens wear. But we also wanted to add customer service. We thought doing this amazing 365 day returns and free returns was the way to do it. But what we discovered over time was if you couldnt try on the product, et it wasnt an amazing experience. Im wearing a bonobos suit and shirt. Very amazing. We realized we had to build stores. But part of your business success, i think, as i understand it, is the inventory. You dont have to keep inventory. People order and then you have it made and thats been something thats helping you a lot financially. Yes. When you have a retail store, you have to have inventory. Its 1200 square feet of pure customized service. You come in, try it on, have a great experience with one of our guys and we ship you order our from our distribution centers. So we have inventory not forte home and that allows us to focus on a Great Service experience. I asked you when you walked up, thats a great suit, where do you buy that . You said bonobos. People like me would never buy a suit online. But if i go to all the effort of going to your store and trying it on, why are you then going to send me one from stock . That might not fit as well. Its going to fit exactly as you tried it on in the store. Are you sure . Im very sure. Our hope is that we reeducate you that you can move on with your day, go to a restaurant, go back to work. Why do you have to walk out with the bags . Some of us have short legs and have to have them taken up. Its okay for you guys that are a perfect fit. But the rest of us are struggling with amounter ragzs and i bet we have your inseam. Seriously, im wondering what you think of the some of the reir retailers out there, the jcpenneys and sears what would you tell them as you have built this model online and gone to a physical presence . What weve seen with our partnership with nordstrom is theyre doing a fabulous job with ecommerce in part because they made it a focus. They invested in our company and we are now all carried in all 1800 nordstrom doors. I think if you ruthlessly look at the evolution from offline, like nordstrom is, i think you can have success. So if i read what youre doing correctly, you say youre revolutionizing retail. Do you think that can be extended to many other products . Is that showroom idea what about the car dealership in many ways . Let me tell you about a company i invested in. Dave. Neal came and visited me and said were going to do this in eye wear. I said you guys are crazy. I think its going to be incredibly hard. Yesterday i was in chicago. My sister has a brand called monica and mandy, a baby clothing brand. So my belief is that this will start to be the way, one of the ways that brands build experiential retail. My question is whether you bring them together. Say you have a department store. I dont know if that works. Okay. Why would it not work . Well, i think the issue is the size of the footprint. Right now, weve got a thousand square feet in part because were focused on showroom inventory. Our producer, ben thompson is getting a bonobos pair of pants for fathers day this weekend. Do you see a bump in sales this weekend . Particularly if he orders. We see a nice bump and right now in may its springtime, we do a lot in color and print. Were seeing a Healthy Business rye now. Weve doubled over the last ten years and we hope to keep it up. On tuesday, cnbcs unveiling the disrupter 50 list, the most innovatives companies. We will name names for you on tuesday. As the floor claps us into the break, the 114th u. S. Championship is being held in North Carolina today and technology is playing a big role that could even dramatically reshape the game of golf. Don is live in frankfurt. Cheering you on with na story. A lot of cheers. Its a big day for golf out here. So what it comes down so is, remember, Dicks Sporting Goods basically said that the company is seeing that theres a slowdown in golf equipment sales. One of the big deals is a technological embrace or lack thereof. And thats the big deal. Because what it comes down to is a lot of technologytype based golf equipment pieces. Its really all about whether or not people embrace it and there are a few companies out there trying to bring golf and technology together. Thats the real key. Arcos is one of those. Its Golf Technology meets equipment meets cloud computing. This is a company that you basically attached to your golf club and all of a sudden you had a sensor, a smartphone, that kind of thing. And all of a sudden all that data gets accumulated together. Thats just one company. Game golf take a wearable that you put on your belt and that tracks what your golf club does and joup loads all that data to the cloud so you can analyze it. Were right next to a swing facility put on by American Express where one of their simulators, the track man, has about 25 data points that track every aspect of your golf swing. A lot of folks are using this right now. What this is meant to do is try to get a Younger Group of players involved in this and thats the real key to whether or not they will get back in the game of golf. Simon, back over to you guys. Have you tried it out, john . Did it work . I have tried it out and he has been pretty decent. I dont know if its going to solve my game longterm, but im willing to give it a shot. Na from an expert. In a cnbc golf shirt. I like that. See you later. Thank you very much. Still ahead on the show, the former president of yahoo will join squawk and weigh in on todays massive deals between priceline and opentable. Were back after a short break. N to show how many years that amount might last. I was trying to, like, pull it a little further. [ woman ] got me to 70 years old. Im going to have to rethink this thing. Its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. If we want to be ready for a longer retirement. We stathat the kid onhe thought the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device. Up to the cloud it goes. Back down it comes sounding better. We break down the walls of creation, and we give music creation for the masses. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Welcome back to squawk on the street. Rick santelli here live on the floor of the cme group. Id like to welcome any friday guest, andy brenner. Thanks for taking the time this morning, andy. Thanks for having me. Appreciate it. Listen, you talk to a lot of trading entities from hedge funds to large retail, institutions, and one of the big themes of late is lack of volatility. If we look at the vix, the moves, we see it. What do you think is going on . I think its fairley obvious that Central Banks in the world have pretty much taken out all the volatility. I think thats one of the things the fed is going to be talking about next week, the lack of volatility. The i think theyre going to start to get scared. I dont expect anything like what carney said last night from janet yellen, but i think its probably a month or two away. Well, bring guests and viewers up to speed, basically carney from central bank of england talking about rates may be going up sooner rather than later. It seems to be a market dynamic. It certainly seemed to have moved the pound a bit. No question. It moved gilt and the pound, strengthened the partly cloudy and sent gilt downward. The fed and the bank of england are pretty much in the same boat as far as where they are in the easing tightening cycle. Whereas the ecb is much earliest in the cycle which is why youve seen spanish rates blow through u. S. Rates probably all the way out to five to seven years. You bring up a good point here, andy. Let me stop you. Ive been all over this showcasing boone versus ten and all these relationships, many, many months ago. But the new interpretation is since these are eurofunded countries and the central bank is potentially trying to weaken the euro its an Interest Rate differential argument, that rates arent on a relative value in Southern Europe that much lower when you take into account what could happen to the euro. The trade has been relatively flat. I think this is developed in such a slow pace, i dont buy into that argument. Your thoughts . Absolutely not. I mean, i think its going to last for another six or eight weeks, to the ends of the summer where youre going to see ridiculous things. The only real opportunity we see in europe is greece or greece five years has moved 100 since weve liked them. I think theres another hundred for them to go. But generally speaking, i think the world will wake up and say do you really want to lend spain money at 2. 5 or wherever they may be at the time. Listen, you know you dont mind going into dark territory. To hear all these hedge funds now, these too big to fail banks, the large trading entities say its the economy, its Central Banks taking over the markets. Andy, weve been saying this for years. Why do you think they waited this long . Did they first have to take all the milk from the cow before they started to speak up . Would things have been different if this group would have spoken up much sooner . Things definitely would have been different. There was a lot of Good Opportunity in 08, 09, 2010 and 11. The opportunity doesnt seem to be quite there in 2014 and its because of the lack of volatility its taken the fed and the Central Banks basically a couple years to really take all the volatility out of the marketplace and the regulators havent helped. Maybe the eventual end is not a huge stock market direction because of all the central bank activity, but that we flat line and go sideways here for a long time. Yes or no for the final answer, is that a possibility . No, i dont think so. I think were going to go to higher rates sooner rather than later. But you could be right. I give it 50 50. Thanks, andy. Lets go back to sara, simon and the gang. Very timely, rick. Sterling at a fiveyear high. Now lets send it over to jon fortt with a look at whats going up on squawk alley. Weve got the follow on implications of pricelines bid for opentable, we have the winners and losers behind the shakeup at twitter and a first look at samsungs new tablet coming up. Oh my god look. You need to see this. Show em the curve. Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. 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Whats wrong with trying new things . You feel that in your muscles . Yeah. I do. Drink water. Its a long story. Well, not having branches lets us give you great rates and service. Id like that. Experience a new way to bank where no branches great rates. Ally bank. Your money needs an ally. Good morning. Its 8 00 a. M. In intel headquarters in santa clara, california. Its 11 00 a. M. Here on wall street and squawk alley is live. Ole, ole, ol ole, ole ole, ole, ol ole, ole im Andrew Ross Sorkin and Carl Quintanilla is off today. Joining us, the coxb et toward for recode. As always, jon fortt is here. We have a lot to talk about. To note, the vacant 700,000 house gang bling over a crumbling cliff in texas. Take a look at this. Its going to be initially set on fire any moment now. The 4,000 square foot residence was condemned and evacuated about two weeks ago after a large portion of the