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tv   Squawk Alley  CNBC  May 5, 2015 11:00am-12:01pm EDT

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headquarters in burbank, california. it's 11:00 a.m. here on wall street. and "squawk alley" is live. ♪ ♪ welcome to "squawk alley" for a tuesday. joining us, kevin o'leary, chairman of o'leary ventures and investor on "shark tank." kayla tauschy as we watch the market down 48 points this morning. couple calls on the street. netflix getting an upgrade from bank of america, based on its rapidly growing portfolio of aaa content. they take it from underperform all the way to a buy.
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they take their price target from 350 to 722, and then tesla initiated as a buy over at jeffries, a $350 target on the stock. jeffrey says china concerns are overblown, gross margin improvement and significant pent up demand for tesla cars. kevin, two very note worthy calls, especially -- b of a essentially admitting we've been wrong on netflix for a long time. >> netflix is interesting, because i would argue you would get more volatility, there is more risk in the stock now than ever. when you create hollywood content, you run into the hits and misses. and i know everybody says that you never get a miss on netflix, because even if you make something really that nobody wants to watch, the long tail is it stays there and serves up digitally on the streaming basis. somebody will buy it. i argue if you look at the risk of creating content for television, that's a different business than streaming it. i think netflix is riskier now. not safer. and i don't understand this call. >> well, at a certain point,
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doesn't the track record go against that idea? you could say the same about amazon. amazon in a lot of ways riskier now than ever. look at how they have executed time and time again in an environment when others have succumbed to the risk. is that what we're seeing with netflix right now? >> you want to put a huge multiple around one or two hits, like "house of cards" and tell me for the next 20 years, their producers will have the same success? i say no, that's not going to happen. there is no evidence of that. in all of the history of making television and movies. that business is actually a lower turn, single digit business in the aggregate of portfolios. for every avenger, there's ten dogs that people lose money on. people forget that. i know we're in the euphoria stage. i just want to be words of caution about this changing the model and making it safer. i say no. it's riskier going forward. streaming everybody else's content as a click charge infrastructure business, i like. that makes sense to me. all it needs to do is pay me a dividend and i might buy the stock one day. >> to be sure, kevin, the report
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does point out there are risks to the call, namely that the u.s. market is already saturated so far as subscribers go to netflix. and also that more competition and video on demand could eventually increase content rates above where they are, even now. those are some pretty big risks. i'm just wondering if you think at this point these are pie in the sky calls from momentum names and if you think it's safe to chase some of these calls in this space. >> this is the big name. it's the institutional name. i think if you want to take a position in this over the top streaming, you would definitely buy netflix. i want to point out something that's very important. if i look at everybody else that has a huge digital footprint with users, let's take huffington post. it's no secret, they have hired a team to start sourcing content. they have the same plans to go over the top and serve up screen content to their customers. it's not going to take them forever to figure that out. there will be lots of competition down the road. i think this is not a justified upgrade, in my opinion. i'm not -- i don't own this
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stock so i'm just calling it the way i see it. >> yeah, your point about the unpredictability of content creation is well taken. but they're talking about subs, the international opportunity, kevin. $20 million international to $50 million at the end of '17. eventually $100 million-plus. why is the international story not convincing to you? >> no, it's very compelling. but to think that this is unique and the only entity that's going to serve up content over the top, which means they don't use the television networks anymore, i think is foolhardy. when you apply really high multiples -- haven't we learned on this corridor, looking at fantastic brands and platforms like a linked in, like a twitter, you have to be able to stomach huge volatility when there is any miss f. you're going to put a lot of optimism on a long-term schedule of success around content development, and pay that in today's high multiple, i think you're taking inordinate risk in your portfolio. that's my point.
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i don't deny people are going to bicon tent this way. tell me why "huffington post" isn't going to have a 5% share. they have 200 million subscribers waiting for content. >> you love the huffington post, no doubt about that. a couple times you have made that comment. moving on, kevin, to disney, out with earnings, beat estimates on the top and bottom line. we talked about bob iger earlier this morning on "squawk on the street." take a listen to what he said. >> parks and resorts and consumer products had great quarters. but actually, all of our businesses did. there are some numbers that weren't necessarily comparable. fornls, the studio had a great quarter but last year in this quarter we had "frozen," particularly the video. so that's not a great comparison. on the media network side, extra costs at espn, because of the college football playoffs and the nfl wild card. so generally speaking, all of our businesses had a very strong quarter. but from a percentage increase perspective, parks and resorts and consumer products led the way. >> obviously, even with those
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anchors around their ankles, media network revenue up 13, kevin. a lot of discussion this morning about the bundle. he doesn't see the bundle as we know it. the owe bit should not be written quite yet. don't need to go out shopping for more m & a, own plenty of intellectual property that will pay dividends for years to come. >> you know, it's very hard to find a fault in this company's story. i mean, i own this stock. o'leary funds own this stock. when you have a ceo that not only executes on the business plan but keeps talking -- every time you hear iger talk on cnbc, he talks about getting capital back to shareholders. do you know how sweet that is in my ear when i listen to that? >> i do, kevin. >> that makes sense to me. he's building a business, he's growing, and he wants to send me back capital. yes, yes, yes. >> and a beautiful thing they figured out is they went from 8-year-old girls and absolutely fleecing their parents with "frozen" stuff and now moved on to 12 to 14-year-old boys with
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the "avengers" coming out this season. they're going to get the 30-year-olds later this year with "star wars." they built this portfolio that really does continue to pay dividends. but this a way, isn't this the case for netflix? netflix is a $34 billion market cap. disney is huge and has learned how to execute on original content again and again. could netflix be the disney of the next decade? >> wow, john. that's a huge call. i mean, you think about -- >> it's not a call, i'm just asking. >> listen. if disney has amassed a portfolio of brands that has spanned four generation of children, i'm still stuck on the original "star wars" and here they own it now. netflix is a neophyte in building brands like that. they are a distribution platform for digital content. and they're the best at it and the largest so far. i'm just pointing out, and there's so many others that can do this in so many other countries. i actually think the right blend
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is to have the content, which is disney's model. if i had to choose between these two stocks today which is going to make me more money, is i'm disney. plus i get a distribution, which matters to me, as you know. >> kevin, i'm wondering if you identify any special sauce at disney that could be relationship applicable by other companies. i'm thinking back to when iger was under fire for having the chairman and ceo rule, and then he delivered quarter after quarter. and the best way to silence any critics is to deliver the type of growth that disney has delivered. i'm wondering if you can identify anything at disney that could be replicable for other companies. >> i think it gets harder and harder as they break these mega franchises. i had some experience with working at mattel. when we would want to work with disney, they understood the toy model. they knew which products to license to us and use our contribution. so "star wars" is coming and i bet in the long run, the merchandising value of all of those plush toys and all of the other sabres and everything else, that's a multibillion
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dollar business in its own. iger is legendary in saying one thing. he keeps focusing, and i actually use this when i teach cohorts that are graduating the business. customer first, shareholder second. always worried about those two, and the rest to him is noise. takes care of the customer, providing up content we want to buy and love. and then he makes sure that the shareholders get paid back something. i think that is the model for great american franchises. he's the most successful ceo that's combined content and media in history, as far as i'm concerned. >> yeah. an unbelievable story. i see that sales of weeks frozen" merchandise ten times higher than a year ago period according to the call. amazing. kevin, good to see you. thanks again. kevin o'leary. more episodes of "shark tank" at 8:00 p.m. eastern time. more details on the tragic death of dave goldberg, ceo of survey monkey, husband of cheryl
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sandberg. the associated press and reuters reporting that he died while exercising on a treadmill, and apparently slipped and hit his head. that's according to local officials. family members went searching for him after he left his room and did not return for two hours. the four seasons motel has denied the reports. the general manager at the four seasons said goldberg had not been a guest and the accident had not taken place at the four seasons. a private service will be held today in stanford. just a sad, sad story. >> he was a beloved executive, and a mentor to many an entrepreneur. he will be missed. let's get a check on the markets now. still negative territory. the dow down by 80 points. s&p down by 13. the nasdaq fairing the worst, down more than 1%. we are expecting to get some retracing for gdp numbers. we did see the trade deficit come in weaker than expected. even though ism services was a touch higher, but certainly we'll be watching the markets
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today. carl? >> big show coming up for you. mark zuckerberg posting on facebook he's invested $15 million in an education startup. the ceo of that company that got zuk to invest will join us live. and walt mossberg here with his review of an iphones case or phone case that will have you seeing double. and billy corgan of the smashing pumpkins will join us live. why he says the music business is, quote, getting jobs by the tech industry when "squawk alley" comes back. we are the t. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours. turnhello.eamers into business owners. i am a fully automated investment advisory service.
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i can help you choose investments. monitor them. and rebalance your portfolio. i can do a lot of what humans can. except have a real conversation. if you'd like that, you can always speak to someone at schwab. they aren't algorithms. try not to hold it against them. say hello at
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a case for your iphone 6 that adds a second screen to the back of the phone. 129 bucks, is it worth the buy? joining us with hughes review is co executive editor, walt mossberg. walt, the first thing i thought when i read about this was about the apple watch, actually. are we in this era of needing a second screen to more quickly and easily access information in our phones, and did you really find this convenient? >> well, hi, john. i don't think we necessarily need a second screen. it's actually what you would call a first-world problem, right? it's not that hard to get your phone out and look at stuff on your screen. but it could make certain things convenient and quicker. and that's the idea behind this
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pop screen. the idea is, you would have to open your phone, unlock your phone. people do it scores of times a day. dig through some information to check something. whether it's the weather, your calendar or to look at a particular picture. and pop screen just keeps it on there all the time with a kindle-like gray scale display that never goes away. >> is it a good case? 129 bucks is a lot for a case. is it a good case, and is it is the resolution on that photo on the e-ink screen on the back pretty good or so-so? >> it's good. but it's gray scale. i mean, i can show you here -- i don't know if you can see it, but this is the same picture in color on the front of the iphone, this is the picture in gray scale. it's a good gray scale picture. and the case itself is not as thick as some.
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thicker than others. i did not try to drop it six feet on to concrete. but i did drop it three or four feet on to wood, and it protected the phone. so, you know, i think if you're going to go get a case that adds bulk to the phone and you want to be able to quickly glance at things, this has promise. one of the points i made is, they have yet to issue their developer kit, which will let you see things like this. and, again, i don't know if you can read it, but this is a weather report. there are news headlines that will come from places like the "new york times,". >> sure. >> and so forth. >> it certainly seems, walt, like there might be some good use cases for it. i'm wondering, if you get a second screen, does it doubly drain your battery? >> no, it has its own battery, kayla. it does not use the iphone
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battery. but the down side of that, anything with a battery, tough recharge it. battery lasts about a week, because these gray scale screens take up very little power. but you do have to recharge it, let's say roughly once a week. and if you forget to do that, you'll turn it on and you won't get anything on the screen. of course, you'll still have the benefit of the case. but you won't have anything on the screen. >> walt, do you sense a real consumer appetite? are people clamoring for something like this? >> my sense is it really is going to depend on them getting beyond just photos and images, which is where they're starting. obviously, a lot of people buy cases for self expression. so having a photo on here could satisfy that need. but it's probably a relatively small need, compared to for 129 bucks, being able to get your calendar, a notification on some news alert or stock price change or something like that. and that's coming later in the
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year. and i think it will have to really be judged on how well that plays out. >> so walt, should i expect the second screen of the future to be the back of the phone case, or on the wrist? watch or case? which one are you going to stick with? >> i don't think it's an or, john. i think you're probably going to see both. obviously, there's a lot more money and a lot more apps behind the watch right now than behind this second screen. >> yeah, for people who aren't looking to spend a lot of money, though, that could be an advantage. either way. >> oh, yeah, this is less than a lot of the watch bands. >> less than the bands. you can get three of those for the price of one low-end watch. thank you, walt mossberg, for bringing us that new product. >> take care, guys. >> all right. up next, where is mark zuckerberg investing? the founder who just got facebook's ceo to invest in his education startup, raising $100 million. he will join us live.
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and billy corgan on the smashing pumpkins on the failures of the music industry and what he's doing about it. all of that is coming up on "squawk alley." let's take a look at your credit. >>i know i have a 786 fico score, thanks to all the tools and help on so how are we going to sweeten this deal? floor mats... clear coats... >>you're getting warmer... leather seats... >>and this... my wife bought me that. get your credit swagger on. become a member of experian credit tracker and find out your fico score powered by experian. fico scores are used in 90% of credit decisions. anyone have occasional constipation, diarrhea, gas, bloating? yes! one phillips' colon health probiotic cap each day helps defend against these occasional digestive issues... with 3 types of good bacteria. live the regular life. phillips'
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shares of natural gas shipping company, golar up over 20 some percent tracking for the best day ever in trading. the company signed a 20-year contract for liquified natural gas ships or vessels with a company. the contract will start in the first half of 2019. but as a result, you can see a lot of these natural gas companies moving higher, especially on that 26% move. back over to you. >> thanks. let's call it education 2.0, maybe 3.0. two-year-old start-up alt school believes it can save america's schools and it's got high-powered backing. the company announcing $100
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million in new funding yesterday. mark zuckerberg. all right operating four schools in the bay area with four more set to open in california and new york by the fall. joining us now first on cnbc, founder and ceo, max vantilla. max, a lot of people are talking about education reform. the stifling bureaucracy. in alt school, you're saying you found a way to personalize education to each child, strip all the paperwork and annoying stuff that teachers have to do away. and enable parents to get more involved with the day-to-day process of educating the child. how? >> well, first off, we started from scratch. we designed a new approach to school from the ground-up for the 21st century. and we started with private schools, where we can innovate very quickly, where we opened our first school in four months.
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and ultimately, we want to prove this new model and then make it available for public schools. >> and that's what i'm wondering also on the how, is even if you are right in this model, there is tremendous bureaucracy right now, movement in schools, common core battles pro and con. it takes a long time to get curriculum changed. what is your strategy for moving from the private schools, which are already having in many cases great results, into the public schools to affect the broader population of kids who really need improvement in their education? >> so first, we have built a operating system for the 21st century that allows educators to really, as you said, personalize education for each child, and do it in a way where what works in one classroom can can directly benefit another classroom. and that idea that the school system gets better, the more people are part of it, is ultimately what we need in a country where we have 55 million
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students in school, and yet the experience is getting worse, because we have so many students not better. and we need to show that that works in a smaller setting over a large period of time, and then ultimately, allow other people to start new public schools and take pieces of what we have built and really modernize what they're already doing. and as you said, it takes a long time. we're in this for decades, you know. i have a ten-year vest. my 1 1/2-year-old son is going to graduate from middle school in a long time. so we're in it for that long haul. >> max, i'm seeing you pay teachers north of $100,000 a year. that sounds too good to be true. i'm wondering how the recruitment process works, and the retention process works, and whether that figure ultimately comes down as you guys scale. >> so first off, we are able to spend a much of larger fraction of our money on the actual classroom, where it experienced -- where the
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experience for students is most affected. and we can do that because we don't have local administrators. we center linize all of the functions that don't make sense for teachers to do in the classroom and in that school location. and that allows us to pay teachers more. we also are able to attract the kinds of teachers that have been teaching for a long time, but want to really personalize education for their students and do things in a different, new way, where technology can play a massive supporting role for them. and ultimately, we believe we can allow teachers to have more students in their classroom while actually working less and while delivering a much better experience to each of their students and to have that felt by each of the families. >> max, i know that priscilla chan, of course, has experience in education, being an educator. mark zuckerberg has visited local schools in the bay area,
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and just spent time observing classrooms. so clearly, they care about this. what was your process in engaging them with your mod he and convincing them to put money behind it? >> so you know, we have been talking with mark and priscilla for a while now. and ultimately, what they wanted to see was that we were taking a long-term approach that we were learning, that we respected how difficult this problem is. and that we could be a part of a broader solution. and ultimately, what they wanted to see is that this is an approach that can really scale, and it can scale quickly. although it will take a long time to really reach the numbers that will matter for this country, and that is really can can get better, the more kids are going to alt schools and schools that are enabled by our operating system in the same way that a social network or smartphone gets better, the more people use it. >> all right. max venntilla, ceo and co founder of altschool. we want you and others to
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succeed in making education better. thanks for joining us. >> thank you. all right. as we watch the european markets just a few minutes into the close, simon hobbs has a rundown of what's moving. >> this is a significant day for europe. check out the details you see on your screen. we've got heavy selling of both bonds and stocks on the session today. it's a broad-based selloff across europe, but at the helm, the big decliners seem to be the insurers and banks sitting on so much of the sovereign debt in europe. let me show where we are on the bond markets. we'll have a look at germany, first of all. the most safe part of the eurozone, of course. there you see -- this is a weekly chart. the way in which yields have risen, 25 basis points, 30 basis points, in the course of just the last week. and if you have a look at spain or italy, obviously there the moves are even more dramatic. let's move this. thank you, guys. the there you can see this spike emerging. still you've got beaten down rates. given that the european central bank is buying 60 billion euros of assets, this is kind of moving. somebody is fighting the ecb or
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at least taking profits. the problem appears to be what is happening with greece. let me take you back to the euro group meeting in rega ten days ago. do you remember this? we covered it at the time. essentially, the financial times is now reporting that at that meeting, the imf told everybody else the greeks are not going to bet good a 3% primary surplus on their accounts this year, they're going to run a deficit of 1.5%. more than that, the imf is now saying that the greek position is unsustainable, and therefore, the rest of europe needs to write off some of its loans in order to do a deal. that means extension of the maturities, lowering the interest rates, we assume. imf is saying, look, if you don't do that, we're not prepared to come up with our half of the $7 billion euro cash tranche you're currently negotiating. now that obviously puts the cat amongst the pigeons. in the meantime, there is a suggestion just looking at the meetings going on and the comments we're getting from citi, the greeks aren't going get a deal any time soon anyway on what is going on.
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and probably not even what they call a staff level agreement deal that could be signed off on at monday's euro group so they get an emergency raising of the cap on their t-bill issuance. more importantly down the line, the imf stance could mean that it forces more flexibility on the rest of europe. that's the view that rbs is taking. it's hard-line but might work. and le guard was talking yesterday, importantly, as well. for now the rest of europe is worried, and it's risked off on bonds and stocks. top gainer today in europe ubs, righting the day, 5% after they came out with a profit that almost doubled the return on equity guys at ubs, above the 10% target now coming through at 14%. back to you. >> all right. simon, thanks. we'll see where we go from here with the dow having given up -- close to session lows here, down almost 100 points. when we come back, billy corgan of the smashing pumpkins on the music business, on the streaming business, and why it, quote, has no plans for the future.
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five bodies were recovered, and the survivors reported that many others had drowned. the video was obtained by the associated press from a crew member of the cargo ship. secretary of state john kerry made a surprise visit to somalia where he met with somalia's president. it is the first trip by a secretary of state to the east african nation that is battling an al shabaab insurgency after two decades of civil war. iran is warning the u.s. against what it calls duplicity in nuclear talks. this after john kerry told israeli tv sunday there will be inspections in iran every day. iran's parliament speaker said that iran will enrich uranium to any grade it wants if the u.s. treats it in a deceitful manner. and jetblue and amazon agreeing to stream television, movies and music from the internet retailer for in-flight service. it will be available on a majority of jetblue's aircraft this year via the airline's free wi-fi. little something to make the trip shorter, perhaps. that's our cnbc news update for
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this hour. now back to "squawk alley." from streaming to sharing, music listeners' consumption of content going more and more digital as we go on. question is, what comes next for the music industry? joining us this morning, billy corgan of the smashing pumpkins, living legends, joins us at post nine. what a treat for us. >> thank you. >> you've been outspoken on what would you call t the overall business model? >> absolutely. music business is mostly run by feckless idiots who do not subscribe to the normal attendance of capitalism. which when they do, the business tends to work out well. stars rise to the top, everybody benefits. but it's still a parochial business run by thiefdoms, way behind the times technologically. the tech world is blowing music out of the water, particularly. but music artists in particular remain incredibly valuable to launching things, hence tech companies keep cycling back to
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music artists. and music artists need to figure out their true value in a free market society, which they have been slow to do, because you have that old model of telling artists they're not worth anything, they're disposable. similar to what you have seen in the sports leagues. you're going to see that evolution now happen finally in the music business. >> so billy, what do you think of tidal. it seems to me this is jay-z's attempt to swing the pendulum, to get the artist more power. that's the way he talked about it, to slice the pie differently, and to get higher quality music out there, because it seems to me we're in an era where it's easier than ever to get low-quality bad music and somebody has got to push things the other way. do you agree with his approach here? what should we do? >> the problem is, although i celebrate the idea of him creating his own model, it leaves a lot of people out. and so at some point, you have to have winners and losers, because that's the way it works. to try to sell it as an overt, al truistic thing is disingenuous, because it's not. he's taking his slice of the pie, which he has every right to
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do, he's a powerful man and works with powerful people. by the way, i'm a powerful artist and i don't remember getting a phone call from him. but i get phone calls from other people and i have to make a similar decision. but to sell it as all truistic, i don't buy it. >> as we see more competition, more people like jay-z getting the game, everyone fights over licenses, exclusivity. >> wild west. a complete disintegration of the business model. the problem is, artists, because they're generally sort of manipulated, it's just the old business model, the music business, you're told constantly, you have no value, you have no value. they're slow on the uptake on how much value they actually have in this marketplace. because when it comes to athletes and rock stars, or music stars, those are two people that can sell a level of independence that works with marketers that nobody else can sell. hence, you know, the quarterback for green bay does the ads. that's the world we're entering into. music has been slow on that,
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because the old music business continues to try to control their little diminishing share of the market. >> so when you say that they have ceded leadership to tech, are you talking about apple, somebody else? consortium companies? >> i wouldn't make it specific to apple. i think it's sort of like music at one point had their whole world cinched up. the manufacture, the distribution, held the conversation. if you really want to look back is when they ceded their power over to mtv. when they let mtv build a network on their juice for free, and then eventually kick music off the channel and then still call it mtv, right there, that's the tipping point. so tech is just basically coming in the wake of what was the mtv version. >> so today is that youtube, is that veefo? who takes over that role? >> hard to say. i know what you're saying, but it's hard to say, because honestly, i believe it's wild west now. >> so why when we get actors here at post nine do they say
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we're in this golden age of television with movies and distribution and there's so many possibilities. why has that not worked for music, and is it possible to change the script somehow to get muc back to value? do you have any insights into that, based on the other things you have done? you're into wrestling, so many forms of entertainment. >> yes, thank you for mentioning -- i just signed with t & a wrestling as an executive. god bless. >> the problem is that there's not enough money in music as a business model where in television and -- you know, vis-a-vis the advertisers and movies, so much money, the controlling forces, stars are taken care of better in those industries. in the music industry, it's still very much this exploitive thing. still very much people signing their life away, the old deal with the devil stuff. that is still going on. it's unbelievable in this day and age that is still going on. >> last question on touring, right? the narrative has been written all the money is in touring, you've got to tour if you want to make any money at all.
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>> don't buy it. >> and you say it's frustrating -- >> who just made $3 billion for selling headphones? it's brand identification. music will be only the -- excuse the french -- the lubery can't to make the bigger deal. the bigger deal will be i represent my company or my brand. and that -- once you saw that deal made, it's over. the old model of, like, selling plastic is over. and by the way, i don't remember getting any checks for selling computers and telephones. but i've helped sell a lot of computers and telephones, as have a lot of music artists. at some point, the market is going to have to come around and pay those artists for what they're worth or do what jay-z is trying to do, break off and make their own deal. >> i have to ask about easter seals and veterans. >> we're working with easter seals, to rebrand the message around veterans and their families. moving the conversation away from ptsd, which sounds like something debilitating to war trauma and working within the communities to bring people back, reintegrate them, reappropriate their skill sets into society. and i want to move the
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discussion above a political left right spectrum into something that is more social consciousness thing which is why somebody who like me associated with a liberal message or libertarian message. this is a social issue and that's why i want to move in that vacuum and i'm appreciative to work with these people. >> an important cause and you're a powerful voice. please come back. >> thank you. >> billy corgan, joining us here at post nine. mike huckabee officially entering the race for 2016, speaking now in his hometown of hope, arkansas, a day after carley fiorina and ben carson entered. john harwood is in washington with more on that. morning, john. >> morning, carl. mike huckabee is illustrating the dynamic of this 2016 race, which has got so many republican candidates, and the fact that it's so fractured means you only have to have a modest foothold in the race to stay in it. mike huckabee was a credible candidate in 2008. he won the iowa caucuses. he was the principle challenger for a while to john mccain.
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but he aroused a tremendous amount of unhappiness among the business republicans, the economic conservatives. he was a socially conservative candidate. now he's got competition from social conservatives, from people like ted cruz and ben carson, who announced yesterday. so his chances of actually winning the nomination are di minimus, but he does have a base which we're seeing demonstrated and we'll see when he goes to iowa that when you've got so many people in our new nbc "wall street journal" poll, jeb bush is leading with 23% of the vote, followed by marco rubio at 18. you know, if you get 5 or 7% of the vote, you can hang around that race for a while, and mike huckabee is going to do that and we're just going to have to wait and see, guys, when this race settles out and becomes a more streamlined field of candidates. then we're really going to be able to separate the top tier from everybody else. >> all right. thank you, john harwood. coming up, the co founder of
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payments company, square, jim mckelvie on bridging the talent gap in tech. how do we train the next generation of coders, engineers and programmers. that is coming up next.
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excellent looking below the surface, researching a hunch... and making a decision you are type e*. time for a change of menu. research and invest from any website. with e*trade's browser trading. e*trade. opportunity is everywhere. 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change.
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we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back. does mark zuckerberg have too much power? we talk to the investor pushing to take away some of zuk's
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control. and our week of halftime heavy hitters continues today with rich pa xena. where is he putting $28 million under management to work now, and why he doesn't like social stocks. plus nba all-star chris bosh is here, looking for investment opportunities at the emerge america's conference. we're going to catch up with him and find out where he's finding opportunity off the court may surprise you, as well. all that and more coming up, kayla, in 15. >> we won't miss it. thanks, scott. no computer science degree needed. that's what our next guest hopes companies will say when trying to fill the tech talent shortage and making his case at the startup tech conference in miami today, where nbc universal is the exclusive media partner. that's where we find jim mckelvey, co founder of square, and launch jim, good to see you this morning. >> good morning, kayla. >> so we have seen companies specific efforts, federal stem programs. i'm wondering, which piece of the talent shortage you're biting off and trying to fix.
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>> so what launch code addresses is job placement. it turns out that it's relatively easy to learn how to program. you can do it through a boot camp, online, you can do it anywhere you want. but if you don't have traditional credentials, most companies won't consider you for a job. so what launch code does is we take people, we test their skills, and once we have tested them, then we have over 300 employers that will accept our pedigree and give them a chance at a job. and it's working great. >> how did you recruit those 300 employers, any names we might recognize? any big corporations taking part? >> tremendous number of big names you would recognize. enterprise rent-a-car, monsanto, master card. as a matter of fact, kayla, every company we have approached to take launch code candidates has agreed. we have never had an employer say no to launch code. >> jim, what's your process for convincing these employers that your testing is rigorous enough, and is this something you advocate more broadly? it's almost like a form of
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certification versus just the stamp of a particular institution, saying you took certain classes. >> well, so the way to get the employers on board is just to tell them what they already know, which is they have a tremendous problem recruiting talented people. and once they admit they have that problem, we then say, look, we have another way to do it. we have talented people willing to work for you on an hourly basis, and then with no commitment on the employer's part, if you want to hire them, you can hire them. and so when we de risk for the employers, nine times out of ten the hourly position results in a full-time job offer. >> a lot of companies like general assembly, code academy, some boot camps where they train students in coding and the like. where they would boast they have pretty solid job placement programs, as well. i'm wondering how launch code is different from some of those schools. >> those are training programs. and we actually work with many of them. as a matter of fact, the ones you listed are people supplying into the launch code ecosystem.
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but there are other ways to train, as well. the boot camps are -- tend to be good for certain types of people. but a lot of people like to take it slower. they don't have money for boot camp and train online. using curriculum from ed-ex for instance. we have a fantastic program through harvard available free through ed-ex. >> finally, jim, i want to ask about the payment space. you co founded square, and it's been six years since you were one of the co founders. i'm wondering, so much has changed in the payments landscape, and we're used to today. obviously, you are training and placing people in jobs at a lot of these companies. how do you view the payments landscape from where you sit? >> well, i mean, i love square. i co founded the company. and one of the things i learned at square was to appreciate something called paraprogramming, where we take people and make them work as a team. and that's really -- was the basis for launch code. so square was where i was
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inspired to, you know, create this thing called launch code. and launch code is really, you know, an instanceation of those lessons i got out of square. >> jim out of square. >> jim, cofounder of square and launch code, which is expanding to miami, which is why you're at emerge, it's good to see you and thanks for joining us. >> thank you very much. >> when we come back, while your work/life balance may be getting less balanced. but first with the dow down 85, rick santelli, what are you watching? >> well, of course, i'm watching what the dow is doing and watching interest rates go up while it's doing it. what's going on with interest rates? have they bottomed? we'll discuss that and more after the break. can it make a dentist appointment when my teeth are ready? ♪ can it track my crew's performance, and protect their heads? ♪
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can it tell the flight attendant to please not wake me this time? ♪ at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim? like, right now? can it download a track while i'm sampling it? can my keys find me? with the power of digital, analytics and automation, now every little "thing" can provide even greater value. ok, so can it tell the doctor how long you have to wear this thing? the answer is yes, it can. so, the question your customers are really asking is, can your business deliver?
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welcome back to squawk alley. rick santelli live on the floor of the cme group. the big question people have been asking, is that it? is the bottom of rates in? if you look at the special five weeks, and that's the time when we made the high and low yield of the year. the high was 224, and that was march 6th. those five weeks pretty much every trade after that, and that big 30-session consolidation, all augered that, yes, the bottom in yields are in. but what does that really mean? i'll tell you what, it means a
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lot less now than it used to, when one can have a day like october 15th of last year, where we closed 28 basis points above the low yield and all of that occurred so quickly, 186, settle to 214, then settled a year and months later at 217. who knows? why, because old school versus new school. and i'll tell you what i mean, okay? in the old days, the beauty of the free markets with open price discovery and the aggregate personality of all the players was that if interest rates moved up, stocks would take notice. and they'd start to move down. and that activity was the automatic pilot that would keep rates from moving up too fast. but the world we live in is a different world. there's been so much artificial involvement in markets, it's hard to say. but one thing we can say for sure is that the run-up to european qe gave us so many insights, so now let's look backwards in time. if we look at ten years in portugal, they're almost back to
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where they were pricing in the qe, at least pretty darned close. spain, france, and the boon, all in the ten-year maturity, they have ascertained those levels. now let's look at our market specifically. okay? 2013, we settled at 303. we never saw it all of 2014. and 2014, of course, we settle at 217. and so far, thus far, there's only been two sessions that have traded a yield above the 217. that was on a friday, we had a 295,000 jobs number. we settled at 224. the following monday is, we digested that number and we had 219. that's it. other than potentially today. so when you add in the magic five weeks, where we went from 164 to 224, this market's actually pretty easy right now. if we get above 224, all bets are off. if we get back below the 217 settlement that we have currently for the year, most likely, we're not going to ever trade below that range of 186 to
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199 that we traded for 30 sessions. so, at the end of the day, watch europe, but the most important thing is, watch stocks, as rates go up. that's the key. back to you. >> all right, rick santelli, thank you very much. a work/life balance is of great importance to millennials and tech and other industries, but that doesn't mean they're getting what they really want. we're going to explain after a short break. [ male announcer ] your love for trading never stops.
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in case you missed it, managing your work/life balance is becoming more difficult, at least coaccording to a new surv. one third of full-time workers around the world say the balance is getting harder to manage. at least half of managers work more than 40 hours a week and almost half say their hours have been increasing over the last five years. younger generations and parents seem to be harder hit than others, according to the survey, and for the millennial set, one in specix millennials in the u. say they've suffered negative consequences as a result of having a flexible work schedule. the question seems to be, being promoted into management and having children at the same time, as millennials get older. >> they're facing the same generational challenges that their predecessors did, that's for sure. market wise, close to session lows. crude oil continues to trend above $60.
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and then the ten-year will be one to watch. we've got 222, i believe, currently, right around 218. but that ism number did give some people a feeling that maybe the economy is hanging in there. that does it for "squawk alley." coming up at noon on the east coast, let's get to wapner and the half. ♪ >> carl, thanks very much. welcome to the halftime show. let's meet our starting lineup for today. we have joe terranova, steve weiss, and john najarian, along with rich pa zina. our game plan today looks like this. wtf. what the frac. is david einhorn right in his takedown of stocks in that space? joe theerranova says no. friend or foe? does facebook's ceo mark zuckerberg have too much power? one shareholder thinks so and will be here to tell us why live. we begin with the market stocks


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