Transcripts For CNBC Squawk Box 20150505

Now well get to business at hand this morning. If youre just waking up lets get you up to speed on the markets and whats going on in the futures. Looks like a little bit of a mixed morning. The dow might open slightly higher. Nasdaq would open marginally off and the s p well call it across the board. Well see how things play out this morning. Joe. It used to be mostly new york social sociallights wasnt it . Five years ago it became very strange that it became sort of a moment. Its almost like the white house correspondence dinner. Its for not nerds. For real celebrities. For actual celebrities. Very few cross overs for the two i would think. Probably a hand full. Maybe a hand full. Other big stories were watching today a packed earnings count are among the names set to post results today before the bell. Disney archer daniels, discovery, kellogg and bloomg brands and disney moving its release up to 8 00 eastern. So executives can attend a Memorial Service for survey monkey ceo who died over the weekend. His wife Cheryl Sandberg sits on disneys board. On the economic front, two reports of note today, International Trade at 8 30 eastern and then ism, nonmanufacturing at 10 00. And in Global Market News Australia central bank cutting Interest Rates for the second time this year. This is an all time low as policy makers are trying to protect the economy from decreased Mining Investment and fend off tim pact of a stronger currency. We got some stock to watch. We should talk about Dave Goldberg at some point. Among the stocks to watch this morning, texas roadhouse share with a boost on better than expected Quarterly Results. Profits also more than doubling. Wall street expectations more people with Health Insurance use the hospital chains facilities. Well talk to the ceo at 8 15 eastern time this morning. Dont want to miss that. Also Anadarko Petroleum with a loss. The output rose to a record level during the quarter. Also on our stocks to watch Eog Resources plans to resume fracking if oil hit 65 barrel. Posting better than expected earnings in the latest report and then the shares of the Armored Car Company get a bump. An 8. 2 stake in the Company Called it undervalued and ubs posting its highest quarterly profit in near flooif years today. The Swiss Banking giant also announcing its in advanced talks to settle allegations of foreign exchanged market rigging. We have a lot this morning. Germanys adidas with better than expected sales. Among the driver a recovery in its north person unit and strong from its running and fashion. Underarmour, nike its tough. Yeah but they used to be a big deal. I remember when reebok was a big deal. Its competitions and millennials who knows the way theyre going to go. Lets check on the markets this morning. The futures are indicated pretty flat. So far up 6 or 7 points on the dow. S p up fractionally and the nasdaq up as well. We had two days of gains but were just around 18,000. We have been sort of up theyre going to be at the halfway mark and well talk to someone in a moment about which way this reconciles its but we havent made a lot of head way. Theres europe today. Nothing more than a half a point move on the upside but greece is down 3 . It was back above 800 but maybe ready to breach that level again. Asia hang seng and shanghai. Getting the worst of it. Other markets are closed today. If you didnt see the equity futures they changed. They were up 6 and now theyre up 8. That was a fat finger. Be glad it wasnt a trader with a lot of money or it could be the start of another flash crash. And then the euro 111. Thats kind of retraced as oil has as the dollar has, retraced some of those moves that people thought were going to go further. Check out gold quickly and then well move on and get to the afore aforementioned next guest. Lets get more on all of this. On the markets and the key economic and employment figures coming out this week. Really . Is it the first week of may, the big jobs report . Friday is the jobs report already again . I have to come up with another thing to do on my sign i hold up. Its hard every month to come up with something. So you did watch the fight. Yes. So you saw juan 316 on Manny Pacquiao. Maybe we could hear those bands around our head. And you saw Freddie Roach had the geico band. I mentioned that to warren yesterday. How are you . Good. Do you think theres going to be a reassertion of some of these trends. Im going to summarize. You think the economy reasserts itself as being stronger than most people thought although you do acknowledge descent on that. You think the dollar gets the parity with the euro. Oil is probably going to stabilize. My guess would be around 60 because thats a level you can make money. We just heard someone would start fracking at 65. Thats right. In that ballpark is where economically it probably levels out. I eluded to the stock market which i dont know if id say stall but weve been flat the whole year. It doesnt take much of a sell off for the media to say were down for the year. So were right there. Do you think that finally when it breaks out one way or another you think its higher . I think that the direction of stock prices is higher as the economy grows and the earnings grow but i think this year if im right about the economy getting stronger in the United States ironically that makes me better for european stocks. Because the fed. Because of the currency. So if the u. S. Economy is strong as i think it is and wage growth is strong as i think it will be that might prompt the fed to move sooner and that should help the dollar and ironically that might help the earning of companies in europe more than it helps the earnings in the United States so you might have a more robust 6 to 8 in europe. You think the fed goes twice this year . Its based on my relief that the labor market is stronger than most people think. Part of the reason why some of the pressures of wages and change in Hourly Earnings are weaker than people think is because some of our fellow baby boomers are making a lot of money being replaced by less than expensive work. Some show wages are already growing at close to 3 . Thats a better measure of what the underlying wage pressures are and thats good. America need ace raise but that will also put the fed on watch that they need to start to tighten monetary policy. Youre a big time asset manager now. Youre not a one trick pony anymore. So do you pick different sectors here for your clients or say im going to europe . It depends. We have been moving some of the money this year into europe that didnt workout well in april but we still like the United States. Were still overweight u. S. Stocks but not as aggressive. Any particular area here . If you like the u. S. Market you want to look for parts of the market that will benefit from higher Interest Rates and Higher Movement in the market. We tend to be very diversified. Were not making big bets on industry or individual stocks but theres good opportunities in stocks but maybe not as dramatic as a few years ago. Youre hearing people he said theres an easy way to short the bond market. The 30 year and maybe even the ten year that he would its getting pretty common. Two things make it contradictory. Rates will raise but 3 is the new 6 it will seem like a more normal rate and it will have a ten year bond for quite some time. Theres still a tremendous demand for safe secure returns and that tremendous demand for bonds and relatively constrained supply means that rates will low for quite sometime. Are you 60 yet . Im over 60. Doesnt look it. Im older than you are. 60 is the new what now that youre over . I hope its new 40. Is it the new 40 or 35 . Im with you. I glued my price target down. Youre 30. Im thinking 30. Ill go with you. My mother never turned more than 29. So you go with 40. And youre there and you know what youre talking about, right . I hope so. I shoenlt be afraid. Thank you. Nice to see you. Were going to turn to d. C. For a moment 2016 is the big focus. Governor Mike Huckabee will be the latest to declare his candidacy. John joins us now. Good morning. I wanted to run through some of the highlight of this poll. Lets first start with a very fluid republican race that grew by two yesterday. Jeb bush is in first place. Right behind is marco rub i cant from florida. Hes at 18. Scott walker at 14 and the votes carved up before that. Jeb bush improved a quit in terms of his potential vote from our last poll in march. Then you look at the democratic race its absolutely locked in with Hillary Clinton even though she has taken a bunch of hits over the Clinton Foundation and various scandal stories. 8 in 10 democrats think she is knowledgeable and effective enough. Experienced enough. Can get things done. Shaez she has taken a hit on how straightforward she is. 52 of democrats rate her as being honest and straightforward. Now when you look at the other elements of the race president obamas improvement in the polls polls, he is now up to more positive than negative in terms of his approval. 48 approve of the job performance. Thats a benefit going to democrats in 2016. One final note on trade we see the effect of the improving economy on the number and the assessment of American People of whether trade is good for the United States or not. You now have a 37 31 pluerality. And that will help as they try to get votes for trade Promotion Authority and the Transpacific Partnership coming down the pike later this year. Its weird to watch all of this. Ive seen editorials written about how at this point even democrats are desensitized. Theyre like were used to this and we dont care. They said that bill was going to take a backseat and not be real involved. They put him out and he is he is as good as he ever was. Hes like i just dont see how if we get money from other countries and its used to help poor people i dont see how thats a bad thing. Youre good at that. And im listening to him and then he gets a little teary eyed. Hes unbelievable and they better not put him in the back corner. Thats their strongest asset is that guy. Joe, you were talking about democrats and new information. When you have been in the public high for a high level for as long as bill and Hillary Clinton have been your image is pretty well fixed. It takes a whole lot of information to change how people look at you and so i think thats why the stories will take a nick at Hillary Clinton and with certain characteristics, people thinking she is candid youll see some knock on effect and the question is whether its enough to change the race. I asked buffet yesterday i said all of this stuff and then i said let me ask you, is there anything, anything that could come out that would cause you to change your opinion . I dont think there is. Maybe murder or something. I dont know. I dont think theres anything that could come out there was a saturday night live skit with the president when they were talking to six obama voters and they all complain and then they said but would it be enough for you to not vote for him. No. Its funny. 25 think she is trustworthy. Anyone else would think thats a bad number but not her but i think you need to add a couple of those republicans together. I dont think you can when bush has only got 23 and then you have 18 17 14 you cant do a fair evens up comparison against Hillary Clinton. Sure t republican field is fractured. Then it will be much closer i would venture because she has the democrats but i dont know about swing voters. If she moves left she may lose swing voters. Joe the race is already close so we matched up Hillary Clinton and she leads all of them but margins arent huge. She leads rand paul by 4 marco rubio by 6, jeb bush by 6. This is not a situation where Hillary Clinton is running away from it. Jeb bush leads. So it is not fated what the outcome of this election is going to be. Theres another part of the survey that ran as a separate story in the wall street journal this morning and i dont know if this is something you focused on. This was about our favorite topic at this table, maybe mine joe, which is economic inequality but what was so interesting was it said the survey finds americans are more concerned about moving up the economic ladder than about the rich becoming richer. If that is true do you think its going to impact the way Hillary Clinton approaches the issue. Its not only true it is impacting the way Hillary Clinton and everybody else is approaching the race. The issue of the ability of the middle class to make gains is much more important to people. We saw that in our poll by Something Like 30 points. As long as the middle class is move ago head the gap wont be debilitating. But the left played this class warfare issue with it being about the rich being richer. The two are linked. The middle class, yes the rich are getting richer and the middle class are not getting ahead. Those things exist. But the emphasis is do you try to make the rich poorer or do you try to make the poor richer . Thats really about how this discussion gets framed . Yeah true but the discussion is being framed about the middle class getting ahead. The campaign is not going to be about making the rich poorer. I can guarantee you that and its not going to be about income inequality itself. Its going to be about the ability of average families to move ahead as they have not moved ahead for 40 years and one element of that as i said it overlaps with and is related to trends in income inequality. Larry summers said his values havent changed but his view has changed because of the rise of inequality and when you have the trade offs between economic efficiency, what makes the engine run most smoothly and fairness. Some level of redistribution, what you do at the top end the balance has shifted. Youre doing good damage control. Hold on a second. But when Hillary Clinton says im going to topple the 1 . Im going to topple the 1 . Topple. What does that mean . What does it mean . It means its a 0 sum game and im going to take from the rich. No. Im going to be hillary hood. Thats a cartoon picture. She didnt mean it. She didnt mean the private sector doesnt create jobs. She never means the stuff she says. What she and democrats want is not to topple or make the rich less rich. Theyre trying to theyre trying to raise some money. In this case i think she has approached it in terms of framing the issue a little bit differently. No, no. But its with the middle class. Ill leave you with this. Were in trouble. Weve gone too long. Their approach is government needs money and theyre going after it from the 1 . Not to make them poorer but to pay for things they think need doing. Okay. I think were going to agree to disagree this morning. Its wonderful to see you. Well see you soon. In the meantime well talk about changing the world because becky quick sat down with warren buffet and get this she also sat down with bill and Melinda Gates. They talked philanthropy. Find out why gates argues profits shouldnt be the sole motivating factor for entrepreneurs but first, heres a look back at this date in history. New performance numbers today on the worlds most powerful Hedge Fund Managers. Last years Fund Performance was the worst since 2008 with the top 25 Hedge Fund Managers bringing home half of what they did the previous years. The founder and ceo on top of the list for the first time with earnings a billion dlee. Thats not the fun and me management. Becky caught up with the gates in omaha. Also joining their conversation warren buffet who pledged much of his fortune to that foundation. I know that this is an important year for berkshire but theres other anniversaries too. Its been 15 years since the bill and Melinda Gates has been founded and nine years warren since you made your pledge to the foundation. I just wonder from your perspective how things are gone. Up until now its perfect. Warren hasnt aged in that time and neither have we. If you look at what the foundation is doing before what you have been able to do since the pledge was made to the foundation, do you mark that time as before and after . Yeah it was pretty phenomenal. We learned a lot of things. We got this doubling of capacity an we were able to be unbelievably ambitious in what we were going to do. Thats our lifes work now is making sure the money is well spent. All three of you are very busy. You have been traveling all over the globe. Why was it important for you to get here for the 50th anniversary too. This is such an amazing time for berkshire. I wanted to come. Its been a few years since been here. Its been tricky with children. Warren has a great time and bill has a great time. Its a huge milestone and so exciting to see all the things the company has done and all the people that come in honor of berkshire. She may be busy on the 100th so she thought she should make this one. How would you say your threes friendship and partnership has evolved overtime. Well, with me started on july 5th 1991 and bill was reluctant reluctantly meeting with me and we hit it off and we had a lot of good time since. We started doing things together. One of the great things was the arranged so i could eat hamburgers the whole way. That was big. I tease bill because i think there came a point in our life where it seemed like omaha was always to or from the east coast. How would you say youre so busy well you two are. I dont know about warren. You had to bring that up. How often do you get to communicate about Foundation Business and berkshire business . How does that happen . Its not real often but bill knows whats going on at berkshire and i know whats going on at the Gates Foundation. What would you say in the evolution of the partnership you had was this something that was cemented when you first met . I think that first day i met warren and how he was curious about why the world worked the way it did and he was asking why doesnt ibm just do what you do and how do the profit dynamics work . I had always wanted somebody to talk to about those questions and be fascinated about it. We find the world fascinating. Well never understand it completely. Theres some things you know in technology i might be able to see. You have a small edge on me there. We went to him ripping things out of magazines and now he hands them to debbie and she scans them and she uses email. So i get things more quickly. Im incredibly flexible. One of the things i often hear from bill because i dont see his calendar but we talk about the next day. If he has a phone call with warren the next day he says i get to talk to warren tomorrow and he looks forward to it. But its a nice piece of their friendship, right . Well hear more from becky in the next hour. Coming up greece facing a major deadline this week and the countrys future in the eu could be at stake. One of the top eu negotiators will join us on set next but first a look at yesterdays s p 500 winners and losers. E announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Greece and its lenders working to resolve the debt crisis. Joining us with what is happening behind closed doors is the head of the Euro Working Group and part of all the negotiations with greece. Youre the equivalent of cfo, if you will. Is that a good way to describe what you do. Advisor to the cfo, co. Thats you. Take us in the room. Where are we . Whats happening . Well greece has had a pretty long and troubled history over the last five years before and even before if you look at the development of the fiscal situation and competitive situation and the new government started learning and was doing after it was learning the election with a government thats so new you cant learn before the election. You dont have people that have been in there and doing the job. So you have new guys in there but the current state of play we thought wed get a list of things theyre going to do just this week. Technical experts have been shifted to brussels. Theyre talking there. We have a euro group on monday. We hoped we were so close that something was in sight. Now colleagues have been battling with fiscal issues. Labor market reforms and its fair to say that the judgment of everybody including the greek colleagues is we will not yet be there. No deal on monday. No deal on monday. But will a deal be reached before a true crisis ensues . Sure. Never say sure. I am very convinced. You are very convinced youll get a deal. We have a Program Current until end of june 2015. There are still around 7. 5 billion euros. 7. 5 billion still to be dispersed dispersed some of it from ecb profits and some from Fire Fighting funds and id say weve got another good month in which we can come up with a deal. Then you need a couple of weeks, three weeks to do all the parliamentary processes. Why are you convinced that the greek political leaders are going to give you what you need before you dispense that money . Because theres going to be people on the other said that say this is not enough. This is not going to work. Were putting another bandaid on this problem. The greek population is firmly convinced its future is in the euro. Its given a man date which is quite clear to me it seems to me and the greek politicians. Do whatever it takes to come to a conclusion with the creditors and im quite convinced that well get there. So far certain steps have been made but these are steps in a direction. Were not there yet. We have to go but just so i understand, a grexit, katz catastrophe or not anymore . An exit of greece three years ago would have been a real catastrophe. I dont believe it will happen. But if it were you have to deal with probabilities or possibilities. Were well installed kated. Theres quantitative easing of the ecb. We have a fund to take care of that. It would be bad for greece. Not good for europe and not good for the world. So were fighting on. Thank you for being here. We rarely get to speak to the man in the room. So we appreciate it. Thank you. Thank you very much. Thank you for being in the room with me. We think its not going to get done but its always going to get done right . If youre in the room you need to think its going to get done. So theyre handicapping it. Yeah. Well take it with a grain of salt. Were watching. Well get there. Well take your advice. Come back when you do. Coming up a media start up raising serious cash. Its called refinery 29 and its target audience is Millennial Women. Well talk to the two men behind the company next. Unbelievable. Squawk box will be right back. And when you bundle your home and Auto Insurance through progressive, youll save a bundle [ laughs ] jamie. Right. Make a bad bundle joke a buck goes in the jar. I guess thats just how the cookie bundles. Now, youre gonna have two bundles of joy im not pregnant. Im gonna go. [ tapping, Cash Register dings ] there you go. [ buzzing ] bundle bee coming it was worth it saving you a bundle when you bundle now, thats progressive. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. Stories front and center this morning, panera with a no no list today. They have listing 150 artificial additives it plans to remove from its foods by the end of next year. Its the First National chain to make such a list public. Well talk now about refinery 29. Its a media site for young women and audiences that advertisers and investors want to mix they Just Announced a 50 million series deround of funding. Theyre the cofounders of refinery 29. Dont try to diffuse the issue. Its steafano. We have two men running an organization for women. How did that happen . We started with creators and those doing Something Different about fashion and style. It was really a unisex thing but women gravitated toward it. So you just raised new money and youre doing new productions with lena dunham and others. Yes. What kind of stuff are you trying to produce . It was around fashion and style but we believe womens life style is sort of 360 degrees of audiences lives goes into Global Culture or travel. Even the wage gap. The 360 degrees of every day life. Right before you guys sat down or when you sat down during the commercial break i said is there a media bubble. We have a lot of digital doesnt folks come on the show recently. Vice just raised a huge amount of money. Theyre claiming to be worth 4 billion. Does it feels frothy in media land . It does but theres real economics to it and theres certainly a trend that you see of Real Companies emerging out of the digital core setting themselves up to the the mtv of a new generation and thats happening in and around a cluster of some Core Companies that you mentioned. And theyre going a long way. That means you have to think you just rub the old traditional businesses and they wont be what they used to be. Absolutely. Its never been more efficient to reach a consumer directly and many businesses havent figured out how to do it in an organic and cost efficient way. What do you think of a vice which was, i would argue, a Digital Media company up until about six months ago and tried to transform itself to an old media company. Well much of media is media is converging right now so you have a lot of old players trying to get into new media and a lot of Media Players moving back up into more traditional formats because theres still a lot of revenue tied up in the formats and being able to effectively run and drive a new Digital Business while being able to really take advantage and capture old media dollars do you have a female ceo or will you eventually . No. Thats the first thing i thought. Is you better get some Senior Management that are ladies. The majority of them are ladies. Yeah. I dont know what you know about Millennial Women. I think i go right to some Millennial Women to figure things out. Men play a really important part in that conversation. Im trying to help you guys. Because you have to walk the walk. We have an office of 200 Millennial Women that do all the hard work every day. So when you think about your business, right now its totally adverse tiegz driven. Is there a premium element. Its very diversified so it goes from events to video and integration. How much are you leveraging . Now theres a lot of big multinational corporations that created these marketing buckets just for women and womens issues. Is what youre doing trying to take advantage of that or is it different . I dont know. For us its about driving a smart informed conversation for Millennial Women and working with brands and facilitating the most the smarted conduit between what a message is and how to engage millennials online. Thank you for coming in. Thank you so much. The exact dates. 18 to 35 now. I dont want to go and figure that out. My daughter is 15. She is gen z. Get ready. Gen z. Thats the next wave. Youre thinking about that already. I can see it in your eyes. All right. Still to come the ceo of rubbermaid plus tenet health. And well catch up with dan gill brett. First its cinco de maya. Well talk about tequila. Im not going to taste any. Grab a glass. Squawk box will be right back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. music boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. 2,000 calories is the recommended portion for a full day of food but some snacks alone could snack up and oronge mango juice, italian sandwich with mayo and chips and a cookie from potbelly or a single slice of chocolate cake from the little italy hot spot little italy could take up the calories. You know this already. We have a pretty good idea. Like a cinnabon is like 800 or 900. It has it be more. I think one could be your whole days worth of calories. Thats rough alcohol is something and well talk about trends because i will tell you, i need spirits because beer fills me up too much now. And wine so i never thought i would be a spirit drinker and tequila fits the bill. Cinco demayo. Sales in the United States more than doubled over the past decade. Used to be 926 million and now over 2 billion last year. Joining us now is one of the worlds leading experts on the subject of tequila and the global ambassador for jose cuervo. For me its an honor to be here with you. Thank you very much. Im glad youre an expert because i have a lot of questions and i was just talking about how beer i cant drink. The first six go down pretty smooth, but its that no. For spirits, i like tequila. I cant imagine people trying to drink premium vodka. Its tasteless. Tukealia i understand because it has a great flavor. Are people doing the shots or doing the i like margaritas. Everybody knows margaritas and the shots of tukeel tuqueela keel. Thats where the growth has been. What is clooneys brand . Hes got one, too, right . Yes, of course. So cuervo is coming into the mix here. Yes we start with this is more than five years. Five to seven years and where it starts is 1995. I need to know do you know the difference between the different types . I know nothing. I know nothing about nothing. Its white after the process and then we have minimum two months and no more than one year and then becomes and no more than three years. After three years. No kidding. So what is this . This is how long . This is 5 . Where does it stay . In barrels . We use american oak and french oak. We take the best of the house. In 1995 to share the best of the work and the private cellar and celebrated the company in 1995. So every year is a special collection and the box is painted by a mexican artist. Hets lets taste this thing. Seven years. Give us a price tag. What does a bottle cost . 150. 150 bucks . This is for sipping, not for marg margaritas. Not a shot, just a sip. Try, okay perfect. We say salus. Thank you for coming in this morning. Coming up this morning, well see how tipsy we are a little later. The boss of rubbermaid owns a whole set of products were familiar with. Cellophane cookware teflon. You sell cellophane. See im drinking already. Two sillyllablesyllables. Graco. Its in the middle of a big cost cutting effort and well talk about that and a lot more. Stay tuned. The network that monitors her health. The secure Cloud Services that store her genetic data. The servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. A changing of the guard. The top bond fund. Details on the new king and fixed income just ahead. Earning season still under way, but we have an early report card. Gentlemen, senior midterms grade you. Theyre not posted yet, sir. Ive seen them. Many companies struggling to hurt earnings estimates. How the scorecard is shaping up. 0. 2. Fat, drunk and stupid is no way to go through life son o. The new star wars movie set to open up a big revenue stream for disney. Merchandising, merchandising, where the real money from the movie is made. From toys to books to video games, disney set to make billions in merchandising. We have the second hour as the second hour of squawk box returns right now. First in business worldwide im joe kernen along with andrew ross sorkin. U. S. Equities were up and now theyre down. Not a whole lot of action. A lot of numbers coming this week and a lot of analysis. Were in another world. A stronger economy, a weaker economy . We will get a better indication on friday because its already time, already time for the employment report, again, because its may. May 5th. Its okay to do a tequila segment on cinco de mayo. You took one tiny sip. She said i made a face. If you havent eaten anything. Just a little coffee. Coffee and tequila, breakfast of champions. This might be good. Maybe you should drink every morning. Total return fund has lost its crown as the worlds biggest bond mutual fund. The Company Announcing another 5. 6 billion in withdrawals last month net outflows for the fund that brought its assets to 110. 4 billion at the end of april. The new king in town vanguards total index fund with 117 points as of the end of april. Chicago fed president Charles Evans says that rate hikes could begin this year without harming the recovery, but he said he would prefer the fed hold off on raising Interest Rates until early next year. And among the names set to post quart eerly results before the bell disney moving its release up to 8 00 eastern so executives can attend a Memorial Service for survey monkey Dave Goldberg who died over the weekend. His wife sits on disneys board and he was a friend of the show. We just had him on the broadcast about two weeks ago. The story about how this happened has gotten saturday sadder and more terrible. 47 years old and now it appears he was on a treadmill and hit his head. Might have fallen off. Maybe collapsed. Or exactly what happened. You need to find out. I guess, probably. Do you go through all that . I dont know. You find out if it was a heart attack first. They said it was head trauma was the ultimate cause. So, wouldnt you think it was a heart attack. Who knows . Terrible, terrible and our hearts go out to the sandburg and goldberg family. He was just one of the great, great people on this planet. Great guy. Anyway time to check the earnings scorecard including a couple sectors that are standing out or outstanding. Don joins us from cnbc headquarters. Good morning, joe, guys. We are about threequarters of the way through earning season when it comes to s p 500 companies. 370 companies in that index have reported through yesterday. So, we got the tallies through yesterday. And right now its been generally positive. If you want to look at it this way. 68 of companies have beaten average analyst averages. 10 have met average analysts and 22 , one in five have missed. The rub here, the caveat always is that analyst expectations typically come down going into the earnings season. Maybe it is below a lower bar already. Some of the best and worst sectors overall for Earnings Growth. We already knew that oil and gas was going to be a real drag. It, though earnings per share growth is only down about 54. 5 . Thats better than the drop of all the 64 that we thought we were going to see at the beginning of earning season. This all according to the estimates. If you look at the best performing growth part at least earning story, it will be your health care. Up 17 . We are only anticipating up 7 move on health care overall. Thats on the earnings picture. Health care stands out and energy drags. The same story plays out here for revenue growth. Health care as an overall revenue sector growth. Pretty amazing here. Up 7 . We were only expecting 8. 5 in the beginning of earnings season. Energy down 34 here. We were expecting just about that amount at the beginning of earning season. Heres the thing, guys. If joe, all the Earnings Report comes in for the s p 500 company in line with estimates, we could see 2 Earnings Growth as opposed to the 3 earnings drop that we were going to see or expect to see at the beginning of the season. Right now its not crazy positive but still if we can manage to meet expectations for the rest of earning season. We could actually turn out a slight bit of Earnings Growth guys. Back over to you. Rates better stay low, dom. Some people just like to talk about stock appreciation as earnings plus Dividend Growth and youre talking low Single Digits then. If you talk about it discounting the present value the way people try to value these stocks. Of course, Interest Rates will factor in there because thats what you are going to divide by. Dollar is obviously, a problem. 2 is you know its not what you we shoot for in terms of yearoveryear growth. Obviously, the stock market is near record highs right now but were seeing growth here. Remember when we started the season we were going to see a 3 drop in earnings per share. That could have been prateetty bad. Some case for those people out there who think the market could still run a little bit. The numbers right now on the revenue side. You saw it right here. The revenue side is still not a good picture. Anything that companies are eking out in terms of Earnings Growth seems like it is coming from the expense out of the equation. All right dominik, thank you. How stocks should be valued right now and he did it right here on squawk box. The market against normal Interest Rates is on the high side of valuation. Not dangerously high, but on the high side valuation. On the other hand if these Interest Rates were to continue for ten years stocks would be extremely cheap now. Rebecca paterson some merit in that argument . Also a cnbc contributor. You dont really have to think that long or that hard to say, yeah thats probably true. Rates are, theres no alternative. Maybe stocks dont have normal valuation metrics with bonds at 0 . Thats probably a given. If we take away the bond factor and dont look at relative, but look at absolute valuations equities are getting rich. Whether youre looking at a forward or schiller price earnings ratio, theyre expensive. When you put bonds next to them suddenly they look like a bargain. What i want to ask you about is whether, what were seeing in 4x and Interest Rates and Everything Else is it going according to plan . We had the big move in the euro to 105. Now, everything always it never goes in a Straight Line and it has to shake out people who are in that trade. Were back to 111. Doing a retracement of some of the move and doing the same thing in oil. Will that original trend in your view reassert itself . I think the dollar definitely will. The European Central bank is not very happy and see bond rising a lot. Thats their goal to fight deflation to end deflation but they want to keep borrowing costs aggressively low in europe to help foster more credit creation and more loandriven growth. So, bond yields rise too much and thats part of the why the euro is rising as well. That works against the ecbs plan. I wouldnt be surprised if over the coming weeks we see different ecb officials coming out and reiterating that they just started qe in march and it is going to go for a long time. Those guys shorts look like youre talking and were looking at a guy out the window. Looks like hes jogging in his underwear. Boxers. In new york city. Okay no this is a normal retracement. I think the dollar will continue to strengthen. We just talked about evans. Want to bring in whom . Youre talking europe. The reason that the euro has gained some strength is because the whole best neighborhood, best house in the neighborhood has been thrown into question with that First Quarter gdp number. The last employment report we had and a lot of other numbers. A lot of the Dollar Strength and the trade of the euro getting weaker and weaker had to do with us growing at 3 this year. And were not. Not taking the fed to raise rates. Now theyre not going to raise rates. Wait, not going to raise rates . Not in june. Not in june. September. Were going to want to kill urourselves. Theyre not going to have raised. Not do anything in this whole year. I think they are going to move this year. I think they desperately wanted to raise rates and they go zero to 25 is more symbolic than anything. In september, not december. That would be my bias because i think the u. S. Will improve into the summer. Why . Why because gasoline is still a lot cheaper over a dollar cheaper than it was a year ago because borrowed costs are still good. Waiting for that to filter. Housing data are still improving. The job market is still improving. Jobless claims or other job surveys and at the end of the day, it comes down to the labor market more than anything else. Im not saying its going to be gang busters. Gdp. It looks like low 2s, again. Doesnt it . I think it will be close to what we got last year. Mid2s, maybe. That would be an uptick. Mid2s would not be the worst thing in the world for equity market. Thats a nice backdrop for stocks. Even if they went twice or 0. 5 . Its still low Interest Rates. They just want to show the world that were getting back to normal. Equities. We have been you know right around either up or down. I made the point earlier that if we have a big selloff, the next day youll say the dow is down for the year. Were right, any big selloff even is tomorrow the anniversary . Is it may 6th . Do we know . We should know. Someone said we mentioned it earlier. I was kidding about a fat finger trade. My point is may 6th. May 6th 2010. Something to talk about tomorrow. The anniversary. It doesnt take much for us to say, wow. Its may and the stock market is flat for the year. This is its struggling to make head way this year. This year is sort of revenge of the global investor. We had two incredibly strong years for u. S. Large cap equities and now that europe has ingameengaged in quantitative easing and the weak currencies are helping their exporters, its feeding through. This is a reminder that taking a globally diversified approach to equity investing, youll never get exactly right tilts to any country at the right time. If you take that broader view i think overtime you get both better returns and less volatility along the way, which means you get better compounded returns. You make more money. Right now we are neutral on europe and japan. We hedged as much currency risk as we can. I wish we had even more. But just be neutral. Those parts of the world have helped us get a return on a diversified portfolio with bonds. Thats better than s p. Are you convinced this is all going to end in tears . The bond rally or the bond move, i should say . I think bonds are the scariest thing out there right now. But is the fact that everybody is saying this. Literally, everybody is saying this. Everyone is saying that tenyear treasury yields will be slightly higher over the next 12 months. I think the 12month Consensus Forecast if you look on bloomberg is about 2. 5 . By the end of this year. For the tenyear treasury. And we just did a road show meaning a lot of our clients around the country and we surveyed them. What do you instinct . Slightly higher. It doesnt mean all great minds are wrong, but a consensus view that is wildly held its wrong. Bond yields i think, have a very real chance of being quite a bit higher or back under two. That would be scary if that happens and thats not our base case. But i think you have to be weary if bond yields crack because the u. S. Gets the momentum that is a period of voltity for equities. You have all these rich clients. You have a rich husband. I do not have a rich husband. Rich in love. Rich in character. But he knows about the super rich. Yes, he does. Are the super rich buying Municipal Bonds with sevenyear duration or tenyear duration. We have one of the largest underweights to fixed income that we had. Even with taxes. Because theyre going to follow what the taxable bonds do. Some people think this is a secular you know period of and even if it is only 2. 5 or 3 tax free that gives you five basically. But a lot of those folks and im not just talking about wealthy individuals or families but people all around the country. Everybody. My mom. They lived off cds for years and years. They lived off income. In 1995, a bond portfolio gave you a 5 yield and if you had, if you had 1 million bond portfolio, you got 50,000 in income. Today you get 8,000 in income. You cant live off of it any more. People have to go into other asset classes. That is a no. Robert frank is not buying muni bonds. I wont let him. I am shunning muni bonds. Other places. People that cant sit in cash. Big institutions cant sit in cash. Were going to sit in cash. If youre a Sovereign Fund and youre a fixed income manager. Youll buy stuff with negative yields and deal with it. You have any cal fulawn in your house . Do you have any cellophane in your house . I have both. You have some caflon pots . Everybody has it. Just saying. Because theyre good. Theyve never been used. You know what else they make that joe uses every day. Depends. A sharpie pen because he signs all his 8 by 10s. Love joe. I go through those like water. Or today jose isnt that what you said earlier . I did. Thats spanish. If you ask nicely, hell get you a glossy. You want clothed or unclothed . Clothed, please. Coming up from pots and pans to home organization. Chances are you do have a new rubbermaid product in your home. Talk earnings and consumer trends. If youre telling cnbc he is not worried about the prospects of oil coming to market. Well take a closer look at crude in our trading block just ahead. It took Tim Morehouse years to master the perfect lunge. But only one attempt to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. Take a deeeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhh 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 one day. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring] Consumer Product giants rubbermaid is known for its products ranging from cafalon pots and pans to sharpies. The Company Announcing plans to cut 150 million in annual costs on top o of 500 million savings already planned by the end of o2017. Michael poke is the companys ceo and he joins us on the set now. You brought us markers to sniff. Thats an ice cream. Washable . Now theyre washable. As we come into the it smells so good. Just like a grape soda. Yeah exactly. You brought a sharpie here for us with our name on it nonetheless. Then this is the cool i want to talk about the company. I want to talk about this pen for a second. The new papermate ink joy. A pen and stylus in one. If you had your ipad you can use this side. Can people see . This side and then on the other side. If you want to retain information, writing is critical. But if you want to publish information, obviously, technology is an enabler. Retention and writing go hand in hand. Then these. You can see, its a sharpie. You can see where to stop so youre not looking down all the time. Those dont smell. But they highlight really well. Rubbermaid is a perfect stock. It is all stuff that everybody has to use. Buying them outright. Ed i with buy them outright. We are busy creating i remember rbd and i remember before it was known as rubbermaid. Putting them together made sense, too. How big is the pen business relative to car seat business . Thats graco, right . Graco car seats and prica in japan and another baby gear business in europe and we just bought a new brand called baby jogger, city mini and city select. Were the leader in basically every category that we compete in. Professional facing tools for craftsman and commercial products which youll see in any of the Office Buildings or on the street, quite frankly, in new york. And we are the leading baby gear company in the world. So, we compete in big, Global Markets with number one or number two share positions. The interesting thing about this business versus other ones ive worked in is that these markets are unconsolidated. So, despite the fact that the running market is a 20 billion Global Market and we have the largest share with about 10 of that Global Market the, if you were to think of all the brands out there in writing and consolidate them they would only represent 36 of that 20 billion. How much is international . In writing, probably about 50 50. Total company the dollar has been kind of a pain for you. Its been quite a hit for us both last year and this year. We earned about 2 per share last year. Trash liners and things like that. Were not in the disposable business were in the durable business. Its all durable products. Rubbermaid. How many products total do you know off hand . Believe it or not, this is an issue for us. We have 75,000 skews around the world. Thereson is an opportunity. You want to take that down to what . Doing all the work as a way to release, we link our cost agenda, cost is inextricably linked to growth. The value between the pen business and the city mini business. Sure. These five segments whether its writing, commercial products tools. What we call home solution where brands like cfalon. Were building a set of capabilities that can stretch across the top of those. Were trying to build a set of Brand Development and innovation delivery and applying these common skills across an advantage relative to our competitive set across these five different businesses is beginning to really unlock a lot of value for us. The combination of that Work Capability development with cost out is giving us the flexibility to invest behind these brands and the strengthening innovation like the products. Five years from now, you think you have the same brand set . You think you have the same five categories . You think you hide one or two off . Were focussed on building the core of our business either organically or through a combination of organic development and external development. But were not interested in broadening the shoulders of the portfolio right now. The cuts that you have announced. How do you get there . Were in the midst of transforming this company from a holding company. When we started 13 Global Business units. Each with their own functional christmas tree. And we built, were building out an operating company. Were releasing all this overhead in the business that is being reinvested into the capabilities that i was describing and also behind the brands. We tripled. By the end of this year we will have tripled our advertising support on these brands. So, the cost out is inextricably linked to growth as i said before. A holding company, like the one we had, was very heavy in our overhead structure. And so the latest 150 million of cost out is just the next step. The next milestone in the set of actions were taking to strengthen the company and build these grants. Did you make this thing, by the way . We just bought this brand, contigo. We invested in two on the go beverage brands. One is contigo and were in thermmales and hydration. Fastgrowing market for us. Fastest growing consumer durables market in the u. S. Because it taps into you know under lying lifestyle trends life on the go. These products are engineered for the flow of modern life and they also provide consumers an opportunity to do something every day thats a little bit more socially conscious, which is not throwing 25 billion plastic bottles into landfill every year or throwing 25 billion styrofoam cups. Thank you for being here. My honor, my privilege. The pen. Thank you very much. You know this is like when cramer made a Coffee Table Book about coffee tables. This is like this is an autograph sharpie. Sharpie has my name autograph on it. Its liked a signed sharpie. Pick it up a little higher. Higher higher higher. Over here. See, joe kernen. And its spelled right. Its a sharpie signed with a sharpie. He has a lot of 8 by 10s to sign. Earnings out this morning from different companies. Well tell you about reports from discovery and arthur daniels. Thats next. music boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. The network that monitors her health. The secure Cloud Services that store her genetic data. The servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Welcome back to squawk box. Futures at this hour worsened a little bit last we looked. Not too bad. They were down 20 and now theyre down 15 on the dow and down 2 on the s p and nasdaq down the most. Down a percentage basis. I think down 8. Archer daniels the earnings beat the street but revenue fell short. The company says a strong dollar limited u. S. Grain exports. Discovery communication topping expectations on the bottom line with revenues in line. The growth was helped in distribution revenue in its u. S. And international networks. Lets give you some exclusive survey data. Uncertainty brought on by currency rates contributed to a drop in global co optimism. Thats according to the latest results from wpos. Here at home confidence slipped from an alltime high and yet american executives remain more upbeat comepaired to the global composites composites. Expecting increased sales ever ss over the next few months. An exclusive cnbc partner with 22,000 executives worldwide. Coming up when we return the price of crude reacting to geo political news and tackles the moves next. Plus well show you what Saudi Arabia Oil minister told cnbc earlier this morning. Head to a break. Heres a look at u. S. Equity futures at this hour. Were back in the red. Back in a moment. Why pause to take a pill . And why stop what youre doing to find a bathroom . Cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Jordan is perpetially under value. Shares rising on those comments. Also, bank of america, Merrill Lynch upgrading shares of netflix to buy from underperform. The analysts points to subscriber and earnings potential based on a growing portfolio of original content. In the meantime well talk about oil now. Crude futures slipping towards 66 a barrel on news that saudi arabia considering halting its Bombing Campaign in yemen. When asked if there was a price, saudi arabia would consider cutting back production countrys oil minister telling cnbc that no one could set the price of oil. Nor die i try todo i try to predict where the price is. Our next guest predicting another selloff. Founding partner and also a cnbc contributor. Good morning to you. He doesnt want to predict, but you do. Tell, help us with your rationale. He also said he didnt only think god knows and i certainly felt that sentiment in my career andrew over the years. But, no i mean all the elements are in place that broke the back of 100 oil mid last year. And i think were certainly still there right now, despite the recount, for example, being halved. Were still seeing Oil Production here in the u. S. High level, 9. 3 Million Barrels a day. And were also seeing slow down around the world. In particular, china, where they have another bad Economic Data point sunday night which the market admittedly ignored. These pressures are still there. The big worry is the persian gulf is yemen right now. Thats what were trying to deal with at this point. John when we set the segment up were basically 6 bucks away from the reemergence of fracking, again. What do you think the chances are well see that in the next 12 months . Amazing dynamic here andrew. Tons of the new oil wells called ducks. Ducks on a pond if youre a baseball fan. Drilled but uncompleted and theyre ready to receive the fracking levels. Introduce another 500,000 barrels to the market if prices hit 65. Its hard it see pricess maintaining themselves if we could see that kind of jump again, in u. S. Production. The saudis are producing at a record level still over 10 Million Barrels a day. This is what im saying something of a relief rally that appears to be hard to sustain in my view as we look forward. What is going to be the Tipping Point to move lower and how much lower do we move . I think the Tipping Point is going to be the emergence of the gasoline season. For the past several years prices have run up this time of year and consistently fallen throughout the summer once the summer assesses that gasoline inventories are fine. I think well see that again. Well see a return to the low point that we saw down around 43 a barrel. Im not sure about the 30s and 20s that we all hoped for for u. S. Consumers but certainly a return trip back down to the 40s is definitely in the cards and more to mid to late year phenomenon as we saw last year. The same timing as refiners go into maintenance and gasoline worries and the economy is seen for what it is. Somewhat shaky, again. When we think about the Fracking Companies and what david recently said what was his line . I think he called it a mother fracer. Was that his line . Are you bullish long term on Fracking Companies or would you short the stocks . I think that his analysis is certainly correct. Its been a perplexing one. They need to feed continually on new drills new production. That is what got the rate of production up in this country so fast. They havent imploded yet andrew. They get their credit lines pulled and able to tap the equity markets. It will last longer term and i think the problem we have the thing i worry about for the company is that the depletion rate on the wells is quick. A, if they dont have the money to keep going. But, b, longer term the saudis can still outlast us in the long run and i dont think it is necessarily something we should be counting on in the 10 20year outlook. No way. Thank you. Coming up the bill and Melinda Gates foundation is one of the worlds most recognizable charities and the groups leadership doesnt shy away from controversy. Up next, bill and Melinda Gates explain their plan. trader vo i search. I research. I dig. And dig some more. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade our passion is to power yours. [ girl ] my mom, she makes underwater fans that are powered by the moon. [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] my mom makes hospitals you can hold in your hand. My mom can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] my mom works at ge. The bill and Melinda Gates foundation is the Worlds Largest private foundation. Also joining their conversation Warren Buffett who has pledged much into that foundation. They address some of the controversy the Gates Foundation has faced recently. Can i ask each of you about the work the one item that youve worked on at the foundation that youre most proud about and, warren ill ask you first because i heard you talk about some of the stuff that melinda has worked on. I think melinda was fabulous and i dont know how long its been now, maybe two years ago or so and melinda really put her energies, her voice and money beyond that. But the voice of the energy are probably even more important behind Family Planning and as she traveled around the world, i should let her talk about it but she saw what happens when people really arent in control of the family size and planning and that took some guts to do. But i think its had a huge impact and its had an impact beyond the money and beyond the specific grants that may have been made. It could change the world in a major way. Melinda, you want to talk a little bit about that world . I took on this work two years ago of getting contraceptives into womens hands. Edgeicating them and then letting them make that decision for themselves because if they can space and time the birth of their children the women are healthier, as are the children. Its a very controversial area and weve taken it off the Global Health agenda because of the controversial in the United States. It is now back squarely on and we now have countries all over the world pulling through commodities teaching women about contraceptives and delivering it to women. If it was a controversial issue and it was one you knew you could get backlash for meeting women all over the world. I am just back to india. Two days of government meetings and two days on the ground in the rural areas and in the slums and when you talk to the women, its just so clear that this is one of the things one of the many things they need but its literally, they will tell you, a life and death situation for them. If you were to pick something from the foundation that is something you could be proud of would it be Family Planning . Family planning or vaccines . 6 million children are alive because of the vaccine work that weve done in deep partnership. That is the thing im most proud of today. Were newer to the contraceptive work. They both are in a position and theyre effective at persuading people in positions who can commit big resources around the world to things like vaccines. And, so thats something that is almost unique to the two of them. And theyre playing that hand very forcefully. Bill how about you . Funding science that helps poor people. Science in general is underfunded because the benefits to society are greater than what comes back to the inventor. A certain risk. Science that helps support people is where capitalism really doesnt have the right incentives. I do love the idea of challenging the best scientists who wouldnt know the needs of the poorest. We use this thing called grand challenges where we solicit ideas. One that got more headlines is one of about 80 weve done. But we solicited the idea of a new condom. You know that was more, less unattractive. Im not helping you out on this one. Youre on your own. The Buffett Foundation was accused of funding a cherryflavored condom and it turned out they were guilty. Never should have done it. Should have been strawberry. Cherry flavored condoms. We have our pens that smell like grape. That one is a chocolate, mint chocolate chip pen. Get out of that. Its a way to get out of it. Talk about pens. You can see more of beckys interview with warren befuffett and bill and Melinda Gates. Casualties of the latest bout of bird flu now total 21 million birds. Which tells you 21 of them have are gone. You figure how many we produce in this country. Morgan brennan, as we call it on the egg beat. Shell join us next to talk about the impact on that on poultry farmers and later, results from disney. Expected to hit the tape at 8 00 a. M. Eastern. Well bring you the numbers and the Market Reaction when we return. Seven out of ten Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. Merchandising, merchandising, merchandising. Space balls the breakfast cereal. Space balls the flame thrower. Kids love this one. Since the first star wars movie came out in 1977 toy licensing alone brought in 12 billion in revenue, about 44 of the total revenue from the star wars franchise. New star wars films will kick off a new bonanza of purchasing. New generation of toys books and clothing set to hit stores in september. Disney earnings said to hit the tape at the top of the hour. Join squawk on the street at 9 00 eastern time. Melhad it right. Purchasing. The box office take. Merchandising, merchandising. No kidding. Are we taking advantage of these pens used to have the mugs. These mugs dont even say squawk on them. Maybe a little on this side. I dont know. I dont know if we really monitor everything that how about joe kernen doll. Like a blowup doll or just a smaller you mean a life size. No maybe just a little one or with a hair dryer. Or different toupee. If were not going to do the blowup doll for me can we do it for you . Lets get to morgan. Quickly becoming the biggest bird flu outbreak in u. S. History. Three governors have declared states of emergency. Several companies have been affected. What does it actually mean for the bird business . Try to think about this with morgan whether it was, did you actively ask for this . Shes on the beat. She breaks down the poultry market to explain what consumers need to know about the bird flu. Was it drawing straws . Did you lobby . How did it happen morgan . Just lucky, i guess. I was just lucky. Im excited for any assignment i get. I got this assignment and off to iowa we went and now this is the egg beat, like you said. Right. 21 million is a big number. And i cant imagine that prices arent going to go up at some point. Well its not just 21 million any more because this is getting worse. Both iowa and minnesota announced more probable cases last night. That brings the total number of turkeys and chickens likely affected up to 25 million. Were still waiting for confirmation on those final numbers. What does this mean for the poultry mark isnt well in the u. S. Poultry is a 48 billion annual business. So theres broilers 8. 5 billion birds last year. These are the chickens that are raised for meat. 68 of the overall poultry market. Eggs 22 . Turkey is 11 . So so far this has been an egg and turkey story. Take a look at this map. Iowa is the top egg producer and minsote thaw top turkey producer and both have been ravaged. Broilers are raised in the south and largely unaffected. Eggs are the Biggest Issue right now. 60 of the u. S. Supply is off line. Chief commodity strategist at the American Restaurant Association expects prices to rise about 15 . Thats based on the current number of cases that could go higher. Now, for turkey. Weve lost about 1. 5 of the countrys total. The problem there, some young birds that would have been used to repopulate some of these farms getting hit and they are getting infected as well. That could drive up prices for thanksgiving. As for the outbreak as that escalates, the stocks to watch, egg producer hormel for turkey and if broilers do become impacted, something youll watch in the fall. Sanderson farms, pilgrims pride and tyson which is already seeing demand for dark meat chicken weaken because mexico are imposing poultry import restrictions. We got that that insight from them last year. So, i just want to mention, guys, the usda and the cdc both say that bird flu strain poses little risk to humans and no cases have been detected at this point. Largely, the impact is going to be on supply and prices. That number its not affecting broilers but the number that you gave puts it in perspective, doesnt it . 8. 5 billion. Thats so youre talking about turkeys and other things at the 21 million. But 21 million versus 8. 5 billion shows you what a huge market it really is. You dont know how many eggs. Can you get me a number on how many eggs are produced in the u. S. Every year . Just under 100 billion eggs per year. I believe the number for last was 99. 8 billion eggs produced. The majority of those come from iowa. What are 99. 8 billion. Thats like you didnt need to check, did you . I asked you to look it up for me and you didnt even round it up to 100 billion. Could be final jeopardy. Thank you, morgan. Did you hear that . 99 billion eggs. A lot of protein. I kind of came up with that. Because i was i dont know why. Because 8 billion chickens and lets say they each do a dozen. That would be like 90 billion, right . 96. I figure they are each good for maybe a dozen. How do you get a dozen . How many does it produce . You buy them in dozens right . They produce 12. I suspect, i think they probably produce more over the life probably. But it did work out. Coming up dow component disney set to report. Well bring you the numbers and reaction from the street and then later, Cleveland Cavaliers owner dan gilbert is going to join us. His team trails chicago by one game in the eastern conference semi finealfinals. Were back in a moment. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. music boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. The force awakens. Entertainment giant disney set to report Quarterly Results should investors hold on to the stock or just let it go the numbers and treat reaction just minutes away. Investing in start ups while facing a potential tech bubble. How are venture capitalests valuing Early Stage Tech Companies and well ask eric where hes putting money to work and where he sees a bubble brewing in the big apple. Dan gilbert talked about his drive to reinvigorate the motor city and the cavs chances against the bulls in the nba playoffs as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Becky is on her way back from omaha. Here are the futures at this hour. Theyve been mixed most of the morning and now actually up. They were down 20 or so and down 15 or so. Dow indicated up 2. 6 points. We are waiting now for dow component disney which i just looked. It looks like its crossing the tape. We can go its 112 stock. 188 billion. I remember when it was 13 or 14s. Why dont we send it across the country to julia borsteen. She has the quarterly numbers. Julia . Looked ded like a beat on the top and bottom line. 12. 6 billion. Adjusted eps per share cominging up and growing 14 to 1. 23 per share up from 1. 08 a year ago. Thats also better than expected. And now looking at whats driving the quarter here it looked like its real strength in the Parks Division in particular. Driven by the domestic park. So we saw parks and resorts and big increase at the domestic parks and also studio entertainment despite comps to the year ago period when frozen came out. Holding its own in studio entertainment. Broadcasting Holding Strength in operating. Operating income in the Broadcasting Division in particular. Part of that Media Networks division, which is of course o, the companys largest division. So big strength in broadcasting, which we could assume could be a result of better performance at abc there. But huge increase in the interactive division. 86 increase in the interactive division. 32 increase in operating income at Consumer Products and 24 increase in operating income at the parks and resorts. Due to strength in domestic parks. Bob iger saying the power of the winning combination is that worldwide success is reflected in Marvels Avengers which has opened at number one in every market so far. The avengers has come out this past weekend and not included in these results just yet. Back over to you guys. Content. Julia, we will be joined yes, content. However, i want to tell you something. And not to be the bearer of bad news. Operating income at Cable Networks including espn decreased 9 to 1. 8 billion for the quarter due to a decrease at espn. We always say content is king. Heres whats happening. This is part of the issue. The decrease at espn was driven by higher programming and production costs. Costs more and more to get the rights for these production and we have to make it up on the other end with the subscriber. Its costing them more to bid on the things that they want. My point is he was, and i wouldnt say that he was criticized, but that looked like a lot of money for pixar and looked like a lot of money for marvel and a lot of money when theyre paying for those things and as it turns out, 188 billion company now. Based on the value of the content. Merchandising, merchandising, merchandising. They are merchandising with content. The content is valuable. Im not did anyone think marvel was going to be content . Im not questioning that. And then frozen is not even pixar. You still watch that every day, dont you . Best best movie out. Were waiting for frozen 2. We went and saw cinderella so we could see the seven minutes before it began the frozen. Well talk a little unbundling. Our next guest, as well. You have got more worries about everything in the world. The American Dream is over and were going to run out of this and football is over and boxing is over. Everything is changing and dying with you. You got to get more optimistic. If it bleeds it leads, my friend. Some stories that investors will talk about. U. S. Stock mutual funds and etfs 36 billion last month according to new data. Its the biggest move away from u. S. Equities since the financial crisis. Also pimco losing and 24 consecutive months of outflows. Bond Market Index Fund now takes the top spot. Sitting the. Chuckling. He is. Theres no doubt in my mind. Showed you guys. We should tell you on the economic docket today. International trade data get that at 8 30 eastern time and get the ism nonmanufacturing numbers and that comes at 10 00 a. M. Also a market alert. Crossing above 60 a barrel just a few minutes ago hitting the highest level since december 11th of last year and who was it this morning that said once you get to 65, the fracking game is back. Usg resources said. Or was it if the numbers get back to 65 they will begin fracking once again. You were right about the chickens. 259 eggs a year for aheardworking hen. That is a hardworking hen. As they get, as they get more, as the eggs get bigger. Those jumbo eggs that you see. Thats an older chicken. You learn something new every single day. Learn something new from our next guest. A huge event here in new york this week where the nextal big tech start ups make their pitches live on stage and we have one of them here with us on the eric, a big question for the markets right now. Are we in a bubble . I know its the perpetual question. But it feels like you know if this is a baseball game, we have to get closer to the eighth or ninth inning than the first or second. I went through the 2000 bubble. If a bubble looks like that today, it doesnt look like this. The companies that were investing in for the most part have businesses. They do tend to go public later, which is very different than what we saw in 2000 where there was this rush to go public without a business plan. Are you worried, actually that this private market or this longer private market has created this bizarre bubble where we actually dont, there is no real market. We dont really know how much this stuff is valued. If it is valued perhaps its overvalued. No question that Late Stage Companies are valued very highly. Part of it is because theyre going public later, the early public investors, you know the t. Rowe price of the world have now become the latestage primary investor. Do you worry about public investors being in this private market . I do in a sense that they you know our business is only private. Their business is mostly public. Can they really price those companies correctly . Obviously, only want to go public where we know. Were up to 70 unicorns now. Over billion dollar start ups . At least. How many do you think will be in business five years from now . The majority will. If you look at them they all seem to have strong businesses. Some are not yet profitable. Will turn profitable. A lot are the enterprise business. A huge phenomenon. We see this in new york where i mostly invest. 30 of our current portfolio is enterprise. Lets tell the audience about some of the bigger investments you have more successful ones. So, buzz feed. Buzz feed. By the way, you know this guy was behind Huffington Post which just had their big party last night. The tenyear anniversary. Used to be the editor. No no i was the ceo. Ceo. Arianna has always been the editor. Birch box. Very successful subscription company. Perk laid. Lade is one of the biggest, very very successful. What kind of glasses are you wearing . As an investor you have to wear but i have a very complex prescription. They cant handle it . Well i havent tried them yet for that. Very Successful Company and disrupting the eye glass business. Disruption is the name of the game. You are an investor in mike . I am an investor in mike. You know about this anthony tweet at twitter. Whats going on there . Can you tell us . This is all news. This goes back two, three months where anthony nodo just cfo of twitter. That he wanted to buy mike. Mike is still a private company. Hasnt been bought by twitter. Got it. When you think about buzz feed how much do you think its worth now for real . Well well above a billion dollars. They raised it was announced public publicly, raised 850. The company has made a lot of oprogress since then. It is one of the iconic companies. We just had another media, Digital Media company on this morning. Refinery, is it refinery 92 . Its one of yours. And then we were talking bout the vice valuation. Those are, i consider those sort of more Media Companies than necessarily digital companies. I dont know if you think thats fair or unfair. Vice seems to get a lot of its money from selling programming to television. Thats where i was going to go with that. These new Media Companies have to go into old media to actually make money . No not to make money, but i think as a market expansion. What is happening is that old media is finally waking up to the fact that their audience is leaving traditional outlets, such as television, you know not cnbc but everybody else. Thank you very much. And, so they need to buy programming. They dont know how to create this programming. It takes years to develop programming that is adapted to the digital world. Companies like buzz feed sorry refinery and vice of course know how to create that problem. Thank you for coming in. How often have you disrupt them and seen something and walked out and given them money . About every year we see something. This year im one of the judges to the competition. Ill see them all very closely. Sort of like, their own version of shark tank over there. Thank you. Appreciate you coming in this morning. Lets get more reaction and stick with the media theme about the disney results. Joining us now on the squawk news line. David, you knew that the company had already talked about espn having to pay more for programming. That was not a surprise. Does it indicate is it negative in any way for espn . Well i mean look heres what i think. What stood out to me more was the extraordinary performance of the broadcast networks right, that theyre benefiting from the rating strength at abc and some of the strengths on the broadcast side. I think the current quarters results on the cable nets you know given the ramp that they have in affiliate fees, i dont think its a concern, but i think we probably will want to get more color as to you know this kind of sustainable expense level. It will be the primary focus of the call. Every time that i iger bought content, did it always seem like he was overpaying . Well, i think he bought intellectual property instead of content. Thats what i mean. It always seemed like how could they possibly monetize this intellectual property to generate a return that makes sense. And i think with very few exceptions. Little bit maybe on the video game side. Has really proven everybody wrong and, you know the next big bet, obviously well see what happens with star wars but it has been a bad idea to have second guessed bob iger on the m a front for the past decade. No super hero fatigue in sight . Well i mean you just had the second biggest opening in history in the avengers. I dont think so. I think as long as the movies are good. You know theyre not, dont think of these movies as necessarily just kind of classic super hero movies. These movies appeal to a broad, you know four quadrant audience. These are not just fan boy super heroes guys that like to read comics. You know theyre broader than that. Its too simple i think, to describe them as super hero movies. Action movies, for sure. So i just think that 188 billion company if you were to just sink content, disney content is probably universal. I just think about the market in china for theme parks and just for Everything Else and it seems like you could just multiply 188 billion by two, three, four times down the road. But will there be piracy and can they control their intellectual property in places like china . In a place like china, i think their strategy. China the reality is isnt quite as open a media market to be polite, as a market like the u. S. Is or some other, you know western europe or a place like india. So, the strategy has been to approach the market more from a Consumer Products and, you know branded perspective. Thats the rationale, i think, behind the parks and some of the Consumer Products strategies they have. So, i think, yes, piracy is a concern. But the bigger the bigger driver is ultimately going to be in, i think, exploiting the brand in ways that are outside of pure media. I think, you know the next thing were going to watch for is over time what is the plan for espn . Is there a lighter bundle coming . Is espn in it and what are the Secular Forces that impact that business as opposed to piracy . Better be in it. David bank thank you. We appreciate it. Well see you soon. Be sure to catch bob iger today on squawk on the street. Going to talk hospital operations in the recent deal and the stock up 11 over the past year. Heres a look at the futures after dow component disney reported a couple minutes ago and that reflected the dows positive. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Reporting after the bell beating on both the top and the bottom line. Benefiting from the drop in the number of uninsured patients. The stock spiking a bit on the news premarket. Joining us now, president and ceo of tenar health care. Whenever tenar has some good results the Affordable Care act has given more People Insurance and that should be good for hospitals and that always is one of the positives and it was, again, in this quarter. Thats true. You know i always point out that twothirds of our growth in the quarter is unrelated to the aca. So we are getting some benefit from it. But our Core Strategies and investments were making are also driving a lot of growth. I saw something troubling yesterday, trevor. I dont know how history will finally judge everything that happened in the past five years. But emergency room visits were supposed to decline and now we see theyre spiking again and the reason given was that primary care physicians are in short supply so that people now have insurance, but they go to Emergency Rooms because they dont have primary care physicians right now. And right when this happened when you add this many people or try to add people of the uninsured to the insured ranks in and is the supply of doctor stays the same we know how supply and demand works. That means it will take longer and be harder for people to find health care from. Im not particularly surprised with this trend, joe. I mean this is similar to what happened in massachusetts when they put in an expansion and coverage. Youve got a lot of people who gained coverage through medicaid and still many physicians who dont accept medicaid. Thats part of what is going on. There is also a trend, though among consumers who are choosing to be treated in Emergency Rooms or urgent care centers. Were adapting to that trend by making our Emergency Rooms much more accessible and proving the ease with which people can get treated quickly and leave or be admitted to the hospital and were investing heavily in other sites of care in order to relieve some of this pressure on the Emergency Rooms. So youre just going to go go with it. I mean that was one of the big selling points in the aca, Emergency Rooms are swamped and it will cut down on that. Now we know that is probably not going to be the case. Let me be hyperbolic for a second. One of the fears and complaints about single pay and other countries, everybody is covered, but no one can get health care. Yeah im covered, but it takes me nine months to see someone. Why should we think that is not going to happen the more that we dont increase the supply and the more demand increases . Well the supply is increasing somewhat and, like i said, we are moving out of the hospital setting into the outpatient setting for a lot of care. Our growth for many quarters has been much stronger in outpatient visits than in inpatient visits and i think some adjustment period, just like i said on the physicians accepting medicaid, there is also an adjusted period you have towards the outpatient setting where there is more capacity being added. That might be one way to do it. And i guess you dont how many of these things of people going to the emergency room could a qualified nursing professional or someone handling an outpatient setting rather than expense of emergency room setting. Its a lot. But, for example, i was just in one of oour hospitals in california a couple weeks ago where they have a nurse right at the door of the emergency room who is doing the initial screening and, you know if you dont really need emergency room care there is a separate track that theyre putting you into. What a concept. What doesnt everyone do that . Why dont we do that . Its being done a lot in our industry. And it makes total sense. You want to talk to trevor at all . I love trevor. You asked all the Smart Questions so it becomes very complicated. No im not being sarcastic at all. Funny how . Funny, haha. Its a pretty clean quarter. Not a lot to ask about. When you have i mean it would be stupeid for me to ask because you have great management, thats just the obvious question right . 110,000 people who are really good. Thats the way to answer that question, too. You havent gotten what . Is there something to be said at this point . Yeah. Go ahead. Do it. Sadly he resigned from our board in december in order to pursue other opportunities. But, what a great guy, what a great candidate. Hes so smart and were very supportive of him. Hes he actually had some ideas. And he understands business. He was always very well prepared in our board meetings and certainly understands the impact of regulation and sort of epic changes in regulations on industries. He understands health care very well. Thats health care. Does he undo obama care . Oh, i think he favors private sector solutions. And i think, personally its a little bit late to undo this and have millions of people who gained coverage who didnt have coverage before that was a really pressing problem that we saw in our industry. We could make it better. He could make it better trevor thats for sure. Right . I think he could do a lot of things and be very smart. Okay. All right, trevor thank you. Appreciate it. Thanks guys. See ya. Coming up in the market for a tesla but not willing to shell out all that cash. Elan musk has an answer for that. George mitchell has a new book out today called the negotiator. Delves into his childhood and hes going it be our guest in just a bit. By the time Police Arrive on a crime scene they could have little to go on. A vague description. A single piece of evidence. A partial plate number. With an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. Ibm analytics helps one hundred thousand officers work smarter every day. Elan musk is getting into the used car business. Launched a preowned Vehicle Program at the end of april. A new program that offers older virgs of the ss ss virgsversions of the sedans and like other highend carmakers it gives a fouryear or 50,000 Mile Warranty on preowned vehicles. Take a look at tesla stock sitting near a threemonth high but well off its 52week high. Youre looking there at 238. By the way, i thought batteries, though, dont last. You always have to replace the batteries, right . Lithium. How many years has tesla been out with their vehicle, if you want a preowned tested you are probably getting it in the first year. Youre getting a 1. 0 version of the car. Is that a used car . Its a used car. Thats what it is. It sounds fancier and nicer. It does. Would you buy a preowned vehicle . I dont have a problem with a much cheaper. They say right after it comes off the lot, it loses 20 of its value. Another thing thats been done. Certain smells you cant get out of a car. Remember the guy, the valet parked it once and he had to sell the car. When we return former senator George Mitchell talks politic politics, the middle east and then later dan gilbert founder of the cavs and Rock Ventures and well hear about his efforts to revive downtown detroit, which is starting to happen, i think. As we head to break, take a look at u. S. Equity futures. Thank you for being a sailor, and my daddy. Thank you mom, for protecting my future. Thank you for being my hero and my dad. Military families are thankful for many things. The legacy of usaa Auto Insurance could be one of them. Our worldclass service earned usaa the top spot in a study of the most recommended Large Companies in america. If youre current or former military or their family, see if youre eligible to get an Auto Insurance quote. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Welcome back to squawk box. Breaking news. We have the most recent march for trade mrans andbalance and its a deficit much larger than expected by 10 billion. 51. 4 billion. And that comes on the back of 35. 9. You talk about some escalation. Boy, thats the highest at least going back on my records to around the end of 08. So we will continue to monitor and we all understand that the valuation of the dollar has implications for trade deficit. But this really is a big one and it will have big effects, of course on things like gdp. Interest rates coming very close, again, in ten year to testing on changed on the year which was 217, falling short by about a basis and a half. But we continue to monitor and monitor, of course deals on the tenyear moving back very close to 0. 5 . While all this is occurring, were handicapping what direction different Central Banks will take. The music goes on and the markets continue to move in a fashion that seems to cumezerate with weaker than expected economic growth. Squawk box game. Back to you. Thank you, rick appreciate it. Well turn to politics for a minute. Few political leaders have earned the title of negotiator. None more than former senator George Mitchell striking peace accords in the middle east to being the chairman of disney during their search for a successor to Michael Eisner hes done it all. The former Senate Majority leader is out with a new memoir today, appropriately titled the negotiator. Thank you for being here. Thanks for having me. You have this title as negotiator and it is a question around washington and around this whole country is whether you can actually negotiate any more. Do you think its actually possible . Is there something, you think that the world has somehow changed . The world has changed. Especially the political world and washington. But i think it is still possible and i think, in fact youre likely to see some Little Movement back towards bipartisan efforts and legislation this year. There are some issues that the interest in the parties will converge and i hope theyll overcome the differences and i think that is possible this year. You think thats happening because . Because a convergence of the senators themselves im talking now about the senate are tired of the fray and the partisanship. They are there to get things done. And i think the issues coincided. Senator, you are a democrat. Looking at the tenure of harry reid and the majority or the leader of the senate. I mean would you have in your wildest dreams would you have imagined being that type of leader . Well everybodys different. And i led the senate on the way and dealing with the circumstances at the time. I didnt face the problems that harry faced. In the six years that Lyndon Johnson served as Senate Majority leader, he faced two filibusters. And harry reid six or seven years he faced 700. Would you have changed the filibuster role . I faced 175 filibusters, but i did not change the rule. The number keeps increasing all the time and, so you deal with the circumstances as they exist. Were running under you right now, we have on the screen the art of negotiation. Yes. So for those out there that are trying to do it like you do it if there were two or three things you would tell them they would be what . First, listen to the other side. Genuinely listen. Youve got to have a lot of patience and perseverance. If you are a mediator as i was, youll have to submerge your ego and be very humble and boost the egos of those who are doing actual negotiation. Right. You know when we introduced you, we mentioned disney and mr. Iger. Are you happy with the successor to mr. Iger who seems to be on the table . An outstanding disney official executive. Hes been there for a long time. The board made clear that this is not an automatic transition. I think hes got the job to lose. But i think very highly of tom and i think hell continue the success theyve had. Disney has been very fortunate. Michael isner did an outstanding job for a long time. Bob iger has been terrific. Remember we had phil graham on last week. He drew a bell curve and said this is the way the political situation was in the United States 10 15 20 years ago. People in the middle and then as you went further out on either side. He said now its a camel. Its over here. And im sure you would probably think Republican Party is moved far right, as Many Democrats do. Would you be willing to concede that the Democratic Party at this point has moved far left of where it was when you were serving . No. What i would say is that some democrats have moved far left and some republicans have moved far right. Dont they seem like they have the louder voices on the extremes at this point . Elizabeth warren you got burnieernie running for president now. Well. Do you think the country is matched up with how progressive the company has gone . I dont think theyre matched up with how far some democrats have gone or how far right some republicans have gone. I think the fact is that there remains a broad majority in the middle. I think one of the reasons weve had this recent pollerization is that if you look back over history and see when Economic Times are tough, polarization grows. You saw that during the time of the great depression. Youve seen it in depressions in the past when times are better i think people are more positive and less susceptible to extreme requests. Were told every day that theyre better. Theyre getting better. But i think one of the great challenges we face is the collapse of what i call middle class jobs. I describe my life in a small town growing up in a small town in maine. When i was a kid there, there was a Large Railroad repair shop that employed hundreds of men and a paper mill and my mother worked nights in textile mills and within an hours drive there is 24. Not a single one of those enterprises right now in that area. And we havent, we made the technological and communications and information transition into the future but the job market that we havent replaced the jobs that that technology has displaced. And i think thats the great challenge of the coming centuries. My mother was an immigrant. She couldnt read or right. My father left school after the fourth grade and he was a janitor. Because of the openness of america at that time i became the majority leader of the United States senate. That was historically the case throughout american history, but thats changing now in a negative way in part because we havent been able to replicate the jobs that what i call middle class, working class jobs that have been lost. That is the great economic challenge that we face in the coming decades. The latest 30 of jobs are going to be robots is the latest lead i saw. 30 within 15 20 years. But, well one of the keys is much greater level of education knowledge and skill. You can program the robots. I hope we can all negotiate like you did. Thank you, andrew. I thought that negotiator was some kind of fast money. You sure that we have a show in the middle of the day for the guy who called negotiator, too. He may look lets not even mention it. Copyright thing here. I dont know which one it was. Eric boling or something. When we return owner of the Cleveland Cavs dan gilbert joins us to talk about his drive to rebuild the motor city. Tomorrow, another big lineup right here on squawk box. Entrepreneur and investor jb pritzker geo president ial candidate Carly Fiorina will be here. Squawk box will start tomorrow at 6 00 a. M. Eastern. Well be right back. [ girl ] my mom, she makes underwater fans that are powered by the moon. [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] my mom makes hospitals you can hold in your hand. My mom can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] my mom works at ge. Dan gilbert is not shy in promoting detroit to attract and retain top talent in businesses this morning at the forbes reinventing america Conference Gilbert shares his strategies on how to build a great corporate culture. Joining us with more is dan gilbert, chairman and founder of quicken loans and also founder of the Cleveland Cavaliers and for some reason ive seen some Media Coverage national Media Coverage lately dan, about detroit. I mean theres been some positive stuff since last time. I think when did we start, a year and a half ago talking about this when you started and its bearing fruit already, isnt it . Yeah you know things have really really turned in downtown detroit and detroit as a whole. Now that we got through the bankruptcy and got through way faster than people thought we were going to get through. We have a mayer and a governor who are really focused on working together. Detroit city council and a Business Community and a Foundation Community that is all working like theyve never worked before in unison to make this city a great city, again. So, what can you point to . Has it been a bounce in Property Values . I mean are the street lights turned back on . You know, the police if you call them they come. All of the above, joe. And, you know believe it or not, in downtown and midtown detroit, you cant even find an apartment. Were at 100 occupancy. Both rehabs and new buildings. The office space and most of the large, sort of class a, Class B Office towers are 98 full. Believe it or not, if youre a large tenant lets say 50,000 square foot or more looking for space in downtown detroit, very hard to find. We have challenges in the neighborhood that were aggressing aggressing. Were removing close to 1,000 homes a month. 1,000 homes a month are being taken down and you have all that going on and youre out of the, again, out of the financial sort of storm clouds that have been over this city for years, if not decades and you have a car business, an auto business that is doing very very well. Put that all together very very positive here in detroit. You can do it there, but thats in new york. You can do it anywhere. Thats true though right . If people want to a lot of people like the urban environment to live and all you had to do was just give it a chance and very exciting to see that happening. And, you know you probably make a lot of money but i think its good that wasnt necessarily your first motivation. And, joe, just one other point. If i could tell you, as far as young people go i mean detroit has become not just in detroit and michigan but across the country, for instance we have 1,100 plus interns coming into downtown detroit and we had like 22,000 applications for those internships, you know with no advertising. People from harvard and yale the east coast and west coast and Michigan State and, so you have this intense interest by young people and that is really the most exciting part of all. We might as well talk quicken. What got you in the crosshairs the way you talk its almost like it sounds like you think there was almost a van detta against your company. Why would that have happened . Im pretty independent on that front but i tell you what joe, you know were the lowest default rate lender in the United States for fha. We have the lowest default rate of any major lender in the whole country. Were the largest fha lender and were asking that question that you just asked and for three years they came in with an investigation. Really, i dont think its quicken loans, hey, large lenders. Lets just, were at the doj and lets put up all the large lenders on a white board and extract settlements from them. You know what if the companies are at fault, you should extract settlements. We have the lowest default rate. They use quicken loans as an example as best practices. Now, there are great people fha and hud. Were talking about the doj and small group of enforcement people who really dont understand what is going on. A quarter million fha loans that have closed since 2007 with the lowest default rate in the country and they looked at 55 loans and they told us 55 loans we dont like these out of quarter million and pay us a larger money and admit you committed fraud. And were not going to do that. The doj harasses you and then the fha gets taken hostage. So, the people that end up paying are the people that cant get the loans now. It actually hurts its very ironic that at this very time that were having very big challenges in this country on middle class, lower middle class, upper middle class people who want to buy homes. Firsttime home buyers. The fha is a great program. It works well. Some challenges with it it works well and we have proven it can work well and the fun can be very, very profitable on fwgood, wellwritten loans like they have produced. For this kind of enforcement action to have taken place that has no validity to it in all of this, again, we ask the same questions youre asking. You have nothing on this sorki sorkin. I want to talk about the cavs. Youre joking. You were doing the quicken loans for me. There could be a time when regulation becomes selfdefeating. There was a quote today that an idealist is someone who smells roses and cabbage and says i bet you can make better soup out of roses than cabbage. Theyre idealistic. Is this wrong minded . I just want to talk about the bulls and the cavs. I want to know if they can win. I know it was a tough night last night, i want to get the, you know, sense from the man who owns the place. Well you know we had eight days off. First of all. Thats a long stretch when youre in the playoffs. So were a little bit rusty last night. 40 of our starting lineup was out. Kevin love unfortunately, had the shoulder injury and hes out for the rest of the season jr smith was suspended for two games. Hes been a starter since the middle of the season. Were adjusting a little bit. We were in the game until the end and i believe in this team and i believe in david griffin, lebron james and ciryirving. We have to get you some rings. We have to get a ring. That would be great for cleveland. I saw him across the way, he was at berkshire over the weekend in omaha. I dont know so its nice to see you on the tv. You didnt go over and talk to him . I didnt get to talk to him. Id like to talk to him, but i didnt get a chance to talk to him. He was at the brunch the day after. Yo a more powerful investing experience. Call our specialists today to get up and running. Lets get down to the new york stock exchange. Jim cramer joins us now. Looking forward to the iger interview. There are walt disney shares. Youre like me you go all what it back, i know you do what was the guys name . Ron miller and one of the disneys roy or something. Roy. They bought arvida and were like blind without a came. Then eisner came in. Remember ovitz . Remember shamrock . You guys did the show in philadelphia mark haines was there . There was dissidence everywhere. There was a gigantic block that traded during the teens in the bad period. This company is firing on all cylinders. When we talked to bob, its difficult to find anything that is not perfect right now. You could argue, maybe thats the issue. No. This is an onfire company with many franchises. One of the best quarters ive ever seen. And he did it with i dont know if i would say low expectations, but when they first picked iger he was the heir apparent. Hes good looking. I was like can this guy really supersede Michael Eisner . You have to say by all accounts the pixar deal everything thats happened is clicking. Even marvel. When they bought that, isnt marvel tired and it wasnt . The marvel franchise may be the most exciting thing hes done. Weve got star wars in the fourth quarter. Andrew is worried about espn. Is that the viability . I wonder what the margin will be like for espn long term. I think they have to pay up to get programming, but they manage to do something no one thought could happen which is put the bcs on espn. I think espn could have more different Live Programming than they are thinking of five years from now. There will be sports we havent thought about watching that will be big margins for them. They are doing so many things right. Broadcast is very good. Its the money they are making at the theme parks thats the real shock. Thank you. Thank you, guys. Look forward to watching you with iger. Thank you. When we return, Manny Pacquiao under fire for not disclosing a shoulder injury. He may face fines. Well explain after the break. Check out oil at this hour. In the us, three in ten College Students drop out. But how can you spot whos at risk . The one who lives far from campus . The one who works the night shift . The one with new responsibilities . One thing cant tell you, but the right combination can. Universities are using ibm analytics to understand pressures in and out of the classroom some expect to cut dropout rates by twentyfive percent. Ibm analytics is working to make education smarter every day. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. music boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. Macys is testing a socalled offprice business with four pilot locations in the new york city area called macys backstage. The stores will sell clearance goods from macys stores and discounted items from other fashion brands. Merchandise will be 20 to 80 . Andrew easy. That got your attention. Ive got to get down there now. Its like a filenes basement. Theres only 50 seconds left in the show. You are looking at the cheapest man in america right here. Youre thrifty. Fallout from last weekends big fight. Nevada state Attorney Generals Office will look into why Manny Pacquiao checked no if he had a shoulder injury. He could face a fine or possible suspension. The fighter disclosed the shoulder injury to the u. S. Antidoping agency before the fight. That Agency Approved the use of an antiinflammatory shots for the fight but state regulators werent informed about the injury and denied the shot two hours before the fight because they had no previous indication there was an injury. Hell have surgery this week. I wish they would let him get the shot because it might have been a better fight. Exactly. It will take a while to come back to a 100 fight after that. You dont know whether its real or not. Join us tomorrow. Squawk on the street begins right now. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the new york stock exchange. Disneys bob iger and a cnbc exclusive. Company results beat the street. Later this hour ciscos John Chambers stepping down as ceo after running the company 20 years. Big show today. The premarkets slightly negative. Plenty of earnings. Moments ago oil cracked