Recession. The euroat a nine month low, and the dax with a 10 correction. No deals, fox withdrawing the bid to acquire time warner, sprint abandoning the bid to acquire tmobile. Giving back mondays gains, shares of ralph lauren lower despite beating estimates. Well explain why. And disney beat despite lower profit at the Cable Networks. Two big deals fell apart. 20th century fox withdraws the bid for time warner saying they refused to engage the highly compelling offer and sprint abandons the bid to buy tmobile, and they plan to replace the ceo. I guess a name well have to get used to, a billionaire entrepreneur. Someone who i think you get along better with. Well, we have to get david the problem is that dan has independ, and dan, wish him the best of luck, turned that company around, he was not necessarily the right guy for soft bank. The right guy for the troops, left after a good quarter, but jars for those that know hes a guy who was the godfather of the industry in the phase, wish him well. You knew him well, very well. You know, dan, known outside the office, and he did a great job, in a challenging situation. He fixed the nextel, and interesting once the government knew the deal was not going to happen, it was time for dan to go. All right. Theres a look at what sprints doing in the premarket. David is on the phone this morning. David, hope you have a good time wherever you are. Walks through the two deals. What is more important, and what do they mean . Whats more important is hard to know, but, you know, i guess when you look at these two, sprint and tmobile, i would argue, sometime down the road still a deal that very well could happen. When i say sometime down the road probably quite some time down want record, and that means a great deal of possibility that it will never happen, but nonetheless something you could see. You can argue time warner and fox also, but that feels more final right now. I dont mean in any way to say the door is going to swing open for either one, for sprint and tmobile any time soon. Its not. This is about regulatory impediments here, particularly even after, you know, the offense that we want on for months and trying to reach a broad frame work of a deal, which they did, it was clear and what ive been told a number of times is made clear just about a week or so ago when the fcc put out rules about bidding, the upcoming aws auction, spectrum auctions, not allowing joint bidding. They had a bitco already put together that would jointly bid. That was not going to be allowed. That was the last straw when they said, i cant even consider moving ahead any longer. Its just clear well never get this past the regulators. Seeing that often, the feeling it was a great deal of risk for the breakup fee and taking on all of the execution risks as well for the combined company, so it doesnt mean it cant happen one day, but not in this Regulatory Environment right now. They went their separate ways at this point. Well, david, i have to tell you that periodically the Justice Department seems to get involved, and where do they get involved periodically . In telco. Why let the airlines merge, the rental Car Companies merge, and just hands off to a business that you and i both know has tons of competition in . Yeah, listen, you know, the argument being made all along and to a certain extent by tmo and john ledger was that youre going to need scale to compete with verizon and at t, its not a fair fight in any way, despite all the success that tmo, interesting, not unexpected, would be the run away, had over the last couple years, but youre right, jim, you know, they picked their spots, though. Youre talking an environment where comcast is eventually buying time warner cable, at t is buying directv. This deal would have come after they are conceivably approved, making it more likely in the view of sprint that it gets turned down, they could not keep approving all the deals where the consumer is such a focus. Hey, david, on the murdoch front, levin on squawk this morning said its not a diversion, but theres cost discipline here, this is not the journal, and you got to behave differently, but others think if you believe murdoch is truly done, you dont know murdoch. Whats your take . You know, my take is after speaking to a lot of the people close to the situation, carl, yesterday and this morning, that they are done. They are not coming back any time soon, and by that i mean conceivably years. I think it was a surprise to a lot of people. You know, i kept reporting on sitting next to you and jim about discipline, hearing this, the idea of a hundred being a bridge too far for fox, but there are few people who truly believed that, given as you said, Rupert Murdoch gets what he wants. When you pay for dow jones, youre not hurting the company. Yes, you overpaid, no doubt about it, but its in the nearly a great a penalty if you overpay by 10 on an 8 0 billion deal. That was the fear there. They stuck to their guns, very much surprised by complete lack of engagement. Coming out of the gate, they did not expect there would be no engagement whatsoever. Time warner turning up the heat with things like cancelling the ability to act to call a special meeting and things like that, sent a sign there was no hope. As i reported a number of times before it was resolution opposition to the price at 85, and the idea they have to go to a hundred, and perhaps, we hear that from shareholders as well, something they were not willing to do at this point. Jeff gets the opportunity at this point to run the company and deliver value they say is there for their own strategic plan, well see what happens, but you cant expect to revisit this any time soon. Viewers have to understand the day this broke was the day of delivering alpha. I said theres not any price he couldnt pay. He said thats not true. If theres too high, theres discipline. Congratulations. That was your reporting. I did not hear once time warner say this was an antitrust issue and theyd go to the government. Does that not meantime warner might buy someone . Cbs, viacom . What a combination. Theres an got to be anned why of those who form the programs, but when it comes to particular situations, cbs, theres a Controlling Shareholder and very much unclear to me what decisions, if any, will be made there in the near term. So, yeah, i guess i agree that there will likely be consolidation on the programming side. This was a deal many of the combined shareholders, and there was a Significant Shareholder base in time warner and fox believed would have. A good one. A lot of potential synergies. Could be other ones, but my guess, keeps it as is. Deals have not been kind to the company in the past, and so my guess is they keep it the way it is to create value from here starting with today, and reach advertising on turner, phone calls this morning were not what people were hoping for. We got Earnings Growth at hbo, at turner, warner brothers, but they did not guide higher. That surprised me. Remember, you are up against a difficult company which is disney. I know people tried to pick on disneys quarter, talking about espn. Give me a break. All i heard that was substantive was how is Harrison Ford . That was a question at the end. How is Harrison Ford . Bob told us personally, do not worry about the delay, ford will not delay us. Thats the biggest risk. Im a buyer of disney on weakness. Yeah, i know, jim. This morning, incredible. Sorry im not there in person, obviously. All these things not happening, talk about time warner and sprint and walgreens as well, jim, given the lousy quarter, lack of inversion, and stock down sharply. Yet, again, the third sort of thing not happening that is punishing shareholders who were hoping it wouldnt. Walgreens incredible. What is interesting is they are literally saying no to a couple activists that, david, you speak to a lot, really smart people, jana, really also clear, david, this was a company that if they wanted to invert at least in the terms of money and spent in the shareholder base, they could have. This was the bridge too far too meaning they are america. They might not tolerate this, right . You could expect competitors made a lot of it. You heard the economic patriotism line coming from the administration over the last few weeks, starting with the delivering alpha conference, and dont be mistaken, inversions are complicated, require a deal of Different Things to be able to work, and apparently, they didnt view it as a possibility to be able to work the way they wanted it to, in particular, the opposition ver bbally from othe that work against them. They dont make them, they just sell them. Right. Were seeing double, triple cap the of the deal. All right, david, enjoy the week, see you soon. You got it, guys, enjoy. David faber on the newsline this morning talking the slew of media deals not happening. Picked the wrong week to take a vacation. Its the best. Lets get to the markets. Indexes coming off the loss with futures pointing low, concerns about russia and ukraine continue, of course, all ten sectors led lower led by energy, but we have to get down to 1891 for a 5 correction. Do you think we can get there . Im adamant its russia. Seeing this this morning, the High Water Mark inversion, were not getting good numbers today, probably not able to get to that. No ones coming forward in europe suggesting, perhaps, a Demilitarized Zone in ukraine and georgia, the other side of the border, actually giving us some solution saying, listen, were not going to put ukraine in nato. No one is being creative. Putins obviously not playing by anybodys rules, but i come back and say if putin or merckle has a Demilitarized Zone, a frak work for diplomatic peace, what you see overseas could reverse, italy in recession, germany numbers not good, all the pieces with russia. Its russia, not inversion or break down of deals, but russia driving us lower. Can we go down 2 to 4 . Yes. I want to buy the percent. I do not believe we will, indeed, go to war over russia. Im waiting for merckle to say, lets carve out that area. How about that . When that happens, if youre short stocks, it comes down, youll get your head slammed. Maybe if he senses separatists are on verge of defeat, maybe hell agree. Has not backed down on sanctions, but i think there is a frame work thats out there. I just dont hear the frame work. Someone has to come forward and offer a solution that lets russia have face saving and not kill a lot of people. His solution seems to be not the kind of solution that the western powers are going to let happen. Or that the markets are going to like for that matter. No, no. Italy europe is slowing down quickly. When we return, Spencer Rascoff to the Quarter Results, and russian hacker stealing more than 1 billion emails and pass words. How do protect yourself in the digital age, well talk to fireeye in an exclusive. The fed approved the m as resubmitted capital plan. Not what i expected. Futures are negative know. Well get more from squawk on the street in a moment. Moment, the fed approved the capital plan to allow to return to share hollers, and youll recall they recalled the prior plan after the accounting error, but that fix with the fed. Disney beat estimates, revenue beating as well, and the ceo was on closing bell yesterday on what led to the profitability for the quarter. We had Great Results at parks and resorts, profitability at the interactive group, tremendous story of consumer products, and, of course, the studio with Great Results for movies like captain america, and, of course, the lingering effect of frozen, the highest grossing pi ining film of all t. More than in three quarters than any full fiscal year ever. More in three than normally done in four, but Cable Network operating down 7. You have to pay up for baseball and soccer. Right. What i loved about the quarter is he teased star wars, the footage seen so far is spectacular, worthy of the fan frenzy and excitement. Were so far from it, but its generating frenzy. The franchise is here, the second tier players this weekend, not real superheros, but, like, you not, not that bad heros, like pretty good heros, they generated good numbers, and can it continue . I mean, coming back says, look, this is what we are. This is what we produce. They are talking about the idea of the mega a few years ago, didnt have megamovies. You with make movies and franchises, but hes done more franchising and merchandising, nice numbers. More star wars in the parks still to come. As long as hes there, this is the stock to own and buy for your kids. If russia, italian gdp, if german car sales, this is the stock to go to, okay . This quarter was perfect. Asked on the call whether or not they were going shopping, like so many other Media Companies appear to be at least thinking about. Said, we got a good hand. Yeah. Does not seem to be interested in another any kind of deal so to speak. Well, how about this ae, how about the espns structure. I mean, you know what . This is aint broke dont fix winning hand lots of ws in playoffs, probably super bowl, why would you trade anybody . Yeah. Well watch disney for sure and talk more about it later on this morning. Yes. When we come back, cramers mad dash, opening bell, and a look at the premarket. 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Carl, i have not seen retail trade as gloomily as it has in a long time including target after the breach and challenging the consumer. This is the best retail idea. Selling at 12 times earnings. They have a strategy, and when you see amazons going to parachute stuff to you, i feel like amazons anticipating right now that i want that beach chair and itll be there. They probably are. Right. Look, cramer, beach chair, boom. I get home, click, its there. Macys has the omnichannel, a good call. Careful, retail is in a big function. Speaking of big funk, General Electric has been in a funk, the trust stock thats disappointing. Bernstein says its hated too much. Its hated. They are doing things they are not getting credit for. Enough is enough. Go to a buy. Its going to be industrial, not expensive, going to be able to change the capital structure, but what i find interesting about the call, carl, you dont get them often is, you know what . It just isnt as horrible as you think. The name of the report is youre not imagining it. Yes. This is not a joke. No, and they had 5 ogranic growth, better than almost every sing single industrial i follow. It was not falling to the bottom line. If they can, the stock goes to 30. This is 24 on the downside. 30 on the upside if they get it right. I think the reports worth reading. Youre critical of the stock. Bernsteins target is 33. Aggressive. Manageable, more industrial exposure than in a quarter century. Yeah, you know, my problem is, look, you know, sometimes you cant catch a break. Europe is bad again. That means if the people flee from the industrials. Ge is snake bit when they do something, Something Else goes away. I think that if you feel europes going to turn, feel that russias going to ask for the zone, if you think theres going to be big easing in europe, youll get to 29. 30, but its not this is glacial, okay . I saw them in alaska. Its going to go, like, what . I dont know if we have time. Do we have time before the break to show you anyway, you get the picture. A good read. Opening bell moments away, and squawk on the street continues in just a moment. Bulldog if youre like me, youve been working like a dog all year. But you dont need to camp out til labor day to reward yourself. Mattress discounters labor day sale is on now rest those tired bones on a queen size serta mattress and box spring set. Right now, theyre just 397. Get 48 months interestfree financing on the entire tempurpedic cloud collection. Not to labor the point, but this sale wont last long. Mattress discounters [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. Youre watching cnbcs squt squawk on the street, opening bell in a minute, busy day shaping up, futures in the red. A lot of things familiar with still going on, russia, the ewe crepe, we have a ceasefire in gaza, but the inversion at walgreens not happening, jim. No. A lot of m a pulled in the last 24 hours, but your point going in you have to watch what nato says about ukraine, what putin and white house says about russia. I mean, you dont want nato forces directly facing russian forces. You want buffer states. I wish people would be creative in solving this rather than have poland say maybe nato, eastern flank we have to watch. You know, i dont want hundred years ago world war i start now because of treaty obligations. Countries its sleepwalking, a great book. You dont want sleepwalking into this situation where we just have a lot of alliances and everybodys back is to the wall, dont have a plan that allows us to get out diplomatically. Watch for something. Remember, a lot of i think the putin wouldnt mind ukraine being more western because he gets paid for the gas. Absolutely. He doesnt want to have c again, im not proputin. I think what hes doing is wrong, but you have to put yourself in his shoes for a second, as lonesome as that is, say, all right, the guy, you know, hes trying to protecting. Yes, yes. With that, theres the open, and look at the s p at the top of the screen, negative breath, obviously, at the open. The big board, 24th annual Hong Kong Dragon boat festival takes place in new york this weekend. A semidevice conductor supplier doing the honors. If you pick one to watch at the top, jim, would wag down 13 surprise you . Ill take some off the beaten path and say that what i think would surprise me is if we did not see something from cbs that is better than what we are getting now. They are down about to do an inversion, decide not to. They had a good quarter. Watch walgreens, people pressure greg watson, and watsons saying, listen, the president s against it. We have are a neighborhood store. This is americas apple pie. Cvs is not caught up in this thing so its a buy. Watch cvs. Page one in the washington post, a story that the chief met with Chuck Schumer and said congress has to do something or we might be forced to do is too, and schumer says dozens in the works, youll hear about it all through august. I know. What i pressed secretary lew was the irs could do rule making. If democrats and republicans want the comprehensive reform, remember what the irs did to us. Have a home office . Rules say, you cant have it. Theres a lot of rules. Lew was saying, hey, you know what . Yeah, first we thought you needed congress, but then, next thing, you know, you have to have a few more people over there, and then all these lawyers who have been issuing the comfort letters come back and say, well, we made a mistake. They put the merger in place a long time ago. They haved too a restructuring. Years to undo this thing. I just say be care. Buying stocks because you want inversions, selling cvs because theres no inversion, think about earnings. Not going to earn 550 in fiscal year 2013, earns less than that. A global power house, you want to buy walgreens here, not sell it. I know people dont want to hear that, butment to join the fray. Jim, jump overboard. No. Cvs had a good quarter. Walgreen is the worst component, down 16 now. That is nasty. Ralph lauren we have not mentioned, 1. 80 versus 1. 76. Looking for comps. Traditionally offered conservative guidance. They are flat lined. Overall, buy i dont have a hedge fund, but divide by ten. Realize this stocks been trading 14 to 16 forever, and i think the macys call says back to school could be good. I would they are a hard stock to trade, down five to six, but you come back. Its a boomerang stock. Going back to jeffreys yesterday, putting abercrombie on the franchise list, as they call it. Like, hey, its going to get a bid. I hate teen apparel. I hate teen apparel. I have one teenage daughter who just turned 20. Dad, i hate abercrombi, why did you spend 2 00. You look at the bill, they go to aero, j. Crew. They rotate, least predictable, we love them, but, boy, unpredictable, woah time warner, mentioned at the top of the show, down 75. That puts you down to the average, jim. They say on twitter, guys, if you hate me, dont follow me, dont obsess with me. Time warner, jim, why dont you say he should hang in . The answer is because i think he could take the stock to a hundred. Yes, i wanted the big guide up, but you know what . This is a company doing a lot of things right. We wanted them to clean up the books, rid of time inc. They got rid of the newspapers, but time warners a winner, not a loser, a buy back is this place. The people who own time warner stock are not your friends. They have, like, hey, we were in this for a takeover, we have to go. Let it turn over, and then you can go back to those. Those are not the first day stories. Buy a cvs on a first day story, disney, but not in there and take the rs out. Let them sell. They are panicked, dont know what to do. Initiation today, two out perform, demand is good, the targets are reasonable, an underappreciated growth trajectory. They take the price target to 316. What does retired tired ceo say with the trajectory . The most under appreciated growth trajectory ever seen. That said, teslas charm. You know what else is charmed . Netflix. On the disney call, bob calls how much he likes netflix. I mean, these stocks, you got to admit, held up fairly well. Thats true. Netflix has nothing to do with putin, and tesla does not sell to russia. What does that say . Complacency or stocks to buy, buy Procter Gamble because it was not bad, put money to work. Seems like theres money coming into the market. Wow. Yeah, well, i think people realize no one knows what putin will do. This could go on for a very long time. Yes. In the meantime, data points will come in. Right. Theres rumors, buput through t demilitarized thing, going back and fort offering solutions, and, frankly, if major leaders offered solutions, then i think what youll have is that rumor, which you go over the weekend friday, and people cover the shorts with the idea theres something going on between merckle and putin. They correct each other, german, remember putin was a kgb agent in east berlin. Yes. East germany, and merckle from east germany understands russian. These two people together can hammer out something. I believe that. Thats the hope this does not devolve into bloodshed more than it has, but if you sell off for russia, you know you have to recognize there could be, like that, if merckle makes the right phone call. See if that happens. Meantime, s p 1914 here, and bob is on the floor. Hey, bob. Jims right. You talked earlier, jim, its not just the ukraine. Europe was ugly today and has been for a month right now. Italy slipped into recession here, decline in gdp for the second quarter, 0 preponderate 1 in the first quarter, two consecutive quarters in decline of gdp, and look, italys down, germany, portugal, greece, ugly for a month. The fourweek numbers, put them together, thank you, kristin, for doing this, greece down 10 , italy down 9 , spain, you get the idea. This is a continuation of a trend, did not just all the sudden start today. The s ps only down 3 in that same period. This is causing flight to safety in the United States, not just in the target, but in the bond market, comments about the tenyear yields, see them . Sitting at, like, the lows of the year. That got comments, guys, and they dont talk about the bond market. Gold spiked up. Take a look, up almost 2 . Sectors here, telecoms weak, utilitys weak, technology, and consumer discretion naary on th weak side. Theres the state of retail, stores not doing well, ive known steve tanger for 20 years, great company, excellent management, tight management, came out in line with their earnings, important thing here, look at the numbers here, despite concerns on retail down, a respectable 3. 3 , same stores, the same Companies Year over year, up 1 , and occupy rate up 80 points from the prior quarter. Despite all the concerns, still, get companies wellmanaged, rotate out companies not working, put in stores that are working, you can do well in retail. Also, take a look at papa johns, came out with the earnings below expectations, a little disappointing, but look at the same store sales. They talked higher costs, cheese costs have gone up, a problem for all the pizza companies, but look at the same store sales up 7. 5 , international, 8. 6 . A great example of the big National Companies taking share away from the small mom and pop companies. Got their internet sites to click on easy. Watch that when you talk about pizza. Back to you. Thank you very much, bob. Keep your eye on the 10 year. To Rick Santelli in chicago. Good morning, rick. Morning, where do we begin, carl . Perfect day to be back. Why . On an intraday basis, took out the low close of the year, anyone who watches the Santelli Exchange may 28 th knows of the low, intraday traded through it, but its the comp. Look at the yield curve, 10st to 20s flattening again, eight basis points of the flattest at 13 and a half months. Fives to 30s, roughly flat, but had brief steepening. Thats reversed out. Lets look at that fiveyear chart specifically to about midmay. You see the effects. Long end is going down faster, fiveyear still not breaking through some of the may low yes. Lets look at june 1st of the last year of the ten year, closing below what we traded already, wed copping back to second week of june. Still now at 245 comping on the 28. Look at boom yields, 109. Look close. Why . Youve never seen them before. These are historic lows for boon yields, and we talked about europe, many times, gdp, bob mentioned it, italy, two quarters down in a row, tech anily recession, but the banks rewrite that rule, but nonetheless, the dax at 90. Watch the 9,000 markets. Look at the euro versus the dollar, weakest level since september of last year, and the catalyst today, obviously, some of that weak data out of italy. Carl quintanilla back to you. Thank you very much. Bank of england tomorrow. Another busy one. Something to get that economy moving, boy, do they ever. Yes. When we come back, rascoff here for a cnbc interview. Dow is down after the break. The ca illac summer collection is here. During the cadillac summers best event, lease this 2014 ats for around 299 a month and make this the summer of style. We do . I took the trash out. I know. And thank you so much for that. I think we should get a Medicare Supplement insurance plan. Right now . 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With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of Fidelity Investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. All right. Zillow shares trading slightly lower couple bucks, come on, after reporting mixed Quarter Results well, micced if youre a minitpicker. Whats happening is that they are merging with trulia. We are lucky to have mr. Spencer rascoff here. We talk about how hes here in spirit a great deal. Yes. Spencer, when i interviewed you in the spring, i said, come on, if you cant beat, join them, buy truila. You said, well beat them. What changed . Ask and you shall receive, jim. Why dont you buy . We now intend to buy trulia. I think the combination of the companies provides benefits for employees, shareholder, and industry participants. Theres no question that there are a lot of cost savings of the companies combining, revenue synergies, and excited about the transaction. What im concerned about, you have a lot of people signed up, amazing. Could you run out of inventory to sell . We have 57,000 subscriber Real Estate Agents buying from us, but the traffic continues to grow. We have 89 million users last month. As traffic grows, more to sell. We have lot available for agent advertisers. People say, wait a second, home sales are slowing, mortgage numbers, and you do a preapproved mortgage. In reality, youre not lever to that. No, whats happening is the consumer is rapidly changing their behavior from shopping for real estate in the newspaper classifieds to the internet and not even on a desktop, but mobile di vice. That is swapping macro head winds. Housing is slowing, but the user shifts so quickly to the internet we benefit from that. Visitor growth, desktop deaccelerating. Mobile making up for deceleration . More than making up for it. 2 00 homes a second on mobile, and three years ago at the ipo, it was 20 homes a second. In three years, 10 x mobile growth. Astounding. What i thought was most interesting, im from summit, new jersey, and you did a special about a broker, and i just want you to walk people through. This is a broker meaning some i know the broker personally probably, but talk about the number of leads generated with 5,000 a month. I want people to understand why the brokers initially reluctant to use zillow are now all in. Agents that advertise with zillow, they spend money with us and make a lot of money. We met this agent at the zillow summit, meeting hundreds of agent advertisers, and this agent was telling me, thanks me for how much money we helped him make. When he gets a lead, he following up quickly and converts that lead into a transaction and makes the money. Thats why our average revenue per agent grows quickly, now over 300, the typical agent advertises a month. Yelp had good arpa basically, but didnt get the agents. You didnt sign on as many as some thought. Why do you get a pass on that . Revenue is growing so quickly. The premier agent Revenue Growth is up 82 year over year, the Fourth Quarter in a row of accelerating agent advertising revenue. Youre right. We are focusing more on a smaller number of top producing agents willing to spend more because they value the audience more meaning we bring on fewer total subscribers and advertisers, but at a higher rate. Ill take the trade off, and its working, clearly, total revenue continues to grow, which is what the law of good numbers, harder to continue to increase your growth rate as numbers get bigger, but we find a way to do it on agent advertisers. Journal does a piece on Oklahoma City people move there because they are priced out of the coasts. The millennial story is moving not because a job is better in another city, but houses are cheaper. Do you think thats true . Well, it is true, but theres an anchor on american homeowners which is negative equity. Many are upside down on the loan. Could be a job in a fracking state of north dakota or oklahoma, but they are underwater, doesnt matter if theres another job, they cant sell. That opens job ability lower than wed like. This preapproved mortgage, people felt that was just dying on the sign, but the numbers there, you revealed that program when you were on the show last time. Thats right. How can that be going up in this environment . We created the product which is the only place on line where you get preapproved for a mortgage. Normal preapproval experience is painful; but you you get preapproved and have a letter to go look at houses with. Thats a big deal. I imagine trulia, what you put through, and preapproval, and you dont need all that spend, that ad spend they are doing. Look, you told me years ago, buy street easy. We did. You said buy trulia, so whats next in. Ill get to you, but arent you cohosting. Youre cheaper than an m a investment banker, and your deal flow is better. Oh, spencer, thank you. Jim, why arent you harder on him . Stock was at 20, stocks at 140, save it for the guys from 140 to 20. Spencer rascoff, thank you. Good to see you. Stock trading with jim in a minute. Dows down some seven points, and squawk on the street will be right back. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. 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Comcast business. Built for business. Time for cramer in stop trading. Let me put my hat on, okay, my small plate mexican restaurant. We make a fortune selling beer. You know who makes a fortune selling beer . Molson coors. Thats always been one of my favorite situations. Look at that stock. They are cleaning up. If you believe in molson, be a buyer of constellation brands. That sold off corona and modello. This market can do no wrong. They love the markets and consolidation. May not allow sprint to merge, but Beer Companies can get together. Why . Because craft beers are the alternative. Ipas. You have Beer Companies miller could be too this Group Remains hot. The hotter the summer, the better the numbers. Constellation, my favorite, but well done molson. Yeah, even though global volume down one almost. They make it just doesnt matter. I dont know, 6 for a beer, doesnt really cost 6, but people know its a profit margin, you lose on the avocado and make it up on the beerskis. Whats on mad tonight . I have a worry of tech slow down. Its so much europe. Who has a better handle on net . Rick hamada allowed us to find out whether there is a slow down in tech. If there is, the market is too high. Great to see you. Great to have you back. Great to be back. I like the chartnado. Its a learning experience. Yes. Mad money tonight at 6 00 p. M. Eastern. Where do we go from here . David kelly and Jp Morgan Funds navigate it, and the ceo of fire eye joins us for an exclusive on the hacking ring, all passwords and emails stolen. Be right back. Find yourself. In an accomodation where you get to do whatever it is that you love to do booking. Com booking. Yeah thats keeping you from the healthcare you deserve. At humana, we believe the gap will close when healthcare gets simpler. When frustration and paperwork decrease. When grandparents get to live at home instead of in a home. So lets do it. Lets simplify healthcare. Lets close the gap between people and care. Weits not justt wed be fabuilding jobs here,. Its helping our community. Siemens location here has just received a major order of wind turbines. It puts a huge smile on my face. Cause im like, this is what we do. the fact that iowa is leading the way in wind energy, im so proud, like, its just amazing. Yyyup. With xfinity internet soyour family can use all their devices at once. Works anywhere in the house. Even in the garage. Max whats going on . Were doing a tech startup. Were going public [cheering] the fastest inhome wifi for your entire family. Only from xfinity. Welcome back do squawk on the street, road map begins with the markets in the red, but climbing back. Worries from europe weigh on the dow. On the sound of two deals falling on wall street, a hundred billion dollars worth of m a ending, time warner, sprint, fox, tmobile moving this morning. As earnings continue, disney, time warner, looking at fire eye after a massive data breach in an exclusive interview with the fire eyes ceo. The deal moves forward, but not with the tax inversion. Walgreens staying in chicago. Not taking the news lightly. Markets from earlier losses, but still in the red as europe weighs on u. S. Stocks, bringing in david kelly, chief global strategist at jpmorgan funds. Nice to see you again, david. Glad to be here. How did you feel yesterday in the middle of the afternoon seeing the dow accelerating down 200 points on the suspicion that russia might invade eastern ukrai ukraine. What did you tell . Well, i think the it is, obviously, scary and worrying that the pain is concerning, but i think you have to balance that risk, and there is a risk there, again really good numbers. The trade numbers this morning, going to revise up to, and 11 year over year, and because of the worries in ukraine, ten year trading below 2. 5 . Theres a risk, a lot of stuff in the u. S. Economy also. Yeah, but i mean, people are in two minds. I have your note here dated august 4. On the one hand, make hay while the sun shines, overweight equities for the reasons you gave us, but two paragraphs before that, on friday, you noted the s p 500 fell on the week. The market reacts negative fashion, and you say make hay while the sunshines. Thats right. Key thing is to invest how you think, not feel. It does not feel good with the headlines around the world, but you have to go through the scenarios, what does it mean, putin could be bluffing, in which case, clearly, markets are higher, but if its worse than that, if theres an invasion, likely to get bogged down. Hurts the european economy somewhat, not the Global Economy that much. Does not negate the fact theres Earnings Growth in the u. S. And low rates in the u. S. That pushes money to equities. I dont know, david, part of the good Earnings Growth in the u. S. And especially revenues growth has been derived from europe, a bright spot for multiNational Companies in the United States. Why are you so convinced if europe has a downturn, seeing that in germany factory orders, italy back in recession, does not affect corporate earnings . The story in europe is more mixed than that. Improving Unemployment Rate going on and improvement in the peripheral. They are doing well in terms of growth here. Also, you know, i i think the effect so i think the effect of the european economy wont be that great, but one of the reasons earnings are up because of the dollar, not just that europe is better, but were not hitting the dollar head wind we hit in recent quarters, so, you know, overall, i think it is still a genuinely good earnings season, a lot of potential profit in american companies. Okay, so, david, if i buy in totally to what you say, and many, many millions of people who will, how high does the market go, and what will win . I think thats the key question because even though, you know, i like the u. S. Stock market, over the next few years, only gives you midsingle digits overall. Temp expectations given the levels we start with. What wins look at cyclical sectors, sectors that do well as Interest Rates rise. Things like consumer discretionary, technology, financials, those areas will lead the market forward going over the next two years as we get past worries and rates rise again. Thank you for the advice. David kelly, thank you. Moving on to time warner, Company Reports earnings as 21st century fox withdraws the bid for the buy. We have the latest after a busy 24 hours. Absolutely. This gives ammunition in the battle to show investors that time warner is best off on its own. Earnings at 98 cents a share surpass expectations by 14 cents on cost control. Strength at hbo, revenue grew 17 benefitting from a jump in subscription revenue overshadowed by questions about m a. This is as the company reaffirm the outlook, noting, quote, does not include the impact of future merger or unplanned restructuring or charges. We will hear more on the Earnings Call starting in a half hour. Yesterday, disney reported better than expected results. We sat down with the ceo to talk about his record earnings with studio profits more than doubling on captain america and guardians of the galaxy, and they are well positioned to be a significant driver of disneys Bottom Line Results for the next five years. This is not only about a good movie. Its about the fact that the marvel brand arrived and is very healthy, and if you look ahead at avengers and sequel to guardians in 2017, the pipeline there and across the studio is in great shape. For the parks and resorts, they plan to expand star warss presence and opening day for Shanghai Disney soon. Magic wristbands should boost profits starting this quarter. Great success domestically. We had higher attendance and higher spending, clearly demand for the parks in the United States and other places around the world, hong kong and tokyo, very, very strong, great intellectual property there, fine operation, great experience. And for all those parents out there, i asked him about the massi ivdemand for frozen toy and the division is ramping up so there shouldnt be shortages. Ill monitor the time warner call shortly and get back to you with the headlines. Back over to you. Thatll be interesting. Interesting to hear what he says about the deal that fell apart. Thank you. Heres how media stocks react to all the news, broken deal news. Tame warner, as you see, down 1 11 . Fox up 5 , and disney after the great quarter, up about half a percent. More insight into the entire industry, barton crocket. Start with time warner, jeff about to get on the call, how does he explain it to shareholders . I dont know he has a lot to explain. Fox came out of the blue, made the offer, rebuffed it, gone back home. You know, meanwhile, fox time warner had a great quarter and continued to make the argument this is a, you know, midteens etf grower longer term, which i dont think is fully discounted in the stock at this price. After the dust settles, argue that you can buy the stock and hold on for 18 and change a year or so down the road and be up to 90 bucks by then. You have faith they go at it alone, dont see a bigger buyer, not many choices that could acquire the company and you think they are successful at doing it . Well, look, if theres a takeover for time warner, its gray city. The business works on its own, thats why fox was interested. I think that fox was in an unusual position to make a bid. I dont see a lot of people out there in that position. You know, both being in the industry and large enough to digest it. The question is whether fox comes back and, you know, i readjust the tone on the way they got out of it quickly. The verbiage around it. I think its unlikely. I wouldnt hold my breath waiting for fox to come back. As far as your concern, did murdoch make the industrial case for the deal . You know, it was a very interesting overturn. No. I dont think they made a full court press to the public on the merits of the deal before they withdrew it. I find it odd in terms of approach, but it is what it is. I think time warner stock works without a deal, fox stocks work without a deal, and the saying, you know, quickly forgotten if they dont come back. What about disney and the block buster quarter, firing on all engines as julia ran us through, the parks, the media, the television networks. It really is, according to the journal, one of the financial power houses that could do this deal if it wants it. Do you see disney going that direction . Unlike bob who tends to focus on smaller acquisitions. No. Id be shocked if disney went after time warner. Disney has enough leverage where they are to battle cable consolidation. They are focusing on iconic, you know, really kids, you know, properties, and theres some of that at time warner, but nothing disney covets to get in m a. I think lucas, marvel, those are working for them right now. They have enough with that to be happy for the moment. We had a discussion this morning whether or not they buy something. Do you think murdochs pulling of the bid marks a near term top in overall media consolidation . You know, i think it does. You know, i think that if fox and time warner got together, you know, people would have thought about it, would have increased, you know, the talk from investers, would have been more top in mind in board rooms. I think thats not happening takes the pressure off, gets the bid out of the stocks, and, you know, thats a healthy thing. I dont know consolidation beyond fox and time warner is plausible given family control and companies have leverage to grow fees, and well see that play out with cable consolidation. All right. Seem like a happy man. Thank you for joining us on the deal news today. Yeah, great. Looking at sprint, down 16 , wireless giant putting a new ceo in the hot seat, claure, currently the ceo of brightstar. Withdrawing the bid due to difficulties they would have had with regulators. We have an out perform on sprint. Jennifer, good morning to you. Morning, carl. Can they build a sub base on their own . I believe sprint can. I think todays reaction in the stock is a total con pitchlation, and if you look at the company and the things theyve been doing on the network, its been a slow grind, but were kind of seeing the light at the end of the tunnel here. Discussion about what they could launch or unveil in the fall in terms of reintroducing themselves as a stand alone to consumers. Whats that going to look like . That gepdepends on apple, actually. The key part of sprints strategy is ability to use their old clear wire spectrum, 2. 5 gig hertz, and nothing supported that. If apple introduces one with the chip, its a game changer for sprint. Do they circle around on this given all the lobbying effort that was put into the deal . Circle back around and try it again . Yeah. No. I think they fought the good fight, but hes a smart man, and i think if it was not a 50 50 chance of getting it approved, he made the right decision not to proceed. At 6 here, what do you do with a company that lost money for, what, the past seven years . Well, i think we have to look at the asset value urn this stock. I mean, when you include the spectrum, sprint of the carriers has more spectrum than four playser including at t and verizon in the statement. If you have other companies not in the Wireless Industry like yahoo and google talking about wireless and mobile being in your future, there is a fine night asset here, and sprint has the most of it. Well, what about tmobile, jennifer . What do investers do there . Do you think the billionaire behind the french operator takes it out, and if so, at what price . Ill yad confirmed the price for roughly a 57 stake in tmobile. I dont think they were taking that overly seriously. I think they said as much they would reject it. Hard for me to see that with under 2 billion could realize the synergies promised here. I think for tmobile theres a lot of logical dance partners, but not sure they are here and now, so i think its a waiting game for them. What about charlie and dish . Opportunity for him . He had that failed bid to soft bank last year. I dont follow dish agtively, but when people mention charlie, they mention options, and he got a few more today. Finally, jennifer, i hope i said the name right, claure, is he wellknown . Bought the majority of bright star and bought reminder he has not owned. Been on the sprint board since january. He knows the issues, wellrespected in the industry, used to running a low margin business. I would think hes good with cost control, what sprint needs right now. Arguably any company. Right. Jennifer, it got interesting. Thank you for the time. Thank you, carl. Coming up, a massive data breach. The news that hundreds of thousands of websites, over a billion usernames hacked. The ceo of fire eye, david dewalt, joining us after post g ing results that beat the street. Walgreens staying put in chicago, but making a big deal. Squawk on the street will be right back. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com female announcer sundayduring sleep trains triple choice sale. For a limited time, you can choose to save hundreds on beautyrest and posturepedic mattress sets. Or choose 300 in free gifts with sleep trains most popular tempurpedic mattresses. You can even choose 48 months interestfree financing on the new tempurchoice, with headtotoe customization. The triple choice sale ends sunday at sleep train. Sleep train your ticket to a better nights sleep another massive data breach uncovered, and revealed that russian gangs stole more than 1 billion passwords from 120,000 websites. Here for the exclusive is david dewalt, ceo of fire eye reporting second Quarter Results. David, good morning to you. Morning. Seems like every breach you expand your imagination whats possible on a global scale. What how did this happen . What does it all mean . Well, its all part of what were seeing over the last few years, carl, and that is the cyber Threat Landscape is continues to rise. The latest revelations around the russian Hacking Group is somewhat expected, actually. I mean, were seeing a lot of large retailers, large banks getting breached on a regular basis, vulnerabilities in the Core Infrastructure of Big Companies are vulnerable to hackers like the russians, and they are stealing the credentials for consumers as well as for, you know, professionals, and, you know, this is the landscape were in, and, unfortunately, its ominous, and were seeing more of it. Were talking, obviously, almost half a million websites, everything from household names, things we visit every day to small internet sites. In general, though, if you parse them in categoriecategories, whe most vulnerable . What sites are we most vulnerable when we visit . Well, what we find is that the corporations are the most vulnerable. We saw this with a lot of large breaches that have been reported including, you know, target, and the news they just had, and, i mean, these companies are getting breached at a very rapid pace these days, and, i mean, our reports show that more than 97 of all Large Companies are getting breached. They are getting breached regularly, and some of the current tools used are in inadequate for being able to again defend against the large groups. Fire eye comes in with more advanced technology and advanced people to help with the problem, but its a large scale issue right now for a lot of companies. Yeah, without question, david, theres, obviously, a commercial opportunity here for you guys. Hold security gave a detail on the russian breach to the New York Times and they have detail here. Hackers placed in a small city in south russia, they know each other, possibly have been helped by somebody else. What i dont understand is if the guy has the detail on who the people are, what the held is the nsa doing not preventing them from operating or the cia from taking them down . Surely there that has to be some National Commercial response to this at the highest level. It cant, with respect, just be left to you guys, can it . Well, i tend to agree, simon, hitting the core issues. The internet now, our cooperation globely, we got some challenges. The Cross Border Communications and collaboration to arrest criminals and to Work Together is not there. The russian market, the United Statess market and Chinese Markets are not working well together in cyberspace. David, i dont care if they arrest them, but i want them to shut down the server, and i believe the government, like israelis, are capable of doing that. My question is, what will it take for them to get on with the job and simply shut them down . Well, this is the point im making, simon. Its difficult to shut them down because the servers they operate in are in russia. Its a difficult process for our criminal agency in the United States like the fbi and cia to shut them down and takes collaboration between nations to do that. What happens is these groups operate. They have been operating since 2011. They will continue to operate. Until we come up with better governance models, better cooperation, well see crime groups and nation states continue to operate successfully. What we know on the hack, what do they want . Well, they want personal identifiable information. That identifiable information is credit card information, password information, username information to sell on the cyber black market. Its sold to corporations, believe it or not, and its sold to corporations that do things like email spamming and other types of advertising. Its also used to perpetrate crime, that might come in the form of credit or debit card theft, but valuable information sold in the black market money, and when you have multiple of them. Can you stop it from happening . I think we can. It takes new types of architectures and securities to stop the problems. In some cases that weve seen, we can identify who is doing it, where they are doing it, like hold security found out. The problem is the people and process part of Large Companies breaks down. It takes a combination of products and expertise to solve the problems. I think thats where the new generation of security has to come in play to solve these types of issues that are happening around the world. David, well keep our eye on this, obviously, well have the discussion much more times. Thank you for the time. Thank you. David dewalt with fire eye. More on the markets as we climb back from the lows of this morning, down 11 points on the dow. Look at walgreens, the decision to stay headquartered in this country, buying abroad, and not to do a tax inversion when squawk on the street comes right back. My mother made the best toffee in the world. Its delicious. So now weve turned her toffee into a business. My goal was to take an idea and make it happen. Im janet long and i formed my Toffee Company through legalzoom. I never really thought i would make money doing what i love. We created legalzoom to help people start their business and launch their dreams. Go to legalzoom. Com today and make your business dream a reality. At legalzoom. Com we put the law on your side. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. 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Another sharp stock move, but not another tax inversion. W walgreens is buying Alliance Group in europe of that which it doesnt noz own, but will be headquartered in chicago for tax purposes, so no tax inversion. Heres the ceo on the Conference Call this morning. The company and board looked at the full range of issues, both the potential opportunities and benefits as well as the risks that may be associated with the inversion. I cant emphasize enough this is a highly technical and complex area of the tax code. Interesting. It would appear this was always going to be a test case, go beyond health care and, in particular, into consumerrelated companies. You know, 8500 Stores Across the country. Was it fearful there could be a public backlash with the tax inversion . Take a hit on revenue or the fact that treasury says that maybe the administration is able to pull back to prevent invergs on its own . Clearly, they succumbed to political pressure instead of investor pressure. I have a note the company would have saved 4 billion in taxes over five years if they would have gone with the inversion. On the other hand, there were reports that senator durbin sent a letter to the ceo of wallgreens saying that if they go through with this, its turning your backs on the very people that allowed walgreens to thrive and profit. You feel strongly. Theres no laws in place right now. Thats the logical thing, not pile pressure on writing letters and calling ceos saying its unpatrioti unpatriotic. Durable intercontinental, we think was approached by startward, but never confirmed, but apparent through earnings yesterday there was a second approach according to the Financial Times from wyndhams, and after a tax inversion in the case, but we know, surprisingly, when last we interviewed that ceo, he was looking for deals. Take a listen. We look at deals all the time. Our dna is m a. Weve been built through acquisition. We are constantly looking, always in the prowl for something that makes sense. Interesting not a huge amount of movement on stock today. Certainly is going to dominate conversations, the idea of inversions, faber said expect to see more of them. Broader markets now, the dow just turned to positive territory, not a lot, but up 14 points now coming from the back morning lows. Art cashin is here, concerns here, focused with russia and ukraine, why have willie come b . I thought the line in the sand was the low of yesterday of 1913 in s p, but my friend pointed out right below that was the hundredday moving average at 1911. Thats what happened. We opened at 1911 for the low of the day and bouncing at a heavily oversold market. Whats rather disappointing to me is its a limp bounce. Ordinarily, with this condition being as oversold as we are, with that bounce over the morning low, youd be up 75 in the dow. Can you clarify what you mean when you say oversold . The various metrics where the market has declines in advances, more new lows. Relative strength. Relative stength put together indicates were at the extreme. Its like a patients health, vitals come back, and the doctor says, we have to slow it down. Ordinarily, when youre a oversold, you get a reflex rebound, not necessarily a turn back to the bum market. This was a bounce off the hundredday moving average. That average worked time and time again, and so it was a perfect spot, but the national rebound was not much, and i think that may be because of the geopolitical concerns that were pointed out. Yesterday, everybody was talking about the headline and gold never really moved. Now its up 22. Was up 25 at one point. Thats because of the strong dollar . I think it is more well, the dollar is strong for the same geopolitical reasons. I think youre seeing this flight into gold temporarily. Its just a reminder. It is not a raging signal. It is just saying to people before you get ahead of yourself, remember theres a geopolitical problem out there. Further context on that, you know, looking at the index, a lot has to do with the euro, and that is under pressure, italy is back in a technical recession. Nine month low. Sensitizing the euro for whats happening there, and what did you say . Eight month low . Nine month low. Thats dead right. Theres other problems in europe besides ukraine, and the threat of deflation comes back with italy being back in a recession again, and but maybe that means more qe from the ecb. Well, well hear from them tomorrow. Yeah. Yeah. And see where it goes. I believe that they cant do a truly functional qe. Well see what happens. Art, good to get your take on the sentiment out there in the markets. With the dow positive, we have breaking news on inventories from the imex. Theres a decline of 1. 8 Million Barrels of crude in the past week according to the eia, and big decline in gasoline, down 4. 4 Million Barrels. Part of that is the fact that refinery runs declined. We have an outage in the midwest. This is the time of year when refiners come down for retooling for the winter, retool to produce heating oil and the winter grade gasoline. Some folks are concerned that that might mean lower utilitilization, lower draw downs with gasoline, but so far, we have a fairly bullish report here for the week. A lot of analysts, carl, are talking about how much of a geopolitical risk premium should stay in the market begin the situation with russia and the ukraine. Mike fitzpatrick says he thinks that its something that is going to really underscore the market, and they are recommending if we see a pull back, if youre looking for a long play, thats not a bad one right now. Back to you. Thank you so much. When we come back, more stocks move this morning including ralph lauren and alan simpson with santelli in chicago when we return. Developers are all about speeds and feeds. Its all about latency. Its all about how fast does it run. I often sit with enterprises who ask me about how Mission Critical and hows the performance of the cloud. And i tell them, if you can make gamers happy, you can make anybody happy. Speed is made with the ibm cloud. The ibm cloud is the cloud for business. Could help your business didavoid hours of delaynd test caused by slow internet from the phone company . Thats enough time to record a memo. Idea for sales giveaway. Return a call. Sign a contract. Pick a tie. Take a break with mr. Duck. Practice up for the business trip. Fly to florida. Win an award. Close a deal. Hire an intern. And still have time to spare. Go to comcastbusiness. Com checkyourspeed if we cant offer faster speeds or save you money well give you 150. Comcast business. Built for business. Ralph lauren, they are lower, coming off the lows of the session, down a percent this morning following results that just beat the street, revenue just shy of expectations. Lets talk about the retail trade. Liz, senior retail analyst. Liz, perhaps disappointment with margins, although, we knew they were investment mode to grow the footprint. Why the stock selling off today . Yeah, i mean, i think these results were very much in line with actually a little better than guidance, and so i think the disapointment is just in looking at what the company has on tap for investment spending. Theres a lot of spending planned for the balance of the year and beyond, and so while i think its the right way to go, i think the markets judging differently today. Now that weve gotten ralph lauren, michael kors, and coach, theres been surprises and take aways. How do you trade the three in the same category fighting for same consumer . Yeah, i think soo far from earnings, just starting with bulk of earnings ahead of us, but i think its very much an expectations game. If you look at michael kors, a beat, but stock traded off on retail margins, coach was, you know, pretty weak report, but the stock traded up. Right. Its about gauging where expectations are. And yet, if you look at the macro trend with the retailers, the journal put it nicely, a sustained decrease in foot traffic for retailers. Which one is handling that challenge the best . Its not just about buying more online, but also changing buyersbuyer buyers habits, more knowledgeable and sophisticated buyers. More pricing transparency than ever, and they are armed with information about price more than ever before. Retailers with a promotional stance gearing up to be a promotional retailer like macys are best positioned because they meet the consumer where they want to be. They have a market place of goods so consumer, you know,mentknow, me wants a variety of goods, and macys is best positioned now. What about coach . Cheap enough to get in the stock list . A wait and see story. Excited about fall and stuart bieb biebers collection, theres hope there, but itll be a year before theres signs of life there. They are gearing up for a pretty bad fiscal year. Yeah, and executives eluallu to that. Great to see you as always. Simon . Thank you very much, alan simpson in an exclusive interview with our own Rick Santelli. Whats it like when musk builds a private launch pad for space rockets in your backyard . The mayor of brownsville, texas tells us coming up on squawk on the street. Er, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Thank ythank you for defendiyour sacrifice. And thank you for your bravery. Thank you colonel. Thank you daddy. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance can be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Welcome back, i have a special guest, retired senator from the great state of wyoming. As we call him in chicago, the incredibly quotable alan simpson. Thank you for taking the time. I have a size 15 shoe, i have it many my mouth a lot, thats why they do that. I have a quote we have to read for the viewers, one of my favorites, and this is the senator on some of the previous spending cuts in tackling some of the issues on money of the day. Lets put it on the screen. Thats a spar rows belch in the midst of a typhoon, and anybody giving you anything different than that, walk out the door, stick your finger down your throughout and give them the greenie weeny. Only you can phrase it in such terms. Listen, back in 2010 when simpso simpso simpso simpsonbowles had the report, we really missed the boat on that, didnt we, senator . We did. That was an old infantry term from the army. When you messed up the order, the green weeny was oak leaf clusters. We messed up. Look, in the business, you cant no wonder corporations are doing what they are doing, and individuals are all confused because the tax code is a true mess. Has over 18 0 things in it called tax expenditures that cost a trillion one hundred billion a year, and the corporate people, they have the worst Corporate Tax situation in our country. We they are not competitive. They cant bring the money back without itting taxed twice, and we have the highest rate of any country in the world, 36 , and we put it all there to bring it down on how to keep them from scrambling. Just insulting to the american voting electorat because when its not near election, but we dont call these things loopholes, but the tax code. The tax code designed by the people that call it loopholes when its elector efficient, and, of course, they want to get reelected. The long and short of it is when treasury secretary jack lew talks about the bandaids and dick durbin arm squeezing the likes of walgreens because they comply with the tax code, your thoughts, sir . I mean, to me, its just completely insane that these become loopholes. These were all written and well thought out and well lobbied for. Well, heres one for you. Only 20 of the American People use 80 of the tax code. When youre hearing that babble about the little guy, you want to remember who is getting the grapes out of the tax code, and only 25 of the American People itemize so 75 of the fellow citizens dont know what the goodies are in the tax code. Thats a tough one to swallow. Thats whats out therement you got to do something with that. We said get rid of it all. Go to a broaden the base, lower the rates, and if you make 070 grand, pay 8 , 7 0 to 210, you pay 10 k and anything over that, pay 23 , corporate 26 from 36 and have a territorial system when you dont bring it back. No wonder they leave. I want you to weigh in on one thought, and that thought is simple. What would you say to jack lew, sitting next to you with regard to the comments youre not patriotic if you do the tax inversion trade. What is your final thought on that comment . I would just tell all the n congressmen to get patriotic so they dont screw the corporations that give people jobs. They are chicken. They pander to the pace. Either you a patriot or a panderer. If youre not a patriot. Get out of the race. Senator, youre a great american, thank you for the time and want you back closer to the election to see how its squared with the electorat. Back to you. You bet. A tough talk there on taxes from alan simpson. Thank you, rick. Coming up, the mayor on the town where elan musk is building a launch pad in texas. Well be right back. During the cadillac summers best event, lease this all new 2014 cts for around 459 a month or purchase with 0 apr and make this the summer of style. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Crude Oil Rebounding today, but hovering near the six month low, the story of oils resilience, price, increasing production in the United States. Jackie deangelis is on site looking at Pipeline Safety in plumber, minnesota, hard hat and all. Jackie . Pink hard hat and all just for the record. Good morning, listen, if the u. S. Is going to be Energy Independent by 20 20, if we surpass russia and saudi arabia as a crude producer by 20 35, things have to be worked out in the industry. First, of course; how to get the oil out of the ground, but how to move it around and how to do that safely. Now, smart industrys answer to Pipeline Safety, we here in min integrity dig with enbridge, where pigs were used to detect problems in the pipeline system. Areas that needed repair. Now, pigs can be quite large, bedepending on the pipe size. This one is four feet in diameter and enbridge spent about 4. 5 billion on intreg grate tools like this to keep 50,000 miles of pipeline safe. Safety a big ish whew it comes to the debate on the Keystone Pipeline as well. Concerns over safety. A main reason for the delay seen so far. Consider the oalternatives. Rail, barge accidents weve seen of late showing Industry Experts here that this may not be the best way to move large volumes of crude. Not to say that pipeline accidents arent an issue as well. They are, but Companies Like enbridge are working on Safety Initiatives to get the incidents down 0 . Focusing on that spending billions of billions of dollars and Technology Like the smart pig is helping them do it. Cool about it as well, this pipe as being repaired is moving oil through it. This line moves 2 Million Barrels a day. Doing this smartly, and efficiently. Guys, back to you. All right. Jackie, thank you very much. Jackie deangelis. Great live shot. Great pink hardhat. How do you get those . At the Company Launches a takeover splitting up into two separate apps, dennis crowley, founder of four square later this morning on squawk alley. Dow is up 17. We never thought wed be farming wind out here. Its not just building jobs here, its helping our community. Siemens location here has just received a major order of wind turbines. It puts a huge smile on my face. Cause im like, this is what we do. the fact that iowa is leading the way in wind energy, im so proud, like, its just amazing. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. 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Tell your doctor if youve been to areas where certain fungal infections are common, and if youve had tb, hepatitis b, are prone to infections, or have flulike symptoms or sores. Dont start humira if you have an infection. [ woman ] take the next step. Talk to your doctor and visit humira. Com. This is humira at work. A quick check on shares of tesla, which are up over 3 so far this morning. Pacific crest nishgtitiating a. Elan musk, south texasbound. Building the worlds first private commercial rocket launch site in brownsville near the mexico border. Texas governor rick perry says the project will bring 300 new jobs to texas, and pump around 85 Million Dollars into the local economy, speaking of which were joined now by the mayor of brownsville, texas, tony martinez. Tony, welcome to the program. How do you feel about the project . I cant tell you how excited i am about this project. I think its a game changer for brownsville, for the valley and for the state of texas. Did you have to fight hard for it . Were there lots of negotiations . I mean, are big tax breaks on offer . How did you win it for texas . Well, geographically, we were well positioned to compete in this effort. Weve spent about 3 1 2 years putting together packages. I cant tell you that all of the incentives were the main goal of mr. Musk, but i think was a collaborative effort by everyone here in brownsville and the rio grande value, and theley and th incentives totaling a nice package which allowed him to come to our area. Do you guy, do the congressmen and the senators locally have to get more political . Because, of course, the big game for elon musk is to challenge the federal government giving up, is it 70 billion worth of space launch projects directly to lockheed and boeing over the next few years. Do you guys have to get in on the lobbying on capitol hill and try and get more business as the years tick by . Well, you know, i tell you what, i think this area and the musk organization is a perfect match. Now, as to what any lobbying efforts, or how do you go about challenging anything else thats going to other companies, im not quite sure, but i suspect that theyll be a a number of activities that will take on that were not even aware of at this particular time, but were ready. Mr. Mayor, did you meet elon musk . I did. It was a wonderful conversation. I did go to hawthorne and tour his facilities, and talk to his staffs, and it was quite interesting, and he certainly is a dynamic individual with a very futuristic and visionary look at life, and so it was fun. Yeah. I wonder if you got a sense of his view on American Manufacturing . Given hes been such a strong proponent of the gig georgia fact vi and now this in brownsville . Were hoehoping that will co. All the facility and manufacturing that comes with this industry, were looking forward to cultivating it and, again, ready for the challenge ald the opportunity, and looking forward to it. And if, mr. Mayor, at some point in the future he offered you the chance to go up into space in one of these rockets, would you take it . Im afraid not. And ill defer to my age, currently like it probably wouldnt be healthy. Yeah. Me neither. Good to meet you, sir. Thank you for your time. Tony martinez joining us from brownsville, texas, the new home of space x launch pad. An important job on planet earth. They would miss him. Want to check on a photo of the week, simon. Good to have you back. You were away at your sisters wedding. Theres another sara in simons life. Yeah. And that is his sister. Yeah. I gave my sister away back in the uk. It was an amazing thing. You know . Actually, one of the greatest days of my life. She is very much in love with her new husband rich. An amazing couple of days right in the middle of nowhere. An ordinary house. One of the most beautiful brides ever, i think youll agree. And you look beautiful as well. I was trying hard not to get emotional. The point we walked in. Dont break down at the beginning. At least give her away, which i succeeded in doing. Rounding out the hour, look at gains. The dow now up almost 40 points. S p 500 up about a quarter przage point and nasdaq up 0. 3 . Leading to the reversal in todays trade, obviously a fragile day. And over to you, carl. Did is 8 00 a. M. At t. Mobile headquarters, and 11 00 a. M. At post nine, squawk alley is live. Good wednesday morning. Welcome to squawk alley. Joining us today, Jon Steinberg bringing west coast action to the show. And from l. A. Today, with us on set, jon fortt and Kayla Tausche as always. Good morning, guys. Lots to get to. Two potential deals falling apart. First 20th century fox announcing withdrawing proposal to buy time warner saying the companys board refused to listen to its highly compelling offer and sprint dropping a bit to buy tmobile, getting Regulatory Approval was proving too difficult. What all of those companies are doing this morning. A big topic of discussion, kayla. The effect on the overall market these deals are being pulled. I would argue the takeaway now is that rupert truly is done and this is not some sort of diversionary tactic. Or maybe just choosing this route because everyone said he would push on until he