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tv   Squawk on the Street  CNBC  August 31, 2017 9:00am-11:00am EDT

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up 7.25% that you will see. >> s&p needs 12.71 months to pull even for the month of august we'll see what happens. >> make sure that you, thank you becky. >> make sure that you join us tomorrow squawk on the street is next we're live from the new york stock exchange carl has the day off let's give you a look at futures as we get ready to start trading here at the nyc. we're headed toward a higher
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open european markets let's take a look at europe and see how it's doing. >> yeah, there you go. >> look at it. the expanded accounts review. >> let's go to kayla with more on that story about new numbers in terms of wells fargo. >> this investigation has been going on for more than a year. it cost the job of its former ceo but the bank announcing this morning that that he review is now complete they did find close to a million additional what they're calling potentially unauthorized accounts that's up. the number is now 3.5 million and the bank says that in addition to that they also identified about half a million points higher ten shl i
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unauthorized online bill pay enrollments. the bank gives more detail on how much money paid out as part of the investigation it's paid or to be paid as part of the third party review today. they already paid close to $4 million of compensation in july of this year and paid through a class action settlement that goes back to 2002. the bank's current ceo said in a press release we apologize to everybody that was harmed by unacceptable sales practices that occurred. on a call this morning he said no personnel changes as a result of this investigation closing. there's no update on conversation with regulators or on going federal investigations and there's no update to the number of people fired as an extension of this review.
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>> thank you for giving us the latest there but this does appear to be at least the potential end becky did ask him about wells fargo and he started talking about household insects that are annoying. >> there's never just one cockroach in the kitchen it's what they find after the first one because any time you put the focus on an organization with hundreds of thousands of people working for it you may very well find that it wasn't just the one that misbehaved and of course it was more than aone in the wells fargo case. >> largest holder of wells fargo is berkshire of course
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>> it's rogue. this is a rogue bank. >> would you believe they have conceivably put this behind them. >> put it behind them? >> we all focus on the stock market, that certainly seems to be the case. >> well yeah the stock market has nothing to do with the idea of whether you want to deal with them or not but it's a rogue bank it's a rogue national bank >> you sound like elizabeth warren. >> you know, maybe she has a point on this. i remember sitting down. they thought they got to the bottom of it but they left out a million accounts this is so outrageous.
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>> i'm about to be disciplined here did i do something wrong. >> no, this is a rogue bank. i'd like to call all of the board members to congress and i'd like to know the cfo that left that we never found out why he left i'd like to bring him on too. this is not an embarrassment this was a bank that was run amuck in order to meet cross selling obligations which is all they ever told about we should not let up on this wells fargo situation. i was fine with it when they said they did their big analysis what kind of big analysis leaves a million on the table. >> they continue to uncover apparently more cases. many times they were opened on a friday and closed on a monday. >> they were put 2ting 25 cents
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in i bank with wells fargo and always liked them but then again who am i. >> your opinion carries some weight. >> with who? >> carries some weight with who. >> it does. >> with my dog who does it carry weight with. >> i don't believe your dog or your wife care about your opinion but there seem to be other people. >> i had him on. john stump at the end of his reign came on the show and he had this vince lombardi quote saying the buck stops here, or whatever. >> he is no longer the ceo >> he worked at the bank he can come here and he can tell us that everything was fine. i don't know, i'm trying to figure out something else in the walk of life that would allow you to miss a possible million and say you had done a thorough investigation. i don't know did nixon do a thorough investigation of
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watergate? >> i don't think he was the one doing the investigating. >> no. >> well that's why he inspired the federal prosecutor probably had a handle on it. i didn't say anything about the fake news in russia. >> you didn't but that does get us to president trump but having nothing to do with the continued russia investigations by congressional committees, we're talking more today about tax reform he delivered a pitch yesterday speaking in springfield missouri calling on congress to commit to reforming the tax code. >> this is our once in a generation opportunity to deliver real tax reform for every day hard work americans and i am fully committed to working with congress to get this job done and i don't want to be disappointed by congress, do you understand me do you understand? >> we'll be talking more about the president's push for tax reform treasury secretary steven
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mnuchin will be our guest at 11:30. that will be a steve interview. >> nice. >> i'll be interesting to see having interviewed mnuchin back in may i believe, what meat they can put on the bone in terms of the expectations for what we're going to get based on my reporting, jim, i'm not sequin on the prospect for any major revision of the tax code. >> about a debt ceiling. >> no. >> raise high the proof being carpenters. >> i do actually. >> they have to raise high the roof being carpenters. >> we can talk about tax reform again. it remains the single most important thing for many businesses although many of them are moving on in the key decisions they need to make when koimts to consolidation or strategic imperatives that they get.
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they're moving because there's an expectation that there's not going to be anything this calendar year and we'll see what we get next year but you're raising this debt ceiling thing again. >> because houston, houston is going to be 100 billion. >> but you may very well get that bill to aid the victims of hurricane harvey tacked on. >> i'm going to ask him that but there's a lot involved which is the mortgage deduction it's easier to get rid of death than it is mortgage deduction. >> that would be going a long way. they talked about rolling back charitable deductions as well.
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>> have two more days and i can start making money for myself. >> you may want to consider becoming a pass through because then you might be benefitting from a farlower tax rate the treasury secretary says they will be able to clearly demarr kate those people that are not really small businesses deserving of the lower tax rate. >> these guys don't remember the history of corporate tax but that's okay because anything goes anymore i want to see what he says it's going to be a great interview.
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>> he never really said much of anything. >> he's like a mess. yankees lost too last night. >> thanks. come on, come on man. >> i follow the worst team in baseball belongs to us. >> yeah it does. >> did you see my fantasy league team >> we're not far. >> my fantasy league team has dynasty written all over it. >> sparking fires now in crosby texas about 25 miles northeast of houston if you recall, brian sullivan talking about that potential story yesterday now we have scott with us and he is bringing us the latest, scott. >> we are as close as they're allowing us to get to this plant which is another 2 miles or so down the road there. there's an evacuation perimeter of 1.5 miles they have set up a no fly zone for 1.5 miles around the plant
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that includes drones and the sheriff's department is asking people to respect that but nonetheless they say this is compounds that basically just expand. they will pop and heat up and catch on fire and burn with intensity until the fuel is consumed and then they will die down. >> that's what happened about 1:00 this morning. a couple of the containers, these are 15 gallon or so containers loaded on to refrigerated trucks when the plant lost pour. a couple of the containers popped there was a fire, brief plume of smoke in the air and there's about 36,000 pounds of this
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stuff in nine different trucks and as the trucks lose their fuel these containers can pop or explode one by one the company referred to it as explosions the fire department and sheriff department saying they just pop and there's a little bit of fire so again trying to ease any concerns about this and it seems to be one of the many little stories that unfolds in a disaster like this one more thing for everybody to keep track of. not as disastrous as it sounds like. >> it certainly has and reached the front pages of a number of newspapers scott, thank you. >> there's a plant that had, company told you it was going to explode. >> there's nothing they could do about the fact that the temperature rose. >> maybe a back up to a back up.
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>> i don't believe they play a big role in this administration. >> well who does the energy protection -- i'm sorry environmental protection >> when we come back ge's new ceo get reading do cut jobs at the company. also ahead we'll have expedia's new ceo. >> these bookings. >> he would be a good booking too. i'd like to hear from him. we'll bring him on soon. we're 15 minutes away from the opening bell here at the nyc
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the cutting is going to start and it's going to be aggressive exact number of jobs not known at this point. >> my charitable trust owns it it's a sign of my own idiocy i apologize to anyone. when you own the worst stock in
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the dow you should have it taken but i will say this i thought fl flanner wouldn't take action until november he obviously recognizes this place is overstaffed and that's very kind. flannery means business. this is not business as usual, ge. >> they pledged to take $2 billion in cost up by the end of 2018 that was a pledge undertaken by previous management and the chairman when he was ceo and it's something being closely monitored by their shareholder. >> they should put them on the board. >> which is on the board even though there's expectations that should happen and you did have the ceo change people were anticipating would be a result of them going on the board and instead it was without that. >> he turned around health care and did wiit with fewer people the idea that he's making these cuts ahead of the meeth. >> do you see him as somebody
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that's going to change the direction. >> i think he's somewhere level headed, i think he agrees of the people selling the stock. >> things need to change. >> guys that have a sell in the stock happen to be some of the most respectable analysts. >> what is their main argument >> the counting issues involving turbines a sense that there is lethargy, why do we have locomotives >> aggressive on the service revenue side unchts you can did tax avoidance. >> you can move up by lowering the overall payment. >> all i'm say as good what jp morgan said. i think that he's turned around
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health care. i think he's the man. >> ge shares down 23. >> don't talk about him. >> 23.16%. >> don't talk about it. >> i won't mention it again. >> don't talk about the worst stock that i have owned in my charitable trust in years. >> is it years >> you have to go back >> that was not a pretty picture. up next, cramers mad dash was the countdown to the opening bell one more look at futures we have ten minutes before we get the opening bell and a lot ren ua othstetmo osqwkn e re when we come back. whoooo.
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is it the 31st today >> it is august 31st. september starts tomorrow. >> they added another day. >> no, they didn't. >> where do you want to go >> there's nothing like the smell of a double upgrade in the morning. it's the smell of victory. fmc now a lithium and chemical company it was almost equal to what happened to constellation brands merrill lynch had not liked the stock which was a new advised position that they had taken and now they go from sell or buy lithium, obviously we know that is from batteries and the change
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in electric cars is happening and also the division that they got from fmc. >> it's absolutely terrific because the ag market has come back david this is just tom foolery because it's going to be at 100 and if this were fantasy football you would draft them in the second round because you can probably get away with not drafting the first round because people are look at dupont and dow trying to merge. >> you were enthusiastic on the prospects for the acquisition sometime back. >> guilty or innocent this one right. i remember when i was recommending the machinery company. people thought it was ford motor, idiots but this is a new fmc and better fmc. >> dow-dupont closing tonight after the bell. >> is it >> yeah. >> i knew that wanted to create excitement. in the time since you and i have been talking how many additional hundreds of thousands accounts were discovered in the
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incredibly thorough investigation? i'm still trying to figure out an investigation that thorough tom brady's inflated ball investigation was more thorough than wells fargo tom brady's investigation was taken more seriously and what did he do air in a ball. >> they do the wells investigation. >> i don't think so. >> somebody did. >> they had moe, larry and curly. they didn't even have joe. joe did quality work but they were all three on the investigation and also the pep boys let's throw them in. >> that's who did the second investigation. guc, harpo -- >> we got to go. owing bell five minutes from now. stay with us on squawk on the street
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curious as to where you are today. >> west texas for me is way too high it's almost filled oil is going to be suppressed even further the refineries are in much better shape than people can realize. and trade in the futures market but that's okay. everybody has the right to be wrong. people have the right to fake news but they don't have the right to fake facts. >> you're entitled to your opinion but not necessarily your own set of facts although that doesn't seem to be the case as much anymore but that's another a discussion for another day.
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>> there it is as we get start on this trading day, august 31st of course given the futures we expect a higher open and that appears to be what we're getting. the american red cross raised the bell highlight it's efforts during hurricane harvey. a lot of donations flowing into that a lot of that from clients they gave them all of their commissions. at the has the tack, fox sport celebrating opening weekend. you're committed to watching a lot of college football now. >> no, i gave up college football and i'm allowed to watch pro. i'm not lewd to watch college
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football. >> that's against the 72 inch screen it did allow me to speak to adam in fantasy football. >> i see. >> it's the only thing i was aloud. i wrote that into the marriage document >> let's talk about campbell's soup which sometimes people watching on a cold sunday afternoon their favorite professional team might want to enjoy some soup. >> they actually, this is interesting, what did they site for weaker cash flow weaker sales i like that. it's good to say hey listen the reason we had bad numbers is because our sales were bad >> yeah, biscuits and snacks, organic sales were flattish. >> it is hard to find campbells related to that. general mills has done a lot better job as well ahead of the natural and organic but i thought he told a good story demand for natural gas, online
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29%. brick and mortar just 9%. >> a lot of salt they're taking a lot of it out and trying to deal with the new demand but don't seem to be doing a good enough job. guidance looking for an eps in a range of $3.04 to $3.11 just to give you a sense for where the multiple on the stock is now. >> have you seen the movie >> i have indeed >> there's a key scene where the cans were being shot at. they're shooting the cans. they're shooting campbell soup's can. the best thing they ever did was cooperate. oh, no, there wasn't any cooperation with that company. >> i don't know if that's the case. >> okay so make it 100. >> 13 or $14 billion market value. they still of course have control there. do you think that it's consolidation candidate? >> everybody has been -- >> might always be.
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>> in 1999 i had position campbell soup calls at my old hedge fund. >> but that was their spokesman for awhile with with his mom that sat in my box one day but that stock can come back on takeover rumors all day. my friend was talking about the interview about kraft-heinz. they seem very defanged. netflix up more than 4 points on absolutely nothing. >> yesterday, yes. following through a bit today. why do you mention kraft-heinz becky's interview with mr. buffet that's a large holder with kraft-heinz saying he doesn't think they'll be interested in mondelez.
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>> but they're better than anybody else's. >> true but they're velveeta and canned soup. when we had fall out shelters in 1961 those were foods they told us could last with thermonuclear war. i am told that velveeta and cockroaches that's about it. death, taxes, cockroaches and velveeta. >> unfortunately due to north korea some people are having the same conversations. >> i know. my wife wants a fall out shelter. >> i'll tell you, too early. >> too early. >> it's too early to discuss fall out shelters. >> we have been talk because
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it's 36% new ones that they did and were any of them on the up and up >> i don't know. >> did you check your account there friday to sunday that was a great way to be able to get extra bonus open that account friday, close it sunday, close it monday because if you saw the small damages it had to be like putting 25 cents into an account and if anyone had a program there they might have detected that but david, no one was really involved and there's no further investigation and as a matter of fact the case is closed. >> you're angry about this. >> i know nothing is going to happen they should put ted wells on the investigation of wells fargo because he was involved with inflate gate which was obviously more -- remember that, did you ever read the report very thorough. >> i have it in my inbox now
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thanks to our executive producer. >> that stock won't break 51. >> it's 243 pages long. >> longer than the wells fargo investigation. >> he has been my lawyer at one point. >> no long faang short faang and then short the other faang. >> the other faang. >> we're going to have to put oil in the spr, the strategic patrol yum reserve which looks like they were empty at the same time you would think that the president favors higher oil prices i think he's really a coal guy. >> he does seem to be a coal
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guy. a broad based move this morning. the s&p up a little bit ove over .3% i'm not seeing a lot of red here other than a slight move down in disney disney also announcing number o job cuts at the abc unit in materials of tv, news and production in that area. >> one great movie don't forget bam tech. >> that's all you got for me you don't want to go there. >> i was using mlb.com. >> usually i get a response when i go to disney you got something to say. >> it's like, you know who else is on that wells investigation >> oh my god, really back to that >> yeah.
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>> i don't know. >> they are thorough. >> i don't know. dumb and dumber? >> petey. >> let's just come back to the stock itself. >> it's not going to move. >> it's america. >> it's over and done with. >> it is over and done with and the dividend is fine and they're probably going to, wait and it's all over again it's the chiptole of banking. >> what does that mean >> customers coming back to both >> customers won't leave accounts are sticking. wells will do great. he'll say i don't know there's another 67 we missed a couple easy come easy go. okay
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>> i like that. >> easy come, easy go, wells fargo. sorry to be so cynical but it's america and we don stuff dodgers that kind of stuff to banks. we should get that fella at yale, he wrote that book i can't say a name because it has a curse word in it do you know what i mean? >> do you want to talk box at all? >> my father used to sell boxes and bags aaron levey is going to be on. >> he is. >> he's fine okay quarter ibm has to buy them. >> ibm has to do a lot of things. >> what are you hearing? >> continue to get the growth out of its growth businesses to the extent that it can offset the appliance business. >> yeah. the way to do that is to buy box. he added grey to his hair because he was tired of being a 19-year-old ceo. >> the picture that we have been
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running has no grey in his hair. he added it for gravitas. >> he's too young to be a ceo. >> speaking of hair let's get to dom on the floor this morning. sports a pretty cool hair cut. >> i have grey coming into my hair but it's not because of the market we are moving to the upside. it's one of only 50 stocks right now in the entire s&p 500 down on the day to point to your point here mostly utilities lag and let's look at what the sectors are doing because the dow is up 80 points right now the s&p 500 up about 9 or 10 points if we can get a half a perkren upside we'll close positive for the month of august.
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materials and health care are leading. the lagers are staples and eun tillties but this same theme has been playing out month to date as well. you can't say it was risk on risk off for the month of august utilities and technology, two polar opposites are leading the way higher in the s&p so far in the month of august. august has been the worst performing month in the s&p 500. not so this time around if you look at september the third worst performing month over the last 20 years that's one to watch as well as we head into the labor day holiday and one more chart that is interesting it's gold prices versus the s&p
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50 if we are going to keep this trend intact you can see their 4% out performance for gold over the s&p if we can finish the year better than the s&p it will be the first time in six years that gold prices will out perform the overall stock market something we're watching as well north korea and everything else play ace role in that trade bachblth back to you. >> thank you we'll have the exclusive with steven mnuchin at 11:30 a.m. eastern time don't go anywhere. stay right here. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average.
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>> the low read for the year coming right out of the shoot. not a bad number historically. all right let's go to the matters at hand shall we if you look at interest rates they haven't been doing much even though they did have soft spots over the last several sections we did indeed have some trade down below what still stands as the low yield close of the year right below 213. exactly where we're hovering now. mario draghi and the ecb aren't happy about the 120 handle trades in the euro specifically or the generalized strength generally so some of that verbiage is having an effect an effect that was already going on with respect to dollar strength but also with regard to interest rates and on our interest rates the yield curve 10s minus 2s is getting close to the flattest it's been since before the crisis. only several basis points away now if you look at the dollar
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index it's a penny and a half off it's low so it's building and holding a 93 handle that all the currencies are weaker against it uniformly whether you look at the euro versus the dollar and the dollar-yen and of course the pound versus the dollar now as the day goes on we're still going to have pending home sales but for the most part it's going to be trying to reconcile what ecb may do in the context of that and all of that can be can effected by tomorrow's employment report. jim and david back to you. >> thank you very much mr. santelli we were talking during the break about gilead shares. they have been so strong since announcing that large acquisition on monday, about a $12 billion deal it's now a new area of cancer treatment. >> the market cap is now higher than what they spent. >> yes they added more market cap as a result of the deal than they're
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spending. >> rt. >> which is a real great through. now kite has one that's for nonhodgkin's lipoma. they're coming out for treatment for childhood leukemia when the current treatments don't work $475,000 a year is where they're pricing the drug they take out your t-cells and take them away and infuse new genetic coding into them. >> it's incredible. >> puts them back into your body where they become killer t-cells that kill the cancer. >> it's remarkable. >> and people were awaiting that pricing decision from novartis it will be interesting because they are expecting to get approval for its drug in the same class. >> i think this fda is very forward looking and trying to do what is right. they're the two ways to play the arms dealer so to speak because you need their equipment.
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>> you need sequencing and the genome. >> they should have bought thermo fisher but the balance sheet doesn't have it. >> in other news uber's new ceo already making headlines in his new role he sees an opportunity to bring the company public within the next 18 to 36 months while promising a culture change at the ride hailing company of course expedia has a new c can eo -- ceo as well. it will be an exciting day when uber becomes public. >> it will expedia has done remarkable things and no he just wouldn't let it happen. strength of his intellect his incredible ability to be able to marshall forces and really great choice for uber. >> an interesting choice no shortage of challenges as i pointed out just given the warfare on the board itself.
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but it's not an easy situation to take over. >> maybe the hewitt packard board. did you report on that >> i do. >> maybe they took it from that. >> they were investigating their own board members and leaks and spying on reporters. >> that was quite a time. >> that was yeah, they're fabulous people. starsky and hutch they're thinking of adding. >> hawaii 5-0. >> the old guys or the new guys? >> they're going to investigate them too and in the end it's
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probably going to come down to reckless driving it doesn't prove who is right. only who is left maybe they have to bring nba of th in somebody of that. >> leave your blood to the blood bank and not to the highway. they're going to find more than they did when they investigated deflategate. that was a big investigation zeek treated more toughly. full brunt of an investigation >> we're going to have stock trading when we come up with jim and who knows what else he's going to discuss in this new muted tone. >> celegene is spod upseto buy
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analog devices at a conference call the radar they make is better and also make something that allows your electric battery to read better. robotics, there's talk about a brown field revolution david this is the essence of what is going on around the world and why the internet of things it's a terrific story
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>> i know what goes on on your show because i listen every day. >> we have a chemical company doing incredibly well and i wonder if it had been in at wells and sorry to leave do you know what i feel about wells? stagecoach john ford it's probably the best book i read. >> we have to go. >> we have a press conference going on now let's listen in to the press liason. >> obviously our primary layer of protection was our power supply when the storm hit we lost our primary power.
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we brought in emergency generators to provide back up power to provide refrigeration to the products. as the flood waters rose those generators were compromised and we lost the use of the generators because of the flood waters we actually had a third system in place which was liquid nitrogen we have a liquid nitrogen system on site to provide refrigeration to these storage containers. because of the flood waters some of the equipment necessary to operate that liquid nitrogen system was also compromised and our fourth layer was the storage containers so we moved all the product into these containers and that's where they are now. >> are more explosions or whatever you want to call it >> yes, we're anticipating that the remange 8 containers that have not yet to have product
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degrade in them for that to start to happen. >> at least three are not cooling of the 8. >> my understanding is that we have lost refrigeration capability in 8 of the 9. >> 8 of the 9? >> yes >> i'm not sure about the exact distance but the container themselves are in a remote area of the plant so we don't anticipate any other buildings or equipment to be effected. >> can we get a layout of the plant so that we can get an idea of how far away it is. >> no that's something that we can do. >> excuse me. >> was there not enough time for you to get these trucks out of the way? >> no, we felt that the best place to keep this material based on the nature of the product was in the plant we have experts and people that
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know this chemistry, know how to handle the products. we had the equipment there that we felt like based on what we would have anticipated happening in the storm we certainly didn't want to bring these containers out on the roads with hundreds of thousands of people being evacuated and having a trailer stuck on the highway somewhere with numerous people around so we felt like the safest place to keep the containers and to protect the citizens in the area was to keep the product on our site. >> are you willing to release a list of all the chemicals? >> yes, we can share the information about what other chemicals we have on the site. >> no what we have is a fire
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so the question is what is the health risk? what we have going on is not a chemical release that's happening. i want to be clear about that. this isn't a chemical release. what we have is a fire and when you have a fire where hydrocarbons are burning sometimes you have incomplete combustion and smoke and any smoke is going to be an irritant to your eyes or your lungs or potentially your skin so if you're exposed to that, we are certainly encouraging anyone that may be exposed to the smoke coming from this fire to call their doctor or to seek medical advice. >> you said a campfire; is that correct? >> i heard the sheriff say that and the chiefs say that. i don't want to necessarily compare the intensity of the smoke. >> the sheriff said this is no more dangerous than a barbecue. >> i heard the comment but i don't want to make any
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comparisons on the smoke that's coming from our fire. >> so you can't be sure that it's just a campfire smoke >> no. what i can tell you is from the tox s toxicity to the smoke will cause irritation to your eyes just like any other smoke. >> can you tell tus status the f the plant. >> the plant continues to be shutdown we have one of these nine containers that experienced degradation of the material inside of the container. the water levels are starting to recede slightly and that's the current state of the plant as we know it. >> with the recommendation of
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the local authorities we established this 1.5 mile evacuation zone. we believe that we have moved everyone out of harms way and that no one is in danger based on the fire that we expect. >> your teams access the plant right now. >> we are not intending to go into the site based on the current state. we don't think that's a safe thing to do. >> when will you be able to go into the plant again js certainly we won't until the flood waters receded that's the first step and then the product we believe is potentially decomposing we're not going to try to restore refrigeration because we don't know the state of the product in the containers we're working on that strategy now but my expectation is that's what the plan will be. >> would that solve the problem?
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>> if the products haven't degrade as long as they could be kept cold the integrity of that material could be kept. >> but right now as close as you can get is 1.5 miles away. >> they degrade on their own >> yes they begin to decompose and that generates the heat which ultimately potentially produces the fire. >> can you talk about how they burn and give us a worst case scenario if there is an explosion how big are we talking about? what's the worst case with that fire. >> hah would just be all speculation in terms of how big a fire could be. what we do know with the first container is that the sheriff's department did some video of what was happening the smoke plume we understand was 30 to 40 feet in the air and they could see visible flames coming out of the container.
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is is that the extent of what could happen we can predict. >> how long does it burn. >> i don't know the temperatures we can try to get that information for you. >> you talk about shutting the plant down on friday did y'all considering flooding and replacing the back up generator. >> how often do we test the nigh k -- nitrogen back up system? i'm not sure how frequently but it's one of our layers of protection to provide refrigeration. the beginning of your question -- certainly we didn't anticipate having 6 feet of water in our plant and this is really the issue that's lead to the incident that we're experiencing now.
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>> yeah. i can't comment on that. i don't know the details around that obviously the fire marshals office imposed the 1.5 mile evacuation zone. we certainly respected that and we certainly encourage all of the residents that live inside of that zone to respect that zone for their own safety. >> we believe that the containers are in a remote enough area that we don anticipate any other damage to any other property on the site. >> do you feel you needed additional layers of back up
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power. >> you said the chemicals will then be release tlud td through smoke. any chance they can get into the flood waters. >> no, we expect them to burn. we have back up generators and back up, back up generators so i'm not sure what much more we could have done to provide additional layers of security to provide power to the site. >> did the flood catch you off guard? >> put you no one on site. how accurately can you measure the situation? >> so inside these containers there is remote telemitry that we can monitor the temperature and that's how we know should we anticipate something to happen soon that is also compromised based
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on the flooding that took place so it's not 100% certain what the conditions are in the containers. >> we're not going to put anybody in harms way. >> you don't have any idea of how long the fire will continue? >> we do not we anticipate that certainly we had the first incident we don't know the answer to that. >> can you say the fumes are nontoxic or are you so sure? >> they're noxious i don't know the composition of the smoke but it's certainly noxious. >> so you can't say that neither the smoke or the products themselves are non-toxic because that was said earlier. >> it's noxious. >> so you're not able to say
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that any of this is non-toxic, correct? >> organic peroxides are, yeah as the sheriff said they are chemical materials used to initiate other chemical production for the purpose of making plastics. i mean, toxcitiy -- >> so you're not going to say that they're non-toxic you are going to say it or not i think it's a pretty important thing. >> the smoke is noxious. it's a relative thing. >> what will it do to you? >> if you breathe in the smoke it's going to irritate your lungs and it's like -- it's an irritant it's going to cause irritation in your lungs. >> it's not going to kill you. >> no, we don't believe that to be the case. >> is there anything you want to say to reassure this community because there's a lot you don't
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know in terms of chemicals and timing what do you want them to know? >> we want them to understand that we want them to respect the 1.5 mile radius. that is providing a safe area for the residents to stay. we anticipate that all of this product is going to degrade. we don't know how long that's going to take. certain through warm temperatures that we have is likely going to speed that process up but we can't define specifically how long goiths it's going to te whether it's today, tomorrow we just don't know it's impossible to predict that. >> you understand people are worried. >> of course we understand that and that's why we want people to make sure that they respect this 1.5 mile radius. we don't want people returning back to their homes thinking it's over. it's not over. this is a very serious issue and we know that. >> after this is done should
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people be comfortable having arkema as a neighbor >> i think so. i think we have been a good neighbor. >> it's a french chemical company and it's all happening in crosby texas about 25 miles away from houston where he has confirmed the two blasts that happened overnight as a result of the flooding i guess come pounds to make plastic create an explosion. not quite answering the question of. >> they call it degradation. the chemical itself is not being released into the air. it is a fire that has hydrocarbons that will like any fire if you breathe in the smoke bother your lungs and be harmful
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to you but in terms of toxcitiy he was some what cautious and they're continuing to have that 1.5 perimeter around the plant to keep people away. >> yes the workers have been he vak you wa -- evacuated. we'll continue to keep you posted in the meantime let's get out to seema with other breaking news for us. >> we're learning that the port arthur texas refinery may be shut up to two weeks that is according to reuters quoting sources. this of course is the largest refinery in the united states producing about 603,000 barrels per day. cnbc has been mon montana toi te situation closely. for now back to you. >> thank you very much as we continue to monitor all of
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the fall out from hurricane harvey the news this morning that the key continental pipeline has been shutdown one that does carry oil, fuel and diesel from the gulf to key northeastern cities like new york, washington d.c. and atlanta. at the same time we learned that european exports of fuel is making their way over to the u.s. to help with the supply shortage. >> wti has moved up. >> gasoline futures really is is what you're seeing the immediate effect and they are also on the rise here. >> higher gas prices across board. listen to that briefing from the chemical plant what have we learned >> a couple of new things. first of all it's 8 of the 9 refrigerated containers that are no longer work and the ninth will fail soon which means these
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chemicals as the representative said will degrade, they'll heat up, they'll catch fire there's still the potential for actual explosions. what they tell us has happened so far is that pressure valves on the tanks and these containers release that's the popping people heard no one is getting near the plant and as they burn up and explode they'll let them burn out. it's certainly an irritant literally and figuratively to the people that live around here 300 or so homes evacuated with the idea this was going to happen and they can't say when they'll let people back. when it's safe
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when is it safe? when the water recedes and the chemicals burn out and no one knows how long that will take. you heard a lot of back and forth about it and what they seem to be saying is that these chemicals are noxious and i asked what will they do if you breathe them in? they'll irritate you but won't kill you but they won't say they're non-toxic anymore than smoke from a campfire is non-toxic but it's a hot intense flame but it's now inabevitable that it wl burn and potentially explode. >> not a chemical release. it's a fire seems to be what they're calling it thank you. we'll continue to check in with you when you get more. when we come back, expedia promoting it's cfo to be it's new ceo.
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and the new ceo will be joining us next but first a quick check on where we stand in the markets. we're finishing a positive month for the dow and the nasdaq in positive territory chlo ain ithtenogygan e lead more squawk on the street right after this break there's a denture adhesive that holds strong until evening.
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>> the home away integration is not yet complete what you'll be focused on as the ceo of expedia. >> the home away integration is going phenomenally well. the home away team is working hard on transitioning that business from a traditional listings business to a true e-commerce business and they're making phenomenal progress i was on a call with the team yesterday. they're really focused on not only improving the traveller experience but also the experience of the partners, introducing new tools to help make it easier for them to manage their properties and make the most revenue they possibly can and i think that home away will deliver exceptional things in the many years to come. >> uber is not totally unrelated to the travel business that you now run expedia. do you have any vision about how you can leverage this newfound close relationship between you
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at expedia and dara leading uber is there potential for integration there. >> there's no media plans. i think that dara is focused on getting uber into shape and i have the upmost confidence that he's going to do that. certainly though we have spoken over the years about how great it would be to have deeper integration of uber services into the expedia app or hotels.com app or home away app. i know how to get ahold of their ceo and their ceo knows how to get ahold of me. >> you mentioned how closely you have worked with him, what would be your expectations, him upon taking this position, what will he bring to this new role given the state they have been in from the public company experience? >> well he is going to just completely change that business for the better would be any expectation. he is a incredibly bright
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individual he has the highest intelligence i have seen. he knows the culture and he is humble i would expect him to do a lot of listening to get a feel for things when you pit a leader like him in int that business we can expect great things from uber in the coming years. >> when it comes to expedia of course you guys have shown the willingness to make a lot of different investments and as you pointed out some large acquisitions we mentioned home away on the last conference call you talked about tougher comps as you move tlud the back half of this on expenses because you benefitted from lapping over the first half of last year where you were hef individual up in association with an integration then what are you doing on expenses and what are your expectations when it comes to the investments
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the company made. >> we tried to strike a real balance. putting money into market management sales force to sign up more hotels around the world. last quarter we have 435,000 hotel properties there's over 1.4 million properties around the world so we have a lot of runway to go and we're also going to continue to invest in technology. above all we are a technology company. we apply our craft to the industry of travel but we're going to continue to invest heavily there as well. >> what can you tell us about bookings how are things shaping upright now? how would you characterize the travel economy >> well, generally it's been pretty healthy
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obviously these are peak months here in the summer july and august people do the bulk of travel the great news is that people are still traveling and we have certainly seen disruption in places like barcelona. not dissimilar to what we saw in paris and niece when these terrible things happen but of course we're such a global and diverse identified company that although we see isolated impacts generally the overall business performs well so i characterize the overall environment as very healthy. >> a lot of the analysts say this is a natural fit and continuation in the strategy you been the cfo for several years under dara one of the highlights of his tenure and this comes up all the time was the aggressive buying the m&a this company has done. are there any other sites for you to buy or are you going to continue this aggressive appetite to buy others
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>> we had a pretty big appetite and that's a by product of m&a and our desire to do deals but also opportunity we were faced withan unprecedented opportunity over the course of the last few years. as like forward are there opportunities? absolutely do i expect the same amount of activity as i saw the last couple of years? probably not although we'll still be opportunistic we're excited about our organic prospects in the business. home away is firing on all cylinders and if i was going to guess i'd say they're probably a little bit more of a focus for us over the next couple of years. >> you mention the hotel business does look healthy does that overtime as the actual underlying business improves make it tougher for you? if you're dealing with room inventories you would like all the rest of it there's a sense that expedia's
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business is counter cyclical. >> so i think certainly in times where there's excess inventory we do well from a volume perspective and when things are very tight, you know, it can be a little bit more challenging but we're talking about extremes here and we have been really what i would suggest is near very close to the peak of the cycle for a pretty long time now and expedia has been doing exceptionally well but i really have no con serns abocerns abou ability to control this business over the long-term we have lots of opportunity and i think expedia's position very well in the overall travel industry for the many years to come. >> we're in this new era of ceo, activism and moral leadership after we saw so many ceos step off of the white house councils. dara was an outspoken critic at some times against the trump administration and some of the policies do you plan to use your role in
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that sort of same, use your platform in that same role >> well, i think that dara was very wise in the way that he used his voice he spoke of policies against expedia. bans on travel were bad for us and dara was wise to take that stance and certainly i was side by side with him as well as we look forward i'm going to continue to actively protect the interest of expedia and that's my sole interest you may hear me speak out against them but at the same time, there's policies that are in our favor such as things like tax reform and infrastructure investment >> and finally, sir, anything, you've indicated clearly that you'll be following the path of your successor in many ways. anything you see yourself doing differently? >> you know, nothing immediately
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that comes to mind i'm going to do a lot of listening. i have my eyes on dara's parking spot so that might be something that i do quickly. aside from that no big plans. >> is it that much locloser >> just a little bit just enough. >> thank you for joining us. we appreciate it. >> he did join us every quarter on the results we expect that to continue as well. >> that's right. >> when we come back, president trump's new tax reform push calling for lower rates and a simpler tax code we'll discuss what that means for investors but first it could be the costliest natural disaster in u.s. history who will pick up the tab we'll talk to the head of fema's blood insurance program. stay with us tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident.
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good morning, everyone i'm sue herrera. here's your cnbc news update at this hour. a houston area chemical plant that lost power from the harvey floods was hit by fires and two explosions early this morning. the plant president said that it was not a chemical release but rather smoke from a fire
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he said they evacuated the area earlier this week so no one is in harms way. >> the walmart and the walmart foundation have committed up to $20 million in support of relief efforts. walmart is matching customer donations 2-1 in cash and product donations up to $10 million. the u.s. flew some of its most advanced war planes and bombing drills with south korea today. it's a clear warning to north korea after they launched a ballistic missile designed to carry nuclear bombs over japan earlier this week. >> and in britain people are laying floral tributes photos and personal messages at the gates of kensing on tton palace it was on august 31st, 1997 that diana died in a car crash in paris. that's the news update this hour sarah back to you.
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>> hard to believe it's been 20 years. >> the rain stopped but flooding dangers continue around houston and southeast texas this morning. hurricane harvey expected to be among the costliest natural disasters in us. history leaving the question who pays the bill among those on the hook the nation's largest flood insurer, fema's national flood insurance program which is already roughly $25 billion in debt from earlier storms joining us now in a first on cnbc interview, fema deputy associative administrator that directs the national flood insurance program. thank you for joining us. >> it's great to be with you thanks for having me. >> first an update on how many claims you received from texas. >> so it's a vast area i have 425,000 policy holders in the effected area. not all of those were flooded. yesterday i had 37,000 in file that's going to get updated at noon and that number is going to keep growing at a rapid pace.
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>> what about those that don't have flood insurance what can you do for them >> this is where fema has two ways to participate in and help those survivors. if they have a flood insurance policy we'll be able to file a claim with them and go through and pay that route for those that don't have insurance we'll be in a position to give them potentially initial help under our authorities and many of them will be seeking loans to help finance their rebuilding efforts >> it's not a great time for the national flood insurance program to be in this kind of financial shape. nearly broke is it your expectation that it gets reauthorized by congress in september? >>. >> we currently expire on september 30th this year congress has been working on this for more than a year. i'm confident that they'll make sure that we don't lapse the consequences of lapse don't
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even just effect this area down in houston but i look across tim pact it has on thouzing market national association of realtors told me as many as 9,000 closing a week would be impacted so i'm confident that congress would ensure that we have authority. >> would you expect that reauthorizing the program is going to be in it's current form as you know whenever you have one of these disasters people criticize it do you think a clean reauthorization or might there be changes >> it's too early to know. they moved through a piece they talked about bringing to the floor. there are clearly needs to address pieces of this program
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it gets to where we provide the discounts. nearly 80% of my policies are actuarily priced where it aligns with their risk but by law we give discounts to more than 20% of our policies they rolled it back in 2014 congress will have to make the decisions there. i have an operational lead related to that. we need to make sure that they have the assurance we'll be there for them and congress can look at this broader sense i'd love to see them do that on time with the multiyear reauthorization. we'll see if they can pull that off. >> well that's why a lot of people think this gets thrown in with the debt ceiling. is that something that you see
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happening? >> i'll leave that up to the leaders. >> finally how do you see the storm stacking up in cost. we've seen so many costly disasters lately how are you assessing this one at this point? >> let me just focus on the portion of the national flood insurance program it's too early to tell. i'm getting modeling every single day the bottom end of this storm is clearly north of several billion and i don't know what that top end is yet we still have people coming back to their homes i have 250,000 insured structures so when you look at the potential impact of this, it is enormous: at the same time, we need to be measured.
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there's a lot of uncertainty in the models they're bringing to me now in the days to come we'll have greater clarity on what the numbers look like. when i have it, i'll be happy to share it with you. >> thank you for taking time i know you're very busy and good luck with what you're doing right now. the director of the national flood insurance program joining us from fema. >> thank you. >> president trump is shifting focus to his agenda making a major tax reform speech in missouri he called on tax makers to simplify the u.s. tax system and stepped up pressure for bipartisan progress. take a listen. >> this is our once in a generation opportunity to deliver real tax reform for every day hard working americans and i'm fully committed to working with congress to get this job done and i don't want to be disappointed by congress do you understand me do you understand?
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>> joining us now cnbc contributor, i'm going to take the other side of a debate i know where you're going to come out on but i wanted you to respond which is we're not going to get this and we're not going to get it because even with dynamic scoring and even if it shows it could be deficit neutral you're going to have enough senators, 51 of whom you're going to need if we get reconciliation to say we're worried. we're deficit hawks. alternatively if they do show it won't increase the deficit there's enough senators that will say no i won't like it. you don't get there to the 51 you need what's the view that you have which i would assume is in opposition to that. >> there must be other problems. you nailed a lot of problems are there any other problems i should deal with >> there's certain to be great debate but i want to hear your view. >> my view is trump gave a very
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good speech yesterday and i hope he gives about 50 more of those type speeches. he basically linked simplicity and lower tax rates. he linked it to middle income wage earners the working class that have incentives to work more and save more and will have more money in their pockets. that's a very powerful argument for growth, for jobs and for wages. secondly he did what the white house has not done up until now, link the business tax cuts, both large and small to the ultimate beneficiaries which are wage earners. middle income wage earners they're going to win from more business investment and productive and higher jobs and real wages
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these are very powerful political incentives on the vote count, put ago side, your question did suggest they could get this deficit neutral i don't like revenue neutral i like deficit neutral but, but, i can think of at least three, this is the point of one of his key paragraphs trump won, i don't know 18 or 19 points in the general election she is going to be on the hot spot and trump singled her out i think most republicans are going to stay on board they like the growth they know they need a w after the health care fiasco so i think the politics play out well but i think the economics play
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out well here too. >> you mention the idea that cutting taxes results in higher wages. that's to be joined on the other side by people that say there's not enough definitive research that indicates that's the case that most of the gains will simply be returned in the form of stock repurchases or other things that will benefit the investor class not noengs of course you know the course is going to be out there that says the bulk of these tax cuts will go to the highest earning portion of americans not to the middle class. >> well, i don't know that's a measurement issue. >> well we don't have the details yet. >> i don't think the top rate is going to come down very much i'm not against by the way, i must confess my vices. i like investors i like people that get rich.
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i especially like the nonrich that get rich. 50% of american households through pensions or iras or what have you are invested in the stock market and i think those are all good things not bad things there's a lot of talk out of context that in 2004 when we had a one year repay triyags a lot of it went to shareholders for buy backs and dividends, david that's a good thing because those investors that get buy backs, presumably for a profit and dividends they will put that money to work. but what's missing is lower corporate tax rates. that was not in the george w. bush plan. this is my favorite part of the
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speech trump stayed with the 15% corporate tax rate that's kudlow. that's forbes that's steve moore and he gave a shout out to steven mnuchin that has said this all along hold your line at 15% large and small businesses i just love that this is what we talked about a couple or three weeks ago when i was there. he singled out mnuchin and gave him a shout out for hanging tough on the 15% rate and you have the standard deduction for individuals and much lower rates for individuals. and going from 7 brackets to 3 major push for incentive for business investment. say what you will, david, say what you will, trump has ended the war against business
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trump has ended the war against investment and already without legislation trump has either frozen, listen to this stat, he has either frozen or rolled back over 800 business regulations that were pending. that has been done by executive action and that's why you see confidence up and that's why you're seeing better growth. you're at 3% growth now. i thought that couldn't be done. >> well it was done two years ago on a quarterly basis during the obama administration, the question is can you keep it at an annual rate. >> it does effect workers and businesses so president trump indicating that he is going to ditch this obama rule of requiring businesses with more than 100 workers to disclose worker baby gender and
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ethnicity. this was all designed to try to expose discrimination and enforce equal pay. do you really think this is the kind of burdensome regulation on business that the president should be targeting? >> yes. >> why. >> every business group opposed that because wages are settled in the marketplace and by the way if i may, lower business tax rates will add productive to stimulate wages. you can't order -- this is this identity politics garbage that was put in by the last administration and continues to be used by the democratic party today. these are business decisions this is not government decisions. this is not a regulatory state. >> you don't think anything needs to be done to equal the
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playing field on gender pay. you think let the market decide. >> let the market decide how about this, the best studies i know show that when you equ equalize marriage, education and other factors the wages are virtually the same so this is all nonsense and unproven stuff and look the more trump can get government out of the hair of business the better off business will be. let me repeat, trump has already with these regulatory roll backs ended the war on business. he sending the war on investment with his tax cut plan and he is opening the door to new business start ups and new entrepreneurship and new economic growth. it's tile we had a chance. look last point is, we tried the
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heavy regulatory state, the last 8 years and bush wasn't great on this either. we tried that model. all it developed was 2% or less growth now let's try a differ model of lower tax rates and regulations and see if it works. try a different model. we tried to old model. trump is coming in with what we calls the american model give it a chance give it a chance it's our turn to try capitalism. >> we got to go. >> you have to come back larry we have to debate the gender pay gap because i totally disagree with you with one button every ceo knows they can pay women and men equally. >> that's the music. you can't talk >> i'll have this debate we'll look at the numbers. >> i'll bet you're not going to get your 15% rate either but larry as always been a pleasure. quick programming note do not miss an exclusive interview with the u.s. treasury secretary
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coming up at 11:30 a.m >> also why the residents of one small town in wisconsin are scaring big time activist investors and getting a check on stock at this hour a pretty broad based rally again in the markets though we lost a bit of steam here the s&p was up .5% we'll keep an eye on that for you when squawk on the street comes right back
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the market is about to slip he makes his bearish case on our website. more "squawk on the street" coming up.
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we want to show you live video we're getting from port arthur, texas. much is still under water even though the sun is out today. there are rescue operations on going. clearly, guys, the rain stopped.
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though the cleanup and still rescue operations continue trying to get people out of their homes that they still are out of the streets where it looks like they're canals at this point these are some of the image that's are still coming through what seven days after the initial hurricane harvey hit texas overnight. we'll keep an eye on all the images and share them as we get them in the meantime, let's get to chicago and the cme group. rick santelli has the "santelli exchange." good morning >> good morning. thank you. welcome to my guest peter chirp. we're going to have to move it along. breaking news cut into our time a bit. take our economic hats off put the trader hats on we have central banks all trying to micro manage. we have certain central banks trying to slow it down but in the end, you look at it like a giant position. central banks are just trading markets. they have huge position wlz it's in corporates in the case of japan, equities, in the case of all of them. treasury securities or sovereign securities what's going to happen when the world figures out that they're
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not going to keep accumulating even if they promise to distribute the positions slowly? >> i think in europe, you're going to see it first. you'll see it in the bund market they've been a beneficiary from the policy and then i think next you'll see it on the corporate bond market. if you look at european high yield, it's around 2%. so yield on high yields. basically, high yield in europe is less than ten year treasury i think once these announcements become clear, you'll get the market position ahead of time. you saw that on the way in the yields rallies and corporate bonds rallied before the purchases started. i think you'll see exact opposite happen on the way out you'll see the spreads wide and yields go higher. >> manufacture the option traders, peter, look at all the derivatives. they're looking at deltas. when we think about the positions, we should think about it in the same type of logic that in the end, no matter what central banks do, traders are going to be one step ahead of them the distortions experienced in corporates were led by in many
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cases speculators front running the banks on accumulation. as you pointed out, it seems logical they're going to do it on the epilog side of the distortions. your final comments? >> yeah. i think that's why you have to be very careful. i think u.s. markets are actually going to be led by europe and the yield side. i think they're going to be a key to treasuries. corporate spreads in europe will be a key to corporate spreads in the u.s. f those start backing up, it will have a crossover he vekt i'm focused on europe and the ecb has a tougher job. i think the fed has an easier job in terms of reducing the balance sheet than the ecb does. >> yes the strength in the euro is going to keep any type of normalization the big ecb balance sheet at large they don't want the occur enstoi go up. thank you, peter david, back to you >> all right and thank you, rick. let's send it over to jon fortt and get a look at what is coming up. >> you know about the treasury secretary. we're going to have box ceo aaron levy talking about the
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quarterer that company had it was rough the stock made up just about all of that loss found out where things are going in the cloud david? >> thank you, jon. there's a new threat to activist investing and coming from a small town in wisconsin with only 250 people our leslie picker is in wisconsin and she joins us now with more on that story. leslie >> hey, david. that's right pretty much everyone here in this town knows what a hedge fund s every resident we spoke with blames activists investors for the closure of this mill you see behind me saying that it led to the decimation of their local economy. and in a few hours from now senator tammy baldwin will be addressing residence and reintroducing a bill named after brokaw it would require hedge funds to reveal stakes greater than 5% in a four day window rather than the current ten days they would also have to disclose short positions and say whether they're working with a group of
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other hedge funds. lastly twhoeshgs ha last, they have to reveal all of the positions held in derivatives. she is a democrat from wisconsin and signed on a new co-sponsor, david purdue, a republican from georgia. she also has the backing of businesses such as home depot. starboard took a stake in the owner of the mill. the company that oenld the mill back in 2011 the former wasaw paper ceo said the public criticism caused potential acquirers, lenders and customers to balk. we'll have more details whether wh we speak with the senator later today. >> we'll look for that leslie, thank you. we head to a quick break don't miss steve liesman's interview with stephen ma nuchin' on the next hour and lululemon reporting after the bell don't miss our interview with the ceo tomorrow morning at 10:00 a.m. ete o"sawon e reet."n quk
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i know when i hand them the keys to their first car
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it's gonna be scary. but i also know that we're gonna have usaa insurance for both my boys. it's something that they're not even gonna have to think of. it's just gonna be in the family. we're the tenneys and we're usaa members for life.
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oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. welcome back out sides move on the energy market that the largest u.s. refinery may be shutting down
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for up to two weeks. this as flooding continues in texas. energy stocks gaining as oil prices move higher check out the move in gasoline spiking over 12% this morning and up over 25% in the past week it's highest level in over two years. now we'll send it back downtown for the start of "squawk alley. jon? >> thank you good morning it is 8:00 a.m. at uber headquarters in san francisco. 11:00 here on wall street. "squawk alley" is live ♪

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