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tv   Squawk Box  CNBC  July 5, 2013 6:00am-9:01am EDT

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>> good morning. welcome to "squawk box" on cnbc. e i'm michelle caruso-cabrera. becky quick is out today. the squawk agenda. the june jobs report, here are the expectations. economists expect the economy to add 160,000 nonfarm pay rolls versus june's 175,000. the unemployment rate expected to dip slightly to 7.5% from 7.6% a month ago. average hourly wages likely to rise by 2%, .2%. and the data will be released at 8:30 a.m. eastern time. full coverage and instant market reaction. as for the futures now, joe was telling you, the futures are soaring this morning. they indicate the dow would open higher by 144 points. and the markets in europe, holding steady after a huge surge yesterday. big, big climbs across the board there. even though you see some negative arrows, there were big
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gains yesterday. mario draghi pledged to keep interest rates low for an extended period of time. he's never talked about the future before. ecb has never done that. we'll talk more about that in a moment. and just days after president morsi was removed from power in egypt, there is a movement to crack down on the muslim brotherhood. his party. morsi is under house arrest. we'll have a live report from cairo in just a few minutes. andrew? >> we have another major development brewing in the insider trading investigation into steven cohen. the wall street journal now reporting that prosecutors don't have enough evidence to file criminal charges against the famed hedge fund manager. the five-year statute of limitations on filing criminal charges runs out this month. an unidentified source says that will likely pass without any action. just to clarify, a couple of things on this issue, the statute of limitations relates to the trades around elan and the other drug trades. this is -- matthew martoma
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stuff. there is a potential they could go and try to find some stuff that happened later. >> sure. >> and the five years would extend. it is also possible that it could be extended if you believe there is a conspiracy. so they could prove six months later that something happened related to these trades, you would still have that opportunity. >> the clock restarts. >> having said that, it seems like it is very unlikely. though we should also say it is possible the sac could bring civil charges -- >> where the bar is lower. >> the bar is low, potentially related to supervisory sort of issues, you know, just you could say, you know -- >> you're running this company, you got this guy working there, what's going on there. >> exactly. this is a big change. >> there is a whole group of people that are just saying -- they have been jonesing for him to go to jail forever. >> exactly. they just assumed -- even if they're not sure that he's even done anything -- >> they don't know how much rich he is. they don't like how rich he is. remember he bought that place,
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$30 million, $60 million, whatever the number was in the hamptons and people thought he was giving the middle finger to the prosecutors. >> and the purchase of the painting at that time. >> we talked about it, i know, joe, we won't pull the tape, but we talked about the fact that if you look at the actual trades themselves, it is not clear that he, a, knew what was happening, and, b, that he was trying to short the company. he was shorting those stocks basically to get what they call flat ahead of the news. in this case, this is someone you don't want to put in jail. >> i'm confused. he wants everybody to go to jail? >> yeah. a connection between steve cohen and -- >> snowden. >> and snowden, yeah. >> you didn't see this whole -- >> you had a little kerfuffle. >> a little kerfuffle last week. >> i think it is wonder follow have these discussions out loud. >> michelle, he's now -- honestly, there is a cartoon of
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him with some of the leading journalists in the world. david gregory, piers morgan. before people said, sorkin, they thought it was aaron sorkin. now you are there, you are there with these huge guys -- >> who want snowden to go to jail? >> kind of an infamous -- >> you want snowden to go to jail? >> no, the other guy. a journalist. >> i don't. >> i know -- >> i decided i wanted to say -- >> i didn't see anything else that happened when i was in georgia, but i was on the floor watching that saga happen, andrew. and now -- >> you weren't here to help me save myself. >> i know. >> had you been here -- >> he would have cut you off. >> no, no. i would have let you do that. but i would have told you that the far left, they let anything else happen, irs, all that stuff, they don't give a -- but if you, whoa, the journalist, you look at a journalist, if you
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even twitch when you're talking to them you knew -- anywhere, where are we? i think we're -- >> you know what is amazing to me, on the journalist thing, when journalists advocate for a leftist position, they think it is honorable. advocate for a right position, you're evil. the poor thing. so great. >> are we wrong? come on. it is a total double standard. >> you'll have a rough time. it home lasts an hour. >> irs, real quick, did you see the front page in the new york times? >> i did. >> they're checking out other folks, not even a republican issue versus democratic issue, but they're going after all sorts of people who are related to just about anything. it was pretty incredible. >> i wish we could call it a nixon enemy list but we can't yet because we don't -- >> this was a palestinian rights group that they went after. >> but on their own. i can't believe the low level people are doing these things without any guidance from -- >> it could be independent
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thinkers. >> i assume there was some guidance that basically said we need to look at all the 501c3s, no matter what they are. it looks like they're starting to look at everything. maybe that's the left spin that this is -- this was not just looking at the right -- >> it is on the cover of the new york times so -- >> have to assume that from the start, i think. let me walk through that. you can't really -- >> it is a good newspaper. i think it is the best in the country. i know you disagree. why don't we hear about health care this morning. >> okay. investors will continue to follow that sector and all the fallout from the obama administration decision to delay a key measure, which requires employers of 50 or more workers to offer health care. if you have an interest, there is a great editorial in the wall street journal -- >> it is a good editorial. >> it is a good editorial.
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it is funny, because it says that we apologizing to readers, we have been against this obama care from the beginning, but we weren't -- we didn't see it coming. >> not vitriolic enough. >> not strident enough against this thing. >> this is one time where i'm very happy that president obama won re-election, because if this had happened under a republican administration, everybody would say, oh, you are absolutely sabotaging this bill. but the fact that the people who gave birth to this child can't even get it to work is telling, right? >> that's like -- you're talking like rosemary's baby, that kind of birth or in the -- like the -- remember the eyes? and the crib, the big -- >> i knew you would get that reference. >> you did? >> yes, absolutely. >> the s&p 500 health care indemocrinde index dipped early in the news. we have the stuff we heard from europe. i just heard someone on "worldwide exchange" saying that
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if our future this morning are indicating a huge jobs number, and that if it is not huge that they're going to come back down, i think it has nothing to do with that. we could have a jobs number that means we're going to do the the same thing that draghi is doing and the market this morning has nothing to do with anticipating a -- even though adp was strong. we probably got the bump on wednesday. >> wouldn't you say on friday, like today, the futures are generally flat into the number while we wait for it. >> this is europe staying on board. this is europe saying we're not -- we have no -- we aren't going to taper for much longer. they waited longer to decide to do it. >> haven't talked about egypt in a meaningful way yet. does this have any impact on it at all? have people -- are people over egypt already? >> well, the fact we saw the stock market recover so dramatically, i don't know the u.s. market moved much on egypt in the first place. there is a lot of talk about how important it being this
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region -- the cable news guys have -- finally sort of there, but they weren't seeing the bump they wanted and you know where the real bump was coming from. >> zimmerman. >> trayvon. yeah. they weren't getting what they needed for -- from a real, you know global news. anyway, time for the -- that's the nancy grace phenomenon. the headline news phenomenon. that's where you -- who is the woman that killed her kid or something? >> there are several. i don't remember. >> anywhere, time for the global markets report. ross westgate is standing by. in london. becky always gets mad when i do that. i figured i would go with it today. she calls you every time -- i call him ross westgate. you didn't hear me say that. >> i didn't. >> it sounded so -- we like the green. isn't the open coming soon? we got to get through wimbledon. >> in a couple of weeks. >> in a couple of weeks.
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you know, i'm -- maybe you have another english guy win that. like -- that would be big, wouldn't it? >> muirfield is a fair track. it is tough. i like ernie for that. he won the last time they had it there. >> did he? and he just won a couple of years ago. where was it there when he won? >> he won last year and just won his last tournament in germany. i don't know. i'm just -- i don't know. >> he almost snuck in the back door at the u.s. open too, remember, on the last day, ernie, and there was one -- i think he bogeyed one hole after all the birdies and just missed getting in there. all right, sorry. big green behind you. we're happy, because the spigots are open. portugal, you guys better not do anything over there to rock the boat. >> well, with we'll try not to.
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as a good day. i hope you had a great day yesterday. a good day for investors here yesterday. surprise by central bank action. michelle was talking about this, the bank of england saying -- coming out with a statement they didn't do anything. we hardly get a statement where they don't do anything. but this statement said the implied rise in expected future profit of bank rate is not warranted by the developments in the economy. in other words, ecb has also said, never precommitting, but came out and expected rates to remain at present or low levels for an extended period of time. never said that before. didn't know what an extended period of time means, but not six or 12 months. still not sure if that means it is three months or 15 months. but anyway, that was the comment from the ecb. certainly lifted the equity markets. dax up 2%. today, little more caution after the big rises. we have employment report, the ftse 100 up .6.
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the portuguese government has come out and said we had talks with our coalition partners, we think we'll be okay. don't think there will be any more resignations, but yields still elevate and above 7%. on the 7% mark at the moment of portuguese yields. push it on to the debt market, we'll see where we stand. the problem is it is clearly unsustainable for any period of time. portugal. have to see whether this comes down for a little bit. gilt yields are a little higher, 2.4%. what they're worried about is that gilt yields, bond yields have risen because of fears about what fed policy might be. they're trying to calm those down a little bit. they can't be unaffected. back to you. >> all right. we have faldo in too. i was listening to the other stuff you said, but we had faldo. he'll play at muirfield because he won twice there, i think, didn't he? >> twice. yeah. he beat zinger.
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the first time he won, first major, he had 18 pars. >> have you ever been in the same room with him? he's a monster -- >> i have. >> a giant. >> like paul bunyan. >> i was going to say at the open at sunnydale, i walked into the locker room -- there was a rain delay, i walked in, he happened to be laid out on a massage table, getting a massage. >> i don't need to see that. i don't need to see that. >> shoulders, back, you know. >> yeah. he's a giant. anyway, he was kind of nice. he made a couple of cracks that i didn't like. but, you know, we'll see. he's going to play. i would be afraid if i were him, you know, because he's an announcer. he may shoot 85 or something. but hopefully not. all right. >> yeah. i'm speechless. >> speechless. >> speechless. >> the massage table still.
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>> you know is tall? our next guy, yousef. >> is he? >> like paul volcker tall. >> he's not my cleaone. >> put him in a two-shot. >> he's a good looking man. he's a good looking guy. a good looking version of you. >> yeah. >> he's like seven feet tall, i kid you not. >> is he? >> yeah. >> i haven't met joe yet. make sure you're prepared for that. the others have seen me in real life and know what to expect. i think you'll be a bit surprised. >> let me introduce what zboeg on here. there is a crackon down going o here. yousef gamal el-din in cairo. my twin. >> your doppelganger. >> my better looking half is there. it is a serious segment and now -- >> i just don't see it.
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we do look alike a little bit. to the story here in egypt, it is, of course, rapidly evolving story. and this morning we saw some military aircraft flying at low altitude. this was some muscle flexing, a show of strength out of the protests that are expected. muslim brotherhood is not giving up. they're defiant and putting up a fight. they're planning a rally in different parts of the capital to fight what they're calling a full military coup. the military is on high alert as we have seen this morning. taking no chances and they are also engaging what appears to be a crackdown on the muslim brotherhood. a senior figure from the party has been arrested. and several others have arrest warrants issued against him. also, the plug has been pulled on three of their networks, keeping a very close eye on this group. and the air here is very tense because you not just have the muslim brotherhood rallies, you also have rallies that are supporting the army and supporting this transition. all of this is coming just a bit
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over 24 hours since the inauguration, the swearing in of the new president, the acting president. adly mansour will oversee the transition. a lot of question marks about when early elections could happen, but they already reached out with an olive branch saying they're welcome in a new government body to transition this to the new parliamentary elections that are expected, but you saw the reactions on the market. yesterday on the domestic market here in egypt, it soared by over 7%. hit the circuit breakers. trade was suspended for 30 minutes and resumed to close just over 7%. also encouraging signs when it comes to the local currency, when it comes to the cost of insuring egypt's sovereign debt and the defense market bond yields. there seems to be a lot of confidence, but what i would like to note is there is a lot of discussions about whether this constitutes a military coup. if you notice, the united states is saying this is not a coup. and then you have turkey, for
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example, the foreign minister saying this is unacceptable and it is a military coup. discussions not just in egypt, but questions also abroad. >> thank you, yousef. appreciate it. >> the military is on line with the secular forces. you can imagine that at least -- i'm a simpleton as everyone nose, but the military forces aligned with someone that wants to put in another theocracy. >> or more military rule. it feels like we need a new vocabulary. i think we think about the kind of things pack from when we talked about the '80s and what happened in latin america and the middle east -- >> how do you get in line with the -- >> the muslim brotherhood? i don't know. >> we believe that was a former democracy. the problem -- i saw your friend richar haass last week -- >> right a nice piece. >> they both made the same point, that democracy in the
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middle east in the past couple of years has been more about what you've been against, rather than what you've been for. once you realize that you actually get the job, meaning -- >> you have to rule. you have to govern. >> we get half -- what happened so far is we only sort of made half step progress because you get the election, but after that, it hasn't really -- >> okay. let's take a break. coming up, what will -- what will the latest revolution in egypt mean for stability in the region? and also, oil prices. former shell oil president hofmeister. you have to call him the hofmeister meister. it is confusing. >> from the christmas show. >> the hofmeister. just back from saudi arabia. and ready to fill us in. plus, would a lone ranger be a dud for disney? >> you need to ask the question? >> 22 on rotten tomatoes. >> can only hope. >> johnny depp. i don't know. will the mignons of the
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welcome back. disney could be dealing with a dud. the lone ranger movie did not start off the fourth of july holiday weekend with a bang. the film starring army hammer as
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the lone ranger and johnny depp as tonto only brought in about $10 million on wednesday and could struggle to make $50 million for the weekend. however, universal's despicable me 2 sold $34 million in tickets on wednesday and is predicted to rake in up to 140 million. universal is -- >> like cnbc. >> like cnbc is owned by comcast. >> we could not get the 3-d version in the right time period and because it was the opening day when we were going to go, there would have been some crowds, so we had to get monsters university out of the way. so we went to that, which we did see in 3-d, which was good. >> and you'll go see despicable me. >> yes. >> will you see the lone ranger? >> will i what? >> see the lone ranger? >> i don't see any adult movies. always see kids movies. that's the only time we go. >> lone ranger is an adult
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movie? >> a spectrum, adult, adult and then this other -- >> this other guy that wears a mask. oh, yeah, that's -- >> oh, yeah. >> i don't know what you're talking about. >> oh, yeah. i'm very naive. i don't. >> where the u.s. equity futures? >> you haven't seen the one -- >> at this point, they're green. >> they are? >> they are. >> you act like you're embarrassed. >> i am. for myself. >> the unrest in egypt -- >> not for you, for me. >> the unrest in egypt is -- i know how you feel. i do know. john hofmeister, former president and ceo of u.s. operations at shell oil, founder and ceo of citizens for affordable energy, joins us now with his outlook. and i guess we're used to this, to some extent, john. that is any type of instability in the middle east. i don't even know if people connect the dots to how it could
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impact the streets of hormuz or something. why did this put oil above 100 again? >> i think traders always look for the opportunity, joe, to make money. and if there is something unsettling, in the environment, they'll pounce on it. because even if it is a day or two, there is a chance to make some real money and that's what they do. that's that they love. they want to make sure that molecules get from where they sit to where they're going to. and if they can convey or world events convey some kind of possible disruption, even if there is no disruption, it is still a money-making opportunity. >> are you making the point that egypt itself is not a big producer. they import, don't they? not like the -- the suez canal isn't as big a mover of oil as the strait of hormuz, right? >> right. the suez canal moves a little over half a million barrels a day. there is a pipeline way out west in egypt that moves about 2 million barrels a day and that's unlikely to be impacted. there is really no disruption
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here. >> who are the idiots who are selling? >> it is always -- there is only a buyer if there is a seller. only a seller if there is a buyer. so you end up with this whole internal -- i don't call it mischievous because they really do move molecules, we need them to move molecules, but it is opportunity. and who doesn't want opportunity? >> is it because we just are so far away from building out our infrastructure for natural gas? i would think the higher disparity you get between where equivalents are and in terms of btus and what something costs, when do we see oil start responding to all of this, you know, bountiful surplus that we found in natural gas here that we can use eventually for -- even for moving trucks or something? >> we're on the verge, joe, of moving to a new higher institutional level on the price of oil because the world cannot
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produce more, much more than it is producing today. we have got to go to the natural gas alternative fuels or we will face 120, $140 oil until the economy sags. i just got back from saudi arabia yesterday. my hat is off to the saudi aramco crew because of what they're doing with technology to sustain a high level of production. and to the u.s. industry, for what they are doing against all the political odds in this country. but what we don't have are the enablers from the u.s. government to seriously shift some of the fuel demand from crude oil to natural gas. and we will look back in foolishness at the lack of leadership at the political level, not to spend any money, just to provide the enablers that enable the industry to build out a midstream and a downstream for natural gas. >> john? >> yes. speaking of foolishness and
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demand, et cetera, a lot of problems in egypt stem from the fact they were subsidizing fuel. fuel, in the huge fuel lines is what led to this whole downfall of morsi, right? are we finally going to see countries around the world giving out free gasoline to everybody? >> they do know they have to come to grips with it. i got that message loud and clear last week. this past week. because you can't continue to sell gasoline for 15 cents or 25 cents a gallon when the real cost is 100 times higher -- hundreds of times higher. so you can't subsidize this. you got to come to reality. >> john, you know, better just set your alarm clock for three years from now. you're not going to get a speech about natural gas and energy independence. you got a climb change speech. that's what you got and a big one. >> that's what i call foolishness. we're not dealing with the real problems.
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let's face climate change -- >> easy for you to say. you don't have a house on the coast that will get swept in to -- new york will be under 32 feet of water. better get with the program. >> thank you, joe. that's good advice. >> you haven't read -- you haven't read my twitter feed, i'll tell you that much. i don't know, some problem with orcas and shark fins and a lot of things happening that the enviro socialists are -- it is a cult. it is a bona fide cult. >> we have a large house on the coast, you don't want to see it submerged. >> artman has been -- is he going to be on? >> thanks, john. >> thanks, hofmeister. hofmeister meister, thanks. the jobs report now only two hours away. as joe was saying, dennis gartman will tell us why the employment data will get an erratic reaction from the market. "squawk box" comes back after
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huey lewis. >> i don't like moving with music. i don't. >> you're a -- >> i'm like that movie in and out, kevin kline, first one finger starts moving and next thing you know he's all over -- anyway, good morning. welcome back. welcome back to "squawk box" on cnbc. i'm joe kernen with michelle caruso-cabrera, only one person, and andrew ross sorkin, yep. >> hey.
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>> so pretentious. anyway, becky quick is out today. and the headlines this morning, okay for women, i think, to some extent, because they get, you know, they want to keep their names and -- what is your excuse? i don't -- >> i've given you the excuse. the best excuse you can have. >> if you get a sag card and there is already an andrew sorkin and then got to distinguish yourself with ross, i can understand that. >> lucky it is ross. ross is my mother's maiden name. my grandfather asked me to use my middle name when i was an intern at the new york times in my first and what i thought would be my only -- i never thought i would write for anything and that would be the end of that. >> what if it was finkelstein? would you do andrew finkelstein sorkin? >> if i was a mensch. >> there is a big employment report coming. >> i heard about that. today? 8:30? >> adp was big. zandi will be here. >> zandi was there on wednesday
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too. >> he was there. it takes nerve to be here when the actual report comes because he's now sticking his neck out with the adp report. economists are looking for 160,000 new nonfarm jobs in june. the unemployment rate is seen falling this time to 7.5. are we at 7.6? all right. softbank's purchase of majority of sprint shares has reportedly been given unanimous approval by the fcc. the commission also giving an okay to sprint's purchase of the shares of clear wire that it didn't already own. we're talking about clear wire. >> the japanese buy our airwaves and we don't care -- >> china hasn't bought our bacon yet. hold your horses there. we may be eating horse if we never see pork again. commuter rail service will resume today in the san francisco bay area, even note two sides in the labor dispute haven't reached a new contract agreement. and the b.a.r.t. system should be up and running this afternoon
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with the two largest unions agreeing to extend talks. the system has been shut down since monday. and a look ahead at the jobs -- >> we should get a quick look ahead at the jobs report. >> all important here. >> all important. >> all eyes are on. >> all eyes are on it. >> the teleprompter. is that what's happening here? mark vintner, senior economist at wells fargo securities. >> suspenders. >> he is wearing suspenders. >> joe gave us the number 160. i've seen other numbers, 165, i've seen the number 158. what is your number? >> for first time that i can -- in a long time, we're actually above consensus at 185. >> very nice. >> we're seeing a lot of negatives, jobless claims, trending down for a while. i think the big change is we have seen hiring plans have picked up. we have seen it in a number of surveys. i think we'll get a better number. >> what kind of headline rate do
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you think we'll see? by december we could get down to 7.1. i don't know if you agree with that? >> the unemployment rate doesn't tell us that much anymore. most of the improvement, two-thirds of the improvements come about because people left the labor force. there is a tendency for the last few years for the rate to rise in the summer because of some perkiness that came into the number from how deep the recession was. and so we had this payback every summer where we have seen the unemployment rate rise. i'm hesitant to predict a decline there. there is not a whole lot to go on. the model we use came out with unchanged number, though if you were to take it out to a few decibel points and look at where we were, you could see it getting down to 7.5. you can make that argument, probably where the consensus comes from. >> we won't see it in this month's number, but do you have any worry that next month we're
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going to see maybe not a strong number on what we might call a bernanke tapering sort of decline? whatever volatility you think -- are there employers who you think said, you know what, i don't know what is going on anymore, i'll hold tight for a little bit? >> i'm not so concerned about a bernanke tapering decline as i am about the affordable care act decline. 45% of the jobs we added over the last year have been in leisure, hospitality, retail trade, temporary staffing and home health care. all those jobs, they pay less than $15 an hour, they tend to be disproportionately part time and don't have benefits. and i think a part of that pickup has been that companies have been working to increase the number of part time workers and reduce hours below 30 hours because they had to get that done bit end of june. even without the extension we may have seen a payback in the second half of the year. that's what we'll look for. we don't know if that's actually
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happened but the pieces seem to fit together. one thing we're looking at today is average weekly hours. >> got it. mark, thank you for this. we'll see you whether 185 is the number to beat. >> all right. >> see you later, thanks. next, hot commodity, not so hot commodity. dennis gartman talks gold, the dollar, oil and why we may be in for some erratic market behavior when the jobs report is released. as we head to break, check out the futures. "squawk box" will be right back. oh, hey mike. what are you up to? oh, just diagramming this accident with my state farm pocket agent app. you can also get a quote and pay your premium with this thing. i thought state farm didn't have all those apps? where did you hear that? the internet. and you believed it? yeah. they can't put anything on the internet that isn't true. where did you hear that? [ both ] the internet. oh look. here comes my date. i met him on the internet. he's a french model. uh, bonjour. [ male announcer ] state farm. more mobile than ever. get to a better state.
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this is greta. she works in quality control.
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s&p 500 up 14 points. and the nasdaq up about 30 points as we await the jobs number at 8:30 a.m. and, of course, that could change all of this. >> want to read this, dennis. i haven't confirmed it, so if i'm wrong, let me know. what a difference a week makes. just last week dennis gartman was decidedly bearish on gold, but now you've changed your sentiment in what he's calling a water shed shift on gold. probably that was yesterday. and you're already looking foolish. joining us now on the squawk newsline to talk gold, the jobs report and more is dennis dpartmdpar gartman in virginia. you get bullish and it immediately goes down another $20, right? >> it happens. and, yes, i turned bullish after being bearish on gold for quite some period of time. i've been worried about the rising rivers here on the banks of the james and the chesapeake that the ocean went up .01 last year and maybe 800 years from
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now my house may be under water. >> i can't believe you brought that up. you've been named as a heretic by -- what does media matter? i think it is a conservative-funded blog website because i think it is, like, it is a parody, isn't it? they're not serious, are they, with all the positions they take? i think it is funded by conservatives because it is so ludicrous. you read it and it is so hysterical the positions -- have you ever seen this? >> i see their tweets go by and read some of them. >> they somehow have black balled both of us. i think here in the past i may have said something skeptical about the global warming cult, the doctrine, the dogma -- >> you're skeptical of global warming? how can that be? >> you're excommunicated immediately. they want me tarred -- i think it is a -- i think conservatives
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are funding it. they look so ridiculous on all the positions, they can't possibly be serious, are they, gartman? >> i hope not. if i'm a heretic by being skeptical of global warming, i accept that. >> didn't we start on gold? >> he was named with me as heretics that basically should be burned. >> i want to join that club. >> you should. now i'm worried about dennis. we had other people saying gold could go to a thousand, dennis. >> i suspect gold may be able to go to a thousand, but having been bearish of gold for a long period of time, given the level of skepticism that has occurred, given the changes in the open interest on the futures markets and perhaps i'm wrong, golly, won't be the first time i've been wrong and certainly won't be the last, but having been bearish of gold for a long period of time, i thought perhaps it was wise to step up and be a buyer. i'm not a true believer in gold. i think most of the gold bugs,
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and i'm on their heretic list at the same time. i'm usually agnostic of gold. not more than another currency that gets crossed one against another. i'm bullish of gold in yen terms primarily because i'm bearish of the japanese yen as the japanese authorities continue to expand their reserves at a pace far more aggressive than any of the other monetary authorities. so gold may go down in dollar terms, i'm bullish of gold in yen terms and that has to be differentiated. >> okay. and better than somebody i had on last week that would not acknowledge that maybe it would have been a good sell at 1900. remember? were you on for that? >> no. >> okay. anything else get your attention? is oil pricey or is this the beginning of something, you know, early in this now that has gone -- we heard hofmeister say it could go to 120 or 130? >> right man, mr. hofmeister, a pleasure to be on the same panel with him.
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i think gold -- or crude oil has gone on the upside. it is silly to be concerned about oil in the middle east with an egyptian problem. there is no oil that moves out of egypt. and if they bid oil up predicated on egypt, oil is probably going to go down once we find the egyptian circumstance as always these things do gets a little less frenetic and things calm down. if oil got sporty to the upside in the last several days, likely to find its way lower in the next several days. >> normally i would never mention any -- give any, like, blogs, sites like that. never give them any attention. now i realize it is a parody and probably -- i think it hurts the cause, the progressive cause, to see something just so outlandishly ridiculous. it is so -- but, anyway -- >> thanks, dennis. >> you like them, right? they're -- >> he likes it when media
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matters. >> i'm moving on. >> you're moving on. >> i'm moving on. >> okay. >> that's a soros thing. >> this is funded by conservatives, it is a parody. >> we're counting down to the jobs report at 8:30 a.m. eastern time. first, though what does another radical change in government mean for egypt's financial system? we'll talk to the head of the country's top private bank and the banking system there live from cairo. check out the futures as we head to break. very sharply higher opening. bad grammar. "squawk box" is coming right back. wi drive a ford fusion.
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with the dramatic changes in egypt in the last 48 hours, it's major challenge for egypt's banking system. can it hold up to the stress of the latest revolution? we have chairman of the commercial international bank, egypt's largest private sector bank and chairman of the federation of egyptian banks. good to see you again. you've been a frequent guest on cnbc during dramatic changes in egypt. tell us what you think has happened to president morsi. is this good or bad for the economy which desperately needs help? >> let me remind you that the banking sector in egypt went through a dramatic reforms between 2003 and 2004 and up to 2007. we entered into a change into
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2011 with a solid ground with capital equity higher and locally and international acquired and liquidity issues by far exceeding the international norms just to give you an idea on average loan to deposit ratios in the banking sector it was about 50%. that means banks have liquidity. so we always keep ourselves away from politics because we serve the entire society there. definitely political changes are impacting our business. mind you, that for the last 12 months since the politically elected at the time president morsi, growth has been stagnant because people don't have a clear economic outlook. this has been the challenge for us. we need to see a road map about economic reforms going forward either from the previous government or the coming
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government. it's really hard to drive your truck in heavy fog. >> who do you think should be in charge now? >> as a prime minister? >> yes, at this point, yes. >> well, as a person coming from the banking sector, i personally think the current governor of the central bank should be the prime minister. i know the gentleman well. we worked together for a short period of time. he's been the governor for a while now. he took over responsibility at an extremely tough time. many of the people i know have turned it down. >> that would be the greek model where you bring in a central banker to run the country. i know there was talk or overtures to him in the past being in the leadership. >> another excellent choice. if they want to move, that would be fantastic.
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>> newport beach to cairo. we'll see if he's willing to do it. >> we have a duty. each one of us as egyptians have a price to pay. maybe he decide to pay the price now. >> he's that way. if he feels the call, i could see him doing that. >> we'll see. >> he's a good guy. >> the state of the economy, it's pretty bad, right? >> well, put it that way, corporate egypt is in reasonable shape because reforms of the banking sector has affected egypt. just to give an idea, leverage issues within the egyptian corporates are one to two max. >> we keep reading about long fuel lines and inability to get bread. >> that's from the macro side and not corporate side.
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corporates have huge backlog of investments to make. demand is growing. jobs are not being created because no new investments are being made. 2011, '12 and '13, 6,000 graduates came to the labor market every year. few thousand have manageded to find a job over the last three years. a time bomb of more than 1.5 million egyptians that came to the labor market and without a job. those used to be absorbed in investments not only by government. we have to forget -- there's a chronic issue in egypt about subsidies. i wish dr. morsi came out in june of last year and told egyptians that we're setting a time bomb. we have a major problem there. this is the situation of our economy. there are decisions regarding the structure and reforms that
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should have been ten years ago. >> it would have been great. we see too many promises all over the world. thank you so much for joining us. we're coming up dpeagainst a commercial break. we wish you the best and the banking system of egypt to survive through this tough time. >> coming up, we have the almighty jobs report. what is our hard out? do we have a hard out, rob? sounds like a job for our guest host coming up right now. moody's chief mark zandi. there he comes. those pants are white, dude. >> those are khakis. >> those are nice. >> we'll get to his payroll predictions. you thought you would be -- you didn't know you would be doing the walk, did you. ♪
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good morning. welcome to "squawk box" here on msnbc. i'm andrew ross sorkin along with michelle caruso-cabrera in for becky quick and joe kernen. markets around the globe this morning. look at futures. green arrows across the board. all of that could change as we get employment numbers in a little bit. right now dow looks like it would open up 135 points higher and s&p 500 opening 14 points higher and nasdaq opening 29 points higher. in europe, the markets there holding steady after a surge on thursday. european central bank president pledging to keep rates lower for an extended period of time and as michelle said, that's the first time we've really heard them say that. >> ever. they made a point of saying we
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won't tell you what we'll do in the future. >> we're just 90 minutes away from one of the most critical pieces of economic data. the june jobs report. economists expecting the economy to have added 160,000 nonfarm payroll jobs versus may's 175,000. i have seen numbers come in higher and lower. just days after president morsi was removed from power in egypt, there's a movement to crackdown on the muslim brotherhood. we'll have a live report from cairo in a couple minutes and finally "the wall street journal" reporting today that prosecutors don't have enough evidence to file criminal charges against famed hedge fund manager steven cohen. the statute of limitation runs out this month on those specific trades. an unidentified force saying it will pass without action. michelle? >> let's get more on the june jobs report. steve liesman is here with a
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preview. steve? >> thank you, michelle. interesting report today. important report that will help set the pace for tapering of quantitative easing. june job growth expected 160,000 by wall street should be reported by the government down slightly from the 175k in may. right at the three-month trend of 155,000. here's why economists expect trend job growth. a split between things that matter. adp stronger than expected. in ism, manufacturing, weaker. services stronger. i have to tell you, neither claims nor manufacturing component have done a very good job of forecasting where things are going. adp better. mark zandi here to defend it. we'll talk to him in a second. services component has done a better job of forecasting job growth in all of those combined. to my mind. unemployment rate is a puzzle. just barely piticked up last nit
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at 7.55% rounding up to 7.6% behind the forecast of some it could fall by 0.2 this month to 7.4. there are discouraged workers and those working part time for economic reasons show excess labor capacity out there and better job market could bring those people back into the workforce. that could tick up the unemployment rate if they didn't find jobs. that's my expectation long-term for what that is worth. >> not today, right? >> i think people come in and they don't necessarily find jobs right away. over time that ticks up the unemployment rate if the job market stays strong. that's my take. i could be wrong. one more thing wall street will watch, the workweek along with wages. some expect it to tick up to 34.6. that together with those better wage numbers could make president street more optimistic but how much money consumers have in their pocket to spend in
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july. expect weaker economic growth. wall street looking for a decent jobs report keeping the fed on track for september tapering but not a huge jobs report. give me 200, 250, 300 we get excited. i've gotten the zen. >> we get a number like that and the market falls because tapering ends tomorrow. >> i got this zen on the fed right now. i think i get this. the fed is not -- it means i got to deal with it. earlier this week the markets sold off because it was worried about a weaker jobs report. then it rallied because of a stronger jobs report within the space of three days. a ton of labor slack out there. the thing the fed cares about is wage push inflation. we are very far from wage push inflation. the debate we're having is will there be more or less fed easing? we are not going to debate fed tightening for a very long time. i think the market will be okay
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as long as there's not fed tightening. i get that. i get that. i'm just saying if -- >> tightening doesn't mean rates to me. tightening means implying you might taper some day. >> i don't agree with that. >> we described it as the sixth derivative. not even second derivative. >> you said in the mind of a trader it goes from 85 to 0. >> it would be worse than that. 85 to zero plus a rate hike. that's the mind of the trader. that's what the trader thought. >> i don't think so. >> that's what fed fund futures did. >> it slowed down. 80 is still really fast but it's still going slower than it did before. >> the -- i think you're going
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up but rate of incline has gone down. you're still going up. you're still easing. >> are you putting your foot on the brakes? that's tightening. >> we should introduce our guest host. austan goolsbee is here this morning. >> you bought into that too? >> his hair is different. politics are identical. mark zandi -- you weren't quite a member of the administration but you're sort of -- you're not de facto. >> they love to talk about you. >> and you love writing things that you read, don't you? i interrupted you and i threw you off. you wanted to get through that. >> i did. maybe it was narcissistic is what you're saying. >> you're a print guy. >> i've been trying to move away from that. 11 years now. i don't know that i succeeded all that well. >> mark zandi, i'm with -- you
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hear what we're saying that the traders move so quickly it doesn't matter what you call it. if they see anything that indicates that it won't be quite as good as it is now, they get out and they -- it's the weak hands and guys trading in hours and not even days and weeks. it still affects -- >> day-to-day and week to week. in the grand scheme of things it doesn't matter. >> we know that anything that finally gets the fed out means that things are good and better. so we all know that eventually that's where we want to get to. get to. i like to dangle two. >> i don't know where we'll get to, idiot. end it with a noun if you're going to dangle one. we heard you were going to defend adp. >> i'm nervous.
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i was feeling really calm. now i got to defend the number. >> it's definitely better. it's the best of a bad group of indicators to predict the jobs report. is austan here? >> that was a joke. it was an attempt at humor. >> he doesn't look anything like you. >> because he's good looking. >> i want to push back a bit here. here's the thing. you are correct. the market took it the way you said they took it. what was the better play here? if you were to go and in your portfolio for example sell stocks in response to what bernanke said, you were a loser -- over the past week, i think you would still be up if you had shorted in that regard. the markets come way back with that understanding.
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plus, you have what's being called out there sfrg. psy sick ronnized forward rate guidance and the u.s. by the way. >> you have been working? >> sfrg. >> that's what they're all calling it and then -- >> i made it up myself. >> i hadn't heard that. >> it was from a barclay's report. >> if you put less sugar in the drink, it's not as sweet but it's still sweet. >> it's still sweet. if you're a diabetic, you're dead. that's the story. i think that when all is said and done, the fed is going to still be out there easing and that has an affect beyond the expectation effect. there's an expect effect. >> don't give -- you do things like that and you give daily show more material to make fun
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of us. the people sitting around talking about it and then they laugh and all of the createons in the audience laugh and it's not worth it. >> they're high on dope. they think everything is funny. >> if you acted in a way that would prevent "the daily show" from using our stuff here, you wouldn't say a word, right? >> it would be really boring. >> we actually want to be there. we need young viewers. they have no money but we need them. more from mark zandi and more from you too. >> i have great report coming up about whether or not a fish is worth more alive than dead and economics of fishing. coming up. >> okay. we have that going for us. >> sold. >> a crackdown on the muslim brotherhood in egypt. let's get the latest details from cairo. >> reporter: they just wrapped up friday prayers and now the
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expectations are that protest areas will grow for both camps. those supporting the military coo and what could be described as military coo depending on how you see it and those opposed to it and supporters of former president mohamed morsi calling it the friday of rejection saying they will fight what they call a full military coo and they also are calling on people not to use violence although the army is on high alert across the city. the army has made it clear that it will not tolerate any violence and it also said although it accepts peaceful protests, it will have negative consequences on the country and the economy if things get out of hand and it's clear, michelle, they're not taking any chances because they pulled a plug on three islamist leaning television networks and arrested the senior member of the muslim brotherhood. there appears to be a crackdown from what we have seen. to give you an update on what happened in the last 24 hours, the country has a new head of
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state. he was sworn in. 76 year old judge, veteran judge, low profile for the most part in the past few years but a respected man. he's going to be overseeing this transition period in coordination with the army and in coordination with other political parties. what's key here is that earlier on here already, gave a signal that muslim brotherhood is welcome to participate in the political process going forward. this is critical but the muslim brotherhood thus far rebuffing those calls. we will have to see whether they can bring everybody to the table. no time frame about early elections or parliamentary elections for that matter or any other details really. we expect the cabinet to be announced in the next few days. one of the names being floated for post of prime minister and egypt former central banker so a lot of variables out there to be figured out. united states watching this very closely. this could have implications for
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u.s. financial military assistance in the vicinity of $1.3 billion. >> thank you for the complete update. we'll have them throughout the day as we continue to see whether or not these large protests unfold and if there's any violence. all right. comments, questions about anything you see on "squawk," e-mail us a and follow us on twitter. coming up next, can markets expect more fireworks this morning when the jobs report is released? we'll speak to a portfolio manager coming up next. >> announcer: comments, questions, send them t to @squawkcnbc on twitter.
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welcome back. futures are suggesting a big gain. this may be catchup from europe yesterday where they had a huge rally across the board because two central banks over there were clear they will be easing for a long time. >> back to the markets, our next guest says the recent market volatility could continue into the fall. joining us now from new hampshire, a portfolio manager and director of global macro at fidelity investments. good morning to you. >> good morning. >> so help us try to understand here a little bit about how you're seeing the markets. you think this volatility is going to continue.
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does that mean you think there will be an opportunity to buy over the coming months or are you hanging tough? >> we're long cash. cash is a viable asset class. if you look back to the may 22nd high in s&p of 1687, since that time, the s&p has dropped about 110 points. it rebounded since then. treasury yields have backed up. so treasuries are for the moment not offering the safe haven they have since the late 1990s so this correlation between bonds and stocks is really the critical thing for investors to keep in mind. cash has been a good asset class even though it yields zero in real terms it yields negative but for the time being the option value of cash is important. so what i'm looking at is volatility returning whether it's egypt or portugal a couple days ago, the bank of japan with its bold move a few months ago basically forcing a tripling in
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jgb rates which increases the bond market which affects the value at risk models for japanese banks which forces them to bring down their balance sheet. volatility is returning and i think the latest thing with the fed and you guys were talking about this earlier about tapering qe and i was on a month ago talking about this, it comes back to the whole stock versus flow argument where the fed believes in the stocks saying if we hold this much paper on our balance sheet it's still easing. the market clearly disagrees believing in the flow argument if you go from 85 to 75 it's actually tightening. >> what do you think though? >> well, it doesn't matter what i think. it's what the market thinks. the market believes in the flow argument that any kind of tapering will be seen as a negative even though fundamentally you would argue that it really shouldn't matter. >> you didn't answer the question. what do you think though? what do you think? >> i think volatility is back
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after a number of months of a low volatility increase. i think the flow argument is what matters. every time the fed does more qe it increases more expectations and desensitizes the market and when it takes it back it makes it that much harder. the fed is realizing that the unintended consequences or risk thereof are too great now versus the economic benefits which are questionable. >> so the implication of what you're saying is the fed is not going to be able to manage this well and interest rates are going to rise very quickly? >> they have already. i think the 1994 playbook is on the table at least from the bond market's point of view in that rates are rising very dramatically. if you look at the tips break even, they have collapsed and even core inflation is way down as well so the fed really shouldn't be tapering at all and the fact that they are actively talking about it tells me that they realize they need to get out of the whole qe business. >> you're holding cash for what
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moment? what are you waiting for? where do you think equities ultimately go for that opportunity if that's what you're holding cash for? whatever happened to the great rotation? >> right. you know, s&p has corrected 6% so far. who knows where it goes. i'm more interested in sort of looking inside the equity market as to what to be long and what to be short. so long u.s. consumer for instance is a very powerful trend. >> shorting emerging markets. >> there are some people now who say emerging markets have fallen so much already that it's actually a good time to jump in. do you agree with that? >> from a trading point of view that may be true. i take a little bit of a longer horizon. i think china remains the biggest risk out there. they are printing more and more credit growth and producing less and less economic growth with it. and that has obviously a spillover effect into emerging markets. we have a significant underweight against our
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benchmark. an overweight in u.s. equities but overall underweight in terms of the entire equity spectrum. we like having some cash here. maybe the market goes down another 5, maybe another 10 or maybe 20. who knows. at this point we think volatility returns. >> you don't sound like you're worried you're going to miss the upside? >> not for now. we had a big run up against very low vol and vol is returning from all corners europe and oil and we're comfortable keeping a low profile over the summer and we have earnings coming up in a few weeks. >> i was told the other day that viewers didn't know vol was volatility. >> happy july 4th, the day after. we'll see you soon. >> coming up, the next move for gold and oil. volatility in those markets. and former aetna ceo ron williams will weigh in on the health care delay and what it
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means for the nation's larger insurers. here's a look at the ten-year note. "squawk box" will be right back. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions
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>> if you couldn't get to the movies, a parade or a barbecue yesterday, maybe you saw this. that is joey chestnut wolfing down hot dogs. there's something about this that really grosses me out. i think it's because what goes in must come out. eight 69 hot dogs. not sure where he went or what he did. >> he doesn't seem like a huge man or anything. >> you don't have to be. >> you know who was there? >> you can eat all of those hot dogs. >> wow. i can't talk about it anymore. >> why? >> i can't. i think if you say vote for
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someone because of sandy. >> because of climate change. of course. how could i forget. >> this guy is a seven-time champion. did you know that? >> we're back to hot dogs. >> i'm back to hot dogs. >> did you see the runner-up? this tiny little girl. short by two hot dogs. >> that means the stomach is stretched. >> how do you practice? >> i think they chew the hot dogs. go ahead. >> comments, questions about anything -- >> e-mail us or follow us on twitter. we'll talk to a former ambassador the egypt coming up in the next half hour. teach a man to fish, he can be fed for a lifetime.
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steve liesman reels in the economics of fishing in just a bit here on cnbc. ♪ ♪ unh ♪ ♪ hey! ♪ ♪ let's go! ♪ [ male announcer ] you can choose to blend in. ♪ ♪ yeah! yeah! yeah! or you can choose to blend out. ♪ oh, yeah-eah! ♪ the all-new 2014 lexus is.
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welcome back to "squawk box." in the headlines this morning, we're an hour away from the june jobs report. current conse they call for unemployment rate coming down to 7.5% from 7.6%. we'll have numbers for you moments after they cross. greece is expecting to receive the next batch of bailout cash. there is a monday meeting to decide whether greece shut get that money. samsung reporting record quarterly profit of $8.3 billion up 47% from a year ago. this is becoming apple like. increase was driven by strong sales of smartphones including the new galaxy s4. shares did tumble overseas
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falling sort of analysts estimates. let's get a check of crude higher this morning that a state of emergency has been declared. you can see crude up marginally. 101.74. joe? >> we'll get to our trading block now for more on volatility in gold and currency joining us now, tom is a partner and we'll see if we'll be joined by other guests in a seconds. let me start with you, tom. we had dennis saying he's going long of gold the way he likes to say it but in japanese yen terms. does that make sense to you? >> well, i think if you're trading the yen, you should trade the yen versus the dollar. i understand what he's saying but if you follow what the yen started to do in november, gold has followed it. we are down since november and it was really probably the
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initial catalyst that created the decline in the gold. it was really started then. >> for where it is now down again today, is it getting cheap or is it going to 1,000? >> i think they'll take another crack at the low. i think that you'll get another washout. a lot of this is driven by etf and investor feeling pain and getting out of the trade. i think that's really what this is more about in the last couple months. i think you'll see them go after this low, short-term control and then maybe it bottoms out. there are still people in this trade now and they're still in pain. they are under water so to speak. >> david is joining us now head of global rates and currencies research at bank of america merrill lynch. this is music to our ears, david, that this is one of the most important releases in a long time. we say that every first friday that you need to watch that. they are all the most important. you really think this is the most important.
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why? >> i think as you know, a lot of people are talking about the fed starting tapering in september and market pricing that in. this number is going to exceed expectation one way or another. it's interesting despite the importance of this number, the market is not prepared to be pricing in a stronger than expected number. we can see that in option data. for the more than exchange market it's important. after yesterday the ecb and bank of england having forward guidance and with interest rate differential the most important driver in the foreign exchange market it means that there is stronger u.s. data and stronger u.s. dollar. given the market is selling the dollar in the last couple weeks we get a strong number. euro can really take a crack at 128 and be low. >> we've had people on for three years that would say whenever the euro gets above 130, is it a
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short? people think it is. sooner or later they're going to have to on a relative basis be more accommodative than us because they haven't fixed things and they have more problems. do you think this is the time where it goes below 128 and then goes down even further? >> we're forecasting 125 by the end of this year and 122 into next year. these are conservative forecasts. the biggest change as far as euro/dollar is concerned, it's what's happening with german gdp versus 1% of the u.s. which means the slowing story is definitely going to hit europe much harder than it will hit the u.s. from that point of view, that's another major factor driving the euro lower. >> what about the yen? >> i think the yen as well. i think there's no doubt -- you talked about gold and the yen. the bearish aspect for gold and yen is the fact that the u.s. is now moving toward not only
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energy independence but most importantly basically stronger fiscal outlook. the cbo forecasts by the end of next year the u.s. budget deficit could be 1.25% of gdp. from that point of view, u.s. is moving toward stronger fiscal position than all of the safe havens in the world are going to be worthless compared with the u.s. dollar. >> can we go back to gold for a second? >> that's tom. >> the thing that confuses me about gold compared to other asset classes is there is no way to find value. you look at stocks with a true measure ratio and house prices to income or rent. you have some way of valuing this but gold there's nothing you can put your teeth into so when you think about that -- how do you think about that? >> it's a very emotional trade. i think what happened is people were piling into the trade expecting inflation five years ago when the printing presses were turned on, everybody assumed by this time we would have inflation. although the monetary base
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increased, we didn't have velocity of money. it never really happened. as we started to break levels, people were in the trade had to get out. it was just a massive exit. i think, you know, if the only thing that can turn it around is if the real rates go negative again and at this point that's not what's happening. we have disinflation and positive real rates both kryptonite for gold at this point. >> there's no reason why it's 1,200 opposed to 1,000 or 1,30. there's no anchor there. >> if you're afraid of dollar devaluation you try to find a place to hold value and at that point everybody feels like gold is the most liquid. i'm not quite sure if you'll find gold holding down here if you will see people start to pile in again. people were hurt in this trade and even if we get some kind of catalyst for gold to go higher, a lot of people are skittish
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about getting back in. >> all right. david and tom, thank you. we appreciate it. andrew, did you retweet me yet? >> i haven't yet. i'm trying to figure out what clever thing i can say. >> i'm a terrible twitter. >> tweeter. >> every week i get a summary and it says you had one favorite, which is better than last week when you had zero favorites and no retweets. i tweeted something yesterday. i tweeted a ronald reagan saying and a picture of me and ronald reagan. >> looks beautiful. >> i got -- they look like brothers. >> as you're going to tweet, we went to high school together. that's what i heard. >> same colorist for hair. >> both of those are funny. if you want to see -- don't tell
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them the quote. it was out there with a quote. it's me taking sides in the political spectrum. >> because you never do. >> because i never do. follow me. you need to follow me to see my tweet. so i'm going for get some followers. >> what's your handle? >> @joesquawk. >> how many do you have now? >> over 400,000. >> i have 24,000. >> okay. >> i could get you some followers. you know what scares me? i know how to tweet a picture. you know what that scares me for? weiner. i might by accident tweet my wiener. i don't want to do that. i'm out on the grill. i was grilling wieners
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yesterday. >> i'm out of this conversation. >> still to come, it's jobs friday. we are less than an hour away from the june employment report. forecasters looking for an increased of 160,000 in nonfarm payrolls. we'll talk to our own panel of forecasters at 8:00 eastern but first -- >> is a fish worth more alive than dead? surprising economics of fishing when we come back. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.
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the futures suggesting the dow opening higher by 122 points. that could change when we get the monthly jobs number. >> all week long we've been bringing a series called economic sense. we talk about how biologists use the environment to save fish. i think tragedy of the commons. it kills me. >> they are using economic -- >> where were you when you shot that thing? >> down in the everglades. >> you knew you were going to do this. >> it's a place where if god exists, that's where he lives in
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in the everglades. >> you knew you were going to do the series because you did the opening down there. >> we did it a couple months ago. >> it's old. >> it's not old. >> so good that it lasts forever. >> everglade. >> economics turns out is having a big impact on the environment as marine biologists show politicians how to preserve habitat rather than developing it. many fish recreationally including me. to keep our hobby from going belly up, we need healthy fisheries like this one in pine island, florida. to tackle the problem, marine biologists who weren't getting through to policy makers got their attention by turning to the economics of fishing for leverage. >> nice fish. >> fishing generates an estimated $30 billion of economic activity in america every year. in some places like california,
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texas and right here in the sunshine state, it's big business. recreational fishery is worth about the same or more than the citrus industry. >> reporter: nationally recationally fishing provides the same number of jobs that ford or general motors does and is worth more than american express in retail sales and adds up to more tax revenue than the total tax revenue for 11 states combined but no one really knew that. what people knew is what commercial fishermen told them that reducing harvest would cut jobs and revenue. then the biologists got smart and hired economists to do studies and gauge the economic impact of healthy fisheries. bottom line is the economists found that fish are worth more alive than dead. if you save the fishery and save habitat, it could mean more jobs, more growth and more tax revenue. due to past practices, florida
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has lost close to 50% of their mangrove shore lines home to many species worth billions of dollars. a guide travels to florida to fish for a big six-foot tarpon but existence of that fish begins with a decision not to destroy a mangrove. aaron adams says the decision is an easy one. >> you don't have to pay to build roads. pay to have a big police force. run sewer and all that kind of stuff. as long as habitats are healthy, it's basically free. >> i brought along studies for your reading. the economic impact of fishing in the bahamas. >> who paid for these reports? >> they get money from guys like robert rubin and some of the big -- there's an economic angle there. it's true. i thought about that. the difference is here's a report and methodology is in there. you want to dispute the report.
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bottom line is it leads to changes. things like preserves have created in the bahamas as a result of these studies. development has been altered or changed in places like florida because of these studies. it just puts it out there. you can do that but here's what it costs you and anglers spend a lot of money when they go to these places. they hire guides and hotels and stuff like that. that's different than commercial fishermen. if you cut the quota to this, you lose x jobs and x amount of revenue. now it's on even footing and politicians make those choices. you wouldn't put a condo in the middle of a golf course. people wouldn't come. put it on the side or whatever. you would mitigate the impact. it changes the discussion. it's not right to stop all development but it's right to think about the impact of development. >> this is must reading for joe.
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this is all about multipliers in here. >> it has all of the methodology in it. >> any climate change stuff in there? >> i don't believe so. they stay clear of this. >> i'm going to point to this media matters site. i'm going to report you to them. >> hold on. i think you're wrong about that. i think they are big in this group called trout unlimited if i'm not mistaken. >> i'm joking. >> i'm serious. that's the problem we've had for 11 years. >> this is such a parity sight that they would do well to fund this thing because every progressive cause looks so bad the way it's presented by the site. >> when i go to specific regions and i go out to wyoming and jackson hole and you talk to local people, their politics goes away when it comes to preserving the local environment. you can talk to hardcore republicans about the smog situation created by the
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development of energy in the wyoming region. >> the point i would make is that i am an environmentalist. i want to clean rivers. i want clean water and clean air. i think the demonization of c02 has hurt the cause. it's too bad. >> rather than emphasize -- >> i want to recycle. i want to not use energy and do all of the things you're talking about but the way it's presented and you have been to sea island. this is better than sea island in the everglades? >> more beautiful? >> it's more expansive. to me it's more beautiful. i don't want -- when you go deep into the everglades and when you are nowhere close to nowhere, if the guide died, you would die. there would be no way to get back home. >> that scares me.
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>> you have your cell phone. >> there's not even that up in there. there's nothing. preserves that place is one of the great things we've done. >> did you ever read "rivers of grass?" >> i lived in florida. >> thanks, guys. coming up, the egyptian revolution part two. we'll talk to a former u.s. ambassador to egypt about how the nation will react and what this means for billions in aids and we'll talk jobs of course and health care with ron williams. former chairman and ceo of aetna with the delaying of obama care. what makes the sleep number store different?
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we now turn to a former u.s. ambassador to get his take on the situation in egypt. you served as ambassador under bill clinton and to israel under george w. bush. mr. ambassador, thank you for joining us this morning. >> thank you. good morning. >> how do you assess the situation right now and what do you make of all of the hand wringing about whether this should be called a coo. is what happened good or bad? >> in egypt there's a lot of
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consolidation of power going on. the decision has to be made about who will transition government and how far the arrests will go and whether or not there's a timetable for both constitutional reform and elections so they have a lot of work to do against the backdrop of a really bad economy, one that probably was one of the main causes of mass unhappiness. back here at home, you see already in editorials this morning disagreeing on whether or not u.s. aid should be cut off. "wall street journal" saying let's support this. "the washington post" saying this is a coo that violates our law. >> if you were making the decision, if you were in the administration right now, what advice would you give to this president on that very question? >> i would first of all forego as many public comments as we could and get in touch very
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quietly with the leadership in egypt and lay down clear red lines. number one, this has to be a transition with a time frame. number two, that the constitution has to confirm to liberal democratic values and number three, that there has to be due process in all of the arrests going on. i would not cut off aid to the military given the fact that we have a strategic relationship with them that goes back 30 years. >> okay. but so what? in theory if it were a coo, then in theory our laws say you can't give them that money so just that we had a relationship so far why does that outweigh the ultimate legal question? >> i'm playing with semantics and that would be my advice for the time being let's play with semanti semantics. we don't necessarily always follow the letter of our own laws and this is one of those cases where i think we're going to have to tiptoe a very significant line. once we declare this to violate
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law, we have no choice and of course the president would be bound to follow that law. i think as long as possible if we can find a justification for calling it something else so we don't trigger this, that's where the strategic tie kicks in. >> timetable for elections should be a red line assuming the administration would follow the red line, what do you think the timetable should be? >> i think a reasonable time frame for this process should be about a year. you want to have your constitutional reforms in place before an election so people know what they're voting for to have a credible constitutional process you probably need four to six months and you need several months to organize and set up what we hope would be free and fair elections. i would say about a year from now would be a reasonable time frame. >> mr. ambassador, thank you so much for joining us this morning. we appreciate it. >> my pleasure. bye-bye. the countdown is on. the june jobs report is a little over 30 minutes away.
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our panel of experts are getting ready for predictions and reaction to the data. we'll break it down and tell you what it means for the economy. you don't want to miss this. zandi is already here. all here at the top of the hour. as we head to the break, look at u.s. futures ahead of the jobs number. dow opening higher by 131 points. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time.
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the all-new 2014 lexus is. it's your move. welcome back to "squawk box." i'm joe kernen along with andrew
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ross sorkin, and michelle caruso-cabrera. becky quick is off today. smart thinking. i've been trying to say this is a four-day weekend for me and you and that we just have an appointment we had to just take care of something in the morning on friday but we still were up at 3:00, weren't we? guest host this morning is mark zandi. we got to be with michelle and mark zandi. we are counting -- do we count up to 8:30? we don't count down? >> i count down. >> that clock is counting up. >> june employment report. you're looking at a live shot of the official labor department clock. >> nobody has a count-up clock. >> we're delayed. >> countdown to the moment. >> we never know what andrew might say because we're on a delay by a second.
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forecasters expect increase of 160,000 in nonfarm payrolls. zandi would know whether there's a good number or not. >> not bad. >> decrease in unemployment rate of 0.1 of 1%. steve thinks some day people start coming back in the labor force. so low. 30-year low. that will hurt. >> it will slow down the decline. he was arguing that it would lift it. >> when there's more people trying to look for a job, that raises the size of the sample. >> the job growth doesn't accelerate as well. >> we'll have a whole panel. >> we'll do that panel. first, michelle has some headlines and the world keeps spinning. >> muscle flexing by the egyptian military this morning as fighter planes flew over cairo. this just a little more than a day after the inauguration of the country's interim new president. since president morsi was removed from power, a crackdown on members of the muslim brotherhood. supporters of the deposed
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president plans to protest today. morsi is now under house arrest. we'll talk more about egypt's future at 8:40 a.m. eastern time, the senior associate from karn gri endowment institute ka peace. latest quarter was a 47% jump from a year earlier and 8% increase from the prior quarter. another major development brewing in the insider trade be investigation of steven cohen. t"the wall street journal" reports prosecutors do not have enough evidence to file criminal charges against the famed hedge fund manager. the five-year statute of limitation run out this month and unidentified forces say that will likely pass without any action. let's get a check on the markets ahead of the jobs report. we had a big, big rally in
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europe yesterday. huge when two central banks said they would be easing for a long time. they don't talk about the future normally. watershed sea change. big deal if you're into central banking. overseas in asia are higher across the board. look at the hang sang in hong kong. nikkei higher by more than 2% as well. europe continuing to rally today after yesterday's move? no. i would call it flat considering the big gains they saw there yesterday. andrew? >> our jobs panel is here to predict and dissect the most important economic data point of the month. joining us is the chief economist at chase private client. adam from the center of american progress and kevin is the director of economic policy studies and senior fellow at the american enterprise institute and former adviser to mitt romney and our guest host from the begin, mark zandi. have you given us your number?
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>> i have not. you have not asked. >> let's do that now. we'll go around the horn real quick. since you're in studio we'll start with you. what's your number? >> 175. 188 is adp. private sector. and government is going to lay off 10,000 to 15,000 jobs. that's effects of the sequester kicking in. one other caveat, june is when school ends and there's as lot of difficulty measuring teachers and when they leave. we see a lot of volatility in that number particularly. >> anthony, do you want to jump in? >> i'm looking for the unemployment rate to come down to about 7.5%. i like to look at the jobs conference. the conference board and that's suggesting that more jobs are plentiful and payrolls looking for 170. >> let me ask a different question. you're our stock market man. what do you think will make the market truly happy and what will make it not so much?
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>> i think that at this point the market probably would like to see a number that is a little bit positive. it's one of those things where they want maybe a little bit more than goldilocks but not too much more and that would get the market happy, corporate profits will continue to go up and we'll continue to see multiple expansion and that things will be okay. we don't need to see a blowout number but not a huge disappointment on the premise that somehow the federal reserve -- >> bad news is good news mantra. adam, what's your number, sir? >> there's a lot of forecasts out there for what we expect payroll employment to be today but to look at the bigger picture coming in at the high end of the range of forecasts, we're not growing fast enough to get employment back to full employment in any reasonable time frame. >> i don't think adam gave you a number. >> we need a number, sir. price is right rules.
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>> $1. >> my name is bob barker. kevin, where are you at? >> i think that the economy if you look at adp numbers, job number is 30,000 above adp number which would be a blockbuster number today and the advanced herbals show strong capital spending growth and a lot of good bones in that data as well. i think we'll be close to the adp number. >> he was our guy last time. >> totally on the money last time. >> can we go to good news/bad news issue which if you believe tapering is coming and nobody knows when it starts, how this number will ultimately impact that decision. are you worried at all? >> no. i think if it comes around 175 -- >> let's say we come in around 175. >> that's consistent with the feds forecast. that would be consistent with what they tell us about qe and
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when they will raise interest rates. >> so i was going to say is there good news and bad news? if the number comes in lower than we expect, does that say they're not going to take their foot off the pedal that quickly. >> anthony said this and i would agree. we're getting to the point where good news is good news. if we get a good jobs number, i think people are going to say, okay, i can live with higher interest rates in the context of better jobs numbers and a lot is priced in. >> what's the center for american progress have to say about that? >> i have to say that even if we see a really good number this morning, that's not going to change the outlook that the federal reserve is looking at in assessing the state of the u.s. economy. the employment is a lot lower than the feds targets would like it to be and inflation is a lot lower than the feds target would like it to be. and so this should not even if we had a really good morning this morning, it shouldn't
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change the feds calculus about where it's going. >> what would be a good set of economic data? >> good is anything that's going to -- we're going to have to sustain monthly jobs growth above 200,000 for quite some time in order to be able to reemploy and bring new entrants into the labor force to a level that will get full employment or get employment back to full employment levels. we're looking out into the next decade and another generation of experiencing high long-term unemployment. >> where is the actual center for american progress? >> a block west of the treasury department. >> so it is in the center for any progress that we'll ever make is sort of based in washington, right? >> yeah. >> i asked this question again and again. i have this -- there's fundamental disagreement on both sides as you know like you have heritage on one side.
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you have guys on the other side. we all want more jobs. that's all any of us really care about. what frustrates me is if we can't get congress to do fiscal things like infrastructure, they move onto other things like climate change or immigration or gun laws or gay marriage or whatever because they don't think tax reform or entitlement reform would generate jobs. that's what a whole half of the country thinks that washington is in the way. they don't need to do anything pro actively. they just need to get out of the way to get these jobs created. are you totally -- >> if we look to the economics research about what causes economies to grow, we know it's things like investment in education. the most important thing investment in infrastructure.
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>> is there anything to the notion that maybe changing -- doing the affordable care act in the first year of -- when we were still -- unemployment was above 10%. we're still dealing with some of the effects and some of the uncertainty. is there any second-guessing the ideology that that was the right thing to do now that it's been so tough to get this recovery going? >> i don't think there's any question it's the right thing to do so extend health care coverage to people. human capital and health is part of that and is number one driver of economic growth and bringing costs down, containing costs in the health care sector is going to be a big part of our long-term fiscal outlook. >> can i raise -- a couple people on twitter sent out a note saying you guys want to comment on the crappy state of the jobs that are being created. >> it's a good point. >> if you look at where the job growth is coming, it's leisure
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and hospitality. sectors that are low paying jobs. i think that's a fair blemish on the job numbers we're getting that they are just lower quality jobs. >> and then therefore -- go ahead. >> mark is right. the jobs are not high quality. that's one of the reasons why average hourly earnings are growing at a 2% number and year over year might see that number slip down. one of the things that wasn't mentioned that's important is that since the financial crisis began, we have seen that the labor force is growing a lot slower so therefore you don't need 200,000 jobs per month in order to lower the unemployment rate anymore. we've been seeing that since quantitative easing 3 began, the labor force has been growing less than 100,000 on average per month. >> if we decide that all jobs are not created equal, how does that change the view of the economy and how quickly it's growing and estimates that ben bernanke and fed are using? >> this is not atypical. this is not early -- we're getting deeper into the recovery
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but first parts of recovery you generally have lower paying jobs created first and then you get better paying jobs starting to kick in. feels like that's starting to happen. do we have time for one second for kevin. >> i think that mark is exactly right. you don't create a ceo job when we start to recover. you create a job where somebody gets to build productivity over time and watch wage grow. it's normal in data right now that wage growth is low. one thing i can say about the puzzle about what's going on is that the political supporters would be crowing as the economy starts to get better. i think that big government agenda is upended a bit if we don't need another stimulus. it's odd to watch as data gets better and better that it almost seems like president obama's allies are getting more concerned because stuff they want to do, big government spending programs are less likely. >> legislators like to legislate. that's his point. they have nothing to talk about.
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as economy gets better, they have nothing to talk about about more spending they can do. they don't have justification for it. >> we have more to talk about but we'll have to do it after the break. our panel will stick around and talk numbers. we'll continue to count up to the june employment report. we'll talk jobs and health care with ron williams. the former chairman and ceo of aetna. his thoughts on the white house decision to delay a key provision of obama care. that's right after the break. out there owning it. the ones getting involved and staying engaged. they're not afraid to question the path they're on. because the one question they never want to ask is "how did i end up here?" i started schwab for those people. people who want to take ownership of their investments, like they do in every other aspect of their lives.
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welcome back to "squawk box." dow looks like it would open 139 points higher. s&p up close to 15 points and nasdaq up over 25 points but all of this could change in 15 minutes when we get the employment report at 8:20. >> this week the obama administration decided to delay for one year an employer mandate that requires companies to provide health care insurance to employees. our next guest says the decision is a practical one and shows that the white house is listening to employers concerns. joining us now on the squawk news line is ronald williams
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former ceo of aetna. it's a pleasure to have you on today. there are -- it wasn't going to work right now the way it is. and companies didn't have enough clarity and the government probably wasn't ready. it does make sense. i see what you're saying responding to companies but does it imply anything about the other mandates or the other parts of the law? "the journal" thinks it's more important than other outlets in that it could indicate a problem with the individual mandate. >> let me first say good morning. it's a pleasure to be here this morning. i do think that it was a very practical decision based on the physical reality of getting all of the work done and decisions made in a timely way. i do not believe that it really will have an impact on the individual mandate. i think in some ways it may actually increase participation.
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as you know, it really affects slightly more than 1 million individuals who would be impacted by this decision so i think it's a decision around the edges. >> do you think that there's going to be a lot of companies -- the big fear -- we were told that if you like your plan, you can keep it. the big fear is that companies would just say, you know what? i'm just going to -- i'm just going to pay the fine and let people just go into one of the exchanges. why wouldn't that happen? why isn't this baby steps to single payer, the holy grail of the progressives? >> that's a good question. a lot of companies are waiting to see the program season a bit. i think many of these programs start out with great expectations and really very good intentions to cover more people. it turns out it's a lot harder to implement these programs than it is to talk about and describe them. i think business who is really
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value the profductivity of employees will watch and see what happens and we'll see how business views that as an option. i think it's a practical option. >> does the whole issue speak to something far larger which is government running this kind of program is extremely difficult even from the beginning. it's going to be enormously complicated. it's such a bad start. do you think it actually ever gets better? to me it's a telling sign that this is something that government shouldn't get involved with in the first place. >> i would agree that i think that private sector solutions are much better for many reasons. i think what we're going to see both with this decision and with the exchanges is that it is very complicated and very difficult. now, my own view is that the exchanges are going to be declared a success by those
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people who support it and not a success by those people who believe that we should have different approaches. recreating the administrative infrastructure is a huge undertaking and ability to get it right and make it flawless and give the customer the experience they would expect is going to be a huge challenge for the government. >> the retort is social security and medicare are the same problems. >> medicare is a mess. >> people love it. the country loves it. >> i think we have to recognize that a lot of the comparisons really around what happened in massachusetts. we have to understand in massachusetts the 20-year migration and the last step was really the individual mandate decision. what we've done with this law is really crammed 20-year migration that massachusetts went through into a very short time frame. so i think you really can't compare established programs
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that will have a long time to work out kinks with this massive transformation. >> all right. ron, we appreciate it. next time we hope we'll be able to get you on camera. i know we had some technical problems and some of the stuff you said was cutting in and cutting out. we appreciate what you're saying. thanks. >> okay. very good. >> just because wealthy seniors love subsidized health care and health insurance at the expense of future generations doesn't mean it's not a mess. >> think of the world prior to medication. wh that was a whole mess. >> the private sector started to response with insurance programs for seniors. go back and read that time period. that's not true. the government cut it off. >> we have to take a break. now i'm seeing the other side now. here's some of the things i'm getting about july 4th isn't fireworks. socialism. your people are writing into me. it's like the government does the fireworks so if you like that then you must think there's a role for -- i'm seeing the
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other side of this. i'm really seeing reagan was wrong about a lot of things from your tweet people. >> fireworks are socialists. >> it's a collective thing. we all do it together. paid for by your tax dollars. >> it takes a village to have a fireworks. >> each village decides. it's taxation at the local level. >> that comes back to steve's fishing story. >> still ahead, we're counting down to 8:30. eight minutes away. june jobs report coming up. we'll get final predictions before the employment data hits the tape.
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welcome back to squawk. we're just five minutes away from the june jobs report. >> let's get final predictions before we get to a break and get that final number. let's go to rick first. let's start with rick. he's had a decent record recently. last month you were off. before that he hit it two months in a row. rick, what's your number? >> 157,000. >> and you get there how? >> i have a calculation based on moving averages and some recent data like retail sales and i
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benchmark 150,000 and add in or subtract. >> you sound like every other money manager we have on with that. >> thanks a lot. i don't say nasty things about you, andrew. >> not that he knows of. >> i'm talking about just getting to the number. >> i don't say things about you as far as you know. >> rick, we love you. steve, where do you come out? >> 190 range. i think there will be more government employment as a statistical anomaly this month because june is a weird month and revised away. >> because of the teacher thing? >> federal also has a problem. that would potentially be revised away. it doesn't matter. >> anyone want to make an estimate on hours? >> i think you could kick back up to the 34.6 number. >> it rose last month, right? >> it hit a high. unemployment rate is the question mark. >> we'll give you the answer when we return. the numbers we've been waiting
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for all morning. just a couple minutes away from the june jobs report when we come back.
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welcome back. we are just seconds away from the june employment report ahead of the number dow futures have been strong all session. a panel here that is going to respond to this and a panel of experts plus steve liesman. eamon javers joins us now from the labor department and he has the numbers. what are they? >> up 195,000. up 195,000. unemployment unchanged at 7.6%. average hourly earnings up 10 cents to 24.01. nonfarm payroll for april rev e revised up. revised up from 175,000 to 195,000. that makes job gains in april and may 70,000 higher than previously reported. private sector jobs were up 202,000. federal government jobs by contrast down 5,000. leisure and hospitality added 75,000 jobs.
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professional and business services up 53,000. retail trade employment up 37,000. civilian labor force participation rate little changed as 65.3%. people working part-time for economic reasons rose by 322,000. i'm eamon javers reporting live in washington. back to you guys. >> let's get back to our panel for reaction. mark zandi, anthony, adam, kevin, rick and steve, you are probably a guy that has the most because you have all of the adp stuff. >> adp did well. >> excellent number, right. >> what do you tie the tear stu temporary stuff to? part time? >> it may be health care possibly. you look at the hours worked per week and that was unchanged. you would expect that to decline. so that's the perplexing thing
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if you listen to business people in leisure and hospitality and other things they have been complaining but you can't see it in the data. >> last month i thought that the people got what they wanted. they got a good number and yet you didn't see the rate do anything. so the public says the fed should stay in but it was still -- you got the best of both worlds. it's similar now. >> i told you earlier that unemployment rate last month was 7.55. it just got barely revised. >> what is it now? >> 7.5 from what i can tell. >> i thought we showed 7.6. >> okay. >> which is perfect. >> i'm looking at the survey. that's right. what happened was 177,000 people entered the workforce. unemployed went up. you have the dynamic i was talking about. you said you were interested to
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hear my take on the call. that's not your prediction? >> i think it slows the rate of decline. >> isn't the overall rate supposed to drop by 7.1 by september? >> how come when rick gets it right, that's all we talk about. i get it right and joe and you guys don't care at all? >> was that a rhetorical question. >> i had 193. >> that's got to be a rhetorical question. i just want to point out i had it right. >> i tell you what the markets are on fire here. this is really, really fascinating. forget stocks. stocks are doing what they've done all morning. >> we're still not talking about me getting it right. >> we've seen a huge break in the pound. the pound is really getting pounded. the euro to a lesser extent. there's only one currency, two, that are doing better against the dollar. interest rates jumped up which
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matches the intraday high yields going back 23 months. that was the high yield mark of several weeks ago. our current high yield closed is 261. went from 265 to trade 262, 263. this is going to be a big day. >> rick, do you see the jump in u-6. that was what they were talking about with surge in part time for economic reasons. >> mark zandi should know. this is why they postpone part of the health care after the election. a, because they don't want to throw hillary under the 2016 bus and i think they don't want to see a lot of jobs lost, which you probably do see when you go up to these cutoff dates. >> i thought you meant zandi would know because he can't find full-time work. >> anthony, your thoughts? >> well, some of the things that
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are not getting any attention is the average hourly earnings. that came in very strong. 0.4 of 1%. an environment with no inflation. this is real potential purchasing power and it really offers a little help out there. with regard to the part-time for economic reasons, that's not encouraging. that number is very volatile in march and went down by over 300,000 and rebounded in the month after that. it's a very volatile number. part of it could be health care. part of it could be the transitioning to an improvement in the labor market conditions but one last thing to point out, that is that one of the things i'm very enkoushcouraged by is labor force is starting to recover. it was way too weak. it says people are getting more encourage. higher consumer confidence is good. higher job confidence when it comes to perception out there is very good for labor force participation. >> nobody is doing the good news/bad news situation.
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>> i was about to say and ask anthony or kevin to my mind this keeps the fed on track for a september taper. and the number in my head is 20 billion. i don't have that number on any -- 20 billion down. >> let's emphasize the market doesn't seem fearful of that. >> i think the market gets this concept that less easing -- >> maybe we had our hissy fit. >> we had weak hand/strong hand shift. >> adam, it's never enough obviously. i was wondering, because a lot of this is fed induced maybe in terms of the wealth effect and stock market and keeping mortgage rates low, do you believe that this is a good report and that things are working well when the fed is orchestrating a lot of this or would you rather have it coming from the ground up? >> there's no question that this number comes in as a welcome report along with revisions that we've seen for the past few months.
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we're creating jobs faster than we were and faster than we thought. we should be happy about that. that doesn't mean that we're out of the woods yet. as we talked about earlier, the quality of jobs being created not so great. about 0.3 of the job we lost during the great recession were middle class jobs and about what we're seeing. we're not seeing temporary hiring and hours that are usually a prediction of future hiring. a long way to go to get a real strength in the labor market. so as far as the fed is concerned, i don't think this should change their perspective on where the u.s. economy is going in terms of easing. >> ten-year yield approaching 2.7. >> that's a big number. >> and kevin, i mean, for those on the right that say, wow, this economy can't get out of its way because of awful policies, you have to concede that things are
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moving in the right direction and things are improving. what would you attribute that to? just that it's a strong system we have in this country that inspite in spite of what you do it's going to grow? >> think about what's happened this year. tax rates went up. that lopped 1% off growth we could see this year. you don't see that. that's something that conservatives have to think about. why is that signal not in the data and we have sequestration that was going to be armageddon and that hasn't happened either and run up in property values and equity prices has people hiring right now. >> i just want to say that i thought i saw -- rick, can you confirm that the market was on fire and has come off a bit? >> the stock market is still up 165 in dow futures. it was below 140 before the number. i would say that it's not on its
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best levels but it is cooking in grease pretty good. >> it hit a peak of 266. new all-time closes. steve, i do congratulate you. you got very close to the number. if you bring a tote back down here, i'll sign the heck out of it for you. >> you're a gentleman, rick. an absolute gentleman. i think whatever our differences we all want more people working. and earning more. >> except for maybe 500 guys in d.c. i would like a lot more working. >> just 500? i think you lost a zero in that. >> that includes all of the czars. >> i think rick would like 5,000 fewer people working in washington. i do think though that one of the questions is that if the market can do two things here, which is digest this better
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economic data as well as higher interest rates and still feel higher, to me that's a quantum shift. >> now you think bernanke has this thing right? >> what do you mean now i think? i thought that for a long time i think. >> we still don't know. we still don't know how to get out. >> that's the question. >> we'll see how it looks at 4:00. we'll look at stocks at 4:00. >> when do you get to say the guy was right? >> i don't think you get to say that for a year. >> what guy? what guy? >> you have to land this plane. >> we cannot say that it was the right course until what? 2017? >> you have to say so far it's unbelievable how well he's flown the plane. >> we need sully sullenberger to be the next fed chief. >> that's a good candidate.
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we'll see how guys like larry summers could do is one of the names i hear out there. >> who did that? >> i guess maybe that's the way the market feels. >> all right. thanks, anthony, adam, thank you. you didn't get mad at me for playing around. kevin, thank you. we need you each and every month. people have been requesting that we have someone from his perspective and then rick and steve and mark will be staying with us for the rest of the day. >> we have your perspective. >> we have mine but i try to go right down the middle. >> coming up, the latest on the crisis in egypt. we're going to talk about the process for choosing a new government and the challenges the next leader faces. i want to know what the role of the u.s. should be in all this. we're back in just a moment.
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welcome back to "squawk box." the futures in the wake of the jobs report sharply higher though off the highs of the session. dow jones industrial average would open higher by 158 points. nasdaq by 29 points. >> support of egypt's ousted president protesting today calling it friday of rejection. for more on the situation in egypt, we're joined by a senior associate from the carnegie endowment institute for peace. good morning to you. >> good morning. >> help me with this. the u.s. government spends about
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$1.5 billion a year in aid to egypt. what should the role of the government in the u.s. now be given what's happening there? >> the obama administration is faced with an issue. the u.s. wants to show it's committed to democratic principles and committed to the rule of law and the rule of law and democratic principles were not followed in egypt. the country's military waged a coo against an elected president mohamed morsi. on the other hand, the u.s. government also doesn't want to be seen as going against the will of the egyptian people. what we saw over the course of the last week or two in europe was tens of millions of people going out into the streets against mohamed morsi. that's going to be very difficult for -- it's been very difficult for the u.s. government to reconcile these two objects of standing for rule of law and standing for
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democratic principles but at the same time not going against the will of the egyptian people. >> what ultimately is the answer? is there a carrot or stick involved in terms of how to work with either the military or whatever you think is supposed to be the next election process and how that goes? >> i do think if you saw the statement from president obama, they did again articulate this commitment to rule of law and principles and that's the route which they're going to continue to talk about and i think they will want the transition, the process towards another presidential election to happen as swift as possible. they certainly don't want the military to continue to rule over egypt and frankly i'm not sure if the egyptian military is interested in overtly ruling over egypt. >> real quick, go through some of what you think may then
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happen next over the next couple weeks. because there is a lot of volatility in the region. the economy and markets are all looking at this trying to understand what may happen. >> i think the immediate concern that egyptian liberals and u.s. government has is that the muslim brotherhood, president morsi, the ousted party in egypt is going to say that they -- the legitimate power they held was taken away illegitimately and they'll go outside politics and take to the streets and use violence. it's critical in this transitional process at that takes place muslim brotherhood is reassured that their rights are going to be counted. i think an announcement has to be made very quickly as to when presidential elections are going
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to take place. >> thank you for joining us this morning. interesting to see what happens. thanks. we'll talk more about the jobs report and the reaction we saw in different markets as we head to break. look at u.s. equity futures up 160. what do you drive? i drive a ford fusion. who is healthier, you or your car? i would say my car. probably the car. cause as you get older you start breaking down. i love my car. i want to take care of it. i have a bad wheel - i must say. my car is running quite well. keep your car healthy with the works. $29.95 or less after $10 mail-in rebate at your participating ford dealer. so you gotta take care of yourself? yes you do. you gotta take care of your baby? oh yeah!
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welcome back to "squawk box." let's rekcap the numbers non-fam numbers came in well above expectations. and the unemployment held steady and the private sector added 202,000 jobs in june. our guest this morning is mark sandy. much better so far and the markets are reacting positively. >> well, the 10-year bond yield. >> went to 2.67%. >> and the stock market is digesting that reasonably well. >> holding on. >> and we will have to watch what is going on there. >> and is there a problem of the 10-year yield or almost doing the tapering for the fed? >> well, the expectation is to end the year at 2.5, so if we are at 2.60 or so. >> we have been at 2.70 a couple of weeks ago. >> well, at sustained basis. >> at the end of the year?
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>> 2.50? >> yes. >> then we are golden. >> higher? >> well, then i downgrade, because of the housing. >> and the gdp growth? >> it is very, very weak, and like 1 or 1.5%, so there is a lag between that and job growth which suggests that we are not out of the woods yet in terms of the job growth and creation going forward so we have a few more months of that. >> see, every time we don't go down in the "usa today" headline number, the fed stays that far a away from 6.50% or whatever it is, the key numbers in unemployment where they have cover given the dual mandate to stay ak come mow ccommodative n what. >> yes. >> that is what greenspan says. you have to manage it no matter what. >> and the fed says we will stay no matter how long it takes.
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>> and greenspan says you may not be allowed to stay as long as you want. >> and the fed has all of the tools to keep the yields down, but they may have to be more aggressive than they think they have to be to achieve that. >> and even more stronger metaphors out of members of the central bank. >> well, the car may not work for us. we have been using that. >> and maybe farrell pigs or something like that. >> why do you think that the interest rates will gro up more? >> well, my view is that the job growth over the last two years we will continue to get that for the next six months or so. >> what do we end on in december, 7.1? >> no. >> much higher? >> with the current job growth and labor growth, the unemployment is falling half a point per year. so we are at 7.6 and if everything stays where it is, a year from now it 7.1, but that s is a year from now. >> do we ever see a improvement in the major cyclical dislocations that we saw in terms of labor participation rate drop sping so dramatically
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that some people are not going to be coming back and the people employed is dramatically lower. >> and the decline in participation, and 2.5 percentage point since the hit, and that is due to demographics, and that is not coming back. >> because they retired. >> but 1% that is cyclical, and it will come back, but exactly when, and that is in my view not cause the unemployment to rise. >> and great point. maybe i was rounding up to 2.7, but if we go to 2.8, i wonder if the market doesn't like that by the end of the session. >> well, they can't like it. >> by the end of the session today. >> or 2.75. >> and we don't know the liquidity in the markets, right, because of the trading around the holidays, and maybe it is just juiced. >> and rick santelli says that all of the adults are out of the office. >> and we will have to see what happens next week the yield. but the bond market and the stock market are disconnected. >> so we are 2.68, so this is higher than it was?
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>> well, it is not disconnective if you think that the rotation is going on, because we saw the sell-off in the wake of the announcement of the potential tapering and you saw a sell off in the bond market and the stock market at the same time and presume a lot of cash. that cash has to come back at some point, stocks or bonds? >> well, good point. it could be that the economy is doing better than anybody is anticipating. >> are you investing in bonds now? >> well, we didn't get this high before. >> this is higher. >> this is higher. okay. we will see how it goes. >> 3.0 would get your attention. >> 3.0 would get everybody's attention. >> well, 2.5 is already with my attention. and if we get higher, then everybody will mark down the expectations for next year. >> and coming up is mark zandi of moody's, and we will have a little surprise. how much would you pay for a lock of mick jagger's hair?
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auction for mick jagger's hair. the winning bid is $6,000. that was double the presail -- presale estimate by bonhams. and the money -- people have suffered -- well, considering the age, that is a nice looking hair. do you think that it is current? >> well, it is amazing that he has hair. >> well, i don't know -- >> it is a good position to be in at his age. >> i don't automatically assume it is dyed, because there are people that, well, they don't get gray and other people gray when they are 30, and i'm getting it here now. and people are convinced that as you said reagan and i have the same color. let's get back to the same guest host mark zandi who has 23 seconds and no, 22, and 21. >> boring last word, sorry. you look through the volatility of the data month to month and where we have been for two
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years. the average monthly job growth is around 175k and that is where we were and where we are. how about that for 20 seconds? >> thank you. and everybody have a great weekend and join us monday. "squawk on the street" begins right now. ♪ good is good ♪ bad is bad wellb , it looks that way. i'm carl quintanilla here with k kelly and david faber. jim cramer is off today. the earnings are up 0.4 and the biggest since 2008, and take a look at what is going on. the futures looking at a good gain and a lot of it


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