Transcripts For CNBC Squawk Box 20140819

For a hundred reasons, but i think ive got the one that people understood is we bought l. A. Beach front, not seattle beach front. And ballmer gave out his email address to 4,000 plus fans that were in attendance. Were going to talk more about sports later in the hour. Also coming up, our dom true. He sats down with rory mcilroy last night. It was a busy need for rory pep appears on the tonight show. Tiger, will you be be my coach . Yeah. Im hitting the ball to find out for you. I love it. Youre my caddie. This is the best thing ever. Theyre in new york for the start of the barclays and the fedex cup. So a little bit of fun. Ive seen that interaction before. I guess he doesnt remember when we used to jump around like a monkey. Same act with microsoft and the stock prices stuck at 25 for like 16 years. If you buy a team, thats not really a new job. Its a team. His job is sitting on the floor and having starlets come up, dont you think . Yeah, you buy a team you want it to win. Hes a sales guy. Selling. A sales guy is probably you were a sales guy. I was. Did you do that . No. Hes probably the richest salesman in the history of the world. 20, right . I believe hes worth 19 and then thats tiger and rory. I hope thats not a true passing of the pa done yet. It almost looks like when you swing that hard and you buy a lot of the great players, boats just dont hold up. I remember when it happens, he said he was fine. He said his knee, too. Hes had a few things. And rory, he had an entire farm i think rory could have had a great well see. Well talk to is is his name dave . Dave greg is going to join us. The dow and s p 500 are now less than 2 off record highs. Futures this morning, theyre going to consolidate a little from yesterday where the nasdaq closed at a 14year high. Theres the s p back to 19 or whatever. So its up 22 points. 170 points. So yesterday for today, the test in the market will be the inflation data. The july cpi. Housing starts, both of those are coming at 8 30 eastern. And on the earnings front, home depot is out. I havent looked at where the stock is trading based on this. But home depoint reported im sorry . There it is. Its up 2. 41. Is that normally thats an alltime high. Must be close. Ill having a hard time become but 1. 823 r 2. 6. 4 . In the u. S. , total sales 23. 8. That was above the 23. 6 billion that was expected. And total sales up 5. 8 . And were above where expectations are at 441. And the seasonal business in the spring rebounded. It said in the Second Quarter, it was in the core of the stror and across all geographies, things are better. So i think thats probably an alltime high, although its not getting any help from my machine. Im not getting any help with my machine, either. Im trying to play the news edge game. News edge im fine on. The nasdaq closed about 4500 for the First Time Since march 2000. While many are cheering the pep rally, there are still many names that havent gone back to their highs. The story in usa today where i get my business info, it highlights ten big names in the nasdaq and it is still still surprising. Yeah. Did you hear the names . I would have thought that syrias xm would have been a net winner. Sirius xs xm has never been more than a penny stock. Which is stocking to me. Do you think why . Because of the Huge Investment made initially. Because there were too many shares. And then the other one, intel, its a social media world now. All the you know, the old stallwarts, its just not the same. Sitsco has never been back to 80. And still having trouble. It included how many layoffs . But this is totally different. Its new tech that has the nasdaq back where it is. Not totally, but think about google, apple. But apple back then, how much was that worth back then . Probably worth under 100 million. And just a series of guys that have no idea what to do. Next i had ran National Semi conductor. Shares are rehiring its former ceo, julian geiger. Aeropostale is trying to bounce back from losses. Do you think i would shop with my teenage daughter . You might do that. Would you like to do that . No, no, no, thats not what i why would i even think about enter ago teen store trying to i cant pick out. I cant pick out my own clothes . Would you be able to shop for i could. Were going to buy cargo shorts against my wife anticipates wishes. Cant you focus for paying for what they pick out . Thats my story. I will not even enter the i usually stay out in the middle part of the mall with the seats and starbucks and things like that. Because you know living in new york city, we dont have malls, we have big bizarres. Thats your loss, isnt it . Another retailer to watch this morning, urban outfitters, inline with expectations as vestors focus on a 10 drop in samestore sales. Sprint cutting rates as it tries to learn new customers, that Company Unveiling a new plan that unveils 20 gigabytes of data and up to ten lines for 100. Amazing deal. Sprint says additional plans are still to come. Tmobile has expanded its family plan. No gig is a word that means a lot . But what am i used to used per month . 5, 5, 10. And im using that mostly with texting . Usually the videos that you dont like to talk about. If you need to talk, you need to switch the set off. Youre missing my joke. Oh, no, no. Thats whats taking the the demand with. The. Sprint now making a plan for fighting the low wars. Becky and out and gets to spent this year. Home depot is going to help as a dow component. Everybody says, wow, oil should be much higher based on all this. Which tells me if there wasnt all this stuff happening, it would be lower. The tenyear yesterday, its definitely more attractive. At this point, its the current thing to watch. Because it matters what happened in items of the economy. But i look at that 1. 33 and the euro is getting into what seems like a more appropriate level. Its from the style of managing the economies over there. And then lets take a look at gold which also with everything happening you think would be here he is, as i said. Jim paulson is not here. Hes with love capital management. Thats not him. Thats him. Thats david beyonker sitting right next to me, deutsche banks chief equity strategy. Paulson, i hope given that you were on like a week ago, i hope you at least thought of Something Else you could say since we have faithful viewers. Theyll know if youre tuning in the same slop today. Its the same slop. Youve been right for that long, its okay. And i meant like youre on a food place. Whats the today, its come back again. It did not do the 10 pullback again. No, it hasnt, joe. I think heesh is my take, i guess. I think the economy has moved up to 3 growth. I think most investors think thats the case. And the question is, if you now have notched up to 3 , can you grow like that without any Interest Rate or inflation consequences . And if you can, thats nirvana. Thats territory. That could take a market move like we had in 87 or in the late 90s. Or are we eventually going to get some inflation and Interest Rate pressures and move the feds timetable up in which case, you know, we could still get a correction. I lean a little bit towards the latter, but maybe we have to break through 2000 first. I think were just one hot wage number away from a different mindset on wall street regarding whether good news is indeed i think you might be nirvana. Im starting to wonder about you, jim. And im tell you why. Well, i have for a while, but number one, we had the i like it. Yesterday it was said corrugated boxes indicating Nothing Better than a 1 economy right now. And then we keep looking for answers for why the consumer doesnt feel confident, why the consumer is not spending for us. You said because theres no money in the consumers pocket. So its starting to look more and more like the stock market is disconnected from the underlying economy. If corrugated boxes are only if its a 1 world according to him, then the only reason youre right about all this with the market getting higher and higher is because the fed is juicing it. Yeah. I just disagree. How do you disagree with a guy who knows about if its 1 is with whats being shipped in corrugated boxes and he knows what do you know . Whats your data . Well, i guess, i got the ism reports are all in the midst of the nonmanufacturing reports. Youve got the strongest job creation of the entire recovery in the last six months, the biggest drop of the Unemployment Rate in the last year. Are they all parttime and is the Participation Rate still going down . I dont think theyre all parttime. And i think that Consumer Confidence majors, you know, are close to the highest levels of the entire recovery. Theyre close to the highest level since 2008. You happen, i think that the good orders are showing some life. Bianco, does he know anything . Yes, actually, i think hes spot on. You know, the more guys that agree, jim, thats a bad sign. Dave and i together could fail. Its what weve been thinking for a while and certainly the whole year. He has investors, everybody seeming to em brice. Not quite as slow for the longterm, but 5 , 6 Earnings Growth over the next few years. Longer term rates have done nothing but go down this year, even as the labor market has improved. And the Participation Rate ticked up in the jobs report last month. I think thats more about the fed chair janet yellen shell highlight the importance of trying to get a higher Participation Rate, a move from parttime jobs to full time jobs and so forth this week from jackson hole. You can take the market right back to its top, maybe close to 2000, maybe above it. But i think you have a tough autumn with investors worried about longer term growth. When we see growth being help moving about quicker normal Interest Rates than weve seen so far this year. All right. So, you know, i have to disagree. Do we have any type of conflict at all, i have to provide all the dissenting opinions here. We have to think about that when we call you guys. We need david tyce on for every interview. I could disagree with this. Please, go ahead and disagree. No, im serious. We saw yesterday, they didnt what do you think of the International Paper said . That the real numbers are not and consumers . For this economy and everybody is more conscious about that. All the retailers, right . Why . Whats wrong with the consumer . Just havent seen as much of an uptick and the competition is fierce. Why . Why does that data point not make you skeptical about the argument that youve just made . Well, theres more to the earnings on the s p than just the retailers. And i have some degree of caution on but not just retailers. When youre thinking of boxes, not just i could point to other transportation, rail car data and international were going to have a segment on in the 7 00 hour about transport this morning. Yeah, good. Weve got to run anyway. Thanks, jim. Thanks, david. Looking at the paper this morning, you know, when the president does something that frustrates his own party, i always like him. This is when i go, you know, i like him. Do you see this . Harry reid and mitch mcconnell. Harry reid says we have to talk about this. And the president said, you know, harry, you and mitch work this out, okay . And he dismissed him completely and harry reid was seething for the rest of the meeting. You see . I like that. Here are these two clowns bickering again. You like the leadership thing. Its like, look, what are you doing in the senate . Who hired you . Didnt the people hire you . I have iraq on my plate, ive got putin on my plate. Handle it. So that i liked, that hes frustrating hes not frustrating me. Hes frut frustrating his own party im saying. And when he frustrates his own party, thats when i like him. According to that article. I think theres an economic piece to that that were not thinking about. I want to talk about that with you. Coming up, though, the most honest city in america find out if your home makes the cut. Plus, how one of the biggest hospital groups appears to have fallen victim to chinese hackers. Squawk box returns with that and a lot more in just a moment. Long time saturday night live announcer do know don pardo has died at 96. A hell of a number. We should all make that a goal. If we make it there, we may never die. He was the voice of news cast game shows and tv programs for more than 60 years. Jimmy fallon once said in his words, nothing is like the moment when don pardo says your name. We have a guy here that has a distinctive voice, too, that does all of our stuff. Fought, obviously, with the same cache orr don pardo. Lets talk about a different topic this morning. How honest on your neighbors . Joe . Conducting an experiment that it calls a National Honesty index here. People in 60 locations in 50 states were offered an honor system street rack for honesty. The company measured weather people paid 1 for the drink. 95 of people did. The most honest city do you want to guess . Honolulu. You were looking in the te teleprom teleprompter. Of course. For the second year in a row, 100 paid, apparently. D. C. Was the most improved. Its honesty went up 96 from last years rating. And the most dishonest state, providence, rhode island. No comment. I didnt think new york would be high on the providence. Providence. No. Given that politicians what about jersey . Newark. Jersey would be 100 . The home of big ben more than double the investment deals than new york. London the said to be better connected for air travel and has a time zone advantage over new york for doing business with asia. I think we should work on that time zone thing. Maybe we should try to get the politicians to pause. So just to change that, just to make it better for dealing with it is true, by the way. Thats going to be hard to do, i think. We could to do our show in london in the afternoons. I didnt like it when we did that in davos. Then you get done and its like 4 00. Its like, wait a second, ive just worked eight hours. In political news, the clintons are headed to iowa. Its Hillary Clintons trip back to the Hawkeye State since her loss in the president ial campaign. Its the unofficial kickoff for the season, according to politico. I never thought any of that was running. Turning up the camera is following them everywhere. Did you see the latest, though . Gotta have a g450. Nothing smaller. And youre happy for a bathroom in the lobby. She, it has to be the president ial suite when she goes to any of these places to give a speech. I saw the story. You didnt bring it up, though, and you dont look like you want to discuss it now. Im happy to discuss it now. What do you think is the appropriate rate that she should charge . I dont know. She already got in trouble for that. Clinton will be a featured guest as retiring iowa senator tom harkins annual steak fry. I dont think you should fry a steak. Community Health System says it was a victim of a cyber attack from china. The hackers stole Social Security numbers and other personal data belonging to 4. 5 million patients. Security experts say the Hacking Group may have links to the chinese government. Our friends. Coming up, home depot shares getting a boost this morning. Quarterly results beat the streets. Samestore sales were going to talk to an analyst next. As we head to break, here is a look at yesterdays winners losers. Good morning. Welcome back to squawk box here on cnbc. Im joe kernen along with Andrew Ross Sorkin. Becky is off today. Why are you laughing . Luckily, im able to prevent certain things from happening around here. You know, ive got a new guy in charge who understands some of this stuff. Were up 28 points on the a great day yesterday. Especially if you were playing the nasdaq. 14 years later, march 2000 . Its so high now. Look around. This is the nasdaq 5,000 building. We thought we would be at 10,000 by the time we built this. Comcast built this building finally. It is a beautiful structure. We moved to msnbc, but we have this beautiful building, but we were flush. Those were flush days. And were still not back to where we were. Were kidding when we call this the nasdaq 5000. But its nice to be at 14year highs. It is a thing about building stadiums and building at the top . I know. Well, i know. It was a pretty good sale at that point. Lets talk about building things this morning. Shares of dow component home depot on the rise in premarket trade hitting an alltime high. The Home Improvement retailer hitting shares 7 cents above estimates. Revenue came in above expectations. Home depot increasing its earnings forecast for the year. So a lot of good news after a strong rebound in the Spring Season failed. Brian nagel, hard line analysts. Good morning to you. Help us through the your biggest surprise, lets say, for all of this. I think you summed it up pretty well. This is a really good quarter. The number that most investors will be looking at here initially will be the sales number. In the United States, a 6. 4 comp that was on top of comparison last year. It shows this business rm did rebound as the weather improved. Always trying to figure this out about home depot, is this a bellwether for the economy or should we take away something away the this beyond the operations that are home depot or is it home depot specific . Its both. Its both. Its definitely just given the sheer size and given the sector, its an economic component to their results. But i also think home depot, its an interesting question. We look over the last couple of months, there were some negative preannouncements out of our smaller hometype companies. And then to hear home depot report today, they show very good results. That demonstrates how good of an operator home depot is. Given that they Beat Estimates and they beat them handily, what did you miss . We were positive going into this report. They beat our estimate on the sales line. And home depot also, to their credit, controlled expenses better in the quarter than they expected. You have a 93 cents target when they change that . Well see. Were digging through the model right now. This remains one of our top picks in the retail sector. Well see what if you had a buck to invest in home depot or a buck to invest in lowes, is it clear to go to home depot. Home depot is the better performing company, but lowes well see lowes results tomorrow. I think both companies are capitalizing on improving command in the sector. Final question, the weather question. We talked about weather for the first half of the year almost. What is the lesson of what just happened here in terms of how we should seek through numbers, given weather situations like what we saw earlier this year . I think its a reminder for everyone. It tells everyone to keep in mind this is a very weather dependent business. So when we have wild swings in the weather, keep that in mind when were taking into consideration home depot results. Coming up, it is definitely the rory mcilroy period, really. The 25yearold golfer is, you know, hitting 335 yard drives and making every putt. And all this before he even starts the fedex cup. He is sitting down with us. Developers are all about speeds and feeds. Its all about latency. Its all about how fast does it run. I often sit with enterprises who ask me about how Mission Critical and hows the performance of the cloud. And i tell them, if you can make gamers happy, you can make anybody happy. Speed is made with the ibm cloud. The ibm cloud is the cloud for business. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com welcome back this morning. Time now for the squawk planner. I like this squawk planner music at 8 30 eastern time, the july Consumer Price index, the headline number seen rising 0. 1 . Were going to be getting last months Housing Starts examine building permits. Starts expected to jump by more than 8 . And today marks ten years since google went public. Were going to talk more about the dutch auction and the stocks massive rise since then a bit later this morning. That is todays squawk planner. Joe. If you are heading out to the pool, the beach or the golf club today, will you wear sunscreen . Before you make your decision, listen to this story. This video has gone viral. A photographer modified his camera to record people in the ultraviolet spectrum. The video highlights speckles and sun damage. Meantime, it shows that if you apply sunscreen, the cameras filter shows a white lotion looks like black war paint. It says here. But both of us know that ive had like three different kinds of weird things. Youve got to wear the swim shirts and the spf50 every day. Did you see when liam nielson, what the tabloids do when he has a small basal cell . He had a pre weird neevus or something. We are compared to liam niecen neevus is an island. To you. What do they call that, and they clear up margins and everything. But we should be all be very careful. Im not complaining. B basal cell or Something Like that and its from me not paying enough attention to my skin. It is about the kids. Have you seen my kids . Covered. My gingers, they cant no. Weve got to immediately, even if theyre going to be out at all, we invest so much money in sunscreen, in spray sunscreen. But then, you know, for us, i dont know, someone yesterday said you look better pale. Do you remember that . Who said that. I definitely look awful, you know, pasty faced. I look better with a tan. I think you look good either way. Ghost right here. Who was that . Its not bad to look good pale. You know, i think its okay. I wish i could look good pale. Coming up, squawk sports news. The ace of williamsport, shes in a league of her own. She throws heat. She lights up the Little League world series again. The buzz that shes bringing to baseball after the break. Plus, rorying ahead. Rorying ahead. Thats the latest onename golfing great have what it takes to lead the pga in the golf funk . Stick around to find out. Squawk box will be right back. Announcer tomorrow on squawk box, carl w i didnt ans journey from wisconsin to washington, d. C. Hes out with a new book, the way forward and will be our special guest host. What he said about the direction the country is going and what he wants to change, jobs, the economy and politics. A special onehour event with congressman paul ryan. Tomorrow on squawk box. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. [ male announcer ] since we began, mercedesbenz has pioneered many breakthroughs. Breakthroughs in design. Breakthroughs in safety. In engineering. And technology. And now our latest creation breaks one more barrier. Presenting the cla. Starting at 29,900. Tiger woods and rory mcilroy teaming up to introduce nikes latest golf clubs. Theyre here in new york to talk about the state of the industry. David chu got to sit down with 25yearold rory mcilroy. He joins us now partnership admire tiger, i always have we all do. But to hang with rory, i dont want to say its a passing of a baton, but sometimes i fear it kind of is. The reason i would say its not a passing of a baton, they were both at this nike event for their new irons last night. Tiger did not hit any shots. Why . Because hes still injured. But rory hit with ease and he dazzled the audience with how will he could strike a ball without any effort whatsoever. But it speaks to the idea that there is this idea that maybe golf needs a new lightning rod. Somebody who can get out there and jack won a tournament at 45 or 46. Watson almost won a tournament up in his major, right . I mean a major. I didnt mean miller won a tournament, he won pebble beach. But the way tiger and these guys swing now, tiger is 50 older than rory. Thats right. And youve got knees, back. Youve got back and youve got, as we know, the small neshs involved with putting on the six and sevenfooters. Rory putting on six and sevenfooters, tiger does not putt like that any more. I have to imagine that tiger is going to be around for a long time. Do you think he will win more majors . I think he will. I throughoutly think he will. Did you have a better chance of beatinging paul trekker . He has the last four could be bigger than rorys next ten. Here is the thing. Take that thought, right . And that is what may save the game of golf. Golf has been in this second ewe layer state of decline. Here is the interesting part. We spoke to rory and mikey golf president cindy davis about this last night about the idea that with golf, maybe there is a chance that golf is going to be around for a while and its demise, like you said, joe, has been grossly overstated. Take a listen to what they told us. People that are playing the games, the numbers are slightly down. Whether thats just because of demands of the modern world, modern life, people not having as much time to play ten holes of golf. But you look at, you know, viewership numbers in golf are, you know, staying steady or are on the rise. So, you know, people are still interested in golf. People still want to be involved with golf. As i said, people might not necessarily have the time to play, you know, 18 holes any more, but, you know, if we brought some sort of shortened version to the game to them, they can still play nine holes. Golf is a great game. Its a game that i still think people that want to be involved with. And so i feel like i have some sort of responsibility. And some way, yes, i feel especially kids can be inspired by not just what i do on the course, but i was inspired by tiger woods. And these young kids coming up might be inspired by me or by yordan spieth, some of the young guys coming up. So we have some responsibility in trying to bring the Younger Generation into the game. I still feel like, you know, the game of golf will survive. Now, cindy, for you, as a golf executive, you have an intp interesting view on the economy. Golf is probably one of the most Discretionary Spending items for anybody out there. From your standpoint as a golfing executive, what do you think its telling you about the state of the overall economy, not just in the u. S. , but around the world . Well, weve always noted that where theres a growing of the world where there is a growing middle class. And were there and were part of that from a golf standpoint. I think, though, as we go through this transition with golf, i think its important to remember, this is a sport thats been around for centuries. And it has always endured, theres always been golf and an opportunity. Were all old enough to remember the old ad campaign from nike, right . The Charles Barkley one. I am not a role model. Yep, i remember that. Remember that one . The poster and Everything Else. I am not a role model. Rory mcilroy is refreshing because hes embraced this idea that he is a role model and hes baring the mantel now for a lot of young golfers out there which is a good thing for the game of golf overall and thats maybe one of the reasons why youll see golf perhaps catch a bit of an upswing in the next coming year. Worked for charles, though. Ive seen him, you know, ive seen him lose 500,000 in lake tahoe at a gambling table. Yet ive seen him say things so right on without worrying about the consequences. So i love him, too. Youre here. Im here. Stick around, dom. Dave briggs is here. Dave briggs anchor with nbc sports. Like all sports guys you are willing to hype the hell out of a story that golf is dead. Thats just what you do. It has not been greatly you wear ridiculous outfits. You wear, you know, youve seen what you who is that guy . Who is that guy at the tennis tournaments that wears those ridiculous jackets . All you sports guys got to make a statement. Golf takes five hours. People are on social media now. Its different but its never going to just go away. Im not saying its going to die. 18 to 30 rules are down 35 in ten years. The golf course closes every 48 hours in this country. Its dying. Weve got to overbill. The tiger bubble its not instant gratification like playing brick breaker or whats that bird thing . Angry birds. Its hard. Thats the issue. Sometimes its good that things are hard. Should be nine holes. You should learn that sometimes things are hard. Look at the retail industry. The golf golf is getting crushed down double digits the last three years. They said it. Dicks let go all their golf pros, 500 of them. Its not greatly exaggerated. Oh, yes it is. Things cycle. They ebb and flow. I mean, the satisfaction i mean youre talking to someone who really does think at times why am i still out here spoiling a good walk. Because some days we feel great. Dont we feel like you know i really got this. Other days its like, im never going to get any good. Most days but, but the satisfaction of, you know, when you actually do play a little, and then get a little bit better. Theres nothing like it but i dont think the young kids want to and i dont think theyre ever going back. I dont believe that, though. Correct me youre like the pope talking about Birth Control or sex. You dont play golf, you dont know anything about it. I play golf ive seen you swing. Its not really a golf you didnt start that is correct. I started too late. Not a golfer. Hes a golfer. Hes a single digit handicap golfer. But golf was not cool when i started playing the game. It will never be cool. Its going to be Craig Statler is our athlete. Give people four hours where are people going to find four or five hours and its expensive. It grows on you. I will say i fought my mom and dad tooth and nail about not playing the game of golf. My dad got me out there, we hit the range every day, we took lessons and all of a sudden now, ive just found like its this zen thing that i can do. Can i make a different argument . Im going to make an urban versus suburban argument. Okay. Which is and weve had people come on the show over and over say more and more people move to cities and are leaving suburbia. The more and more people move to cities the harder it is to actually play golf. Its very difficult. The accessibility is terrible. Were all in the new york area. What about technology being able to bridge that gap . Because if you go to places like golf and body in new york city, and you know that, urban golf centers can prap because pro golf and thats another trend thats greatly exaggerated, too. Not everyone is going to move back in the city. Im never moving back i may some day try and have a second place there or something. But im never moving. So you know, you like it. You get the food delivered to you. And you know, people whats the other advantage . You know, having dog poop everywhere you walk, is that good . Or a guy with an ice pick around every corner. You dont have to, but they are. Oh, really . The rest of the country is moving to cities. Really . 23 you look at the overall demographic trends in america. This is whats happening. You and i talked on twitter and the American Dream is dead and everything is different than it ever was before and its late evening in america, its not morning. It is always morning in america. We talked about the Television Ratings for the pga. They were up 35 . But the prior three majors were historic lows. 30, 40, 50 year lows. Martin kaymer, you want to watch him even when hes not ahead by eight strokes. Thats my point if you dont have worre rory, rickie and phil youre going to struggle and rory won the open this year, too. Right, didnt he . Rorys prior three major wins were double digit television declines. Thats because he was ahead by double digits on a couple of those. That is not good. Thats the its got to be a match. It cant be someone ahead by eight strokes. Its not just every match. Its got to be the old and the new. Its got to be Phil Mickelson and rickie the last pga that was the high, right . That were coming from. Was 2009. That was the year tiger and hawaii yeah. Came back from two strokes to beat tiger. Its a good story. I was talk theres an expression, when you hit 5 iron the way you should, like a tuning fork in your soul. Its like a tuning fork in your soul. Its like a tuning fork going off in your soul. You can say in your pants. Anyway. Talk about mone. Not just playing with boys but a 13yearold who stloes a 70mileperhour fastball. She is dominating the boys. The first shutout in Little League world Series History in 67 years. 32,000 fans showed up for the sunday night game. She didnt even pitch. Thats more than 8 Major League Teams do on sunday. What is her facebook . 70. About ten miles an hour faster on average i can throw as hard as i can and its like 48. Shell pitch wednesday against vegas and youll probably see Television Ratings bigger than major league baseball. Dave briggs thanks for joining us. The streets reaction to home depots quarterly ruts. Were going to talk about what those numbers mean and a lot more in just a moment. S of delay s of delay 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. Go to comcastbusiness. Com checkyourspeed if we cant offer faster speeds or save you money well give you 150. Comcast business. Built for business. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. The summer of stocks. Momentum, the name of the game. We have the biggest winners and losers. Raising the roof on housing. Dow component home depot posting better than expected Quarterly Results and giving a unique take on the real estate market. Google, the date, august 19th, 2004. Thats when the search giant went public, ten years later the Company Still dominating the world. Squawk box starts right now. That was, of course, rory mcilroy. I often wonder whether Kenny Loggins is glad that he allowed this to be part of you think its a good thing or a bad thing . I actually saw Kenny Loggins live a couple weeks ago. People see him and cant think of anything but caddyshack. He was amazing. Amazing show. Where was just Kenny Loggins. Kicking off squawk box this hour. Hes in town for the start of the barclays is that why youre here . For what the barclays . Were talking about rory mcilroy not Gary Kaminsky. Good morning, joe. I love the beard. Dominic chu caught up with rory last night. A lot more of that conversation a bit later in the hour. He also appeared on the tonight show with jimmy fallon and with him another face familiar to golf fans. Tiger, youre going to be my coach. Im just getting the balls lined up for you, sir. I appreciate it. I love that youre my caddie. This is the best thing ever. Our guest host this morning, Morgan Stanley Wealth Management vice chairman Gary Kaminsky. Also known as joes caddie. You have not no youre not part of the problem. Because you cant quit the game so you never did play. I did play one time out in pebble beach, and oh, thats a good place to start on pebble. I went to golf camp but i just dont have the patience. To play. Its hard. It takes a lot of work. You should start on you should start from the back tees. Anyway futures right now lets take a quick look. They have been indicated higher for most of the session. And then the tenyear, take a quick look at that which is 2. 37 confounding everyone. Wait a minute. Somebody called that. Have you ever been really get friendly to the stock market though, gary . Very friendly to the stock market . Yes, did you ever in the last absolutely. Absolutely. Absolutely, joe. What about now . You want to talk about the market already, right now . Yes, i want to know just real quickly, is it is it exuberant, is it irrational, is it too high . Does it need to pull back . Is it overpriced . Is it overvalued . Would you stay long . Would you buy today . Those are eight questions. Very simple, i think that the typical normalized Asset Allocation which is to have some fixed income and to have some equities for the great bulk of people continues to make sense. Its what ive said for the last several years. I dont necessarily like where market is going up. I dont necessarily think it makes a lot of sense. Why is it the fed you mean . Is that what youre implying . Its Central Banks around the world. Thats what its been basically driving the great bulk of equity moves. However i dont think thats going to change. As a result of that, what ive told people, what ive told our clients and advisers for the last six months is you might not like the way it smells, the way it looks or the way it feels but this is what you need to do in terms of investing Asset Allocation and that doesnt change. You can do the oneyear or you can do the tenyear german bund for 1 or double your return in a u. S. Treasury for 2. 3 . For ten years. So the stock market, as long as thats de facto where savers are, you probably are going to put people push people out the risk curve which is what the fed has been intending to do all along, and makes sense to stay there. Out the risk curve. Junk bonds. As simple as it sounds, sometimes we try to complicate things. Its that simple . You and i have been around to watch enough markets, you know, thinking back to the google tenyear or the 20year tech bubble. When they said whoever came up with the phrase dont fight the fed and in this case obviously the Central Banks around the world, you dont have to make things more complicated than that. Okay. The Central Banks have told you where they want to put where they want people to put assets. And as a result of that, i dont see anything thats going to change as a result of 459. The one thing that i differ from most, and i have differed from most is that i continue to believe fixed income plays an Important Role in a portfolio. There has not been a bond bubble. I dont believe theres a bond bubble. All the evidence i see continues to point that Interest Rates are going to stay low and remain low, whether its post taper, in the taper, or whatever we have there. We have a lot of time for you later. We do. I like that green tie, too. Thank you very much. You wore green so you could hide from me. Courtney said she liked it. I do like it. Okay . Thats a caddyshack look. Thats why i said that. I dont just look at you and say you wore glean so you could hide from me. Lets talk headlines. By the way, were both purple today. Is this purple . Where . What color is that . Is it purple . I dont know. Its purple. Dow component home depot, its one of the days early winners after beating estimates with its Second Quarter earnings and revenue. The Home Improvement retailer raised its earnings forecast for the year. Joining us cnbc retail reporter courtney reagan. Retail itself may be in a funk but the Home Improvement retailers seem to be the exception. Home depot posting stronger than expected quarter nearly on all fronts beating earnings estimates by seven cents 1. 52 on 23. 811 billion in revenue. That top line also better than consensus. U. S. Samestore sales gaining 6. 4 higher than the 4. 9 expected. Upping the full year guidance by ten cents to 4. 52 thats eleven cents above where the street is expecting it to come in. It was a solid quarter straight through for the Worlds Largest retailer. Ceo frank blake says home depot saw its Spring Seasonal business rebound as well as Strong Performance in the core of the store and across all geographies. Credit suisse says cooperative weather, pentup demand for home depair and market share donated from sears in the nonappliance categories both helping home depots results transactions and average ticket up 4. 2 and 1. 8 . Respectively but the retail earnings parade does not end with home depot. Analysts looking for Dicks Sporting Goods to report earnings of 65 Cents Per Share on revenues of 1. 65. 3 billion same stor sales growing 1. 1 . Remember last quarter the retailer noted golf and hunting were weak. Well see if those areas have picked up. I dont know if you were listening to the earlier conversation. Tjx looking for 73 cents on revenue of 6. 884 billion and samestore sales gain of 2. 4 . Tjx has long been a standout. As the internet begins to gain strength and just ramping up their operations theyre losing just a touch to some other players. Thanks, courtney. Other retailer home depot is going to be a big winner today. Among the other best performance stocks this summer, biotech. Be careful, though, janet yellen put a sell out on biotech. Meg tirrell joins us with that story. They have done well. Its really the big guys that are doing well. Were seeing celgene, amgen hitting alltime highs yesterday. And analysts tell me thats because the Second Quarter was really good. These are all driven both by earnings but also about excitement about their pipelines. Cellgene has got a big drug thats a blood cancer drug. Its tapped into the smaller biotechs through Business Development and partnerships. A lot of folks are really excited about that. Amgen just did a restructuring, cut a lot of jobs. Folks are excited about their emerging pipeline. They have a drug that targets cholesterol. Gilead of course has that huge hepatitisc drug. Estimated to bring in 12 billion to 13 billion in its first year on the market. A lot of folks excited about that. Theyll be bringing in a lot of cash. Expected to do a lot of acquisitions. And rejeneron. They have longterm growth in a cholesterol drug sets up a space race over cholesterol between amgen, and you mentioned yellens comments earlier. Analysts are staying some of those fears might be waning a little bit. There was also some concern there were fears from janet yellen a real fear in the market . Some of the concerns she was saying it was overheated causing a little bit of a selloff but then there was also a letter that congressman waxman had sent to gilead over its pricing so there were fears about that in march as well so what rbcs michael yee saying that might be waning. Pretty funny, gary, that as the fed goes some of these stocks seem to be getting a little ahead of themselves. We dont understand why. Bit, i mean they may have had a little bit to do with some of these stretch valuations, dont you think . Yes, yes indeed. And it was probably some staffer who actually wrote that line it was sort of a cya line in case something does happen. Again, it was, when did greenspan say the irrational exuberance. I think we were at about 5,000 on the dow. 6,000. We doubled there. The nasdaq doubled after he said irrational exuberance. The fed speech writers put these kind of things in there as you say cya. Im not sure what that means. The late great marty situation came over with the original phrase dont fight the fed. Biotech one of many sectors taking investors on a wild ride. Check out major moves so far this month. Big winners like linkedin, tesla and trex. And big losers like seaworld, noodles, and nuskin. Gary, let me just no, let me just get ready. Because you know what i really like . Should investors expect these mood swings to continue or is this just a byproduct of the summer Trading Volume . Interview. Let me read it, too. When did we start doing this again . Let me is this you . Is it really . Yeah. All right. Read it. Really works good for me. Let me read it again since i cant think of my own questions. Lets go back down. Gary, should investors expect and then youre going to read it. Should investors expect these mood swings to continue or is this just a byproduct of the thin summer Trading Volume . This is going well. Okay. When you look at the august gainers and losers, i actually think you asked earlier about signs of a normal market, healthy market, i think its a healthy market. Look at the decliners. Each one of them has a fundamental reason. Its not the closet index taking down a bunch of the lowest you want to talk as someone who is going to listen . Im sheer. Joe is typing something. Hes saying dont so when you look at that, in fact, guys i think its a sign of a very healthy market. I actually pulled a couple of full screens in line with this because i also knew what the question was and that you know, i was nick carl at convergence does a lot of great stuff thinking outside the box and looking at sentiment, things like those stocks that are down and this to me was really interesting late july, he looks at the Google Searches, and i always used to reference this. Interest in traditional financial assets, stocks, bonds, mutual funds is down 19 in terms of initial Google Searches since 2006. When the Capital Markets reached the new highs leading up to the last market crash searchers were led to traditional assets. Searches were up 61 . Subsequent to the peak of october 2008 these searches fell by 45 . Ie you want to know, youre always asking the question, is the public obsessed or is the public too invested. Now conversely, look at interest in human capital. Ie schooling learning languages getting involved in startups is up 359 since 2006. Prefinancial crisis interest related to investing in ones self was virtually flat down 3 . Post financial crisis by 33 . So when you want to know are we in irrational exuberance and you look at this type of data you think the Google Search is actually the index for you . Well if you looked at previous Google Searches in terms of when people were hearing about things and looking at things, its a good indication of what the public is thinking. Much more than what are the biggest gainers and losers let me ask you completely different question. Yes, sir. This is a Wealth Management question. Mmhmm. Pretend i am a client, i come to you right now, i say look, gary, i got some dough over here. Right. I want you to do something with it. Should you put my money in hedge funds today . And the reason i ask is that the equity market has so outperformed the Hedge Fund World over the past 12 months maybe even the past 24 months even more like the past 12 months that its out rangeious and i think there are people with money who watch our show saying somethings got to give here. Thats a good question and the first question i would ask you or one of my advisers would ask you is whats your time horizon on the money. Cant just say i want to invest the money. Okay lets say i have 5, 10, 20 play for the longterm. And so the answer to that would be that the belief is that a certain portion of a pool of assets should be in alternatives. You used the word hedge funds. Alternatives is not just hedge funds. Its private equity. Its not and hedge funds doesnt just mean long short equity hedge funds. Theres a number of things in credit area. Number of things in you would argue that most alternatives have not performed well on a relative basis at least to the equity market. It depends what it is. The s p 500. If youre looking at a relative basis of the hedge fund versus the s p 500, youre correct. If youre looking at a bench mark such as overnight libor times two plus two, sort of an absolute return bench mark, theres a great bulk of alternative assets beating that. It depends on what your bench mark is against. One quick question you think were going to have sort of a september swoon . Theres a lot of people sitting around with cash thinking that something is about to happen and they havent gone in waiting for this moment . I dont i continue to believe that the path weve been on for the first eight months of the year continues. But again im not a great market timer in terms of the short term. Your whole thing a lot of times is just all that stuff. Youve been saying. Youve been beating that closet indexer. Yes. For 15 years. Well, because, joe why would anybody want to give money to an active manager pay them 1 , 1. 25 and that was even in the preetf world when you could guy the vanguard now you can buy a whole package of etfs if youre going to have somebody who is actively managing money but basically hugging the bench mark. This is a way you were always able to generate value and worth forewhat you did at newburgher berman. Correct. We also the performance. There was i ten year period the s p return was zero and we had an annualize compounded return of 10 . That was by thinking outside of the box and stocks related to the index. Most famous stock in the world for you. Was that sun corps. Sun corp. Been great. One more stock to watch andrew. And this one is not on the winners list this morning. Shares of mining giant bhp billiton Just Announced plans to spin off 16 billion of assets to shareholders in a separate publicly traded company. Investors were disappointed when the company did not announce an expected stock buyback. Coming up planes, trains and automobiles. The story of the transports and what they tell us about the economy, and the broader markets. Then later is this countrys job market finally bouncing back . And more importantly are the positions being created good ones . A passionate debate. That will be totally un unprepared or unplanned. Well begin at 7 30 eastern. The transports coming off their best day since may and overall its been a great year for trains, planes and yes automobiles. The dow transports up more than 13 while the Dow Industries only higher by about 1. 5 yeartodate. Lets bring in jason subtle from cowen company, he covers air freight and surface transportation stocks. Good morning to you. Help us through this. So we had the ceo of International Paper on yesterday. He would tell, based on boxes, corrugated cardboard, that the economy not actually in great shape. That its only sort of, hes sort of seeing a 1 world, and yet, the guys are transporting all of their boxes ostensibly doing much, much better. To me transports are a good indicator of the economy. You dont see the economy go up or down unless my guys see whats happening. When you take a look at train traffic and you dissect it the economy is doing pretty well. Right now quarter to date in q3 were up about 6. 5 . If you remove ag, and coal, which is not really economically sensitive, were up over 7 . So if you look at the what are they transporting . Because the guy who is making the boxes, which i would have thought everything. Theyre transporting everything right now. If you break it down even further and look at the air modal piece and say, all right, lets say three quarters of the growth is due to people preshipping because of fears of the west coast port strike and some of that might be a little bit of leakage from the tight truck capacity out there youre still looking at growth of about 5 . Historical rail traffic, like that, is usually gdp plus or minus a percent so were doing pretty well right now. If you look at the supply chain in transportation, its tight. Its tight in rails, its tight in trucks. And that tightness is leaving the one thing. Prices going up for all carriers. Maybe their transporting lumber. Have you figured this out with home depot yet . How do you do 6 . And its not the first quarter. Its year over year. What changed at home depot in the last 12 months . Thats the best retailer number weve had. Thats what im trying to is it i was going to ask you, part of whats happening is that because of 2008, 2009, clearly in the Airline Industry there hasnt been capacity growth. If you look at typical economic recoveries, and new trucks or new rail cars that are put into action, or put into the system, is that part of whats happening . Well, i think capacity is clearly constrained right now. If you look on the trucking side, for instance, its not the new truck bills the issue its getting the drivers into the truck. A new trucking asset is 120,000 not enough drivers . Not enough drivers. Ive been in transportation 21 years. Theres never been a good year for drivers. But this has been the worst year. If you go back last year the government instituted some regulations that made it tougher to become a driver. So these guys are on, you know, the drivers on the road three weeks at a time, making about 50,000 a year. You know, its just not a real pull for people to come in and be a truck driver. Thats what weve seen now. Jason help us with one thing before we let you go. Mergers and acquisitions. I understand you have a view that were going to see a lot of consolidation come perhaps even as early as this fall. Whos going to merge, why . Whats driving it . Sure. Now we wrote our piece i think back in april, and you know, if you saw what happened in q2 there was a lot of movement in transportation, weve seen trucking, m a, weve seen logistic m a. Youll see continued logistics transactions. I think we could even see continued trucking and maybe even a Shortline Railroad transaction. You play the game with us and just throw out a couple names . Sure, i think people to participate in the m a world are going to be likes like genesee in wyoming, gwr, i think as a seller . Tease are guys that are going to be buyers. You want the sellers . The sellers . I think on the private side. Thats what weve seen a lot right now. Most of these are private transactions but fairly large. Hundreds of millions of dollars. Thank you for joining us this morning. My pleasure. Doesnt float your boat. Excuse me . That doesnt float your boat. No i want public m a. Thats how you play. Thats not what andrew he wants bigger in public. Coming up a 1200 acre wildfire burns just a few miles from the entrance to Yosemite National park in california. Well have an update. And then, the google guys are in the top 20 billionaires of the world. But ten years after the search giant went public theyre not alone. Well have a look at who else has cashed in big on the famed dutch auction when squawk box returns. Your 16yearold daughter studied day and night for her drivers test. Secretly inside, you hoped she wouldnt pass. The thought of your baby girl driving around all by herself was. You just werent ready. But she did pass. cause shes your baby girl. And now youre proud. A bundle of nerves proud. 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What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. The ibm cloud is the cloud for business. Coming up, call it the jobs recovery. Why some say hiring is finally picking up and high paying industries. Plus, before there was buzz about an ipo of facebook or twitter, there of course was google. Ten years ago today, the search giant went public in heavily hyped dutch auction. Were going to talk to the investment banker behind it and ask why the internet based auction never took off with other companies. When im working, things can get so hectic. So sometimes i need to find an easy way to express whats most important to me. Like, with my crew, i use shorthand to talk to them and tell them what i need. And when i need to talk directly to my fans. But the most meaningful shorthand of all is the one i use when im about to drive x. Its an easy way to tell everyone that im about to drive. And i do it every time before i get behind the wheel. Use x to pause the conversation before you drive. Because no text is worth a life e financial noise financial noise financial noise financial noise welcome back to squawk box this morning. Home depot getting a boost this morning. The dow components earnings and revenue beating the street handily. The Home Improvement retailer also raised its earnings forecast for the year. And also, no bieber fever at elizabeth arden. The company posting a bigger than expected loss, revenues also missed the mark. Among the reasons, steeper than expected drops in celebrity fragrances. No idea what youre talking about. Particularly Justin Bieber and taylor swift. Who in the world would wear and want to smell like Justin Bieber. There are probably not enough people want to smell is there one . Part of the problem. Is there a Single Person in the world who wants to smell like Justin Bieber . What does he smell like . Well, thats a totally different matter, isnt it . I mean i dont want to smell like young ladies might like to. Maybe some young guys want to smell like bieber. What does he smell like . Hot. I dont know. I dont know. All right. You okay maybe youre on to something there. All right. Lets tell you about some other stories going on around the country. 1200 acre fire is burning in central california, and is forcing evacuations today. The fire is just a few miles from the entrance to Yosemite National park. People in some 13,000 homes and businesses have now been told to leave because of the fire remains under investigation. Better paying jobs staging a comeback after being concentrated in fields with low wages this according to the National Employment law project. Yesterday, we spoke to cke restaurant ceo andrew puzder, thats carls junior, and asked him if hes seeing that same type of growth. Now were in a position again where were not seeing the kind of growth we should be seeing. Were not seeing the kind of job creation we should be seeing. And joining us now jared bernstein, love this man, board member of the National Employment law project, former chief economist for Vice President biden. At this point, jared, you do or do not have a fragrance marketed under i do have a is it called jared . Next time we get to the, ill allow you to smell me. And then youll know my fragrance. I always thought you smelled pretty good just whatever that is. Thank you. Natural pheromone or whatever. Right back at you. A lot of your arguments stink. But jared, you know what . I immediately thought about this, and its great. And youre trying to be happy about it. I can see that. That some of the jobs are better. But when we had alan krueger on, remember what his work did, what his work showed, that there wasnt as much slack, therefore the fed might need to be a little bit more wary of what theyre doing . He he acknowledged that he had gotten some pushback from the administration where he used to work. Because thats the last thing they want to hear, is that the fed can relax and not no, no, no. And i think youre looking at this half empty you should be saying how great this is, but the first thing you say is, yeah, that the jobs are better but the fed if you give me a chance ill tell you what i want to say about it. Go ahead. Thank you. The report suggests that there are sectors of the economy that are doing a bit better on the wage side, and im sure thats true. But tilely, theres still considerable slack in the job market, and theres not very much wage pressure across the board. I actually think its valuable to look at the broader picture in this regard, both in terms of the federal reserve, which we mentioned earlier, obviously chair yellens been talking about the absence of wage pressure as an important criteria to keep the monetary stimulus going. But also at the microlevel. Because while you can find some improvements at the margin, remember, theres, you know, 100plus Million People drawing paychecks and many of them have been flat for years now. Now, we talk a lot about Financial Markets on this show, as we should. But most people get by based on their paychecks, not their stock portfolio, and theyre still facing some slack, so i disagree with alan on that point. So you really do. But i think there are certain interesting things, we got some people writing in about trucking jobs. We were just talking about transport jobs, we got guys writing in that you can do not overnight, and you can get 70, 80 grand, theres plenty of jobs available, and that people just, theyre not taking them. So there are there are Certain Industries where there is no slack, and they are actually looking for people well, actually, i would challenge that view on trucking based on some recent research i read that suggested wages there, again, theyre starting to tail up at the most recently, but theyre still in real terms 5 or 6 behind would you like wages to trend up in the private sector naturally . Or do you just love government minimum wage hikes so much that youd just rather have the government set wages . What would your preference be . Look, at the low end i think its widely agreed upon that we need a minimum wage youd rather have the government legislate the higher wages. That wont but that wont change the average picture or even the median picture at all. Its a relatively small group at the bottom. I would much rather have tight labor markets, full employment, create the wage pressure. Thats the only way weve ever seen wage pressure in the last 20 years although, it isnt great when the labor market gets too tight. Where you have the worries about inflation and wage pricing. That is that is a high class project. Long way off. You want to ask i was just going to say, jared, you know theres a correlation between the industries that have been most positively impacted by quantitative easing in terms of what wage growth has looked like there. Yes. So clearly the industrys highend real estate, highend retail that have benefited from the stock market gains and the quantitative easing have seen the wage growth. What does that tell you in terms of, in a post qe world . You know, its not just qe. I think its an interesting point. The Financial Services generally have done better all the way from profits down to wages. And i do think it has a lot to do with the structure of the economy. The kind of industries that have been doing better. I will remind you, you mentioned quantitative easing. There was also obviously a very significant bailout. So theres really a linkage between government activity and areas of the economy that are doing better. So your point would be that because the government was in favor of quantitative easing, that more Government Programs would impact the overall wage growth for the entire economy . Well, more somewhat. More nuanced than the following sense. When the market fails, as it did so dramatically in finance back in 2007, 2008, theres an obvious role for government to step in and temporarily try to make a difference. And where we did this, we had some success. Where i think weve really missed is in the rest of the economy. That is there hasnt been enough activity to squeeze help squeeze the slack out of the rest of the job market. It shouldnt be that just the finance sector is doing well. I mean, thats actually a relatively small sector. We need to see retail doing better. Not just on the profit side but on the wage side, as well. We need to see construction, manufacturing, health care. There is some employment being created there but there still is wage stagnation. Are we going to do any positive things in the next two years in your view just through executive action, is that the only game in town . As far as youre concerned . It is definitely the only game in town in terms of i wouldnt even call it legislation, because its not legislation. In terms of, you know, making new rules, or executive kinds of changes. But i will say this for congress. If you actually look at the macro economy, congress has evolved from really whacking the heck out of economic growth, with this austerity, and you know, fiscal drag, to the point where theyre now kind of a do no harm congress. In the sense that theyre really not taking much off of gdp growth due to fiscal policy relative to earlier years. Fiscal impulse has been neutral, not negative. And do no harm is the best you can hope for. Would you be as someone that, you know, if he does criticize the president , usually from the left, would you be angry if the president walked across the street to congress and said you know what . Ive decided that the tax reform is something that i think can help, and im going to get it started. May not happen in my administration angry . I would pop a champagne cork on that one. I mean i think that the have you suggested it . I mean, youre widely respected. As far as you know. Yeah, im not im not sure of the sway i have in that regard. But, look, i think that the by the way, speaking of tax reform, theres a guy sitting at that table who wrote a really great piece today in the New York Times. Kaminsky . No, his name is andrew sorkin. Im sure kaminsky could do it if he wanted to. But sorkin actually did it. Thank you. Where is this . In the New York Times. Its in the New York Times today. Let me check it out. Its a great piece. So i think what let me tell you what andrew said. 90 marginal rate makes things went well under eisenhower is that it is not just the president walking across the aisle and saying tax reform i didnt even need to read it. Head line grabs you right there. Not as heavy as it looks. Thank you, mr. Bernstein. It was going to corporate apologists as andrew as andrews piece shows you its going to take more than any politician including the president wanting to start tax reform, because you see, in tax reform, some people end up worse off, some people end up better off, and those who end up worse off will block your efforts. So its not as simple as it sounds. Right, andrew . Thank you, mr. Bernstein. Kleinbar professor at the Havana School of oh, no, no, goulds im sorry, goulds school of law. Anyway, what is this, andrew . Whats your premise that the premise is how did you get it in this paper . How did they publish this . How did you get them to do this . Andrew has been making a ton of sense on the inversion issue. Thank you. You know what . Listen to andrew on that point. You guys are basically soul mates on that issue. We have. We talked a lot about inversions. I didnt want to raise your Blood Pressure too much there. Well see you in a little bit. Coming up the worlds most popular Search Engine turned tech behemoth celebrating ten years as a publicly traded company. What . Behemoth. Robert frank takes a look at whos made billions from google. Take a look at this in 2004 revenues were about 3. 2 billion dollars. Today, 63 billion dollar profits. Now, 13. 6 billion. Google employs more than 52,000 people just ten years ago, only had 3,000 workers. And then theres rory mcilroy on keeping golf alive. Squawk box is back in just a bit. So i can reach ally bank 24 7, but there are no branches . 24 7 its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. I take prilosec otc each morning for my frequent heartburn. Because it gives me zero heartburn. Annc prilosec otc the number one doctor recommend frequent heartburn medicine for nine straight years. One pill each morning 24 hours zero heartburn. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Welcome back to squawk box. Futures now up 30 points. As you can see, you know, home depot, we got to talk about this eventually, frank blake is really good. God bless him. Obviously. And do you have well reading through the report. This is one of these situations where its all about execution. You talk about companies missing or not delivering. 6 samestore sales . Execution. Thats market share gains, growing the top lines and execution. Lowes wont necessarily do as well youre saying . You cannot say that because home depot is executing and bringing in more people that its necessarily meaning that the entire industry because retail has not. Even remember macys was the last nail in the home depot was about execution, Significant Management execution does it mean that housing is maybe were missing something thinking that its, you know, not recovering as people are pointing to housing i would read into home depot about Company Specific execution in terms of making the Customer Experience better. Do you think Housing Starts will be better than expected at 8 30 because of the home depot numbers . I have no idea. Bob frank may know. I can tell you whats happening with mansion sales but theyre not shopping at home depot. Mansions need to be remodeled. They do. Just not by the people its more like the restoration hardware. The people who own them arent going but the people who are building them are going. The underlinks. The butlers and contractors. Do you just if we talk housing its got to be mansions with you . Yeah. Otherwise im clueless. Will not get on anything less than a g4 i flew back from back from pebble economy. Im an economy guy in my real life. Something happened. I know you were supposed you better get a better anyway. You better get a better agent. Were talking about google. Googles initial Public Offering happened ten years ago and boy did it make a lot of people rich and mr. Rich right over here robert frank joins us with a look at whos cashed in on googles shares since going public. Mr. Rich. Yeah, you know, when google went public on the day they went public the shares were the total market cap of the company was 27 billion. Now its 391. So thats 360 billion dollars in shareholder value and wealth created. That is earned success. Now the biggest winners, of course, larry and sergei. In 2004, remember that ten years ago, they were worth 3. 8 billion each. Ceo eric schmidt worth 1. 4 billion. Now larry and sergey are the 12th and 15th richest people in america with 32 billion. Eric only worth 9 billion. Hell still be back. Google has become one of the biggest millionaire machines. Estimates say at that day the ipo about 900 people became overnight millionaires. Everybody from the companys masseuse. Remember that New York Times story . Early hires. The company chef this guy Charlie Ayers used to be a cook for the grateful dead, he owned shares that became worth 46 million after that ipo. Now since the ipo, postipo, the ten years did he hold the shares or did he sell them . It was unclear. But they were saying the value of those shares that were given to him were 46 million. Since the ipo in the ten years since weve had another 1,000. Estimates say about 2,000 millionaires created in the ten years since google went public. Now i talked to several google alums and millionaires yesterday to see and you start to see sort of two patterns. First a lot of people stay at this company for a long time even after they get rich. So thats a good sign theyve been able to retain these folks even after they could just cash out. The second thing and this is the most interesting, those who leave are using their money to start or fund other companies. Theyre called google angels. And theres this whole generation of them that have gone on to start other compan s companies, i spoke to eli gill, a google alum. He estimates that google angels have funded hundreds, if not up to 1,000 startup companies. You look at everything from twitter, evan williams, and ben stone spent some time at google, pinterest, Ben Silverman was a googler and the climate corp founded by david freeberg. It sort of changed the model of the cash jut, right, gary you know this, the cashout you get your liquidity event, you become a Morgan Stanley client, you buy your boat, you go to the beach. And now the model is increasingly a, youre younger. So you dont want to retire. And b, you want to stay in the game. You want to start all these other companies. By the way i remember on the day that google went public, or that year, the california tax collectors got a 200 million check from a google executive who cashed out options. And they just had never, ever seen anything like that. So in addition to the wealth creation, youve also had huge tax revenues created with all this stuff. Do we know of folks actually google angels whove actually invested in something successful, second round . Done it again . Theres an encore performance . Nothing that none of the companies that we would have heard of. Theyre tons of Small Companies still in their infancy, i was given a list of angel and google angel projects. I hadnt heard of any of these companies. But there are hundreds of them out there. Right. That could become big. And Morgan Stanley ended up you guys worked on part of that ipo, right, at the time . The ipo if you remember it was the dutch auction. Were going to have him on in just a bit. Did you get the Wealth Management business . Well, i you werent there at the timer . I was at newburgher when i look at that, barks ten years and the numbers i was pointing out, what i think about is the organic growth. Look at that market capitalization. That was primarily organic growth. Yes, there was some fold in acquisitions like youtube and stuff like that. But when people say you cant gre a business organically, you know, that everything has to be through acquisition, that to me spells you can grow a business and create shareholder wealth organically. And its not just about the money. Im a little skeptical with everyone at Silicon Valley so sanctimonious, its about impact and not money. But the fact that these guys stay at google for a long time, even when theyre rich enough to leave and the fact that they really go on to start other companies maybe its about the bigger money than just the money. But, its its not really the wall street model where its like you cash out, and youre done. Right. Thank you. Thank you guys. Appreciate it. Were going to talk more about this in the next hour. Thats true. Coming up, rory mcilroy, in town for the barclays. Here in northern new jersey. Our dominic chu caught up with him to talk tv ratings, golfs future, and much more. And then in the next hour, the natural gas boom helping Atlas Energys bottom line. The companys ceo tells us why, as the economy improves, so should demand. And as we head to break take a look at where nat gas prices are this morning, 3. 85. Coming up. Trivaugo shows you all the difference prices for the exact same room. The pitch man that for one reason or another youre mesmerized by. Hes amassed a huge cult following on line. And hes here to chair this story. Its the trivago guy, live. Rory mcilroy hitting the big apple this week. Cnbcs dominic chu joins us. He sat down with rory to talk about the business of golf. How did you get this interview . You know, this is just cant really tell us how. Because weve got to hurry then tell me off camera. I will. Theyre unveiling new irons, and they wanted to show what those irons were all about with nike. Nike is. With rory mcilroy and tiger woods. And, those two are characters and the reason why golf may be seeing an upswing is because weve got more characters to talk about. Rory mcilroy sat down with us and talked about maybe a little bit of the character of the cast of characters that may help revive the game of golf. Take a listen to what they said. Its hard to call it a rivalry, or rivalries in golf, because its only, you know, if you take the previous rival which would have been tiger and phil, they only went headtohead, you know, a handful of times over their careers. It doesnt quite happen as much in golf as it does in other sports like say in a tennis where youll have nadal and federer play a lot of finals. So, its very early stages. But i think the young guys coming through, myself, you know, rickie, jordan, and a bunch of other, you know, young guys that i havent mentioned there, you know, we can compete for majors for a lot of years to come. And i think it is important in all sports that they have, you know, as you said, main protagonists and main characters that compete for these majors. Golf is a very deep sport right now. Theres a lot of guys that can win. Theres a lot of guys that have chances to win big tournaments and majors and you know i think it would be great if a few guys were able to separate themselves from the pack and be able to slug it out for some of the bigger tournaments. You are the golfer of the moment. You got the hot hand. How does a golfer like you keep that going . What are you doing personally to make sure that you have the longevity to make that career in golf one of the great ones in history . I mean, i im not im not thinking 10, 15, 20 years down the line. Im thinking the next week. Im taking this week by week, and ive had a great run so far. And i want to keep that going. You know, ive ive played some great golf over the past few years. Ive got to four major championships. But i just want to keep the stretch of golf going as long as i can. And theres no point in me trying to think 5, 10, 15 years down the line, because you know, i dont know whats going to happen next week. Im just going to try and make the most of every week that i have and go from there. Guys, i will say this. The guy is a physical specimen. Hes taking care of himself and hes working out a lot to get his body in shape. You hit straight 330 yards. Neither one of us bigger than him could ever do that. No. Not even close. Oh, i know. Jordan spieth is only 21 isnt it or 22 . Yeah. So much going on. Thank you. Weve got to run. Thank you, coming up the man who brought us the dutch auction, Bill Hambrecht on googles ipo anniversary. And later, is cool a bit creepy, smooth yet rough its the trivago guy right here live on squawk box. Han ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. We stathat the kid on thehought 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. Unlock the creativity in anyone. With the ibm cloud. The ibm cloud is the cloud for business. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. Googles dutch auction took the market by storm. We speak to the man who helped take the tech startup public. Plus a special look at where the company is investing for the future, from wearables to voice and data. Whats next for the tech giant . And the pitchman thats turned in to a social media rock star. Trivago makes it easy to find the ideal hotel for the best price. Tim, the trivago guy, williams, joins us as the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc, first in business worldwide. I am joe kernen. Who are you . Youre joe kernen . Yeah, thats him. Along with Andrew Ross Sorkin of tax burden not as heavy as it looks fame in the New York Times. Becky is on vacation. In studio this morning Gary Kaminsky. Feast our eyes on that. Chairman of Wealth Management you see the headlines. Andrew wants us to pay more taxes. Why dont we just turn doesnt krugman have the same column today . Oh, hes not in today. Im sorry. Sorkin, taxes, pay more. Andrew, whats making please calm yourselves. We have some headlines to bring you this morning. Shares of dow component, home depot, theyre hitting an alltime high this morning. Earnings and revenue beating the street. Home depot also increasing its full year earnings forecast after a strong rebound in Spring Season sales. Also we should tell you a Bipartisan Group of lawmakers slamming the fed. That group sending a letter to chair jabate yellen urging the central bank to restrict its crisis lending programs for big banks. The 15 lawmakers argue if the feds power is unchecked the lending can once again be used to provide massive bailouts without congressional authority. I bored the heck out of you yesterday then i read it and thought it was pretty decent. Its the living wills issue, which the fed has told the banks but they changed their minds. Because were not going to provide the discount window part of this debate is about when i went home i head it so that i could so we could talk about it and have something in common because the tax thing, thats not going to work for us. But, with that one, in 2011, 2012 previously they never really said that they were going to not allow that. Right. And there are critics that say if youre not going to allow that, then why even have it . And i dont really i understand understands what were talking about. But i understand dont worry about it. You never do it but i dont understand i do understand why theyd want to make banks have their own private sector remedy if they get in trouble again. Without help. Exactly. For the too big to fail, the idea that its not been fixed yet, and they didnt ring the bell thank you for it was smart to ten years ago today Search Engine giant google went public by way of a very unusual dutch auction. Bill hambrecht is here. He was the architect of that internet based ipo. He also helped back the ipos of amazon and netscape and took apple public, as well. And hes actually here in person. We often have him on the show but youre usually on the other coast waking up very, very early. Not that this isnt. But its great to have you ten years later. Not to be a downer or a skeptic, look at the dutch auction. I remember all of the hype around that, and i remember writing about it and talking about it. You know, incessantly, and here we are ten years later, and it hasnt really taken off as a trend. Why not . Well, first of all, i think i made a mistake. In that after the Google Offering we did a number ofologyings that were really, you know, morning star, Interactive Broker groups, some really good ones, on our own. And after the Interactive Broker group, the bulge firms came to us and said, okay, enough is enough. Well work with you. And well use the auction. It just didnt work. Because they just dont want to use the auction. They dont want to give up the ability to allocate shares as clients and most important they dont want to give up the ability to discount the price. So this was about the big, in this case, the big bad banks. It wasnt about the model its f itself. When you say you made a mistake, its not the model . I think the model is still very viable. We are now back in the game in the smaller deals. Where were not competing with the bulge girls. And yeah, i think ultimately i think its going to win. I really do. Gary, you had a question. Were talking about this during the break first of all, i agree with bill when we fought back on the ten years. Remember, too, bill, its also that the sellers like the traditional model, the sellers of equity on the initial Public Offerings, like the traditional models are, because they know in terms of an underwriting that theyre going to get a minimum price. The issue really was with the auction, you know, is it guaranteed, and so i think that theres a combination of both. Bill said he was wrong. Ill tell you when i reflect back on google i was wrong because i remember i was in newberg at the time we put in for a deal. We got a doughnut because we came in below the clearing price. What ive always wondered when you look back at how that was allocated was it the traditional Large Cap Technology funds that would have in a traditional ipo they would have gotten, that would have gone in for 10 of the deal and gotten a nice allocation . When the deal was actually priced ten years ago, was the traditional long only Large Cap Technology players well represented. No. The two major buyers, the guys who really made the auction work, were fidelity, and legg mason. Bill mueller. Theyre the guys that put in the bids at 85 that really solidified so fidelity, though, wasnt in the select Technology Fund was just fidelity as an institution acrossed board . It was a specific portfolio manager. But, he led the charge. One thing i can remember, and it was not just pen did its, it was everyone. And i mean you eggs, there was a run on eggs for as much egg on face that there was on that offering. Do you remember how many people said it was going to be overvalued . Didnt it come at 80 . 85. I would say 95 of people at 85 said that that was totally overvalued, and within a year it was what . It opened at 100. And it traded up to 130 after the but there wasnt enough egg in the world to go on the face of the heres my question about that egg. Which is had you pursued a more traditional model, would have cool raised more money or less . I think less. In that some of the original price ideas from the traditional bankers were 60 to 70 dollars a share. Why was it so missurprised then . I mean, on well on the low end relative to where it is today, obviously, but even where it was within twelve months . Well, first of all, it was very controversial. As youve said. There are an awful lot of people that didnt get it. You were also coming post2000. Post th where you had other Companies Like yahoo which 250. You had to bench mark it against other Technology Stocks which are coming down very, very hard in the previous three years. Yeah. But i think, bill, if you open an ipo at 85 you price it at 85 and it opens at 100. Wouldnt you say traditional banking models that that would have been euphoria . Thats like the perfect pricing appreciation after a pricing of a deal. Yeah, 15 to 20 , thats what they shoot for. Right. Youre saying if it had been priced traditionally as opposed to an open auction it probably would have doubled it would have doubled. Weve seen a lot of Technology Stocks in the last couple of years. Double on the ipo price. Do you think it would have been a linked in . Yeah. Do you look at a linked in or even a facebook as a failed ipo, or a successful ipo . Well, i think its pretty hard to call facebook successful. I mean, they lived through a year of real pain. I think facebook shows how difficult it is at the market without an auction. Right. You know its just because the week before, you know, there was some sales figure that wasnt as good as it was, and then the analysts say run with that, and question the whole underlying rationale. I think youre right an auction is the best way. Its the perennial question youre never going to have it answered. Do you leave more on the table or do you want to get a huge price, a huge pop right at the beginning. If you only sell 5 you want the huge pop because your 95 is worth where the huge pop goes. Well look for 30 years we did traditional underwritings, and i always preached, yeah, take a discount because if you become a winner in a Mutual Fund Portfolio theyll hold it. And when you come back to the market for more money, theyll buy more. Because they always quantity to look good. That changed. And once the premium became embedded in the system, 95 of that stock thats typically allocated gets flipped the first day. So you dont get any value bill you mention h q did you go to work at h q every day . Well, no, not really. Someone else is running the firm. You dont even go you had nothing oh, no, im major owner and im there. So you do go in every day. Oh, yeah, yeah pretty much. When you reflect back on the ipos, the companies you brought public through hambrecht and quest obviously talking about google, there were some great biotech companies, other technology names, which is the company you think when you reflect back was the greatest Capital Raising in terms of what the business has become now . You know there were three companies that i felt were great examples of different ways of financing. Apple, obviously, genentech. Genentech is one i was really proud of because we did that, you know, three years before its first product. You should be and raising money for something thats done that good it was brand new and created a industry. Saved a lot of peoples lives, too. Oh, yeah. And the one that i was really proud of personally was adobe. Because that was an example of a Little Company with a great idea that steve jobs wanted to buy it. Came in, did 40 million for it. And we had to do something. So we took them public for 5 million. So everybody got a little liquidity. To me, thats the one im proud of. You remember who was running h q before this tragic untimely death and you wonder whats with that family. A bunch of overachievers. Do you remember . Steve cases brother. Dan case. Dan case was running it before the sales of chase. And dan got steve his first job as a salesman at aol. Yep. Yeah. Remarkable family. Dan was just a brilliant guy. Overachievers. Bill hambrecht, thank you for the memories and a little perspective on this you can imagine being in San Francisco during the heyday of tech and working for hambrecht and quest. Montgomery at the ritzcarlton. I still enjoy it. Robertson robbie stevens. The four horsemen. Who owns the city now in terms of banks . Thats hard to say. Theres really no the local firms have been largely bought out. Well, goldman is always very strong, Morgan Stanley very strong, jpmorgan is very strong. Its good. Thank you. Coming up were going to talk to the ceo of ellis energy on why he sees an opportunity to export natural gas then a read on the Housing Market. July Housing Starts at 8 30 a. M. Eastern time. And then later, whats with the weird obsession with the trivago guy . Were going to find out. When we speak to him live right here on squawk box. Tomorrow on squawk box, paul ryans journey from the small town of janesville, wisconsin, to the spotlight of washington, d. C. Hes out with a new book, the way forward. And will be our special guest host. Why hes upset about the direction the countrys going. And what he wants to change, jobs, the economy, and politics. A special onehour event with former Vice President ial candidate congressman paul ryan. Tomorrow right here on squawk box. Financial noise financial noise financial noise welcome back to squawk box. Making headlines this morning. The faa now barring all American Airlines from flying over syria. The agency says the ongoing conflict poses a quote serious potential threat. In the past the faa had only warned carriers to avoid the country. Joe . Okay. Youve been to youve been to the jersey shore . I have not. You two you know what . I cant i cant but actually im just youve never been . Been to the delaware shore, rehoboth. You know that piece that sorkin wrote today, i dont know if we mentioned it because somebody emailed it around, copy and pasted it and sent it around to the entire firm. How did you make that happen . You know who we have on tomorrow paul ryan . Im going to let paul read it tomorrow. Hes going to be here and both of us are going to gang up on you and spank you like a huh . Yeah, yeah. Thats what were doing tomorrow. I will wear my kevlar. Youre getting a lot of promo. Andrew, my word. Are you a different person at that paper . Is this really who you are that im with every day . This is this is me, baby. This is me. Good, its yin and yang. Now to Natural Gas Prices. Were inclusive. We want everyone to watch. Down more than 14 since midway. Our next guest warns a bigger drop could be becoming simply because were seeing too much of a good thing. Ed cohen is the ceo of atlas energy. And everything we do, ed, in this business, the Investment Management or i mean the news business, its all about good news and bad news. Everything we talk about is half empty and half full and we can talk about things going up and down based on the same the same thing. And i would think its the same with you, right . Well, i think the future is really great. There are ups and downs but the economy is expanding. And the increasing amount of natural gas and oil that we have just has to be good for the country. And i think it will necessarily be good for the countries and the industries. Look at the wealth of i mean we think about what its done for the country, and for our future in terms of input costs for energy, and manufacturing, its opened up a whole almost a renaissance possibility for this country in terms of our energy needs. And yet we found so much that natural gas is stuck at 3. 85. So it makes it harder for Companies Like you to make money. It makes it harder to justify, you know, certain projects that might be more costly than others. Its almost a, whats it called, a something of riches . Embarrassment of riches . Embarrassment of riches. Its too goo, ed. Its been great for our company and i think its been great for the industry. Our stocks up 400 in the last three years. And i think that we have a temporary problem in that the demand has not kept up with the supply. But the demand is really, i think, virtually infinite because we have the whole world out there. I have been discussing previously the fact that for the first time pioneer down in texas has actually been exporting with government permission from the department of commerce, oil in the form of condensate, and that although its not a blanket permission for the entire industry theyre going to handle it on an item by item basis i think thats a glacial change. A major change and thats why im optimistic actually about where prices are going. Do we need to build an lng structure to export . We are building it. Were very fortunate that we had a large portion of that infrastructure already built. Unfortunately it was built to import. Good heavens if we were actually importing natural gas today, as people intended, our balance of payments problem would really be unbelievably out of control. But weve been able to a large extent to take steps to reedge near that import facility infrastructure so that well be able to export. Its just so important for the country, i think for the good of the world, and i think for companies in our business, despite the fact that as we produce more, prices do have a tendency to go lower in the absence of an increase in demand. That demand is there. Its worldwide and the United States should be able to take advantage of that. Let me ask you quickly about the mlp asset class structure. Obviously you use it. Rich kinder said last week he doesnt use it. What do you think of that deal and are you going to have to reorganize that of the mlp asset class now . I think as usual rich is great. And he said it perfectly when he said it doesnt make sense for him anymore. For the rest of us, its an opportunity really to revisit our situation but just because it doesnt make sense for rich doesnt mean it doesnt make sense for the rest of us. Becky would normally do here she would do the all natural gas. She wants to hog it and keep all of the rich resources we have, keep them domestically. But i think its a really a great opportunity to export this, right . We have more than enough for everyone. Obviously we want the American Consumer to continue to enjoy the benefits of natural gas which is so clean and which is relatively cheap. But its sort of like Winston Churchill famously said before el alamain the british never won a battle after they never lost a battle i spent 25 years drilling for natural gas and oil and we always were disappointed. The results never were there. Thats why companies were leaving the United States. Were from pennsylvania. Companies were leaving pennsylvania. But in the last five years or so, weve never had a situation that hasnt been enormously successful. When you specific about a shale revolution for the people who actually are in the trenches, the emotional impact is unbelievable. I spent years trying to produce natural gas because i knew it was good for the environment and for the country. We always were disappointed. The last five years have been like a revelation. Its always successful. And thats why we can export and we can provide for our people in the United States. All right, thank you, ed cohen. It is, its a Great Success story. Thank you. Totally private sector that generates you know, in spite of Everything Else. On a programming note, dont miss mad money tonight jim is focusing on a gas and oil theme all week. And there it is, behind the boom. Its at doesnt have what time to watch. Everybody knows. 6 00. 6 00 eastern time. Coming up, a read into how the Housing Market is faring through the first half of the year. But first, just how much does it cost to raise a kid these days . The numbers may stagger you. And they are up there right after the break. We will tell you all about them. The futures right now at this hour take a quick look before we go, dow looking like it will open up higher about 30 points higher. Were back in just a moment. What can your fidelity greenline do for you . Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com welcome back. New parents beware, your little angel is going to cost you a bundle. The department of agriculture says that a middleincome family with a child born in 2013 can now expect to spend more than, guess what this number is going to be, 245,000 for food, shelter and other expenses up to the age of 18 years old. Now thats an increase of nearly 2 from the prior year. The annual report found housing was the single biggest expense, average about 74,000. Or 30 of the total cost of raising a child. Thats followed by child care and education. And then theres food and transportation. The good news, the government says families that have more children can expect their average costs to decline. So the more children the better. However, those parents with kids in new york city who send them to private school, that number bunk bed, hand me down. Im thinking new York City Private School at 40,000 a year. Think about that for 10 or 15 years. Were not all a bunch of you could move to a place where theres a Public School district bied w by the way i am distr for Public School were not all elitists. Were the exact opposite. Were the exact opposite of elitists . Yeah. Coming up were going to do Housing Starts data. Plus sweating, clapping, shouting. Youve seen it before and Steve Ballmer did it again last night. This time for the clippers. That story just in a moment. That gets old, man. Trivago shows you all the different prices for the exact same room. The pitchman that for one reason or another youre mesmerized by. Hes amassed a huge cult following online, and hes here to share his story. Its the trivago guy. Live. Welcome back to squawk box. A litany of data. Cpi for july up 0. 1. As expected strip out the allimportant food and energy also up 0. 1. Year over year head line 2 . Year over year 1. 9. No inflation out there. Lets look at Housing Starts for july. 1. 093 million. A bit over 1 million, this is pretty good news. Considering our last look was revised upward from 893, up a handle to 945. This takes us up to 1,930,000 i mean 1,093,000. This is a good number of 15. 67 . But remember, it is based on revision but it was an improvement. Permits what may be down the road also leapfrogged a bit. 1. 052 million so 1 million 5 2,000. This comes from revised 173,000. So we are seeing some pretty decent data out here on the housing side. And this really is fascinating based on the Home Builders index jumping a couple of points yesterday. I know the index could be affected by lower Interest Rates and this is july data and Interest Rates did move lower obviously over the last couple of weeks so low rates is never bad news for housing. Its just how much bang for the buck you get at these levels, considering the history of housing. Were seeing yields, you know, basically getting close to the 240, but 237 and really hasnt changed much. And the preopening stock levels have improved a bit. The dollar has been doing well, because the euro isnt. So to summarize the data today, inflation is certainly not cold, its not hot. Some would argue its in the middle. I didnt pick 2 as the annual rate the fed did but the housing numbers improved. Back to you guys. Great, rick, thank you for did you read the times today, rick . No i always have to fight the bird for the times. Today i lost. Just check out andrews column. Maybe well talk about it tomorrow. Its every tuesday, isnt it . Supposed to be. Ill have to make sure. Ill look it up online. I dont know what i want to donate the title is tax burden not as heavy as it looks, basically. And about these companies, and stuff. So oh, the fact that its only a couple of billion a year and that you know basically this administration and this congress, they use that for what money . Are you talking about inversions . Yeah. The premise is actually the actually corporate rate is lower . The premise is that u. S. Corporations actually have some of the lowest effective tax rates in the world, and so the argument around the territorial changing our system to become more territorial, and all of the ish as surrounding lowering the rate are much more complicated andrew since youve researched that thoroughly im before talking about that a long time, years. Because it all is a game about taxes. Yes the effect ef rate is low. But you have to consider the size of the entity. And thats where it goes off the rains. The big boys, the ges, the cocacolas. Correct. They can get away with it. But smaller businesses do a lot of hiring and the little guy is not. But if you move facilities offshore. Yes. Doesnt that lower your effective tax rate . Yes, but wouldnt it be good to bring them back here if they didnt have to move them offshore . The largest point is a lot of u. S. Multinational corporations may prefer to do it this way. Meaning when and if we get to a point that we want tax reform, there are multinationals that may campaign actually against not better. Everybodys now andrew do the correlation between those big multinationals and how much lobbying money they spend every year. That will be a fascinating article, too. Thank you, rick. Thank you. All right, were going to go to the housing numbers now. Chief economist at trulia joins us along with our guest host Gary Kaminsky from Morgan Stanley. And just like every time we talk about housing we say better but we still wonder why it isnt even better. Is it good or not . Todays numbers are very good. Construction is one of the lagging activities in this housing recovery. Prices are almost back to normal. Sales have been improving, theyre more than back to normal. Its construction thats really been lagging especially in local markets that were really hardhit in the housing bus. What we saw today, big increase, a lot of that was on the multifamily side. Now people have been sort of downplaying the multifamily side because thats more volatile. Thats been a big part of the construction recovery. When you look at the markets that are seeing a construction boom right now, relative to whats normal to them, its places like new york and boston, San Francisco, los angeles, places where most of the new construction is multiunit. There are apartment buildings in anticipation of a lot of those young people moving out of their parents homes and forming new households. Whats the problem, then, with the Single Family market . One of the biggest problems is that there are still a lot of vacant homes out there. Even though the inventory is tight in a lot of markets, there are a lot of homes vacant and being held off the market. Builders dont build where there are a lot of empty homes. Even in places where we expect there to be longterm growth, places like florida, parts of the southwest, you know, there are still a lot of vacant homes in markets that saw overbuilding during the bubble. Until those vacant homes get filled up, until the economy continues to increase to improve, until we see even more household formation, in those markets, were not going to see a full construction recovery until more of those get filled up. Is everyone moving back into the city . No, everyone is not moving back into the city. We are seeing faster growth population growth in cities than we did during the bubble. Remember, big cities actually andrew just told me that the entire demographic trend to the world is that the suburbs are moving back into the urban areas. You know, in fact, the denser suburbs, some of the smaller cities, they are still growing faster in terms of population than the largest cities wait a minute just is that you werent part of the conversation but the three of us were having a conversation but thats the multifamily units are being built in the cities. Therefor those that want to rent are going to where the multifamily homes are. If there was a multifamily development that was in the suburbs, wouldnt the demographics mean that they would go there . There could be more of a shift in suburbs, depending where the construction is. But i think the bigger point is that were a point in the Economic Cycle where theres a lot of demand for rental. And more demand for its not going to change though. Do you think that demand for rental is going to change . Yes. I do. I thinks demand for rental is going to change because were a point right now where a lot of young people are moving out of their parents homes and theyre going to rent first before they buy. The biggest demographic is folks in their early 20s. These are not people who have been buying my son is my son hes moving out, hes moving out next week, renting. I could tell you that buying a home is the last thing in that demographics mind. Especially after seeing what happened in 2000, 2009. Those people are going to rent. Those kids are going to rent for the next decade. And thats why you see new construction of multifamily. When you look at the likelihood of Home Ownership, are young people owning today . The biggest reason why Home Ownership is low among young people is because demographics are different. Theyre getting married later, having kids later. With you compare young people did with young people of the same demographics, ethnicity, marriage, 20 years ago the Home Ownership rate looks essentially the same. This is not a big change in attitudes, this is a change in fundamental demographics thats not likely to reverse which means the age of Home Ownership is getting later ill bet you 100 dollars i can new the new york centric, maybe San Francisco take you average city k. C. Or something indianapolis or denver. People are still moving theyre not moving back into these cities. Right. When you look over this whole cycle, so, dont look at i want to lose points and tell you im not sure those are cities. But thats a separate issue. Oh, wait a second. Denver is not a city . Why do you do this to yourself . Did you just say indianapolis is not a city . Indianapolis is a city. How about cleveland . Denver less so. Actual a little bit kansas city . Im losing points as i speak. The city snobbery. Terrible, isnt it . When you look at whats happening since 2000. My life. I feel bad. He just sets himself up. Denver is not a city. Over this whole cycle over the recovery, the boom, the bust, the places that have grown the most since 2000 are pretty much the same places that grew most in the last two decades of the 20th century. The underlying patterns of sun belt cities, midsize cities growing fastest that hasnt changed fundamentally. Right now theres a lot of demand for living in cities but the underlying longterm pattern is still faster growth in midsize cities in the sun belt. Well, have you been in the studio before . Yeah, i have. Oh, you have . Normally we have you on remote. Good to have you here. You got and you definitely told him exactly how it is. Thank you for coming in. I want to thank all our viewers from all over the cities all across the country. You cant make he wants i want to go down a list. How about portland or seattle . Theres downtowns. They have downtowns. But they dont have cities. You are so warped. Anyway. A number of stocks on the move this morning. Aeropostale hiring its former ceo. Dicks Sporting Goods posting better than expected Quarterly Results. This as golf and hunting sales continue to decline mr. Kernen. Gores declining. I know. Elizabeth arden needs a little bieber fever. The Company Posted a bigger than expected loss. Revenues also missed the mark, steeper than expected drops in celebrity fragrances, particularly those by Justin Bieber and taylor swift people dont want to smell like the biebs. I dont know whats going on. Shares of tjx popping right now. That retailer earnings two cents better than expected. Coming up people are tweeting in that he grows his fragrance organically. He does. The man weve been talking about all morning, trivago capitalizing on its pitchman. He is here, theyve been all over social media social media hit actor tim williams the trivago guy joins us to talk about his pitch man success and what he thinks about what people are saying about him. Spokesperson get a 1,000 turbocharged reward card with a new volkswagen turbo. Why are we so obsessed with turbo . Because we like giving you power, but we also like giving you fuel efficiency. Like the sporty jetta. And the turbocharged passat tdi® clean diesel. Okay. And the iconic beetle. And the powerful tiguan. Okay you cant forget the cc. Guys, this is going to take a while. Avo get a 1,000 turbocharged reward card on new 2014 turbo models or lease a 2014 jetta se for 169 a month after a 1,000 bonus. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. The ibm cloud is the cloud for business. Welcome back to squawk box. Travel search site trivagos pitchman has been described as both cool and creepy. Also sexy and sloppy. Whatever the case may be theres no denying hes generated a lot of buzz from the moment those commercials started to air. With us now on the set is the face of trivago himself actor tim williams. Thank you for being here. Thank you very much. This has sort of gone viral in the craze did you ever expect this . Never. I dont think any of us ever expected it. A few weeks ago started coming out. I got an email from my father, a few emails and a few tweets from some friends. Im like whats going on . I looked at it for myself. Okay, here comes some negative. Here comes really good positive. I was like oh, my god. Did you take it personally . No. No i laugh. I have a great time. How did you get involved with this Company Trivago . I did a voiceover for the american market. Just my voice. You didnt see me, and friend of mine, he said, as a director, he said, you know, lets get new front of the camera. Youre there now and lets use you as our pitch man. Do we know what trivago stands for . We were just going on. It could be trip vacation go. Im not really sure. Youre not really sure . Trip vacation go is a good answer. How much time you do you know the folks at the company very well . Yes. Some of them. Not all of them. I just visited the offices in dusseldorf two weeks ago. Do you use the confidence . Yes, i do. What have you done with it . Well, i get in my car sometimes if im traveling with my friends, we need a hotel somewhere. I go to my app. I punch it in. I punch in where i am because of the Location Services on the phone. And it tells me the best hotels and the best prices right in the area where i am. So i just jump over there, check it out, book a room, and now your voice is extremely recognizable for those that watch the commercials. Have you ever had any crazy things where you call somebody up, ordering a pizza, some chinese food or something and does anybody ever recognize your voice . Not yet. But its funny when you walk in somewhere and you say something. They look at you. They may not know you from the commercial. They dont know you, they cant pinpoint it and they say okay, thats i know that guy. But you speak a little bit, trivago guy. Oh, youre the trivago guy. Okay. Now youre an actor. How has this changed your acting trajectory . Is this helpful . Are you going to be pigeon holed as the trivago guy . I remember the dell dude and he used to talk about how he struggled actually to get other roles because people thought of it him as the dell dude. Ive had a few offers since the commercial came out. I feel like im pretty safe. I did kind of establish himself in germany, at least, as an actor. So it was, you know, easy to jump into a commercial. Nobody knew the success of this commercial what it was going to be. Nobody. And were just very lucky and very happy at the moment. Some people argue you need a makeover. What do you make of that . Makeover thats the contest were coming up with. You have to get your outfit that you think i should wear in the next commercial, you have to submit that by sunday, this sunday, to trivagoguy, or go to the trivago Facebook Page and you pick out an outfit. You, you or you, pick out an outfit you think i should wear. Do we have the v. O. Of that . I tell you i didnt say anything about the stomach. I didnt know what the i never even knew who you were representing until but i noticed you and youre wearing your shirt is not tucked in or it is stucked in but you have a totally flat stomach. I dont know if id be envious, i was angry that you have no gut whatsoever. Thats what i noticed you have no gut whatsoever. And thats all i knew about you was that you had no get. Im not with my own struggles. But the no gut guy. What can the makeover include . Anything. Anything they wanted. Use your imagination so you dont have a beard on the see i think you do. On their i can tell you about the beard because i was doing another role at the time. I was doing good times, bad times in germany. And i played an american rock star so i had a goatee and some hair on my face already and i had longer hair and i had to keep that for continuity. Are there any american soaps left that are popular . You would be a good soap guy. You know what i mean . Be in love with someone. Problems. You could be the other man, theres a lot of different roles. Its always like that. They still have soaps in america . Theyve become less popular as everyones moved back into the city from the suburbs. They dont really watch do you know that im going to roll that back. I 345ed a comment about cities. Andrew, do you know i love all the cities. Denver has an omelette, used to be named after it. Denver is not even a city, even though it has an omelette named after it. My sister, my nephew, my brother, they all live i dont want to you said it wasnt. You said they shouldnt have kids on flights either. We should put the United States on the big wall and have andrew go up there. Joe as you know so well occasionally you try to be funny and it doesnt work. Im usually pretty funny. Maybe you know about that. Thank you for being here, mr. Trivago guy. No problem. We appreciate that. Coming up whats google investing in now. Jon fortt, a special report on the tech giant and hes at it again, Steve Ballmer pumped up for his next big gig. That story right after the break. Squawk box returns in just a moment. Tomorrow on squawk box, paul ryans journey from the small town of janesville, wisconsin, to the spotlight of washington, d. C. Hes out with a new book, the way forward. And will be our special guest host. Why hes upset about the direction the countrys going. And what he wants to change, jobs, the economy, and politics. A special onehour event with former Vice President ial candidate, congressman paul ryan. Tomorrow, right here on squawk box. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. But what if you could see more of what you wanted to know . 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Thats one heck of a city. L. A. Clipper fans, he doesnt is it real . Its real. Oh, it is real. Clapping and shouting until he was nearly a horse, sorry, until he was hoarse. Paid 2 billion to buy the team controlled by a former owner, donald sterling, who, as you know, had problems. Lets get down to the new york stock exchange. Jim cramer joins us now. We had a really interesting conversation with the atlas and natural gas, and i know youre doing a lot with that. Whether we import or export, but interesting thing is, jim, the better it is, its the best of times, the worst of times, you know, so you find all this great, great for the country, manufacturing, and input, but, you know, its almost too good. Well, look, the story does not get to be told because theres not enough people willing to talk about it. The fact that spot Natural Gas Prices right now, right now in new york city are lower than louisiana. Why is that . The largest gas fuel in the world. Its the largest if you include virginia and a lot of kentucky. This is just happening right now. The fact is we are paying so little for natural gas because of this, and yet who talks about that . Our president . Jim, it changes the whole dynamics of how long is it going to be cheap, and what does that mean for the long term prospects per ptu of all the things that never get down to the price . Changes the whole game for trying to develop an energy future. Well, the cost of the wells is going down. Range resources talking about a 27 decline, so, actually, our price of natural gas is coming down. Solar and Everything Else makes it harder for those to be economically feezasible. If we cared about global warming, it puts tremendous pressure on coal. Imports coal. Coal is problematic here. I know there was on fast money yesterday, someone recommended comb, and coal stocks likes bottom. Be careful with coal. This is the death note for coal. Its just the death note. Okay, jim. Well watch. Thank you. Squawk on the street and mad money. What about philadelphia . I misspoke as usual. We have the google story after the break. Dow is 40 points higher. Were back in just a moment. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Having a perfectly nice day, when out of nowhere a pickup truck slams into your brand new car. One second it wasnt there and the next second. Boom youve had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. Boom youre blindsided for a second time. They wont give you enough money to replace your brand new car. Dont those people know youre already shaken up . Liberty mutuals new car replacement will pay for the entire value of your car plus depreciation. Call and for drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch to Liberty Mutual insurance and you could save up to 423 dollars. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. What is google investing in . Putting cash in uber, flat iron health, survey monkey, and hundreds of startups and billions of dollars. What are the areas that google cares about, and i wish we had more time. Sometimes we dont know. They do things because its not expensive, they might as well just be there if they dont have plans. Seems that way. Google, four or five years ago, google touches, 1. 5 billion under management from google itself, and like the guiding core business, which has, as you see, soared since the ipo ten years ago. Google ventures lets data inform all investing moves like what entrepreneurs to invest in in what areas and in what industries. Google venture has an unconventional way of awarding employees, everyone has a share, and when investments do well down to the administrative assistants, and Google Ventures unconventional approach helped into Promising Companies with industries, all over the map, consumer, enterprise, robotics, and also its interesting to take a look at some of the companies that have gone public. Retail me not, home away medicine, and uber and others they invest in through google capital, another 300 million. All right, john. Is googly a word . It is. Thats how they describe themselves. Adjective, dash y . How do you spell that . Check with larry paige on that. Thank you, gary. Thank you. Went too fast. Come on back. See you soon. Join us tomorrow, and squawk on the street begins right now. Good morning, and welcome to squawk on the street, im david faber with jim cramer, and carl has the day off. The road map starts with the markets looking to extend ral ralli rallies. They are racing around new record levels. Home depot boosting guidance with better than expected Second Quarter results. Sprins swinging, a new ceo, and now a new mobile pricing plan spurring colorful comments from the once almost merger partner, john ledger, and its the 10th anniversary of google goi