Recapping the day's news and newsmakers through the lens of CNBC.
Jack Welch's Words
Notes:
In a sprawling "Squawk Box" interview, former General Electric Chairman and CEO Jack Welch chimed in on various subjects. Jack thinks:
• The Booz Allen Hamilton employee who exposed the government's PRISM internet surveillance program should be prosecuted.
• The IRS is not the only biased federal agency
• Splitting the chairman and CEO role at a company is the "dumbest idea in the world."
Quotes:
"You give the guy the job or the woman the job. If you don't like them, throw them out [completely]. I'm not against firing them."
—Jack Welch
"When the government unions and the government employees are in subjective jobs, no matter how decent the people are—let's assume they are all perfect—their biases have to come through."
—Jack Welch
Old School at Dole
Notes:
Dole's 90-year-old CEO, David Murdock, wants to take the company private (again) by buying the 60 percent he doesn't already own at $12 a share, valuing it at just over $1 billion. The value has sagged 32.7 percent since Dole sold its Asian fresh produce and packaged food business last year, not to mention the downward pressure on its shares since banana prices split.
Quotes:
"He pulled off a buy of this company about 11 years ago. It was a larger company back then ... [It had a] packaged food business and other significant assets, and [he] managed to take it private and public again. Back then he did it with 24 percent. This is old school, it feels like."
—CNBC's David Faber
Gamers Try to Game Pricing
Notes:
How much more would you expect to pay for Microsoft's new Xbox One console than for Sony's new PlayStation 4? $100 would be the correct answer. The Microsoft console will be priced at $499 when it goes on sale in November. That left some analysts and customers a bit nonplussed, especially after Sony announced a price point $100 lower at the E3 annual electronic entertainment conference.
When consumers compare the two systems, price is likely to be a significant factor. Sure, part of Microsoft's strategy is planned scarcity, but has the tech giant gone too far?
Quotes:
"In terms of the games that they're offering, it's a very similar package. Obviously, there are exclusives on Xbox One and exclusives on PlayStation 4. But if you're going to go buy one console this year, the driving factor is going to be price, and at $100 cheaper, that's a big deciding factor."
— Alex Simmons, U.K. editor in chief at IGN
Slimmed Down
Notes:
Carlos Slim could see his nearly $70 billion fortune shrink because of a new Mexican antitrust law that targets communications companies with more than a 50 percent market share. TelCel, TelMex (both subsidiaries of Slim's America Movil) and Televisa control at least 70 percent of their respective markets.
Though Slim said the law won't affect America Movil's profitability, investors are less sure. The company's ADRs are down almost 27 percent since the election of Mexico President Enrique Pena Nieto, who campaigned on reform of the sector.
One possible remedy is a price cap on Slim's companies, but no one else's. Pressed about the hit on his net worth, Slim said it was not a concern and quoted Lebanese poet Khalil Gilbran when asked about his philosophy on philanthropy.
Quotes:
"To think that having more money is happiness, they are in the wrong way. I don't know who thinks that, that having more money is happiness. You need to take care and have responsibility [in] how you invest and how you create wealth. The fruit of the wealth […] is providing the income for people, through […] salaries, and the investments and acquisitions that you do or by the taxes that you pay."
—Carlos Slim
Border War of the Wonks
Notes:
The Senate is expected to vote Tuesday on whether to begin debate on immigration reform. That's looking less likely now because of bipartisan bickering.
Border security—specifically, its $6.5 billion cost in addition to the $18.5 billion the government already spends—is a big issue. Another sticking point is health care. The Heritage Foundation, in its new report, estimates that granting amnesty to 10 million illegal immigrants will cost about $6.3 trillion. Critics say that number is a worst-case scenario, as the barrier to entry should ensure that less-needy immigrants are granted citizenship.
Quotes:
"If you bring in an immigrant with a college education, on average, they're going to pay about $30,000 a year more in taxes than they take out in government benefits. On the other hand, if you bring in immigrants that have a 10th-grade education, they're exactly the opposite."
—Robert Rector, Heritage Foundation
"[The Heritage Foundation report] also assumes there is no American Dream. ... It's a study biased against finding any success lowering the price tag."
—Doug Holtz-Eakin of the American Action Forum
Taper Talk Heats Up
Notes:
Fed taper talk is back on the table as the market sold off for the second straight day Tuesday amid climbing bond yields. Two trading days removed from last Friday's Goldilocks jobs numbers, the consensus seems to be that the Fed can produce money but not jobs.
Because the Fed's putting the brakes on its bond-buying program will affect jobs numbers, some speculation since last Friday's report has the Fed delaying tapering to January from November. Other data also support a taper delay, as manufacturing weakness persists amid weak sales. An unfavorable export climate is also impeding the creation of jobs in that sector, likely because of sagging orders and the strength of the dollar.
Quotes:
"I think you have some people who are concerned about an oversupply of money potentially triggering inflation in the intermediate term. But in the near term they like predictability and steadiness"
—Tim Pawlenty, CEO of The Financial Services Roundtable
"What Ben Bernanke knows is if he pulls back too early, he probably doesn't have enough firepower to start a new program later, meaning that the bias must be toward caution, to a clear and evident recovery rather than sparse data here and there."
—Gina Sanchez, chairwoman and founder of Chantico Global
By Doug Cubberley