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tv   Squawk on the Street  CNBC  October 5, 2015 9:00am-11:01am EDT

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>> she was always more insightful. when i called her to tell her, she broke into tears. they were not tears of joy. she understood it would be a tough thing. >> thanks for joining us. >> thank you. >> hopefully not your last time here. >> good luck with the book. >> thanks a lot. >> she must be happy now, obviously people must thank you. >> she's much better off. >> here you go. a party favor. >> oh, thank you. >> for the man who has everything. join us tomorrow, "squawk on the street" coming up next. good monday morning, welcome to "squawk on the street," i'm carl quintanilla, jim cramer here, what a discussion with ben bernanke. we have news on ge and twitter. the ten-year yields just above two as we wait for ism services
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in about an hour. our road map begins with the news, it's official, twitter finds its permanent ceo, jack dorsey will remain ceo of square as well. general electric gets a new top ten shareholder. nelson peltz takes a 2.5 billion stake in ge but said trian is supportive of management. >> and ben bernanke speaking about the crisis, yellen, and the strength of the economy today. we'll start with twitter. making it official, after more than three months, the company removing the interim tag and naming jack dorsey as permanent ceo. he wills are remain ceo of payment start-up square and will serve on twitter's board but no longer be chairman. in fact, they don't have a chairman as of this moment and they will look go outside. >> i have to tell you, i think dorsey's a uniter.
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that's the most important feeling i get from him. uniter in that the shareholders do like him. i was hoping he would choose one or the other. needless to say, this is a man who has great respect internally. and the initiatives. many of them are his. the october initiatives that will make it so there's a more coherent, easier way for people to use twitter. it's a new beginning. it's one that people at the top, both the board and the senior management like. >> yeah. >> i know i've been critical of twitter. i'm less critical of dorsey than i am of his predecessor. >> when these reports first surfaced late last week, we were trying to understand, well, a board that had previously said it would not want him to be ceo of these two companies, square, which soon will be public, and twitter, changed its mind. had an opportunity to understand the thinking behind that. it comes down to a simple
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premise which is the problem is the product, and there are fewer people than you can imagine who can fix the problem. since this is the guy who came up with the problem, the feeling on the part of the board is he can do it. he has overseen a rethink of product strategy in the last three months. the board seems quite happy with that rethink. and they seem willing to change their tact and say you can remain ceo, even though will you be ceo of square as well. it's all about the product. it's one basic responsibility he has, more bane running the sales force and so many other things at the company. and that's where they decided he was the best available person. >> that is -- my sources indicate similar. what's happened is he recognizes difficult for people who don't use it. difficult for people who are heavy users to handle the people who try to bring down the heavy
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users, making it so you want to step away. i think he uniquely understands that problem. >> i'm sure first person experience. there's a conference call going on as we speak. here's what dorsey said on that call a few moments ago. this is a really exciting day for me. i'm honored by the trust the board has placed on me to continue to lead twitter as ceo on a permanent basis. my commitment to twitter runs deep. no one is more determined than i am to see this company achieve its promise. >> conference call just wrapping up a few moments ago. now we can start worrying about more important things, now that this has settled. >> i think that's right. the things in the pipeline will make it much more enjoyable, much more so it's your personal paper. i know those of us pleading for a concierge type, another tier where you can actually deal with humans is on the table. and this is a person recognized as many constituencies of
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twitter. no longer feels if you build it, they will come. that's really important it did have a build it they will come attitude. open minded person, far more than i thought, enjoyable. i think people like him. it will be good. >> to the extent it is a one single product company, which is still the case, he's the man that the board believes can get it right. that said, they will go outside to find a chairman. we'll see who they end up with in terms of somebody stepping into that role. mr. dorsey will be busy. he has plenty on his plate. >> yeah. i think that those of us who felt you had to make a choice, accept the fact that the disarray has to stop. there is not anyone who can stop the disarray better than jack dorsey. >> let's move on to nelson peltz trian partners has introduced they have taken a $2.5 billion stake in ge. calling the company to continue on the road it is currently on as it transforms into an
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industrial infrastructure company with over 90% of earnings coming from those businesses before the end. let's call it by the end of 20178. trian for its part started to move into the shares after the company announced its intent to divest most of the assets of its ge capital unit. and it's a supportive position for trian. very different to a certain extent than what we know them for so often, namely when they get involved in fights, where they try to get board seats, take board seats immediately, or push management to do certain things, including what ends up being a breakup of a conglomerate. not the case here. they come out and say some things we discussed, which are you have a company with an organic revenue growth higher than many competitors but doesn't seem to be rewarded as yet by the stock market, they think it's a mispriced security that could do as much as $2.20 in earnings in 2018 and will
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earn a price of 40 to 45 between 2017 at trian. they are pushing them to do a few things that ge has yet to commit to. 16% margins by '18. another turn on leverage, taking it up $20 billion, and even more return of capital. in terms of share repurchases. significant share repurchases that the company told us about. >> jeff talked to nelson in 2007. this is as friendly as you make it out. i love the title of it. transformation underway. this is the trian paper, transformation underway but nobody cares. it's similar to what we talk about here. as if they watch and said, you know what? everything they do is right. i would tell people this may be the new form of activism. an activism which says from the get go, work with us, we'll
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all -- so collaborativism? blew you away with that one, huh? >> epiphaniville. >> that's deep. deep. >> collaborativism. >> stocks are on track to open higher after a wild session on jobs. selloff turned into a rally from high to low. the dow swung 459 points on friday. the biggest range since early september. earlier this morning on squawk, former fed chairman ben bernanke offered his feeling on the low growth in the u.s. economy. >> the low growth is coming not from the recession, per se. we've come back quite a bit. unemployment is down to 5%. we've come close to full employment. the slow growth is coming from slow productivity growth. output for workers not going quickly. why that's happening is not understood. it doesn't have do with monetary policy but waves of innovation. i think that's part of it.
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but clearly, one of the issues is that we have been relying too much on the fed. the fed has been the only game in town, doing most of the policy heavy lifting for the last few years. we need to see more action from other policymakers. a lot of bullet points coming out of the book which is published tomorrow. 600 pages called the courage to act. one is they were out of bullets on lehman. he wouldn't second guess janet yellen. the up with attracting the most headlines is more executives should have gone to jail. the things that went wrong were the actions of individuals, not abstract firms. >> so interesting, because the former ceo of wells fargo has come on and said the real problem is that the shareholders ended up paying the bills for the people in the bad. he is closing the door after all the bad horses left. i think he made a compelling case to start remembering again
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the deflation is a real worry. because he worries about the average worker and the wages. and that those who have criticized the fed have been wrong in terms of the growth level. it was -- can i say he looked great. he looked like he had been -- the weight of the world had lifted from him. he was very clear-headed. said that it wasn't 6.5, and therefore tighten, that was part of the criteria. i salute this man. he was unwilling to slag anybody. had a crystal clear view of things. i felt great. i felt better after listening to him in terms of how people second guess the fed. >> right. though there is a sense that central bankers around the world have infallibility and will be found. as he admits, are quite the opposite. >> yes. >> he did say that we knew there was housing bubble, we didn't fully understand, as we discussed many times since then, how it swept its way into so
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many securityized products that distributed that risk around the globe in all sorts of different ways. i wonder sometimes when we look at our central bankers and how incredibly important they are now to what's going on economically in the world whether we take perhaps too much solace in the fact that they know everything when really they don't. >> but at the same time he talks about how the germans were crital of his p what has growth verses what hasn't. and without publicly criticizing the rest of washington -- i have not read the book yet. he does say to a certain point the rest of the government has to step in little fiscal action. germany was uniquely able to do that. overall he was the right man at the right time after being the wrong man, yes, on housing. but those who have been criticizing the fed -- they even criticized him after the employment number. the employment number showed, look that was a rearview mirror. that was the last good number. now you know why those of white
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house said, listen, we're not going -- we give in to the people who say you have to tighten, you have to tighten, but they were wrong. i think bernanke is saying we need a -- there's a better time to tighten. i was hoping that we might put an end to the discussion of tightening for a bit. earnings season, it would be something i'm thinking -- >> expectations on a hike certainly would argue for that. >> i mean, we can keep talking about it of we can hope that people don't change the channel to watch bowling for dollars or other entertainment that's on, including "monday morning mountain quarterback. there's probably a whole show on why the eagles lost to the skins. i don't want them to watch that. or maybe we just wallow in their own misery. >> eagle fans may be wallowing -- >> i'm trying to get them to watch us. >> i'm a jet fan -- >> and a met fan. you don't have to rub that in my
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face. this is "squawk on the street" this is not "squawk on the fan." we're talking about stocks, we're talking about companies. >> yes. >> we're talking about ge. we're talking about how i think we're not going make the playoffs, my season's over! >> it's only 1-3. >> it's a long season. >> it's a short season. let's talk baseball. any way, we're staying focused on how to make money. >> you go. >> in the environment. when we come back, a new era for google kicks off. a new future for what's known as alphabet and we talk about trian's newly disclosed interest in ge. ed garden will join david in under an hour for an interview. look at the pre market. s&p, a gain today would be the first five-day win streak in a year. more "squawk on the street" in a moment. t the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data
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. google's reorganization into a holding company called alphabet takes effect today. today google's class "a" and class "c" shares start selling as alphabet class "c" shares.
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alphabet's noncore businesses are things like life sciences, nest and driverless cars. i wonder which is more appealing to you. >> it's funny you say that. i want a third group. i wish youtube were broken out. that's the company i'm hoping will be highlighted once you move over some of the more -- the moon shots, so to speak. i am not someone who is as coop on venture capital right now as others. i think it's hard to bring companies public. not that any of those have to become public. nest is part of the vocabulary now. self-driving cars, much morality. there more reality. there's more press on them. i think youtube is the gem. i hope this shines the light on them. >> think it will? >> i'm very concerned that it won't. >> because of facebook? >> i just think youtube is a
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fabulous business. search is a great business. i think that when you have this kind of ability to really dominate advertising, every one of these is great business. i think the stock will be dramatically higher, but if you wanted to see the break out, there was a game this weekend, a game with your jets and the dolphins. that game should have been on youtube. there will be an international game every weekend from the nfl one day. that game will be on youtube if youtube was able to demonstrate it. that's my thought. >> wow. yahoo! getting a game, that's one baby step. >> that should be google. google as youtube knows that, youtube is buried within. and it's the most powerful asset other than facebook that's out there. i cannot tell you someone tells you you should watch me on youtube. you have seen this on youtube?
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i was at best buy this weekend, they watch youtube, netflix. they don't watch traditional tv. but you do. >> right. >> they watch over the top -- they don't have cable. >> no. >> and they're so proud of it. >> they have broadband. they have broadband which means you can't just say, listen, cable's dead. the people i meet, including my daughter, does not have cable. they're like, dad, i don't have to pay that cable bill, which i always find funny. because i pay the cable bill. i was check nothing a hotel, the person was like can i see your daughter's credit card? you're looking at it. any way -- >> when does that end? >> david, i don't know. read those surveys about how only 20% of the people believe they're doing better. i don't know. i know that my father cut off my amco card when i was stuck in georgia at one point. i said isn't this card working? no, it's not working. i had to call a friend from
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florida to pick me up. my father did not tell me. >> the gas station credit card is one of the first to go. >> this is -- the alphabet is a nice way to bring things out. >> alphabet outpacing facebook for the year. >> isn't that interesting? >> we'll get cramer's mad dash and count down to the opening bell. look at the premarket this monday. a busy week ahead. ism services at the top of the hour.
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. about seven minutes before the opening bell. we will start off on a name we've watched all over the place, down mostly lately. that's valent. find its on the front page of the "new york times" as well. >> when you're on the front page of the "new york times," it's not just a wall street story, it's an american story and a united states congress story this company has raised prices the most and slashed r & d. this is motivated -- a piece basically saying this is a national problem. >> you can't mandate prices. maybe there needs to be more generic competition for these drugs suddenly that find themselves with a much high every sales profile, but can you move into that -- how do you effectively police prices? >> i'm glad you mentioned that. if there was medicine that had
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three different guys -- none of them were making money. so they really kind of flushed out who has drugs that don't have generic competition that is generic. it's been very smart. the government will be wise. there's going to be political risk the way i look at it. >> this thing has been ugly for a lot of hedge funds that have owned it heavily. >> i wouldn't want to own this. >> the multiple vs very low now. >> the one thing i will say, they can do another deal. they are inverted. all the drug stocks have come down. there is value among the drug stocks. a political risk is something i don't like. fascinating company. incredibly low tax race, nothing for r&d basically. we want to hit another stock. >> yes.
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a lot of the really good portfolio managers want very much to get a jump on what could be a turn in china. people are talking about that. >> a recognition that maybe there's no rate hike. they've been buying union pacific and norfolk southern. ba barclays is saying hold on. why? coal. coal -- i don't want to say coal remains dead. that sounds silly. >> like francisco franco. >> still dead. i remember that. coal is union pacific's main stay. these are inexpensive stocks, but no catalyst. that's what barclays is saying. it's an important piece. they're going against the grain of what a lot of big portfolio managers are saying will be the turn. >> we'll watching the transports, watching ge, so many other stocks, of course. join us after this break, we
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you're watching "squawk on the street" live from the financial capital of the world. premarket looks good after friday's upside reversal. the biggest in four years as we start the first full week of october and the first full week of the fourth quarter. china closed until wednesday. european services is a miss, but they're catching up to what we did on friday. >> were three issues that i was concerned about before i went away, when was glencore, the second was volkswagen and petro process or oil. oil was helped. especially even though the saudis were saying we're still pumping. we're isolating who is wrong at volkswagen. therefore it might be contained to being -- i don't think it
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will wipe the company out. >> all right. but isolating the executives responsible doesn't have anything do with how much money they'll -- >> no, but ge managed to get out of this thing. i'm saying the companies ability to survive -- oh, no, it's bad. they're going to use every ounce of their catch. it's a bp, but it may not be worse than bp. and then china. i got it tell you, this wynn -- that's the party blanket saying we've got about as far as we can. volkswagen, i don't want to minimize it they have cash position, bye-bye cash position. but at least it was not mandated by the board. >> wynn a big winner on friday, upgrade of the day. opening bell, interbrand celebrating the best global brands. at the nasdaq, webmd, online provider of health information.
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jim, we talked about october over the past couple of days. big piece today about how it's not the most consistently positive month, but when it's positive, it's more positive than any other month. i read that piece and i was thinking of you, carl, saying how september is a weak month. when i worry about issues being addressed, you have to be careful being as bearish. i thought friday's action was very constructive. a lot of this -- i have to focus on this oil again. if you can avoid oil collapsing -- there were a lot of s&p downgrades of oil companies. if you can avoid oil collapsing, you will a lot of high yield risk. i am conscious of the fact that everyone has gotten bearish that article was very important. people should read that. >> oil up a dollar today. >> yes. >> almost to 46.5.
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they call it rocket fuel for the carry trade. a rate hike is staved off. it's more punch in the punch bowl. >> it's kind of what i wanted. i wanted them to say that employment is -- it's the last good number, there is not much else that's a good number. the fact that if oil can stabilize and go higher, there won't be as many bankruptcies. >> though it's already baked in, but there's a great deal of restructuring. >> oh, my. >> it's coming. it's here. >> oh, my. i'm seeing -- when you see that deal -- the consho deal. you're up 11 points, but also you were up 11 points the last time they did a deal. the s&p downgrades is the beginning of the end of being able to pump, pump, pump. this is an issue uniquely united states. we have been pumping much more than anyone realizes. we're getting backed out. i think people don't realize --
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we have doubled production in four years. we can't do that anymore with this. >> yeah. one other thing you mentioned as being worrisome, glencolre, tha stock has been climbing back. there was story in the telegraph that you don't necessarily want to believe but talking about a takeout. more importantly the ceo has been speaking more positively. that stock is up 14%. back above 1. >> you need copper. we have said often how bad glencore could be. this is not lehman brothers. addressing it hands on. it's not lehman. i don't know. i was encouraged. >> ge up almost 4%. up almost 4% for the year as well. ge one of about nine dow
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components still in the green for 2015. >> i don't know. nelson peltz, i did a lot of work on activists, if you bought a position in nelson peltz's family, even after you heard it, not before -- >> on their announcement of a position, if you went in. >> yes. you still beat the s&p 500. i analyzed about 20 activists. he was the only one you made money on. >> that's interesting. >> so you can buy it today. empirically you can buy it today and still make money. that's important. for the most part, once you heard it, like macy's, you were too late. >> the argument from trian which is collaborating with management here and is fully supported by them is simple. they say ge has undertake an massive change in its business model and the market has yet to appreciate that. talking about organic sales
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growth, earnings per share growth. the ability to take cost out of the business. a lot comes down to execution. while mr. peltz can be friendly for a time, he is not always friendly forever. >> a lot of people are talking about the idea that there's a leash, at a certain point if you don't do "x" -- you know what? he's talking about a gigantic buyback that would boost earnings. i think if you take down more debt and you do the buyback, i bet jeff imal could be talked into it. >> are still investors who harbor ill will for ge as a result of the dividend cut that took place during the crisis. the dividend today in terms of real dollars is far below what it was, even though the yield is quite strong. you have those dividend related funds, things like that that no one wants to look at that stock again. that's a large constituency that it's hard to win back.
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>> that was a glaring -- i'm sifting through the presentation, it's a long presentation. >> 81 painges. >> that's a stand-out slide. >> and 10% return over the past ten years. >> there's an unit current, david, a lot of index funds own it. i think nelson pelt sz tired of the index funds not doing anything to help the situation. that's undercurrent from dupont, where the index funds did not vote with him. >> no. >> that's an important point. but they went against the proxy advisory firms to a certificate be extent. index funds are taking it more seriously, their fiduciary role. >> so you think -- >> they are. that's an important change in activism and could have significant repercussions. >> i do think if you go through the presentation, i like the presentation. if i were running general electric, i would say, you know what? maybe i ought to be more open-minded about borrowing
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money. it is true, by the way, that people love the dividend and the fact it's almost 4% is a reflection of the stock not being high, not the dividend growing at the level people want. >> another name in the -- on the dow, disney, of course. over the weekend not only raising prices for their seasonal and annual passes, jim, raising prices force thi s fors parking. they are mulling over dynamic pricing. pricing based on demand. this is part of an overall effort by them to talk about the profitability. profitability away from espn. the stock -- there was a lot of stock bought back in the '90s. the stock is ultimately creeping up. i think it's still a good stock. i do. i think that the company -- i remember when abc first went bad. went bad meaning it did not generate growth.
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people wrote the company off. and it was too soon, so to speak. i think we'll be looking back and thinking that whole notion that espn achilles heel, it won't be the achilles heel. that's more bullish than i've been. when i saw that article, i said they have a few more levers. i think star wars will be very, very big. i say that because i've been dealing with merchants who are involved with star wars, they're very excited thinking that it's just going to be really gigantic. that's gamestop, by the way. >> interesting. >> right. the media sector has yet to recover, of course. >> i know. >> from the epsn down day, as you point out. disney up 10% for the year is the best performer. everything else, when you look at it, down dramatically, whether it's time warner down 17%, viacom down 40%, cbs, 25%. the list goes on.
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fox also down. >> espn made a couple of changes. one is they talk about the line. more importantly they have become very fantasy-oriented. >> yeah. >> to the point where there's a show, adam and matthew -- people i respect in the business -- talking about fantasy. you can see it in the coverage. i think it works because you want to watch the end of the ga game -- i apologize, i'm all in, but i apologize to the wife. she doesn't watch the show. as long as guys keep your mouth shut, i'm cool. i think this change in espn will rebound positively. i like the fact that people forget how many different parts of disney there is, just like when we said, oh, abc. i thought the theme park thing was interesting. particularly because they have long lines. i don't know if you've been
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lately -- >> since they invested the billion dollars in the electronic pass which has changed -- it's a game change n r in terms of traffic. >> theme parks can be gigantic, shanghai will be good. bernanke saying don't look at that stock market. does not reflect china. china will make a comeback. i know i'm on the odds there. i have been waiting for them to bend and blink on makow. >> a lot of gainers today energy related. it is the first monday in october. supreme court back in session. kate kelly has some news on that. >> carl, good morning. big blow for u.s. attorney in the southern district of manhattan in that the supreme court is declining to hear a key insider trading case. the u.s. versus newman. this is a landmark insider
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trading case, in which on appeal a new york panel decided that insider trading would have to be a more narrow definition than relied upon in the 80 plus convictions for insider trading including some of former hedge fund managers. we're just learning that the supreme court which the department of justice asked to review a key aspect of the u.s. versus newman is declining to hear it. that, again, is a set back for the government and in the new york area we will defer to this higher court who had previously decided on a narrower definition. >> newman is affected, but also steinberg? >> michael steinberg, it would seem this is the final technicality that needed to happen in order for him to be a free man with no further danger of additional cases or additional liability. he would seem to be off the hook. of course, as you said, todd
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newman, anthony chaccin exonerated. the precedent it sets for cases in this area. other appeals courts, other than the 2nd circuit in the new york area have decided on a broader definition of insider trading, that's their most recent precedent. it's easier to bring broader insider trading type cases in other jurisdictions. now in new york this will be the law of the land for the moment at least. >> yeah. >> probably may not be the last headline we get from scotus today. kate, thank you very much. with all of that dow is up 164. let's get to mary thompson on the floor. >> carl, dow very close to the highs of the session, just off them a couple points. the mood very positive coming into today's session. given the big reversal in the dow on friday and then the strength we had seen in the european and the asian markets overnight. keep in mind the chinese markets are closed until thursday for holiday. investors bracing foreving for
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of earnings season. we're watching the s&p 500 because people are talking about the dow's reversal on friday. the s&p last week touched or retested those august lows. and now technicians are looking for 2000 on the upside to be the next barrier for the s&p 500, that's the 50-day moving average. the s&p up five days in a row adding to gains today with a 20-point gain in early trading. let's look at some sectors, as carl mentioned earlier. strength pretty much across the board. among the better performers, energy, as we see crude oil up just about a dollar now at 46.55. the dollar a bit stronger. that's not having an impact there. russia making noise about tal g talking to some opec producers, even as saudi arabia cut the price of oil to asian customers. industrials led by the news on ge with nelson peltz's trian
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taking a stake in the company. and ge at 26.51. the activist takes that $2.5 billion stake in ge. up 26 points. the dow off the highs of the day. up 153 points. carl, back to you. >> thank you very much. let's get to the bond pits and check in with rick santelli in chicago. good morning. >> hi, carl. it's almost like the teacher's out today so the students will be a little rowdy. china's closed, it's post big employment report so there's digestion. as we embark on the last quarter of the year, and even though this is not as true as it used to be, october is a big month, especially when we get towards the end of the months for a lot of fund adjustments. you would think it would be the end of the third quarter but really it's october. if we look at a long-term chart going all the way back to may of two-year note yields, i want you to see how important the bottoms are on this chart.
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we continue to seem to want to hold at levels, we're stabilizing here in the 57 to 60 area. if you keep that line of thought, look at the one-day and two-day of tens. the one-day looks like, wow, yields have popped. two-day gives you the reason why. this is the post reaction, that big drop on employment. the best chart is the year to date chart. similar to the two-year. the 2% on the ten-year is huge going all the way back to the beginning of the year, we couldn't get above it. we were knock at the door. once we got above t it was almost impossible to get below it we settled under by 1 basis point on friday. if we look towards spreads, this is very key. if you take the 30-year yield minus the 5-year yield, right now it's toying with the steepest since july. only by about a third of a basis point. it starts to get above 155 and a half or starts to widen, starts to steepen more, it's going to be the steepest since october.
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something worth paying attention to. steepening not associated normally with a fed normalization or tightening. but the yield curve, with all the central banking position held on balance sheets by central planners gets hard to divine what the yield curve is trying to tell us. suffice to say that the 30-year has rebounded a bit in yield and also keep in mind it's one of the few maturities that's higher in yield now than it settled last year. the only maturity. if we look at the dax since august 3rd, look at the pattern. it's rebounding. remember, weak euro is good for this. this should correlate with the dollar index. you can see not exact, but very close. we want to pay close attention today to some of the weakness in the euro, especially with china being closed. >> rick, thank you very much. we are getting word that the president will announce a trade deal today, 12 pacific rim nations including the u.s. and japan have agreed to the
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transpacific partnership, or the tpp, lower tariffs, increases trade. it will go to congress for approval. something the president has been after for a long time. it's been four years, as of today, that steve jobs died. we'll talk about how apple is remembering the former leader and carrying on his legacy. then david has an exclusive with ed garden of trian after that stake in ge. more "squawk on the street." good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. yes, investment opportunities can be anywhere... or not.
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> . remembering steve jobs today. tim cook tweeting remembering steve for who he was and what he stood for. we honor him by continuing the work he loved so much. cook e-mailing apple employees in part jobs' legacy.
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soaring achievements in technology, architecture, experiences of surprise and delight. a company he only could have built. with an intense determination to change the world for the better. it comes on a week where a new film about his life is coming out. >> i don't want to say i've been pleasantly surprised -- fabul s fabulously surprised, tremendous appreciation in the stock. you always feel like the stock trivializes the man by mentioning him, but we are "squawk on the street." some people say there has not been a lot of innovation isn't. i was at a target yesterday. the excitement about the watch. the excitement at best buy about the watch. geez. there are things coming. so, i -- i think we all recognize that jobs may be the greatest industrialist of our life.
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i stlaw there were some notes tt said take profits on apple. that's why i say own it, don't trade it. jobs built a great company. it's the stewardship that's good. >> some say tim cook may have been his greatest creation, which has been said before. we'll get stock trading with jim. dow up 185 now. daughter: do you and mom still have money with that broker?
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dad: yeah, 20 something years now. thinking about what you want to do with your money? daughter: looking at options. what do you guys pay in fees? dad: i don't know exactly. daughter: if you're not happy do they have to pay you back? dad: it doesn't really work that way. daughter: you sure? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab.
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s&p is going for its first five-day win streak of the year. the dow, s&p and nasdaq are within 10% of their highs. the russell now is lagging. down about 14%. let's get cramer and stop trading. >> this is interesting upgrading autozone. autozone is my favorite in the group. i don't know why anybody would have a hold. advanced auto parts last week -- this is like ge to some degree. advanced auto is good. maybe it's not as good as autosauto autozone, but they can make it better. i like this form of activist. starboard is doing the right thing. peltz is doing the right thing.
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will you be talking to ed gardner, which is a really important thing. ge is widely held. i want to know how you make money giving money to trian in order to do it. i think the answer is they can provide tremendous value. it's good for everybody. i think auto zone is the model of what aep should be. i'm talking about this positive kind of constructive activism. i think it's great. >> that old saying you get more with honey than vinegar. >> i used to say you get more with thermonuclear weapons than honey. i dropped that whole thing. the kinder, gentler activism gets the job done. >> the threat has to be there. the threat has to be implicit. >> let's find out when you talk -- but i think ge is a buy, not a sell. i'm talking about trian, how well you do once they're announced. >> what's on "mad" tonight. >> tg therapeutics is on.
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michael weiss is a money maker. you know michael weiss. >> i do. >> i want to point out like one drug where they have that's remarkable for blindness up 14, let's not forget biotech is the homers haves valeant of some many great things. i'm so glad to be back. it's good to have you back. we'll see you tonight. when we come back, ism services and trian's ed garden. dow up 187. (trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading.
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good monday morning. welcome back to "squawk on the street," i'm carl quintanilla along with sara eisen and simon months. dow up 186, s&p almost up 1 tnt 25. twitter naming jack dorsey as its permanent ceo today. it's up almost 2%. we are getting breaking news on ism services. for that we go to rick in chicago. >> 56.9. now, sequentially it's lower,
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that's a september read than the 57.5 we were looking for. but it doesn't really break us out of the range in a wild way. the low read for the year happened in may at 55.7. the best read was july at 60.3 which went all the way back to the summer of 2005. let's go through some internals quickly. this is nonmanufacturing. this is the service sector. the biggest swath of the market. 58.3 on employment. that's an improvement over the last look in august of 56 if we look at new orders, 56.7 is a deterioration. a large deterioration of the 63.4 look in august. a split decision on the two big internals, employment improving, new orders not improving. it is lower but the realm of the range of the year so far. david faber, back to you. >> thank you very much, mr. santelli. trian announcing this morning it is making a big bet on ge
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accumulating a $2.5 billion stake in the company. that makes trian one of the top ten shareholders in ge and marks the single largest investment trian has ever made. it believes ge could reach 40, 45 in the next couple of years if the company follows its current path. we are joined by ed garden from trian. nice to have you here. if i'm a trian investor, i invest with you, i say i invest with you because you make action happen. ge, i can go out and buy ge. why should i pay you guys to tell me ge is the right way to go. >> let me frame the discussion. we made ge the biggest investment ever for trian for a reason. it's an amazing risk/reward. i think we bought the best industrial business on the planet. happens to be trading at the cheapest valuation. with regard to risk, david, i
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feel like we're taking very little risk because of the balance sheet, the brand name, cash flow, unbelievable market shares. think about 70% market share in commercial jet engines. across the portfolio, incredible market shares. they really leveraged their scale. they spend 50% more in r & d than the closest industrial competitor. you have to buy junk in the bond market to get a 4% dividend yield. i feel we're taking very little risk and will sleep well at night what is underappreciated is the upside. what jeff immelt has done is isolate the core industrial businesses. those businesses are amazing. they have grown best in class revenue-wise the last ten years. eps in those businesses up 50% the last five years. incredibly resilient. so, down 5% peak to trough,
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great recession. why do you think the market failed to appreciate what you at least point out is this transformation of this company and potentially it's better metrics than many competitors? >> i'll give you a perspective. there's a ton of investor skepticism in ge. and there's a reason, right? stocks down since jeff became the ceo. total shareholder return doesn't look great. >> 10% over the last ten years. doesn't look great versus the market or industrial comps. eps is down or not as compelling versus the market or industrial peers. probably most damming, the dividend being 25% below where it was in '08. this reminds me of lazard, where in 2012 we game the largest investor in lazard. there was a ton of investor skepticism. we felt management had a great
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plan. we believed, became one of the largest shareholders. we told management we would hold them accountable to execute. we ended up doubling our money. i think that's where ge is today. we see eye to eye with management on the plan. now it's about execution. they need to execute. we'll hold them accountable to execute. that's what we do for a living. pretty good at it. i think they'll execute. if they don't, then all options are on the table. >> there is at least some sort of a threat or what i typically would hear from an activist what gives you the confidence that ge can do what you believe it is capable of based on the track record you just mentioned if trian had a track record like that, would be out of business. >> first, you have to appreciate that jeff inherited a company trading at 40 times earnings. >> no doubt. >> and ge capital was 50% of
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earnings. levered 30 times. you have to realize that is what he inherited. but the transformation which is really amazing, taking the company from a broad conglomerate to an instructure play. so we think it's reasonable they can get 50 basis points of margin improvement a year. so ebit goes from 14% to 16%. >> but they have not committed to them. >> they haven't, but that's what we think is the art of the possible. i could make the case that's conservative. i could make the case that there's a lot of runway for growth after that. as you know, the best industrial businesses have ebit margins in the 18% to 20% range. there's upside from that. but jeff has said he will bring sg & a down as a percentage of
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revenue from 14% to 12% 200 basis points there. cost of goods sold by 300 basis points higher than the ten-year average. so, there's a big margin opportunity. when you couple that with the capital return, it really is going to drive a ton of value. >> you want them to also increase leverage by one turn, $20 billion. that's what you point out is more efficient capital structure and you recommend they increase the buy back beyond what it already is. you are asking for a couple of things here that management has not committed to yet. >> management has said they will return 90 billion of capital to shareholders. i think that number could be 110 to 120. depending on how you capitalize the industrial business going forward. now you're talking about returning 40% of the market cap to shareholders over the next few years. and when you bring down the share count and you couple that with the operating improvements i just described, it really
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magnifies, right that eps growth. so, that's why i look at this and think it's the best defensive growth story that we've been able to find in the market. >> ge welcomed your ownership, becoming a top ten shareholder. should mr. immelt and management be fearful given your track record? >> look, i've known jeff for decades. nelson has known jeff for at least a decade. it came public today that jeff broached with nelson joining the ge board. >> some time back. >> '07. then '08 happened and it wasn't the right time for either party. there's a relationship of trust and confidence and respect that i think is pretty special. i think this could be a watershed event where an iconic u.s. company, one of the biggest, most important u.s. companies wanted an activist
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involved. >> is this a new model? >> think about this. wanted us there because they know we'll be lgts. we'll be thoughtful. we'll be constructful. we'll be engaged. they know we'll hold them accountable and they welcome that, it's a paradigm where management wants the owners of the company engaged. when all is said and done, jeff will have an amazing legacy. he has that attitude. >> final question on a different story, dupont. still in there. are you going to -- >> still in there, have bought more shares. >> on a very different note, of course, than ge, there it was combative, there you lost. do you go back at it again given you're a large shareholder? >> the dupont story is fash from over. let me make an observation. you know, it's all about revenue growth and margins, right?
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the case of dupont, we were talking about a separation at dupont. not for the sum of the parts u but because it made no sense to us that as part of an amalgomation the businesses were altogether but they didn't produce operating results, at least in line with smaller stand-alone peers. we created a lot of value by separating businesses like that it's not for the sum of the parts. it's because you generate focus. you redo bureaucracy, complexity, you create accountability and all those good things lead to improved operating performance. in the case of ge, bringing it back to ge, in our opinion they have done one of the best jobs we've seen at really leveraging their scale. but not becoming bureaucratic,
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bloated at the holding company. that's why we're really excited to be a top ten shareholder. >> well done in terms of bringing it back to ge. thank you for your time. >> thanks. the market importantly following through this morning on friday's powerful reversal that lifted the s&p by 57 points. joining us now for analysis on where we trade, joe levorgne and david lieberwitz. is the risk/we rard chanreward ? >> we will be watching earnings season. from where we sit, we have not seen positive earnings for the s&p in aggregate for a handful of quarters. and we're seeing uncertainty among investors. they're looking for something to latch on to the 3 q season will be telling on whether cash flows
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are coming back or whether the stronger dollar and oil prices are weighing on things. >> if you believe the market can rally from here, as jpmorgan morgan describes them, investors may be overly bearish, and the season changes now. we would expect to rally mid-october, november. >> so, i think there is some seasonal stuff going on here. i think the cash flows which have been missing are extremely important, particularly for long-term fundamental investors. what i would say to your comment, equity markets have overshot what a lot of underlying economic indicators would imply as fair value. if you look at a simple relationship to the pmis and the headline equity indexes. this looks like a buying opportunity to us. with valuations more attractive, we think it makes sense to be overweight u.s. equities. >> we have to talk about where we are with the federal reserve.
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is it safe to say janet yellen and her colleagues are captive to the market? will they be able to persuade the market they can move off zero interest rates? >> the fed is very naive to believe it could raise rates if the market is not discounting it. right now the market has a low problemibili probability of an october or december move. somehow the fed has to come out and tell the market to raise rates. i have my doubts. >> joe, you have been adamant that the fed should pull the trigger and raise rates. now employment is slowing. we're not at the fed's 2% target. far from it. and the global economy is slowing. how does that argue for an interest rate hike? >> it doesn't. this is the problem. the fed are what i call scaredy cats. they had a window. they didn't exercise it.
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job growth was over 300 earlier this year, and now slowed to 170. it will be much harder to raise rates given the fact that the jobs number is weakerment. >> let's say we get a decent rally to the end of the year based on seasonals and other factors. don't you think a rising market here, which might lift world markets, might change the fed's perception and hasten a rate rise and allow them go. >> i argue the markets rallying because it believes they have the fed's back. i don't believe these markets would be rallying if the fed funds futures market was not taking out the probability of rate hikes. it has one hike in it basically between now and the end of next year. that's the reason why the equity markets recovered. >> what part of the equity market will work best between now and christmas? >> a lot depends on what happens with the federal reserve. i think if you subscribe to joe's theory, and we do to an
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extent, you will see easy policy from the fed for the time being. that's supportive of the defensive plays that have worked so well over the past few years while the fed has kept rates at zero. if we do see the economic activity pick up and we do think that we will see some strength in the fourth quarter, stronger than what we saw in the third quarter, you may see a rally in some of those more cyclical sectors. the one thing we're watching closely is health care. health care had been a great performer and has taken it on the chin. we're watching for opportunities there. there could be upside to the end of 2015. >> thank you both for your time. >> thanks. up next, the symbol may still be the same, now googl stands for alphabet what else has changed? "squawk on the street" will be right back with the dow up 192.
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google is officially alphabet. the reorganization was announced back in august, but the stock started trading as alphabet just today. josh lipton is there with more on that story. >> good morning. so the tickers are the same, shareholder rights are the same, too but this restructuring is talked about as a strong step to deliver on the promise of
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greater openness at the internet giant. so what is alphabet? as a reminder, it's a husband holding company run by larry page and sergei brim. it will include a portfolio of businesses, calico, the biotech focused on aging, thermostatmaker nest, google capital and google x. its biggest business will be google inc which will include search, ads, maps, youtube and android. the man in charge will be 43-year-old sundar pichai. they hope for more clarity about the underlying strength of google's core businesses like search, providing possible upsides to the shares. his price target is 770 bucks. one change is google's motto,
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don't be evil, is well known. alphabet is asking its employees to "do the right thing." simon? josh, thank you very much. coming up on the program, former fed chairman ben bernanke speaking out in an exclusive interview this morning. and we're watching twitter shares as jack dorsey is named permanent ceo. more on that after this short break.
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dow is up almost 200 points. let's get a market flash here. >> we're watching shares of fireeye, they're down in early
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tradings. piper jaffray downgrading them to a neutral rating. there was a prior overweight, outperform rating citing increased competition among other factors. the firm also slashed the price target on the stock to $37 a share tchlt share. it used to be 60. still fireeye shares, once a hot stock showing real signs of weakness. back over to you. news out that the supreme court has declined to take up the insider trading case of tot newman and anthony chasen found guilty of insider trading in 2012 before an appeals court threw out their conviction. the decision not to hear the case is a big blow for the u.s. attorney. trying to make sense of it all and what it means for insider trading law overall is greg morvillo, chasen's attorney stlu it a through it all. a big win for you. >> the reality is a great win
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for anthony and his family. it's a big thing for wall street as well. >> why is a big thing for wall street. >> now there's a specific set of criteria that everyone knows. so, the u.s. attorney's office, the wall street traders, the defense attorneys, the s.e.c., we're all on the same playing field. everyone knows what the law is now. >> the key thing in your defense, and your success, of course, with you showing that they did not even know that there had been a benefit construed from the original tipee to the tipper, and the long chain at the end where your client is, mr. chasen. that no longer will get anybody convicted, i guess. >> correct what has to happen now, if you're convicted of insider trading, you have to have material nonpublic information obtained in breach of a fiduciary duty. that's always been the law. the part that's been clarified by the 2nd circuit and now clarified again by the supreme court when they denied taking
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the case is that if you -- if you are a downstream tippee or someone who received the information, you have to know that the insider is self-dealing. you have to know that person is exchanging information for a personal benefit. that they are acting on their own behalf and not for the shareholders. and if that's the case, then you can't be convicted because you have not committed a crime. >> isn't this going to allow hedge funds more leeway in terms of where they hear information and what they do with it? and maybe they have an edge that's unfair. >> i don't think so. this has always been the law. this has always been the law for 30 years. this has just been clarified now. it doesn't give anybody an edge today that they didn't have years ago. >> the assumption before was on the basis of friendship i could pass a tip on because it was my friend that i was telling.
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that would be considered the benefit that would have led to a prosecution. that's been clarified, to frighten it back, to having to show some material benefit. >> yes. except friendship still counts. if you and i are the best friends, we're out golfing, and i pass you a tip that says coke will buy pepsi. >> right. >> you trade on it, you're still liable for insider trading, even if you don't give me anything in return. it's where there isn't a real friendship, where people have work friendships, sort of cordial, but there's a work aspect to their relationship and a real aspect to it. so an investor relations person who has become friendly with an analyst at a hedge fund, that person -- now the government has to show specific real friendship, a real relationship, not just saying there's a relationship. >> would you expect lower courts normally to redefine the law in such a way? >> i don't think the law has been redefined it was clarified.
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dirks versus s.e.c. has always said a breach of fiduciary duty is benefit for information. take broader lessons than other than insider trading? >> they won't let them get away with a part conviction. >> does this make it more difficult to prosecute? if you're in preet bharara's office right now, are you saying i'm done? that incredible run i had, i won't be able to be as aggressive as i was. >> i don't think so maybe you can't be as aggressive as they were in the past because in this case they clearly went beyond what the law allowed them to do, because the law specifically required this before and still does.
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remember, he won -- they won 85 cases, 80 in a row or some number like that. most of those people, other than mr. chacin and mr. newman have had their cases upheld. many have challenged and lost this will not open the floodgates. it won't open the jails. people won't come running out. this is simply a reaffirmation of what we always knew to be the law. >> mr. morvillo, appreciate you coming down. >> my pleasure. when we come back, it is official, jack dorsey is the new permanent ceo of twitter. but he's also still the ceo of square. does it set the stage for conflict? more on that with the dow up 188.
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good morning, i'm sue herera. the u.s. and 11 countries in the pacific rim reaching an historic deal to lower trade barriers and set commercial rule force ts deal to lower trade barriers and set commercial rule force t for two-fifths of the global economy. for the u.s. it tightens intellectual property rules and establishes china releasing new video of jetting carrying out operations over syria. he israeli police preventing
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palestinian residents of jerusalem from entering the old city. it's in response to the recent violence. the palestinians will be temporarily barred for two days during a jewish holiday. it's the first time that israel has done this since capturing the old city back in 1967. talk about home security. look at that. two bears there. a 20-pound french bulldog fended off those two bears that wandered on to the family property in wall wall. the bulldog went after the bears and scared them off. what can you do? almost got him. that's your news update. sarah, back to you. >> brave little bulldog. >> yes. >> see you later. watching twitter shares. twitter naming jack dorsey as its permanent ceo. dorsey will relinquish his chairman post but will remain e
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ceo of square. >> twitter shares moving up about 2.5 higher this morning on this news which was very much expected a number of analyst s have come out with positive notes and calling it a move in the right direction. i spoke with twitter's lead independent dreshirector, peter curry, asking him why he thought it was okay to have a ceo running them and another company. he said they spoke with a number of superb outside candidates but dorsey's product vision and pace of execution in the past three months made the choice clear. he also spoke to investors on a call earlier this morning. >> we did not start the search with this scenario in mind. we assumed we could only consider a candidate who could make an undivided commitment to be our ceo. over time, it was apart that jack was not just meeting but surpassing the expectations we had of him as intermittent ceo
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while also running square. >> dorsey also said he is confident in all the changes in the works at twitter, particularly the project lightning product overhaul which is launching soon. >> in the last three months we made significant strides towards the three priorities we discussed in june and on our q2 earnings call. discipline execution, simplifying the service and better communicating our value. the pace and quality of product launches is up. >> now the question is how quickly twitter can start growing stagnating user base. both would not reveal updates on the user number until the next quarterly report. the other question is who the company would appoint as an independent chairman. currie did not give a timeline for that appointment. >> julia, it's interesting that they actually had the board
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meeting last wednesday, according to the news release, but only decided to inform the market today. let's put that to one side it would appear from the conference call which i listened to that dorsey's made fundamental suggestions about what twitter should be in the future. dramatically evolutions he talks about for 2016. it's partly on the basis of that that he won this job and his ability to run both companies. is that a correct reading? does the board know what twitter will be next year and how it will change now? >> i think they do think they know how the company will change. what currie told me is when they put jack in, jack dorsey in as temporary ceo, they told him to behave as if he were permanent ceo. to feel confident to make the changes and implement the kinds of product timeline and road map that he would implement as if he were going to be there forever. it seems like he did that. he continued a lot of the things that have been in place, but
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also has been -- what they called accelerating the pace of execution, rolling out more changes to the protect and getting the changes ready for the fall. everybody has been talking about project lightning it was mentioned a number of time in the call with investors this morning. we'll have to see how that turns out. >> dorsey says his commitment to twitter runs incredibly deep. thank you very much for that breaking news finally on twit a big morning on squawk. former fed chairman ben bernanke speaking out in an exclusive interview saying slow productivity growth is weighing on the economy. steve liesman was there to marsh marsh marshall the whole event. >> an hour-long interview with former fed chair ben bernanke. he walked a fine line to my ear between not wanting to dictate policy to janet yellen and yet making plain his view that would not be in a hurry to hike
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interest rates right now. >> it's not evident to me that policy is too easy because, again, because inflation is very low. and, you know, we just now are approaching sort of a full employment level of output. so, it's a tough call. but, you know, again, the folks who were arguing a few years ago that the fed was creating this radically expansionary policy, they were predicting high inflation, we have not seen it. that's an indication that policy is if not radically easy any way. we'll see. again, the fed is looking to normalize overtime. and they'll make some tough calls about how to do that. >> you can hear right there. he never explicitly says what he thinks yellen should do but walks a fine line. bernanke's new book "courage to act" hits book store shelves
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toda today. >> the worst moment, i think won't shock you, was the lehman weekend, the knowledge that it was going to fail. the fear and uncertainty that was associated with that. then the next couple of days as we had to deal with aig. talk to continue. >> what does that mean, worst moment for a fed chair? does it mean you were worried that the economy was going blow up? >> i was very worried. my whole background was studying the great depression, studying financial panics, effects on the economy. i saw that we were having the granddaddy of all financial panics about to explode on us. i thought the consequences would be tremendous. >> bernanke rejected criticism that the fed's low rates are creating financial bubbles. he said rates should be raised to handle financial bubbles only as a last resort if all other regulatory measures do not work. sara? >> it was a great interview, steve. >> thank you.
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>> a lot of great moments. thank you for bringing us some of the highlights, especially as they relate to the current debate in the markets. joining us on the phone with more is frederick mishkin. good to talk to you again. >> good to talk to you, too. >> professor, it strikes me it is now on janet yellen to have the courage to act. is she being too fearful and too cautious when it comes to the first move on interest rates? >> i don't know if she's being too cautious. there are reasons why the fed -- it's reasonable for the fed not to act in terms of raising rates. i do have tremendous problems with the communication strategy that janet has been using in the following sense, which is that they -- in september the statement said they were not going to raise. there were all these reasons to not raise. there were uncertainty in the economy.
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inflation was too low. was not clear inflation would rise back to levels that it might otherwise do. and to reach the target. now we're in a situation where the data has come in quite week in terms of the employment report. however speeches that janet made and bill dudley shortly after the meeting kept saying they would be likely to raise in -- by the end of the year. that's not consistent with the statement. possibly not consistent with what the data is saying. they should move away from the timing exactly in terms of a date, but actually describe the conditions under which they should tighten. if data comes in that's not strong, inflation stays low, it's completely reasonable for them not to raise rates. in that sense i'm in agreement with chairman ben bernanke. it's remarkable in this period when the fed has been struggling to get inflation high enough that the criticisms have continually been, gee, the fed has been too inflationary.
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it's remarkable those criticisms keep on being raised. >> we have seen nothing in terms of inflation. i know you're featured prominently in the book. did you see the interview this morning? >> i did not see the interview, i have read the book. i read it quite awhile ago, and gave ben some comment at that time. >> do you agree with his assessment of how it went down? >> yes, i do. we were close to having a great depression. this was super scary stuff. to me, you know, i am friends with ben. i think he will go down in history as a hero because he helped prevent a great depression. many people did not understand this. so members of the participants did not understand the severity of what was going on, how dangerous it was. we were lucky to have somebody who studied the financial crises and the great depression during that period. in fact, i had also done a lot of work on this as well. i think it served us well at the fed in terms of doing the right
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thing. >> professor, let's take you to the present moment, please. the question of what is the right thing to do now. already on this show within the last half hour we had the chief u.s. economist from deutsche bank, who shares the view with other people that the fed is captive of the markets it cannot raise rates unless the markets feel it's appropriate for that to happen. therefore people like joe are pushing expectations of rate rises into next year. that doesn't seem healthy that the fed put itself in that position. what say you? >> i agree. given the statement they made in september and the recent data that we see, unless the data runs much hotter than it's running now, the case is not to raise rates. i have no problem with that. the big problem is they put themselves into a box that they never needed to put themselves into.
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what is a terrible thing do is say here's what we're telling you we'll do, and the thinking is inconsistent and you don't do it. then they lose credibility. unless the data is much stronger, there's not going to be the case for tightening. and when they don't tighten people will say, yeah, but you told us you would tighten by the end of the year. this is dangerous for them. i've been unhappy about their communication, less so with the policy. i should say i probably would have raised interest rates 25 basis points at this last meeting with a very dovish statement, very much along the lines that they said saying that it was unlikely they would have to raise rates unless the data actually warranted it. the reason i would have done that is to get it out of the way to decrease in uncertainty about this event. i think that was a close call, but what shouldn't have been a close call is the communication strategy which is doing one thing and then saying another. that's a real problem for them. >> we have more fed speak this week. we'll continue to monitor it. thank you for joining us.
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fred mishkin on ben bernanke and janet yellen. still ahead, security surrounding mobile payments becoming a big issue in silicon valley. the head of google wallet will join us after the break. kid: hey dad, who was that man?
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dad: he's our broker. he helps looks after all our money. kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly. kid: what if you're not happy? does he have to pay you back? dad: nope. kid: why not? dad: it doesn't work that way. kid: why not? vo: are you asking enough questions about the way your wealth is managed?
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wealth management at charles schwab it's a big rally again today, up 154 points on the dow. look at the energy sector. certainly one of the best performers today. >> so, simon, we see energy rallying with the sea of green in stocks, but it's standing as one of the top performers, though well off the best levels
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so far today. among those sectors here, talking about energy. first consecutive five days of gains since october of last year. both the energy sector and the etf that tracks it, it's popping. they're both popping above the 50-day moving averages. average prices force the first time since may. among the stocks powering the gains, chesapeake, consol, marathon all up around 3% 4%. watching closely that energy trade. we know how closely it is tied to the price of oil and gas. back over to you, sara. >> thank you. coming up, an interview with the eu commissioner going after tech giants like google, apple, amazon, she's the top antitrust cop in europe. that's coming up on "squawk alley."
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dow's up 153. let's get over to chicago. rick santelli with the santelli exchange. >> i like to welcome my post-employment report guest charles verdeman.
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what a great time that was. i watched as much as i could. charles, mr. bernanke talked about all the things he's doing and why he was right in what he did. but here's what i heard. i heard we're not sure exactly what's wrong with the engine but keep giving it more gas, and what's wrong with the engine, he's not sure if it's productivity. i think you have a lot of ways to address why our economy all of a sudden out of left field out of the crisis has become less productive. what do you think? >> there's too many head winds from government regulations, from taxes. >> health care costs. >> health care costs. there's so many -- >> i mean, in 2016, we're going to see a bunch of facets of that program kick in so there's still a lot of chapters of that left as well, correct? >> correct. look, why don't we -- instead making head winds to growth globally, which it is, which
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means a global -- we're entering a global recession due to excess production, excess capacity. let's create a global growth initiative. let's make it easier to start up, to grow. let's reduce taxes. reduce regulation. reduce anti-competitive rules by existing businesses. >> we know if the government isn't orchestrating, it could never possibly work. isn't that what we've become? we used to lead the rest of the world. now we've joined the rest of the world thinking only governments could do it. build on that thought if you agree with it. >> we have a community activist that's president and community activists believe government can solve all problems for all people. >> it's an activist federal reserve, don't we? >> well, the federal reserve,
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thing only thing the federal reserve can do. no interest tax rates are possible. now that we're entering into a global recession. i actually think the next move by the fed will be some sort of stimulus. they're not going to call it qe. they're going to call it something else. four years ago, october 11, the fed did something, given that the fed -- and the economists and newscasters who parrot the fed said we're going to have -- we're getting out of this. we're sustainably growing. they launched a new round of qe in october '11 and the market took off from there. >> listen, i have no problem if we could actually artificially create growth. obviously, anybody would looked at the world economy created a
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lot more depth than growth. charles, thank you for being on. hopefully next time we won't get uprooted by live events. >> let's send it over to john and see what's coming up. >> we're going to continue to talk twitter. jack dorsey is the new ceo. and who else has changes coming there. also, google is now officially alphabet. does this mean they're going to spend less, spend more? and we are on the red carpet for the new steve jobs movie. all that and more coming up. so what's your news? i got a job! i'll be programming at ge.
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oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! [ that's a good thing, eligible for medicare? but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients...
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good monday morning. squawk alley is live.
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welcome to "squawk alley" for a monday morning. on a day full tech news. start with the markets. dow's up 171 after that big reversal upside on friday. market taking some solace and some data today. stocks still rallying. all the major averages up 1%. twitter naming jack dorsey their permanent ceo. dorsey will remain ceo of square which is set to file for that ipo later this year. dor dorsey talked about his commitment to twitter. >> this is a really exciting day for me. i'm honored to continue

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