tv Squawk Box CNBC September 19, 2016 6:00am-9:01am EDT
it is monday, september 19, 2016. and "squawk box" begins right now. >> live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with andrew kernan and andrew ross sorkin. security is tight in new york city after multiple explosions in the area. also a mall stabbing in minnesota over the weekend. we will have the latest in just a moment. first, though, we'll get a check on the markets. the u.s. equity futures this morning are indicated higher. the dow futures up by 90 points. the s&p futures up by 9 points. the nasdaq up by 19 after the market did make some gains for the week last week. overnight in asia, the nikkei was closed for a public holiday. this is in celebration of respect for your elders. you can see the asian markets that were open, the hang seng was up .90%. similar gains for the shanghai composite and the kospi in south
korea. in early trading in europe at this hour, you'll see green arrows as well with the biggest gainer among the major markets. the cac in france is up by a third of a percent. and wti crude is up by 1.5% to 43.68. back to the top story, another explosion near a transit station in elizabeth, new jersey, after a backpack that appeared to contain pipe bombs detonated. the fbi is questioning how five people that were apprehended on the verazano bridge last night. morgan brennan is joining us from chelsea with more. good morning. >> reporter: good morning. a terror-filled weekend here in manhattan as well as across the river in new jersey. now all the details still very much unfolding. but here's what we know so far. just hours ago a backpack containing as many as five pipe bombs detonated after police responded to a call about a suspicious package in a garbage
can near the elizabeth, new jersey, train station. one of the bombs exploded while a robot was cutting a wire on that device. >> you know, the people who are doing this, it's -- they have no value on human life. and it's really difficult to understand their rationale. $so >> some amtrak trains were shut down overnight but now they are resuming. a bomb exploded on the new jersey shore. no one was injured. and here in the chelsea neighborhood of manhattan on the street behind me in a separate incident, another bomb exploding on saturday night. so take a look at the security camera footage of the moment of that blast. that sent pedestrians running. debris flying through the air. 29 people suffered injuries, all
since being released from the hospital. now just four blocks from here a second device was found. they describe it as a pressure cooking device that could be similar to the one use in the 2013 boston marathon bombing. police planned a controlled detonation of that bomb last night. authorities have not officially connected all the incidents or officially labeled them as terrorist attacks at this point, but they are saying at least three of these incidents involve old style mobile flip-phones. now as far as suspects, the fbi saying five individuals have been detained for questioning in this new york city explosion. no charges have been pressed. and nbc news reporting that according to surveillance footage of this area, that what could be the same person visited both of these manhattan sites. but these investigations are still very much unfolding. a lot can and will change as we get more details. in the meantime, guys, security, which was already stronger than
usual, is being dramatically boosted because, remember, the united nations general assembly is also kicking off its events here in the city today. back over to you. >> thank you for that report, morgan brennan, downtown in chelsea, new york, at the moment. the investigation continues in st. cloud, minnesota, where a man stabbed nine people at a shopping mall on saturday before he was shot and killed by an off-duty police officer. the attacker mentioned allah and asked one victim if he was muslim. isis takes credit for the attack but the fbi is still investigating whether the attacker had connections or contact with any terrorist organization. all nine victims are expected to survive. what a weekend it has been. >> makes you understand why cameras are everywhere. especially over in europe and great britain. >> and appreciated. yeah. >> because now i'm going to say, well, where is the surveillance video of that area beforehand? so they need to have them
basically everywhere. there's conjecture on the one that did successfully blow up, that there was a construction site that was blocking some of that, that they are smart enough to see where the cameras are and see the surveillance was blocked. >> because otherwise it was a relatively random choice for why there. >> right. to the reaction from the campaign trail, john harwood is joining us now from washington. john, good morning. >> reporter: good morning, joe. you know, there was a little bit of reaction over the weekend and a little bit of back and forth between the candidates, but it didn't amount to all that much. we still don't know a tremendous amount as morgan was just saying about who and why this or these attacks occurred. you did have the initial attempt by hillary clinton to draw the distinction between herself and trump in terms of how quickly you refer to what happened as a bombing. that didn't really go anywhere because it was a bombing. and she used the reference to bombing herself.
so that was kind of inconsequenincon inconsequenti inconsequential. then there was a tweet to national security that is on the mind of national voters as they head to election day. but i think so far we'll see what the candidates think today. so far it hasn't been all that big a deal in terms of the back and forth. and, you know, national security is an issue that works on two different levels. one, hillary clinton has national security experience as a former secretary of state. if you look at the polling, she has done better on some of the attributes associated with being president, whether it is qualification or knowledge of foreign policy, that sort of thing, but donald trump benefits from the assertion of strength. and that is something that appeals to a lot of the voters who are rallying behind him. and the idea that strength is
what you need in a crisis like this is something that he is encouraging and has potency with the group of voters. >> all right. so many polls, all polls all the time. there's some coming out today, i'm sure. they come out even on the weekends, john. and half of them i haven't heard of before. >> and showing a very competitive race. it's showing donald trump drawing within a point or two of hillary clinton. if you look at some of the polling averages, and we are, after all, 50 days from election day. and i just want to run through, before we go, some of the key dates to watch on the calendar. because the days are getting short. obviously, one week from tonight, we're going to have the first presidential debate. that is on september 26th. three days after that, early voting starts in iowa. that is a battleground state. one of a dozen or so in the election. it's one that donald trump is
leading now. and the more vote that gets harvested at a point when you're leading the better it is for you. so after the 29th. you look to early october and you see on the 4th of october you have the vice presidential debate. that is a big deal. you're also going to see on the 9th. the second presidential debate. on the 12th early voting starts in the state of ohio. and you move all the way through the end of the month and you have one significant event after the other. october 7th you've got the next last jobs report before the election. and then, the first week in november, it could have the seventh game of the world series on november 2n. on november 4th, the last jobs report before the election and november 8 is when it all happens, guys, although a significant amount of the vote as we indicated in that rolling set of deadlines for early voting comes early in the way
that we have evolved our elections. so the skill of campaigns, the technical ability of them to get people to vote early will be a key factor in the outcome of some of the battlegrounds of ohio, iowa, colorado, florida, et cetera. >> yeah. we got some things around here that probably are going to happen between now and then, too, john. just saying. >> i don't think it quite makes the calendar list. >> what? i think it does. >> what are you talking about? are you doing something of national importance between now and the election? >> absolutely. >> not me. not me. but between now and november 8th, becky is going to be -- i'm pretty sure becky is going to do something. unless you decide to put it off. >> no stopping it. >> what do you think the implications of that are going to be? >> nothing. >> does there always have to be a political implication, john. we're adding a new voter in 18 years to the country. >> 18. >> were you thinking -- i just
couldn't help that you're going over all these things. >> i'm going to do a little research on the historical, what history tells us about the impact of morning anchors having babies in the run-up to the election. >> i'm pretty sure there's no impact. but good luck with that, john. >> last time it was happening now -- >> last time i had already -- at this point in any pregnancy -- joe is a little nervous here because i am further along than i was last time. and he knows that i am aiming in his direction. andrew's not worried. >> i'm comfortable. >> joe's shoes are nervous. >> actually, they don't -- >> john, thank you so much. a lot is leading up to the election and john is on top of all of it. wells fargo is facing a
lawsuit over the opening of the sham accounts. the lawsuit that was filed in utah on friday is seeking class-action status. earlier this month wells awe agreed to pay $190 million to settle charges that employees opened some 2 million accounts without customers knowledge to meet sales targets. the u.s. prosecutors opened the investigation into wells fargo's practices and ceo john stump will testify at a senate hearing in washington tomorrow. that should make for some interesting television. also, retail gasoline prices are surging in the united states because of continuing problems with colonial pipelines gasline. it carries fuel to the east coast. colonial has started to construct a bypass line because of a link. gas in georgia jumped to $2.26. that's up 15 cents in a week's time. prices rose by 4 cent miss the care lolina carolinas.
>> do you have something for the latest quandary? we don't mention -- we don't mind the ceo pay as long as it's tied to performance. it can't just be -- it's got to be tied to performance. how about earnings for share -- no, no, no, not earnings for share because then they can do stuff. wait a minute, not revenue. how about -- no, let's tie it to profit margins. no, no, no, wait a minute. so what is the answer? >> profit margins are not bad. >> really? >> that's what happened with epipen. >> i know. at some point -- >> we had walter isaacson on -- >> you do have the lull. >> i tell you what, at least he plans on the corporate reputational damage that was done by things like this. and at least it's not just -- >> and it's adding to the national conversation. >> that's right. but it's not just asking ceos to
be good corporate citizens. because this is what we talked about last week. angen was able to keep exclus e exclusivity on this. is that good? they added a point to health care inflation? >> yes, but epipen was not created then. >> i know that. but no one else has it. >> there's a point where greed becomes -- >> as long as you tie it back that you're going to hurt the company overall, then you're hurting business. i agree with that. >> and the goal has to be a rational goal. if you talk to people, for example, on the wells fargo front, which i started to talk to some of the employees late last week, the amount of, quote, solutions they had to create on a daily basis for fear of losing their jobs is the reason why so much of this happened. >> but it's always better if you can -- it's always bet for you're not bogged down by a federal agency or regulation
somewhere hurting competition and allowing the -- not a fair playing field to develop. because otherwise if you're going to question -- on the regulatory side, yes. go back to your favorite, the greatest corporate citizen in the world, howard schultz. >> i love him. >> coffee prices go down. if they see and opportunity to raise prices where it's going to stick, they're going to do it. >> now the market pushes it. >> if you are caring about your customers or employees not getting a raise, it would be a utility and not a for-profit corporation. >> but the consumer protection bureau is the reason we know, well, we know from the l.a. times, but it was that group that actually ended up regulating the situation. >> you mean wells fargo. >> wells fargo would have been outed in some other way. >> you think somebody else would
have -- >> there are areas, especially in food protection and safety, when it comes to medical issues, we still have people who are dying from listeria in peanut butter. >> but you have to be comfortable with the basis of capitalism, which is a profit incentive in maximizing profits. but what holds you back is competition and that makes innovation -- you're not comfortable with that, then everything should be a utility. you should have zero -- your expenses should match what you take in and we'll be venezuela rummaging through the garbage to find a pizza crust to survive for another day. >> the debate continues. coming up, the countdown to this week's big fed meeting. there's not much of a debate on capitalism itself, but stock and crude prices are on the move. your monday morning strategy session is coming up when we return. and coming up at 8:00 a.m. eastern time, you don't want to miss this as we have former treasury secretary hank paulson, the man who saved the world.
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wielcome back to "squawk box." this week is a busy one in new york city with the u.n. general assembly meeting. and this explosion happened just a few blocks away from where the meeting will take place. they will expand a police presence as officials investigate the bombing. mayor cuomo, the mayor of new york, has called an additional 1,000 national guardsman to make sure they are helping to bolster support as well. on the economic front, the fed will take center stage with a policy decision at 2:00 p.m. on wednesday followed by janet yellen's conference at 2:30. the other data points to watch, the national association of home builders releasing the monthly survey today. tomorrow we get august housing starts. then thursday jobless claims and existing home sales. and then we have notable names reporting results this week including fedex, general mills
and bed, bath and beyond. >> i use outliers. get to other companies reporting. fedex, what is their excuse? and what was the other one you said? >> ab, linar, bed bath, general mills? >> general mills. you don't like you wheaties, come on. what allows them not to make -- what is the problem with the calendar year with cereal? does it have to do with growing grains or something? i don't know, bed, bath and beyond -- >> retailers make sense because the busiest quarter is fourth quarter. >> we know that. on a rainy day, there is nothing to do, just browns all day long. get some starbucks right in the middle of it. >> go hang out by the humidifier section.
>> you know what i like? a heavy duvet. >> cozy. joining me to talk strategy, you know what? we're talking about duvets, we could be talking about whether the fed -- i'm going to need a duvet to sleep, whether the fed is going to go up or not. joe, portfolio strategist at richard bernstein, we are happy to see joe, chief economist, john kilduff is partner at again capital and cnbc contributor. i'll be right with you, i promise. but oil is why the market is up today. we are up 70 cents on crude. last week, i guess, that was part of the trepidation was that more weakness brought us back below 45. people think that is a global demand situation. so the slightest thing, false equities when it goes up? >> and you have the venezuela
president talking about his book. he said in the conference over the weekend you have to deal with the iranians, they are good to go. >> we have an agreement to have another meeting, right? >> it's hysterical, actually. >> we make fun of the fed for job owning, but opec has been doing this in terms of ownership. >> opec is playing the expectations game over the weekend by saying that the meeting is an informal one as you said, the opec president said that over the weekend, but the venezuelans are desperate and want every chance they can get. the problem they have is the reality that this production from all of them just keeps going up. and we're about to see a big jump in production once the libyan situation resolves and gets online during the process of doing that. the nigerians are coming back online and the russians of all people are going to bring to 20 0,000 barrels to the market from the big field they have going in the caspian. it's a joke. >> so 40 is on the way down or what happens next? >> i think we reach 40 on the way down. >> we go back down.
>> we do. we have a little support from the market in the colonial pipeline snag you're reporting on raising the gasoline prices on the merck and local markets in the southeast. and that will be fixed. and all the gasoline is shoring up in the oil market pushing the prices down. there was a wedge earlier in the week last week that precipitated the drop. >> we call that a wedge. can you just call it a wedgie just for fun? >> mccrack spread is the other one. >> let's just call it a wedgie for fun. >> we had a wedgie that could break out one way or the other. >> okay, john, so september, do you think they do december? >> i think they do december.
i don't think they do september. the fed doesn't like a surprise. the feds lost the dna of a surprising market. >> that's the reason for all the talking. >> so, you know, this week is about what they say and what they have forecast. the real problem is, we have lost what data dependent means from the fed. because the data have been fairly decent in terms of the unemployment rate. we have not headed to deflation. most of them were ready to go in june apart from the may jobs report. since that may jobs report, we have created 232,000 jobs a month on average. and yet it doesn't appear they are ready to go. >> what was lundgren's point? they all want to cover so many basis, they just send someone out. you know, just in case like two years from now we realize there was a real estate bubble, so he can be on the record saying there's a real estate bubble from all the low rates. that doesn't mean anything.
doesn't mean they are going to doing in about them. >> the problem is that some folks are more equal than other votes. >> from zero? >> i don't know the bubble, but the degree of recovery has been fairly impressive. and, you know, rosengren, has been on the line for a year now and talking about the infamous crane account, you know, looking at how much construction is going on. and we have had quite a rebounding commercial construction and commercial rents. that's what you would expect in a low rate environment. >> all in all, joe, this makes you think, equities are friendly towards continued strength and equity prices here. >> absolutely. number one, as we talk about cranes, we were both in texas last week, you can't go through dallas without turning your head and seeing a crane somewhere.
they are all over the place. so i think number one, you've got a fed that is up -- it looks like they are not going to move this week and will, in fact, be something like december. that deflects some of the attention away from the other story going on here, which is the earnings recovery, where you have corporate profits continuing to rebound. they are continuing to inflate or just toward the end of the third quarter. and right now we're seeing a lot of analyst activity where they are upgrading both earnings and sales forecasts. and that is notable because the last eight or nine quarters we have been in a declining earnings environment. here we are toward the end of the third quarter with analysts taking the expectations up. that sets up for a bullish fourth quarter for u.s. equities. >> i was going to say from the macro level, the earnings have been down year over year for five straight quarters. the problem is the mix between pricing, which is low, productivity growth, which is turning negative and has been the worst over the last five years pretty much that we have
seen. and wage growth, which is pick and go. it's very hard to get an earnings growth in that kind of environment. so we get the analysts raising the depressed expectations again, but are we really going to start to see a rebound? and how does that translate? >> how much of that is set up with oil prices, too? if john is right and prices fall below $40 a barrel, that's a big chunk for the s&p 500. >> the energy component is getting rebounded to a much lower level, one of the lowest in a decade. >> because of the prices? >> yeah, you go back to a year and a half ago, to the mid-part of 2013, oil is part of the s&p 500. so today it might stand at 5.5% to 6%. if you have a decline along the lines of 2015, the magnitude of the impact of that on the s&p earnings is actually -- >> it is only september. and now what really kind of gets me is that we always say, you
know, if it's not september, we can always do it in december. but between now and december, there is a million things that can cause them not to do it. if you look back on how many times we have said those words and really believed it when we said it, it doesn't really mat for this is this week or next. the next time -- we have done that for like, aperiod of really years now, where they will do it then. i mean, i have no confidence. i have zero confidence they do it in december because anything can happen. when you've got 16 mandates, anything can happen between now and december. i mean, right? do you think it's going to happen? what are your odds for december, in your heart of hearts, given the history over the last five years. >> there's a lot of green between now and december, right? you've got an election. you know, you've got several jobs reports. you have all kinds of things to knock the fed off. but lastly, they went in december last year, and this was
taken at the october meeting. expect something similar, but you're absolutely right. between now and december there are a lot of things that can happen. my next zbels they guess -- it e a non-chase forever. just not today. or it could be the airplane movie, i picked the wrong day to -- i'm definitely going to stop drinking in december and then if something happens -- >> that could be the next exc e excuse. when we come back, the latest on the investigation into the weekend bombings in new york and new jersey. a security update next. "squawk box" will be right back. >> the countdown to when's fed decision is on. are we in for a september surprise? we asked former dallas fed
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oracle's ceo talks about the software pipe line. that's on today's "squawk on the street" on cnbc. welcome back to "squawk box" on cnbc. first in business worldwide. the u.s. equity futures at this hour are indicated up 90 on the dow, 9 on the s&p and nasdaq. and if you haven't heard, a backpack exploded this morning near a transit station in
elizabeth, new jersey. because a bomb squad robot was cutting into the device when it exploded. separately, authorities stopped a vehicle of interest near the verrazano narrows bridge in new york. and the five people in the vehicle are being questioned by the fbi about the explosion in chelsea on saturday night that injured 29 people. the explosion sent a dumpster flying more than 150 feet down the sidewalk and shattered windows more than a block away. investigators are analyzing possible similarities between the devices found in manhattan in one that detonated saturday morning in the seaside park, part of new jersey there along the shore. the devices contain old-style mobile flip phones. >> as detonators. >> we'll talk to bernie kirk at the top of the hour, the former police commissioner. a man stabbed nine people at
a shopping mall on saturday before he was shot and killed by an off-duty police officer. the attacker mentioned allah and asked one victim if he was muslim. the fbi is still investigating whether the attacker had connections or contact with any foreign terrorist organization. all nine victims are expected to survive. and back to business news now, the long awaiting fed is kicking off tomorrow with a decision expected wednesday afternoon. joining us to talk about is former dallas president and cnbc contributor richard fisher. richard, great to see you again. >> good morning, becky. >> the talk this morning is all about what eric rossengren, the boston fed president has been saying, he's someone who has been a long-time dove but is now raising the concerns about keeping low policy, like the low interest rate policy for such a long time. and raising concerns about what it meanser the markets, potential bubbles to be created.
how much is his voice heard within that fomc meeting over the next couple of days? what do you think? >> eric came from the supervisionary side. he's historically dubbish, but he understands what he's worried about, and that is about people being blown up and is quite knowledgeable about the infrastructure to the country. there was an interesting revolution on friday with the bank of japan dawning negative interest rates on them. that they are doing enormous damage to the insurance industry and the big banks and all banks. and last week there was an article in the german newspaper to talk about the damage being done to insurance policy companies. so the fed seems thaw are mandated in order to keep inflation low, waiting for the 5% target to be hit or
something. the financial market, i think eric is quite aware of this. late and coming, but others are just not paying attention to this. >> so you believe it will fall on deaf ears this week. >> yeah, look, the wages are curling down a bit in terms of the wage increases. the cpi numbers are stout but the pc numbers are not. that's what the we call the fed curvature. if they are focused like this on the two targets, but meanwhile the policies have done enormous damage in terms of pension funds, interest rate margins for banks. and i'm not sure how much this is discussed at the table, but
i'm very sure that eric rosengren given his background and a couple people at the table are well aware of this and quite worried about it. including stan fisher is not at the table. >> that could be dealing with a product of the bernanke era that has continued on for a very long time. everybody, you and i know, becky, in the marketplace this is sustained at artificial levels as long as the fed keeps monetary policy accommodative. one other thing to point out, which is very important, everyone is worried about them raise i raising -- this is the way they invest the portfolio that has held the system open market account by the fed. and janet yellen has talked
about this in her speeches. it is not really the short-term basis point and whether it increased or not. but all the commentary we were receiving and hearing through cnbc, from the different people we talk to, is so my onicly focused on quarter point increases. the real issue is how they reinvest the portfolio. and then the real underlying issue is when do they come to realize the damage being done to insurance companyies pension funds and other saving schools by having the low interest rates. >> richard, we have talked about this on the show in the past with you, the reinvestment of the portfolio. because the option from bernanke at one point said, we're going to let a lot of this roll off. so when it ages out, we won't renew it. you're not talking act
repurposing it. januariette yalen -- janet yellen, do they reinvest in shorter securities or greater than five years like you were mentioning? where do you think? >> the inner speech north economic pub, it took me the last four paragraphs. she made this very clear. this is the one thing they have, the one tool they have under the ament-symmetry of risk only having to a little bit to get back to at the short end of the curve should the economy rollover, she said we can achieve monetary accommodation in how we reinvest and roll over the portfolio. so what maturity -- i think people should be equally focused on whether that has an impact or whether raising the fed fund
short-term overnight rate a quarter point is really where focus should be. so we'll see. >> we'll see tomorrow when it comes to or wednesday when it comes to short-term interest rates. but richard, thank you for joining us. it's good to see you. we'll sew you again soon. >> thank you so much. bye-bye. coming up, when we return, the ceos are under fire. and john stump is headed to capitol hill to answer questions over fraudulent account. and heather brash will be grilled over epipen price hikes. we'll tell you what to expect when we return. here's a quick check on the european markets. right now we have green arrows across the board.
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welcome back to "squawk box." time for today's executive edge. we are talking ceos under fire with john stumpf and we are about to see what people are describing as a bit of theater, but there is a clear import to what will happen in washington this week. what can these ceos say? it seems to always be somewhat
of a losing proposition on either side. >> it is a losing proposition, but i think that if you are a ceo, what up to go into this knowing is that this is the most fun that a member of congress can have. this is not an investigative panel, this is political theater. the whole idea is a member of commerce gets to yell at the ceo. and so if you are a ceo, your objective is simple, it's survival. it's coming across as a basically accident person in a tough situation. so what they have to think about are a few things. number one, do not spar with members of congress. because you're not going to win. it's not that kind of format. second, i think that if given the choice between coming across as a jeeps you who knows everything and showing basic decenti, basic decentiwins. and third, i think that if given what you've been accused of, you have to be able to show a basic
road map of -- >> there was jamie dimon back in 2012. there was mary barra for gm. at least this time on the banking piece, you'll have elizabeth warren on the other end to contend with. >> andrew, what ends up happening is when you end up giving an apology, for example, the apology is always, not sometimes, always declared to a have been mismanaged. so you have to go into this knowing this is a misunderstanding. >> you are saying not apologize then? >> no, i'm not saying don't apologize. it depends on the situation. you have given two examples. milan and wells fargo. with wells fargo you're dealing with crimes and fraud. with milan, mylan, you're dealing with the unpopular policy but that's not a crime. if you listen to what mary barra
apologized for, she was asked dozens of times, do you apologize for injuring your products, injuring or killing people? that's not what she apologized for. she apologized for letting consumers down. why is that? if you apologize for certain things, that is admissible. in court. so what a lot of people who are watching this theater are getting confused because of the process and the legal process of heading to court. >> you look like you are being so careful and managed by crisis people and not saying reality because you are worried how it will trip you up legally. that is exactly what gets ceos in trouble and makes the public think i don't trust you. >> but it gets them into pr problems but also helps them legally. >> but if you want to come out
looking like a decent human being, then tell me the truth. >> well, yes, but if you -- i come back to mary barra. it was very interesting if you watched that hearing. because she was very careful about what she was apologizing for. and the pundits of course said, it was too little, too late, but that is what they always say. what are you apologizing for? again, if you've committed a crime, the apology is easy. if you are mylan it is somewhat different. if you're going to apologize, are you going to apologize for a policy that you intend to continue? well, what will probably happen there is when what you're beginning to see in the news is mylan is beginning to say that i are going to be able to offer a
generic verse of this, there is an attempt to shift cost. so you're seeing the road map there, but ironically it's a tougher job for mylan than it is for wells fargo. >> actually, wells fargo took the fine but did not admit to wrongdoing in this case. >> well, but that is illegalism, okay? i mean, it's true. but when you settle what the general public takes away, you pay the fine and you add mitted it. which is very different than having a policy that is unpopular. so the tougher situation, i do think it's easier for wells fargo. that's a clean pr type of combat situation. whereas when dealing with mylan, one of the tough questions will be, are you going to continue with this pricing policy? >> okay. fair enough. eric, we appreciate it.
always enjoy your perspective, thanks. coming up, a big night for hbo at last night's emmy awards. we have the highlights from this event.evening. >> missed it again. coming up at 8:00 a.m. eastern, hank paulson will join us. as we head to break, here's a look at last week's s&p 500 winners and losers. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere.
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welcome back to "squawk box." a big night for hbo at the 68th primetime emmy awards. taking the top honor, "game of thrones." the sixth season of the series, breaking records, the show was nominated with 24 awards and came away with 12. and then "veep" taking home the emmy for outstanding comedy series and the actress herself
taking home the award. fx networks, "the people versus o.j. simpson," and one of the biggest surprises of the night was "mr. robot," and he won best actor in a drama. samsung it sold shares in four tech companies, and sold about half of its shares of asml, and plus its entire stake in other holdings and they were worth more than $1 billion. and santa fi is suing, and it filed suit after merck admitted
new drug. microsoft bought skype back in 2011 for $8.5 million but has seen a drop in its popularity. i still use skype sometimes. >> do you? >> occasionally. face time, otherwise. and when we come back, former new york police commissioner will join us next. "squawk box" will be back after a quick break.
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breaking overnight. another explosive found in new jersey. the device detonating as a bomb squad robot examined the suspicious package. the latest on the ongoing investigation in new york and new jersey and the growing threats here in the united states. former new york police commissioner, bernard kerik joins us. two companies will be answering questions in front of committees, and we will talk about it more. and standard & poor's is doing something it has not done since 1999. david blitzer is here to explain. the second hour of "squawk box" begins now.
welcome back to "squawk box" here on cnbc, first in the business worldwide. the futures at this hour are right about where they were the last couple of checks, the dow is indicated up 90, and the s&p indicated up 9, and the nasdaq indicated up 18. part of the reason the usual sources are citing for the higher equity markets is the rebound in oil. up. another explosion overnight in elizabeth, new jersey, after a backpack that contained a pipe bomb detonated. and several law officials are concerned an active terrorism cell could be at work, and we are joined from chelsea, new york, where another explosion occurred overt weekend.
>> reporter: details are still unfolding about the events, and as that happens we are getting details emerging about another device across the river in new jersey. right now heavily armed fbi agents are in elizabeth, new jersey, and they say this is connected to the ongoing bombs in the tri-state area. a backpack containing as many as five explosive devices detonated after police responded to a call about a suspicious package at the elizabeth train station. one of the devices exploded while a robot was examining it, and this follows another incident in new jersey, so on saturday morning, a bomb
exploded in a garbage can and nobody was injured, and here in the chelsea neighborhood of new york city on the street behind me in a separate incident, another bomb explosion a little after 8:30 on saturday night. take a look at this security cam video of the moment of that blast that sent pedestrians running and debris flying through the air. 29 people suffered injuries and all of them had been released from the hospital just four blocks north of here. also in chelsea another device described as a possible pressure cooker device found by police sweeping the area, and so authorities have not officially connected all of the incidents or even labeled them as terrorists attacks as of yet, however several law enforcement officials telling nbc news they are concerned that an active terrorism cell with multiple players could be at work in the tri-state area, so here's what new york mayor, bill de blasio,
had to say yesterday. >> here's what we know. it was intentional. it was a violent act. it was certainly a criminal act. it was a bombing. that's what we know. to understand there are any specific motivations, political motivations, any connection to an organization, that's what we don't know. so i think it's important to say with a we know and what we don't know, could have been something personally motivated and we don't know yet, and we will keep the evidence informed every step of the way as we get the actual evidence. >> reporter: the fbi says it detained five individuals, four questioning in relation to this new york city explosion on saturday night. they have not been charged with anything. nbc news reporting that surveillance footage of this area shows a person of interest, and somebody that -- it looks like somebody, the same person was at both of the manhattan
sites, and still a lot of detail emerging and a lot can and will change, but meantime here in new york city, security which was already stronger than usual, is being dramatically boosted and we have 1,000 guardsman and police officers being deployed to this area, and we have the u.n. general assembly kicking off today as well. back over to you. >> morgan, before you go, just connect a couple dots for us. over the weekend, at least originally what took place in chelsea and at least the original bomb that went off in new jersey is not connected and now there are questions whether they are, the original in chelsea bombing? >> reporter: yes, officials have not officially connected any of these but they do say at least three of the devices are similar in nature, specifically they involve the use of old-style
flip phones on these devices, and there are potential connections being investigated, and it's still up in the air and these are all active investigations. we do have a few corporate headlines to tell you about as well. on the economic front the fed going to be taking center stage this week with a policy decision due at 2:00 p.m. due on wednesday, and that will be followed by janet yellen's news conference at 2:00 p.m. and wells fargo is being sued over the scandal in the opening of fake accounts. this is seeking class action status and u.s. prosecutors have opened an investigation into wells fargo's practices and john stump is set to testify at a senate hearing tomorrow. microsoft is planning to close its skype office insulin done in the result of 400 job cuts, and the company is streamlining engineering
positions. microsoft bought skype in 2011 but since then it has seen a drop in popularity. >> they wrote that down, right? >> some of that. >> what is the worth? >> eventually ebay wrote it down. mike, do you remember? >> how much did -- >> wasn't it owned by private equity before microsoft. >> maybe it was silver -- it was that other. it was a strong week for apple shares surrounding the release of the iphone 7. mike joins us on why apple may be the ultimate misfit stock. finally, finally, you get rewarded for adding apple to the dow. finally -- when did you add it? >> i knew i was going to hear about it this morning. >> something else brought you
here, but it's just funny. going to take the big victory lap because it finally had the -- when did you add it? >> march, and it was up. >> long-term forecasting is really difficult, right. >> the dow was flat since apple was added and so it's not a huge albatross. >> the first time happy they added. >> the reason i call it the misfit stock, it doesn't act like a bellwether. the difference between apple's one year performance and the s&p performance, and the other thing is it's a cheap stock as everybody reminds you and yet it has kind of a hit driven business and basically operates by growth company rules.
it's rare to see an enormous company that every year has to wow the world. i think that accounts for a lot of the depressured valuation. and then the legion of steady fans out there in the world, and also under owned, and i think that's behind what the latest move is about. you had them sell down the stock in the first half of the year, and the top three holders of record are index fund managers and it seems as if it was the passive holder's hands. you have to own some. that's why it's a bit of a misfit and runs in the streets. it has had 20 or 30% moves above and below the starting point. >> mike, stick around. we will talk more about that. but the reason david is here today is talking about a new sector s&p is adding today. 28 real estate investment trusts
that used to fall under financials and they will become the new real estate sector. and joining us to talk about that move is david blitzer. david, this is unusual. ten sectors we have been following for a long time and you are adding an 11th, and why break out real estate? >> well, i think two or three things happened. real estate used to be tucked into financials and real estate especially reads don't behave the same way financials do at all. because they have better dividends, about one-third larger than financials and the yield will go down about a quarter of a point because of the change. second of all real estate rates have become more popular over
the last 16 years since we created -- >> the global standard. >> it was created to use with all of the mci uses it with theirs soerbgs we can analyze and follow the market, and we can find out which sector is not moving because apple is not in it and all those other issues. >> there's a warning about new bubbles created by the fed's new rate policy. is that something that comes as a risk if you are looking at this as a sector, how bubblishous does it feel? >> one of the thing one can do is use the new sector to track that sector of the market and
see if they are out of line. had we had a clear technology sector back in the 1990s, we probably would have seen it go to the moon, and we were tracking the proportion of tech stocks and we knew we went 15% to 16% to one-third of the index by 2000. >> would we be able to look back at historical if there had been this sector in particular and we could see what has happened over the last ten years? >> not at this point there's not an official real estate sector history, however one goes into gics in one level detail, and one can pull out the real estate by looking at the eight-digit codes and take a look at that. what we see is the first read in
the 500 was october of 2001, and they have grown very rapidly since then and they moved up before october 2001, and there were no reads and it was probably difficult to buy real estate in the equity markets 15 or 20 years ago. >> what will an investor or fund that has been tracking financials notice that is different in their portfolio today differently? >> well, first, they will look at the numbers and they will see the percentage of financials looks smaller by three points because we pulled out real estate. second, what they may notice in a lot of activity managed funds, last week they probably thought they were weighted in financials and this week they my find out they are under weighted in real estate, and some of the stories we heard in the last few months there are a lot of active funds that will have to go out and buy
to boost their real estate exposure, and if that's a accurate case, we will find out over the next few weeks. >> what is interesting, david, when you separate this out you have what is now the financial sector a good deal smaller than the combination of real estate, consumer staples, and utilities, which are the yield sectors, and that shows you the index as a whole is kind of more perhaps sensitive to rising rates than a beneficiary. >> what jumped out at you? what are things you guys have been following? >> up until about a week ago, we had vick sitting there at 13 or 14, and it looked like it died and nothing happened and we had everybody sort of like, when is something going to happen kind of stuff, and then we had volatility and i think we are in for a lot more volatility, and
this week alone between the u.n. and everybody making noise and then the fed on wednesday, and even without the unfortunate news about the bombing in chelsea, and this week could be an exciting week that will keep all of us busy, and -- >> do you think the volatility is related to the election at all? >> yes, i do. i think if you look back at elections, you get past labor day and the race always tightens up, no matter who wins, and it's not a recommendation for either candidate, things always tighten up and there's a lot of noise and news media focuses more because for a long time it has not been exciting and it gets exciting, so that is driving it. with things like this weekend in new york, there will be a lot more attention as to what candidates say what should be done now and who screams loud wur. >> thank you for coming in.
when we return, ken burns is going to be here to talk about his latest film. "squawk" returns in just a moment. uld multiply. hello, all of you. get organized at voya.com. narrator:kubo: est place come on, this way.e... narrator: ...is in the forest. kubo: wow. narrator: so grab your loved ones monkey: don't even. narrator: and explore a world of possibilities. kubo: it's beautiful. narrator: visit discovertheforest.org to find the closest forest or park to you.
emphasis on the business cycle and not enough on the long-term debt cycle. and i don't think they may be paying enough attention to how markets react relative to what is discounted in the curve. >> the idea you should raise rates to slow the economy, that's a weird argument to make. it's not true the major governments are completely out of ammunition. >> that was talking monetary policy at the alpha conference last tuesday and starting today you can watch the entire discussion with former second tim geithner, and ray dalio, and you will see the connection in a second to our next guest. as world leaders gather, the global refugee crisis. and the latest ken burns film
tells the story of one heroic couple invoking compare sees to the modephaumodern refugee cris. we are thrilled to have you here. congratulations. >> thank you. >> and ray dalio helped fund this film? >> not this film, but he's an under writer. so we attracted a support from lots of people for our pbs program, and ray and his wife are one of the principle sponsors of the jacky robinson film on this spring. >> we should talk about funding some of these films in a second. how did this film come about? >> a dear, dear friend of mine, he's the grandson of a minister
and his wife that lived a comfortable middle class existence in massachusetts. then all of a sudden they are living a life the opposite, and they are saving jews and other refugees at the edge of the holocaust and the eve of world war ii, and it's an amazing story and they have left their own small kids in the care of the congregation and it's one of the most dramatic stories, and we had tom hankings reading a voice, and it's a riveting story. as so many of my projects are, i swear accidentally, it's hruterly chruter ly contemporary. >> i was going to ask you about the timing of it. when did you begin this project?
>> art aphus has been working on it since he was 14 years old, and he is 42 right now. the work had been hidden, and they did not take credit for it and they were always sad they could not get more people out. one of those great schindler's list-like stories. he's been working on it and turned into a film in the late 90s, and i have given it as much attention i could give as restructuring and repacing and getting tom hanks to be the extraordinary voice of sharp, and just as the architecture of the atom, this is an intimate
story that reveals a bigger question. >> how did they get drawn into it? how many people did they save? >> the church called up and said 17 ministers said no way are we going to the eve of the war, and they said we will go and they learned some of their spy craft in london with the friends, the quakers and the yoy got shippedf to prague and all of a sudden this mild-mannered couple are saving lives. their hotel rooms are trashed by the local police and tkpwau stop yo, and they get out on the eve of the war but then come back to southern france and martha sharp, a housewife, organizes the first sort of boat load of kids to the united states that becomes a model for other rescue missions. you pink yourself and ask if this is happening to this
couple. it's a story of sacrifice and you see we interview many of the people who they saved, and so they were kids then and now they are in their 80s and 90s, and they have become professors of mathematics and you realize when we say 6 million, that means nothing, but when you see what one life could have been once they have been saved, then you suddenly give a face, you feel the 6 million, and we will continue to mourn. >> the u.n. is having their assembly meeting this week and syrian refugees are an issue. when you tie the two -- >> it's basically moral ones. there's a choice. we choose to do this. right now, we got as we did back then, a defensive posture about anymore refugees and we found the solution was to be generous. that's what the sharps did, and
they would say continually throughout the film, anybody would do this. and the film is sponsoring interest in our audience to say, what is my role as an individual? not just as a member of a state that might have a political or financial posture to take, but what as an individual can i do? can i reach out to faith-based organizations? how can i serve my government in a real legitimate grassroots problem. >> the civil war, i can watch it again and again, and the way you approach the icons of the south in that way, i don't know if you can do that anymore. there was a piece in "the post," in baltimore a push to get some of the things removed.
>> there's a statue of lee, and there's a lee circle in new orleans, and lee never went to louisiana and he was never in new orleans and he was put there in the 1890s when there was a rejury supbs of white supremely, and that's a no-brainer, you can take that down, but beauregard who ordered the first c confederate battery was from louisiana, so you will keep his stuff. this is not as hard as it seems. it's not calculous. it has to do with sensitivity. the south at the tkpwebeginning the civil war, 4 million of the 9 million, 45% were african-americans and they had no interest in now what is called the lost cause. we not to limit history or exclude history, we need to expand history. we were agnostic about the
historical characters and they are part of the history. at the same time we have a broader history that can be sensitive to a lot of things. >> ken burns, the one and only, thank you for coming in. >> thank you. coming up, the latest on the situation in new york and new jersey, a backpack with a bomb exploding in new jersey. and former treasury secretary, hank paulson, will be our special guest. back in a moment. to visit this company that makes smart phones, used by this vice president, this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured.
welcome back to "squawk box" this morning, and breaking overnight a backpack containing as many as five pipe bombs exploded this morning in elizabeth, new jersey. a robot was cut into the device when it exploded. the five people in a vehicle are being questioned by the fbi about the explosion in chelsea on saturday night that injured 29 people, and this morning law enforcement is currently at an address in new jersey connected to that investigation. we have the latest now with jonathan
>> a short time ago the nypd put out a bolo for a 28-year-old male wanted in connection with the bombings that have been set off across this area from south jersey to elizabeth to also here in chelsea. they have released a photo of him, and they are looking for him. at the same time overnight near a bridge, a car was stopped with associates and relatives of the man and they are being questioned right now by the fbi to see if -- if anybody was providing him with any sort of support in connection with these bombings that have taken place. the police department putting out this be on the lookout for this man, and they want to find him and question him. they believe he is the man that is captured on surveillance
video near the chelsea scenes, both on 23rd street and 27th street, and they very much want to find him and question him in connection with the incidents in new york and in new jersey. again, we now have four locations in all overnight at the elizabeth, new jersey train station, a package with five pipe bombs was found and one of those devices exploded as the police and fbi were try to go secure the scene. nobody was injured. they are telling us those pipe bombs in elizabeth, new jersey, are similar in nature to the pipe bomb devices that were found in the garbage can that went off near the 5k race in south jersey over the weekend, and all had similar detonators, flip cell phones, if you will, that have the police believing
it was all connected. the question is was this one suspect acting alone, and that is one question for authorities and or did he have a support network from relatives or others out there, and there's concern that there may be some sort of cell or network that he was able to rely on, and that's what the fbi and police are running around on over the last 24 hours as they search for this suspect, but the headline at this hour, a 28-year-old man is wanted in connection with the chelsea bombing, and that announcement put out by the nypd just in the last few minutes. back to you. >> thank you. meanwhile the investigation in minnesota, in st. cloud, minnesota, continues with a man stabbed nine people at a shopping mall on saturday before he was shot and killed by an off duty police officer. the attacker mentioned allah and asked at least one victim
whether he was muslim or not. isis has taken credit for the attack and the fbi is still investigating whether he had any contact with any terrorists foreign organization. leaders are meeting here for the united nations general assembly and that does come amid the investigations of the bombings we have been talking about and it's a few blocks away where the assembly takes place. new york city mayor, bill de blasio, say residents will see an expanded police presence, and the governor of new york has sent in 1,000 additional state troopers and national guardsmen to help with beefing up the police presence here as well. when we come back, wells fargo under fire. the ceo set to appear on capitol hill tomorrow. walter isaacson will join us to talk about the implications of this, what it means and what
people will be watching for, not only those in washington but those throughout the country. right now as we head to the break, look at the u.s. equity futures. they have been stronger all morning. we see a big surge of the futures, and the dow up about 92 points. and s&p futures are indicated up 9. the nasdaq is up close to 16, and "squawk box" will be right back. . what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
welcome back, everybody. it's a busy week on capitol h l hill. on tuesday wells fargo ceo will be testifying about the bank, and then it's heather bresch's time to testify over the epipen. and walter isaacson is the president and ceo of the aspen institute and a cnbc contributor, and thank you for joining us this morning. >> it's good to be with you, even from down here. >> even from down there. walter, you bring up really interesting points that the situation with mylan and the situation with wells fargo could be tied together. >> we're seeing a populist
revolt in this country both on the democratic left and the populist left of the republican party with the donald trump, and you know, the anger in this country against big institutions and government and business, this kind of stokes it. when you have compensation systems that are rewarding people for being greedy, and rewarding people for hurting customers and rewarding people for hurting people you are trying to serve, and those are the compensation systems and then they are getting bonuses because it's working and of course it fuels a certain anger and makes us wonder why corporate america can't keep its mind on the fact it's not just about, you know, seeing how much they can make for themselves, but seeing how they can serve customers. >> walter, if you look at it, we should break out these compensation structures from others that offer valid incentives that want to make
people show up, and sales incentives. >> absolutely. you are so right. you are so right that you need to have compensations structures that are valid and allow people to make a lot of money and when you blow it with things like this, you undermine what is valid about corporate compensation. >> let's dig into the details why they are very different structures. epipen itself, this is a situation that would cost, what, $29 to make. >> $29 to make the pen, yes. >> and it got jacked up to about $600 because of what compensation structure? >> i think that when you look right after what they put in for top executives, a compensation structure that would allow, you know, big, big bonuses if there were profits, and that's when they move from upping the cost of the pen a modest amount each
year to doing it as fast as they possibly could. i don't think they were doing it for any other reasons than simply to make more money right after a bonus structure went in that would have rewarded that for the big executives. >> just very quickly, let's describe the wells fargo compensation structures as well, and i think this one is particularly problematic, because this is a structure that was in place for over five years, and people were getting big bonuses and the company already admitted they were firing 5,000 people over the five years which should have set up signals there was something wrong. >> and then you get the big bonuses for the people -- the woman who was running the retail division. you can always smell that there's something wrong. they should have smelled there was something wrong there, just like epipen and mylan should have smelled something was wrong with their doing, and jacking up something kids need and should have in their nap sacks, and when you are doing things like
that, i wonder, how do you go to sleep that well at night? >> walter it's hard to play devil's advocate in this situation, but let me try if you just indulge me. on the epipen piece is there anything to be said about the regulatory component around competition, around the fact there was not competition for this device that would have perhaps kept the price of it down? on the wells fargo piece it's much harder to argue, by the way, and again, is there an argument to be made that ultimately employees have to be ethical? i have talked to employees that felt the pressure and i appreciate the issue but at the end of the day doing something that is wrong is still wrong. >> yeah, and you are saying it would have been better if mylan had a competitor for epipen, of course. this is when things are fine, when you have a market where somebody's, you know, trying to price gouge you or whatever and you don't have such a tight
regulatory regime that you are allowed to have competition in the marketplace. what i am saying is all of these things are backfiring. you are not going to get less regulation because of what mylan did, and you are now going to watch congress go into over drive and try to put in more regulations, both on, you know, for consumer protection whether it be banks or whether it be something like this. so anything in which you try to undermine competition and then people make use of that fact to reap profits they had not earned and would not have in a competitive market undermines our entire system of the marketplace. >> so what would you have advised heather bresch if they were thinking about raising the price for epipen as they looked at the market? what should have conversation have been? >> let's think of the many
stakeholders and not just the short term, but the interest of the quarter but the long-term for the company, and are we going to end up in a better regulatory environment based on things we do? secondly, let's look at our customers. you go back to steve jobs and he did a lot of things at apple and he said why are we doing that and putting that in, and he said i am doing it for the customer and you look if the clients and customers trust you, and steve jobs said you will end up making more and being a more valuable company. tell me mylan is a more valuable company because of what it did? of course not, and not a more ethical company for what they did. >> while you are here i want to talk about the cyber summit coming up. >> we will have andrew there, and becky and joe. >> andrew will interview john
c carlan there. and i talked to admiral rogers and he runs a cyber ad and he will be up there. it's a really important time for the private sector, the banks and the financial institutions were doing it at m.i.t., and we are doing it where some of the people are trying to rearchitect parts of the internet, and we really have to get to how can we make an internet that is more verified and more secure and more trustworthy when we are seeing everything from our banks to our election infrastructure being threatened by this sort of corrosion of the foundations of the internet. >> walter, we have to go. real quick, do you think -- >> by the way, it's october 5th
in cambridge. >> do you think we will see an election where you can vote by your phone anytime soon? >> i think that has been set back by the beginnings of our worries about russians having hacked into various peripheries of the political system. i think we are going to go more likely to paper than to going to phone voting. >> walter, thank you. great to see you and we will talk to you soon. >> see you in cambridge, my friend. >> cambridge, october 5th. >> you bet. coming up, former new york police commissioner, and check out the futures where they have been all morning long. the do you indicated up 92. we'll be right back.
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we are counting down to our exclusive interview with hank paulson, the former treasury secretary. we have the latest in new york and new jersey. "squawk box" will be right back. is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions...
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we do have news that broke just in the last few minutes. multiple senior law enforcement officials and an nypd spokesperson tell nbc news they are looking for ahmad khan rahami, and he is from elizabeth, new jersey, and looking for him for the suspected role in the bombings that occurred over the last
three days in new york and new jersey. let's turn to our guests, joining us now, former new york police commissioner, bernard kerik. a lot of things to talk about but there's an unease in new york city and we are talking about -- and new jersey as well, and we wonder how uneasy we should be. a pipe bomb with a flip phone detonator. does that indicate to you foreign training or you can learn to do that on the internet? >> it's both. it's both. >> it is a level of sophistication that indicates help from a bona fide terrorists? >> it's the exact same mo that they use in iraq or syria, or afghanistan. same stuff. same detonation devices. the flip phones, date them back to 2003 when they did the jordanian mission or some of the other spots.
>> because nobody died, we should not take any consolation they were not as successful as some of the other recent terrorists attacks? >> their intent was exstraerpblly dangerous. the devices they have were dangerous. i think we just lucked out that people were not around that dumpster when it went off. you know, you had some people that had hearing loss and bumps and bruises. at the end of the day it could have been far worse. >> it did not involve a suicide -- obviously that person is still alive. does that mean the level of commitment so far in this country isn't what it is other places? how hard is it for a suicide vest to walk into a huge crowd of people wherever? is it harder to make a suicide vest than a pipe bomb? >> suicide vests are really
probably easier. some of the stuff they had in these, the pinballs and stuff like that -- >> ball bearings. >> it's exactly the kind of stuff they use abroad. you know, it's just -- it depends on what they are looking to do and looking at their training. >> what surprises me is how quickly we were able to see and now identify suspects and pick these other people up. >> you know, i predicted this yesterday. i said within 24 hours they would have them or be close to them, and they had them. the bottom line is, look, in today's world, technology, cameras, you know, we can tell who is coming in and out of new york city anytime of the day, the sophistication of our
technology that the rbi uses that the new york city police department uses, it's the best in the world. you know, they can get these guys. >> talking about technology, and i don't know if you heard this little ringing. this is the iphone, and did you see this? this is what you got, too? it's an emergency alert, wanted, 28-year-old male -- >> that was the buzz we were hearing. >> this is the technology -- >> i had my turned off, and maybe -- >> i don't know. >> it's immediate stuff. with the push of a button you are hitting a couple million people with a notification. >> we have no idea at this point so it's all conjecture, and if it's a cell, we don't know if there is more than one guy or if he is a lone wolf. >> they are looking for this guy, and they have five in
custo custody. >> the intent for guys like this, they want to continue this, they want to continue their thing, so and they had a number of different devices. >> thank you for coming in. >> thanks, guys. >> unfortunately we see you under the worst circumstances, but i would like to see you again on a better day. when we return, an exclusive interview with former secretary, hank paulson.
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a "squawk box" news maker, the former treasury secretary weighing in on the race for the white house and trade. >> "veep" sweeps and "game of thrones" sweeps. >> the minnesota vikings adding to their home field advantage. starting off the season in a big-money stadium, and the owner will join us as the final hour of "squawk box" starts right now. >> announcer: live from the most
powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i feel like there's really becky quick -- you are at least 1 3/4. >> it's like one and 7/8 at this point. >> the futures up the best levels we have seen in a session, and s&p just up under 1 point, and strength in the energy complex has been helping markets. let's get to the developing story out of new york city. officials identifying a suspect wanted in connection to the bombings in chelsea over the weekend, a potentially related bombing in new jersey. morgan brennan joins us with the
latest. >> reporter: investigators are searching for a man that was caught on surveillance at both new york city jeans. this is an emergency alert just issued on cell phones, and this is ahmad khan rahami. he is 28 years old. the department of homeland security just moments ago issuing a report that all of these incidents in new york and new jersey do seem to be linked, so that is heavily armed fbi agents in camouflage we are seeing entering a building in elizabeth, new jersey, and officials saying that's connected to the ongoing investigation on the bombs found and detonated throughout the tri-state area. as of earlier this morning, the fbi had five individuals detained for questioning related
to the manhattan explosion and in all we have four crime scenes, two in new york and two in new jersey and much of the evidence from manhattan and saturday's seaside park explosion have been sent to the labs in quantico for first analysis, and the investigations are far from over and now we have an active manhunt going on. the street behind me was the site of the saturday night new york city explosion here in the chelsea neighborhood, and as you can see, this street is closed and police telling us it's likely to remain closed for today. i will say several law enforcement officials have also told nbc news they are concerned that an active terrorism cell with multiple players may be at work here in the tri-state area. back over to you. >> thank you for that. in the meantime, a big week ahead for the markets as the fed hold's its much-talked about
hearing. we can talk politics and other issues. i want to start with the fed, which is to say last week we talked to tim geithner and ray dalio, both about what the feds should or should not do. they both seemed concerned about raising interest rates, and historically you have suggested you think these low interest rates may be creating some adverse bubbles in the markets. i want to see where you stand these days? >> andrew, it's a complicated situation. you know, we have got growth still bumping along in the u.s. at, you know, less than 2%. there's no visible signs of inflation. we have growth slowing around the world. you have got negative interest rates in europe and japan and elsewhere in the world. on the other hand, as i have said before, you know, these
extraordinarily low rates cause big dislocations and misallocations to the capital increasing the risk in the financial system, and you see -- thank you. grooming. i can always use a little help. and also, accentuating an income disparity. >> right. >> as i look at it, that's not the big issue. the forest through the trees issue is this. markets are focusing on whether interest rates should remain at almost zero or go up to slightly more than almost zero. and i think the megaquestions are much bigger than that, and the first one is why, with interests so far below our potential why don't we see our government dealing with the major structural issues we need to take to restore growth and i
am talking about entitlements and tax reform and immigration reform. but the second issue, which is of equal concern to me, is that with growth slowing almost everywhere in the world, and with interest rates extraordinarily low, and with debt increasing at the federal level at a much higher level in governments around the world, what tools are policymakers going to have to avoid and prevent a slide into a recession or, god forbid, pull us out of one or help us respond to a crisis? we are in unchartered economic territory. >> the question is when? we have been waiting for when and when do you go and raise the rate. >> i guess as i look at it, whether they raise the rates --
bump them up a bit in september or december or early next year, we're still looking at a world where -- i don't see any significant or quick increase in rates anytime soon. >> you think it's a risk? >> i look at it and say rates are going to be low for a long time. again, i have watched markets for a long time and i understand why people ring their hands over there this, but give me a break. we're either going to -- rates are going to nudge up a little bit, as i said slightly above zero, you know, and in september, december, early next year, and again, i think we're in unchartered territory here and what i am focused on is we need big structural changes in our economy to restore our economic competitiveness, and i'm worried by what i see around the world. >> you believe, by the way, the
fed is affectively allowing congress not to do its job? >> yeah, they are in a tough spot. what happens is almost everywhere i look, and let me tell you, the united states is a bright spot. our economy has fewer problems than any other major economy around the world. everywhere i look i see economic policies that used to work are not working as well as they need to and i don't care whether you are dealing with authoritarian governments like russia or china or democracies in the west, and structural changes aren't forthcoming and so central banks are the ones trying to get us out of this problem, and to me with interest rates where they are right now, you know, they are not providing much juice. i do recognize that if you are the chairman of the fed and you
are looking at a situation where there is no sign of inflation, and negative interest rates in japan, in europe and switzerland and sweden in denmark, and growth declining around the world, it seems like and i guess it's a big decision, but again it's not the big issue. the forest through the trees issue is what i have just gone through. >> realistically what kind of growth rate do you think you can see in this country, and i ask in the context donald trump suggested 4% is not unrealistic, we could get back there if the right steps were taken in washington. >> let me say this, and one thing i do believe is we are not growing at anything near our capacity, so whether it's 3%, 3.5 or 4%. we are not going to get where we need to get unless you see big, difficult structural reforms in the u.s. >> which would be impossible
through congress to do. now it's not just congress, it's the government right now. i mean, congress could write a beautiful tax reform bill that is never going to get signed. i mean, it's intractable because of the executive branch and congress. we need changes at both most likely to ever effect anything like the reforms we need to grow faster. >> you have been a big supporter of china and open trade on both sides when you hear it, the tpp, both sides, hillary clinton or donald trump, they seem more to be about closing things down and what does that do to our growth rate? >> i have been a big supporter of the u.s./china relationship, and i said that's by far the most important bilateral relationship we have and i see one that is going to be
increasingly under stress, and so i, you know, i think it's important to maintain a constructive relationship, because it's in our best interest to do so. you raised another issue, which is my big concern which is protectionism. >> right. >> i just think it's deplorable right now the level of protection or sentiment we see in the united states because trade and cross border investment are big in driving growth and essential in prote protection in our competitiveness, and they are being blamed for problems that while the fact is that the average american household has an income -- a household income that is $10,000 higher as a result of this trade boom we have had since world war ii. >> how do you get the public to believe that? how do you articulate that in a way --
>> andrew, that's the question. the problem with trade is simply this. the benefits are spread over the entire economy and there are very real job losses that come from trade that hit specific sectors, but the biggest problem is that most of the job losses we are seeing today in my judgment aren't coming from trade but are coming from oddmation, advanced in technology, which benefit the american people greatly and it benefits society, but are definitely disrupting the labor markets and destroying more jobs than creating and hollowing out the middle class. >> that sounds like you are taking one anime and substituting it for another? >> no, i am taking a fact, okay? i am taking a fact that you look at almost every industry today, and what you see are -- whether it's architecture, engineering, law, business, anything that can
be automated is, and it is creating disruptions in the marketplace. >> we have seen it for decades but it's happening faster? >> it's happening at a much faster clip, but i think we have to do a better job of explaining trade. it's never been easy, and it's never been popular. i was very pleased to see that the white house called a meeting on friday to really focus on the importance of the trance pacific partnership, tpp, because this is, again, hugely important, because, you know, i just made arguments about trade, which i really believe in, but the tpp goes beyond that because our markets are very open, and they are the most open in the world. we have the lowest tearifftarif the fewest tariffs.
what the tpp does, even if people are not enthusiastic about trade in the u.s. how could they oppose tpp because it's opening up markets and for the digital market which will benefit you, and geopolitically it's really important, because the united states -- it's about u.s. leadership. the united states of america has said we are going to do this agreement, and we have our allies, you know, trusting us, and we have countries like vietnam and malaysia willing to break with their past and become part of our system, and vietnam looking at changing their constitution. if we can't deliver on this, how are we an economic leader? >> the president doesn't have the votes, in his own party he doesn't have the votes. >> we will have to get the votes because it's just too important not to, you know. >> the chances are, what at this point? 10%? >> i don't want to, you know --
trade votes, joe, are never easy. they are never easy for republicans and they are never easy for democrats, but it's going to take strong, strong leadership from the white house and take leaning on democrats and president calling in shifts and i think it's going to take, i think, business doing a much better job of going into individual districts so there's a cost that the congressional -- the congressmen have for voting against tpp. >> you wrote a very aggressive, if i could call it that, op ed in the washington post this year about donald trump. you are a republican and were appointed by george w. bush and here you were calling him a phoney and in the recess saying you were voting for hillary clinton. i want to understand your thinking process and what the reaction has been among people
in your world? >> first of all, the reaction -- let me just tell you. people in general, what you do is the people unhappy you don't hear from, and the people that like it say you are the man, okay? it's the same with the t.a.r.p. i know most of the people are against the actions we have taken, and i never had a single person come up to me and say you are a jerk for doing this, and they come up and say thank you for saving our country and that's the nature of people that are polite. in terms of -- i am a republican. i am very supportive of paul ryan. i am very supportive of a mitch mcconnell. i have been working hard, giving money and working hard to elect republicans in the senate and the house. i think it's very important that we keep our leadership position there. the reason i said i was going to vote for hillary is as i look at
the world today, i have said repeatedly, we need big difficult structural reforms to get our u.s. economy going, and i believe that the best opportunity to get those is when you have divided government and you need someone as a leader who has a temperament that allows him or her to compromise, to be able to say, you know, i understand the other side, and i'm not going to demonize them and find middle ground and get something done and that's the only way you can do that, and the president has to lean across and lean against their party. >> but she would need to do things diametrically opposed to what she believes. "the wall street journal"s which has not been positive about
trump at all, and called his policies in stark contrast of what hillary wanted to do with the country, totally different. 90% of paul ryan's initiatives have been hijacked by donald trump in his speech, and you have temperament conditions, and 60% of the country thinks she is untrustworthy, and looking at policies, republican policies are being put forth much more readily by trump than -- it occurred to me that it's disingenuous for you to -- she would have to totally change her economic policies to get in line with your policies? >> i did not come here to debate politics with you, but i would simply say that i read about donald trump's speech, you know. you are not going to get me to sign on to any economic policy that doesn't deal with our
ballooning debt and entitlements and takes the, you know, exorbitant views being taken there on trade, but to me, to me, it really comes down to two things. as i said, it comes down to character and temperament and an ability to work across the aisle, and i watched secretary clinton when she was a senator do that, okay? also, i would take -- you learn a lot when you are secretary of state, and i would -- to me, i would take that experience any day. i said what i was going to say about donald trump in my -- in my op ed in the "washington post." i can't sign on to the sort of pop pop yao lizam, and i am
where i am and i am a republican and i am hoping we are going to have a majority in the senate, and i am hoping we will have a big majority in the house, and i am hoping -- >> to stop hillary doing anything of the raising taxes and maybe the republicans will stop her from doing all the things we know she will do that are wrong? >> maybe we will compromise to get some of the big difficult things done. >> okay. >> and lastly, i have got a 94-year-old mother and i have three grand daughters, and i have a wife that would like to see a woman president, and you know what? i think i will throw in with them. >> fair enough. before you go you have a new important paper out on china and i wanted to ask you about it before we go. you talk about the idea there's going to be much more direct investment from china into the united states in the coming years. how should we as a country think about that relative to all of the issues we just talked about?
>> well, the foreign investment like trade is very unpopular at the macro level. very popular foreigners buying u.s. assets. you are showing long-term confidence and foreign investment has got the potential, including investment from china to increase jobs and maintain jobs, and so to me, in today's world, you are going to see increasingly fierce competition for investment, and it's really important that we welcome investment that is going to help our economy. and i look at -- i wrote that paper because i think that the fundamentals mean there will be much more outgoing investment from china, and it's going to be
much more driven by private sector companies compared to as opposed to state-owned enterprises, and it's going to be focused on -- it going to be driven by a number of things, companies that have big business in china are looking to become global companies, and looking to get to consumers, services, and advanced manufacturing, and so they are -- you are going to see this coming to the united states and the whole purpose of my paper was to make the case that a lot of this is investment that we should welcome. >> we could compare that to the japanese when they were buying pebble beach that was unpopular. >> you are absolutely right. we hate the fact, and i remember
when the japanese investment was coming in and they would be very concerned, pebble beach and rockefeller center, and i would say they are going to stay in the united states of america, and we are not going to take them to japan. we have got them and the capital. i think what makes this more complicated is because people are raising issues about china, and they don't have the same access, and there are subsidies to state-owned enterprises and don't play on a level playing field, and it's a dangerous thing if you start going down a tit for tat approach because the fact is regardless of what china does, we -- why should we turn
our back on investment that helps the united states, number one? number two, this investment provides links, and these economic linkages are very important. thirdly, i am in support of the bilateral investment treaty, because what it's going to do -- the u.s. government is still very serious about negotiating this with the chinese and making progress, because reformers in china use the bilateral investment treaty as a lever to open up their performance and leverage to competition. >> hank paulson, thank you for touching on so many different subjects this morning. good to see you. >> thank you. coming up, gasoline prices jumping on the east coast. and don't miss business titan, jack welch.
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from new york. >> they have been hunting for the man the past 12 hours and they decided a short time ago to go public, and he is 28-year-old, ahmad khan rahimi, 5'6" weighs about 200 pounds. authorities told us he can be seen in surveillance video from both new york city locations where bombs were planted on saturday night, and separately information from cell phones taken from two of the devices. from the unexploded pressure cooker bomb on 27th street in new york and from the partially exploded bomb left on saturday in new jersey played a role in identifying him. his family home was searched overnight in new jersey, and members of his family were stopped and questioned, and it's not known whether officials believe he was involved, if he was the only one involved or if he had help. >> pete, thank you very much.
obviously a lot of questions surrounding all of this, and again, it's pete williams of nbc news joining us, and we will follow the news as it continues. and we will start with a look at energy prices right now. this has been part of the reason the futures are propped up, and wti up to 43.65. the dow futures at this point are up by triple digits if you look at what has been happening. we have been watching futures up by 90 points, and now you see them up at 102 points above fair value. you saw the oil price chart and retail gasoline prices surging in the united states, not because we have seen with oil prices but also in some areas because of continuing problems with colonial pipeline's gas line. it carries fuel to the east coast, and colonial has started
to construct a bypass line because of a leak because it krcreated a huge problem, and georgia, aaa reporting the average price of a gallon in georgia up more than 15 cents in a week, and prices rose 4 cents in the carolinas. and then we have highlights from the awards. julia. >> hbo tied with fx for the most awards. six awards each. the streaming giant netflix with three, and amazon got plenty of shout-outs, and many shows and actors cleaned up again and the big surprise of the night was "the people versus o.j. simpson." hbo, despite having 94 nominations to fx's 56 tied when
it came to awards, and partly because of the snub to silicon valley. "game of thrones" gave it the most emmy wins of any show ever. and julia louis dreyfus won the supporting role for "veep," and a surprise win to john oliver, and it was a blow to comedy central, and they lost the comedy talk show after a 13 year win streak. now, "transparent" brought amazon two wins and a couple shout-outs to the ceo, and as for the ratings, the emmys themselves, we will see how the rates come out today, and it was
up a big football game and we will see if it impacted viewership. >> is there any economic correlation between an emmy and what ultimately happens to the network or show and syndication later? >> i think winning the emmy and the same is true with winning an oscar it helps the show talent and directors and show creators, it helps when tiesing a show. people watching last night who may not have heard "mr. robot," may have seen the star win best actor and they will say, let me find the show, i would be curious to watch it, and i don't know if there's a direct correlation in terms of the financial impact but it should help with advertising and helping the network's draw raw talent with the emmy wins. >> thank you. great to see you. so early in the morning for her, and she had to watch the emmys.
think about that. >> it's her job. we are all here, and thank you for being here. >> thank becky for being here. she's the one, who, you know -- >> buecka plus one. >> it's very disconcerting to hear you go, ah! >> active baby, that's all. >> i will say it's active. how do you know that's not it when it does that? >> that's the excitement of it all. watch your shoes. >> yeah, i know. they are not shiny. >> and as we head to break, check out european trading this morning. it was like that all morning long, and most of the boards up more than 1% point and that's helping us. stay tuned. "squawk box" will be right back. >> announcer: still ahead, a look inside the minnesota vikings playbook and the team's owner weighs on tackling the competition, and the state of
the game and the new money stadium, and "squawk box" hits the field, next. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
up by triple digits continuing some of the big swings we have seen over the last week and a half. s&p futures up by 10 and the nasdaq up by close to 19. and wells fargo being sued by customers accusing the bank of fraud and reckless behavior over opening sham acts, and the lawsuit is seeking class action status, and wells fargo agreed to pay. there's a hearing set tomorrow. up next, squawk sports. the team opening the season in their new billion-dollar stadium. owner and president of the vikings, mark wilf will join us next.
it was their home game at their new stadium, and joining us is owner and president of the minnesota vikings, mark wilf. if i had not been glued to the emmys -- no, i had to go to bed. aaron rodgers looked like a rookie quarterback that was totally disorganized and meanwhile you bring in sam bradford and people make fun of you and he looked like the biggest quarterback in history. bizarre. >> a great team effort. have to give kudos to the gm, and it was a great victory against a tough opponent. >> a lot of people tweeting out about the new stadium and no negative comments. >> this building is really state of the art and i hope everybody gets a chance to see this. it's the premier sports and entertainment venue in the country now, and the clear roof and fireworks and national
anthem with jordan sparks, and i think the fans came away loving the night. >> knee problems with the team. we need some new technology or titanium something or other. you don't know about adrian peterson yet? >> it's part of the game sometimes, and adrian is a huge part of the team but we won't know much until his mri this morning. >> when does teddy get back? >> he had surgery last week and his spirits are good and he's a special part of the team and he will be back stronger than ever knowing teddy. >> whose decision was it to go after sam bradford? was that you? >> we have a great football operations and our general manager and our whole organization, listen, we have to get deep at that position and it was a big blow to lose teddy and sam has shown he can play in the league and he stepped it up last night. >> that was unbelievable. people thought you got the raw end of the deal and at this
point i guess the jury is still out. >> the jury is still out on these things but we are pleased with sam bradford. he's a pro's pro, and he came in just two weeks and the locker room and whole organization accepted him quickly, and sean, our quarterback has given him support, too, and all around he's a great addition to the team. >> and for the stadium, how was it financed, and is it a winner long-term? can people do this in other places and except success or can it be a boon dog? >> it minneapolis, it was a great public partnership and the state co-ventured on the stadium, and we have the high-foot high front doors that swing open and all the fans came in and they were looking at it in awe. we have a fiberglass roof, so
when you are inside, you feel like you are outside. it's a great indoor and outdoor environment, and a lot of technology in the stadium and you can see the fans having a great time. >> what has to make it to make it a profitable venture? what do you mean out of it in terms of filling it? >> the building has sold out and it's a great experience when you are there, and a great corporate community. >> i was going to ask about the corpora corporate suites? >> it's the seats and suites and sponsorships and the food and jerseys and all of it. we have to make the in stadium experience as good as it is or better than at home and we think we have done that. >> you talk pretty good, and you are not from there, and i asked are you from northern new jersey? >> yes. >> what town?
>> up in hillside. >> but you are learning to speak minnesota? >> getting there. >> yeah? >> starting. >> either the movie or the tv series -- >> great series. >> i thought denver would be a different team, and all of a sudden, i don't care about the bangles, but they are playing denver and i am not feeling very optimistic. >> we are the minnesota vikings and we know a lot of people have opinions especially in the video, and we are playing hard. >> you don't have any idea whether adrian is coming back? >> we know how tough he is. >> not until next year? >> he's fighting hard. >> how is the state of football right now. you have myriad issues, and you have concussion issues and i wonder about cannibalizing on twitter? can it be too easy to watch the
nfl? >> when you have a game that exciting and it comes down to the last few seconds, there's nothing like the nfl. all our fans know it and we will keep making the nfl and football as great as it has been and get the game better every day, and making it better. >> weigh in on the national anthem debate? >> for our team, i can tell you, we constantly encourage and hope our players are respectful of the flag and the military and all the sacrifices that go into that, and the reality s. we respect people's rights for individual expression, but in the end we are patriots, and as far as the flag and we are very encouraged that our team is supportive of the flag as well. >> great. mark? >> good to see you. >> we have an anchor by the name wilf and i got confused.
welcome back to "squawk box" everybody. a union representing thousands of auto workers in canada will strike at two general motors plants if tonight's deadline for a new contract passes without an agreement. a walkout could disrupt production on engines that go into gm's suvs. canada's largest private sector union has designated gm as the private company in talks that will set a pattern for discussions with ford and fiat chrysler down the road. down to the new york stock exchange. jim cramer joins us now. jim, oil is up 1.5%. so immediately the markets go up. not even back to 44. it makes no sense. >> it's exactly what happened. i'm watching the futures sunday night all through the morning. it's very clear that there really isn't much of a factor. now, there was typically a story that was promulgated between 4:00 and 5:00 a.m. about how venezuela's going to be looking for a freeze. again, this is the big joke on the market. of course venezuela wants prices
higher, saudis want prices higher. instead of cutting back, they talk prices higher. every time that happens the algorithms must say better demand, buy stocks. this has been going on forever, joe. you and i both know how stupid it is. >> we have had an up, down, up, down, almost alternating days for the last week and a half or something. and big moves. i got to say, you know, after a pretty good up day, i'm like, yeah, this market's pretty solid. and then you get down a couple hundred points it's like, wow, this market's ready to -- i'm just as short-term as the market itself seems to be. i don't know which way it finally breaks out. >> it's hard not to be. you'll see a lot of charts rolling over and then, boom, intel, good news. apple looked like one of the worst stocks in the market and, wow, all of a sudden it's the leader. apple took up a lot of stocks with it last week, otherwise i think it would have been a bad week. so there's no conviction anyway. people just have to get through this fed meeting.
and even then i don't know. i mean, we've got to get away -- we're so trapped by oil. joe, it is rare that i've ever seen us trapped by something less relevant. >> right. well, i still would like to get through, you know, september and october. because if we really are, you know, set up for some kind of, you know, sharp shakeout, this is the month that it happens, it seems like. >> yes. and it would be great. after brexit we had a nice rally because the we cans all came back. looked like they came back after things calmed down. we need them to go. we can't seem to make headway with this money that comes in. almost always after it moves out that we have a nice move up. >> thanks, jim. see you in a few minutes. >> thanks. >> when we return, stocks to watch ahead of the opening bell. and don't miss oracle ceo mark hurd happening at 10:45 a.m. eastern time. "squawk box" returns right after this break.
among today's stocks to watch, isle of capri gaming casinos, for $1.7 billion including debt up 32%. networks security firm info blocks being bought by private equity firm vista equity partners. the price tag $26.50 a share, about $1.6 billion. hospital operator community health systems announcing that it's exploring a variety of options with financial sponsors and other potential alternatives. take one last quick look at the markets this morning before we hand it over to "squawk on the street." you can see markets are continuing with the big gains we've seen through the futures through the morning. not triple digits b. nasdaq up by 14. as jim and joe were just talking about, oil prices obviously have something to do with this. wti up by close to 1.5%, that's a gain of 62 cents to $43.65
after struggling last week. >> thank you, everybody. great show. >> yeah. thank you, guys. >> tough weekend, but great show. in the meantime, make sure you join us tomorrow. "squawk on the street" begins right now. good monday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at post nine. several big earnings and of course ongoing investigation into the bombings in new york and new jersey over the weekend. euro positive to start the morning. crude is helping things along after the third negative week in about four. road map begins with fedticipation. investors are gearing up, what you need to know ahead of that decision. j.p. morgan throwing cold water over the excitement over that dd