Transcripts For CNBC Squawk Box 20140917

Activist investor Nelson Phelps is taking his to the next helpful. Out now with news this morning that the founder has sent a letter to the company, to calling for or dupont, rather, dow chemical, dupont, calling for a breakup of the country. If this story sounds familiar, hes been working since back in july of last year that we first reported that he bought a big stake in the company. He says that this is an excessive Holding Company cost. He estimates 2 billion to 4 billion of excess corporate costs. He says the district businesses are overwhelmingly complex. How big is his stake in the company again . 3 . Hes probably the largest shareholder. For us, it would be a big stake. For you, its like 2 billion or something, 1. 8 billion. It would be a big stake. For me, not for you. But both, you know, dow, dupont, theyve been its too slow . Theyve been doing a lot of stuff. I didnt get it from anyone. I got it. You got a cold . I do. Both kids i know, i know. Dust mites. I dont know what caused it. Kids get it. I have been busy moving and not getting enough sleep. Thats when i get it. I think thats something key to think about. If you stay healthy and get enough sleep and unfortunately life gets in the way. It does. But in general, we see a lot of different pathogens and theyre unable to make you know, to colonize you. There arent many people who can get eight hours of sleep. Working out is a luxury. Sfwh. And when you have a job like this, everybody in the world gets to decide if youre a slacker. Your relatives all know if you were at work. That part is true. My family knows if im not on the air. My mom and my grandma every time. I knew you got back from your vacation. Everybody knows was going on. Im sick, im going to by looging. This show, something will drip out on to my tie. Yellow tie, im glad. With a little green on it. I was worried about you because i know im going to get blamed and youve got kids and everything and im going to get blamed. I got my flu shot this week. You did . Yeah. You should be coming down with the flu any second then. If you havent come in, you could have face timed us because our next story is about tech you face time me on weekends. I know. In tech news, the iphone reviews are in. Some of the nations respected tech corporates tried to devices now and they are sharing their thoughts. The common theme, bigger is better. Many calling the iphone 6 the best iphone ever made. You would expect that. Its the six, which is after five, right . Wallsburg writes, inge it is a terrific phone. In my view, its the best smartphone on the market when you combine its hardware, allnew operating system and the Apple Ecosystem whose doors it opens. Geoffry fowler says iphone felt stuck in a bygone era called 2012 before the launch of the bigger phones. Is it not 2012 . What era is it . 2014. Im still writing 2012 on my checks. How old is geoff . I wrote 2004 last week. You know what i forgot to tell you guys . I didnt even tell my wife. I got back to my seat when i was at the game and i got carded. You did not. I did. I got carded. I dont believe that. I swear on my life on my life. I got carded by someone. Were you wearing sunglasses and no, no, no, no. Lined no, be careful. It was not a visually impaired person. What did they say . I need to see your i. D. I was like, oh, my god. I jumped across the i rarely get carded. This nice, wonderful girl doing her job making sure that underage tips a big tip, thats what she wanted. Thats taking it seriously, where you make sure that everybody has to get carded. Did you tip . Listen to me, i got two beers and a bag of peanuts. They were large beers. Now hes going to be upset about the cost. Take a guess. 22. 35. You know what theyre telling me from the control room . What . You got carded to see if you get the senior discount. Yeah, yeah, ha. Not your drivers license, your aarp card, sir. Microsoft those guys. Losers. Okay. Microsoft is boosting its dividend 11 . Its great to find this stuff out as im reading it. Its a 46 stock. That is the smallest increase in the payout since i believe 2009. How do you feel all of those stats . The Software Giant also, if im correct, appointed to new directors to replace Board Members who decided not to seek reelections. Kraft foods ceo im sorry, cfo, terry listoll and visas ceo charles srharf will join the board next month. Endo offering to buy Auxillium Pharmaceuticals for 28. 10 a share in cash and stock. That is about 2. 2 billion. At least its look at that. No official response from auxilium. Auxilium said it would move its headquarters to lower taxed british columbia. Something we didnt talk about yesterday, that was the auto parts division, that big deal larry started talking about at crw. And it was not an inversion. It was bought by a foreign company. That to me is the more concerning issue. You start making our assets more valuable than they dont want to talk about that part of the thing. They just want to talk about the nasty you know. How can we not talk about that . We should have talked about it yesterday. Another story, Credit Suisse coming under scrutiny from the fed. The wall street journal reports regulators want the bank to immediately address problems relating to the firms underwriting of sale and interest loans. New yorks attorney general is blasting barclays once again. That suit alleges fraud and how barclays ran a private trading platform. Eric schneiderman calls barclays argument misguided and disingenious. He anteriores the bank isnt helping global traders. And the fed will be setting up a twoday policy meeting today. The big focus is on the language, of course. Policy decision is due at 2 00 eastern time and chair janet yellen will hold a News Conference a half hour later. I saw the hitton yesterday he was saying that the fed, they would leave that in, but take out they would leave that in, considerable time, and leave in another statement, as well. Both of those add up to the markets thinking maybe the fed is not moving as quickly as we had anticipated. Moving yesterday we talked to traders who said no, no, but i mean, looking around and kind of listening to that one guest we had yesterday that said look, there is not a done deal in terms of getting above false speed. There is considerable people think it does no harm, maybe we dont know if it does any good. He said look, the market takes in this idea that the market is going to remove that. That is why stocks have been down at the beginning of last week and the beginning of this week. Its three sets down, two up. All of them have been acting like the rates are going to go up. What happened to my read . I didnt talk that long. I really wanted to read that. What was that one were skipping now . You wanted to read the boards . Well keep talking about this. Everything you said kb oil moving up. They do think that were in here and were just like okay. Youre a puppet because whatever they say comes out of your mouth. You guys handle it, you guys in there. There are no strings on me. Another federally this week. Investors will not raise rates for a considerable time. Here on set with us is ed keyon. Ed, i saw you nodding as joe was just talking about this. The idea that the fed will hang in there. If theyre going to make a mistake, its going to be that theyve stayed a little too easy, a little too long. Wages are not rising. Theres still a lot of slack depending on which measure you use. So a little more conscious and you think as a result the market gets bored by this . I think actually the economy is going to be a little stronger than the market expects. And so the fed might end up moving earlier than the consensus, which i think is around june or july. From my perspective, that means you still want to be overweight stocks in your portfolio. If youre going to get a stronger economy, youre going to get stronger earnings, and thats going to be the driver of the market from here in my view. Is there something point when the market realizes the fed may have to there always is a knee jerk reaction with the fed. All of us talking about two or three pieces. The bottom line is that the economy is getting better. The fed is going to have supportive Monetary Policy and that stocks, although they are not cheap any more, are not terribly expensive, either. So i think youll see that as earnings grow, the economy grows, youll get positive returns out of the stock market. John, how about you . Whats your view . I think it was just ten days ago that we had a terrible employment report. I think investors are lost on that fact. So i think that janet yellen has done a very good job broadening the labor market discussion to include underutilization, underemployed. The plight of the longterm unemployed. I think that gives them a lot of leeway. Im not necessarily considered on underutilization. I think theyre going to disappoint those people that think its going to be sooner rather than later. You expect they will keep that in, the underutilization of the labor market . Ed just refers to slack in the labor market. We have a lot of people who may have been engineers in one job working in retail now. It sounds as a job, but theyre only making a third of the income they had made previously. That has an income statement and a conimpact to the economy, which is why, in my opinion, were growing at 2 , 2. 5 as opposed to 3. 5 or 4 . So you agree that theyre not going to change the statement necessarily today, but you dont agree with limb that the economy could pick up faster than expected . Yeah. I think the labor issue is the biggest thing for the fed. I agree with that, that the economy is going to be stronger in the second half. Weve seen that. But i do believe the bigger issue for the fed and for rates is wages. If were only up 2. 5 , but it itit its you know, all that liquidity the fed created has to become income before the fed translates it to inflation. I think in many ways we do agree. I think there is a lot of underutilized resources overall in this economy. The poll and half the American People city think were in recession. Thats because they look out at their own lives, their own ability to get jobs and income and its pretty weak. So i think there is still even though the markets have done very well, theres still a lot of people not making the kind of living they would like to make. Whats the Tipping Point . What changes that . Actually, again, im optimistic. I think the economy is going to make more progress. I think we will see wages start to decree this year and next year. Eventually the fed will have to go back to a more normal Monetary Policy. But i think thats what sdoun road and i think the fed is, again, its been pretty clear. Theyre going to make the mistake of being a little bit too cautious about the labor market rather than being too reactive to potential inflation which frankly isnt there. But you said that the first time. Then you said theyre going to err on the side of not tightening, but then you said i think the economy is stronger and its going to come earlier. Thats right. Saying ta there are misjudging the actual strength of the economy. I think actually thats right. I think the economy is going to be stronger and theyre going to end up moving a little sooner than they might have thought. But again, theyre not going to do that. Theyre not going to make that move unless the economy is stronger. I think thats the key point. They dont think theres any error, that might be their complacency error. They think its okay. Stay at zero and there are some people that think thats the way the fed has made maces in the past. That may be. But i think if you look around the world and you say whats the big economic problem the world faces, its not ininflation. But the hardest thing to do is the one that helps out the most. Who cant stay easy . Who thinks its great to always stay at zero and thats the easiest thing to do. Traders likes you, the market goes up. Thats the easy thing to do. Is that going to be if thing that results in its the easy thing to do, but the fed has been taking withering criticism about being too easy. Notice from the left theyre not. Overall, if you look at the guests they have on their show, most of them are arguing for an easier more taken policy . Most of them are arguing for a tighter Monetary Policy. Thank you for coming in today. Its good to talk to you. Thank you. Coming up, yales management guru Jeff Sonnenfeld is going to be with us. Plus, well see if he has advice for Roger Goodell as the nfl deals with a variety of scandals. The vikings this morning reversing their big decision now suspending star running back adrian peterson. And the owner of the houston texans, bob mcnair, is going to join us to talk about the nfl culture which he think is break breaken. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Welcome back. There are mow more than 2300 billionaires in the world. Their net worth . 723 billion. And the United States claims most of them. Yale University Holding a major ceo summit in d. C. This week, bringing together power players in both business. Politics. Key challenge facing the corner office, how can Corporate America be heard against a broken and noisy washington back drop . Here to tell us what hes hearing, Jeff Sonnenfeld associate dean from the yale school of management. Hes a cnbc contributor. Gis the top tom topic that were going to be hearing about this week. Thanks. The top topic is two clusters, if you want to split them off. One of them has to do with the sense of frustration that the ceos have that they just dont think theyre being heard in washington. To our surprise, theyre feeling a little bit better about their business Advocacy Groups, the business round tables, chamber of commerce and the like, maybe 80 think that theyre trying hard in their advocacy, but 90 feel they arent being heard. They have made no progress on the key issues. You had Randall Stephenson from at t and he had a very optimistic discussion with you guys and squawk box back in the spring about the priorities. He and others there are admitting its not going to its not going to happen . No. The three priorities they had and even in a year, on immigration reform, tax reform, and trade promotion. But theyre very optimistic about the economy. The 30 split were disappointed. It was like the business round table event yesterday. But pumped on sales. And you wonder, thats the bigger companies. You talk to the guys and said the smaller companies, you see theyre euphoric about the economy and they hope not much happens across the street. Theres less out of washington for the small and mid sized i want to switch topics on you. Were going to be talking to bob mcnair in just a moment about the nfl. I wanted to get your reviews. You guys spend a lot of time oftentimes doing panels about crisis and is companies in crisis and how you deal with the crisis. Roger goodell arguably is in the midst of one at the nvm. What do you think he needs to do, if anything . You know, i have appreciated the i think openminded discussions youve had on this. You havent raced off for a hanging party and i think many of us like Roger Goodell a lot. Hes done an excellent job. Hes been there 32 years or so, grew up in the place. But, you know, this is perhaps his eighth year in office and i think he was planning on a tenyear term, anyway. Are you calling for his head . Is that what youre doing . Not what he said at all. Work on their succession. I mean, you i mean, he has great relations with the team owners. Hes helped players learn to discipline their own teams. Hes done a lot, not to mention made this thing quite a money team. But i hear you talking succession. Am i succession, there was an issue in youre right on the four points of whats going on wrong here is there should have been more of a diligent examination of this stuff, should have been a better call on how this was handled. Also the confidence or we get the full story on how the state came in there. Like you say, the crisis management, the explanation of all this. Theres a loss of some credibility with some advertisers. But no, i dont think this guy should be shot at sunset. Hes done a great job. As they start to accelerate the sesson plan that i think roger had in mind, it would be a winwin. When muellers report comes out, the fbi chief who is doing the investigation. But i wouldnt rush to condemn this guy. It wasnt his finest moment, but hes had a long career thats stellar elsewhere. Jeff, hes a young guy. I dont remember rozelle or any of these other guys signing on for ten years. Where did you get that ten years figure . I dont know of any commissioner its my surmising just in you know, hes a different guy. Hes a family guy. He has some young girls that are interested in other sports, even lacrosse. I think that hes interested in other things in his life. Hes a young guy, but he started there earlier. None of those other guys made their whole careerhierarchy. Thats the same thing in football and baseball. The other guys game in after doing things. Hes been in this. This is a wearing job, too. Ive had discussions with him, private discussions that i knew he was on a time frame. Hes maybe 50, 55 years old or so. So we want to thank you and we want to wish you luck with the Conference Today and, of course, we will get more from you a little bit later this morning. Thanks. The big challenge now is the geopolitical ripple affects that has everybody worried. And we will come back to you on that as we continue that conversation. Yeah. 55, thats like thats really middle age. People 55 still get carded for alcohol. Is the nfl culture broken . And what would we mean by that . Houston texas owner bob mcnair says yes. Hes got some interesting statistics on arrests per team. And its completely one can be twice as likely on one team to get arrested as another and that says something about how they draft and how which players they pick. Back with that in a moment. Guys youre not gonna believe this watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. [ male announcer ] ship a pak via Fedex Express saver® 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. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Good morning and welcome back. Lennar posting better th betterthanexpected earnings and revenues. A 23 fers increase in orders. Adobe, the photoshopmakers earnings beat the street. But the Company Warns that its current quarter, revenue will be below analyst expectations and that has that stock down almost 5 this morning. Rackspace has been facing competition from companies such as amazon and google. Lets take a look at the markets this morning. Yesterday, du see a broad rally with the dow up by 0. 6 . The s p and the nasdaq up by 0. 75 . This morning, you see the futures are indicated slightly higher for both the dow and the s p. The do i dow up by 19 points above fair value. The nasdaq down. The dax in germany up by 0. 5 . Overnight in asia, we saw the markets there were mixed. The hang seng was up 1 . Oil prices picked up broadly. The tenyear note, at least at this point it looks like it is yielding 2. 571 . So just below that 2. 6 that we saw a couple of days ago. If youve been watching the dollar this morning, it is down against the euro, trading at 1. 2963. So the euro is still below 1. 30. Gold prices this morning look like they are up slightly, 1,238. 40 an ounce. The nfl is working to recover from two off the field issues. Anheuserbusch statement said we are not yet satisfied with the leagues handling of behaviors that so clearly go against our own Company Culture and moral code. Our next guest, bob mcnair from houston, texas owner. He has a reputation of hiring only, in quotation marks, choir boys. Hes the head of the chairman finance committee. The nfls reputation is on the agenda. Quickly on an thiezer bush with all the statistics that we have on this, by far and away, the biggest incidence is dwi and driving while intoxicated. Anheuserbusch would never market to young people or cause any type of overdrinking or a cultural for drinking with football games. So theyre in a very good position here to train the nfl. I want to see budweiser not advertise on the nfl, like that is ever going to happen. This is like a wya move. They have to say something, obviously, and theyre a sponsor and they need to weigh in. Physician, heal thyself. For example, over a 15year period, the viking 5 . Twice as many vikings are likely to have a run in with the law. Is it an nfl problem or is it who of the individual owners decide to staff their team with . First of all, its a microcasm of society. Its high life. Why is that something that you need to say that people arent understanding right now . Well, our players are role models, no question about it, whether they want to be or not, they are. So theyre in the spotlight. If they do something thats wrong, thats in the spotlight, too. We have to recognize that were being held to a higher standard and we need to act to a higher standard. In any other business, you dont immediately you say, wow, i wonder if something happens to smp . You dont immediately say, ghee, i wonder if its because of the row let me ask you this, is basketball a lower or higher innocence than that i cant say. The nl leads the nba is up there. Major League Baseball and the nhl are a lot lower. We know theres no violence in the nhl. They would have no reason off the field or off the ice to hit anyone because theres never any hitting or violence on the i would argue thats a great example of why if youre capable of doing it in one sport, you should be capable of doing it in another sport. These guys are in college all the time. Theyre coddled a little bit. Theyre widely admired by everyone. Is it just that theyve they get a big head as they go through college and make a lot of money in professional football . I think all the way through high school. And in college. Even grade school you see theyre protected. Theyre protected because thool theyre local heros and everyone is trying to take care of them. Theres always a second or third chance for them. And i think what we have to say is zero tall rant. Should individual teams do that or should goodell do it . I think individual teams do it, but its a bad situation and use it for a good purpose. Zero doll rans means if you can tell arrested, convicted or not, that is a strike. No, it depends upon the nature of it. And that becomes a complicated issue. It is a complicated issue. So you would want to have as you would with any of your employees, if the evidence is overwhelming, that you have even though they havent been tried, if theres a woman who comes in and she has a black eye and bruises, thats why i would the pooter son situation. I think thats something that needs to be addressed. I think they need to back off a little bit and think about it. But, you know, the whole thing is, this has been going on in society for a long time. The National Organization of women wants the nfl to do something about Domestic Violence. You know, when i read that, we all want Domestic Violence to be dealt with and people to get help. We cant take care of someone elses house. What about hooe, weve seen the pictures, okay, so we know that the kid had welts and everything. So we dont need you know, hes guilty. We know hes guilty, right . But your point is that the court system everybody is entitled to but in the meantime, should he be playing . I understand. And thats the team anticipates prerogative to not allow him to play. But we do sort of cross over the idea in that in country, that is the way we do things. I see how south africa conducts their courts and i believe we have a good court system here. As an example, we can take action with a player without the league taking action. But were limited with the collective barg yapping agreement to only four games. What would you do differently . First of all, i dont think i have the tenacity to be Roger Goodell. Roger is an outstanding and youre 100 behind goodell . Absolutely. Here is the i talked about the daily news. Their absolute witchhunt, maybe theyre an armed mob with pitch forks and baseball bats. Roger is an outstanding executive, a man of integrity. Hes courageous. And i ask you the question, if you were there and looking at the ray rice situation and you have part of the information, you dont have all the information that the District Attorney has and ray rice comes in and he brings his wife to be with him and he gives you a story as to what happened and then it turns out the video is different than what they had been told, based on the information you had at that time, are you going to say i had less information than the District Attorney, but im going to pass judgment here that bob, let me ask you, this is now a major problem because the Players Union is suing because they want ray rice reinstated. They say this is double jeopardy and it presents a huge problem for the rest of the players. He has more information now. He didnt have that information if he kwifrt made that decision . Well, it woovsh image for him to have that because. The ka sane know said if he would have asked, they could have given it to them. Now, we know something happened in there. When you see it and the visceral feeling of watching it on video makes a difference, but the facts were there all along. This i would also say, andrew. You can thank my later for this. But this is a post, not too big to fail. Thats the name of your book. I would say that the nfl has a better chance of surviving than citigroup or aig or any of those can i finish, please . The idea that this is going to take the really . Thats why with mcdonalds dont they live in a bad house in terms of i dont think anybody true think thinks youre kwlad to use the title . Very. I think theres a question of how do you change the culture so that youre not having these problems as routinely and and how do you change society so were not having these problems consistently and but here is the difference. You keep saying that its somehow that somehow this is a mirror image of society. Maybe it might be a higher. Is we talked about it. Its the money its what happens. The question is, if youre running a league, what are you supposed to do about it . I have a lot of admiration for Roger Goodell. This is about when you were running the league given you all these things, what do you do snch. I think you say were not going to hole rate it, in the case of Domestic Violence as an example. If someone committed murder pb but the incidence is about half that of the population. Theres a fact you didnt have. That surprises me. That is a good stat. I would have thought wrb given numbers that weve looked at you didnt chair to just making the point gen and govern. I think what we can do is just say, this is something that were not going to have happen. As a merit of policy with our team, theres been three things we say we wont draft a player if theerve involved in Domestic Violence, drug abuse or show lack of work. You want to do it on the team side. You want the team to control the issue more than necessarily the league. Is there a question about the incentive that a team would have to keep a player on the field whereas the league might have a different view given that theyre looking at the whole spp. Yes. That is why the league would have to be involved so there would be consistency in what we do. But in the meantime, the as a club, this is what we can do and what we should do. But what the commissioner has done, hes brought in some people who can help in terms of investigations of Domestic Violence, the ladies brought in, the panel over 300 cases a year, very experienced. We just need to let people know this is not acceptable behavior. Ive had a lot of people come in, normal people, that we want to talk about the friprocedure. You know, thats a good example. Here is a person who, on the field, is a warrior. Off the field, he is the finest gentleman that youll find. How far are you doing this year with those setbacks of last year . We dont talk about last year. It was a bad year from the beginning. Areas before, you beat the bengals. I hate to bring that up for you, joe. Thats all right. But who do you like, three top teams this year, in your view . Houston. Well, you know, weve got a long ways to go, but were moving in the right direction. I like our coach. But its new england i think has always done well. The packers are good. Go where the really good quarterbacks are, thats a good starting point. Theyre both from wisconsin, arent they, j. J. And russell. North carolina is there for this year. Were thrilled to hear youre cancer free throw right now. Thank so much. Down think that you can ignore this. It woernlt go away. We have great peemp around and poem like you. Thank you very much. When we come back this morning, apple goes plus size. Another iconic brand is going in the opposition direction. [ woman ] if you have moderate to severe Rheumatoid Arthritis like me, and youre talking to your rheumatologist about a biologic. This is humira. 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This is humira at work. Attention coffee lovers this morning, starbucks testing a mini. Im excited about this, a 10 ounce drink, lower in price, and calories are less than the traditional version. Test taking place in denver and houston, two great cities in america, joe, a trend of smaller treats catch on as millennials focus on healthier habits. Crumbs had done a smaller cupcake, maybe they would be around. You are a person who can enjoy them. Youre a thin love them. Youre a thin person. Coming up, countdown to the alibaba ipo. Americans are not familiar with the company, but a criticism is that its full of counterfeit goods. Never guess what we found for sale on the site. Give you the answer when we come back. This is a burrito made with chocolate, soybeans, and apricots. What kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Ali ba ba on track to be the largest ipo in history, but Many Americans are to the familiar with the Online Retail giant. We have more on the legitimate and counterfit goods for sale. A big player in ecommerce, but brands complain its a tighten for the counterfeit trade. We looked into it, and what better way . We found a shanghai vender offering up cnbc stickerings, bookmarks, and mag innocents to deliver in a couple days. Ill order some stickers from the shanghai vendor and see what happens. Reporter days later, my orders arrives. Oh, my official cnbc stickers. Not so official as it turns out. Cnbc does not authorize the production and sale of these types of stickers in china. We decided to call the vendor, mr. Shun. Shun told me he makes the stickers in his own factory after copying the cnbc design from a special data base off the internet. I asked if he had legal authorization to use the logo . Translator we are not authorized. There are few people authorized unless they have special franchise stores. Reporter i asked if al alibaba told him to stop. Translator no, no, if they wanted to us stop, they let us know. Reporter alibaba refused to comment, but they are taking down counterfeits making it easier for brands to report infringements. I spoke to a lot of lawyers about this, and alibaba is not doing enough and policies far behind ebays. This is a question for the companiment as it lists in new york and starts to join the big leagues, theres a big question whether or not investors pressure them to clean up the site and really if they do that, what does that mean for the sales . I have to say it is very easy to find fakes. In fact, andrew, your book is on the site, and we spoke to the vendor saying that its going for 50 cents after he bought it on the kindle. So proud. Jim cramers book is on the site, ripped off, and, yeah, its going for a dollar. His is going for a dollar. Well, now my feelings are hurt. Thank you for joining us. Appreciate that story. All right. When we come back this morning, we do have a special squawk box event, twoours with power players peter thiel. Bet big on facebook, now an author and hes the guest host from alibaba, apple, and beyond. Its all coming up here on squawk. New car smell 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 so what were looking for is a way to plus our Accounting Firms mobile plan. And minus our expenses. Perfect timing. Were offering our bestever pricing on mobile plans for business. Run the numbers on that. Well, unlimited talk and text, and ten gigs of data for the five of you would be. Oneseventyfive a month. Good calculating kyle. Good job kyle. You just made partner. Our bestever pricing on mobile share value plans for business. Now with a 100 bill credit for every business line you add. Who would have thought masterthree cheese lasagna would go with chocolate cake and ceviche . The same guy who thought that small caps and bond funds would go with a merging markets. Its a masterpiece. Thanks. Clearly you are type e. You made it phil. Welcome home. Now whats our strategy with the fondue . Diversifying your portfolio . E trade gives you the tools and resources to get it right. Are you type e . This is a special presentation of squawk box. One of Silicon Valleys newest icons and rebels is here live. Peter thiel, cofounded paypal, brains behind the Internet Security giant, and man who bet big on Mark Zuckerberg and facebook before anyone else. A move so shrewd, he got hollywood fame. We looked at everything, congratulations, well start you off with a 500,000 investment. The second hour of squawk box starts right now. Good morning, welcome to squawk box on cnbc. Our special guest, peter thiel, member of the forbes mightyist list, on the cover of fortune magazine, a big time author. His book zero to one. So much to talk about over the next two hours of the alibaba ipo, facebook, apple leadership, all kinds of stuff, apple and leadership and why hes not a fan of the term disrupters, all that coming up. This is you get carded all the time, im sure, still, dont you . I was carded the other day. Which has not happened in a while. At least as often as you do. Yeah, all right. If you ever choose to order a drink. Peter, youre 46 years old . Yeah. Looks 21. He does look young. Lets start with the markets this morning. Following the best day for u. S. Stocks in a month ahead of the fed policy statement, futures are mixed. Dow and s p futures indicated higher with the dow up 17 points, nasdaq down by two and a third points. Tenyear treasury yields below 2. 6 , and the fed policy Statement Issued at 2 00 p. M. Eastern time followed by a News Conference with janet yellen a half hour later. China looks to be a market mover. Media reports says the countrys central bank is injecting more than 81 billion in liquidity into chinas top banks saying its a sign policymakers are stepping up efforts to shore up the economy. Dupont needs to break itself of management, 3 owned of dupont sent a letter to the board saying the current Corporate Structure is destroying the value. They say can i say it with sarcasm . They welcome open communication with the chair holders and vams input towards enhancing shareholder value. Wow, after three and a half years, you did it. What . You did sarcasm, nice. Lthere was a little. Sony forecasting a much larger than expected loss. It is announcing that it wont pay a dividend for the First Time Since it listed 1958. General mill shares hit hard in early africanamericanings. The company says u. S. Market conditions are more challenging than have been expected. Alibaba on track to be the biggest ipo this week and may have missed a chance to get in on the action. We have more. In order to pull off whats going to shape up to be the single biggest equity race in the history of man kind, one of the biggest groups of banks and brokages formed, the underwriters, and they are called the syndicate. At the high end of the pricing estimate, 68 a share, could race 22 billion. Theres no single bank or small group of banks to handle that size and weight of a transaction. Lets start with the biggest guys here. The six socalled lead underwriters, ones primarily responsible for raising the bulk of the mun that alibaba gets. You have credit swiss, morgan zanly, citi group, deutsche, jp morgan, a global list representing the Global Nature of the ipo. Raising 22 billion, not an easy task. You need a lot more contacts to raise that kind of money. Thats where all of these other guys are going to come into play. They retained to help further distribute the deal and take on the financial risk of financing the ipo. They are comanagers. Think hsbc or maybe a steeple financial here. Rbc in canada. If you wanted any shot of getting in on this ipo at the offer price, youd have youd have to be at the tiptop of customers with any of the guys, and even then chances of getting any allocation close to what you want is tough. Bottom line is the biggest ipo in history needs one of the biggest groups of underwriting banks to finance transactions and even then, you dont get shares you wanted, guys. Back to you. Thank you, turning our attention to the guest host for the next two hours. A lot to talk about. As we mentioned, cofounder of paypal, early investor today in facebook and author of a new book zero to one, notes on startups, on or how to build the future, and, peter, were going to talk about the book a lot over two hours, but we want the news thats out this this morning, specifically alibaba this week. Youre an investor. Have you invested in alibaba . Well, its quite hard to invest in a private chinese internet company. Did you want to . We didnt look at it that much. We probably should have looked more, but china is off limits for u. S. Investors. You know, even yahoo had a mixed experience where the ali paid subsidiary was given concerns, whats your view of the ipo . It probably it probably will do fine. Certainly, the contraryian instinct i have is theres something odd about an ipo where people say its underpriced, underpriced, underpriced, probably, but its strange how thats the absolute drum beat you hear nonstop. Flip it around, a year and a half ago now, longer two years ago. Two years ago now, facebook had a public offering, all the hype for lack of a better word around it, and some people argued it did not work as well as it should. Today, looks like a great deal to some extent, but for a year, it was a lot of pain. Should people buy at the ipo for these types of deals . Well, its mostly Institutional Investors who are able to get the allocations because ipo you mean after it opens . Yeah, not at the ipo price . Yes, i apologize, after it opens. I think after it opens, its just like any other public stock. Can go down. The super Big Companies are probably like any big stock, maybe more volatile initially, but i think its just like buying any stock in the stock market. You see alibaba, opening an off in Silicon Valley. Do you see them coming here and being a meaningful component of the valley and of the u. S. Market . Certainly were starting to see a lot of of the large Chinese Companies investing in Silicon Valley startup, so there is this sense that china will try to be competing more aggressively with a lot of the u. S. Companies in the years and decades ahead. Peter, you know, one thing we hear without is you really need to invest in people and management, and you made a comment, you know, alibaba, the 40 thieve, and jack ma, i mean, is he someone that you would normally think maybe hes has he changed his stripes in terms of the ali pay move . Will since its now going to be subject to global regulations, is it can it not happen again . Can happen in china, but not again . Is that a character flaw he was that ruthless about taking that without authority . Would that keep you from investing in alibaba . It would keep me from investing. Might not be, you know, i would miss out on it certainly. Feels like i would have missed out on it in this case. That was a move that definitely makes you raise your eyebrows. Makes one raise eyebrows. With all the chinese internet companies, china thinks of the interpret differently from the way the u. S. Does. Thinks of computers and i. T. As less important than we do, but more importantly, politically. These companies are fundamentally political play, and alibaba goes up as long as hes in the good graces of the communism party, and if he falls out, goes to 0. Margins, enaable enabled by being a backing of mo notary public liz tick powers. Sure, sure. It is a state sanctioned monopoly. They dont want too many Different Companies in the it sector because they want to control the situation. Even ecommerce. Do you care the Company Effectively has the equivalent of a dual class . I mean, in some regards . Facebook has a dual class. Youve been a proponent in certain instances. Are you a proponent of dual class always means let the founders have control of the company . I do think theres something to be said for founders able to drive these companies for a long time. Its not clear you absolutely need a dual class structure. Theres not many down sooids. Google has it, facebook has it. It works until it doesnt, right . When it doesnt, you have a problem as a shareholder. Sure, but you have a benefit as long as it works. Multigenerational. After the founder passed the shares on. Its a big challenge once someone passes on. If the shares are transferred, they stop being multiclass. Thats a way to fix it. The way the to be structures set up, if the shares are sold to somebody else, they become the class b shares. One of the big alibaba plays over the past year is yahoo to the extent you want expo slur to china and alibaba, its yahoo . What do you think of melissa mooir . Doing the best job of any ceo they ever had at yahoo and, certainly, the best of the last few they had gone through. Its a fairly challenging job at yahoo because it is, in some ways, it is an old media company. Its its an old media space competing closely with new media. If youre in old media, you want to be in really, really old media like radio or billboards or Something Like that. If youre sort of the old internet like aol or yahoo is the place to be. Backing out the value of alibaba, whats left . Will we see a renaissance or reinsurgence of yahoo or say, oh, goodness, theres nothing here anymore . Well, i believe if you back out alibaba, the rest is close to zero, slightly less or more, depending which day you look at it. Its not the case that yahoo is over valued at this point. Can she fix it, though and make it worth something . Should be worth more, and shes doing a good job, but its hard to radically reinvent the business and shes up against all the tough competition. You spent a lot of time with iconic founders, you are an i n iconic founder. We talk about apple, the new iphone, what do you think of tim cook, the new watch, the new phones . Well, tim cook has thee hardest one of the hardest jobs in the u. S. Since he has these impossibly large shoes 20 fill from steve jobs. I think hes done a really good job as apples ceo. The basic challenge you have at a place like apple is that if you have a 150 billion a year coming from phone revenues, its really hard to have other product lines that even come close to moving the dial. A Million Dollars a year, a billion dollars a year does not move the dial at apple. I think, you know, payments, watches, these are all probably too small to move the dial as far as apple goes. . Its not the next ipad. Even that was not enough to move the dial. But do you see the watch as a major sea change in the industry . Its probably not enough. Maybe if they reinvented television sets, which was a thing they talked about for a long time, that might be a vertical. If you had a dollar to invest in google or am, you put it where . Thats a tough call. Id probably still go with google. The risks with apple are that at some point the they lose the Pricing Power on phones, risk of google is the e. U. Antitrust stuff. Those are the basic risks, but theres probably more upside with google than apple over the next decade. You think the e. U. Trust situation impacts google in. They dont seem to get it resolved. I think its Silicon Valley which is oblivious to how it builds up. Theres been little scrutiny from the u. S. On silicon valg lee, and the e. U. Is hostile in part because European Countries have not been able to compete on the i. T. Sector so they run to the regulators to shut down u. S. Businesses. Is there a fix for that, or is that something theyll have to have loads of people go back and comply with the law . Well, there are fixes for it, and questions are whether they are small technical fixes or major product changes. Thats whats in debate. You big lord of the rings fan, i guess . I am. Before the movies, before even before the movies. Me too, in high school. The armor used. The armor of the elves. Yes. You have to be a big fan to name your two Biggest Companies after it. The eye . Whatever it is. Mary looked at it, and he stole it from gandolph. Yeah, the seeing stones. See into the soul which no one should see that, i dont think. Taken over by the bad guys when you get to the book, but the prehistory was very different, but, yes. If i Start Companies, ill name them after characters in too big to fail, you know what i mean . I dont know, a paulson or something or bernan nanke. Well talk about the nsa and other issues. Do you have time to read anything for fun when you were building your resume in grade school . No, i was just trying to climb the ladder. Hanging out at the new york times. Climbing the corporate ladder. Seen the movies, anything . Climbing over people. Basically. On their shoulders. I know, still trying to do that. Starting with you. Yeah, i know, its happening. All slumped over. Were just Getting Started and why monopolies are a good thing, who gets it right and wrong. Thats coming up. First, though, unveil for nike, the lebron 12, is it a game changer and a wallet buster . How much for a fleet of phantom . Someone placed the biggest orders in rolls royce history. Thats coming up ahead on squawk box. Financial noise financial noise financial noise alternatives, also scaling back planned investments in several u. S. Plants. Lebron up vailing the newest shoe this week, first new nike product since returning to the sal call ofs. Retailing for 200, and brought in 300 million last year, only a small fraction of the companys 28 billion in sales, biggest Apparel Company in the world, and held of a name, peter, which we talked about, how important it is to have a good name. You like nike . Its well, its a fantastic brand. Become good over time. Nike, nike, nike. A greek goddess. Mythology, all these things work. Theres a rule where the names you Start Companies with set the tone for the whole thing. Facebook was a better name than my space. That sounded narcissistic, l. A. Like, and facebook, more reading, and my space about writing, and reading dominated writing, or a bad name would have been napster, the music site. What do you nap . Music . A kid . Where are you between dr investor between uber and lyft . Im bias. Im an investor in lyft. I feel uber has i feel theres a negative ring because it sort of means youre above everybody, above the law, and and daring authority. Lyft is uplifting everybody and catching a lift. Yeah. Its a close call between the two. Tell you about another story, hong kong real estate entrepreneur wants wealthy gamblers to travel in style placing an order for 30 rolls royce phantoms, largest order in the companys history. Hung will use the cars for the hotel set to open in 2016. When we return, another giant leap for mans space flight. Landing a million billion dollar deal. Does this get the u. S. Space program on track . Thats next here on squawk box. Alibaba founder is the richest man in china. What is his net worth . The answer when cnbcs squawk box continues. And a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. Find out how fast aflac can pay you, at aflac. Com. In a we believe outshining the competition tomorrow quires 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. Now the answer to todays trivia question. Alibaba founder is the richest man in china. What is his net worth . The the answer . Hes worth an estimated 22 billion through his 7 preponderate 3 stake in the business. Welcome back. Boeing and musk spacex winning contracts. They will fly astronauts to the International Space station and let the u. S. End dpenependence russia. Boeing and spacex should be ready for services in 2017. Remember yesterday, we talk about how jeff besos company was trying to get in option the action as well. Up next, peter tells us why monopolies are a good thing and why he believes hypercompetitive businesses are for losers. Well talk about that when we return in a moment. Our bestever pricing on mobile plans for business. Run the numbers on that. Well, unlimited talk and text, and ten gigs of data for the five of you would be. Oneseventyfive a month. Good calculating kyle. Good job kyle. You just made partner. Our bestever pricing on mobile share value plans for business. Now with a 100 bill credit for every business line you add. What if we finally had that would be amazing. Hey, what if we took down this wall . What if this was my art studio . What if we were preapproved . Shut up from finding to financing, howd you do that . Llow. Welcome back to squawk box, everybody, among the stories front and center, fedex in connection withes shipping rates as of january 5. Theyll post results any minute now. The nations top military general says he cannot rule out a ground war for fighting isis in iraq, but president obama says theres not a combat migsz. That will be continuing. The Minnesota Vikings reversing course on the decision to reinstate the running back. Has to avoid the team and all activities while he addresses child abuse charges in texas. Look at this texas. What is that . Auxillium. Thanks for listening to me when i told you six times. Were like a married couple. Offering to buy the the company for 28 a share, about 2. 2 billion. In june, theyll buy an ie drug maker, qlt and move to the lower tax quarters in british columbia. They have no plans to alter on abandon the qlt deal. Searching for the next big thing. The entrepreneur says theres new frontiers to explore and the next Mark Zuckerberg will not build another social network. The next great business nobody is billing. What he calls the paypal mafia and monopolies are a good thing. Thanks for having me. How did you write a book . I started a class in stanford summarizing everything i learned about startups. One of the students, blake masters, took notes, posted them on the interpret. They went viral, hundreds of thousands of people read the notes, and as crazy as it seems, best followup thing, turn it into a book distilling everything. Thats what we did over the last year. Some of the theories that have people jumping around catching headlines. The idea that monopolies are a good thing, but not in the common sense of what we think of. Not, like in the Parker Brothers board game where youre a tax and toll collector, but i think that every time you have an innovative Tech Campaign that does something no one has done before, it will be in a unique place, a product nobody else has. When apple built the first smart phone that worked, they had a monopoly of sorts on the iphone. Thats a good one, does not create scarcity, but forms of plenty. In some ways, they are protected by the government with patent laws, intellectual property law, and thats the kinds of thing that at the best these companies are doing. Tough to stay a monopoly, though. Tough to stay one. Thats the kboel you want when you start businesses, do something so good that theres no competition. You dont want to go in the Restaurant Business thats super competitive, not capitalist. A fren of yours quoted in the piece and says hes right, try to do something nobodys competing with, but wrong if theres a good idea, other people do it, and then what, give up . No, you compete. It he wrong when he comes back with that . Thats true, although although if its a good enough idea, you can get ahead of other people. You can Something Like google, you have the page rank search algorithm better than all other Search Engines in the late 90s, and by the time people figured out what to do, say microsoft with bing like that, they locked up the market. I do think thats the kind of dynamic you want. If its an idea easily copied that people can immediately copy it and come after you and you have the third on line pet food company and theres a fourth online pet food company, thats not as good. Ideas that are easily copied, think twice before starting. If you have a hand puppet, it does not matter, youre going are they out of business . Oh, yeah, pets. Com. A while back. Oh, i dont forget. Fedex, you know, get my news edge up, but the 210 number is above 1. 96, because of Strong Performance at fedexground. Outlook for the year, even though they dont give a lot of forecast, 850 to 9. Reaffirming that means they affirmed once already. I dont know they have. Means theyre affirming got what the streets expecting. 8. 50 to 9. The stock now, as you can see, up 3 on that big beat of 2. 10 versus 1. 96. Sorry, peter. Fedex is a good mo nope my that placed the bad one, which is the post office. Theres a point where they are bad, and its in a stat tick world with no innovation, monopolies are bad. Looking at ups, though. You said you dont mean like i think he did mean ma notary public my that youre talking about. You did mean that, did you not . If youre that good. The government takes you down. They do, but people say that, you know theres always these rules youre not allowed to use the power to crush other Companies Like thats not done. Places where people run into trouble, but in some ways, thats in a way, thats the problem you want to have. You want to if you have a problems microsoft had in the 90s, youd rather not have it. Rather be microsoft than, you know, whatever. Jeff a monopoly yet . Hes an interesting one since its not making money. Definitely has all the attributes of the monopoly business. Squawk box a mo notary public my for morning business shows . Define the market. Theres a question how the market is defined. Just say, yes. That was not a serious very close, although we dont want government it has Pricing Power, somewhere in between. Okay. Thats all well get. Stay on the ball every day, though. Uhoh, that might be a problem. Cant rest on your laurels and we dont. Good. Coming up from hammers to power tools, the ceo of stanley, black and decker, see, i dont know, stanley, black and decker, thats what you come up with, stanley, black, and decker, is that enough . Not enough. Set to join us. Monopoly power too. Yeah, companys stock up close to 15 this year. Whats his read on the economy . Housing . Jobs . That after the break. Speaking of tools, andrew will bring us more on the fedex results. Oh, thats mean. What . 2. 10 the share was well above. Speaking of tools did i say that . That was in the teleprompter. Speak for yourself. Well be right back. [ male announcer ] automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a newly redesigned cabin of unrivaled style and comfort. The allnew cclass. At the very touch point of performance and innovation. Stanley, black and decker a global tie tran in Industrial Tools and household hardware space, stock up 16 in six months, and within striking distance of another al time high, joining us now the ceo, and senior associate dean for executive programings yale school and management joining us as well. John, you know, other than management, what do you attribute to the stock being at new highs to . I think a good portfolio. We were blessed with three strong businesses in three segments that ride various economic cycles, and the beauty is when one is not working, others are. Struggled last year, both our consumer and diy segment, consumer construction business, construction tools business, and our industrial segment performed well. Simply said, earnings are up, not surprisingly, stocks performing well. Jeff, i gave john a softball pitch about is it management . Hes too modest to talk about it. You wrote books on leadership, jeff. Does john fit into the mold. Absolutely does. The Stanley Black and decker story is per felgt example of that. Wherever you are, theres a statue in the town square, sure its not a statue to a meet, task force, but a bold individual. John would hate me for saying this, but his predecessor did not have the same reputation he did. Weaved together the tapest ris, and its all operates all over the world, and hes soaring. Its a reminder were caught up talking about the new, new thing, but investing in old things can do a tremendous transformation, and thats people talk about the creative destruction, you know, that the essence of capitalism is its own demise, almost marxlike, and thats not the story. Take a look the global foot prints and cults edge technology. How much and in the interpret of things. How much is your wife really running behind the scenes running this place . And her company . Well, you know us both. Shes a busy lady, proud of her and her accomplishments. In addition to running her publicly traded company, which is a fortune 1,000 company over a hundred years old, sitting on boards and the San Francisco fed, acting currently chairman of the u. S. Chamber, i get a lot of good advice. Ill say that, and i listen to all of it. Youre coasting. You can. One of the i wonder if home depots outstanding results recently, you know, notwithstanding the hacking incident, but their same store sales, revenue indicated something about that sector of the market place. Has Stanley Black and decker been doing better than a lot of other areas of the economy you think . Yeah, we dont talk specifically about customers, but im sure home depot would not have a problem with me saying were gaining share in the market and gaining share at home depot. Thats going to be seamless transition of management at home depot, and our strength is our brands. We have the leading brands in the world and our new dewalt power tools perform extremely well at home depot as the legacy stanley hand tools and black and decker products. Weve performed well with the large domestic big box customers in general, and with home depot in particular. How much is international of stanley, black, and decker . Yeah. Jeff was a limit high. 53 of our business is outside the u. S. About half of that is in europe. The rest spread across latin america, emerging markets which currency issues in latin america and gdp in emerging markets about half what it was a year ago is having an impact. Not growing as fast as nay were in the past. Europes flat, maybe up 1 on a good day in terms of gdp. Weve gained a lot of share in europe, primarily new product driven. Again, power tools and Home Products as well. Hey, john we gained share in the u. S. And europe. I hate to lose you to a german competitor. How much taxes you pay last year, what personality, and how much money you got left out of the country . Well, the overwhelming majority of the cash flow, our projection this year is 675plus million of cash flow, would be a billion charges or onetime payment, and in a normal year, 70 to 80 of our cash is outside the country. Our tax rate is in the 20 to 23 range. You know, and the issue with the inversions that we talked about at jeffs provocative conference yesterday, its not so much its as much as access to the foreign cash the ability to bring it back to the u. S. , to build factories, to create jobs, to pay dividends or buy back share, all benefitting the economy. John much of the its due to the excess of cash more than lowering the tax rate. We are domiciled in the u. S. And intend to stay there. Journ, in favor of another one year tax holiday for repatriating money . Yeah, i think thats one didnt work as well as intended the last time. Far more in favor of massive tax overhaul or tax reform including a territorial system that one that got our rates in line with the large global competitors and give us access to cash. Thats a stopgap measure like extending xm bank, helpful, but not the solution. Extending highway funding. Extensions are better than nothing, but im looking for something a little longer term. All right, thank you, appreciate it. See you again. Peter, i just i just have to warn you, you know, with your question sounded like you were for that. When andrew found out he gave money to romney, it was watching someone so crest fallen that is so not true. That a tech person was conservative. Im worried you might be in favor of Corporate Tax reform. If you are, dont tell him while were here. I wont tell him. We have the high eest tax ratesn the world. Tell him. Thank you for misremitting my views. Youre both right. Both right. We have super high Corporate Tax rates that do not pay, and not a lot. Thats an insane system. Why were ying and yang. Hurts sill conference valley because new Companies Pay the taxes. Its the Old Companies grandfathered in with the complicated rulings. New companies do not get grandfathered in. You effectively have youre so young. How i got the same question. He founded the stanford review. What are you talking about . Conservative. I want lower taxes too, my friend. I do. Fewer loopholes. I dont know about zero. Well see. Zero loopholes is the key. A trefrs with uber, lyft launches in l. A. Peter thiel talks about the investment and the dispute after the break. And do you remember this ad . This is your brain on drugs . Guess what, its coming back, but not as an ad against drug use. Well explain after the break. Welcome back, everybody. The nations largest pot Advocacy Group launching a new ad campaign in colorado aimed at promoting moderation and safe consumption of marijuana. To get the point across, skewing old ads like this, you remember this. This is your brain on drugs commercial from the 1980s. The idea is to caution consumers about the potential of getting sick from accidently eating too much pot. The group says the campaign is a response to the marijuana education efforts which depict pot smokers as stoners. I have a little problem with this. I have friends that have tried pot in the past, and pot has gotten to the point now its hype. Theres no such thing you take one p hit of good pot, and theres what is that . Moderation with pot . Whats that mean . They are putting it in candy. I see what they are saying, but the notion that you can have two drink equivalent of marijuana, two glasses of wine or something, thats not its just not the case. It isnt the case. One is multiple drinks. I can give you the names of the people who confirm this for me. As a libertarian, im in favor of legalization, but as someone im depressed by the fact were doing it. I think its symptomatic of a stagnant society. Its like prohibition ending in the 30s, Nothing Better than people to do than to get drunk in the 30s, and now theres Nothing Better than to get high today. Thats interesting. We legalize drugs when the economy is bad, and when its good, like in the 80s, you got reagans war on drugs. You might as well work, so much work to do, you cant get high. You dont want high schools 90 stoned while they learn, do you . Or after high school, absolutely not. I watch i thought you were going to say hbo on pot, on stone . What did you say . Think they get the best ideas or best ideas. Thats ambiguity. And twinkies do not taste that good, and moody blues and pink floyd is not different. Lets continue the conversation with peter, making the business finding and investing in the technology of tomorrow. Peter, youre an invester in lyft. Side car made headlines. When you think about whats going on in the space, 1 it possible uber has the advantage, they got there first. Shot on goal here for lyft, multiple players or a monopoly issue . Ends up being a question exactly how the markets shape out, and lyfts pitch will be that its going to be better for the drivers. They will treat employees bet e and their theory is that the competition comes around attracting drivers in the long run. Thats the key factor. What do you make about the headlines that the ceo and what uber apparently has done, doing competitively, put that in quotes, apparently trying to go into the car, you know, booking rides and cancelling rides, booking rides, trying to get the driver getting in the back of the car and pitching drivers to come to uber. Is that fair, unfair . Im extremely bias, but i think lyft uber is the most ethically challenged company at this point. Ethically challenged . There are theres do you have an opportunity to invest in uber . We did not. Did you have a chance . We did not look at it. Because . We missed the boat early on and valuation got too high for our liking. I think it i think theres a question how intensely youre allowed to feet, and ubers probably right at the line. Im not saying theyll get in trouble for it. Its theres a good chance they get away with it. I think they are pushing it right at the line. Right. We have the ceo of lyft on squawk ali liert. Bitcoin, we have to spend a minute on. I was a nonbeliever, went to Silicon Valley, talked to a number of your friends and became a little more of a believer. Where are you . Im slightly skeptical. I think that its its the on skit of paypal. Paypal was a payment system, but we could never create a new currency, which is in our fantastic founding vision. Bitcoin, its a new currency. You cant use it to make any payments. At least any legal payments. And so id like to see more payment activity to make sure its not a bubble and something real. Okay. Hopefully well talk more about payments and apple payments and what you think about that and apple watch, which you sound like mcneil y, fashion. Incremental and not quantum yet. If it is, its a small markets. The fashion stuff, i agree. Ugly fashion. Hard to do. Looks like one of the old casio digital things. There are collectives these days. I cant evaluate fashion. When we come back, talk more about what peter thinks of edward snowden, net neutrality, Cyber Security, talking bitcoin too. Miss it last night. The baltimore wrapped up the al east with a win over the blue jays, First Division title in 17 years. And squawk box will be right back. Whenwork with equity experts who work with regional experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. 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. Whenwork with equity experts who work with regional experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. Heres a tech rebel and icon. Silicon valley is fairly o believe yous how its building up. Peter thiel our guest host from Cyber Security to the next business. Covering it all this hour. Hiking rates and reports results, what a large shipper says about the state of the economy. And its down to the wire. What scotlands vote means for the Global Markets as the third hour of squawk box begins right now. Welcome back to squawk box on cnbc. Im joe with andrew, and check out this video. Implosions are a fan favorite of viewers. This week was part of the kentucky bridge that was tumbling down. Demolition crews imploded a 400 foot section as yo can see. The bridge that spans the tennessee river. Wow, thats a different angle. They should have had a michael bay movie, a script to incorporate that in. I think they should call hollywood before they do this to be used. I agree a hundred personality. Question is you how far had to write a swipt for this moment. Ive seen this happen in one of arnolds movies. That one. Maybe get your money back, hollywood pays for it that way. Or Indiana Jones running along a sanction. You cant do that anymore, hes about 70, but you could be. The headlines this morning, a number of things to talk about. Mortgage applications soaring at 8 in the latest week driven by refinancing despite a rise in rates, microsoft boost eed 11 , the smallest increase in the payout since 2009. The giant points to new directors to replace Board Members who did not seek reelection. Shares of dupont get a boost. The Company Needs to break itself up. Hes arguing that current Corporate Structure is destroying shareholder value lieu. They say it welcomes open communication with its shareholders. Yeah right. Owning roughly 3 stake, talked for over a year. Spoke to us a year ago, and give him the last offering at the conference, said he would give a little more time, and they have run out. They have made moves. Dupont made moves to sell off businesses. We wants the whole thing broken up across the board. Thinks theres a discount applied to the company and that theres so much overhead to be taken out if they were broken up into many pieces. Well see. Climbing higher, helping the dow, which if you noticed yesterday, after segal was on, 17130something. 18,000 by the enof the year. Out of nowhere. Over a hundred points yesterday, and dupont 1 up, starting up a couple points higher. Looking at the markets this morning, as joe mentioned, dow is getting help, futures up by 12 points, s p up less than half a point, and nasdaq down four points. Overseas mixed markets. The shanghai up by half a percent, but nikkei down slightly. Europe, early trading, green arrows there. Biggest gains come in france where the cac is up. Peter, peter. A great guest host so far, and we got a lot of things. We have to get to bitcoin. I knew it was coming. Lets get to the snow den, the hacking, major banks, security breaches. Cloud. We did talk not much. A little. We can continue. We did. He says paypal you didnt hear . Paypal was for transactions, not a currency, and its obvious. All right. Anyway. Talk about naktd people, celebrity nude photos on the cloud, shining light on the as a rule nerlts. I want to talk about another thing that we were both right on as ying and yang. I want to talk net neutrality. If i build these pipes, any other business im in, im allowed to say this is what its going to cost you to use them. I dont understand this politically correct notion that the little startups that were unable to, you know, they got to be able to do this, that ridiculous argument, they somehow hurt innovation if you dont let markets work. You got to let markets work. Monopolies are okay. We found that out. I would say i think comcast is on the border woah, woah, not talking about that. How about verizon . Okay, they are borderline. Okay, well they are, they are. Were not. I would say that, andrew, had net new tralty debates for sioux 15 to 20 years now, not necessary so far. Im not sure this is the exact moment we needed, and then even if youre right in theory that theres a bad monopoly with verizon but not with comcast you through that under the bus too. No, i want cheaper access in practice. Faster speeds. Thats whats been happening. Look whats happening u. S. Relative to europe and asia, we are woefully behind. Why . Peter . I think in theory, theres a problem in practice. You know, government trying to break up ibm, government breaking up microsoft, not clear it was necessary, not clear it did that much good. Okay. The other thing you point out is that the provided the pipe owners are already charging their customers more to get it quickly so they get it on that end and they want to charge the content providers as well. Get it both ways. If, you know my feeling is if you charge me extra for a high Speed Internet to get netflix supposed by without buffering issues, then its ridiculous to say, well, i know were charging you, but the buffering problem is netflix because they dont pay us. Theres always complicated pricing issues with all of these services. I dont think its perfect. Skeptical of that any regulations make it cured. The cure is worse than the disease. Obamas guy tried to do the right thing, getting backlash. I dont know that the rules will be watered down. Im not against mergers or thats big of you. Suggesting not against mergers. I love mergers. Founded something called deal book, is that a good name . Created, by the way a great name, two short words that are spellble, spellble by average people. Before facebook existed, 2001. They took it from you. I should have a lawsuit. We could have done the social network anyway. You stated youre libertar n libertarian, are you mad about the nsa and once you found out what snowden brought to us, were you irate . Look, i think snowden is both a trader and also a hero, and thats like even though they are contradictory, theres a sense hes both. It is a big problem there were no internal checks that we could in the have a debate about the nsa without something as crazy as the snowden stuff happening. Talking about looking at so much stuff, not looking at anyone individually, dont care what porn site people visit, just looking for money going to yemen, i mean, is that a big deal . Well, i would say the picture that snowden has of the nsa is its not really big brother. Its more like the keystone cops. They were hoovering up all the data all over the world no idea what they were doing anymore. First thing an Intelligence Agency should do is counterintelligence. If you have an it person, you notice that. Once hes down loaded files, know what he took. If theres way too much data, you have no clue whats going on. I dont think they should have tapped merkels cell phone. I dont think president obama knew. I think that was news to him. It was just massive Data Collection with no rhyme or reason at all. I think the more data you collected, the less you knew. What do you do with snowden if hes a traitor and hero at this point . Thats somewhat above my pay grade. Below your pay grade. Or below, one or the other. Its below. We need to have a very serious debate about the nsa, how to strike a better balance. I do think all these things where you i dont think theres, by the way, a tradeoff between privacy and security. I think if we develop technology, you could have both. In practice, weve had neither. Look at airport security. Yeah. Where its very low tech, very intrusive, and not secure presumably. For it to work and in order to find patterns and different things, it needs some level of metadata, no . How much data does it knead to both protect peoples privacy and be successful in terms of being able to find when theres bad stuff going on and give that over to the well, the critical thing is always to be able to really be to have to be as to have to be able to get the analysts to sort through the data in very educative in very educative ways. You dont need to have this enormous sweeping pools of data. The big pools make it worse. Big data is one of the worst buzz words in Silicon Valley. Its like dumb data. Its overwhelming data. Its pages and pages of data you have no eidea what to do with. I thought big data was the opposite in that you needed all of this data to sort through because you wouldnt find patterns if you didnt have the massive key thing is to figure out how to make big data smaller. How to find valuable things in that. I think there are a lot of very powerful ways to do this that dont require us to be intrusive. We are intrusive with low tech solutions. This is why technology is the key to finding something where we have more privacy and security. Airport security is neither. Yeah. Im stalling. Why . Trying to order up music as we bump out. Oh. Clever. Now that ruined it. Normally, you talk forever. I messaged, said wed have tom there it is. There, okay. Now we can read the tease. More with him throughout the morning. When we back, though, hiking rates and the state of the economy after this. When will winds die in california . Latest on growing wildfires already creating major damage in the area. Well be right back. Its the barbarian queen. Wait, wait, wait, wait, wait, wait. Whoa, does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi to cars, trucks and crossovers. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Welcome back, firefighters continue to battle a wind driven wildfire near the small town of weed. The fire which is the largest currently burning in california already damaged or destroyed 150 structures including homes, business, and two churches. Firefighters are making progress on containing the blaze, the danger is far from over. Conditions there expected to be more severe today. Fedex beating estimates with the latest earnings out this morning. The company earning 2. 10 a share for the First Quarter compared to the what the street expected of 1. 96. A rate hike january 5 of next year. Joining us to break down the numbers is john, a managing director and Senior Research ammist, and, don, the street is impressed by the numbers, are you . I am, i am. Another solid quarter. Like california, fedex is on fire. Okay. Take a look at what happened there, a lot was it was strength across all across the units they are looking at. Anything that jumps out, anything that caught your eye . Well, youre absolutely right. We saw rebound in International Air freight volumes, continuesed growth in ground, 6 growth in ground volume is the slowest in eight quarters, yet its still strong at 6 . We saw growth in freight. Largest less than truckload carrier in the United States, up 11 volume, posted best operating margins since prior to the recession. A great turn around there. Planning on raising their rates by 5 starting in january. Is that something that sticks . It will stick. The reason is is capacitys tight. Volumes strong across the board, capacitys tight, and so they have the ability to not only ask for but receive rate increases, great news for fedex. Saying that all of these the numbers they are giving us now, outlook on this, its all based on moderate Economic Growth continuing. Is that something you see happening too. Well, i see moderate Economic Growth, but look at the freight flows, actually seeing throughout the modes accelerating growth. Fedex is notorious for being conservative in the outlook telling you they cant control the price of fuel, cant control the global rate of Economic Growth. They can only control how well they operate and react to it. Thats certainly true. They are conservative, i think. The were at the top end of the Guidance Range for the full year. Guidance is 850 to 9, im at 9. Comfortable there. I think the number could be marketedly higher, but by the time the fiscal year, just the First Quarter of the fiscal year, by the time the fiscal year is done, could be higher. How do you match up the stock with ups . You know, the story is clear on what the performance was last holiday. Last holiday, we had ups stumble and bumble and deliver christmas packages, little johnny did not get a visit from santa until the 30th or beginning the january. If the carrier was ups. On the other hand, i literally had a fedex Person Driver knock on my door Christmas Morning and deliver a package. They did not have Service Problems around the holidays despite the snow and ice, and ups did. I know the weather was a factor. Bottom line is the little ice and snowplows did not follow aarp the ups trucks and ignore the fedex trucks. They got it delivered over the holidays, and thats benefits them in both volume and Pricing Power today. Don, thank you for joining us. Always a pleasure. When we come back, cpi data, a preview of todays fed decision. Later, google, apple, my clo soft, ibm, a hundred billion Dollar Companies plus. See what peter thinks the next 100 billion giant will be. Futures, things look like they turned down. Dow, nasdaq, s p below looking like they open lower this morning. Well be right back. Way to plus ourso what wea Accounting Firms mobile plan. And minus our expenses. Perfect timing. Were offering our bestever pricing on mobile plans for business. Run the numbers on that. Well, unlimited talk and text, and ten gigs of data for the five of you would be. Oneseventyfive a month. Good calculating kyle. Good job kyle. You just made partner. Our bestever pricing on mobile share value plans for business. Now with a 100 bill credit for every business line you add. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back, everybody. U. S. Man has been arrested in south korea for trying to swim across a river into north korea. The man found in a Restricted Military area near the border. A he said he was trying to get to north korea to meet the leader. This is a tourist did you read that article . That north korea i mean, you go to exotic places, thats like the last place cross that border, all bets are off. Youre out of your mine. Dont do it. Im not going there, dont worry about me. Booker taking a shot at the nfl. The democrat introducing a bill disallowing sports leagues from claiming status as tax exempt nonprofits. Nfl teams now pay taxes, but the League Office does not. Booker says the bill raises a hundred Million Dollars over ten years and money used to pay for Domestic Abuse programs. How do you feel about that . Its hard to, you know when its put that way, who says that you dont want to pay Domestic Abuse. You get to the point on the break that government why are they tax exempt . Should they be . Why are they . The league . The teams, teams. No, no, the leagues are tax exempt. They pay fees. Pay taxes, but they pay fees to the League Office. Thats where the taxes are not paid, at the league level. Figured they pay tax because of the team . Its a league. Basically, i like whenever if theres a way to leave anything in the private sector, we talked about this, a better place for capital to get a return. Well, its, you know, i think that the government has gotten less efficient over the last 50 years. Hard to imagine. Hard to imagine. The Empire State Building in new york was built in 15 months in 193 is 1. World trade center, 13 years and counting. Even though im libertarian, i would have that the obamacare website was going to work. I wouldnt have predicted that wouldnt work, and designing a website is much easier than building an atomic bomb or sending a man to the moon like the apolo program in the 60s. Thats been this real decline not talk the about enough. Right. If youre running any type of organization where you cant find a person thats going to exert influence to do things in a way that is important that you do it quickly and first tieffic. Why not take four hours for lunch . Why do anything . Its the nature of the beast. They were not taking four hours for lunch so i do think theres they im not going to say the dmv or throw the post office, but take your pick and watch. Those are probably the best since everyone knows how they are doing. The people are monitored much more than educational where. You want to end this, we had a minute left. Ending it because were trashing the government. We have a question from twitter for peter i wanted to get to. Better be good. From a fellow name the jartd, peter, whats your biggest concern in the social media space when weve seen the my january spaces of the world leave and twitters of the world enter . So how durable are the franchises . Well, they a number of them seem fairly durable. At the same time, it is a space where you see continued innovation. Theres instagram, twitter, snapchat is the one thats emerged in the last year. It is a much more dynamic space where theres no competition with google at all. Plong term bullish on twitter . I know you are on facebook. I twitters hard to evaluate. They have a lot of potential. Its horribly mismanaged company. People a lot of pot smoking probably going on there. Wow. What do you really think . But its such a solid franchise maybe it works even with all that. Dick is going to call you for dinner to nyway. Talk about that and more with peter on the next 100 billion dollar company, and the countdown to todays major fed decision. Back in a moment. Financial noise financial noise financial noise 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, everybody, a few seconds away from cpi. Lets get to rick santelli. Here we go. Down two tenths of 1 , headline cpi for august. Cooler than we looked for. Last months one techt unrevised. Strip out food and energy, looking for up a couple tenths. Unchanged, year over year headline 1. 7, core 1. 7. Sec quarter current account balance, and lets see, thats 98. 5 billion. Thats definitely on the right side. Looking for a number of 110 billion. We could argue how that filters out into the things like tratd balance and how much of the strength in the dollar actually made a difference here, but that is a surprising number as well. Yes . Yields moving down, after the high yield close last week of 261. Second day of the fed meetings, so well get the decision today. Most likely, push forward in time, any significant interactions with the marketplace via the fed. Back to you. Thanks, rick, for more, and look ahead to the fed decision this afternoon, steve joins us from washington. Hesitate to talk about this, steve, i apologize, but you what . Yeah. The only thing is, you know, he has a lot of hair. I dont want to go into that. You respect that more than you do youre an antibald guy established over the last decade. Yes, and you go to the 12 step meetings to deal with it. Is it true that people that thought they were getting a little bit more accommodative, and considerable time . To be clear, talk about the odds rising, came out, big banks called for considerable time to be removed, tweaked, and third group remains. Thats one of the main issues there were watching today, what happens to it, could be tweaked, and comes from the hawks and doves who expressed concerns with being date dependent rather than data dependent. Watching that word significant in the characteristicization is in the labor economy. We get the forecast for the fed looking at the rate forecast, same as the long run . Long runs 375. Getting there in 2017 . Theres the thing we talked about all week, joe. Markets rate outlook versus the feds. I want to sure with you in theory fomc members who object to calendar based guidance should be alarmed by the dot chart. Calendar based guidance does not get much more explicit than the dot charts. They are date dependent somehow and anyway. Quick thing on the cpi, guys. We knew we would get a big decline in energy, down on gasoline, housing fuels down 0. 4 , but there were declines in other things, for example, apparel down, airline fares down. My guess is fed looks through the report, does not see deflation in it in part because its consistent to the extent its energy based, but they are not going to feel any huge need to move because the numbers seem to go beyond just headline stuff of food and housing. Those are the things i think they will be watching very closely here. Joe . All right. Steve, thank you. Man, watching the fed. Will there come a day, steve . Yeah, i mean youll be out of a job, but one of the things worth mention why would i be out of a job . They raise Interest Rates . No, a day where we dont analyze every utterance from the fed . There was a time when we didnt. You didnt know who paul was then. Were public, and, in fact, they have, you know, a lot of influence on the markets why it becomes so important equity and bond marks and sometimes they hear the same things or talk plainly or talk in code, joe, and one of the things our survey picked up yesterday we didnt talk about yesterday with you guys 1 how much respect there is out there right now or faith in janet yellen. Ask people, you think the exit process ends badly or ends smoothly . More people now think its going to end smoothly, up ten points from the last survey, theres a good amount of faith she works out of it. So far shes coasting on the plan, ending qe in october and mid2015 rise of Interest Rates. It does nothing. Peter, the well known rand palms father, you know, how hes viewing the fed. Not friendly. Do you have similar views . Lives are greatly influenced by these people, arent they . I dont think they have much choice. Raised Interest Rates, its not clear the economy would a big part of our lives in general. No way out . Its a huge part i suspect ending qe is a big deal and somewhat of a problem. Probably done too much of it. Should have stopped at the first two rounds good, 2011 on warz was unnecessary. Huge vehicletity in the markets, qe, that was good, qe 1, but infinity starting in late 2012 unnecessary. I was looking for a yes to outlaw the fed from you. Not one of those . I think its a mistake to make it the scapegoat for everything. I think problems are much more microregulation than macro economics, but i worry we have a third bubble in three decades going on in the u. S. A dotcom bubble in the 1990s, housing and finance last decade. Its the government now, its the government bubble, bonds, fixed income. Yeah . Real rates are massively negative, clearly where the bubble is. Interesting. Sorry, steve. Peter just said, you know, made more money. We have to talk to him. He has good hair too. Lets talk about whats going on overseas. Big day for scotland tomorrow. They go to the polls to decide whether to split from the United Kingdom, and Michelle Carusocabrera made her way across the pond. Reporter a beautiful place, andrew, yes, one day to go before the historic vote. The nos in the lead by a small percentage, but both Sides Campaign heavily still because they believe the result is still up for grabs. In eng lan last night, there were candle light vigils with the english begging the scots to stay, and bill clinton weighed in last night issuing a statement urging them to vote no saying unity with maximum selfdetermination sends a powerful message to a world torp by identity conflicts that it is possible to respect differences while living and working together. When you talk to the people on the ground here, the no vote is very much about fear and, you know, why should we risk it . The yes vote among the Common People is about passion and selfdetermination. When you read through the paperwork and advertisements out by the yes campaign, its clear the politicians leading the Campaign Want to control all the tax revenue that is generated by scotland for scottish purposes, and i want to show you stats they put in posters and in graphics, showing you they are very unhappy with the reduction in the welfare state that the United Kingdom has done in the last couple years. These are stats from the yes campaign saying, look, 89 of the scottish mps in the british parol limit voted against cutting the child benefit. Actually, they voted against means testing the childs benefit. In other words, the subsidies you get as a child go now only to the poor or low income families. They voted against that. 91 of the scottish voted against the bedroom tax. If you live in Government Housing with an empty room, they tax you on that now. That was skinned to if it family if children move out from a family, they want the family to move to smaller housing because theres a shortage of subsidized housing. They said no to privatization of the royal mail, and also to Pension Changes that would have ra raised the retirement age. Very much very unhappy with the reduction in the welfare state as well, guys. Back to you. All right, Michelle Carusocabrera, well see how it turns out this week. Up next, peter thiel knocking twitters management mitchs ago, back to the topic after the break. Plus, his guess on what will be the next 1 00 billion dollar company. Before we head to break, if you think u. S. Politics are dirty, check out ukraine. Angry citizens in kiev throw a member of parol limit in the trash screaming foul language, but they thought it was domicile, threw objects at him, and squawk box will be right back. An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. 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See more on the iphone 6 coming up later on squawk alley. Back to peter. All struck, what do you think of twitter . You had a very negative opinion both of the company and the management. The company is a fantastic franchise. The paradox is when the Business Model is as good as twitter with you have 140 characters, no one copies or competes with it, you can be screwing up a lot of other stuff. The management can be bplus. Maybe people come in at 10 30, leave at 5 00 p. M. Thats fine in a company that is significanti isuggesting the mismanaged today in. Yes, they should be making more money, building more products, i think it is its it feels like its a vastly under performing its potential. There is a way in which its going to do fine as a business. Decades ahead no mat whaer they do. You dont own shares 234 twitter. I do not. Prevailing view in the valley it was mismanaged for a long time in the beginning, but once dick, the current ceo was brought in, things got better. You think they have not . Its hard to change these things, you know, the tone, the culture gets set at the founding moments of the company, and its very, very hard to fix nda like that. Eject the current ceo . Im not sure they could do that much better, but its the ceo cant change things that much in the companies. You dont have the i mean, you have to fire everybody and start over. Founders lazy and put that culture into it . Not lazy, but set the tone for the company. Is the the tone for the company. To make more money, you need more revenues. How do you do it with twitter 1234 . Its all advertising. That will work . Nothing on twitter induced me to do anything in terms of opening up my wallet. There probably are things for branding . I dont like it when i see something im not following. I go past it. I dont know what it is. I dont know how it got there. What is that . They have to figure out a way to do it where you dont notice it. You dont notice it now. I saw it, i dont like it. I dont follow it. Its when you dont notice it that it works. Founded square. Great entrepreneur. Brilliant product guy, and i think, you know, played a key role in coming up with the idea behind twitter which was really good. The square reader was, again, a brilliant idea. Competitive challenges with lots of other people copying the product at this point, but definitely been a brilliant visionary. We said wed ask you about the next hundred billion dollar tech company. If you were to pick one, is there one out there right now . Well, this are theres a number with the potential to be there. Probably on the Consumer Internet side, i would be most bullish on air bb. Investor . I am there. As the one that has the potential to get there. Alibaba. Whispering that. If you go china, alibaba thats at 200 its not really will it get there . I think so. I think so. Thats more enterprise software. They tend to be more relentless, longer thing. Some gets there fast, goes wrong fast, or grows fast. Peter, i hate to ask, coming back to it one more time. If jack dorsey was the guy behind it, ba what do you think of Evan Williams . Where is the culture messed up . The whole founding is complicated. You know, there was a book written on the history and really unclear who exactly did what. I think dorsey was brilliant. A lot of talented people, but somehow the combination did not work. All right. And the culture was set in somewhat of a weird way. Peter, i want to weigh in, if i can, a somewhat sensitive topic, only because we read fortune magazine. You talk about it. You have been public that youre gay. Youre one of the few in Silicon Valley and in the Business World whos been public about it. I wonder when you look at jim stewart, for example, wrote a column, two ceos Public Companies who came out historically, not historically, but are. Do you wish more have no dooup why they have not . Views on this . Im not sure im necessarily an expert on this topic per se. I suspect there are a number of gay ceos who have not announced it. I suspect a generational thing if youre in your 50s and 60s and have not come out, its unlikely that you will, but i think well see a lot more in the decades ahead. Coming up, coming up, jim cramer from the New York Stock Exchange, and later, rapid fire with our guest host, peter thier. Tomorrow on squawk box reaction to the feds rate decision, the guru is here, and, plus, the biggest ipo of the year set to hit the markets. We talk alibaba and ecommerce. Squawk box on cnbc, profit from it. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Welcome back to squawk box, everybody. Take a look at the futures. Theyve turned around once again. S p futures up about by 2 1 2. Lets get down now to the New York Stock Exchange where jim cramer joins us. Think of the individual names weve had today. F fedex looked pretty good. You have dupont. We have had Stanley Black and decker on. I dont remember the founder, mr. Black and decker stanley. Do you see a great inventor of tools or something . I know the stanley family. Oh, im sorry. Yeah, the stanley family definitely up in connecticut. Very smart people. Black and decker, i think geez, the guy was a diplomat to see the previous guy wasnt that strong. That combination, its a very winning combination. I think its turning in europe, too, which is very significant. They have big european business. I like what theyre doing. They have an Oil Service Business thats good too. How about peter on twitter . You been listening to some of that . Im a big anthony nodo fan. I think hes shaking things up. But i respect peter so much. I feel there was a mismanaged situation, but a guy like nodo comes in, no nonsense. Id like to hear what peter thinks it on a cfo. Cfo is more the public facing. You need a cfo so you dont have creative accounting. Its really bad to have a bad cfo. Good cfo only goes so far. Thats interesting. I think look, who am i to disagree with peter . I would say nodo was a special enough guy he can make it so a lot of things they were kind of like a university of twitter. I think thats a little interpretation of what i think peter is saying. This place is kind of a geez, you know, weve got a good product in 140 characters. Nodo says, no, we have to run a business. I think otherwise this business gets taken over eventually. Do you have a take on that . You own some companies that could buy it. Well, i wouldnt speculate on that. Fair enough. You remember that, jim . The dangerous combination is the smart and crooked cfo. Thats the really dangerous combination. Thanks, jim and peter. Coming up, we do a little rapid fire session with guest host peter teal. Offthecuff questions that answers that could surprise you. This is charlie. His long day of doing it himself starts with back pain. And a choice. Take 4 advil in a day or just 2 aleve for all day relief. Honey, you did it baby laughs take and. Exhale. In. Aflac and a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. Find out how fast aflac can pay you, at aflac. Com. Starts at 6 30 a. M. On the vo rush hounose. Und here but for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Lets get back to our guest host peter teal. Peter, wed like to do a little rapid fire with you, if you dont mind. Absolutely. So lets start out. Iphone or galaxy . Iphone. Very good. Are you online streaming or cable . Cable. Most unusual pitch youve ever heard. Wikipedia entry from the year 2024 where the person had made a fortune. They had spent their last money the wikipedia entry indicated they spent their last 75 to go to a conference where they met me and that miraculously turned everything around. Did you give them money . I did not. But i was somewhat disturbed by it. I would too. Whats the one thing somebody shouldnt say when pitching you . They shouldnt say that they have five different ways to make money. I like to have one clear way to make money. When you say you have five different ways of making money, that means that you arent clear on any of them and it suggests you dont really know what youre doing. I like that. When you say you can do a, b, c, or d, you havent thought about any of them clearly. Whats your Power Breakfast . Egg white omelet. Every day . Every day. Going to get one after the show . I had one already. Online or instore shopping . Mostly online. Paperback or ebook . Still paperback. Your favorite movie. Joes already brought this up before. Is it lord of the rings . Star wars trilogy was probably the one i liked most as a kid. Youre not going to back a republican candidate. Who do you think is the most talented . I think christie is the most talented politician. He may have too much baggage to win. Rand paul is probably the one im most sympathetic too ideologically. Hillary going to be the next president . Shes the oddson favorite. Maybe the clintons are making the same mistake as 08 to think theyre automatically going to win. A little bit of complacency. The hubris is high. You dont like the term disrupter. Why not . The disruptive kid gets sent to the principals office. They get noticed but end up blowing up. What do you like . Innovator, missiondriven company. If youre a drinisrupter, your defining yourself against people youre competing with. You should be doing something new, fresh, and strange. Should most people still go to college . Probably, but they should think really hard about why theyre doing it. Thank you so much, peter. Its been a pleasure having you. This is fantastic. Go buy the book. Peter thiels new book. Squawk on the street is next. Good wednesday morning. Welcome to squawk on the street. Im Carl Quintanilla at the New York Stock Exchange. We have got it all this morning. A falling cpi earnings from economic bell weathers. Activism at dell components. And hours away from feds statement and press conference later this afternoon. Our road map is going to go like this. Investor nelson peltz calling for dupont to break itself up. The markets looking ahead to the fed