Gaza, the vix up 35 . The markets on high alert. Well take a look at 2. 50. The dow during yesterdays session tried to hold up. Earnings have been pretty good. Yesterday Morgan Stanley was pretty good. Were always going to move on geopolitical events and yesterday a lot of people were just saying, can we do in this entire day we need a doover because a lot of disturbing things happened. Theres the vix, closing up 32 after trading even higher. Now some levels, obviously, but in past breaks, the vix has gone right back down. Well see whether thats the case this time around. Take a look at oil. Thats pretty well behaved, given all this everything happened in the world at this point. But still over 103. Here is the tenyear. The now 2. 48 , which you would expect as people move into the dollar. 2. 44 yesterday, yeah. Rushed through that to buy u. S. Securities. And then there is the euro and the pound and the yen. Check out gold. Which, you know, has been just difficult to really figure out. What beat which drum gold is marching to at this point. Theres been plenty of things happening. Its been tough to move it higher. Theres a lot of factors. Mostly probably that the at least the Second Derivative in the United States is away from more simple Bank Accommodation and thats what had gold the anticipation of it i think moved it up to near 2000. As you get over the peak, they slowly start pulling back, gold has been unable to get any right. The crash in ukraine, that plane crash, the gaza invasion, both developing stories this morning. Michelle Caruso Cabrera has the latest. Weve got people in those places, but the basic headlines, 298 people on board dead, plane shot out of the sky. Tea thats what u. S. Intelligence sources believe what happened. Exactly who . The focus is on russian separatives. That is not deaf innive at this side. Ukraine is blaming the russian separatists and russia is saying, well, if this mraep was shot out of the sky, ukraine is to blame for fighting against the separatists instead of trying to work on peace. Thats the wording thats come out. Putin said it happened on ukraine territory. That was his right. And so what does that imply . Well, no matter who did it, theyre saying dallas beg piece in the journal, putin, the only one at this point that already has assigned blame to someone before right. None of us know anything except what weve read and seen on tv. Thats why its impossible to say anything at this point . Right. Just that we know it was shot of the of the sky. Nbc news believe it was a russian product that shot it out of the sky. 32,000 feet. I dont i cant imagine. Something going that fast and how do you even do it . Does it track it or do you have to aim it . Its locked on. You see it on a radar based on guests we had on yesterday. No american passengers identified so far though plane, but 20 people so far, we dont know their nationalities. Malaysian airlines this movens defending its use of the routes saying Many International flights have been using that route and announcing they were still waiting to find out 20 different individuals. The russian market got hit yesterday already because of sanctions that had been announced before. The russian ruble has gotten hit, as well. Were showing you chart of the dollar here. The dollar has strengthened dramatically against the ruble. You can see it is off the highs. The ruble is coming back just a little bit, but certainly a huge move there. Lets show you whats happening with israel, which is the other thing that happened very late in the session. It looks like the u. S. Markets actually might come back, then the gaza offenses started. Yields struck even lower on the ten year. Theres been video handed out by Israeli Defense forces showing this night vision video. This is actually live video that we showed last night. These are flares, rockets that have handed out some night vision video, as well. They are saying theres 15 pounds as a result of going into gaza. The palestinians are saying there are 19 dead and israel says they have lost one soldier in this process. Benjamin netanyahu, the Prime Minister of the country saying within the last hour, that they are ready to expand the offensive even more in an effort to clear out tunnels and rockets. Implications of both these stories, i think number one when it comes to the malaysian plane, more sanctions against russia if its believed that they were supplying separatists with the military equipment that made this possible. The second, much broader and scarier thought is the movement of weapons around the world, what if the terrorist group really did get ahold of a surface to air missile, right . Nobody has taken credit for this, which suggests whoever did it made a mistake and did not want to do this. Right . But what if there is a you saw this just weeks ago with the missing uranium thats gone, with the idea that it is much toughtory contain when youre not talking about an eastwest standoff alone, when there are terrorist groupses, not separatist groups nonstate reactors like what weve known in the past. It seems there were some separatists that seemed to be celebrating shooting down a cargo plane. But you dont know. You do not know at this point. As far as israel goes, they usually are very tactical about this. They go, they know exactly what they want to do and they usually dont stay longer than it takes to accomplish you were talking about thoughtses of boots on the ground, not hundreds. Five years has gone by very quickly in our lives now. I didnt know it was five years ago, but last time you worry about a ground offensive, but shall theyre limited and theyre calling this a ground incursion, not an actual invasion. Michelle, lets get to sri. He is in kuala lumpur, where the jet was supposed to land. Sri, what can you tell us . Well, i can tell you that this is a huge blow reputational damage for Malaysian Airlines. Remember, its only trying just now to recover from the aftermath of mh370, still unresolved, biggest mystery in aviation history at this stage. Now with this. There is a palpable sense of despair after disbelief after whats happened here. And now, i suspect that that upset and that grief is going to turn quite quickly to anger. A lot of questions are going to be asked here as to whether this disaster was preventable. Why in the first instance this aircraft, a commercial airline all right. It sounds like we are having trouble with sri. Well get that connection back up and running in just a moment. Joining us with the latest on the Geopolitical Impact of the Israeli Offensive in gaza and the crash of Malaysia Flight 17 military analyst colonel jack jacobs and matthew rajanski, director of the Russia Program at the wilson center. Colonel, i know the president expect to Vladimir Putin yesterday. Was it before, during, after . I cant imagine when a conversation was like on either telling him we just put in much tougher sanctions or what happened here. Do you know . Do you have any insight into that . Well, the information we have was that it was during or just after and it was putin who told president obama that the event had taken place. Theres a lot of consternation in washington because it appears that the intelligence community, certainly the National Security apparatus got caught flatfooted by this, didnt know that, and had been instructed bit by putin is something of an irony. So apparently our president found out about it from putin not long after the event kerd. I didnt know that. Matthew, is that what youre hearing, too, and the nsa knows so much about so many things and so many people that this really was not on their radar, so to speak . Pardon the expression. Well, i actually thinking that theres been a lot of information coming through Eastern Ukraine directly. Remember, were living in the 21st century. Youve got social media literally on the ground posting in realtime. Then you have the interest of the various parties involved. You have the russians, the pro russian separatists and you have the ukrainians themselves, all of whom are constantly sending information to the left, including directly to washington to try to persuade us to viewing things according to their preference. The bigger problem here is the needle in the haystack, how do you figure on out whats Accurate Information and whats coming out in the last 24 hours in that respect has been fascinating. If its true, number one, that the rebels captured a piece of Ukrainian Defense equipment last week, they tweeted about it and their official tweet and then it was taken down. If thats true, it supports Vladimir Putins case that this was not a russian action. The russians may morally and politically separate the russ n russians, but if the russians were not calling the shots, the Silver Lining of that might be we can work with the russians to try to get a ceasefire and to try to do an investigation, kind of give them that off ramp that gives them plowable deniability and give them some face saving. My concern is that we created, what you guys showed about the markets indicates perfectly where the default attitude of the International Community is. Hey, we have a confrontation east and west, lets ramp up sanctions and find a guilty party here. The reality is were going to have to work with the russians, somehow or other, to bring the situation in Eastern Ukraine back under control. Theres tremendous domestic pressure on the ukrainian leadership, poroshenko is still fighting for stability to be seen as the rightful heir of the revolution. Theres huge pressure on him i think to go guns blazing to try to get some just and retribution for the ukrainian people for was been done to them. The disaster itself put puts pressure on the countries. These are countries, the netherlands, the uk, belgium that have not previously felt like they had a dog in this fight. And i worry that this is going to push europeans who have been very careful about turning this into an eastwest confrontation. Around the corner theyre going to go with heavy handed situations against the russians. Come on, if youre putin and youre going to be bashed by the west wab what do you do with tab roll of and play dead . Not likely. Youre going to dig in. Do you think cooler head can prevail in all this . I think economics is going to drive all this. One of the things, sanctions have been lagging behind and have always been skeptical about it is the very close Economic Situation with russia, particularly with the oil and gas contracts. So i think if theres going to be a break at all on additional sanctions, its going to be the european reluctant to bite the hand that feeds them. I think things are quiet down after a while. The real problem is the rhetoric and thats not going to stop. And the fighting in the area is not going to stop, either. People in the Eastern Ukraine are predominantly russian. They are separatists, they want to align themselves with russia. Russia is not going to stop assisting them in doing this. I cant see how the local fight is going to get any better than it is now. The relationship between the east and the west is liable to get better. But as long as people stay off the air and stop being inflammatory on both sides. Then we might be able to get something done behind closed doors. My kids yesterday, they dont know about the but you worry, is this some kind of flash point. That is the two super powers still we still worry about russia and whether you could get drawn into something. Is this the i really dont think that that in todays world, everybody seems to be you know, thats the one thing mutually that was given to us is no one really thinks another situation like that can happen. But to kids that get scared about whether theyre going to be living through something you heard wwi, wwii, three is after two, but its very unlikely that thats possible in todays world, isnt it, colonel . Its unlikely but but not impossible. Nobody thought it would happen again just before the second world war. And yet it happened again. Nobody wanted a confrontation at the time of the time of the cuban missile crisis. I remember being i was in college at the time and everybody was convinced we were all going off to war and that there was going to be a nuclear exchange, despite the fact there were all these checks, despite the fact that we had mutual assured destruction and nothing bad was going to happen. A war would be so horrible to contemplate that it wasnt going to happen. And public rhetoric tips these things off the balance. Michelle brings up a good point, a lot of times when you have nonstate actors, when its more complicated than just two super pileup powers going head to head, that can be more difficult to control. What happened yesterday, the idea that no one is taking visit for it, the idea that maybe this was a mistake. It almost assuredly was a physical mistake. But the airplanes have beacons, which identify themselves as friend or foe. This system has the capability of discerning, discriminating between friend and foe. And what you have basically is a fairley sophisticated weapon in the hands of a group of people who know how to use it but are undisciplined and poorly led with very few controls and not probably very good engagement protocols. And so you see how Something Like this would happen in that area. Weve got to get, matthew, but real quickly, weve focused on this more than gaza. Is it because weve seen this before . I think this is crucially and global importance. Not to denigrate whats going on. But that is a conflict that has been relatively routine and relatively contained and were seeing cycles continuing there. This is a sea change in security and stability on the european continent. And you know from markets that underpins prosperity. I think this is going to have longterm impact. They know theres a lot involved here. Thank you. Well see you there. Michelle, thank you. You can come back. Okay. When we come back, the Market Reaction to these two major global events, plus the big corporate stories of the morning with results last night from google and ibm. All that coming up next right here on squawk box. Here on squawk box. Ved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. Frrreeeeaky i take prilosec otc each morning for my frequent heartburn. Because it gives me zero heartburn. Annc prilosec otc the number one doctor recommend frequent heartburn medicine for nine straight years. One pill each morning 24 hours zero heartburn. Poib. Abbvie is going to buy shire for 54 billion. It was a 53 premium to where shire was trading the day before. And fedex has been indicted for shipping packages from illegal online pharmacies. The Company Received repeated warnings from u. S. Drug enforcement officials. The indictment includes charges for conspiracy to distribute controlled substances. Fedex gained 820 billion for the conspiracy. In a statement, fedex says it is innocent and it will plead not guilty. It was a pretty strong statement that came out from fedex saying we have repeatedly asked the United States to provide us with lists of companies that are selling illegals from pharmaceuticals and the United States has repeatedly refused to give them any lists like that. It sounds like its a little more complicated and theres a lot behind this. They also say they have a long history of working with Law Enforcement officials to make sure theyre not shipping any contraband. And how often every day you get something on the internet about buy this, buy that. I cant imagine with as many packages as fedex handles. It seems like a daunting task. When i initially read the charges from the government, i thought, wow, thats pretty out there. And then i read fedexs statement and i thought, theres some confusion here. In earnings news, ibm posted betterthanexpected earnings and revenue, but software shares were weaker than expected and the shares fell on the news actually significantly down almost 2 . Some mixed results from google. Werings falling short of expectations, but revenue beat the street. One of the ceos is leaving the company. Joining us now to talk about it all is anthony diclemnte. Anthony, what do you make of this . The stock was up initially after the news. Yeah. I think the main concerns around google are deceleration, healthy expense bills and cap ex. And the company beat on revenue over 20 Revenue Growth for a company that trades as less than 20 times earnings. That alleviated some concerns, i think. And the expense is still very healthy. But i still think google is a core holding in technology, a very reasonable earnings estimate. Which continues to be very impressive for a company googles size. How about this lieutenant that is leaving. Hes the chief officer at google, very well respected. I think hes going to be ceo of a different company. Softbank is a Conglomerate Company that has many investments immediately globally. They own sprint, and nikesh can go to softbank and achieve his ambitions as being a ceo in the internet media space, something that he was not going to have the opportunity to do at google. Its interesting because it indicates the kind of ambitions and goals of softbank perhaps in media. Anthony, would google ever buy time warner or an old Media Company . Yeah. I am a believer that youtube would benefit from professionally licensed content, joe. It would increase the likelihood of using some sort of streaming device to watch youtube in your living room. I dont know if they go and buy a company of the size of time warner. They can throw us a couple of dollars at some drones or Something Like that. But, you know, were talking starting at 80 billion and going up from there, right . Google is an enormous company. It got a 400 billion market cap. Time warner is roughly a qua