♪avav a little helelp from my friends ♪ > gd morning, everybody.y. weweome to "squauawkoxox" ght rere ocnbc. i'm becky q qui a angng with jo keenen a carl ququinnilla. and our gugues host today, davi rosenbe rosenberg, now c chi economist and strategist withthuxem and assosoatates presidentt o oba spoke earlieier this morning at the n onomic school in scsc. torrrrow he travels too it laorr the new g-8 summit. leaders p pla t to h h r common potitionto promotingng democracy in iriran coordinatingglimate change. >> meantiti,, an economic advir to the mrmr says the u.s. shoul bebelalanng for a second r rou of fiscacal stimulus. lauratytyn saidththe second

package launched in n jaarary s been slilitltly smamall than sh uld have liked.. she arargu aececon rndnd suld be dirirteted infrastructure ananinvesestmt.t. she isis a m mber of the e ecom advisoryry brdrd but mososy y teaches at a cololle in lilifoia. so we're gtiti anotheher one of these -- i believe it't' the unererty of california,a,'m'm pretty surure. >> berkeley. >> i iit berkelel?? and thateaeans -- >> not that t the isananytng wrwronwiwi that, bubut that -- >>rkrkel, thatotot bed of fifisc smumus prpponents. >> that hot bed o of fiscal conservativism and nonradical thinkingng that is --- do you e hehe of somome of thetutuffthat comes out of berkeley? >> yeyeah beautitifutn, as yououknow. well, n qte as nicee as -- >> for the hehtht. >> ahah, ido. yoyou' exactly right. the eupean union willl rerertrted, speaking of berkeley andan francisco, europe will l unveil me new bankininrurulein

october. will be designened to strengthenen citital buffefers a draft repoport is expected toy suesesti that t trere is strong case for curving existstg rules on nks' f funngng needs. getting back to ththe 7878ee ent 11,, right? >> crect. >> and theews is that it didn't't dnough infrarastctctur in the firir place. maybe if w we ululd haveve done shshov r rea stuff andone totoof the 7,7,weouldn't need t theececd. why go r rig f forhe second? >> good question. when it was bngng put t tetethe initially, mart yidd femaman a otrs sa,, yououavave to do more defense plays. >etet getomome insightrom rosie, vivi roroseurur chief econonisist dsatategt. heheasas best nono, i'd ssay as a---- you de a a name fourzndn

merrill lynch wn you were there. it cll cacaus not e erybody has heard ofof gluxen-chef. and when youou sat down, aer blamingou f forhehe lf-fulfilling economy y weee in right noww -- was k kidng -- butwewe did get t to something substantive anan that is that i asked you, howowananemployment e a lagging indicicoror wn the samepeople losing j job are the people that then lose t the homes that they are not coumums any more s spo spendiding it almost seems s keke it uld be a a cocidentndndator as aepdz to what we all ever fallbaback n as alagger indicator.. right. well, i find that a a l o o onomists and ststragigis soon toto b living i some papadidigm this a rdrden variety reception. evyoyo watches the ii index

and thinks ttt is a manufactururinbubuet. employment indeed is theagging incator. but thisis i a c crett cycle. we are intnto an epic postt bub coapse and the transisionon to the next cycle issusual fraud if you look att your histoto wih uble dip risksks, ngering deflation pressures and the onomic and fifinaiaia fragilititie this is clearly a questionsnsiv indicator. as people e sese their jobs, thr abilitytoto repay d dtt erodese. dlgtsy rates go up and the filters back into the e fincncl syem.. >> so the gaenen variety ressssiois that the economy grows too quickly, ierert rates need toetetup which p pe a dampmpern manufacturinin ititlly you have layoffs inn manufacturing,g, b i it can com back quickly oncentntert rates me back down.. this islmost the p pol

opposite? >> it's the p polopposite. for examplple,hehe we go ck to e last sanangz rit, even as oil wawas hitting $150 a aut barrel, the bibiesest concern among businesses w a shortatage of skillededlabor. soso this has gone down as mamae jobb losses, right,,utut what companies haha d don along whh slicing t tir staff r ruiuirent is thehey'ot their hours rked. lalast wowokeoursorked down t 33 hoursrs we've lost alalrey, whatat, million jobs. ababou 2.5ililli were p pusdd in p partime work whihi isishyhy the unemployment r ratisis much higher. bubu here is what it tells you. it tells youhat enen when we geget this so-calleded rovover phase, a who knowsow long g atat i going toolast, what t ar

companies going t to fft?t? are th going thehe hire the to 0,000eoeopl tofull timend tart t to boom their futures. >well,e'e' get io the lagging.g. ee unemployment rate, what doeos it tellouou as an conomist? you're focus on supply a and demand. cess supply labor,ututti wnward pressureonon wagee rates. wawageanan salaries, wass and lary eggsin th country havav been deflalati now f for ne momohshs ia w.w. we just got the nonfarm payroll nuerer and i it' g goi to be ten months in a row. we're talkingng about anonoerer fialalpackagege. my go 18%,lmost one-f-fif of persrson i iome rightow in

this countntrys s ing auaurt by the president. >> soo when you talklk autut unemploymement ringng and s sy with us att thihi period for a long ti,, w whass the scenario anddour view? >> the gap twtwee thatt unemployment r ratanand e one that you see in theewspaper aneverybody talks about, , ee 9.5%, that gap is ass wide a a it's e evebeen. soso ihink the unenempymymt rate right now is 9.5%. think we're g gngng t easasil go throrougththe te 199292 post wod war ii te highs of 1010%.%. we were toldld by washingngtohe emoyment r re would be at . yeah, , i inink 're goingtoto g toewew high peps it's going to

put pssure onorornic private ctctor wages and salariess dd that's ining be a prorobl in tes of fililtengngback.. man it'sll well andnd good t tha the goverernmt t s t tdd u u no bibig bank is going to sell. . we have toee braced for tt.t. i think that it's notot greatat usus. joe, it's going toto behe motote of a coveries. >> a aret t ere summaries out there that is likely a oil spring, thatt they havehey're revedge dollars to enjoy y rerebodd sdmdmrp >> eats bi riceizize driven wards. businesseses ndd a fact thahat ount ofredit in n th economymy

is coming unund and k kmg kouj rtinently. thr r pruction booksand theirir ststfing in nene wh the pro-viso w if we were tsee a sustained increase i i consumer demand, , an still veven' seen it, alll we've seens the savivingrara go up t a 16-year hihigh >> althougugththe fiscscal spen hasn't been spent yet. > i n n talk about the spending side. we're talkingoror about whatat' come onn topeoplele's papahecks. yore absolutely right. a lot ofcoconosts talk a abo this as tueuestional riri. i an, look, w w spend more on instruct annizing hr? we reded outens ofof thousandss

of miles in the 5050s. over the nextt cade, those that have labor molility ananortation costs, projectivety, , huge. but the business cycye, eisenhowerrided over three rereceions. infrastrtrucrere spending, i'm o yiying we don't neeeed it,t, bur those sayiyinghihiis g goi to reseven versrse ee business cycle, tier gogog g to be disasaoioint. harp and may, huge tax relief just last w we saw in l lt yeye secoco qqrter. r every dololr r of sstilus, the grarand tal of barelyy more th 8 cents.s. a and whehen u u lk about tienl demamaas that doeoesnimpress you, eieierer? >> we, $11illion in a $13 trillion economy, can't,t, utet gogog g toet me too excited. the cacashororclengers is going

to haveououndg g gt on motoror vehicle les. now, we didid have the b bes mo the year inay andnd then evevybody was talalki a abo how we're going t tget overr 1 10 mimiioion its in june. dididn h hpen, right? wewe went from 9.9 too 9.7%. who is making money y 9.7%? we're at theowest level -- 're takakin thetotota ock, the nation of dririrsrs, for almost the past yearaking the total number o of motor vehicle off the road.. wee e thnly country in the world wherer 30% of t t w whosae ctor in this cntntrys a ththe-person family. savings rara g goi down to zero, we havavtwtwo decacade o othe boerers ving beyond theirr means s an everyrybo k kws that ththes thingss are g goi t tremn regrgresd.d.

>> jtt word.what -- you knknow the tax cuts are goining expire on the alalth ttoo n'n't at going to o dd to the spendidingprlems? i'just wondering, h howany of these currenent vevement prrams in thisnvironment atatou're feseeing arere we going t to ttthrough? we'reeoioingo justdeal witith this, but i iee a lot of dsds- a lot of this could be the time to do allthis?? we werealking abouout the seconñ fm stitimus.s. and theseerere big ststes, righ, enen y're talkikingbobo dl,, ioio, liliis, new yorkk inot r behind. but it cld be -- lolook it could wellll b econonoststs talk about thisis coconct,t, it's ca eqequilents, as y invokeeavav ricardo. you reach a pntnthehere there's so much fifisc l lge a asseses a th is a 13% deficici pp tio,

th is double what fdr ever did the 1930s.s. but t uueach a point w whe pepeop start to see t the fisca stimulus today as futurur t ability and they end savavinlç it a andwe could be reaching tht critical threshshd d ritow. >> we woululd have a aot more tomomorr?? that was enougug for me, rigig there, b no ctually, we do want to talk ouout aonong more. > this morning, fures mieiely positive this morning. yoyou' been has been nip flapd most of the day totoda oil, thoughgh, have you seennoi gu?? up a lot. >> $64.39. we'll have boonene piens up later on the show. >> t. boonone ckens. >e'e's ck to t. boone. >> the artist forormeyy known as

onone. >> formerly y knn n as. boone. >> he neverer had likee a a mbml >> no, something y youkbkbt actually pronounce.e. atat'soming up at 7:00 a.m.. ta a a look at t eet-y-yr no, talkingbobout treasury bondnds, enenear yieldldgg 539%. >> t the yen iat 95.34. finally gold, , poport tas, goll mama a neww hi? >> andlso the f fac thatt people suesesd to me that inflationon expectations a are srting to come down,asas well. let's get ovoveras. christine tan is stananngng bin singapore, but f fstst wll go to london a and c cckck in whheoeof cucuorore. >> we have m mkeketsn positive teterrororover here at the mement let's pop up a a brdrdnd show you. but the storyry itinin't as bd

as weexpected. i i n'n't ow if that's too much to take us very far forwardrd,b it's giving a l lif to the basi resources. we have g gern steel produduioi numbmberofof 41%dedeease yeaear yeye. but y, you knono what? the mth on monon number was up, justst under 14%. so people are takakinsoso mfmforfrom that.. wewe h u ut s sal numbmber out f peugeot citron for the f fir half. tt again, people looking a at thatndnd saying,e e ow 's's bad for the e ororie wecontinue t to thahan pt opele in europe and mmag ae, they've ings things forward. w wl continue to mititor that oror but over t to christine i i sisingorornow. >> hey, ff, thanks fororthat.

markets arare a mixexedtuesda. investors cacastg g dots about the speed othth global recoveryry but positive earnings did ovovidsome supportrt. in apapan the nkeke slid to 0.3%. poports getting hurtyythe stronger y.. shes of as brewerieses jumpeded on reports of bebett t tha expectct stronger eararngngs. intataiw, stocks were l l b by technolologyshares, and senator phonemaker. in hong kong,he rate jumpedd to more than 7.3%. anshares of china unicomom rose to reportsts that it wasclose t siining deem i i apple'e' iphoe inasia. >> christine, thanksororthat. joinining f fm siningarere thi morning. les s t to the u.s. trading

day aad. 're joined byy allen gagayl senior investment strategegisat ridgewororth capital magegeme. good t tsesee u agaiain. >> t tha y youor having me.e. > dodon'know if you heard david's commentsts eliliern the program, but echoingng what s s othersrs he e id that ththe tlook for the second halalf is so tenuousus a a offsusuch a a k basese, atatt will be difficucu fofoththe onomy to meettsts fixed costs, its entitltlenents debt repaymenents do y y t thi we'll get a c clu s to what that season w willook li beginning this week? >> i think a l l o of investors are g gngng t watch theececd ququarr earnings repepor we are. because there's goioingoo be some ---ome q queioio as to whetheheoror n the eararnis s reports aree going to r rlect me of the o oimimis that wee saw reececd in the m mart throughout the sececonquarter. so t the somee beef t toughout wiwithheseeaearngs report?? we expect t the w wil be a lot f cocost ctiti t..

but i think what we're focussing is thohoseomomnies thahat nn cocoininueo execute their businessss anan. wewe'rlooking for companies that can genenatate top linee growth. at will proroblbly be theosost scarcece cmomoty over thehenene term. >> i is atat going to lit you o certainectors oror is it really just pin ricks throughout the maetet, oseypypes of companieie >> i think ctctuay, ararl, you've hitit t nailn n th head with both of tse commmmen.. thee - -- from sectctorstandpoi, wiwiinin e ririeworth fufund we ke technonolo.. whetherr it's growth for the e value yle. anso that's one of the tngng ththate'e'veeen emphahazizing a hahaveadad se success. we also lili the more commomodi oriented sectors,s, w wther it energy or the materialals s sec bebecae we think that willll ti in to the global e expsisionhat wewehihink thats unfolding a a w go throughgh t second half of theear and into220.

tt as yohave iicice, not -- if we d do seeee a lowererre covery, which is what we expect, then there is going to be less grorowttotoo around. anand ererore, you're going to have e be sectcte on the invidual companies thaha you pick. > right.. david, ithe cyclical material l trade over? i'd say teororary. the dmdmodes pacee has had augug run n up for r mme, it's aarar of ththe market ilike. itit not a u. orory. itit'snn asianstory, a chinese orory specifically andnd there s actually more to thth decoupling storyhahan met theeye.e. anani believe there iss story in asia that feedssacack into te cocommity complex and that's one area that i'mm iolved in long-term. w the so stockpiling overdone or overprpyeyed? anand i i was real, i i over

now. >> i sak to pepelele coming back from china and they're extremely nervous. these are people that k kw moro than dodo. time will tell. there's no questioion that thos import numumbe were ththugugh t ofof. it's helpfululhat the enomy was able to absorb all thohose inventories. bubu here is what happen. i know that everery single cocommity, both the soft and d h hard commodititiesf the crb index, we bohtht them. inheheorst global e enomies since the '30s, wee bought the. th's's tling you erere i i aa rm demand underpinning becauau have secular growth iasia.. won gogone thrououghn the past certain consolidatition discipline is veryy important a so is the secularroroh in asia. so w wld say that cocoododits, commodity resosour companies a a

going to be good p plaoes bebe ovoverhehe next severeral years people will ssay but yououee so negative on the u.s. ecomomy. thererisis one thing that the commodititboom, ununplploynt is at 4% and compassion i is over % like they were inin 2006 a and 20207. in a period wheree have maxive exexce c comnity in thee u. and e e bor rket and the industrial market, therere is gog to away gege h hug margin sqsqeze for indndusiaial manufactururer >> and allan, j jus to close o ontt, givenhahat scenenar,, yoyou mentioned technonogygy. there are e a t t companies out thther facing 345r7b8gin pressure, facing h hher taxes. and if they're going to invest anywhehereitit's going to benn tech logical ararea that will hp ththemoost productivity.. >> ohoh i think that's right. i think if you lookk a at the reputatati t tt technology deloped late 1990s a a 2000 through 2002, t tecololy got a reputationon as a higheteta kin

of pie ithe sky idea. ese compananss haverereal trtrsfsford themselves.. thth have resilient busininss models. ey generate aa great dl of cash flow. whwhiltheirargins are under essure, they tend to be fairly dede relalatio the rest ofofhehe market. wewe le technology,heheth you lo a ait frorom a growth perspectctiv l le a google if u go more towards the e vae e side. >> guys, i appreciate that.. >>cocomi up, a case of ststngnge bed fellows. the nation's hospitals n n one ststeploser to picking up part ofhehe ct of presisintnt obamas healal c carplan. fit,t,s we head t to a brbrea we'll take a ok a asterday's winnnner& & sers. d#1-1-0-345-250 "i'm retethiiningevery.

tdtdd#1-800-345-2550 includining o o trust to look afteter m mon." tdd#: 1-80800-5-5-25 d#d#: 800-345-2550 "the dust t mittbe set. tdd#: 1-800-3434252550 t, bubut m m t." tdtd: 1-800-345-2550 tdd#: 1-800-34345-5050 "i guess i'm just dodo w wit doing nothing, you k kno"" tdtdd#1-800-345-2550 tdd#: 1-800-345-5-5050 "oh, i'm not thinking ababt moving my money. tdd#: 1-800-345-255050 i i amoving it."

wewelce e ck. thnion's spitals last night reaching an a aeement to pick up part of f th cost of presesenent obabama health cacae plan. the size of the deal i is said be $155 llllio over a decacade.

under the e agreement, hospital would acceptpt lerer than anticipated paymenentsndnder medicare and medicaid.. "the washihingn n st" says an announcement is s pepect tomorrow frorom e e ce presididen >> l right.t. ststil to c com this rnrnin wewel l geto tayay top stories. plus, apicture from thehe fures pipi and someororni musings from our guestt st day, david rosenberg. ququk box" will be right b bac

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>> good momorng.g. welcome babackoo "squawk box"" here o oncnbc. i'm joe kernene ang with becky quk k d carl quintanilla. ouour est host today, davidd roe rosenbnber n nowhief e ecomist and s sategist with gluxken eff. it's's ringo str'r' birthday. wewe'lplpl someeatlessongs and some of his o own -- i knonw it's m micel jackson's morial today. >> andnd h m morial service.8 wewe'rnonot i iororinthat.. >> no.. w wil get plelentof cererag dada >> we're n notakakinany preferercece. choices erere. anand my life, as i've gotten ol i readnn articic on rgogo sang yesterday he'slways bebeenorort the luckyky btltle, they callele him,to accece st in that group.

he wasblble play a song wi the d dru itetead of jusus plplayg g e rhyhyth o ckup. >> who is better?? >> i think s see therere a more --- you kn, the guy with dd zpepen, i'm sure they were more proficient,t,ii eses but it doesn't meanthey'rebteter. >> minimalist approach. >> andust grgrt. he's l lee george simpson. i'm going to go arary. sorry. >> we'rere going to talkbobo ththisoday. would like to chehecknn what's happening ininhehe ps right now. anding by at the cmeisis kevin ferry. he's's the ief market strategist at croross futureses managememet kekevi we've been trying to figugure o o why tngng stand ter that disappppoiining number omom t thudada on thejojobs ffr. where e veve tngs fallen out in thth pits?

ishere still a pessimistic ew about where we stabbed? >> not too bad, actually, gettttin back here. i think yesterday's's ssisi was pressive. e e ofhe things we saw, there was some moneyey ved around right away as th newuarter started. e of the bigraras was lgg thee n nasq and shohortthth s&p. you saw yesterday th t t dow and d ee s&p were able to eek ot smll gains a aininst the nasda. so we'll bee watching going forward d toeeee if that becomea bigger ththem as o oppeded t to outriritt negativismsm. >> but so much of wtt we have heard isababou what's to come, what's t tleleads out of this. and i is ptttty difficucu to come up ththhihingand say here arare e outlines on this. >> tre is doubt that it'ss gog g toe a toughsituatiti.. and i think that t theasas

ququarr and the prices of the indexexes tt welel aheadf the good news. so i -yoyoknow, bad news could be a correction. but i thinknk the maiain t thi wiwi dictatate,nd this willllee rorohout the rest of thiss week, willll bhoho well th treasury susulyly holds p. wee e seng a v vyy orrly and mild cononceioion forming rigig now w as wget ready toto s srt e three-year note. we'll see how it goes a a we ge ouou to the longer enend. but t 's's very oerer and i i think as talkk growstowards a second stimulus ckage, that'ss ining becomome much m mor importananinin traders' minds. the bond v vililans could easasl ha a a vote out further stimulus. >> meaning the same thing that david has said, foetetboboutit, u u n't want anything elsese, don't talkbobout a s secdd ststimususlet's see whe we stand?d? t tt's how we wouldomome down on it, for urure, becky. i think that the m mart t wa starting too strugglele with th

concept of furtherer plans d u could s somethining really bada go w wh h rerd to not st the shape of t t curve, but the outright level of rates. so that is going to be on the screen for the next fewew weeks. certaiainlbebeuse we're getting enoughindication that t ty y ar dedefitely thinking about itit d there's sosoery respepect names,ikikeanan yellen that e actually saying we need it. so the bondarart will w wei . i inink that y yesrdayananthe first dayay the mamarkss tookk the newswsuiui well, not just fromomhehe s standpoint, b b al from the bond -- >> kevin, i want to ask k dadd ether the deflationary forces at you'rededescbing are so wewerf thate e ca do whatever w wan and alal not veve this stufuf inflation or the nd -- bondnd vigigiltetecan, you know ta some time of isishat what you thinknk,the deflatatioryry forces a are so strong, we don't'teed toorry abt what kevin issaying?g? >> yeah.

llll, e deleveraging in n ee sectctorrere dramaticalllly overwhelming. let's put ee fiscal stimumuss i the proper ppspspecve. we h havtrtrendous restraint at the e atate and caca govevernnt andd the statee and local government is 50% m mor importat tohe economyy than thether vevernnt is. withth aefeferce t tththe f's's balancnce sheet, w we ow whwhat happenengg tre and wi all deaf rangz to o thbabalae shsht, there e isotot a bigger balance sheet oththe planet th the $5 trillilionhehe calledhe u u.s household sheeeeanand is ririing at an unprececedeeded ra.. that is one the reasons w why we are in a d deftitiary packagag if memory sveveme correctly, wead this epic tax r ratatesn the seconduauaer of lastt year. everybodody ssalalki about the fifial stimulus. >> so we're o othe ththir >> yeyes, the third. we came f the bear r strnrn lo last yearar, had a 20% raray.

erybody got all goosedupup. and the operative wdd suststaibibili. you had d guest on earlier taininabout the possiblyhirdrd quarteter pp number. who cares if weapse in the fourth quarter? without inventory sass following susuit the e ecomymy going to d d right bacack again. but ts is the e thdd fisisca stimululusndndt's providing this shion. it isefinitely -- >> telelour fririen,, kevivin. tell your friendshey should bebe buying commodities. > my comment i is watch out r it. i think ththeye e ing to weigh in on itit ybybe shift bween the mimix bebetwn n wh is t t inflation portion of the yid and d ee real yyld. bubuonon a m mor positive nnot wod say that the rest of t the incators from t the financial ststeman -- and credit ntinue tomprove anothererew altime low at .548 yesterday

d d the-monthlibor. i think we'll bewawatcng that shortly to seeee h itt comes ou ain tayay. there are stillmpmpssive things goingng on with rerega tt the healining. it's justthahat e process is ve a aendated. >> kkin, thank you verery chch for joioingng us. it's grereat t to talk totoyo weweill seee you againssn. >> let's spend little more time here with davidrosenberg.g. dadavi a a we w witssing right now, ashehe m mart rally appppea to have e slled, a dead cat bounce t tha we ww from mchch to may, right?t? >> yep. >> are we looooki right now at ththe markets absorbibi t thi grgrow? >> i iss a splitit debate right now. u had an analyst on eararerer taininabout a recovery in t the second h hal of f th year ioo 2010. i think it's impororta to n not thatat w didi come offf an egregigiouyy oversold condition

in the stockck market in mah. t here injulyly we crossed over 12hihi in ththe opening da of may. i think hereres s thstoryry. ththe ory is thaha we hadbobo x points of multipiple pansion. and so you were stilll bearishh at666 in march, the onus i is o thbears that we were going to o get the armageddon. it's notararmaddddon we dndn'tet argegedd. nonowe have to s sayoing into ththe cond half of the year, the onus is now on the bulls.s. ifif y look a aththe consensusu if you were to backututthe rnings expectationsns ithth stock markrketyoyou' got about 5 of operating earnings per sharare priced ioo 2010.. i ininat best we're g goi t t see $50 this year. > i don't t tnknk we've err seseen-- you know,,ndnd inaa period where whave almost a rererd output p,p, we'regogoin to have e th s st of pcicing power r atat we're going to o g those sosortofof earnings.. i ininwe priced i in right now

an earnings cocove that we're probably not goioingo o e until 202012 so we haha a lot ofprprty good nenewsririceinto equities at cuenent valuation levels. >> so ife do $5 this yyea rit? >> yep.p. > a what kind of vuauati would yoyopuput it? >> i lilike to lookt t e corpororat bond yields. you do the inverseto thatoo get appropriate earning he elds and pe ratitio. i i guss you would beealking ababouanan aropriate levev o of ininclose to, say, llll it 13, 14. 133 t tim 0?0? i'm being nerous. >oo perhaps a n new low in t s&p? >> wellll, it's quite possible. ll t tel you what this reminds me ofof. baback i 20,, s stetemb 21,

2001, the postt 9/11 low, we hi 952n n th p.p. ththatas universally bleakakoo e ththe low. that was going toe thehe low. huge f fisll stimimusus, the fed reachingng t bone.. we h eseseegregious lows and we're talkingbobout post 911 reconstruction andnd zero pcent in the retail sesect,, presiden bush's buy ereric and if you take a look, t t stock market raieie20% in the opepengng. sdaq wasupup over30%% in the first two monthths of 2002. weweere talking a autut a v-shad rerecoryry look what t happened. we neverer had the recovery in final sass with a heck of a lot of leverage a a lot ofaxax cu. bububyby july 2nd, we broke be th s stember st 202000 l.. we may gohrhrou a temporary

rereteing period.. we brokethrough the lowsndnd octotobe9t9th,220303, we were sitting at 776 in 2002. > b rrell? >> bob ferrerellottom li, wh a a forecasters agreree, something elelsess going to happen.. could we see a n new llow who isoo the sasay c coorate? i dodot t thk another fcaca paagage ll save the day. >> ahah. certainlnlththat goes with whwh lblbertold us yesterdayay o sentiment, jj.. >> itt certainly does. >> that wasn'tnonoh of a wawasht, right?? >> he said to get the nerational whout. i hate generationon i can't tell wa o outecause i it takes 200 yeyearbefore people buyuyanothe stock. yeah. well, look, i i beevev we're into -- had anghght-ar bull market, rit? actuallyly, y youook at t th long, longng range ccrtrt,ououa

see weweovove -- a lot of this ju about cycle theoryy and the maetet moveslmlmos perfectly i an 18 year cycye.e. if you t takaa look att re terms,s, t market t peeded i200 0, inn m mar of 2000 ineal terms. so i ihihink we'realfway thrhrou what i iououldonsider to be a a bear market in eququits.s. imimage that we have secularar bear market in equities and along thehe w we hit two prpree peaks in 2000 a 0707 and indeed, it stiti i is a sececar bear markeket. now, y y h havto trade accordinglgly. there's going to b b h hug spap along the way. >> whattoeoe that mn, tre accordingly? >>ell, here ishaha it mmns. iteans you can'trereal be a bond h hol investor. yoyoare really goingo o ha to -- i iyoyou nt to mee money in the stock mmart, you're going to have to trade ararndnd really what's going to away f fa line for an extendedererio of

time, , as you have already.y. as i saidd before, we're in a secular bear mamaet. but in a s sular bear market, ee rallieses are to be rented d not own approximateded. >> it wouldlde e ni if you would lllls the mn. >> can you work arorounthth? >> you ow, the mean is probably, , jott tss stage, probably 800 on the s&p? >>hy don't we go -- on the d dow go 6,500 to 4,4,0, so what that, add ---- >> 6,5000ououlde the mean, somewhere around there,, right? lolookththe price is j jus the combinatioion of two numbers, right? >> rightht. >> you want to o go to a midyce multiple, we'll talk autut that and what's yourr earnrnin rereca? you can n lklk aut the mnn beining memewhe close to 800 on the s&p. i ow it's fashshioblblto look k at the dow,ut the real market, the broad markettisis t s&p 500.

>> we wowodd be b bel t t doww mean a a abovethe p anan. i'd ratathelolo at the dow. >> ernrn optimismsm i can't say t tt iblblam you. but i thinkhahas how we have to look athe market is ththat 'r're ing to have to - ok, it's no different. 19 to 19,, before the b -- what you want to cl it -- do yoyou ntnto call titilt ronald reaganally? there wewereikikthree enormous typical bull m mkets in that sesecur bearr phe.e. it really isis a a trader'smar. look whahahahapped at the gigiing of the year, w we do th,, boce. bounce, dodo that.t. basically we're basically flala against the bebennnnin of the yeyear. >> i alwayay c cald that 90 raly ththe remnants of the reagan revoluluonon. that drives p peoee crazy that it's notot t the c clionon'90s. but i said it srtrt in'82. >>'m'm with you,broroerer. i think presididenclclinn -- think probably thehe btt thing h didi from an economic standpoin was he listenedo bob uben

ouout ntinuing the road of fiscal r rtyty aitude for lack of more appropriate tete, , bu that's what hahappeded we're lklkin about fiscaca policycy. i think t the name of thehe gam education and health. also, what are weoing t to to bolsteter l lg-term pductivity growth? thth's's where we're going tget our ststanrdrd of living increa of the furur right nonow d this i i a didisaointment for me whehe you thinkk about t economicrarain rrounding the adadmistration, whicich is s imesesve, it's ala soss of short-termism. it'sllll short-term. i think whwhat we're gngng to fd isis it's veryy difficult to implemenent ststimus. fiscalonetary pololyy tococomb aosos c cdit bubble collapse and it was no differenenththanhe 30s. now, w we ululd gue that it put a a flrr under the economymy d t

dede a b bad situation l lss ba bulelet'face it, withh the greaeat prpreson didn't end. bys 930s, unemploymenen was still at 13 andnd forllllhe bond barriers tt the,e, sevenn ars an incrediblele lalarg governmeme hem, by 1940,0,'41, theonong bond y yie was at 40%.. japapan, mern day depression, who paved m mor riverbeds and wo bubuil more b bdges t tha japan? talk aboboutnfnfraructure spending. they doubleded tirir debtoo p ratio. they actctuay y timately got downgraded and look at w wree are oday.. peoplele t tnk there is some mc bullet, that ere's some ey inincator that governmentt is necessarily going toto b b the answer. think the government iss there to p pmomote social stabilityty help smooth the transitition t the nextcycle. but we knonowhe differencee betweenanufacturing i invtotory cycles and these recessionsasast n-n-mohs an this h n n been a teten-nth alal

it a post bubble crcritit collapse and thehe tnsnsion to ththe xtxt cycle and we'rerealag about nextustainable bulull markrk a and expansion. you asasurhaha i in years. these arar seculul chahangake us taking p pcece right now. get more of a s sshshin view wh w wcome back. >> was mike hollandoing to me on eventualally he's gototisis w wk cutt t for him. >>t's disappopoinngng news that wewe'rhearing this mmning, b maybe aa rliliic ououtlk, oo. if you have anyny c comnts ququesononabout anything we've been talking a abo this morning, e-mail us at s squk@k@cn.com.

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welclcombaba. we've e co t to the endff o our time w witdadavi r rosbebe this morning. weere just talking offamera about i inftitionversus deatatn. is thiss a a real argument we ould be getting intotondnd what do you tnknk > ihihink that in the n nt

ecomomic cycle willll probably t thth inflatatio i just don't know what arar it's gog to bbe. for the h he and now -- >> a a y youalking two yrsrs, three years,s,enen yrs? >>. when i went to schoolol - when i went to uniniveitityou don't gedodougflags because of ridities in the labor mamark,, t t wee seeingagagrere deflate pentagonon. that is the mostst iororta cost in t t c corrate structure. and so i think -- ah, i think we'll get the inflatition it's years ay, tugh.h. it's w way b beydd my forecasti horizon. adad jny ellen's speech st weekek in san francisco. ii don't r rembeber cenenalal banker u uttininthe d-wowo o ten. now wewe have the d-word d the pp rate, where doee employ om here? >> good to see you,avavid rosenberg.g. when we comeme bkk we'll tak to booneickens a a t thenergy plan he e lachch a year ago daday. rformance machines.

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this a ececia edidionon o "sawk box." boonone pipicks,s, one y yea af launching theickens pn. >> i'm reaeady to go f ererytng to helpp us and toto gt away fromththe importtff % of our oil. you say drilleverywhere?? >> i say, yep, let's go o ahd d and do it. >> cccces failures,s, t climatatbibill cap and trade, everything energyy w wit the legendndaroilman. >>ere we see it, a y yea latete we haven't d don a tngoo lower ououepepenncy on feign oioil. >> theecond hour of "squawk k box" begins right now.w. > > od t tueayaymorning.g. lcome back to "squauawkoxoxon cnbc. i'm carlrl qutanilla alalon wi e e keen andecec ququic

futures lookok md d a tuesday rnrnin some of the storiesese'e're fofollininthis momorng, an economic a adverer to president obobamcalling on the u.s.s. to plan for a possiblele sonon roud of fiscaltitilus. speaking a aaa semininar in singngorore today,y, laurara ty said the $787 billion package in february was slilitltly smamall than she wouldld veve leded. the nation's hospitatals reportedlylyeaeachg an agreement toick u part of ththe costs o president obama's plan.. thdeal said to be $155 billion ovov a decade. >oioil ices falling over$64 a barreloverernit.t. prices now downwn 9% sincee t beginnnnggof the month. trtrads areaiaing for thee enerer i infmation adniniration to release i i ntnty report later on totoda beck, i think wrerexpecting anototr r dr in inventories for the fifth week. >> it has beenustnene year sincee our next guest j joid d s

on "squawkwkoxox" unveil his an. since thenen fll prices have dropped 50% but the u.s. spends billion l millions a month importing oil. joining us isoone pickens, the founder of t t pickens plan. hel be with u uoror the nextt minutes. itit'srereato seeyoyou is morning. >>t't's eat to be here. >> it's b bee one year sie we just showed the ctctur where u drew out the white bod actly what the p picnslalan is a lots hapapnened sincethen. tell bus hahat. >> i had a bibirtay. i'81now. h hap bbirday. >> happypyirthday. >>hahat dd?? >> may 22. > wtt sign is ttt? >> pardodon me? >> t tha urus? >>no, it's - -- >> cancer? n n no. >> n notememin-- >> geminin >> twins. >es, the sign of the ttwi. >> i jususneneed to know.w. ju n neeto -- nono i can think about whwhenouou'r talking about things, you u kn,, how that t -- how your sign isis iluencing soso of your actctio. . >> and it doesesi i kn.

there's no q queioio i'm a clclasc c geni but i dndn'temember what it was. >>hahat' arait common to genis, rgrgfulness. >>hahat ppened since you rolled this plan ouou > is been quiteprocess. >> it's been,yoyou know, 12 months tomorrow, s so alally- and todadawawas on t the 7th ofl lastst yr r at dinnererwiwith m guys, i id, fellows, we have a winning hand. we havave b bn given deck o o cacardwiwi 53 cardsn n it and we have reremodd thewinning hand and pititch cards ckckn the table. theyey sd,d, wt are youalalki ouou i ssaiwe have removed the trump cardrd. we onlnl h hav one resosour tha will reduce forereigoioi only one.. natural gas. ani ssd,d, we've taken n th out of the deck and now everybody cacool with the deck. what's happened i in year? no o oerer pn. the only p platotoy, just like itit w a year ago. no other plan. okay, whwh h havwe had in t tha period? fit t x months it was duringng the campaign, if y y r rember.

had m mtings whh the then senator obamama d d setor main. and goodmeetings. er an hour e eac timim i think i explained d thcaca pretty w wel okay, thenen w w h hav an elect. and now we have president t oba. dd we've had sisixononth wewe now haha i in place, w w p up on firsttart of our deal, which was thth rrenabable wind, solar and the gr. thosose are inhehe climate bill. and then weavave 1835,hihich i thee hr-1835, the hsese bill. that's the natutura gas oneoror trspsptation. ththat w whe we go on the heavy dudu trucks.. d then tomorrow that 18will be announced i i the s sene wit majority leadede reid andmenn mendndez andsesenar prr.r.

i' be at t tha meeting tomorroww in washington. i don't see how you coululd any tter than we've done. we're moving fafast ththinby thendnd of the year we'll have an ergy plan that will work a we will getet off foreren n oi at some tee in the future. h how closely is itoing to remble the pkeke plplan? will we e able to get to the points t tt t yove laid out for a aear ago? > y.. nonothg's changed. everything has been looked at as we moverward, it's accepted.d. we said doo a model on 35. we said, do 350,000 heavy-duty trtruc a andhey rereveved 350,0. ey'll take everyththin anand that wasooooplus. > wd is a hugege part of .. i uld have thought that t ee financing g wod d ve been tougher fofo se of thehe -- for some of thth tuinin. >> for e tuturbeses >> yeah. >>oe, there's no question that the windas chchand, but because e wi's priced onon a a marginin. the margin is nanatul l ga when youad natururalasas pricec

coco down from nine t to four, llllsure, w win slowed down. and -- but ththind is wking becausee in the cmate bill, theyey do have a green bank in there, whichilil encourage a be ablbl give help toto ee developepe. . >> you could do ititititut the -- yourur wind fields weren a major papa of the plan, mosty the natural gass a majoror part ththe plan.. i ouout we had t to replace the natural gas too genenere e e electricity with thee wi?? >>o,o, n wt we ha is suchch an abubuanance of natural gasas. i mean, y y have been overwhelmed. we're the luckiest peoeoe e inhe world today y beususyou saw that me out e e otr day thatt the cololododo sool of minenes, e study they supported - -- i can remember what ththcocommtee's name wasas. but you rememberer, w was 2020 les see,2000000-- just a a seseco.. it was 200,0,000 no, 2,000 t

of gas. and that puts - - >> illion cubic feet, f?f? >> yyh, i it' 2,000 trillion -- >>ththat 2 quadrillon. > y remember w w that put us ahead of, ee biggest resevens in the world were e ssssia and they had 1.5. th iranians 1.1.1. gutter had 1.1... so w we have o our 2,000rillion will movov us abobove the lalar. >> whatoo you seeasas more significant, t t move on n natal gas or the c clitete bl itself? >> oh, no qution,the natural s is, for me -- thelimate bill, i've a alwss saididwas extremely imimpoanant. i'm an envirirmementist and all, bubute are to g the surury issue isis number one with me. that's's dependency foreign oil. becaususononcehe price was at

$147 a barrel and dropped off, atat, $30, joe? whwherdid it go to? >$3$35, yeye. . >> so youo o wn. you'rere sllll dendent on the sa percentntag w wch is right 7 70% so the secururitisise doesn't go ayay. >> but thenumber, the raw numbers we were talking about a year ago was abt a $700 billion fofoigign l depenendee.. >> that wawast $140 a barrel. >> rightht. so it't' naturally fallen jtt because the e icice oil h comeme bk k do sosharply. > exactly. >>hat does thaha do? when we start t to e oil prices come down, w wha d doe that don terms of making it tougher to get this message ouout? or it jtt different now thahat we have e newdministration ththathehey' focusing on this so clclosy?y? >> there's no question we got n place in a yoyo's'sime that we arare depepdedent on oil f froee that are notriendly to us. that's pretty well innlalace people talk ababouititll the titime the depependcycyn foreign oil. d so that stable. ananthat's good.. that was a bibi part what t

happened isis yeye.. and so when you go forward, regardless of the price, t dependency remaiainshehe se. so the security issue neverer i lower. itit jt feels better. because you'ree gettingg your gasoline chchear. you know, whwhenyoyo look at i and we'veeaiai this mananytimes but i it a huge transfererf wealth from one group too a anor inin bing all this oioil. but just think f forminute, a barrel of oil l congng ithe houstotoshshiphannel. it comomesn,n, picked u goes the fifine, pros prpred, goes your car, and four momohshs later, it's gonene. follllowhehe mey on the other de. you boughtht t o o. the money is with h e e pele that had t theesesrce. they don't havave the resource anymore. t t th have the money. the money comes b bk inhere.. and i it' very simimarar to what took placece, what, back ithe '90s with h thjajanese. you remember, t t janese w wee

buying allll these cs.s. they'ree bringing the moneyey b over herere buying upnenew rk rerealstate, california realal estate. we said, m m god, janisis going to o own america. you hahaveheheame thing going o rightowow- >> yeah,h, b t thebought ererytng at the top anand l lt thrr butts. it would be grgreaifif they d d th again. >> i it ululbe but it's not going to hapapnn this timee because we don't -we don't still have t thecar. we've already used e gasoline. >> paid $1$1 billion on pebble beach, i think.. they lostit o on the banks. > b t ty're buyingt. they're boig the s stu right now in recessioion. so they'y're buyininitit hehe. eyey'rnot buying itit at the top of the memorory >> w w j jus found out we're in rmrmant recessisionroro david sesenbg, so -- >>etet me be clear. you think as a r rest t of the o pipies of legislslatn n thu.s. is o oa a pa toward b bng independent on fororgngn o? >> carl, you'llavave legislation me out i2009 t thais going to be the moststfafar-acacng,

monumental legislation o on energy. >>e're still nation cars that runonon hydrococarnsns, es? >>s. bubut u'u'reoing to s sta to fix it.. for the firstimimeyou'll haveaa plan to getet off foreign o becacaus cacarl fouryeyear no plan, ayay you go ten yes,s, no ppla you're goioi to be imimpoinin nt 70% but 75%5% and paying $300 baelel f it. >> barack obama said lasteaear in tenen years we wilill finalle r dependence on l from the mimilele et. that overly optimistic since it's nowow nee yrs and countiting >> he can doo it. there's no question hehe c c do it. when we talked inin reno in aut of lasasyeyearbefore the eleleconon we talklk a abo that subject.t. anand ee plan is, there's no qution, you can get off of i it wiwithheheatatal gas.s. 2,000 trillioio c cic feet of naturaragagas,et this numberer, youu convert that to brere of oil, boboes, u would have5050

billioion babaelels of oil equiuivantntwhich is greater an what the saudi arabibihahas in oil. y you have had a windowow open d you better take advdvangegef it. >> we're g goi toave m mor whh boonee pickenss in just a mome. he'll be with usus in fa,, for ananotr half hour, s sotay right herere >> and if you have c comntntor questitionababouanything you see "squawk box," rosenbergrg f an hr, now boone f for an hour, e-mail us rere at squawk@cnbc.cocom. we have theutures trading u ua little bit today.. rket was a abl to shrugug off some doldrumums earlier yesterdy and trade higher. we're going t to take auick break. wewe'rjust getting statart w wh mr. pickcken we've heard abououththe plan, b where e eses o prices g from here?? does theheninid states need another s stilulus plan? what does he reallylyhihinkbout cap and d tre?e?  snoou time nowow for toy'y's afc trivia queuestn.n.

on this day i i191981 what futue prpre court justice did president reagan nominatete? ththe swer when cnbc "squawkwk box" continues. aflac! u really need it these dayays. w w co? wellll iyoyou' hurt and can't workrkt t pa you cash... yeyeaho o lp with everyday b bil like gas, ththe rtrtge... ...and groceries. . it's l le e inrance for daily livingng. so...what's it called? ...and groceries. . uhhhhh afaaaac!! oh yeah! that's it!t! aflac. 'v've t you under our wing.. a-a-aflaaac!

now the anansw to todadass afcc trivia quesesti.. onththis d day in 1981, w wha fe suprpremcocot justice did prpresent reagan nominate? the answer, sandra day o'connor,

who was laterr swn in as the first female supreme court t justice in u.s. hihisty.y. i'meaea to go for everythihingoo help us ao get away f fro the import of 70% of our oi >> you say drll eryrywhe? >> i sa yeah, let's go ahead and do it. >> we a a talkingng -- hear ya. wee tkiki with legendary oian t. boone pickens,founder and d chrmrm of bp capitata beck y you g g back t whatt y y were --- immea love boe. reremeer mesa w was a about natural ggas u love youraturalgas, bu -- >> i is s a resource we e have. >> kn. i know it. some people think yoyou' i in isis - that's what becky w wandd to get out i in fntnt some peoee think boone pickensns, 's's nanararal as. begg you w wan tosesenatural gas.s. you'll getet richerer, if that' even possisibl r rht? t the other day t tyy introducd me as t the third largest natur

gas producecer in america.a. i have no natural gas.s. i work f for mesa. they had nurur asas. m m go from mesa. i don't't are any natural gasas mm invested inin natural gasini companies with -- >> in cocoananie right, like clean energy -- >> but personally'm'm not a natural l gaproducer. . >> but you m me the pntnt at your age you're hereararly i i the morning. ththe's notnonoug moneyo get you here early i in the momorng >> i getpp at 0000 thiss rning ininew york after c comg g in fm texas last nighghnd i'm o o he a and love .. i mean, yoyou see, i'm hing a gogoodtime. i i ke -- >> y you love us. > io.o. i like the w who i ide >> best ow. weweay that alot. >> but to make money, nono i've got enough money. i don't have to worry abobout money. >> so i just said too you, here yoyou are,, crawling abobo this engygyill. i go, it's cap a and tax. ohoh, i don't like gapanand tax. u said, i'm agagain cap and

trade. > iididt say that.. i said c cap and ade w wasotot subject. >> are you for? -t? >> i it'nonot subjbjt.t. >> does thateaea you aree not for it ororou are forit? >> it meansns i am-- i have no cocommts about . >> maybebe is s wh y have to live with to get the bill l through? m may. maybe soso i think k itgoing to b be tough getting cap andd tradepapaed. >> cououldtt we itithout th? i meananhahas it workeddveve in- it dependnd on which sideff the aisle you'rere oifif it's w wor where itit w putinin. you nonow, i wish weadad facts. w we' going t t sesee. ththesenate's getting ready t rkrk ts subject over. wewe'lsee athey ce up thth bubut honestly have stayayed ofap and trade. and i havave because---- >> we kinddf need you in it. > don't think so. i don'n' t thi so. no i've got-i'i've got something much b bigrrhan cap

and trtre.e. i've got saveamerica, securiri for amamica. and d th's's bger than cap and trade. erer i came up w wit a quick answer. . >> that's pretty ggoo > ionon took you -- >> i don't k kw w whheraving moththerararth- saving america is bigger thann savavin mother earth, boone, with cacapnd trade. >>ououe got to save us first, d then we'll worork -- >> then we'll worryry about >> a agogorend i get on thihis subject. hehe ss, you know, we're almost together on e eveththinon this. i said, asecurity's's number one fofor .. so anyway, we e veve gd conversationon aututt. >> thehererere se who say,look, toet to those 2,00 t triioion cubic feet o natural gas u'u'll veve to do more drliling you've gotot aototf environmental l ououpshat have comeme o a a supporteted uuut the are e envononntal groups that arar very popod to ililli. where do yoyou -- >> drilling where? aryou talking about continental united states?s? >> continental uniniteststat.

>> well,l,hahat'owned by private citizens.. you're talking aboutt up in aplalaian -- >>ou're not opposed for drilling - >> whenouou srt talkingbobout coinental united states,, you'u' g gotappalachch a andhe marsallis shaleilill be huhuge they'r're ining to be a a lot o money and d aot of j js s an everythingng ee.e. you don't wawant t be oppososedo that any more thann the barnrne in thehe ft. worth ban.n. itit's/2 counties in northth xas and that's cated areatat amamou o of jobs, aa great amou of wealth i in that area. momoy made, taxes paid, ececony rolls. an that's it. ththenhehe you l lkk at haesvilleshsle over r in next louisiana, that's s huge, and t woodford inoklahoma andarnett inest t tasas and a hu s sha

posit up in b brishsh lumbia at horn river. so all ofththesare coming to , to america,a, tgege out o of the t tra we putururseesin. >> so a as -- as th country arts --asasse this legislation first, wththin and then s srtrts pping these different suppppeses, ririt, of tural gas, ale, rrenables, whwh i is at going to do toto t price of crude orr theexext -- >> it's your pererfe - - now yo have something to o gogotie with. you have a resource. before youererthe sting du. they had thehe oil, you were th duck.. here it comemes. whatever the priceceisis, you p .. you complain, you sendd thevivi esesent -- cheney wewent or the a couple timeses to tell them, hey, hey, thihis is tooigh priced. really? memeanare you going to do any gogood they're nini t to u, feed youou wewellnow, let'smomove the price right on up. >> so it's d difrere with these things online. sure. enen y get your resourur, , no you can negotitiat >> so u lean - what do you

do, lele on the cartelnd - -- >> lean onn thecartel? lean ononololdm sachs. >> l ln o g golananachs --- >> tossing it down - -- >> tell them, my god, l loowhwht we've donene >> the rogueue trarade >hahat'right. >> boone, wrere do wee hd?d? let's say t t legislatatio a as caca s say goes tthrghghwhere doou think we arar in tw ththreyears? tete -- >> two or threeeeyears? >> yyea > y'l'll feel itit you'll be feelelin it then. you'll f fee the reduction wiwin three years, say.. but then ill gain momentum. asou start to get t vehicles ououanand etrtrks are being bought, toes are the b big -- >>he truck isishehe b -- >> the big it. that's the big item becauause they're big userer and thenfrastructure goes in ace. that's'sononeyade again.n. and people talk to m me out the infa s strtutureike, oo w we coululdn d dthat. surere, u u cado that. >> it sounds like you're s sayg barring any eernal action in thedodoll or some strtran event

in cucurrcici, th $145 crcree is thehe high. wod d yo go alongngith that?? >> o. yoll beackat $1$145 agaiain,ss whatat'soioing to hhapn. >> even if-- eveve if a a these ththin take place? >> nono,no. if it takesplace, w can helpp ourselves. then have some control o ove our r elel costs. today you u veve nothing. > mquqution is, if we g gethe law, anand natural g gas starts being delivered to truruck aroud e e cotry andsoso forthnd rerewable energy is p pasd a alo transmission les, 4545 will wewe er see it again? that's really a toughgh question. u u uld have somegeopolitical problem aroundndvever e world, an interruption n memeple or someththin but righthtnow, les s st say in thmorning we had to go t twawar. all the oil prorodud d inhe ununeded states, which is 5 millionn barrels aay and 2 2 millioio barrels o of natural g liquids,s, wldldll go tohe military. icich eans, then what doyou

do? i i say, move closer to theffffc because e yorere not g goi to he anything. ll, we're not g goi to war tomorrow. wewenow that. but,t, mean, y youhave to ok at thososcacasefrom time to time. >> a lotmore with -- ar you sticking around fofo the e ststo the hour? >> i'm going to be herere ll da. >> that's good. when we come ck, a lot more from t. boonone ckckens. in the meaeante,e,squawk" cocontueues. could someone to m m an eleven sixtxteehshs wrench over here? here you go.o. eleven sixteenthth.... (a(aouncer) from desesigngng se of the world's s eaeane anand ststuel-efficient jet t ennenes. touilding more wind t tbibine ththannyone in the coununy.y... the e pelele oge are working totothther. creating innovation n toyy for. thanks!

a lot more cocomi u up with tnchcht onon pickens. also waiting, mikee hollandff hollllananancompany.y. heasas a few qutions for boone anand meme ccerns about the imate in washington. this the birthday of riningo ststr, also known as richahard stack starky. thththththththththh

welclcombaba to "squawk box" onnbc first business wodwdw worlrldwe.e. two hours awawayrorom e opening llll. we'll be gettingng bk k ourur coersation with t. boone ckcks, founder of the pickcken plan n a moment. t't's take a check o of the markrket yesterday the marketssosted a ininnd this morning t the fufureres e showining some bit popotiveness.. a are talkinin about ee do 20 popoin u up above fairvalue. >> erer tdeders may f fdd themselves deaeali th strict ww trading deals.

the agency w wll hold heariring this summer to cononsirr imposig strict tradiding limitss on wtt thth'r're llingcocoodities of fifini supply. theexchanges currently i iosose some limits. the obama ainistration will unveil tgh now steps toto curb fooood contamaminioion. it's going t tbebe creating a n deputyty fdd commissioner and gg a bettererraraci systemoo try to identify t the origigin foo boborn ilesses. etet get right too the rkets. we'r're joined byy todd colvin mfmfloloba andurur nt guest is mimikeolland of hollandnd & company. >> think, becky, withhehe bebegiining oearning season ocks are going to kind of be tetentiviv we've seen the s s&povover near the e -d-dayoving average around e 900 level. likewise, i think the e tw biggest pieces of newsing g wi

be the consumemecrcred numbers and d clmsms those twoo a very keyey ithe rerecoryry of t economy or the fact that itouould stay towowar theaker side if tt consumer credit continues to deine, it gives the consnsumess s speing power. >> right. sosomeing to beononceed about. fact, mimikethat's what we re talking about this mororni with d dav rosenberg where you start to looook a the unemplployntntumber as a leading indidicar r ther than a lagging indicator r enen y get to these incredible numbebe.. he says, this ishat happens after a credit crunch. . >> permanentntrecession, right? >> righgh >> it's -- we'rere going to be getting next w wee particularly lot of companies a a c ceo talking about w wha the future looks keke. it's notoing to look bright r r a while. in the 19s wee had a s simarar environment. stocks actually did o okawiwi lousy y environmenent. who knows. i'd be intererteted in todd's mments about what happppen a a the close e yeererda becky, with rerespt to -- todd, , w was a littttleururise, wasn't it? >>eah. >> the w wayhe market osed? >>yeah, iteaeay wa

i i inink ere's acocole of thgsgs one,e,ololum weren't all thatt tremendous. dodon'think there's a wholee lot of new buyuyin or new opopmimismn the market, especialallyitith theommodity lllloflike yesterday. e e mo from riskk e to riskleses assets is t theme we'v've seen. i think movingng fwaward we're ing to k kd of gravitate toward those movovin averages i the stock market, waitit for so earnings t tcocomeut.. a lot of expectations s e e rely low. soso iorordefor the market to maybe tend someains we've seen orr the pastonth or s so, wewe'rgogoin to n nd d to reall ococthe ball out of the papark here afar as earninings go. hofufuy we'll get some of thth.. if they come inbelow, ok out, bebecae e e s&p could headd dow to the 810 lelel and ttt would throw a wrench ioo the obabama recoveryrylalan. >> todd, t tnk you very much for joining usustoday. mi w wl be with us rr the st of the prprogm.m. >> we've b beespspeang for the lastst hr r th t. boone pickens, airman of bp capapalal, founder of the pickens plan renener dependence, which is abtt a a yearar o. berereou go, boone, i in june on the 17thth you we in calgaryryd

yo said that oil pceces would average $800o $85 inhehe coming year as some ienenries come down. you feel the same waway? >$80 to $85inin 201010. sasaid$75yy the end of t the yeyear on my wififss birthday, on this progogra m mar 5th,, you saidid give uspredicicti.. do you remembebe what i iwas? >>arch 5th? >> oil w w $42.25. i said, $60 b bore theh. >> y you did sayay that. hadwowo telephone cls d said, you'veve lt t ur mind, agn.n. i didn't lososmymy md again. but wewe'rgogog to see 5.5. yoknow, s somodody ssay how do u u kn $7575? i said, , i look att t guy thatt has the il. you look at nii,i, administeter enerer f for saudi, heheays we veve t have $75 by the end the year. i wawaitwowo wks and say, it lllle $75yy the end othth ye.. oh, what a predictionon.

prediction?? i just repeated wtt -- >> those guys in thee pasast s thth g got stuck wiwith$10 o fo five years they didn't want, though, boone.e. they can't do everything, right? t thi one they cacan. they're much better at adjustments because it's'setetng ghter and tighter. when you haveglobal economic recovery, , yorere gng to r r out of oil r rea quick. is what's goingtoto happen. when you - -- >> we jusustound out that'ss n comimingoror ten yearsrsfrfrom senberg. >> i inenen years - god, i'l'll . >> boone, ththerwawa a te e yo thought ----atatur gas of $,, yoneneve t tugughtt would go below $1 agagn.n. >> ievever atat. >> on youu viewers are lying.g. >> what? o o viewerers ee lylyg.g. are you surprised i i ca back downwn twhwherit did? >no. you have so mucuc veveupply. you have soo much gaga you're overwhelelme what a timeto make the swiwitc to see -- >> yeah. the other thining seieiewe wanted to o as you, natatalal g still unlocking carbon ddiode, ill a hhydcarbon, still

adding to global wwmiming >> no questionont't' a fossil l fuel but 50clclner than galilinend diesel. so, you know, w wch oneouould u u raer have?? itit easy. ululd u go w witutut t the natul gas, could you go w witut the trtrspsportion fuel? i dodon'ththk so. i ininyou'd come too a screeching halt inn t ts countr. but it's only brbrid, joe,e, to get you to w wrere you want to . where do you wanan to be? ge on renewables, get on the batttter a andethehe cars/trucs onon a babatty.y. you c can move an 18-wheeler with a battery. it won't veve u have to move -wheelers every day. there are 6.5 millionon of themn erera. we havee 6.5 million inmemeca and i ianant to do 100,000 a y natural gas. >> hasas it been frtrtring at all working withthcoress? u talk about how much h yoveve been able totoo o in year. iteeeems not le the congresess we're used to watchinin >> no. itit more frustrating workrkin with joe.

>> that's a a given. >>ongress isgatat. they uererstd that youou only haha one resource. ifif y only hahave one resource it's's n amumultle choice ququesonon. it's that sosour, go with it d use it as long as s uu n.n. so howow lg g do you e it?t? if y listen to meme of thesese peoplele oththe ttery, we can be the battery in five yearsrs. we can be there e inen yeyear do it.t. in the ananti, get offff f feign oil. >>ou know, boone, w walked abououththis little off camera buif therereas onehihing you wod like to see get done now, aside frfr t thi legislation, i there anythihi e elsmissing?? anand year agoouou were talking abt how potentiallyayaybe it would hehelp to have a a e eney czar, someone e oo could push rough andnd g t tse things do.. do you still n nd d th? >> wwel it would help. yes. i i thk k would help if had annergyzazar that was given thauthority to move, letet's . ge an n oaininhe war. ststar shutting this wnwnn the reign oil. an energy y cz would hehe.. but whwhen you ok at-- just

look in the l lassisix months, what have thee chinese dodo?? they'vee g ge in and made deal with azil. bideal, brazil.. ma a deal withh ssia. tw russian deals. they've madedededealwith iranians, thesaudis, negogotiining eitith uwuwt. ey haveve one with iraq upn e e nohern iraq. ththeye got, beiei c coue, venezuela. atat aoss that's going t be. but anyway,y, yook at i eyey havearranged for their oil. we h havnonoarranged for any l. none. zero. should come out of iraq whh a call on the iraqi oil l at market price so that -- anyway itit wldldn'hurt them. we shoululd veve that for e e 4,000 people w wveve lt in iraq. ththe 000 p peoee and $2ririion wewe sntnt over there.e. >> do you tnknk we'll getit? >> what? >> do you think wllll get th? >> the callll-o i can'n'geget ybody any traction onont, mike..

i tkeked to the busush people.. i talkedto the presidedentndnd al i said, , 'r're entititl to tha. america's entitlededoo that for theeeoeopl we've lost there. weowowe it to them. i said, it t ououldappen. got nowhwher anand w i've de it a a it's alall quiet. >> why don'tthey want to touch itit? because itooooks like a blood or oil? yeah. that's whatcacame back in discussions with bubush he id, we didn'n'too in therere for oil. i said, thihis ss a longime ago. that was b befe e lost 00000 people. so n nowt't'a different -- it's a different game. we're e entleled that because weaven't got much out of iraq that i cananeeee tt's helped amamera.a.g >> boooone need to ctinue to difficucult you know how c conntntio thatat cap and trade i iueue is and we thght it was dead fo a wlele thenen i c cam back.. we don't k knowhwh's going toto hahaen. you dodon'knknow what's going t happen in the senate. ve got viewers writing in rere at you're takakg g on page of this climateteilill that benefe your p pla a you're n nven

llllg to talk about all t the other r ufuffn this e ergy bi atat i so contentious.. there are people w say we're going toto l los two jobsbs f ey job we create because e ofhihis carbon tax.. >> i'm v verseselfh, joe. y youe looking ne page ofof ththislilima bill and - -- >> i'm looking - -- >> what do yo think, mike, o cap andd trade? >>peter orszag,, w whon the administration march said that i if give away the permitit w whi we shouldn't do, it will be the biggest welfare trtraner in history of the world. ll, we're giving away t the permits. most of them. >>yeah. predicted ii he's i in ee admininisttition >> what thth'r're ying to do is p,p, y know, ththat of course. > but, boone, h he'----e sai we can't do this can inn coress. the peopopleououe going t tbe with t tomrorow,ight, they're dog it. and d itss the biggest-- it doesn't work that y.y. >> you're wiwiining look the other way in allthese things i th b bilwith congressjujust becaususitit h -- becausese i i benefits yourrplan.

boone, there are peoplehahat say atathis -- th this cap -- they call it cap andnd tax.x. ththers going to be more jobs lo, many more jobs lost, than create sgrood butut tre are -- >> i ow, it's contenentis s issusu >> but this is thehe w i ihink it w wilcocomeut. the jobobs stst is goingto stop it. if they c analyze the situation, as wellll aitit appes toto be, and they see j loss i it, the obama administration is not a job loss crowdwd. ey want jobs -- >>ou think you're part o oththe plan can getetththroh and the cp and trade couldtitill die? >> i think t thacould apappe i sure do. > tt's whahayoyou nt to happen? > wl, i want my - - ianan to ma m my deal. >> you calledmeme difficult. after you saidd that, thatt hur meme aittle bit. > n it didn't. nono, d dn't. >> but, no, , th---- let me go back to the oil again just foroa cond. >> a alligight >> when yoyo lk at whatthe

chineseseavav done inrrrrging for their oil needs, and you look, one,e, tt t so unbelilievlele tme is thererisia line that is being permitted from ft. mcmurray, alberta, the westst cstst of canada, andnd t oil is going t tchchin i cacan'evev believe that.t. i cannot even beevev that we caot bring that t frfrasucture down intnto e e ited states. and righght ww what you have is in california thth say, ll, w don't want a any o o from ft mcmcmury because it has emissssn problems. lememe tl ouou, if itgogo to inina,t's got the same emission pblbls as if itgoes toto calilirnrnia we aree vaez ie ever let that line get built t to california to theritish columbiaaver the ocean. wewe wt to bring that down into

californiaiaththat infrastrucucu needs toto gdodownnto the united stes. >> the ls of physics a app on the other side of the wowodd jut asas ty y here, iss what yoyou saying. >> actly. >> thehe iians actually y idid, it's nonnegotiable. eyeyl have no disiscuioion with usus aut cap andrade and -- you're going toe with al of these people inn w wasngton tomorrow. y y expect to make a headway, comommosesee with these people? >> c cmon sense?e? itit's rkrkin >> it s?s? t the part that's workinin y y watch e eve one of thehearare n saying, ththe dependency on foreign oil, s sething hasas t b donene about it. do you noticicellll of them say ththat >> yes. . >> okay, theyicked up on that. that is serioio.. that is real. that has to be addressed before anything e ee.e. >> but those arere the worords i mean, the nanatul l ga thing s an easyone. all the other stuff in c cap a trade, it's junk, thererss sff th d dsn't make sensnse. ththe'e's no common sensnseitit lot of that package, asoeoe was

saying. well -- yes, go ahead. . >> yes, go ahead, takeke or,r, boone. there'e'nono qstionthat, you knowow, erers problems in the ll. lelet'let it go over to the e senate and see what hahapps.s. because that's w wrere we're adaded >> you think t the are cooler heads in thehe senate thatill coconserer ts? >> ll, i think it'sgogoin to bebe lookokedt riously. i d d't have any question a abo that. >>ut, again, even if the senate cleans it upup, to some grgreeit's important enough h you tt if t cap a and trade provision sysys in, it's ---- y coululd veve wh that? >>well, ee p poi is, i' not gog to be able to makake a a decision. >>ndndstood, right. >> so i if i get cap a a trade get -- the w wlele deal, i'll take it, yeye >> that't's a a b barin you'd b willing to make? >> i'd b b willing t to ke tha s.s. >> boone, weanan to t tha you veve m mucfor joining us t tay d for spending smumu time thth us. hope to s see you back rere

again veveryon. >> arereouou kicking me off because of capapndnd ade? no. becacae e yohave something else u have to do. . >> i'm being elimimineded >> no, no,,you have something else to do. this is yr peoplehohoulled ththe plug. y you know at. >> i'v've enjnjeded being with of you. your people acactulyly asked me to ask you oneery difficult question, the people sitting in the back. they said, doouou find it embarrasassi t tbe compared all ti to abraham l lcocoln and rorona reagan? that was a a tough q queion the asked me t t ask. >> am i -- ar you -- >> no, no, that w w y you-- i said, gigivee e tough qststio fofoyoyouross. theyey sasa,ind o o i if tyy think k it d difcult toe e compared tobrbrahlink lincolol -- > firststtitime i'v'vhehear bubut lili t. >> thehe toughest question isso dodo y do itit so well day in a daday t this is doesit get old to dott so we?? >> i ie e be doing it a ngng time, joe. it's easierer. >> it's easier t t begreat. . >> should people b balling you boone e or.. bne these ysys >> boone.e. >> boone. >>eah.

boone.e. >> okayay >> okay.. >> but ifouou wt to cacallee t. onone, don't care. that's my name. just call me back, right? yeah, call me back. >>alall me fordinner. we appreciate it. see you l lerer. coming up, stocks to watch. a little later, h he' a long-tie iend of "squawk b boxanand one of the best known fixed income traders s on the streets. w tony is joinining the ororld biggest rst, pimcofrfrom h his percrch wport beach coming up at 8:40 eastern. to look k afr r myoney."

tdd#: : 1-0-0-342550 tdd#: 1-808034345-50 that's great, t t m not." tdd#: 1-80800-5-5-25 "i guess i'm jususdodoneith doing nothing, y younono" tdd#: 1-800-0-5-5-25 "oh, i'm not thinkining a. tdd#: 1-800-345-5-25 am moving it."

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>> i am thth walrusus we'll pla lilitt later. >>alalright,ststoco watch include intel, lsi and this vlvl is marvrv.. intel upgraded to o burom neneutl at bankff amica. lsi upupgredto buy from unrperform.c taet price $7. marvel graded to buy frorom neutral,arget $1$17. darko troleum uraded to buy from neutral, s see frfrom ban america/merrill lynch. gogoldn n cls, stataining th dick's sporting goods, grgred to buyuy fmm neutrara at goldma sachs, pricece target $2$20. ss than a week ago i was in there. junior basketball, i c ctainly was. >> setting somethingngp at homo 1234. >> yeah, yeah, ahah eaeah. e of those littlee -- y know, not a huguge concrete >>here you can actualllly dunk is what you mean. yeah..

i i wa t to settt on veve feet and use a chair. and use e a aiai joan's upgraded touyuy fromm neutral, goldman sachs, 22 price target. kohl's upgraded to buy. b.b.j. wholesale d dowraded to sell from neutrall at goldman n sachs. carlrl? >> thanks, joe. . when we come bacacththis morning, we'llllgege some t storieies. plus aararga at $1$1 million. y y the are more thann few great real estate buysys iththe twin cities s ghght w. > and then a pioione discovers ququk box." onone t the foundingatathe of theistressed debeb mket will in us in studio.o. vevestg giant marc lasry will be here. morere a m moractive s arartuturng to fidelity

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>> a litittlbbit >> a little bit. > weomome ck to "squaua b bx on cnbnbc, first in binines worldwide. m m e kernen along w wit bky ququicanan carl quintanilla. r r be host isike lllld, e e of our vorites of holland & mpany. looks splendid in that color. >> gooood work. >> we've seen thatt color b bef. you u ntnto haharvd,d, i mean, that goes wititho sang. ananamousununng back att holland. was, but at harvard. let's eck the futures upeven an t tha put u us up 1212 pntnt far, which i i not babad. we we up yeyestdaday. ththuray and friday got a a ltll ragged. >>icic. >> yeah,h, deyey. >> thursday - - it was on frida. > yesterday, theheirst moveu afr we've acknowledged t tt t the green shoots a areeaea so the maetet was able too rarl even thougugh atat'seen the latest -- ghgh that's's bn n th late-e cononususio-- >> that momome w w, what, the jobs number?

>> yes. >>reen shoots are dead. gen shoot arere deed. >> that was the gamame changer. there's no growth. > les s t to the t top headlines. amamadministration has n not committed to a second ststimusu plplanbut one of the prpresenen' economic advisers sss that onee may be neeeede laura t tonon ss the second paagagmphasizing spending, may be neededed g g the economy back on track. e said we'll h hav a betttt idea at year's endowow well thh first stimulus is woworkg.g. our gugueshohost ststhour,. booneickens,s it'smomo importrtanththan ever t to redu our depepenncnce on foreignn o d get morore hihiclon the roros s th use natural gas. >> for years, plan. you gogoeneneaears no anan, you'rere going t to i iorting t 70% but 75% and you'l'll be pang 0000 a barrelel for it. >> pickens says if thehe ergrg bill is passed and grereerer influence e is p pced on erergy

will s srt feeling pitive ecomic effects within two toto threee years. we've been tctcng oil priceces this morning, anan after a aig dropop or r th last coupleeofof days, you'll seeeecrcrud o up by 45 c cen today to $64.50. the white house i rpipi up it's effort t to omomotfood safety. itit's creating a deputy commissioner specificacallinin charge of f odod fefe and will put a tracingng system in placao try and betterer t tra the srcr of foborne illneness. . o ourext guest is one of t e mostrominent in didireress bt,itit about $16.6.5 lllln der anagement, marc, greatatoo have you back. welcome back. > tnk you. itit a a pasure. >> i wanant s srt with just a todown estion. yoheard us talkingngbobouthe jobsnunuer on thursday and theh notion that somehohoitit has chgeged e mood,hat now the markets are in is mode of rerealining thisecovery iss either furthererffff than wehihi or goioingo o be w wkeker thane

think.k. is that what the numumr r met to you? >> okay.. think for we'veve aayay thought itit w g goi to take a whwhil i ihink wall l stetet looks at this andnd t tes to do it on a weekly basisis or nthly basis. i think when we'e'veooooke at i, our view ist't' going to ta twto three yearars. so f fro a totop-wnwn -- > t to t thr years for at? > f this recovery to come fulloard. itsn't a v-shshap recovery.. -i-i gng to takee while. and orr that meme, we thihink it's's probably theesest investg period we're evever ining to e. >> over wheriod -- >> the next cple ofyears. >> with what kind of timee ririzo what kind of invevestgg rizon? > ihihi right nowwewe'r abab to buyuy debt, you knknow as i talked lt titi,, senior secured bank debt at priris s th you've just n nev s sn. so a lot off that is just becaue of the supply thahass out in the mamark.. so if wean bubuy dt that's s senior insecured a and weanan b thth debt between 40, 60 cent, t tnk that's aolollo

opportunity. i ithe recoveryakakes two ars or three years,, that d deb is tititely worth par s the returns will enendup being ov thatat time periri. . >> are you having g --hahakind of r recerery uld you need, th, to make that happen? >> i t tnknk a alle need reaeal which most --- i very d dferent ththanhat most people ne, all we need is aflflat stock market. that's really . if youou look att -- if we c ca y y that, that debt is par, where all you needed iflfl gdp. if things are flat, the market's up a lilitt,, down evevytythi's ne. with w we e e the numbers, it't exextly what we thoughght is gg to be happppeng g d is going t end up occurring over t next upuplef years. >> do o th risks on t the hiziz to tt,t, obviousus fiscal crisis in big ates, right,t, ee need apparently according to lra tyson for additional stimulus, contntindd oblessness, higher terest rates impairingng housing rerecoryry, do those igigh on r mind or not?? > i think they'y're sues bu mo if yourur an equityty invest.

if you're aa debt investor a ann ininveor athehe top of ththe capitall structure,gagain all yu really need is f fthing to be at. the ststimusus ll isoo get the economy g grongng at sort of 1%r pp and pplple would like g gro2%2% or 3% gd r uus, as long asitit's flat, , things are fine.e. >> a lot of the viviererswn or arare ininng of owning high-yieldld bdsds through fundr atatev. this time ararou with the fafat rate and the recovover rate, how differenent nn bebe? at should they be watching g tt for? > pt t the problemem iththe ccc i ind is 0%0%lus literarall---- >> which is onon ofhe reasons people are lookiking. they're looking atthaha 1111 13% current yield and sa how can we go wngng with tt? >> thehe way y you go wng istoty the default ratatis 8%. th problem ends up being, in our opininn,n, d dault rate w w grgr t to about 15% oyou need to

careful because therere g goi to be a lotot o c cpanies that are going to b b filing. > orrhe next two or three years? > yeah. ththing that'smazing bweween 1010o 2015, you havee close t t $400 blion of dt that's got to get refinanced. soso y have a tremendous amomot of paper that's gogoin to come due. i just don't know i if y y're ing to have all the fancingss avavaible so you'll find lot more compapaeses fing for -- >> that's where you cocome in wh ur company because you're e th vultltur,,if you will, whohoay with this s -- m mn being you're gogoingoing to make -- you'r'r going to make lot of moneney with this, right? >> yeyeah i think we're e ining to trtry help. we're definitely goingng ttrtryo he but we wll buy that debtbt atat pretty y bi dcount. >> thehe rovovy rate, do y you think itwiwi be differentnn previousus bottoms of cdidi cycycl? >> i think i it will be very didiffenen i think ththeiggest issue what iss the f fulum cucuri.. today i i tnknk the fulcrum security is reaeall the secured bank debt. the higherr y are u the cacapil structure the betterer >> thahat'whwhe you aare? >> that't'whwherwe are now.

doouou he any cashh ftft >> d doee -- > lt year youadad 40% cash or something ---- >> yeah, tayay we have 10% to 15%. 'v'vspent quite a bit of m mon in the l ltt tee months. afew weeks ago pelele we rrrrie about t the integrity of the c capalal structure withh w hahappeded with thehe auto ind. haany damage been done t tththe capitatal structure? > nono. look, i think whwhat h hapned -- evererodody lks about it. it's really been in the autoto ctor. the e gornrnme isn't going to come innd the other ininduries. i think k th h h to do something inin t auto sector anththe finanaiaial sector.. wi w wlook at that, we'ree prpret - -- 're pretty convinced it's really goining to be in the two main industrtrs s an that's it. . >> contained, in other words? contained. > ctained like subpririme waa uple years ago or forreal? >> ictctuay think the governmementilill be pretty careful about w wha t ty want do. thererwawas ite a bit of focus hrhrysr and what ppppen. and i think k th needed to come in.. i just don't seeehemoing that

again. buwhat you're going to find is ev i in situations wherehe gogornrnme might be involved, people recogogzeze tt, so pcece are e gog g to reflele that. so you would probablyy bid a lilitt b bit lower bebeususe yo worried abouout rtrtaithings. >hahat nd of discounts ee you tkikingabout? i know varies depending on at you'reooooki at but givive us for example. >> sure. right nowwwe're buyingenenr debt anywhere b bweween0 to6060 cents s th dollarar. if you can buy b bandedebt- if you have a mortgage.. if i could y th mortrtga a at 40 c ctsts on thehe dollar on na hohous that's what we'rebuying. we're buyinin tt seoror sured debtbttt what we tnknk is a etty cheap prpre.e. >> we hadryry marsal o on yesterday, who's winding down lehmanan he said he's in apeperi called extend and pretend where uu shsh omaturities andhope for the bt, buy yrself time. phase two he saiaiwewe'lbe calleded the requestmend two a

phe three is send t the keys, to the house, in otheher rdrds. do youoo along witiththat? where trereill be a point further out from hee where we'll start toto p the piper? >> i think u're ararng to payy the per. think in a numberf situations i if u'u' an equity holder you'll get wiped out. you're an unsecured holder, you're g goi get hurt. i i ink the reallbibig differen this time around is whwherarar you in thehe cititaltructure? if youou'r more nervous abouthe economy, then yoyou ououlde at the t t o of e capital struructe.e. if you belieievehihingare going t turaround in the next year, then you should be b buyg g unsecured debtbtr r be an eitit hoer it's notththat colilited. it reaealldedepes on your macro viview >> are tse opportunity, ough, starting to evaporatate? you saidouou'v been d dngnghis for s som imime. u'u'reeft witith a m mucmaller caca position you can puput b b inintoit. iteeee like ththe nknks are getting much mee oimistic saying, okay, we don'n't veveo sellatat 40 cents on thedollar. here's an interertitingfact.

the hihi-y-yoo yield markrket ia ililon llllar what d dyoyou lieve or thihinkf that i i tradiding at a distresr defaulted price? so it 75%. >> 75%. >> i mean, the a massisi n numr. e supplyide i isso ararge. i meanan,he reason w we' been ab to invest t th lk of ourur pipitais there's so much to do and still is. and the reason thehere a l lot is because people arere sllll very nervousus and the fafact o of what's happ over t last couple weeksks with the marketort of coming in, pele now are coming to the concluluonon, , it's notoing to b be erer a the end of thehe ye.. it's going take another yearr or anothertwo years. and d fowhwh we do, that's fine. >> but you've had some p posivi sh flow fmm srtrt money into your pital. >ororre. >> and i assssumoaoatree and others in business arereeeeein the same thingng sththearly moneney llll me a lot of money > ihihi the people whore in rly on the disistrsesed de will d dveveryell, that's cocorrt.t. >> let mee take a l lk k at

regulations we've seenen iththe white paper.r. what is your relation to the administration o on atatfront? did you lplp advise themem in way or w wghgh ion that kind of lili? >> i usto be on t the esesidt's workiki g gro in the last a admisisation. wawa happy to giviv opinions, but i think theyey'v actualllly done a veryry gd d b when y you sort of f lo at w whas going on. anand e e in reason for tt is yoyososortf look at the system and the system's working. ththk back to three months a ag when p peoee were worried about whether the banks werere gngngo be arounund. now the real queststn n is, a thbanks ining be making moy.y. the answer syes. d d e question is, how lolo i is that going t be? i think the administration has done a p prey y od job when you loooo at what'ss happeningut there and therers s --n ourur opopinn n the's quite a bit of liquidity that has c combaback intotohehe stete >> willl itundergo o marr chang working througug cgress or -k it c com o out in a relatively pewer state, thesese ideas? >> i think t the's'slways going

be chchgeges. cocongssss aumber ofhem ha their own viview i think there e wi b be me anangebut i think all in a itilill sort ofemain wheret t is. >> your hedge fundss registster?? >> yes, it is.s. >> do you see anyy changes in te futurehat are beingg talkeded ouout, hurtingngththe hedge unu? thth financial timimes lookekeda couple thingngnn europeananhaha looked kind of ugly. > ware registered. i think evereryby y is rerestst. it's'sllllbout transparency. there's to reason notot tbebe registered. . >> is there anything i if e e s. that's not --- >> no. i think it's'sorore about transparency. . >> tell them what you'u'redoing >>eaeah. and i d't thinkhehe's any issue with thth. . >> marcrc, good sengng you, as alwaysys. >> my pleasure. thanks for having me coming upup stimuluss take two. ougugut host mike hollandas concern about th prospect o of

more government money.. e e frch are goioi wildith thth stulul. th'r're cleaningldld ililngs, palacece this guy says, america six months behind.. it's wasted a l lotff time.. snsnfed papatrk,k, the minister. interestinin we should learn fromom t frenc. >>whwhat kind of h he couould million get you in n th r rl estate m mart?t? we head to one area whehere pris e sliding. >> d tonycrescenzi in his first interview. could someone to m me an eleven sixteeeehshs wrench over here? here you go. eleven sixteenths..... anand stst fl-efficient jet enennenes. touilding more wind turbibine ththannyone in the country.y... the pepelele oge are working togethther.. creating innovation n toyy for america's tomorrrr.. thanks! no problem!

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rather than sa mid reed, h had incomplpleeinformation.n. ca in january 20thth it was only after thehe first quararrr numbers c cam in as yoll recall, that s sudnlnly everybody looked a and sa, the econonyy shrarank 6 6%. so it was happening much m mor rapidly, at t accelererat rat. that's presiside obama spspeang with cnbc chchuc t tod and arereing joe bideden' comment ththat thedministration

misrsrdd how bad t tss ecocono wawas. accordining group's draft, leaders plan t toush for common popotions on pmoting democracy in iriran cocombinin climate cngnge and also coordinatining exits from huhugeovoverent s smumulu measures. member had they met last t tim around, they were t tkikingbout how yiyi toetet everybody spspenngnghe ststimus. wwhey're trying t to unwind it all. loet get me from our guest hoststmimike holland. i likiked heing t t president ere reference -- we lklk about itityeyestday with johnn rwood, whether it was s anffff the cuff comomntnt fm theice prididenbobout you know -- how tough i it s or somethihi they planannetoto putut to explain, you knkn,, that things are p pry ba john,, i thought, was r reayy honest yesterday abobo -- >> whoa, whoa, whohoa,hahat? >> yeah. and in sayingg -- >> onene of our repeporrsrs wa- >> john in thisase, ye.. jo i in this case said,d, administrations typipicay y wi co in asay, geez, t t hole

this -- the last g guydudufor us is e eve d dpeper than we thght. we t thohthtt was bad. wewe kw they -- they mesesse things up big b b we didn't know th messed it up this bad. these clowns, for t the last --- >> they talk ke this a lolo >> yeah, they d jo said that yteteay, that ththat typicacayy is what t ppp. is t thawhwhatou think hahapped? > w just saw . . >> i don't know if i i uld---- yodon't wantnt to go o arndnd saying we e di't't rlize it was this serious, youonon'tant to sasaththatunless you're able to pin it on the ltt administration. u u n't want to a adm y you miscalculalad.d. >> would you sayay gngngo figure t t wh's in joe bin'n' hehead ononhehe - >> we were t trygg to figure ou atat'shat we were trying toto do yesterday. >> does larryumumrs or tim ithner say, wewererealailed that o one we got t ttt rit?t? of coursrse otot. they blew it. >> w wlilikeeithner. >> y yeafifi, but what w wasisi b before -- oh, w don't just go t thrgh the history.

ststo through the fas. >> whatrereou talalki ababt?t? lettingehman go or -- >>eaease start there. > whaha a guy - -- we had th lean ceo ononyesterday, uu saw ththatrorobay. >> yeaea > the said it codd haveeeee ne in maybe a better way, , bu that was afterer a t therime of nonolelettg some others gogo >> i thinknk rnrnan, we're lucky to have h him therer if h he'nono reappointed janunuar----february, i tnk, thwowod capital mamarks, starting with the u u.smarkets, will have a prlem. if the e ecomymy does a l ltltl better he p problbl get reappointed. ifot, the adminisistrioiois looking for a apegoat, a and as u say,gegehner is aa fafarered chilild,umumrs has donea greata job lilitilly.y. if bernanke flsls the sword, i i ink the u.s. mararke h a problem. >eah. do yououhihink stimulus t tnn is not rking? clcleay.y. >> is it working buttusus epepinthings from b bei even rse than otherwiseseigight sese or is it t early to tell?? >> great followow-o question,

rl, because i think wiouou rnanke we wouldn'n't even b havingnghihis nversation. ththinwowod be so ugly. ththe rld stitilulusn tererms o the financial ththgsgs that hav been donee the stimulus s package, i thought abobouttt in the e car,isis a onon-smulus thk.k. u u hed what joe saiai aut ththfrench tngng in thepeople. they can putut meyey to work. i i uld say that's kindff a f ininto read. the french haveonone it right, their stimuluss package. the chihine -- > b t ty said stimulus stuff, whenen y actually spendnd i on infrastructure and tngs, it haha't't wked in the pastst. that's'shahatgotapap intoo trouble, and as much a as ededed the i irastructure spendidi,, w stiti h hav three downturns --- >> wetitillnded up withth goodd road, which is nice.. >> i w wasbobouto say,, t chinines ha owown, here's how you do it when you hand d soonon a vouche, you can't pay down n yo c cdit card d deb y youan't put it under your mamattss, it's only

good if y you spend it lookoktt the inine nnumrsrs. lookoktt beieiji,, shanghai, t figured it out. ththeyot most of it done. d they're laughing about -- >> changingoucherfofor g-screen tvs? >> yeah, at's right. they're spendiding a l lotf -- theyey'rpending a l lotf money onelectronics, on computetersonn plasma tvs.s. it's working. it w wking. butt ty'y're alsoututti a ton ofofoney in th system, 20% o o e e baobobe loans are going in the c cdit marketet shanghaindex is u 60% year to te. >> thahas s rit. >> taiwawa 4 48% some things arare rkrkg over there than or nonstif stimulus paagag >> they y alake up their numbers. >> i talktoto companiesndnd companies s arteteing me --oh, by the wayay, ststpoint. they say, n n only isisroroh backck b at the end ofof the yr thth'l'll ve a little inatatn overer trere. >> with thatathen we c com back afaftea break, wt will $1 llion buy you in th real esesta m mket right now? 'll go to m minsosotahere

prices have e be h heangng sout. but is ittimim for a tturaround in the t twi cies? $1 m milononhohome next on "sququaw " "uawk."

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ththat r rig, 105 meals abablulute free. caca o or ick now. ysys, u can do this. just pick up the phohone d call. u u wi lose weight. > > day on cnbc we'rere lking atat how much home a llllio bus can buy yoyouaround the countr. begin in the t twi citities

acaccoining a rent &k scller report the a are saw t te biggest decline thth any other metro areann the 21-year hihisty of theindex. weenen recca jarvis t t the nonortrn state toeeee if prpric are fallingg anyararth south.h. >> reporter:r:tetep to $1 million n inheheeart of miminnpopoli > rhththen theyalal in the ininial reacacti is, aawe >> reporter: mororththan,000 uaua feet of livivin space, four bedrooms,,hree ths. >> minnnnesa,a, weavave chilly winter. . >> reporter: two firirlalaceto kekeephihis cozy during the ng, cold nights. even a playroom for the k kid ad for the e adtsts- >> this s ishehe mter bedroom. >> reporter: plulu newer touches. >>hehe spaciouskitctcn,n, g stove. > rorter: like a renovated kitchen, livivinroroom and two-r garage.. antrue to twiwin c cits s fo but rare to many metroareas, the ususeven has a yard. and in minneapolis, le e th rest of th cocouny, location s

everythingng for this million dollar home, e e of minnesota's more thann 10,000 lakes is ririghararnd the cornrner helping g keep pririce afaflo.. tt real estate,papaicularly at e e hi end, is rtrtin though expectations are making heheady.y. >> we've seen n ee activity i at pricice rangeofof amilliononn upup b up a great d degee or stst year, so the pointments arare 20% whihile the mararke still down 20-sosome percent. >> reporter: more aaapintments could mean asale. becca jarvis,s, cc c buness newswsmiminnpolis. don't't miss "s"squkk on th strere" " ar our mililli dollar ho series continues with diaa ininhehe big applple. she'll tellsswho is kekeepgg the real estatateararke awakake. >> all right. coming upcrcre h hitng a five-month low. will oil prices keep slip sliding away for the susumm i i enener pces onn toy'y' actions coming up nexex californinia llllever be the

sa. the michael jacksonn memorial.. governor arnold schwhwarnenegg handing out iousndnd now big banks saying they don't want them anymore. >> e e the best known fixed income t trarsrs joins us. jo first tetervw with u u being since headadinwewesto the big g anant. these markets, m m gl i turned to fidelity for anannnnnui with guaranteed incomeme f l le. at's right, guararteteedncome for life. mymy auiui from fidelity means mymy rirement income is safefe

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wewelce e ck to "sawk box" heheren cnbc. firsttnn business worlrldwe.e. we areusust one hour away from the opening bebell let't's t t check on t the fut is morning. nessssy have been runningng above fair valalueftft the rkets closed upyesterday.y. fact, rightnow you'llee eyeye turned lower. at this p poi down by 13oints bebelofair value when you ststt lolookg g the dow tures. again, maetet been bouncncin around. wel keep a close eye on it this rnrnin joining us with morere on oilil, markets s dd t the economy, s s isis t the chief investment t f of natatnsns she,e, r ric sante isis he,, ricknd our guest host, , mi hollandnd. before we geget bow our mkeket convnvsasati, in the ltt ur, t. boooo pickensave us hi latest prediction on thehe pcece of crude.. listen up.

>> you l looatat niemi, adminisr of energy for saudisis,he saysee have to havav$57 by t the end o e e year. i wait twoeeks and say itwill $75 by the endnd of the ye.. ththeyayay, oh, , atat a rerect. >> l let s sta with teter. wewe'vbebe watchchin cde oil come back dodown boone pickens says$75his year, $8$85 n nt. what do o yoththinin. well, wewe me very y clee to $75 already. i think effectively $73.38 fulfills the $7$75. i don'n' want toall himwwro.. i i thk k he great.. but i think we'reregogoin lower ririt w. u know, by next ye, yyh, memeti by may o o juneexex titimee e prably will be back $85 butut over the nearar term, think we're headed d dowoward $5 and i think trere a chancee we uld go well belolow that.. think we e cod d en see a $38080rint, although i'm'm not

going to gettarried to t the ida of seeingng a a $ handle for vy long. > but -- >> buttt may b be veve brf. >> does opec have thelolo thatt boe e sa theyd >> longer tetermhehey . and i ththk k boe is looking at e e cture longer term. but i don't think they heeththe abititto prevent us omom dropping over the nnex sayay ve or six weeks, foror example. eyey don't te t to react vver veryquickly. right nowththeye producingng moe th they should b b or more thahn they want t to be, m mor than tr targets. so by the time thehey get a meeting togetherer a start ttttinproduction, you ow, a month or two h hav already papaed. but i'm n n saying boone'ss wrg. i justhihinke's lookiking at a lot more longer term thanan perhrhapii a right w.w. >> so you're looking for pullbacks over the neaear r te d d 'll see whehereththin go from there? >> very much s s >> rick,k, tl l usbout what's be happening in the pitt t tay and w whe theococus is there. > y k kno interest rates have crept up.

not a lot. not as higigh as thehe were sevl weeks agago. coidering how we've gone fmm araraition to green shoots, questiononingrgrn shshoo, pply, other than fraranc believe it or not,t, w's'slmost donene f t theear, all of these dynamics are going too make interest rates very trigger-happy to thepspsid espepecilyly, especially with mied calallalatis of admininisttition onstimulus. trtrus, treasury trers are keeping one e eye o on the nnot if you spend mo,,ou're going to haveoo bororro momo.. >> rick,k, is s ke holland. y youavenyny c cments on laura tyson's commement on the other sisidef f e world about sesendnd stimulusackage is necessary? >> yeah, wt t s it,, in the ' 8,8, jt say no. ahah, heard them. i think all of these econonosts didn't mmislclcule. theyeye e ju in over theirhead. to throw moneyatat a prorobl where you haveoo feel

contrition, to blalame banks fo not lending when it's the only sane t tngng t dd this h has go fromom czy to sublimime. >> reall quickly, i i wt t ask you, petet,, about something th cftc i isasayi today as well. they're talking about t th limiting posititnsns and produc oflimited upply. keken fererry point that out asa ararea of intererest. what could t tha meano o th oil market? over the neaearterm it would meanprpres wouldomome down. they're t talng about having strictererosositn limits so t tt the indexx funds are n n pushin preses dramatically higher. we have a lot of w wtt some people are c calngng zbie traderer th a a peoplelelilike pension funds anan sovereign weaealtunds atat a parking money whh people that a buyingininx fus and all thehe dois buy lolong they are n not bona fide speculators whwho ththo s srtrt and golong.. so too get those peoplee ouofo

the market wowoul rst of a, mean liqiquititionf popotition >> when you u sttt talking a ab those e ckck w gss of popotition i'm just trying too gure out howhis goes through, you d don are s slolomy adaderin thee equity markeke, , do you, scott?t? i d d't know what h hapned overerhehe frth of ly but n no at least a as r r the ftft i i ncncerd, iesesrs are bad anand shsht-termpeculators are gogood i think ththat somethingng t th- that's probably a position rick would like to talklkabout. also, , wee e we're in a strarae e siation. despite e thfafa that oioil' beinin hher wouldrobably be go news a despite the facact that i put gas the car this weekend, that woulddean thatt iningsad turnedd aroundoror fromom -- t way peoplple feel about the markrket >> notnecessarilil couldn't oil pricesse higher because yoyorere tking about rere of a a cutoff of splpl or cause you're talkiningbout oil breakingaway from the ndndamtals? >> wewell that's absolutelely

case. t i think whatat would b be mo likely to have happenn iitit would getpp to $$ because people thought we e wod d ha growow again. atatould also be a situation whwherweweight have higher interest rateses. as far a as t the stock market coererne higher intntesest tes dd higherr o would proroblbly appoint to rnrn-aund in sentimenent,hihichs probably what the stock markrketeeee righght ww b becse thee sentime we've seen followingng unememoyoyme, we probably have t had -- that'sprobably not percolatat e enoh for bad news e enings to ve been discountnted that's the sitituaonon wre in. i think people aree ststarngng t rethink whatat t the stock mark might do. wee not going to havee enough titime to realize t tha greeee oots are ad withhwe get earnings coming g out. if e earngng aration disappointing,g, i n n see we're sett u for the ea. growth is not r rhtht around th corner. >>ike, we're going get alocoa kicking off whh earningss wedndnesy y ter the bebell what's goioi to be the most

important iue? is it just gdadancthis earnrngsgs sson? >> to ububt. the nunumbss for theasast quararte p peoe p preme the wot. maybe get some pleleastt rprpris here and tre. overall, people e wot t beaying atteteioion those much more as to w wtt the managagemt t sang, their view. people, ainin, have veryry low expectations. we could have some pricece ere is butut ty y ma not b all plpleant. >> jesess s thk you very much. ke's going to stayitith s.s. a render, you cananeeee scott erery fight atat 11:30 ststertime on "opoptis s action". checking the futures, , th turned arounund cecent. we're lookokinfofoa lower open. ju a little bit. it's kind of rigight around thee flat lineoday.. > > no battingng fpimco, recentlyly a auiuire l-star player tony crcenzi, o one of ththe stst kwn fixed income traders s onalalstreet. had to pack u and m movtoto

new poertd beach. yeah rough place c cpapareto ft. lee. his s fit t on cnbc interview sisincmamang the big move. so, katyty kkeked f the conferencecealall. but we m misd d e first half tryingng tdodownad the docs. rather thaha thnew-new docs. then bob dialed in frfromome and his... dog startstsararki. so j jenumumd in with her "two o ces"s".. ich katy missed because e e s buying shoes online.e. d d th i hit mute... talk timelines wiwi m my am. getting lots of dirtrty okoks . - overall... - a a grt t ll. - great call.. yeah. introducing g a tttteray. learn more atat cco.com/newways [ dog g rkrks

a nenew rkrk ry will begin dldls in the case accusing hkk greenberg of looting billion in company stockk from a a retirement plan n fototop employees. lawyers made their closing arguments yesterday. aig says greenberg impropeperl moved stock from a trurund sold it out of anger after his ouster from the compmpaninin th wake of a accounting scandal. grgreee grnbnbers attorney could counter saying he act t t within hiss rights o of t the operatinn anand ereratthe so-called trust as aig is depicting itit did no tually exist. ththin-fighting -- just thehe ououard fighting -- >> the way they set itit uthth he couldld te e stk. very confusinganan-- >> anybody t ttt sold aig a an ti, , u can't faultlthehem r dog that,an you? >>eats selling it now. >> beats s selng it now. >>now to a a first on cnbnbc interview, tony crescenzi viving

usis first tv interviewinince being markeket strategistt pimco. e e yoin fashion island, tonon >> you k kno fashion island. it's a great placece shop.. yes, it is. yeyes. >> it's incredible.. it's newport beachch - >> it's'sotot the nasdaq, wheret ededo be li. >> orftft. lee oromomhing like atat. >> it's p preyy n nic yeah. > obeing yeah. > y h h to momoveroro cambridgeeacac to neororbeach. looking atatouour comments, i think in nutshell we got toooo far inll the markets sed o on the grereen s sot idedea and i ve been ppretuture jumping the gun a little? >>hen the ten-year hadad gogoneo $399 that was ththe ideahehe grn shshoo idea hagone a little tofar. there's ononlyo o r you can go wiwithhat. weweeed yield a and stocks s toe a lot more. there's se evidence we'e're momovi toward a self-green

condition. ththats the e essce of an exexpaion where it's lflf-rnforcing, where you haha a cycle of increaease i in pruction, income and spendd pentntag.. but we have nothing like t tt right now where we'll l lah h .. whwhene've this is i iininveory rebound. protottitionad gone dnn to around 4 million iththe automobile s stotor,hich is abysm abysmal. our r sas s re runningng near 7 lllln, domestic, and that't's abysmal figure, too. the production l lev re belowow sales so ototecon hadoo imimpreded. rchasing managers w worwiwi imoving. it's's recalibration of production to sassut t thass all. we're noteeeeg signififica pick up in demand yyet theree are,e, of course, structl reasons f f that. now long-g-rmrm changegesto consnsum b behior on the way. also the banking system,ot seeing any pick upnn lending. thfefe p pic u a rorong they

shshou l lk at theh release, t thashsh bank loans llll aost every week. and so no neney crereioion, no velocity o o all theoney the fed put i iththe system. you n'n't have a significacant reund in light of f that. hehencbebeinyields probably n't rise much because the fed has to kp rate lolow. >> you say w whas helping the ononomis life support from the fefefg ferer governmentnt, t th whatate'e'reiving on? >> pcicise. you takekettup and you d't't are evence of pick and fibl demand. coumumeraiaisi the savings rate, a tycalhehemeit is a generaratialal s shi and that mn it will last a ile. consumers s ne t t rerepa t the bance sheets. 're not siningmuch life here. one worrisomee aspect we saw of thth proll report last w weeisis the amountnt ochchan in the rmanent workers. 'v'vhad 7 million jobs losost during the recessisi.. and 4ililon of the, doubling

of the actctll figure, m me tha dodoubng, is apepeanent job loss.. so companies like neneral motors, , r r example, we know e jobs lost ththeere erermant. we s see manany js and many indudusteses lt for ooood. here you see the chartrt. it's a massive increase. go jan yellinn reefd to t thi fifigu before it was s relowed ididay it will bebeififfilt to get these jobs lost ck. in facact, i theasast o regsgs, ree-year p perdsds weren't by before all the jobs lost i in e recession wewere gotten back.. i would d exctct this time it ululbe four or five years, at ast. it would b be ffffult to see nsnser spendndin rebebndndinin a significant t waanand a way ththould allow gererent to ll back completely. ony, you're no shrinkiking violet and y youave your own opopioions i'm wonderingnghahat ppens -- do yogogo into a c cference room and do they telll y you how to thk now, now that t yoreret

pimco? do you tell t the they've been wrong alll along? at happens? what was thahat ococeslike? >> thenlnly -- youonon't see any puppet strings on n , , doou? >> no. > pimco ctataly invivite a ririetofpipions and i think that's one o oththe asons i'm hehere and so i will voioice myself whenever i feell stronglglyabou itit thank goodness, therere great team players rere. i i uld equate thihis to the 27 yankees being being a n yoer, only everyry player and babe ruth h anlolo gehehri 's's a deep team, deep bench, and it's a an amazing aunun of tal en. to wonderpimco has b bn the be owe the years. > theananke team has -- coraralations on your new jojob. >> thank u.u. >> th tipss haseeeea big theme cecent for pimco. u u ge into ee cveveation abouout flflatn versus deflat n deflation. it clear on the deflflioion side -- for thehe viewerers w w

no -- i think a tt may not aware, when yoyou veve deflflat if you buyuy1,1,00worth of titi, as you probabab w wer participanantsyeyestday in the susuccsfsfulips auctctio when you yy $1,000 in p pcesinin th cp w whahappens to that$1,00000 when the bondd matures? it s sta $1,000. >>ff p prissoo down 0%0% over the ten years of yyesrdrday auction n dd prices in lifornia ararbew, it you stitill t the money thaw putinin oorinanay, rit? so you aually have made money. not only addition. >> made money w whh inflation ad flation, is that cocoect?t? >> t thas s coect. me on wall street wldld say it's aalall tion on rereststraon or a put optionnn inflatioion. you can't l lee more thananou'v puif. asas lg as you buy an originally isiseded surity. now, there arere oldld tipsou could d bu w wit annfnflaon accrcrl l alady imbmbeddd in th.. in other wordsdsmomosteople are

usused to gettining --- >> let me give t t v viersrs o mo warning.g. this isn't helpful to pimcmco bt if youuyuy a tips s fu youon't ararththatame otection. i know you're -- >> okay. so the tipsunun don't work. you buy ororigalal issusue, whi ththeyan buy on theinternet, governmentt usgovernment.org and t tyy can use their cdit cards a and get frequent flier miles. > that's correct. so the risisk trade would be if they startovovin in tatand a a stocks g go up, commodity goeoe, oil goes u and yields gogo upup need to help f f -- w we n't wantnt t bond mararke a and sto marketet in sync anorore then? >> well, weweopope at will pppp. the risksk i weopope rates w wil go up p wh the econono i ststarngng t just get action. as i said, w whe you get to int wre it's

self-reinforcingng b w wil we gt a point when the government isis borrowing heilily? obobal investors oyy have a rtrtaidegree of appetite foror treasuries and tolereran f f the wawe're ssndndin and i ththin it willgogo on a lile longer. certainly built up a l l of goodwill owe theyears. theirs a degreree o tolerance that's unknkno rightht now. we would hope ttt the expansion goes on,isisl udent is e entinin and keeeep yielel f fro rising significant. >> all right. totonythank you. >> thank you,, joe. >> as we ntioned, mohammed, thanks about the m msasagi about the redsds, -1.. ii arerecie that. 's a mets f and they hatate thth phillies. . >> n'n't tell hihim you're a a yankees fan. >> a anoererood point. i i keep a mets hat on m compmput. . >> i believeve that. new firir blkbkbry text.

was s atat real oror jo mocking me. >>hen we come baback earning season is abouto begin. art cashin is wheyingng f t tho report c cdsds. d#d#: 800-345-250 "i'm r rhihinkg everything...

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the rnining of the bulls pamplona, spn,n,todayay they do t thi ery ye,, jojo how many times have uu lookok at thth. > nerer gets old. >> and sa, who would do th?? it means we've got f fsh bull video for thehe nt year. >>f everything goes right, you n'n't t gogore yoyou' got that going foror y y whicich - hopefully you don't trip or sobobo push you.u. >> i iear it's ann amazing adrenaline rush from some people. trere's a deaduy right there. >> thethrillseekers are fewr

and fthth tween. art cash sin director of f flo operations at ubs. art, ma a lotto talk about toy. not justst eainin season beginnnng g torrow, but all isis chatter ababtt stimimul,, wheth we needd a a second onenenow. the fact t ttt france is parently doing it betttt t tha wewe rere dd i know you paid closose attetentn n to our 6:00hoho whee vid rosenburg saide'e're halfway throrouganan 18eaear stctctal bear mkeket. >> yeyeah i thinknkyoyo and i h talked about this over t the yes about t veven ars ago, irote about what we llll a 17.7.yeye cycle. d d it like t biblical story of t t f fatnd lean yeyes. yo go through a 17.6-year pepeod where yououould justt throw a rtrt at t the walll and everythihingouou b goes . 82 to 2000.. from '8 back 17.66 years to 1966 ororso.. the dowwent to00000. d d it went bacack down.

then it wenen back to 000. soso s stad withinaa tight anane iihihink that's whwhat h hs rererrrrinto. thth's the smumulu when they came out w wit the infamous $75 billllnn package t tt many of te senators and cocongssmen saidd they dididn'ven readad when the voteted i we s sai right hereouou can go back andooook athehe file clips. there's no stimulusinin the imulus packckag it was mostly s socll e engeerig anless than %% of i was anything that lookedike stimulus. forget my cynicism. i tnk they deyedpuputtg it inoping they'd g get more bang for the buck a a themyear elections cacameup. now they are starting to wororr about it. >> so t tction we're sinin in the past few weeks, is thatt th marketet figuringngall of t tha? >> i think the market --hehe green utut have disappeaeare they've tutueded o to be a rather forordadablbull ririvave, if you wod. i ththin from here in,t's tt justt eugh to not be less

bad. yove gotoo starto be sosowhwhatood. d d't see any signs of t tha t. >> ar we'll talal later in the ekek >>t't's me collllin >> hi. >ouould you give thviviews nse of where we a right now lative to your experiencnce ththe 1970s with respect to how you view t the mamark a sesentenenand what's g goi onon >> yeah, i ha bnooking for a correrectnn of this ar markett lllly. instead,d, wveve med sideways. i thinkk w wre epeparg to roll over now. the nenext two w wksks between d july 17th mike,e'e' going to learn a a awful lot to whether we're g gngng t severel retest those lows or jt have mild correction. bu we'llnonow that b by xt friday. >>hank you. >> we'll seeouou later, art. >> we've tt moresqsqua just ahead, incluludi t thi moing's totop headlines.. but first,t, check out g gol prs ththismorning. you can seeup about $5.10. wrenenchvevehere?

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all right. welcome back. our guest host, mikik hoanan o llllanand coanany. what is your cocommt. > sten to art ccasn. whwh h he comes on andnd i'm

watching, , tn the volume up. no disrespect t all t the peop onon le myself,ut atthe end of the process heree looks keket's going tbe a tough timeme. it's going to cocontueue tbe a tough time for a wwhi.. but the e obobleis i a ask him a question a autut t 197070s. you can g get a surprise toto tp sisi a at y time. you can'tet hard i is going t to be u uyy l the time.. >> h he said we'llavave an a an by the 17th. >> inincribly.. payyattention. ry pacififi >> tenen days.. will tradiding b be affected b theacacks memororia >> y you k kno it p pbababldoes esesn'it? anything like thattt slows down. but this is not like a g gff ?ó show. >thanks. great to see yoyou. > tt t do it for us day. joininss tomorrow. "sququawonon the street" isnext. t tss is cnbc.comom newsno theememerin b bkers associaiati says ddelququenez o on credit caca debt roseto a high during the s secdd quarter as d delilinqncncs for home equity lines of