Understanding why viewers want us to compare results to last year, not to analyst expectations. We have 70 above. What does that tell you other than the Company Effectively managed where analysts were. We have no idea is it above or below. Intel, a third of their profit dropped off. In both revenue, and earnings, wouldnt you like to know how it compares . What if everything is down from last year in both revenues and earnings . Was it rich who was saying what you should be looking at is the number of companies that have surprising that shock you by missing by so much. Those are the ones who you havent really seen just objectively, it is hard to do above or below last year, there is always items, they sell businesses, so, you know, things are discontinued and makes it hard. The stock trade is based on where the streets expectations are. If they knew it would be coming down steeply, but if you knew it was going to be coming down steeply, street knew it was coming. Youre late to the game and the trade has been made. Maybe both would be good. Maybe we should start doing that, last year, getting out all the items and in comparing to expectations. Amazon, this is a volatile stock when the company reports, theyre still building out a lot of the still spending a lot of money to do what they do. Under pressure, disappointing in terms of Second Quarter results. Lost two cents a share versus estimates of five cents. Revenue just missed. And this is with amazon, 15. 7 million in a quarter. Keep that in mind. The companys forecast a Third Quarter is going to be below wall street expectations. That scared investors after the bell. The shares have been trading near or at an all time high for as you can see, for the last couple of weeks. It is almost a 300 stock at amazon. And, you know, looking into the actual numbers themselves can tell you, you know, why what was disappointing. A lost times not necessarily sales, that they built them all warehouses to get them to you the next day or whatever. Were work on the logistics. Tough to say anything negative for me about amazon. Out there constantly. You dont shop online, but it is the place that gets the bulk of my online and i think whenever, you know, jeff bezos has the same response, whenever anybody, i think, discounts amazon thats one youre going to, right . Apparently not. Go ahead. I know where youre going. To starbucks, it was a much different you needed to make a joke. Okay. I cant. Yeah, i wasnt. Lets talk about i got crickets. Lets talk about starbucks, it was a much different story for starbucks. The coffee house chain reported profits of 55 cents a share, two cents ahead of whats street was expecting. Global sales grew by 8 . The company says the fruit beverages and seasonal frappuccino ice drinke drinks h drive profits. Shares were soaring in the late trading. It is up by 6. 5 . Unbelievable. That guy. Starbucks founder and chowar schultz will be on squawk box later this morning. It seems like is it even two years since they were trying to find out if there is a problem with the baristas and whether they the sandwiches in morning. They were lost when he was gone. He said, i got to go back. I got to go back at 15 a share and see if i created this great company, like 15 a share and at 75 now. That shows you not all founders are great when they go back. The ones who are 72, oh, my. That just zynga post a loss of a penny a share, smaller than the four cents forecast by analysts. However, the bigger news from the social Video Game Company is that it wont pursue a license for real money gambling. Wow. Hmm. Don matrick, who replaced mark pincus as ceo on july 1st, remember this, says he needs at least three months to thoroughly review the companys road map. And he intends to bring the company back to basics. Now, shares of zynga trading at 2. 89. Here is the big story for you too. Activision blizzard announcing it will buy back nearly almost all of the vivendi stake in the video gamemaker. Company will be buying 429 million shares for nearly 6 million. While an Investor Group led by ceo bobby codic and cochairman brian kelly will separately buy 172 million activision shares for 2. 3 billion. This deal will create a new capital structure, which the company says will drive meaningful earnings per share. After the deal, vivendi will retain a 12 stake in activision. To this point, they had a majority control, 61 , they held for five years. Really interesting structure, though, if you look at the terms of the deal, theyre paying less than 14 a share for that. You can see that stock is up 10 , well above the price theyre going to be paying. I remember when this deal happened. Me too. Five years ago. Bobby codic could tell me, you know, he can laugh at me and make me like eat crow and stuff. It was something about the deal when it was done, or somebody valued some game at this unbelievable valuation and i thought this whole deal, it is not worth that much. Thats assuming it is and i didnt even understand how it was working and it was a big positive, and it absolutely was. And bobby codic is going to be probably got a billion dollars i would say. Well ask him when hes on, what his ez g hes got in his checking and savings account and liquid assets. Less than an hour. Get all your figures ready, bobby. Halliburton agreed to plead guilty to destroying evidence related to the Gulf Oil Spill that is already three years ago. Halliburton was the provider of the cementing services on the oil well. Remember it ruptured. The cement did, leading to disaster that caused 11 death and the biggest oil spill in u. S. History. Halliburton ordered workers to destroy papers about that design. Theyll make a separate 55 million payment to the National Fish and wildlife foundation. And sac capital expected to be arraigned today at 10 00 a. M. Eastern. Federal prosecutors filed charge against the hedge fund giant accusing the firm of rampant Insider Trading at an unprecedented scale. Sac became, over time, a veritable magnet for market cheaters. The sac companies operated a compliance system that appeared to talk the talk, but almost never walked the walk. And that is why today the institution itself, rather than just individuals, stands charged with wire and securities fraud. Just wait until that hedge fund goes to jail. Because it is not going to like its cell mate, its going to hate the food. They have decided they cant get steven cohen, so theyre going to go after his firm and the troubling sac case, can a criminal enterprise be headed and run by someone who isnt a criminal . When they send that hedge fund to jail, seriously, it is going to see what hard time really is. In addition to the fivecount indictment, the u. S. Attorney unveiled a separate civil complaint targeting all assets of sac and its funds, doesnt specify an amount. Could dismantle the firm and leave steve cohen with next to nothing. Well, plus, any of the customers who have stood by him and been loyal because they liked the returns over the years, they still have money in the fund too. This is an effective way, it shows you what the government can do when it decides to we know that. We know that. Joining us to talk about the case, jacob frankel, former federal prosecutor and former s. E. C. Enforcement attorney and partner chulman rogers. He joins us now with more. Jacob, what does that expression mean, the buck stops here . Where who it is an entity that was committing the crimes . Well, the answer the answer is there is a fundamental principle in corporate liability, corporate criminal liability in particular, which is that the corporations liability derives from the acts of its agents. The officers, directors and employees. So they dont necessarily need to tag steve cohen directly with liability. Because these six individuals, in fact, pled guilty, committed Insider Trading, that liability does rise up and take on the persona of the company, because in the law, the corporation is a legal fiction. Thats exactly that theyre saying is the corporation is potentially guilty for the Insider Trading, because of the acts of its analysts and traders. There is a guy in charge, though, and thats the guy that you that supposedly what is that saying, the fish rots from the head down. So the buck doesnt stop anywhere . Or they dont have him, they dont have had on him. They cant get it on him. Exactly, joe. Thats what were talking about on monday and wednesday. That is they dont have it on him. And instead of just stopping, now they have gone ahead and brought the case against the end take using the acts of the individuals. Youre talking before about the hedge fund itself sitting in jail, but i do think there are some other messages in here too in terms of where the buck stops. Remember, galan itself was never prosecuted. It was only mr. Rotman and all the people a converse of this. Is this troubling at all, jacob, that, you know, they could take everything steve cohen has and, i mean, i remember the way spitzer did things, do you remember that . Never brought a case that he could win and yet he right . And he extorted hundreds of millions of dollars in payoffs just because he could. Should we ever worry about the governments ability to do things like this . Or are they in the right are they doing the right thing sneer. Coming more and more to the point where we need to start worrying about that. I think in fairness there is a legal basis for this indictment. I do think there is a broader message that comes out of that, which is all this focus on the compliance systems. We have the sac administrative case for failure to supervise, which is to the notion that in the hedge fund industry, you really dont have the often the level of compliance of supervisory procedures that you see in the broker dealer industry. When the indictment came out, first thing were talking about internally about telling our clients is check your supervisory procedures, compliance policies, because that is something that they are going to look at. I think there is a real concern now, even more so, not just for the company, but as we were talking about on wednesday, the effect of cooperation. Here you have an institution, again, through its individuals who are cooperating all these cases, now not only is there a criminal indictment of the institution, but you also have the civil forfeiture case that even if the government does not want a conviction in the criminal case, you got a civil case for forfeiture, which has a different standard approved, burden of proof, and that could cause the run on the fund. You would hope that, you know, that someone wouldnt be the first im not talking about it wouldnt be the people that have political aspirations or vendettas against when he bought that art and sort of said that to regulators, that made a lot of people mad. And things shouldnt be done for vendetta, personal reasons or political aspirations. I guess it is not in this point. We have no reason to think that. But it is scary when the government has, you know, so much power to decide things. Joe, youre right. Youre right, analytically. Thats one of the reasons that doj was very careful in narrowly crafting this indictment, limited to Insider Trading. Not get creative and bring up the controversial rico statute. Not try to become expansive in legal theories as the United StatesSupreme Court shot down the notion of deprivation on services, used to target ceos and others in the sea sweep in the 2000s, the skilling conviction having been overturned with two others. I think thats why they crafted this case so narrowly. All right. Jacob, thank you. We appreciate it. Stay near a phone. We need to talk to you, like, every day on some of this stuff. Poor arthur anderson, right . Did you remember that . I do. Wasnt a guy. Wasnt a guy. Thousands of employees. Going to send him to but they didnt. All right. Right now, time for the Global Markets report. Ross westgate is in london. Ross, good morning. Hey, becky. Good morning to you. Thank you very much indeed for joining us. We got right now advancers being outpaced by decliners on the dow jones 600. Were at the low point of the session in terms of price action. Around 6 to 4, 2 to 3 right now. Ftse 100 yesterday down one half of 1 . This morning, just lower again, down nearly a quarter of a percent. Earnings still very much in focus, well get on to that. The cac quarante up a third. The xetra dax down half. The ibex outperforming for the second day in a row. The employment picture looking better than we might have thought yesterday, so up nearly 8 . You mentioned Activision Blizzard, and vivendi. Just show you what is happening with the stocks here in europe. Vivendi up 2 , will retain the 12 stake in Activision Blizzard. Dont forget, theyre going to get 8. 2 billion. The interesting thing here is they also sold a controlling stake earlier in the week and maroc telecom. Add the two together, they get 13. 7 billion. There will be question marks on what theyre going to do with that money. Maybe some of the other m a guys will be taking the view. Up 13 after gaining control of the company. Some other companies, renault down. 9 . It lifted its core profit, but a big sales slump in europe. They did get a rise in first half earnings only after reducing costs. Lvmh up 4 , battling a slowdown in china as we know, with results still positive. The firm reporting an 8 rise in like for like sales. And Angela Merkel doing okay for bas basics. A pretax profit of almost 2 billion. We keep our focus on earnings. Overall, equity is lower, heading toward the u. S. Open. Back to you. All right, ross. It is the weekend over there too, right . Yeah, we get a weekend as well. It is going to be they have people, though, dont they, im thinking how cute it will be for william and kate to have their first weekend with their so much fun, you feel like such a family unit, it is a pain. Hes taking two weeks of paternity leave. Do they have help, ross . I think shes doing it they might have a little help, im guessing they might have some staff somewhere doing things. But she was she made aing about deal of pushing some of the staff out when they got married. Whats that . The baby nurse . I was going to say the baby yeah, the best money you could ever spend is a maternity nurse. Thats true. In my opinion. Thats true. The soundproof wing of the you know what, she made a big deal, when they got married, they stayed away from the places they were expecting them to stay, pushed out the staff and was making dinner herself. The whole country has a little glow. Thats a cute little baby. Theyre usually pretty ugly, you know. That one is pretty cute. That one is pretty cute. Coming up, thanks, ross, were digging the seattle scene today. Did you notice that his name was George Costanza and Jason Alexander and this kids name is George Alexander . I didnt. Amazon reports results after the bell. But are both stocks a good buy at these levels . Well break down the numbers next. More from squawk box in a minute. When we made our commitment to the gulf, bp had two big goals help the gulf recover and learn from what happened so we could be a better, safer energy company. I can tell you safety is at the heart of everything we do. Weve added cuttingedge technology, like a new deepwater well cap and a stateoftheart monitoring center, where experts watch over all drilling activity twentyfourseven. And were sharing what weve learned, so we can all produce energy more safely. Our commitment has never been stronger. Welcome back. The u. S. Equity futures are indicated down this morning. You can see the dow futures down by 45 points. The s p off by 5 1 2. This is all coming after the market eeked out gains yesterday with the dow up about 13 . 13 points, i should say. The National Forecast from the weather channels reynolds wolf. Ill send it to you without any salicious talk ahead of time. Are you serious . Come on. You wont know what to do with yourself. A day without salicious conversations. Shes not going to mention the cover of the daily news, reynolds, which is same old schlong and dance. He cant see this and hes not in new york. Im not going to show you apparently this brought in a whole new aspect of this thing to me. He got photos back. Suddenly this doesnt there may be something to this whole tweeting. Thats not bad. Now im starting to understand. I did not set you up. We did not plan this. Anthony is not as dumb as he looks not as dumb as he looks. Hes got 22yearolds i mean, hes a perv, but not as dumb as he looks. Sorry, reynolds. Now. Your forecast for today, here you go, wow. Hey, guys, chance of severe storms across the nations heart section today. May be dealing with storms in places like chicago. You get some backups there. Nice conditions for you in parts of the southeast, Tennessee Valley beautiful. Still cool for you in atlanta. Chance of thunder boomers in the deep south and still have monsoonal rainfall over the four corners and scattered showers through parts of the northeast including boston and bangor, maine. New york getting a little better. Not so sure about the texting now. Just send it back you to guys and let you pick up on the headline. Wow. Yeah. Crazy times. Are you in atlanta . Where are you . Im in atlanta. You are in atlanta. Yeah. He doesnt get the daily news. You know whats filming now. Havent seen it yet, but i can tell you what ill be looking up online as soon as were done. Yeah, you are, arent you . Youre just as you know what is in production right now . An hour away from you. Whats that . Walking dead. Are they in production right now. Thats true. Thats very true. Very close. An hour from atlanta isnt really all empty with just zombies, right . That was ground zero. That was just the tv show. Just here sometimes in the early, early shift. Thats the only time you see any zombies. Im one of them, but later on today, you see people wake up. Not too far from the snl secn, but a great place. Before makeup, you dont look that much different than those people, right . You have a lip here. A lot of them thats the first thing that rots. Exactly. Guys im out of here. Take it easy. All right. Run away. You have fun with your next hit with some boring guy reading the teleprompter. If you dont appreciate this, we dont have to do this, wolf. Bye, reynolds. Have a great weekend. Up next, starbucks beating the street and raising guidance. The stock is moving higher and we have the coffee talk right after this. Plus, how healthy are profits at hospital operator universal Health Services