Transcripts For CNBC Squawk On The Street 20140819

Public, and we have some blast from the past sounds when he was talking with you, mr. Cramer. Yeah. Futures on the rise, and upbeat data on housing added to the positive sentiment. New Home Construction up 15. 7 in july, a rebound after two straight monthly declines. Building permits up 8. 1 , and meantime, Consumer Prices up only. 1 last month. The nasdaq closed at 14year highs. Yes, sir. I do remember march of 2000 quite well, actually. Yes. It was my birthday of that year that we hit 5,000, whatever it was. Right. Of course not to be seen again, will be a generation, but were getting closer. We are. The makeup then was different because it was cisco powering things higher. People need to remember the companies that cease to exist, and thats totally understandable, a couple billion dollar company, but the reason why things got awry was that the s p was infected with tech, radically overvalued, and at the 2,000, wow, it was bad, but there was a dramatic switch in march meaning the money went out of tech into Bristol Meyers and cocacola. People remember the period fa e falsely. We have companies not undervalued that are doing quite well. Its important to point out that the cisco, which i know a lot of people were not crazy about the quarter, but i liked it, the stocks up nine. Wrn you did. Cisco is rarely valued. Yesterday, they downgrade the sem semis. Youre valuing the companies at dramatically reduced multiples. There companies whether its workday or concur, add them together, put in really salesforce. Com, and they dont make up a tenth of what cisco is valued at in march of 2000. Incredible. Dont get carried away. Apple has past that mark in the past and is up almost 24 this year. Right. Talk about technology broadly speaking, certainly. Yes. An agreegs of market value. Good notes today, dont trade apple, own it. I6, wearables, and its done a remarkable job. People felt they lost their way. If i think that samsung lost its way. We dont talk about about it because it does not trade here, but the key story behind ams rise is the dramatic fall of samsung dating back from a very weird almost suggestion of there was a commercial that was the worst commercial i recall. We had the trivago. Talk about creepy. That guy, by the way, not as creepy in person as he is in the ads. Its the blueeyed thing. Looked better. Made me want to go priceline. That ad it was about suggestive about i was waiting for ro roofies. That was the peak of samsung. That said, well talk about it. I know a number of hedge funds here who own it because the yield is high, and the pe multiples extremely low. True. Not happy campers, because as you point out, the numbers have been not trending in the right drervegs. No, what happened, the ibm did that deal with apple, and i think in a lot of ways that was really an attack on samsung because you get that iphone in, and then you do a lot of other things, and this is look, talking about the anniversary of google and androird, its a successful story, but in the end, apple took share back. Apple got cooler. Apple addressed some of the concerns the street had about china, and apple left other companies in the dust, including nokia. Turns out that ballmer had a true call. It was the clippers. Absolutely. Heres going to make mark cuban look like hes bored. He wants to be a in shark tank. He would have survived. Only live twice, dropping in. Yes. Youre absolutely right. Hes dr. Yes, to, when it comes brook ballmer is better, classma classmate, friend of mine, is he like that . No, this was a much more subdued ballmer than i remember in college. Yes yo political concerns continue at the forefront, but today seems to be relatively acquiesce on the front, but it could change in moment whether its ukraine, cease fire in gaza extending, iraq, taken back from isis, so what . We just have to live with that. Merkels going to kiev. Remember in the months from march until september in 1938, british and the french were in the possibility of stopping hitler or delayed him, chose not to speak with the ceo of the czech and dealt with hitler. Merkel is into 1938. This is her period. Shes going to kiev, going to prague, not to munich. If putin believes theres a deal, if he believes the west throws away the businesses, hes got it wrong. This is merkel saying, look, listen, were wise to you. That means that i think that putin has to back down, and thats what were seeing. Wow. Thats a lot geopolitical strategy coming at us. Putin has to back down. Indicating hes rational. I think it would realize that the game plan has changed and theres not chamberlain there. The producer has the samsung commercial ready. Hes watching that awful creepy commercial with the guy watching the girl oh no. That was the peak in samsung. You had to go long apple. It was like apple at 3735. Well play it in a break. Home depot raise the the full year Earnings Guidance and Second Quarter profits, 1. 52 a share, revenues above analysts sfi estimates, had a 6. 4 gain in the united states. In the release, blake said in the Second Quarter our spring seasonal business rebounded, and we saw Strong Performance in the core of the store and across all of our geographies. When i hear that, okay, what is wrong . Where is the ching, is there anything . Frank was concerned. Theres a period which is their christmas, the planning season. I go back and forth with frank because i buy all my flats at home depot. They had a late season. Planting did not begin until may because of the weather so there was a concern things would not go right, but they had a remarkable late spring, and this is a fantastic quarter. I dont think he throws cold water on it. They made the efo, remarkable job. Home depot does not put stores up. They do not add stores, but getting more and more of each store, center of the store is tools, the outside is plantings doing well, and this is also encouraging for spending in the home, coupled with the home sales, meaning you have a real jackson hole so get ready, people at home, to be scared by the jackson hole who says the fed has to raise because of the housing number. Theyll try to scare you out of the stocks. Strap jr. Seat belts on. They make it six flags. They make a sea world. Oh, god, dont start with sea world. The ideologs make it sea rld, kill willie. Im joking. Sea worlds done nothing, they are good now. They increased sizes of the tanks. Theyve done everything. Like putting them in graduate school. Tanks are larger. Scholarships. The documentary still has impact. 9 00 a. M. Conference call on home depot, any reference to lowes . Lowes, look, the spring planting season was good. I go to lowes too. I didnt like the selection of the tomatoes as much as home depots. Home depot had the right selection. They understood that people wanted romas to can. I am not kidding. They were delivering fresh every day, and frank blake runs home depot the way walmart needs to be run. It is responsive. You get through the line very quickly. They are helpful. I actually told frank about a guy who helped me get my bask s baskets. Immediate response. It runs like a truvalue in lower manhatt manhattan. Or penbrook, and everyone is, like, this thing, wow. That pen just exploded. My, lord. I want to things are going crazy here. Sprint up in the wireless pricing wars or at least in way would be the wars of pricing. The Company Unveiling new mobile pricing plans that offer, get this, 20 gigabytes of shared data up to ten lines, plus unlimited talk and texting, 100 a month and pays up to 350 if you switch from the current carrier. This offer only applies if you switch. If youre current sprint, you dont get this offer, which interestingly is priced on the amount of data, not on the amount of lines. Up to ten lines means were not charging you per line. Interfamily, step family, what is it. Its about data. There is a price target, had a sale on it, but, look, if youre the man who through sprint under the bus, tmobile, john ledger, look at this, okay, this is a race to the bottom. Isnt this supportive of the fact make the fcc was right making it clear would not support the merger, that is it is going to be better . Yes, it is. This is what you have to do, and, in fact, the new ceo admitted you haved to do when the network is not up to snuff at the verizon level, compete on price. Some believed they would be more aggressive on price, and well see whether it helps to stem losses they had, and as i said, if youre a current sprint customer, you may be jut set the deal does not apply to you. Curious what the new ceo is capable of doing. Billionaire ceo. Started bright star, now fully owned or soon to be when they close it by soft bank, but supposed to be a forceful presence. In the meantime, american tower, brown castle, spa, these are the antenna companies, the patch work way that sprint has to build the network because they are not all over the country. The former ceo was always, come on the show, listen, if we could just blanket the country, we could have a shot. Well, they are not. They havent. Spent so much money from the worst acquisition in history. Up there with aol, time warner. Forgot that. One of the worse. Made apple look good, right . Oh, man, that was nothing. John ledger, of course, the interloper that, when he brought 79. 9 of sprint expected he would be. Ledger had this to say in a tweet, very active on twitter, as you know. Saying its a new day for data, but the same day for the [ bleep ]. Unbelievable. Is it right hes a ceo . Are you kidding me. Hes winning. Where would that company be . Hes the Steve Ballmer of the he is. He ought to own the browns. Tmo and sprint going at it and conceivably bringing down prices overall. Dont forget at t is in the midst of repricing the Subscriber Base last quarter. Thats happening. Theres a good deal of impact amongst verizon and a ten a tt. The phone bill is down. Your heating bill is down. Your electric bill is down. Your staples in the supermarket, we have now had corn come down big, beef peaked and coming down, poultrys come down since the sanctions, cotton had a fiveyear low. Cpi rose 1 month over month. Its nothing. Thats why yelp can continue to keep rates here. The ideologs say shes behind the curve. How much of the ideologs made you short the nasdaq and s p . Ideologs have thrown you off. When i say ideolog, im speaking of very nice people. Got it. Coming up, a wide ranging look at google ten years after the companys ipo. Shareholders had a lot to cheer about over the last decade. As we head to break, that samsung commercial we just referenced . Take a look. Haha oh, hey. Yeah, how is it going there, man. Incredible. So jealous. Have fun. Want to see something cool . Yeah, sure. Give me your number. Then he follows her on the ski slope. All the way back. Tracks her, and he stalks her, and, you know, this is a sign for advertising executives to say it does matter, our work. Yeah. All right. Well be back. Frightening. Back after this. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant recharge along the way. The green emotion project, funded by the European Commission is using the ibm cloud to make this possible by creating a single charging and Billing Network across 28 countries. So drivers can travel as far as they want to go. Take your business further with the ibm cloud. The ibm cloud is the cloud for business. Today marks the 10th anniversary of google going public. The company priced initial Public Offering at 85 bucks a share. Reverse dutch auction. Since then, hundreds of millionaires created, and they have become, of course, multi, multi, multibillionaires. Six years ago on mad money, heres what schmidt told cramer about the companys future. Google is growing. Were growing globally. We have a lot of new products coming. You talked about android, which i know you were interested in. Theres more stuff coming. Core search is not solved yet. We have too many answers. The web is getting larger. We have to introduce all of these other technologies and content and so forth into it. Theres a lot of new search coming. Search not solved yet. Went to look at the original letter of the origin nalorigina mobile only mentioned six time, and you look at the innovation at this point, and some you go, what are they doing . They warned you about that as well, but the core innovation, what theyve done in terms of changing search and adapting it, of course, to mobile and android, so many things. Brilliant. They missed social. Well, you know what . They can buy social today, and the amazing thing about this, they department know what they had. Eric is a smart guy, and used to beg for servers when i started the street. Com, give me the servers, but they didnt know what they had. They didnt realize how big it could be, and that was extraordinary, particularly because there was so many bears all the way up. So many people did not believe in this company all the way up. They fought it and fought it. Thats really kind of one of the themes of google. From the day it was a powerful tool from the beginning, jim, and also, by the way, always had incredible mar gyps. It was generational. See, were always generating cash from really the fair hi early days. But it was generational. Had to learn it from your kids. A theme is you had to learn ipads, ipods from your kids. You know, you had those who have kids understood these far better because you would get, come home, and the assignment for your kid in fifth grade, you were not allowed to use google. Why would you use this thing called google . Dad, thats because the answers are on google. Let me google something. You had to have a kid who got the homework assignment that said you must not google, and you realize, holy cow, they are on to something. Bought youtube for a billion. They have not monitored youtube. They could call the nfl, we want it. Oh, and that could very well happen. I think its the third most visited site out there. Could have been googing. Very well may be. A 4 billion market cap for google. Watching other stocks this morning. Up next. Cramers mad dash counting down the opening bell. Firstings though, more cramer on goog google. April 21st, my calendar says this is National Google day. I think google goes to 250. I like google, it goes to 350. Im raising the price target of google from 500 to 560. Google . Hallelujah im taking my old 6 00 target tonight, and i am raising it to 750 this is a total and unequivocal lowball estimate. I think googles going higher than. When i get it right. I want to celebrate it too. In todays market, a lot can happen in a second. 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. Taking up a lot of time, five minutes until the opening bell. Mad dash, a little retail . Yes, the expectations for home depot were high, and, frankly, beat it, but the expectations for tjx, so its the least emotional of retail beat it. See, when you see this, and then the number comes in just okay at comp 3, boom. You have a lot of raised numbers. The Retail Complex after macys took another leg down, and now were starting to see retailers do better. Dicks, tjx this morning, and home depot. This is a sector thats lagged. Youll see a lot of money pour into retail the next couple days. Dont forget, gasoline, i paid 3. 80 in a place i paid 4. 50 two months ago. Gasoline and natural gas came down so much because of the revolution, not because of the demand, even though the papers say its demand. Right. The papers are wrong. Its not clear to me that correlation is strong people seem between prices at the pump. Its a brent market, but set in texas because we have so much refined capacity coming on. Thats another story people dont want to talk about. I dont know why the heck i talk about it other than the fact its made people money. A good reason. Thank you. All right, a lot more coming up, aeropostal is up, the ceo. Yeah. And more from me as well on Family Dollar and Dollar General. Stay with us. Squawk on the street is coming back right after this. [bell rings] time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. You are watching ynbcs squawk on the street live from the Financial Capital of the world. Bell going to ring in 30 secs to start off this tuesday of trading. Yes. Quiet week, no doubt about that in terms of volume, at least they can be. A lot of people on vacation. Right. The streets are empty down here yet. Other than the tourists with the umbrellas. They have taken over new york city. That is every day of the year. Right. I think, remember, home depot is a real trend setter. We have a lot of positive almost every single even the negative retailers are viewed as positive in this prism. Urban outfitters i did not like, but it does not matter what i like and dont like. I dont know that thats the case. The big board, by the way, heard the bells ring, Child Abuse Prevention Program doing the honors at the nyse, and s p celebrating world humanitarian day. Im for those. You should be. When you give this up, focus on being a humanitarian. May be my goal. Right now, im too merchantile. You can be both i think. Stocks up with urban outfitters. You find this with retailers, they are not as bad as we thought. They said tat the end of the quarter, you saw urban. Anthropology was good. Theres a lot of congratulations of free people being good. Im not excited about urban. Get excited about dicks, which seems to be addressing the weakness in golf. Finally said, you know what . The be rest of the stores doing great, take the charge, golf, congratulations to the team there for recognizing were sick and tired of dicks being brought down by golf. Theres a look at dicks, of course, as you see, up over 6 . A big move. 5 billion market. Hung in there. Very competitive. A tough time with golf as you said. Should go to 72 or 73 with this, and kevin plank is the genius in the group, most competitive ceo ive seen. John ledger and kevin should get together. Yeah. Yeah. I mean, would be the t34 armor thats a soviet tank. Kevin plank or who is macho . I dont know. You dont see kevin wearing a pink tshirt, but mesh, black, protect this house shirts. Okay . He was the worlds sweatyist man, and hes changed that. Dicks is up. You mentioned restructuring golf, 150 courses close every year in the country. Has been gaining. Its not a growth sport right now. No. The fact that dick recognizes they went all in golf was a mistake, should have gone all in underarmour, foot ware doing bell, the bull market going on. Dicks got it right, will be fun to shop again. I hope. Used to be fun to shop there. It was . It was fun. My daughters a great athlete. Never step foot in one of those stores. Look at retail overall, aeropostale, the ceo, replaced, not a good quarter at all, small company. Used to be a big company. I know. Didnt take long to be a smaller company. Dallas retail. A 10 move when they do that. Theres a pulse. Is there a pulse in lands end . They are a good company. Screwed up. Sent you that i got another gq. Did you get the pornographic thing . A cover on it . A paper cover . Regular cover of a very pretty lady. Was supposed to have card board. She had something on. Lands end stock did not go down because the Management Team is good. They apologized immediately. One of the case studies where it shows you they addressed it well, and i think people are going to come and take Restoration Hardware up, only up a dollar, and that stock takes out the high. Were seeing a lot of retail, a lot of interest in retail, do not forget the gasoline purchasing power means a great deal for retail. Asking that question earlier because, does it . I mean, the correlation attack. We believe, still, despite what is much larger, for example, fuel economy Clarence Otis mileage, opposed garden ceo who had the best work on gas prices versus the check. 4 the level where people stopped going to al live garden as much as they did. Garden is interesting to watch, david, with the high yield. Bob evans, and thats this week. Bob evans, i believe, could have hillshire brands. Well, you could see a lot of directors replaced. Housing stocks have come alive with pleasure. Toll brothers. Smart guy. Seeing a lot of areas that have been dormant including banking, which is surprising because remember the rates did not go. I dont know whats going to move rates. The rates did not go up on housing, but banking doing a little bit betterment housing doing a little bit better. These are the airlines making a major comeback. Even oil making a stand here. A lot of groups that have been weak are getter stronger. Home depot off the earnings, up 4 , and as you said as well, lowes getting follow through on that. Appears up more than 2 . And, david, while youre away, ge went to 26. Yes, i noticed that, 26. 14. Thought that important to point out. Thats a big move, from 25 to 38 cents. Just pointing it out. Something i should be focused on for some reason . No, just a breakout in its own right. Its a 62 cents. We have inside jokes here, but i dont know, should we share well, if they sell the appliance business, that was a price target the other day. Someone instituted a buy while you were away. On ge . I was gone one day, by the way. It was a huge day and a thoughtful piece talking about gross margins, perhaps expanding for general electric. Top line was not bad. Right. Its interesting, theres a lot of things, rand did an acquisition. People dont like that. They want to see inversions, takeovers, they want to they dont want to see bold on acquisitions, ousting ge, what rand did, they want to see outright takeover, and youre not going to get those. Bhp down, the company, as was expected, creating an independent Global Mining Company Based on selection of high quality assets separating the businesses, they say, with the potential to unlock value, but there had been an exception was a significant buyback associated with that. Didnt get it. Didnt getting, stocks down. Minerals in mining have been low, baltic freight went over, thats the number for china importing. Dont write them off. Its a rotating correction. Thats the good thats corrected. And finally, just coming back to button up retail. I noticed shares of amazon, im not particularly weak at all, flat, but uptick this morning so far. Down 16 this year. We talk so much about amazon, though, impact on retail, and how people use their mobile devices, and not going to the mall, yet amazon stock down so much, i do wonder whether thats going to impact their ability to keep an acquire incredibly strong talent. So much in compensation at Companies Like amazon, and by the way, this is part of whats a virtuous circle for the likes of google ten year s today. The stock goes up, bring in the best and brightest, pay a lot in stock, hence the margins are so much better, and, you know, if amazon, big part of comp is stock, you do wonder how long they go down that road without putting more cash in. Talking about that with sales force. Do you remember, is that a real number . Thats right. Thats what youre talking about. That move up. Theres a notion last week on the Conference Call, and it was we have to spend a billion dollars in tech. I remember when Blake Nordstrom told me, why do you think people go to amazon . He says, they got the best Customer Service in the world. No, nordstrom does, i get a jw shirt. No, amazon. So, i mean, you have to spend to keep up with amson. By the way, amazon is a good spender on tech. Other Companies Buy tech, but not necessarily the right tech. Google is an important part of this, especially when you get a lot of Software Engineers as amazon does. Nordstrom is not hiring tech engineers. You cant amazon plants. Spring is not an amazon season. You cannot amazon starbucks. Look out, trucks going to College Campuses selling starbucks, another venue, they continue to amaze. A buy. Home depot, still, a buy. Lets get to Mary Thompson on the floor with more on whats pro moving this morning. Good morning. Modest gains for the markets, dow, s p, and nasdaq over the best levels of the day, and nevertheless, the gains in asia and europe in early trade, it is data here in the u. S. As well as good earnings driving the markets higher today. The dow up 38. S p punching through that 1973 level, an area of resistance yesterday, now up 3 points. Keep in mind, less than 1 away of the alltime high of 1991 and change. Nasdaq yesterday after closing at the best levels since march of 2000, extending gains modestly at 6 points. Broad based gains with the exception of drug stocks which are weaker. As i mentioned, its data and earnings driving the markets in early going, specifically the data received on housing today, that being Housing Starts better than expected, second piece of good housing news received this week, and watch thursday because then we get existing home sales. As a result, the Home Builders index continues the strong move off the year lows in july, extending those gains today. It is also spilled over, of course, into the Home Improvement space with home depot comes out with better than expected results, trading an al a alltime high, and lowes catching a bid from the news of home depot and lumber liquidators. They are performing well in the wake of the data released today. All higher across the board. The other group today is retail, not just home depot, but tjx with better than expected results, and Dicks Sporting Goods, saw weakness in golf and hunting areas, the strong sales in the rest of the units, and as a result, the stock up over 5 . Urban outfiters in line with expectations. The same story here, weakness in the brand its i should say primary brand, urban outfitters, anthropology, and free people doing better, but the company in line with expectations and shares up 3 . Elizabeth arden the loser, a loss for the quarter, celebrity fragrance sales down. We want to point out crude oil, a headline crossed about the iraqikurdish independent pipeline expected to be fully operational, i guess, by the end of the month with improvements that had taken some production offline, and as a result, we saw a pull back and crude ticked higher since then. David, back to you. Thank you very much, Mary Thompson. Big over bid yesterday, vacation day, joined you on the phone to talk Dollar Generals decision to blatantly enter the bidding for Family Dollar, acquired a deal with dollar tree, and cashed in at 74. 50 a share. Family dollars boards is going to be the Central Place to look for the next chapter here weighing the 78. 50 all cash bid from Dollar General, and what is it going to do here . Simply accept it . Will it not accept it . Well, what will it be focused on if, in fact, it says it does not believe its in the best interest of shareholders to move ahead with a general dollar bid. Despite the economics, its 4 high their the existing bid. People close to the situation is the board will meet this week. That could change, but the expectation is they will meet this week. From what im hearing, you can expect theyll reject the Dollar General bid. Where will they center rejection . My sense would be on any trust concerns. Oh, you really go there . Oh, i know. Because of the overlap . I know theyll go there. So smart. The New York Times will be in favor of the dollar tree bid. Im not kidding. Well, i dont know about that. Im saying this is a liberalconservative issue. Really . Yes, because there is an element that says if you cut the world down to two dollar stores, poor people will be doing badly. I have to agree with this, by the way. They were looking at this antitrust argument at Family Dollar. Remember, theyve been in not sell mode, awe activist in the shares in 2011, and garden got on the board from pelts, and icahn showed up years later, but they thought about it for quite some time. Lord knows how many times we discussed. Because they closed all the bad ones. When you go to the dollar tree, take a look. By the way, this was before dollar tree showed up, all right . Before dollar tree had jp morgan call, and say, hey, were interested in working something here. They had an economy consultant to conduct analysis from antitrust per speck tis, potential business conversations. What do you think they were thinking about . Had to be Dollar General. Definitely. On the ninth, company a is Dollar General, to say they discussed antitrust law. Where did you get this . I read the background. Antitrust law perspectives between the two companies. Company a said they preferred just a discussion. Dollar tree by june was in the mix going back and forth with Family Dollar about proposals, and finally, of course, on june 19 th, Family Dollars ceo made with company as ceo, who will stay on if the deal goes through, to learn the extent of interest, and company a said, not interested right now. What was that . That was the 19 th of june, announced the intent to retire in may of next year, now said hell be on if, in fact, the deal goes ahead, but antitrust is the key. They offered to divest 700 stores, jim. Theres a belief, seems to me, Family Dollars board and the consultant that its going to take a lot more than 7 00 stores to make them feel good about signing on to a general dollar transaction. To be clear, not doing a liberalconservative, but theres a concentration of stores that are very similar, Family Dollar, Dollar General, where you can really eliminate what would be a lot of price competition. Dollar tree does not have the same kind of merchandise. Right. Its important to recognize that Family Dollar, i mean, the Family Dollar has a great case to make, the dollar tree, Family Dollar, would not hurt the underclass in the country. Thats where they shop, and thats these are not amazonable stores with the price point so low. Eventually, the deal will get done in some way, in some fashion. Definitely. With the addressing of the antitrust concerns. Lets go to cme in chicago. Good morning, david. Intraday of ten year note that exactly at 8 30 eastern is when we made the high ye of the session at 238. Why is that significant . Because we have pretty decent starts and permits. Now, of course, existing home sales yet to come out this week. Might be the swath of the Housing Market to Pay Attention to and dynamic of multidwelling versus single family. End of chart in may, so many things jump out at you. First should be 345 above us is the key the market, and the break, how orderly is this . You want a filter for Interest Rates . The filter is the clotse, closig yields, you find ten closes in a row under 250. No violations above it. Now were working on the third close under 240. Treasury markets easy if you take out the white noise. Look at other Interest Rates, bund in particular, intraday slipped under 1 briefly, the 0 20year chart never traded at please levels before. Pound against the dollar. They had inflation, less elevated on the core in year over year, similar to our numbers, a bit under 2 , but they have a litmus test of tightening. So the pound was hit hard. Biggest chart, lowest levels since april. Euro against the dollar, fresh lows since september of last year. David, all yours. Time for a trip. Europe. All right, nobody knows how to hold a rally like Steve Ballmer, former microsoft ceo celebrating the purchase of the l. A. Clippers. Find out what he told the teams fans next. 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I talked to a number of nfl owners, and many felt its peaked because its on every night, whats the worth of the franchise . All they say is two words, Steve Ballmer. Changed the equation of how much a team is worth. Including even teams that looked horrible like last nights redskins and cleveland browns, one of the worst preseason games ive seen, but football business is higher because of how much ballmer overpaid for a franchise no one felt was worth anything near this level. I know. Steve, nokia and clippers. Shares of msg you want to watch too. Good point. Stop trading with jim coming up next. Stay with us. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. 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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. All right, time for stop trading. Interesting metrics from the home dee toe Conference Call with implications for other names. Yes. This is 10th anniversary of google. Frank blake, the on the call carol, a terrific ceo, says print will be less than 10 this year of the advertising. We all had home depot inserts, right . 36 from digital. 36 . That means facebook, go buy facebook no, thats terrible, google too, may mean twitter, but this company is forward looking. Homedepot. Com is terrific. Yoo ive used them, its dynamite. I used it for my inn. This is it. This is the tipping point. The tipping point. 36 . Print coming down, only going up, a great point to make. Piece of data. Important theme we know on the 10year anniversary. Google is interesting. Home depot is transparent. They tell you everything. Its incredible. This piece of data they are doing 36 of total advertising on line, bingo, there you go, the twilight of the idols, of even maybe what we do. Dont say that. Sorry. Whats coming up . Whats on mad money . All energy, all energy. I have wpx, and rick muncrief, the driving force for resources, and john schiler, disappointing stock. I did my show from the platform of of the gulf of mexico, and there we found out whats going wrong with wpx, whats going right, and remember onshore is doing so much better than offshore. As i said so many times, learn an incredible amount watching your coverage on energy. Thank you. Coming up, u. S. Consumer and rest of retail reporting later in the week. [ intercom ] drivers, to your marks. Go [ male announcer ] its chaos out there. 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Get the story behind the companys success with the author of the google story. Up 39. Son the dow, markets continuing a nice rally. Remember clocked 17 5 higher yesterday helped by perceived easing of tensions in russia and ukraine. Geopolitics and strong u. S. Housing report pushed treasuries to session lows, and yield at 2. 38. Well come back to that. Jack is executive Vice President and cio of vemo private bank, and the portfolio manage with lumis sales, gentlemen, good morning. Morning. Morning. Jack how far can the mark go, do you think . You know, i think upside is probably Single Digits just because we need valuations to keep pace. You know, if we get a second boost from the economy and earnings and revenues catch up, we can go higher, but i think so when you say Single Digits, what do you mean . The next 12 months, percentages, or talking about points . Im saying in the next 12 months, you know, year end, next 12 months, that kind of thing. You know, over the near term, the thing is were going to need some kind of leg, a catalyst, and its going to have to eventually come from valuation and fundamentals, and right now, you know, we have a lot of liquidity, and that im starting to see some evidence. In fact, i want to hear dan weigh in on this, starting to secret spreads wideen here even while stocks rise suggesting that liquidity is pulling back a little bit, and thats a concern for me. Dan . Dan, what do you think . I agree with the liquidity pulling back, big time. And part of that is seasonal here, people on vacation, but part of it also is really structural. There is on the fixed income side, liquidity in the middle of the market because of the changes. So on tight liquidity, small volumes, you move the market down. Somebody said over the weekend about the ten year, look, dont worry about the ten year or where you are on yields at the moment. People have blood on their hands from trying to be preemptive on a rally of yields for three years, and at this stage, its just basically mispriced. Would you agree with that . Would the yields on the ten year or send a powerful signal . Well, i think the signal its sending is here for the last year the game changed for the worlds Central Banks, not just their own, due to the stress in the geopolitical side, and starting late last year, the first signal of this was the bank of japan with their currency swap line with every country, and then as you watch Central Bank Activity since then and look at the front page of the papers, you get the sense that while in addition to Everything Else had Central Banks normally look at, they have to be very, very concerned with the geopolitical side, particularly in Eastern Europe and in the pacific. Jack, what seems to be holding us back is wages, price pressures, were just not seeing it as evidenced by the data. How do we have an economy growing 4 , interest streak of job creation since the mid1990s, and no inflation . Yeah, i mean, it is incredible. The fact is, i would have expected some inflation by now, but what weve seen is that, you know, that 3. 5 trillion created by the fed is winding up on banks balance sheets, great for capital ratios, but not lent out to the extent that normal recovery would suggest saying thats part of the reason why inflations lagging. Some of it is because of the renaissance of banks, and other is demand for borrowed money. We had a debt crisis in 2008, and, you know, borrowers are reluctant to take on more credit. We are dancing around the subject, jack. Bottom line it for me, if you would. If you think the equity market rices only a few percent over the next year, whats the advice to those watching now . Sure. Stay in for now, but watch the two critical measures that im watching are liquidity levels, notably credit spreads, and thats why, you know, it is a concern. Okay. Considering that they are widening while the market is rising, and also momentum. Okay. What is your central advice to people watching you now . Oh, patience. You cant i mean, the worlds a very uncertain place right now. Its playing out in the market, and i dont see any major moves here at all. There is slight upward pressure on rates in the u. S. , but not elsewhere in the world. Thats true. Guys, thank you. Dan and jack. Lets go to dom chu for a market flash. The mining giant is moving lower in the trade today, the Mining Company plans to spin off 16 billion worth of assets to shareholders in a form of a new company, but disappointed some without announcing a share buyback. The stock is down 3 on the days trade. Back over to you. All right, thank you very much. Another mover up next, home depot trading higher after Second Quarter results beat the street. The companys Conference Call about ending now. Well get you the headlines from that, also talk to the analyst straight off the call about what the companys ceo had to say, and whether its not too late to buy the stock. Home depot shares are jumping on a big Second Quarter beat thanks to strong seasonal sales. We are back at hq with more. What did they say on the Conference Call . Retailers lagging, but dont count the home store as part of the problem. Consumers are not buying clothing, but are buying Home Improvement merchandise. Home depot beat top and bottom lines, sales gaining 6. 4 , and upped the previous full year guidance by 10 cents to 4. 52, 11 cents above what the street expected. Traffic and transactions up more than 4 . In fact, Record Number of transactions for home depot. They are metrics notably stronger than what many other retailers have born able to accomplish, and many say, look, the market is behind when it comes to rewarding shares for two years of strength. Credit swiss agrees saying, wall street does not get it. Investors may be making up for lost time, and shares trading at alltime highs, theres areas of strength, including the core of the store, large appliances, higher cost pro, and seasonal merchandise and home exterior goods. Executives say they are most concerned about mortgage financing availability. Where there are bright spots in the Housing Market and home depot has been a beneficiary, it is certainly not blemish free. Thank you very much, and well pick up where you left a off with peter keith, just off the Conference Call. Peter, what did you learn about the call, any additional color to bring us from home depot . Well, as courtney said, it was a solid quarter above expectations. What was nice it was strength across the board, and that would be in terms of geography, across categories, and i think it really just well defines the strength of the Management Team and power of solid execution. Does that make you think . Numbers show 5. 8 comps, do you believe home depot can handle a bumpy housing recovery with this execution . Would not be immune to a slow down, but when you look at the strength across categories, youre still doing a lot of work inside the store to optimize the space. You look at a category like appliances they sold for years, and that was up double digits in the Second Quarter. What i look for is continued out performance. The overall housing space. Im sure it raises the bar for lows out with results tomorrow. Absolutely. Yeah. I mean, theres clearly been some historic differences between execution with home depot and lowes. I think investors will be optimistic if there was a weather bounceback for lowes in the Second Quarter, but tomorrow morning will be interesting as th might show if the Home Depot Team well executed. I love the home depot, and what concerns me is the stock price has not done well over the last year when all is said and done with the rally on the broader market, with the recovery in housing, however strong that might be, the call is what here for the stock . 97. Whats the catalyst to drive us 10 higher . Sure. Its a great question. I share the views on being a home depot shopper. I think that theres been some concern about housing metrics slowing for the last 12 months, which is fair. Housing turns over slow, and youve seen the multiple compress. Not seen earnings come down, and estimates animal have gone up. As we look forward, youll see the housing turnover numbers stabilize, and i think youll see the investors begin to come back to home depot rewarding the company for the solid execution and strong management. Is it all about new homes . I mean, dont most of us go to home depot when we remodel our own home without buying a new one . Thats right. When you look at the housing turnover number, its about 4 or 5 of total homes in the country. Really, the large majority of what drives home depots business is nonmover remodelling, and as long as home prices go up, thats the key Growth Engine to the business. The housing turnover slows a few points here and there, but the home price depreciation is the main metric we look at. Investors are curious to see how fast the Online Business is growing. Home depot has taken a number of initiatives to increase that. Is that bearing fruit . Last count, it was 3 to 4 of overall sales. Sure, thats another great example of what we view as really a Gold Standard in management execution. Its a small percentage of sales, probably always be small given this industry, doesnt lend itself to online shipments, but its growing 40 to 50 . I think this quarter it grew 38 , and its contributing a hundred basis points to the samestore sales. The growth is there, small, but theres impact. . Did we learn anything about the underlying strength in the Housing Market or in Consumer Spending . Home depot fits in with both macro theme, and both have been uncertain. Sure. I think where home depot, and we have a lot of respect for their view on the Housing Market, the industry in general is trending in line with the companys expectations. Turnover here is now beginning to stabilize, and home price appreciation slowed, but still up. The key point today is that Consumer Spending overall looked choppy when you look at the retail Sales Results across the earnings announcements, and the fact these guys put up nice same store sales growth, consumers are putting money back into the home, and that continues through the end of the year. Good construction numbers in the Housing Market as well. Peter keith, thank you for joining us. 97 price target on home depot. Up next, an exclose uf with Maria Sharapova, building her business off the coast, and fourtime champion, rory mcilroy says golf will survive. Well be right back. 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 . [ male announcer ] whether youre new to medicare or not, you may know it only covers about 80 of your part b medical expenses. Its up to you to pay the difference. 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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 the u. S. Open kicks off in new york next week, but Maria Sharapova has her mind on business outside the court. We have the popup store in midtown manhattan, and we have the success of her candy business. Were very happy with the sales. Weve been in over 26 markets in the world with exclusive distribution deals, unique after being on the market for only two years. We still kept it minimal, and, you know, very unique too because when i started this, i wanted this to be a very unique project and Something Different than what the market has seen in the gummy world, and we created that, and thats created this reaction. Ive been able to experience a lot of different unique things in my career, and i learned so much from each and every one is a process. You meet different people that are experts in their feels, and ive learned an incredible amount ive been able to bring to sugarpova even though i dont know half the business, but i learn so much from the people in the candy industry, but overall, its still having a lot of passion for my sport and what i do, but off the court, being able to enjoy different ventures. Sharapova, of course, the highest paid female athlete in the world, estimated 29 billion last year, 23 million from endorsements. You were transfixed by that. Ive seen her play at the u. S. Open, and shes a great player. Strong player. She is. Very well spoken. I noted how theres not a trace of a russian accent. Interesting. Shes, according to the interview with self magazine, she has soup for lunch. Ive had that candy, its amazing what kind of Business Empire she has while playing tennis. Nothing wrong about a tennis star promoting candy . No. Shes in skin care lines, endorsement deals, but sticking with sports. Tiger woods and mcilroy unveiled nikes latest line of irons, vapor franchise and speak on the state of the golf industry. Chu sat down with the number one golfer in the road, mciroy, must have been a good deal for you. It was. He has an irish accent, and its still there, a charming one. Hes the man of the hour, a man with a hot hand, and when he talks about the game of golf, theres no secret its been in a secular decline, if you will, from Dicks Sporting Goods saying the sports industry, the sales, down, and weighing on some of the stocks in the marketings but rory mcilroy spoke on what he sees as the future of golf and when he thinks his role in the game will be. Take a listen. People that are playing the game, the numbers are slightly down on that, and whether thats just because of the demands of the modern world, modern life, people not having time to play 18 holes of golf, golf is a great game, and, you know, its a game that i think people still want to be involved with, and do i feel i have a responsibility . In some way, yes. I feel, especially kids, can be inspired by not just what i do on the course, but i was inspired by tiger woods, and these young kids might be inspired by me or rickey fowler, the young guys coming up. We have some responsibility in bringing the Younger Generation into the game, but i feel like the game of golf will survive. You are the golfer of the moment. You got the hot land. How does a golfer like you keep that going . What are you doing personally to make sure you have the longevity to make that career in golf one of the great ones in history . I mean, im not im not thinking ten, 15, 20 years down the line, but thinking the next week. Taking this week by week. I had a great run so far, and i want to keep that going. You know, ive you know, ive played great golf over the last few years, got the four major championships, but i just want to keep the stretch of golf going as long as i can, and theres no point in me trying to think five, ten, 15 years down the line because i dont know whats going to happen next week. I just try to make the most of every week i have and go from there. Now, like you guys know, nike golf is a small portion of nikes overall sales. Still, nike golfs leveraging of big personally like rory and woods is carrying across the lineup. This series is pinnacle for nike, and they have taken it to the golf side of the business. Back over to you guys. Why dont young kids watch golf . Why not as popular as it used to be . Because tiger is injured and not as good as he used to be . No, i dont think its that way at all. Rory spoke to that want maybe this young generation can want squeeze so much in a busy day, like a six hour round of weekend golf. Golf is played, by middleaged, slightly overweight white guys. That does not appeal. Rory is not middleaged. Or dom. And sharapova, you know, theres a different demographic, surely. Its a different demographic, but that does not explain when woods was in the hot streak, the game of golf hit alltime highs in popularity. He was the hero, for sure. You sure . Youve seen that in the sale of adidas, and across the country. Right. Adidas had great years for golf. Taylor made part of that tha group did. They are seeing sales on the decline, but theres no secret. I mean, golf is hitting a rough patch right now, but if you look at the way the pga championship played out this past week, right . Cbs said their ratings went up 36 from the last year, and were at a fiveyear high. You need a good amount of protagonist main characters, guys, to get people interested in golf again. Protagonists. Maybe you can do it with mciroy. Thank you for the conversation. Do you watch golf, david . I dont watch or play because its hard and takes a long time. Your career would be better if you did play, though. That actually is true. That is true. Another topic, bitcoin hitting the lowest value since may. Are new regulations on the Virtual Currency taking a toll . More on that giant move after the break. And we are live from googles headquarters, more on the tenyear anniversary of the historic ipo when squawk on the street returns. , 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. 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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. Were one hour into trading. A look at whats moving. Heres what we are watching. Retailers are certainly on the move, some of the biggest today, urban outfitter, t. J. Maxx, david, had a nice quarter. I continue i mean, this is a stand out in the retail word, not just among Department Stores slumping, but among the competitors, filings basement, they all went under. To be fair, t. J. Has not had a great year, and there was a lot of disappointments so coming into the quarter, expectations were not overly high, but they did a good job beating those, and therefore, the stock is rebounding, but down overall for the year. And outperformed, aeropostal has new ceo. Lack of talent in retail, having to go backwards. Yeah. Just that the old guy gets it and the new guy doesnt on some of these businesses . Or they come in to clean up the mess, i guess. Jcpenney, proctor and gamble as well. Theres a glut. Great talent leaves the company rs but theres a small circle of people whom others believe are the only ones. Maybe its stability. This is the guy that built aeropostal to what it was, you know, now i dont know. Were also watching afterle, we should say. I guess actually not far from a hundred dollars a share after the stock split. I guess middle of september is when well get the new iphone launch. Might be the point which you decide buy heading into the fourth quarter. Correct me if im wrong. Yes, leading up to it. The stock tends to peak before the launch, but a lot of enthusiasm and momentum into the big launches, the sapphire glass, everyones talking about, the harder glass that does not break, giving momentum and enthusiasm and people are due for the product refreshes, upgrade to the new model. Shares of Elizabeth Arden on the move. Disappointing results, the celebrity fragrances not selling like they used to, down 25 right now. Just closed a stake from roan capital, not doing much to lift shares. Arden trying to get back to profit the to cut costs and all sorts of things, but could be taking several quarters. Sharapova selling candy. The business valued more highhig highly than arden. Shares of sprint down yet again today. That stock has been in nothing short of a freefall, of course, since the potential deal that we talked about endlessly for over a year to merge with tmobile, fell apart when they said, you know, were not going to get there in terms of rial believing we have what we need to get the sign off from any trust regulato regulators. Sprint shares owned by soft bank, and todays news, of course, a new pricing plan, not pricing lines, but data, and they are doing so at a much more favorable rate than the competitors, but they have to because of their network not in good shape as at t and verizon. This may go to the point made by the fcc and commissioner wheeler when he really made many of us believe im not going to allow the deal to happen, that being tmobile and sprint because we need competition. They have been aggressive on the competition, and sprint entering that with a new ceo a couple weeks ago. Which price is better, sprint or tmobile . Well, ledger do we have the tweet from earlier . I dont know if we have it. Been extraordinarily aggressive in terms of pricing. The sprint plans interesting, offered to those who would move from their current carrier. If youre a current customer, its not available to you as of yet. A hundred dollars for a good amount of data and up to ten lines. I can no longer operate on a cnbc smart phone. I need my own. Whats the cheapest plan for that. I dont know. Ledger says go with him, new day for data, but a new day for [ bleep ]. Not good coverage there . Hashtag sprint like hell. Woah. Hes not one to have a lack of words. You get Better Service with verizon. The cap dwarves the other two, hence the idea to gain real scale you need a merger at some point, some day of tmobile and sprint. That said, its impossible to actually drive in a car on the west side highway and maintain an at t line all the way up. You still drop. I dont drop on verizon. A man like you should have no concern about price, however, simon, just Network Quality to drive your decision. Only the best. Good point. Can i mention you have a plan, i expect. Ill let you know the highest rate to offer you the best service. Thank you so much. Bitcopy, waiting all morning to talk about it, falling sharply in recent weeks. There was a flash crash in bitcoin everybody talked about that happened yesterday where the price dropped 12 on one exchange. Zoom out, remarkable, the stability. The price has fallen over the last few months, i mean, levels at 500, and the reason we have not been talking about it because its remarkably stable. Moved by 20 peak to trough in one week, and thats stable . Stable if youre an investor in bitcoin, youve come to expect this. Investor in bitcoin . Its not a wildly popular investment, but it is attracting more. Youd be better youd be more certain of getting 50 on a roulette wheel red or black. Its not true. Regulators looking into it, and some say thats why the price is under pressure. Bit licenses announced here in new york. The superintendent here. And theres others. You see the fact hes doing a license as, woah, must be safe then. What hes saying, well, ill put checks in to get us to stay j. Its not, you know. Its not an endorsement. Trying to make it safer as its popular. Overstock telling rioters they sell 2 million in sales since january. It is bursting more in the mainstream. It needs regulation. They cant hold it, they can convert it into dollars instantly. The point is its attracting users and shoppers. We can fight about this as long as you want. Thats why you were excited to mention it. In new york, hyatt unveiling the global flag ship for the Luxury Hotel Brand taking up the first 25 floors of the Apartment Building in central park, the park haytt charges 9 00 a night, the largest on the market. Mongs other giants selling hotels to return extra cash to shareholders, hyatt, controlled, paid 390 million in cash to buy this hotel. Thats 1. 8 million a room, which im told is an industry record. Now, Landmark International trophy hotels tend to be marketed to rich foreigners or sovereign wealth funds. Here, too, its widely reported now that the sultan of brunei may buy the plaza hotel from a jailed billionaire in india raising cash to post his own bill. The sultans other property is the Beverly Hills hotel which leno protested of instructing strict sharia law. He might buy the downtown dream hotel. You know, construction work in the apartment, i had to stay at the dream for a full week. It is a nightclub hotel. People are screaming down the corridors at 2 00 or 4 00 in the morning. I thought you would say the dream was a nightmare. I enjoy it it was a nightmare for me at a bachelorette party, not a good experience there. A hotel owned by a man who institutes strict sharia law . 900 for the park . On average, goes up to 1300, but there are big suites. Hotel rates in new york are high, arent they . Average price of the room is not whats interesting luxury was the first to rebound, saw that out of the crisis, and more recently, because it made gains, its not grown as rapidly in average revenue per room as some of the lesser categories, david, in answer to the question. Right. On 57th street . The 157 building . I believe so. A lot of artwork in there. Apparently, the pool is magnificent. Ill have to check it out. Have not been invited to the opening party. One can always hope, simon. One is always hope. This was the scene ten years ago after google went public. The man who literally wrote the book on google up next. Drivers, to your marks. Nte] go [ male announcer ] its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2015 mclass. See your authorized dealer for exceptional offers drivers want to go further with their electrical vehicles. 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A soaring share price, every deeper bench, and as barry diller put it, the ability to vacuum up money. Its been a hugely successful decade for google since going public ten years ago today, but after a search, google glass, and now what will google look like ten years from now . On the cnbc news line, author of the google story from 2005, Senior Adviser at new mountain capital. A good question, david, given theres so much going on when it comes to new projects, fancy projects. What is the vision of google from googles eyes in the next ten years . Well, googles vision is to organize all worlds information and make it universally accessible, and that means, as you look to the future, youll see google with the operating system that will be using in cars, itll be providing information there. Youre going to to see google doing a mammoth job in health care where itll be possible to google all aspects of your own personal health and your jeegen and be able to see google in places that you cant even imagine today, and if you look back ten years, who could have predicted that google would go from 2000 to 52,000 employees. That google would go from 0 to be the third most valuable company at 400 billion behind only exxon and apple, and that google would go to, this is a remarkable figure, 1 trillion clicks per year. 1 trillion clicks per year. Well, david, you wrote the book not long after the company went public. Im curious having assumed watching the dissent over nine years since your book came out, what surprised you the most . Well, what surprised me the most is how well google stuck to the original mission and how carefully the company has cau t cultivated and kept its culture in tact. I mean, you have to go back to the beginning to recognize that you had two cofounders who met at stanford, and they invented the search enjoin, google, not to make money. They did it to please themselves. They were unhappy with the quality of internet search, so they went to the professor at stanford saying were going to download the interpret so we can search it better. The professor laughed at them. They did it. They built a better search engine, and they wanted to stay in school. They were reluctant entrepreneurs. They wanted to continue to get their ph. D. S, and the licensing went out, the microsoft, digital equipment to yahoo anybody could have picked up the Google Search engine they invented for a few hundred thousand dollars at most. Nobody gave them a dime for it. All said search doesnt matter. It is an amazing business story. My question would be for how long they can maintain the position they have when they become really a less neutral arbiter of the internet day by day. You know, promoting their own content, their own listings, prioritizing those that paid more to get a better space on the page. I mean, for example, in the journal today, theres a story about how their vepture capital arm invested a huge amount in uber. Go on google maps, you get an uber connection where you are. They do not pay for that, but they made the connection, and its to the detriment of lyft who are not listed at all. What does that say about peoples willingness to use it . Its an outstanding question, and it goes to the heart of the biggest risks facing google, which is potentially arrogance. When you grow to be as big and powerful as google is, your biggest enemy can be yourself because you can throw your weight around too much if youre not careful, and if they go too far in that direction, they will use users because they are not giving relevant search results and lose advertisers as well. In a way, its a self it could be a selfcorrecting mechanism if they stay focused enough on user and focus enough on advertisers. Despite complaints like that, they cleared regulators for all they are doing, continue to be the subject of it in europe, but the key that you hit on there is that when you become big and powerful, you throw your weight around, you got to be careful because we know what happened to at t. They got broke up as a mo notary public ply. We know what happened to microsoft. They hit an antitrust investigation. The biggest risk to google is that google, ewe knyou know, flo close to the sun and crashes because it did not check itself in having a laserlike focus on user, and laserlike focus on advertisers, so, you know, youre right on the correct question. Theyve got to be very careful treading on that water. Well leave it there, david vise, valuable to have you on this anniversary, author of the google story. I have a quick secret. Quickly, please. Sergey and larry have a secret pact, agreed to stay with the company for 20 years, larry paige is the ceo. Sergey does his thing, were in year 16, stay tuned to see whether they stay with the company four years from now. They told this to you . How did you learn this . In the course of the research for the google story, they agreed 20 years they would be there. And i was told this by people very, very close to the it two of them, and what weve seen is larry paige is the ceo, calling the shots at the company, and that sergey drifted from the core of anything involve the with daytoday management, but more on the creative and idea side, and a really interesting question will be whether four years from now im confident larry page will be the ceo and stay in that job, and the question is, will sergey remain there as well . And, yes, i learned that, you know, i learned that from the heart of google. Wow, well, thank you for sharing that with us. Investors would be interested to learn that as well. David vise, author of the google story. A lot of people make promises or partnerships that do not last, lets not forget that. 16 years from 1998 meaning four more years. Its a question. Hey, remember this yesterday . How could we forget . I could not. You enjoyed it, i thought. Too much, right . Yes. Simon took on the challenge, and they are responding. Well show you the ice bucket challenges a little later. Were back after a quick break. [ woman ] the cadillac summer collection is here. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. Hurry in this exceptional thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Welcome back to squawk on the street. Ryne sandberg here live in the great Trading Floor in chicagos cme Trading Group floor. Welcome other guest, richard farr. Thanks for taking the time. Thanks for having me on the show, rick. Already. Inflation data today and a couple of things i noticed. The first is that headline year over year now, fourth month in a row where its at our higher than 2 . Any thoughts on the cpi data today, rich . Well, sure, rick. I mean, look at the cpi data a few areas where inflations been coming from. Health care expenditure up, costs up. 2. 6 year over year. Energy costs while coming down, up 2. 6 year over year as well. Interesting, as you see housing up pretty much the same amount. As you say some ports of data inflation picking up other parts are going down. Like apair many, for instance. Apparel prices dropping. Seems the consumer will accept some inflation in some areas, but not accept it in others, and overall, even though cpi has been rising, its starting to moderate about 2 . There was a time, rich, let me interrupt you, when equity was the big thing. Savings the big thing. Now debt is the big thing. What do you see on the consumer side regarding debt . A great question, rick. We saw other data today. Thats real wages. Real wage growth is up 0 year over year. There is no wage growth on a year over year basis, when you inflation adjust. Think about that. If the consumer is seeing prices increase in other areas of their bucket of spending, theres only one way to keep up, unless you cut back, and that is through debt. Interesting over the past couple months youve seen a pickup in revolving credit growth now p. So its not getting a raise, when somebody sends you a new credit card . Thats the sense i get sometimes. Stay on the earnings notion. So the feds target level for inflation is arbitrary as it may be at 2 , maybe it should be 1 . Are we doing the middle class any favors . Look at the areas in the sectors doing well. Highend real estate. Highend apparel. Highend collectibles. Highend cars. Highend hotels have come back, simons been talking about. What about all the other areas . Rick, i feel like i should just say amen to that. Weve been on this tangent for a while. If the banks arent going to have a run, if t. A. R. P. Saved the banks, likes like it has, we dont see a reason whatsoever why you couldnt allow disinflation in the economy particularly to hil out seniors struggling with the inflationary pressures. We have to cut it there. The fed reserve system, 100 years old. Tried to see how much inflation in the dollar since created. Only 2285 . No big deal. Thanks for showing up. Back to you. The days of inflation, rick. Coming up, a former apple executive as the stock nears 100 a share. Well be right back. 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If youre still just managing your symptoms, ask your gastroenterologist about humira. With humira, remission is possible. [ squeaking ] [ water dripping ] visit tripadvisor hawaii. [ whistling ] with millions of reviews, tripadvisor makes any destination better. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. E financial noise financial noise financial noise financial noise and we have returned to the scene of the crime here. Yesterday, of course, i took the ice bucket challenge. I, in turn challenged priceline ceo darin houston, march yote ceo and nick woodman and gopro responded. Take a look. Yesterday morning on cnbc squawk anger simon hobbs challenged me to the als ice bucket challenge. Cnbc and simon, i accept. After i take the plunge, i get to make a few challenges of my own. Im starting with my High School Buddy and cnbc reporter josh lipton. After that shawn white. Finally, what the hell. Brad pitt. Lets do this. Check that out nap is the ceo of gopro picking up the als chirty ice bucket challenge and brad pitt and josh lipton in the same sentence. So it rolls on. I like to think of josh lipton as our own version of brad pitt. Many say that. May be getting priceline coming through on the kalg. Done it in amsterdam. Kelly evans, maybe able to put that on in your show. Welcome to squawk alley. Yes, thank you. That gopro video will be hard to top. Good morning. 8 00 a. M. At google headquarters in mountainview, california, where ten years ago today, along with the rest of the world, they were watching this. Six, five, four, three, two, one [ cheers and applause ]