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tv   Squawk Box  CNBC  October 7, 2014 6:00am-9:01am EDT

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>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching the futures this morning and they are pointing to a lower open. investors showing caution ahead of earnings season. traders are looking at the release of the latest fomc minutes on wednesday afternoon. take a look right now. you'll see dow futures are down by about 69 points below fair value. all this is coming after yesterday's gains petered out as we got into session. you'll see in super, cac down by almost 1%. declines for the dax in germany and the ftse in london. oil prices below $90 still, down by about 39 cents this morning. 89.9 a for wti. if you've been watching what's happening with the ten-year, yielding 2.409%. joe, you missed it last week, but there was a lot of back and
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forth questions about where we are headed on this yield. mark graham sends me a note every day reminding me he's been calling for 2% before we see something like 2% or 2.5%. check on out was been happening tt dollar. the dollar is up against the euro, 1 is.2596. gold prices at r at this hour, 1,206.10 an ounce. coffee, futures jumping to a two-year high. andrew, over to you. >> the ebola situation, north carolina drugmaker kumerick is providing an intrimtal drug to a patient being treated in dallas. this is with the approval of the patient. meg has been covering this story from the start.
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meg. >> good morning, appeared rue. first, news coming from the u.s. government about what it's looking to do to prevent further passengers coming into the united states from the affected countries with ebola. president obama yesterday afternoon saying the u.s. is looking at strengthening passenger screening, both out of the effected west african countries and into the united states. >> two additional passengers both at the source and here in the united states. all of these here in the united states, at least, we -- the chances of an outbreak of an he deppic here are extraordinarily low. >> this after the first case of ebola was corrected outside of west africa. a nurse in spain was confirmed to have the disease after having conferred with a priest who
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passed away. nbc cameraman has been returned to the united states and all options are being considered for him. the only u.s. patient to be diagnosed with ebola, the cdc director telling us here vaccines could be an important part of this equation. >> mag, i don't know if you know the answer of this question or not, but when you get a drug that works, a lot of times depending on when it's buy logic, there's different ways of making it. other times we've talked about this in the past. do you know the drugs that we're talking about that may have he kasy? do you know how these are manufactured and how quickly we could ramp something up if it works?
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>> they're all different, but what's exciting about brentadopidier is it's already in several trials. as you know, a less complicated manufacturing process than some of these buy logic drugs. some of the other drugs we're talking about are rna interference drugs. they could ramp up several hundreds of doses. it's interesting because it's been so far along with other viruses. >> and it's -- do you know specifically what goes into the -- when you say they could ramp it up to a couple hundred doses, i'm talking about a couple million. you know, within -- if this were the horrific black swan event that some have sensation allized as that narrative would go, and there this is no reason to think
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it is at this point, i wonder how long it would take to make a lot. >> it's not how long it would take to make a lot of that, but i think the fact that it's a small molecule, i think the manufacturing process is a lot less complicated there than it is for the r&a interference drugs. but, again, the answers we're hearing from public health officials, it's funding from the welcome tress, it could get 10,000 courses of the vaccine if it's shown to work and be safe. >> how quickly would we see this drug work or not work? >> in addition to getting the permission from the fda to use it on ebola patients now, they are talking about starting a clinical trial, potentially in humans. right now, the only thing we've seen from ebola is from a test tube. i don't believe they have animal
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models yet, although i think they're working on that. they know it can't problems in other viruses. in mr. duncan's case, he received the drug after having been sick for a long time. there is question about can it help him now. >> and that is because it's one that tries to stop replication? the virus at this point had a long time to replicate in his body. >> that's true. >> they talked about something that worked really well in monkeys, too. do you know what -- >> scott might have been mentioning -- there was a drug from japan, a japanese flu bug. that's interesting, but it hasn't shown data in humans yet. the w.h.o. says there could be 10,000 of that flu bug
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available. we've herds reports about that drug in the french patients. >> works with a lot of -- works with -- all these different viruses, meg. the -- >> brinkodopiviere. >> papaloma, polio, it's interesting. >> one thing that is interesting, joe, and i'd be curious about your thoughts are those are all dna viruses and ebola is an rna virus. there's been some question about why it would work in ebola. >> they may not know exactly why it does work. but if it's a nuke leo tide analog, it gets put into -- they don't work right, obviously, if it's not -- if it looks like one
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but who knows. meg knows her stuff. we'll street's banks may be under scrutiny once again. the justice department may unveil a new series of charges with alleged price collision and foreign currency markets. prosecutors are hoping to file charges against several banks by the end of the year with one expected to plead guilty. hackers who infill crated jp morlg y morlgan's company. several did see evidence of a cyber attack. several did, but didn't think their system had been breached.
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while testifying in court as part of a lawsuit brought by hank greenberg, he claims that the terms of the $85 billion loan package were too harsh. greenberg is seeking damages of $40 billion. former treasury secretary geithner and ben bernanke also are expected to show this week. >> andrew, you went off on this in your column today. you took a strons stance on it. >> it makes me crazy. it makes me nuts that we're even having this conversation. i've been talking to people on wall street who somehow all of a sudden feel hank greenberg and shareholders of aig were treated unfairly. and i -- the company watts going bankrupt. it's nuts, i'm sorry. there is some bizarre revision going on. >> it was amazing to hear
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paulson's testimony saying this was done for writ bugz. >> but that's not the point. >> you take yourself back to 2008 -- >> but the whole point was the to -- anyway, it's -- >> investors were -- >> it should have been a punishment of punitive instead of just trying to fix the -- you know, to stem the -- >> but if they let it go, investors would have gotten zero. >> i agree with you, because it was a company of how many people? and you're talking about 300 in connecticut that were involved with the derivatives. >> but they screwed everything up. >> they did, exactly. but punitively punish -- >> for five years, the entire country screamed and hollered that we were too nice to wall street and now all of a sudden we were too mean to aig? >> the country a lot of times, the opinions that the country
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forms coming from the new york centered media that gives coverage to fannie and freddie and 20 years trying to get people to own houses. >> punitively, yonl whether the goal at that point was to roll out punishment or -- >> i think it was staunchly honest testimony. >> i think it was what it was. and i think every decision they made was about -- and i hate to relitigate history. but every decision made was about how harsh can we be without undermining the system? why were they easier on banks than aig? i think the answer is straightforward. aig could handle it and they were right and they thought the banks couldn't. we will never know whether they were right or they could have been harsh or not. >> but it also begs the question because aig and others -- it was
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a liquidity issue back then. there's a question about whether the actions resulted -- the insolvent shi on or liquidity issue that took up the whole system. so you're punishing someone for being involved and the systemic issue that -- >> but there is no question that aig and every shareholder -- >> okay. it could have been left to general electric. >> general electric, they could have gone bankrupt if the government hadn't stepped in. are they all bad actors? do they need punished because -- >> they all clearly made mistakes and aig made more of them than some of the others. >> and by the way, had they not been rescued, i'm not sure that -- >> you would have seen the
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difference between liquidity and -- or whether a breakdown of the entire system causes you to be taken down with it. aig is in a completely different category. aig was at the beginning. they almost were the iceberg. and then the last season, aig's board approved this deal. they thought this was better than filing from bankruptcy. >> and i would argue they were right. >> it's amazing to me to hear paulson go back and say yes, this was partial retribution. i hand it to him for -- >> but they thought they weren't going to get this out of him. >> ben mochey, when he's been in and both on and off camera, you saw he indicated of course we're not going to be able to join in
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this. but he didn't dismiss the lawsuit as meritless, either. do you remember.? >> i do remember. >> call the entire board and have them testify as to what they did. >> but he's just crazy and he's got all these -- >> he has david woods representing him. >> he is wearing sneakers with a suit. >> but i liked your column. i thought it was -- >> thank you. >> i didn't like the column. >> have you ever ever written a column i've written? >> can i have all day? >> you have appear hour and -- well, two hours and 45 minutes. >> it could be a brighter holiday shopping season expected for retailers this year.
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the national retail federation says it expects sales in november and december to rise by 4.1% or $616.9 billion. that's a 4% increase from a year ago. diop line sales are expected to grow by 111%. a weak start to the trading week. everybody is talking about ebola. with october typically a nervous month for investors, should we expect more weakness in the future? darrel cronk, wells fargo private bank, and kubal slooekamar. nice to see you gentleman again, gentlemen. back to october in the month of
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crisis or opportunity, daily? >> usually probably more opportunity, i would say. you do typically get a little bit of a swooning down. although i would remind you when you look at the last 20 years, only five of the last 20 years has the fourth quarter done very well. >> you would buy with weakness or -- >> i wouldn't buy with weakness and i would probably differ on october, as well, joe. federal reserve look at october 29th wsh 1999, if you look at black monday, they were all october even. there was something what happens the major corrections, whether they are reversed or not always seem to take place in october. so this is going to be a tough month. we are seeing global developments which are not conducive. we have the german industrial production number falling sharper since the financial
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crisis. if you put two years money in german paper for two years, you get paid a wonderful negative 7 basis points interest. that's how strong the global economy is. >> it was a great number. so the dollar strengthens. you see gold. yet -- >> it did. >> so the yield is going down. >> yeah. we're talking about the yeel going down. since the last discussion five weeks ago, the ten-year is lower. >> and you would think with the dollar strengthening, you would think yields would be matching that. and the reason -- you explained the dollar strength because yields would be rising. but they're not, which means that yields everywhere else would be going down. >> no, no, yields will go down because what happens is i think money is coming to safe haven. it is coming into the german bund.
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it is coming into u.s. treasuries. so it's both pushing the yield down and crossing the dollar to be stronger. so the expectation is you see both forces at work during the month to come. >> anybody reed reading the newspaper, i guess we've gotten complacent that this reading is -- i'm wondering, it's almost like the 12 horsemen are showing up, whether there's an intro virus, there's ebola, cutting someone's heads off, very -- i don't -- and the market continues to go higher. >> i think, joe, at of that stuff is really important geopolitically and in the globe, the markets are not fixated on it right now. the markets are more fixated with what's going on in growth rates in europe, more fixated on what's happening with the u.s.
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dollar. although i would remind people when you look at the dollar and the recent strength in the dollar, the trade weighted dollar on a real basis is still 10% to 12% below what it was precrisis level, you know, '08, and i'm not sure that the dollar is as expensive today as what everybody wants to make it out to be. but if you take a short-term lens, it looks very expensive. >> we printed more than anyone else. but we can afford it, because of our economy, but we definitely have not been slouches in terms of printing money. >> that is right. the way in which quantitative easing in the united states is the dollar debasement technology. and what you see is other countries are following. you have a currency watch. you have the european central bank, the bank of japan that you're trying to do the same thing. the problem is not everybody can devalue at the same time.
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>> they can try, right? >> three years ago, the german yields were a hundred basis points more than the u.s. treasuries. today treasuries are yielding 100 basis points more than the german bunch. we've completely flipped that. >> which is probably why the u.s. treasury is still very cheap, meaning the yield is so high because when you compare it with the german bund, the money needs eventually to come into the united states to push the yield down here. so r selling things, sri? are you liquidating, are you raising cash? >> no, no. there are lots of bond that are attractive. stockswise, the you'll tell sector is good. talking about defensive areas, energy to some extent, health
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care. and all of those have continued to do well. you need to be presence and you need to have a presence in equities. >> gentlemen, thank you. the introvirus, d-68, is this the first year that -- >> it's first year in the why the idea that we have this all figured out. in the past, pandemics have been serious. >> if you look ba to 1917 in particular. >> you're right. >> i had to pronounce it off camera. you said it sounded like a cereal. >> meg has done so much work and then i think -- but you've done
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aig and all that stuff, right? that happened a long time ago. what are you guys going to do for an encore? >> i'm just waiting for the sequel. it's called too big to fail 2. >> that's all you really want. coming, you've heard of peer to peer lending that helps give people money to help pay off credit or small purchases. how about markets being kicked up a notch? these loans are about to hit the big time with peer to peer mortgages. plus, all the fears about ebola giving businesses that help people prep for the apocalyp apocalypse. we're going to talk to one company that has seen sales surge. "squawk box," the doom's day edition coming up right after the break, as well. financial noise
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financial noise
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welcome back to skb southbound. now one lender is eyeing the lucrative mortgage market. kayla tousche is here with this story. >> the mortgage market, andrew, is massive. sofly is a company that started several years ago, it's a platform to refinance student debt. it's inching into that very mortgage market. it's sxantding the pilot program it launched earlier this year for existing student loan customers in six states offering
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loans up to $3 million with just 10% down for some high credit bar borrowers. they have high income capacity and they also have low debt-to-income ratios. they're buying companies that have high down payments. sofi operates strictly within the guidelines set by the financial production bureau. but under those guidelines, the fico score is one of a criteria. c agney says the high quality of borrowers were the majority of whom have graduate degrees. >> there is always systemic risk in any kind of credit. what we've seen historically is these folks tend to respond very well to crisis. >> in nearly eight years, not a single borrower has defaulted on a loan. now banks and institutional
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investors are on stand by to securityize about $300 million of these mortgages to then rebundle to new investors. cagney says it could be a $3 billion for the company in a matter of years. everyone is going to say should they alternative finance companies be stepping into a risky underwriting market? when i talk to experts, they say this company is in a league of its own where the quality of borrower is so strong. >> what kind of rates do they get? >> it depends on how much you put down. if you're putting 20% down for one of these loans, you're getting just below the average rate for a 30-year fixed mortgage. if you're putting 10% down, you're going to get about 40 basis points above that. they're still extremely competitive. they say they're trying to build off of existing borrowers. people who have been maybe boxed out of the housing market because they had so much student debt or they couldn't afford to make a mortgage payment. now they're familiar with this company.
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they're used this company to refinance existing student loans and maybe they'll get a mortgage from them, too. >> and by the way, the company familiar with them know whether they would be able to pay back on that, too. >> they said the most they've ever had a loan go delinquent is 90 days. and they know the day of a payment where that payment comes in because of their technology. whereas with fannie and freddie, sometimes it can take up to 90 days. >> streamlining. >> yeah. and it's interesting, they promise a 21-day turn around for your application, which is pretty astonishing considering the logjam of applying for a mortgage these days. he was joking that he wants ben bernanke to come to refinance his mortgage. he said we could help him in a heartbeat when we have these old line financial products. that's not to say there's no risk in some of these products.
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and that's not to say retail investors should be pieg on the other side. it's an interesting development. >> kayla, thank you very much. still to come, shares of yum brands have been getting rushed over the last three months, down around 13%. is america's fast food police the big reason for the slide or does yum have bigger issues? as we head to break, a look at yesterday's winners and losers.
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he really loves that thing. no. not exactly. to attain success, one must project success. that's why we use fedex one rate. their flat rate shipping. exactly. it makes us look top-notch but we know it's affordable. [ garage door opening ] [ sighs ] honey, haven't i asked you to please use the -- we don't have a reception entrance. [ male announcer ] ship a pak via fedex express saver® for as low as $7.50. [ male announcer ] ship a pak via fedex express saver® big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift?
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ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.
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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. we have some headlines. as you can imagine, they involved the ebola situation. a nurse in spain has now contracted ebola. this is thought to be the first known case of where the virus was contracted by someone that wasn't in west africa. so the person came from west africa apparently to spain. >> he was there for three days. he dayed on september 25th in spain from this gentleman who had been infected in west
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africa. >> officials say sh increases the great concern over oh bowl la, showing health care workers are at risk even in more sophisticated medical treatment centers. >> there are now four patients who have been brought back to the united states for treatment. two of them released from emory university hospital. there are now two, i believe, in home ma what. >> is there going to be someone in texas? >> that's what we were just talking about off camera. to me, you're in a much more dangerous position in texas. if you're one of the blas ambulance workers who arrived to pick up the patient in dallas when he was at at apartment. they weren't wearing the full scrubs and everything that you would be wearing if you were this nurse in spain knowing what you were dealing with. that is the question. >> and we're right now in the zone, right? 8 to 11 days after? >> the 29th is when he was put
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into -- the 29th would have been i think the monday when he was picked up by the ambulance. >> so 8 to 11 days is when they really are -- i mean, 21 days is the full period. we will see. >> we should tell you about other news this morning. general motors is turning to facebook to get ignition switches fixed. gm is sending out right now, less than half of the owners in question have, the automaker is standing up and in some cases has gone to owners vehicles. that must be the way to do it. sometimes you get these recall notices and you don't pay a lot of attention to them in the mail. if somebody shows up at your house and says, here is a loaner car. >> yum brands set to report third quarter results after the bell today.
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shares of yum getting crushed lately. you can see take a look there. almost down 13% in the last three months. another name that's been under a lot of pressure in that space, buffalo wild wings. that stock fell 4% to kick off the week after getting hit with a downgrade. what food stocks can investors sink their teeth into these days? good mortgage to you. help us try to understand what's going on both in what we're seeing on yum, what we're seeing on the buffalo wild wings and where would you put your money in fast casual at all these days? >> well, yum is more of the international issue. and it's been for a while.
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but in terms of buffalo wild wings, it's a commodity pressure story here. what we're seeing is that they're going up much faster and in much greater magnitude than our previous expectations. given where feed costs are at low levels, we usually see chicken supply increase up. but the pliers are acting much more rationally over the last few months. that supply increase scenario has been pushed back. so now you're seeing pressure on wings which is around -- in the low 20% of buffalo wild wings. and you also might see pressure on the chicken breasts, the boneless wings which the contract is up in march. so the numbers are going to have to come down. >> what other restaurant chains do you think are going to get hit by this increase in the price of chicken? >> the cost of sales.
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>> give us a lift. who has more than 10% exposure in terms of chicken? >> casual, you know, for everybody from zoe's chicken and zoe's kitchen, i should say. >> the exposure can be offset by a surprise increase. and some graph dating towards those names next year as opposed so those who would be under pressure. >> krispy kreme doughnuts, i think, are our best position. i think the price increase last
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year gives them, you know, to take the top pride. the list goes on and on. >> krispy kreme doughnuts is not showing that version of their doughnuts, right? >> right. >> we're going to leave it there, nick. thank you for joining thus morning, helping us figure out the what the price of wings is going to befr oh the next year. >> thank you. up next, been ae bowl la outbreak driving all sorts of extreme preparation. we're going the take a look at some of the safety and security kits being sold and who is buying them. that will be right after the break. opportunities aren't always obvious. sometimes they just drop in.
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welcome back, everybody. former treasury secretary geithner will be taking place in the former aig trial. that is expected to start at 9:30 a.m. eastern time. if yesterday's testimony is any clue, this could get interesting. more fed speak for the markets to absorb, including a speak from bill luddy. on the earnings front, yum brands is expected to roll out quarterly results after the bell. joe, over to you. >> beck, thanks. prepare for the worst from the ebola threat. morgan brennen takes a look at some of the safety and security kits being sold. i was thinking about how many times hollywood has looking at
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the pandemics. there is nothing ta causes a more visceral fear than the potential of some unseen fatal pathogen. and i'm sure that sales are going to take off, a lot of them. >> anytime you see any kind of pan dem in, bird flu, you tend to see these spikes. if you take a look at any doomsday prep site, ebola is front and center right now. specifically what to buy to prepare for the worst. latex gloves, particulate masks, these are made by kimberly clark. this is a microcap that surged 23% of the past month, specifically on ebola headlines. hazmat suit res in high demand right now. dupont says it's tripled production. sales of full body suits have jumped 250% last week on amazon. that was after the first diagnosis on u.s. soil. another name to watch, microcap
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lakeland industries. that's up 36% on -- in the last month on its suit, as well. but speaking of amazon, that is when many are getting this gear. so you can get everything from gas masks to infrared thermometer guns to hand sanitizers. these are all listed there and in many cases they're out of stock. that's just in the past week. other names selling friendly products, home depoet, walmart, costco and ebay. this is certainly taking off. >> isn't this more than just the average flu season? sanitizer i think everybody wants right now. you've got the d-68 virus, whatever it is. i will admit i bought hand sanitizer, a lot of it recently. >> yeah. it's a good question. it's hard to december out from that data. that's why i mentioned those microcaps selling products specifically geared towards ebola. that is where you're seeing the biggest surges from investors in
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sales. >> are people buying basic things like canned food and waters? forget about all this other stuff. if i was really anxious, that's what i would want. thank you. >> he lives in the middle of new york city. you're toast. oh, we're going to get to the guests. i wonder if you google preparedness, there must be sites that have all kinds of instructiones. >> oh, baby. this brings out the anthropologist in me. there are huge followings. >> bottled water, canned food, i guess, probably? >> bottled water, canned food, medical supplies. food products where you just add water. the one thing we're not seeing, at least at this point is increased gun sales. >> you don't have a go back show? >> i don't any of these. i'd like to get some water, you know, put some water down -- >> because you're going to use it, anyway. i ordered extra water.
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>> recently? >> yesterday. >> crazy about germs. >> and i'm not sharing with you guys when they come because you're making fun of me. morgan, thank you. >> sure. let's talk about dooms day preppers across america. joining you right now is david scott, founder and ceo of life secure emergency solutions. the first u.s. ebola case hit headline sales and his company jumped 30 found and that is just in one week. david, thanks for joining us this morning. >> thank you. good morning. >> we could say 30 fold, but was anybody buying this stuff before or is this an increase off a very low number? >> since 2011, there's been almost no sales of these kinds of products. it's just now been in the last few weeks with the headlines around west africa. to give you the best idea, in the last three days, we've sold 45 times the sales that we did in the same period of the week prior. so it's taking off and people are taking attention to the risks at this point.
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>> you know, i don't want to be too alarmist or say this is because people think there is an imminent situation where an ebola outbreak is going to occur in the united states. a lot of times the headlines will push you in this direction and it's not a bad idea that they have in the case of a hurricane or something else that might happen. >> i think that's a lot of what we're seeing right now. it's not so much about ebola itself, but people are being reminded that we do live in a world in which infectious disease can move from one continent to here in the united states just overnight. so they are getting more prepared for what may not come even in the next few months, but certainly at some point there's the risk of a larger outbreak of some kind of infectious disease. >> so what tends to be your largest sellers, at least at this point? >> larger seller, our extended infection protection kit. those that provide infection protection over a period of, say, 30 days. so gloves and masks and eye shields, hand sanitizers, surface sanitizer. that's what's really selling. you can tell the larger kits
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begin to sell, people are taking this more seriously. >> and some of those things are just -- like evacuation kits, i think we liveded something that includes something like water, food, those are things you wouldny if the electricity went off. >> exactly. people are being infection production products. at a time, they're buying go bags, water, food, other things to go along with it. a lot of people understand that the very best thing you can do when there's an infectious disease outbreak is to keep yourself isolated as best you can and stay away from where it's happening. >> okay. david, i want to thank you very much for joining us today. >> thank you very much. coming up next hour, we're going to tack to the ceo of new york's mt. sinai hospital. how ready is his hospital to handle a patient that walk necessary with ebola? but first, more news, one of joe's favorite stores and it's not pretty. "squawk box" returns just after this. ameriprise asked people a simple question:
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welcome back to "squawk box" this morning. one of today's stocks to watch is the container store that joe discovered over the summer for the first time. >> my idea. how about a store that just sells containers? >> you had that idea. they stole it from you. check out shares of the container store. they're not selling as many of those -- is it because -- >> i don't know.
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>> i would think if your picture was on those boxes, they'd sell a lot. retailer sliding in late trading after posting a revenue. joe of course pulling his license for them to use his picture on the boxes. that's not true, but that might be some of the problem. >> i understand the rationale. i think new york city has a big one. has a big container store. for places where you're space constrained. >> but it's the opposite -- >> i bought some stuff for my jewelry. they have things to put on a hanger to put them in. it's good for closets. >> i don't want to say it's the exact opposite. but if you have a home with a basement or attic, people oftentimes buy containers to put stuff in. >> they have these nice glass ones for sand that you could put in. >> what happened? it was $48. it's $19 now. >> i explained i heard you pulled your license on your
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picture. >> people want to know the real reason. do you know? >> people aren't buying boxes. maybe they've all gone to cardboard. >> you would think that an unimproving economy would help a container store. >> i'll try to find that out. >> while she's coming up for an explanation for all of this, we'll tell you consequences of missing out with apple. the case of gt advanced technologies which makes scratch resistant sapphire glass which can be used in the making of smartphone class. but talks broke down and now gt has filed for bankruptcy. the company ceo saying it's not going out of business and that its underlying fundamentals are strong. apple has said last year it would invest $700 million in a sapphire factory run by gt. let me tell you more about the container store. just had an ipo -- talk about
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this first. >> okay. it was i think three or four weeks ago before the latest apple -- i'm trying to think of where i was. some guy i didn't know started talking to me and said the gt, wait until you see this. he talked about how heavily shorted it was. and they make the sapphire glass. that was the stock. and it was heavily shorted and it was 12 or 13 when he was telling me about it. then it went down to 9 or 10. and now it's 1. it's 1. and bankrupt. container store? >> very quickly, same store sales were down 0.4%. they've been touting new stores. with a retailer, it's the stores that have been open are the ones where you make money. it's expensive to build new stores. still to come this morning, we have the results of a new report saying this could be a brutal fall for the housing market.
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the next on ebola watch. how prepared are our hospitals if it lands here? retail sales for the holidays. the forecast calls for some spending and we're going to go inside the numbers. >> three, two, one! and behind the wheel are hands free devices in your car really helping you keep your eye on the road? second hour of "squawk box" begins right now.
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good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the futures this morning look like you're going to see some red arrows. we've seen things peter out in the session yesterday. this morning the dow futures are down 63 points. s&p down by more than 8 points. also the 10-year note is yielding 2.412%. in our headlines this morning, one source of weakness is coming from european. markt markets there have been hit hard. take a look at the european markets right now. down across the board which also point out ebola, the first case transmitted we believe outside of west africa. that happening in spain. some questions this morning about potential other victims too. is that is what you're seeing here reflected in these markets.
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in france the cac is down. the japan unit of mcdonald's is forecasting a loss for 2014. the operation's been hit by the food safety scandal and tough competition from convenience stores in that country. mcdonald's shares at this point unchanged. >> let's provide more detail on the ebola situation becky was just referring to. spanish authorities are now investigating what could be the first case of someone contracting the disease outside of western africa. here's what happened. a nurse that had treated two spanish priests who died from the disease was infected herself. now, the nurse crossed paths with the sick priest in a hospital in suburban madrid. right now she only has a fever and officials are drawing up a list of people she came into contact with so they can be monitored. all this is happening as the white house draws up plans on conducting additional passenger
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screening method for the ebola virus. >> we're looking at protocols to do additional passenger screening both at the source and here in the united states. all of these things make me confident that here in the united states at least we -- the chances of an epidemic here are low. >> so far not considering a travel ban from west africa. also planning to step up pressure to other countries to continue to aid the fix of the disease. we're going to speak to the ceo of mt. sinai hospital. he'll tell us how prepared they are if someone walks in and says they've come from west africa. >> latest headlines in spain indicate there have been two other people who've been admitted to the hospital and quarantined with symptoms. that raises questions for this. they have not tested positive for it. they're also monitoring 22
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people the nurse had come into contact there. >> you really need to, like, talk to experts to figure things out. because the knee jerk reaction -- i did a radio interview. a lot of people saying close off travel. but then you hear from the other side that says if you do that it makes it less likely that part of the world take the right steps to contain it there. so you end up with the thing you're not expecting, unintended consequences. >> if you don't contain it there, then you will see more cases here. >> so people shouldn't be flying off half cocked saying shut it down. i remember for the market, sars was really scary. and we had a conference, a major hedge fund guy. that was the one thing he said i'm out of the market because of sars. nothing ever happened.
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then bird flu. we were worried it was going to start being transmitted to humans. >> that it would jump. >> and there were kids using chicken heads to play baseball in certain countries of the worl world. do you remember all that? this has moved further along than any of the others. >> frightening when you listen to the w.h.o. everyone we talked to including dr. scott gottlieb who was on yesterday, said you need to be containing the problem in west africa. to do that you need more help and supplies there. but it does raise questions when you see this in spain as to how prepared westernized medical institutions are for dealing with these cases. >> when it came here and we said it's the first case in the u.s., what we meant was it's the first one that we didn't bring back on purpose. to treat someone. >> right. >> because when you bring someone back, you don't let them with other people.
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>> but he had just come from liberia. that's where he picked it up. right. after bucking the trend the past few years, major averages are performing now to historical september and october standards. on average those are the weakest months of the year. but what about in the past start thinking about a flight to safety and maybe there's some opportunity here. with us now is abigail doolittle. it's always different history, but they say sometimes it rhymes. abigail, what should people do in september and october? but i don't remember any other septembers and octobers with ebola and isis and everything else. i don't know if you can make blanket statement zbl. >> true, although i would say there are cyclicalties shows in the market at this time. i would think we're starting to
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peak out a bit. we saw that in 2007 and 2000. so to that point of history and rhyming, i think we're there. in termins of what could spill e market over, it is hard to say. it's like walking on top of a tight rope. you fall because you're on a tight rope. when we look at broader charts, an interesting picture is starting off with the currency markets. the dollar has gained attention recently but the euro could take center teenage. a monthly chart shows a nice uptrend. it's started to reverse into a sideways trend. could be the straw that breaks the camel's back. below 119 look for a move below parity. that goes back to becky's point in the weakness around europe. but that it could start in europe. backing that idea is the bond market. when we look at a long-term down
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trend this is clearly bullish for bonds. not even was able to break above that. now i think we're poised below another. look for a move at least to 164. i stand by my call we're going to see 1% or noer on a flight to safety and then probably safety. this index is being talked about a ton right now. and for good reason. when we look at that long-term monthly chart, we see that the almost parabolic uptrend out of the 2009 lows is not a picture of stability. and it's starting to reverse now. that promises a reaction down. in my mind, minimum construction of 25% to 30% but similar to what i was on last time. it could go lower. back to the question, i think investors need to be cautious here, be aware of the reality, and if the markets deteriorate plan to get defensive. >> did you just -- what did you say was going to 1%?
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your target on the 10-year yield is 1%? >> below 1%, joe. probably 75 bips or somewhere in there. strictly based on the technicals. this is a shaky system. we've been coming in and out of these dips on the extreme conditions of first the tech bubble, housing bubble, now what i've been calling the fed bubble. if at some point it does burst, you could see a real flight to safety. then be in a situation where the fed's going to have to add back. so it would be first flight to safety and then policy driving it down. >> general electric and verizon and 4% yielders then? >> if the stock market goes down like -- >> why would it go down? there's nowhere else to go. if you're at 0% everywhere else. >> if you have a systemic risk off crisis like in europe. you have the weak economy there. we continue to have a whack a
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mole game system. god forbid if the situation between ukraine and russia flares back up -- >> what asset class -- would you just hold cash or buy gold? >> no, i would not be buying gold. >> take your medicine? take 70 bips? >> you know, well, what i would do is -- first of all, there's no reason to panic here or be fearful. if the markets start to deteriorate, investors need to -- >> you just made me fearful. i'm panicking. >> no, no. >> i'm having a panic attack. >> you don't sound very panicked, andrew. but i think investors need to be prepared to reduce portfolios. this is not a matter of shorting the markets. it's a matter of being defensive if they deteriorate quickly. if we look across asset classes, there are signs we could see it. >> you're right. he's not panicked.
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another systemic crisis means another too big -- >> next movies. you know. >> abigail, thank you. >> like a vulture. >> circling around. talking about being a vulture, is the housing rebound in serious jeopardy? we could see home prices dip across the country by the end of this year. i don't know if there's a silver lining in this. diana olick now. you're saying we could be in far triple dip. what does that mean? >> i'm say on prices, it's a possibility. home prices shot up from the bottom because of big demand from bargain basement distressed properties. as that goes away, so do the price gains. shrinking now for 11 straight months. national prices are up 6% to 7% from a year ago. last year at this time, they were up twice that much. now, the folks at core logic who will release the latest prices in an hour claim that the limited supply of homes for sale will keep prices in the
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positive. but analysts at clear capital say prices could go negative nationally by the end of this year or the start of next. there is your triple dip. now, they use the west as the canary in the coal mine. price gains coming down sharply because so, too, are distressed sales nap drop in the west will be enough to create that third dip. analysts at credit suisse also say for the first time home buyer costs are approaching recent peaks because of higher rates, higher prices, and higher mortgage insurance. and because of that, they've actually lowered their estimates for housing starts for 2015 and 2016. so i'm not saying it's a for sure thing, but the possibility is starting to be raised. >> thank you so much. good to see you. i'm remembering this now. we're going to move on quickly, but people are writing in do you remember there was a run on plastic sheeting?
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>> i just saw this on twitter. >> plastic sheeting and duct tape. ten years ago from sars or bird flu. their house was going to be covered. sealed off with duct tape and plastic. and it's been sitting around for 11 years. >> well, every time something like this happens, people stockpile this stuff. water, you use anyway. you're going to drink it. not that much of a freak. when we come back, we're going to talk a little bit more about how prepared hospitals are for an ebola outbreak and what steps need to be taken now. the ceo of mt. sinai's hospital will join us after the break. and later, driven to distraction. are hands free devices really helping drivers keep their hands on the road? our phil lebeau with the latest. "squawk box" will be right back. financial noise
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financial noise financial noise
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welcome back, everybody. the director of the cdc told us right here own "squawk box" yesterday he thinks it's impossible to keep ebola from entering the united states. so the question now becomes how prepared are our hospitals to handle it once it lands here. here to walk us through that is dr. ken davis, ceo of mt. sinai health care symptoms. his hospital had a scare back in august. that was not the case. that patient did not have ebola. >> that's right. blood work from that patient
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proved negative for ebola. what's interesting around that patient, from the time he entered mt. sinai to the point he entered isolation was 11 minutes. so if a hospital is drilled, has the right equipment, it's easy to handle this problem. but it's a matter of preparation and drilling and having the right equipment. >> and obviously mt. sinai was ready for this. that didn't happen in texas p z presbyteri presbyterian. >> we were prepared. to this date we've had four patients come into our health care system who had possibility, remote, it turned out. all of them were negative, of ebola. >> what was he tipoff? they had recently been in west africa? >> been in west africa, had fever and gi symptoms.
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all cases we had them in isolation about the first time as our first patient, 11 minutes. >> what happens when you're at a hospital outside of new york city, maybe outside of these medical systems. i would have thought texas presbyterian would have been better prepared. they themselves said they were preparing. but something got missed. >> let's start back on what hospital needs. hospital needs the appropriate equipment. so they have to have isolation rooms. they have to have all the gowns. they have to have the protective gear that you need. but much more than that, they have to drill in what to do. and that is a lot of staff. that starts with the emergency room staff, nurses and doctors who have to identify when someone comes in with a fever and gi symptoms. you have to ask about their travel history. and if the travel history comes up positive, put them in isolation right away. but how do you put them in
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isolation? the transporters, are they going to be wearing the right protective clothing? is the room prepared appropriately? when the patient leaves the room, is it disinfected appropriately? so it's physicians, it's nurses, it's housekeepers, it's blood handlers, it's the pathology lab. everybody in that chain has to be drilled. for example, just a few days ago, we had a secret shopper who came in to our hospital to see -- so we could check that everybody is doing the right thing. >> someone you hired to come in. >> someone we hired came in, masqueraded as an ebola patient. we responded well. but then we had a 45-minute debriefing with everyone involved in that case to make sure we'd done everything well. >> you should do "undercover boss." i'll tell you what is -- what most people think about with hospitals. and that is just sort of a murphy's law type of situation.
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even when we were talking about cost containment with obamacare, one of the things we were going to tighten up was hand washing and staph infections. and you hear the statistics of how rampant things not being cleanly in hospitals are. at the average hospital you think staph is on every doorknob and that nobody is doing the things necessary from preventing things from happening. if you're not a top shelf place, why should you have a high degree of confidence the hospital is being run in the manner it needs to be? >> because i think that this isn't a matter of resources so much as it's a matter of training. and the salience is so high now particularly after what happened in texas that it would also be remiss for hospitals -- administrators not to get this right. >> the head of the cdc told us
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yesterday this was a learning experience and people are more on alert at this point. we know that ebola is difficult to contract. it's not like picking up the flu. but at the same time, we are now learning of a nurse in spain who treated a patient there and now has symptoms and three other people who have been hospitalized with potential symptoms there. and i just wonder, we thought westernized medicine was the way for dealing with this. what does this tell sinus. >> without knowing the details of what happened in spain, it's hard to know why the nurse contracted the symptoms. has it been confirmed that nurse has ebola? >> no. i think they're saying they suspect she has it. there are four people who have been put into the hospital. her husband, another health care worker, and another patient i think from africa. >> remember, you have to have a portal of entry to really facilitate this disease. maybe the nurse had cuts. maybe the nurse was in inadequate protective gear. maybe that hospital wasn't as well trained as it should have
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been in how to take care of that patient. we can't extrapolate from single cases to the notion this is an epidemic that's going to sweep us away. this could have been mishandling of a single patient. >> fortunately we only have single cases at this point. >> but not in west africa. >> right. >> the cost of finding people who will do this work, meaning one of the things that happened in dallas was they couldn't find people to clean up -- do the cleanup work. that actually was a tough thing to find for them. is it easier to find in other cities in america? and what is the cost of finding those people? i imagine if you -- if i'm doing that work for you, i'm charging you a small ransom. >> well, what i understand, the hard part in dallas was getting the permits to move -- >> they had to move federal permits in -- >> to move the debris. in our hospital, the issue for
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us is just getting an adequate bleach. we get bleach. it's just cleaning up. it's normal housekeeping. this is what you do in an isolation room for any serious disease. we're all trained in how to do that. i'm kind of flabbergasted with some of the issues that went on with that chain of dirt that they had to get rid of. >> doctor, overall though, you sound very calm about this. you don't sound overly concerned. is that a fair assessment? >> i'm not overly concerned. i'm more interested in questions like this. there are a number of treatments that are being developed. they will be in short supply. they will be bilogically plausible in some animal model. at what point do they get into people and how do we tell whether they're really working? i'm thinking about the next step. because science marches on and we will eventually have vaccines, antibodies, and drugs
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that may stop this virus from replicating. but how will we know they really work? when will we administer them? who will we administer them to? and how will we get really good data to validate whether we have a therapeutic. >> thank you for coming in. >> thank you. when we come back, we have much more to talk about with the markets. stick around. "squawk" will be back after a quick break. where the reward was that what if tnew car smelledit card and the freedom of the open road?
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big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.
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coming up next, hard to believe but there are just 11 saturdays left before christmas. after the break we're going to take the wraps off the first look at the holiday season for retailers. we're back in a moment. ging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. it's in this spirit that ingu u.s. is becoming a new kind of company.
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welcome back to "squawk box" this morning. let's take a look at some of the headlines in the news. we're going to get a fresh read on the u.s. labor market this morning. the labor department releasing its august report. month lis measure of job openings. the government is also out with august consumer credit figures. that's coming at 3:00 eastern time. also samsung says it's heading for its first drop in annual profits since 2011. that follows a quarter in which it hit a three-year row. a drop in the smartphone market
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share largely to competition from apple. we've just gotten word that sodastream shares have been halted due to news pending. that company has long been considered a takeover target by one of the -- >> 27 now. >> market cap is $575 million at this point. >> used to be a billion dollars. >> we'll keep our eyes on it. >> 20% premium and still way below the high. all right. let the shopping countdown begin. it's hard to believe, but we are just 11 saturdays before christmas. this is a way to panic me. i have a lot to do between now and then. this morning the national retail federation is out with their forecast for this season. and the headline is they expect that this will be the best shopping season since 2011. joining us exclusively to break down this report is the president of the nrf jack shay
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and our own steve leisman is here as well as courtney reagan. take us through the numbers. >> why do we have an army of people on this? because it's so important. the season is a made, a lot of the economy is made here. this is a good number and i'll explain why. the last two numbers were lower than this, the prior christmas seasons. and the ones before that which were higher, there were a lot of bounceback from negative numbers in '08 and '09. but this number looks like it's real. >> what is the number? >> up 4.1%. which is pretty solid. it should be a good real number if you're counting on low inflation here. the issue, though, is i'm wondering -- and i'm going to ask jack on this in just a second. he's the chief economist at the nrf. whether or not this is before oil prices went down or after. and if it's before, i think the number could be even better. that maybe there's this kicker coming along with a bunch of
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economists. there's notion that the oil prices are declining at the right time. >> why don't you answer that question for us. is this pre-oil decline or post? >> we just did this forecast about a week ago. and i'm expecting that gasoline prices being lower and of course remember last summer we had had a very moderate summer. so you tilly costs for consumers were low. so i'm thinking at the 4% number, that could be the lower bound. >> it also comes by the way, becky, maybe we throw this to courtney here. with a forecast for employment of 725,000 seasonal workers. that's bigger than last year. why would retailers be bringing on more people when there's questions about big boxes. >> we talked about showrooming for a long time. one of the big trends we saw in retail. it was a real phenomenon where folks would be in the store, look at items, then buy them online. now we're seeing the opposite.
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we're seeing web rooming where we're doing the research online. we can read reviews and look at the specs more in detail. then we can see them in person. you know all the background. now i can touch and see and feel the model. >> you need more people in the stores because people will buy in the stores. that's the opposite of what people thought. >> it happened with back-to-school shopping. people were web rooming. there's something about wanting to see and feel the product. >> i want to bring matt into this. matt, the rumors of the demise of the retailers used to be greatly exaggerated according to courtney there. >> exactly. listen, i think you hit it on the head when you observed that as goes the holiday season and as goes retail, so goes the economy in many ways. so i think there is a lot of
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optimism about the fact we're going to do much better this year than a year ago. and if you think about where we were on this day a year ago, we were one week into the government shutdown. that took billions of dollars out of the economy. it damaged consumer psyche. we were at a dinner with a dozen retailers and they predicted on september 30th if the government shuts down, the holiday season is not going to be a good one. we were also last year working against a short holiday calendar when we were up there in december, we talked about that really short selling season. and we don't have that this year either. so i think there are lots of factors contributing to this. the economic factors you observed. and there's a lot of innovation going on. people taking advantage of social media and mobile platforms. all of that driving a lot more economic activity and interaction between consumers. >> i just have an omni channel
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question. it seems to me it's very hard to actually track who spent time in a store showrooming and then went online to buy. and it's hard to track who was actually hanging out online, doing all of their research then shows up in the store. >> not to mention who's naughty and who's night. >> how does a business especially a retailer figure out the value of having the store or physically having the website and being able to ascribe value to that showrooming experience. >> this is where big data comes into play. you've got all these firms -- >> can you actually figure it out though? >> not to a precise science, but you can get pretty close. a lot of these consumers are enabling the tracking devices on their phone to push promotions when in the store. you can know they're opting in. they're allowing you to know they're in the store in order to get something in return. >> you can use anecdotal why are
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you laughing? >> because you're pointing to yourself. >> samsung tvs online. i bought two at best buy because i went in and they were there and the guy knew all about them. >> good guy there. >> so did you web room? you looked online b and bought in store. >> right. >> because you go in there and there's a guy to help you. >> there's no difference on a best buy retail price really now and a web price. so why not go in and have someone say, no, the reason you get this is because the darks are darker and blah blah. >> can i ask matt a question? would you tell me where we are in the retail process here? are the bubbles and little angels on christmas trees, are they coming to port and being unloaded right now? >> when we were together in july, we talked about the potential of a sport strike on the west coast.
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we were concerned then about the things that might be coming in and going on the shelves for the holiday season. the supply chain is sophisticated. there's a lot of sophistication that goes into the way you time that and are thoughtful about when you order and when they get here. a lot of these things are going on shelves now. and retailers needed that seamless transition from one season to the next to make that happen. i want to go back to one second to the observation andrew made about omni channel. i think in a few years we're not going to talk about a.m. knee channel at all. it's going to be all retail. when do you identify who gets credit for which part of the sale when someone's looked online, they went to the store, they saw it they want it. at some point it's indistinguishable. and it all goes to the bottom line. so the distinction that's existed historically between bricks and mortar and online is fading away over time. at some point in the not too
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distant future, we won't even talk about -- >> before we go, i want to bring another question back to you, jack. we have talked a lot about a very positive glowing forecast. but we continue to hear every day themes about how the job situation is worse than the 5.9% unemployment rate would tell you. people aren't seeing income growth. customer confidence takes hits. how does that impact your forecast? >> actually, it's key. because if you first of all look at disposable personal income, we've been hitting 4% for the last few months on a monthly average. also if you look here later today on the use of credit. so there has been a little bit marginally improvement in the use of resolvolving credit 37 te are the elements for the ability for consumers to spend this
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holiday season. >> is this still a tale of two economies where the haves have a whole lot to spend, the have nots are not spending. or is this growth across the board. >> well i guess i'm going to side we still have a tale of two economies. there's no doubt there's bifurcation in the income world here. even still i would like to put out the premise even though we've had slower wa eer wage gr. the retailers come from behind and start to be resilient. be but that's where confidence comes in. that's why we'll watch the confidence numbers. >> very closely. >> as we get close to christmas. tells people how they're going to do it. >> steve, i know we have more to talk to you about later this morning with the latest research you've seen. >> huge poll. >> we're going to talk about that at 8:30 a.m. eastern time.
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we'll see you back in a bit. courtney, matt, jack, thank you for joining us. >> were you exclusive or were you two exclusive? >> we were both exclusive. >> to us? >> together. you've never had us together exclusively. >> but you're coming back without her. >> so that won't be exclusive. >> thank you. up next, sodastream falling flat. even though the stock the halted, we're going to have is the reason why next. so it's not what we were thinking, parentally. >> nope. >> something educational. >> you know it? >> i do. >> plus are hands free devices in your car really helping you keep your eyes on the road? our phil lebeau we the latest in a new aaa report. plus, do you live in a cheap or charitable state overall? our wealth reporter robert frank joins us with new day from. "squawk box" will be right back. today could be the day. the day we give you hope.
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so ally bank really has no hidden fethat's right. accounts? it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates. welcome back to "squawk box." we told you sodastream has been halting for news pending. we now have that news. expecting revenue for the most recent quarter to come in at
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$125 million. that is well, well below the consensus estimate of $154 million. the company says it's disappointed in the results and points to an underperformance in the u.s. market as a key reason. so my speculation maybe it was going to be taken over. it's the exact opposite, if you will. >> irregardless. that tells us a lot. really bad results. the reason is because they were really bad results in the united states. >> yeah. >> no citing underperformance in the u.s. why? that doesn't tell us. >> was it people drinking less soda? i saw it on -- they sell these things in staples and things too. i saw them there. were they taken out of some retail -- >> some people aren't drinking soda or otherwise. so we'll see where that opens this morning. >> all right.
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a little bit of auto news to talk about as well. cadillac is teaming up with american airlines to target business executives. the car brand will offer 7500 advantage miles to american airlines frequent fliers who test drive a cadillac. cadillac vehicles will be used to transport the most elite passengers between gates. and new vehicles will be on display at some terminals across the country. despite the latest push to make automobiles hands free, a report says that drivers are still being driven to distraction at an alarming rate and our phil lebeau is here with the details of what we are calling, phil, a startling report. were you startled when you read it? be honest. >> because i've done so many of these stories, i was not startled. automakers are frustrated too. as much as the symptoms have improved, there's still a ways to go. remember, these systems are in
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about 85% of all vehicles as a standard feature and all vehicles as an option. so aaa said let's look at these hands free symptoms. and what they found was that these are still a potential problem. it does not mean there is no risk by going hands free. in fact, they are in many cases still distracting drivers. why is this important? more than 3300 people were killed last year in distracted driving accidents. another 124,000 were injured. aaa said let's look at these systems. let's test the most popular systems out there. essentially what they found was this. yes, you may be able to keep your hands on the wheel but many of these symptoms are sot intuitive enough. you'll be told to call, call home now, call my wife. the more you have to give demands to the system, the more frustrated you become, the more distracted you become. here are the least and most distractions according to aaa.
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the least distracting voice recognition systems, toyota, hyundai, and chrysler. the following three were deemed the most distracting with chevy being the worst performer in this study followed by mercedes and ford. we reached out to general motors and said your system gives people the most distraction. chevy said first of all these were 2013 systems that were tested. we've updated on the service, the recognition software is better. and we still believe hands free, eyeses on the road is the way to go. these systems, they're in every vehicle out there virtually. the bottom line is this. many people are still distracted because they're constantly giving orders and the system is not responding. back to you. >> you know that's the case. >> yeah. but at least if you're on the phone, it's good to be talking into your radio. there are times you have to press something on where it is to dial.
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>> they're not intuitive enough. across the board. not just chevy, but everybody. >> all right. and i do find myselves at times -- >> correcting things. >> i'm looking for different sirius xm stuff, whoa! >> not good. phil, thank you. when we come back this morning, the author of the innovators and ceo of the aspen institute, walter isaacson. which states are the most giving and which are the most stingy? we have the answer when "squawk box" returns.
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how charity canable is your state? here to break it down, robert frank. we think of it as private sector philanthro philanthropy. >> no. you're going to like this. >> it's where the money is, isn't it? >> that's what i thought. it's not. this is interesting. charitable giving in america hit a new record last year. $335 billion. it depends where you live. a new analysis from the chronicle of philanthropy. they crunched data. looked at the most charitable and least charitable zip codes and states. which state is the most generous? like you, joe, i thought it would depend on how many rich people they had. >> is this dollars or percentage? >> percentage of adjusted gross
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income. >> all right. >> most generous. >> i vote utah. because of the church thing. >> thaes easy. religion is by far the largest amount of charitable giving. accounts for a third. the most charitable zip code is in california. it's 96015. that's in camby. that's the most charitable zip code. question two. which state is the least generous? >> new york. >> you'd be wrong. >> really? >> new hampshire. so this was interesting. of the top 20 most charitable states, only two voted for obama in the last election. of the top 20, only two were blue. >> of the top which ones? >> most charitable states, only two were blue. >> i wish you wouldn't address me with that type of info. >> hold on. let me have one more thing. on the bottom 20, only three were red states in the last election. >> and let me just suggest it's
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because those states believe that they're doing charitable work through the tax contribution. >> what do you mean? >> oh -- >> meaning -- >> that makes no sense. that makes no sense. >> they give to their church. >> you said the least charitable. anyway, go ahead. >> yes. the last question, which city -- now, they also looked at which states had the fastest growth and the slowest growth in giving since 2006. >> i know what i would say. >> this is the -- >> las vegas. >> city. becky guesses vegas. andrew? joe? >> i'm doing atlanta. >> i'm doing vegas because they crashed hard. maybe they have a bigger deficit to come back from. >> and you are right. i thought that vegas because they crashed people just wouldn't have enough to give to charity. but in fact, one of the things the study pointed out is the middle and lower class ended up giving a larger percentage of their income to charity after
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the crisis. whereas the wealthy cut back a little bit. >> i consider casinos and gambling giving your money away. >> but here's the kicker. >> the reason i really guessed vegas was we had pictures of vegas in the tease leading up to this. >> here's the kicker. which city -- sorry, which state had the biggest decline in giving between 2006 and 2012? this is just very ironic. the biggest decline in giving. >> which would be ironic? >> washington, d.c. >> that's not a state. >> all right. district of columbia. >> that's a trick question. but also d.c. and the surrounding areas -- >> down 25%? >> biggest growth in wealth. if you look at the counties in the areas growing the most in terms of wealth and income, it's the d.c. area. and yet they had the biggest decline. >> the liberal talkers there -- >> it's all about religion and politics more than income and
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wealth. that was the big surprise to me. >> i like it. thank you, robert. >> thank you. >> we're going to break. and then you got to explain to all of us here your ridiculous assertion that you made to try to cover up -- >> i understand it. >> it wasn't a coverup. i'll explain it to you. coming up, when we return walter isaacson of the aspen institute. we're going to talk hewlett-packard, the airlines, and the next big tech information. also glaxosmithkline working on an ebola vaccine. discussing its progress next. check out the futures at this hour. dow looking like it would open down about 48 points down. back in a moment. (receptionist) gunderman group.
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charlie, the demand on this network, it is increasing by the second. it's crazy, huh? and people are relying on it more than ever. we cover more than 99% of all americans. i know, i can't imagine living without it. it's a place where people can come share knowledge and ideas. it's beautiful.
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that's deep charlie. my selfie just hit a hundred likes...(gasps) a hundred! at&t is building you a better network. the war against ebola. glaxosmithkline's head of vaccines joins us with an update on a promising drug. plus should investors be afraid of airline stocks? we have top ranked analysts in the sector. and rebels, leaders, and innovators. aspen ceo walter isaacson joins us as the final hour of "squawk box" begins right now.
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welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. our guest for the remainder of the hour is walter isaacson. also the author of "the innovators" being released today. >> congratulations. >> thank you. >> you're busy. and you don't have -- you're not like jack torrence. you don't have writer's block. >> i've been working on this book for about 15 years. i put it aside -- >> then you do have writer's block. first a look at the futures this hour which have improved a little bit. you just would have to say it's an unsettling news cycle that we're all involved with right now.
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and we certainly have no interest in becoming the ebola network, although i'm sure some general news cable networks are fully. they like to thrive on chaos. but with the ebola outbreak in africa, now other cases popping up around the world, glaxosmithkline finds itself on the front lines of the battle to try to get this deadly decrease under control. meg tirrell joins us with a special guest. hello again, meg. >> good morning. we're joining by glaxo's chairman of vaccines. doctor, thank you so much for joining us. >> thank you for having me. good morning, everyone. >> it would be wonderful if you could walk us through where you are in development of your vaccine. we hear timelines like ten years to develop a vaccine. given the scope of the outbreak in africa, you're accelerating that. tell us how soon it could be developed. >> a vaccine usually takes
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between 10 to 30 years to go to being available approved for human use. the ebola vaccine program started about six years ago in a company based in italy. we acquired about 18 months ago. and we are currently running the first clinical trials, phase one clinical trials as well as scaling up the manufacturing process to be able to produce a bit more than what we can today. because it's just a new program. today we're about to produce about 10,000 doses every month using the manufacturing style. and we have experienced in a handful of individuals, human volunteers, that are testing the vaccine, we hope to be able within the next three months of this year and all of 2015 scale up to an industrial level, the manufacturing process. and also generate much more clinical data with this vaccine.
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both in the western world as well as in western africa before we are able to fully understand its efficacy and its safety and then introduce it for general use potentially. and that would be increasing acceleration of the process. >> how much data do you need, though, in terms of safety and making sure it's effective before you deploy it on an experimental basis? at what point can we get that data? >> normally we need data from thousands if not ten es of thousands of healthy volunteers before making one available. in this particular setting we are working very closely with the fda, the european medical agency, with the w.h.o., with the governments locally as well as western governments to set up the criteria to make this vaccine available for general use. we believe we need data from at
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least several hundred, maybe a thousand healthy volunteers. and critically we need to scale up the production process. it takes years to go from a few thousands doses to a few million doses. i'm afraid we will not have very large amounts of this vaccine available before 12, 18 months from now. >> doctor, that's been one of the problems in the past is, you know, with some of these other scares we've had is ramping up the vaccine production. is it made in tissue culture? or is there a way to do it with -- would it be faster with eggs? chicken eggs or something? what is the molecule you're talking about? is it a deactivated portion of the ebola virus? and how do you make the vaccine? >> yeah. so this vaccine is using cutting edge technology that is not yet approved in any current vaccine.
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it's a virus that has nothing to do we bow la that we put a piece of the ebola virus in that confers protection against ebola. this virus is used to infect the culture. very fragile that is difficult to produce on a large scale. at this stage we're talking about a scale of 50 liters. normally we're talking about 10,000 liters. you cannot go around it immediately. it takes steps and trials and error before you can succeed. we're doing our best. we're thinking about strategies to even further accelerate in terms of timelines. >> doctor, in the past there have been these promising vaccinations and potential help for medicines when it comes to
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ebola but they've been shelved because the outbreaks have been shut down before you could really get underway with production on any of these things. is it safe to say this time is different when you've got more than 3,000 cases and more than six nations with cases. is it safe to say no matter what happens, this time these vaccinations and these medicines will actually go to production? >> well, the answer is yes. we are committed to making this vaccine available. we are accelerating the development and this is not the first time we discovered the vaccine for a disease that's not relevant to the western world. but mostly to the least developed countries in particular sub-saharan africa. we spent 30 years discovering and developing a vaccine for malaria which is now in the approval process. we will make this vaccine available at industrial scale
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for those countries that need it. and maybe, but i hope we don't, maybe this epidemic may spread beyond western africa. and it will be needed on a worldwide basis. >> doctor, thank you so much for joining us. >> my pleasure. thanks for having me. >> okay. meg, thank you for bringing us that story. we will continue talking about this very topic. in the meantime, we told you earlier that sodastream is forecasting revenue well below street estimates. the stock has now just reopened. you can see the effects on so sodastream shares. calling its results, quote, disappointing. that stock off at least 13% in the premarket. big news we were discussing about 24 hours ago here on this set. that is the splitup of hewlett-packard. investigators gave a mixed reaction to that news yesterday. the stock actually looking like it's trading a little lower at this hour a a big boost. knee jerk reaction up 7%.
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one supporter of meg whitman's position is our guest today. walter isaacson. it's great to have you here today. >> it's good to be back. >> i want to talk about the book, but before we do, let's talk about the hp news from yesterday. the critics said this is move whitman should have undertaken three years ago. you. >> three years ago she said it wasn't healthy enough to be broken up like this. one of the things steve jobs always said about a company is you've got to have focus. you can't always try to do everything. that's why he thought mimicroso wasn't doing well, tried to do too much. you see right now is a breakups. paypal being split off to focus.
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certainly time warner, murdoch's empire. split up so they can focus. and i think the era of having these big conglomerates that try to do too much is going even ge which is one of the best run companies for the past years, they're splitting off things. hp needs to have a consumer hardware division that can try to keep up with samsung and apple and other things. it also needs to have its enterprise division. so i think it's smart they break up. >> that makes sense. but let me play devil's advocate for a second. if you're getting rid of the slower moving stuff, then you run the risk of being small enough somebody else could come in and try to buy you as murdoch did with the unwanted bid. so is there a point where you break yourself up into the too small category? >> if you think being bought is a really bad thing, yes. but no. i think that, you know, i worked at time warner for many, many
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years. it was kind of hard to get the synergies across divisions. in fact, divisions was a very good name. and, you know, it was hard to get the focus you needed or the nimbleness. i think it was a big trend in america for many, many decades, really, to try to get bigger and bigger. i think it's smart to stay nimble. although it's interesting to look at a company like google that i think is big, but still innovative and nimble. >> do you think that hp needs a visionary at one of these? and can you get a visionary that's not a founder. meg whitman has been a terrific manager of the company. she was brought into ebay, was a terrific manager of that company. by the way, you could argue that jeff bucas is a good manager of time warner. none were visionaries. can you bring in a visionary after the fact? >> i think you can, but you need to have companies that are run by product people. and i think when you have managers running the company or
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the finance people running the company, lawyers running the company, that's when you lose the focus on the product. one of the things, especially the hp inc. which is the one that's going to keep the consumer products, it's got to have a consumer product visionary the way elon musk can be totally passing about tesla. >> have you seen anybody parachute into a company -- >> i'm trying, but my brain is working. >> we'll think about it. okay. we'll hit the pause button and come back with walter in a bit. in the meantime, top rated analyst on airlines is out. more on that next. and later how confident is america in the president when it comes to the economy? the cnbc all american survey diving into the president's role when "squawk box" returns in a moment. relief. a cure. today,
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it's a fresh approach on education-- superintendent of public instruction tom torlakson's blueprint for great schools. torlakson's blueprint outlines how investing in our schools will reduce class sizes, bring back music and art, and provide a well-rounded education. and torlakson's plan calls for more parental involvement. spending decisions about our education dollars should be made by parents and teachers, not by politicians. tell tom torlakson to keep fighting for a plan that invests in our public schools. welcome back to "squawk box," everybody. once helped companies go public. now he's helping companies go
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private. the former chief starting battery east as managing director. the firm helps companies cash out through secondary sales. is investor out with its all america research team. jpmorgan topping the list with bank of america and barclays following. the year's biggest upward mover. joining us now is one of the members of the all star america research team jamie baker. senior airline analyst at jpmorgan. they have been driving much of the growth in the past year the question, of course, will this continue? jamie, will it continue? >> yeah. yes, and good morning. thank you. we do believe it will. moving to new levels of profitability.
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we think this is still largely on the market. these are companies increasingly deserving standing shoulder to shoulder on the same stage with other high quality transports. virtually of all traded higher multiples. as the market addresses this reality in coming years, that's going to be going to be a higher sector. >> warren buffet says he's in on planes, trains, and automobiles. how many years ago was it the head of mason said that buffett should buy airlines? do you remember that? >> that, i don't recall. >> bill miller? >> he wasn't the head. >> and buffett -- >> and he said he would never buy airlines. >> he owned it and lost his shirt. >> do you think he would ever do it? do you think the world has changed that much? >> you know, buffett got burned back in the '90s.
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but i do think that with all due respect his aversion to u.s. airlines is largely grounded in history. take a company like delta, for example. if you strip the financials out of the s&p 500, you're left with about 415 companies or so. delta generates more cash than 85% of those companies. that's more cash generation than nike, than young brands. you know, than amazon. it's more cash generation than costco which i believe buffett is an owner in. so we do think it's different this time. he should review that aversion. >> among the airlines between american, delta, and united, who do you like the most? >> the sleep quality of my clients matters to me. i think taking a look at the sector, i think delta is a loier lower risk play. american airlines right now is our top pick. but not for the faint of heart.
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there is integration risk ahead. you know, it's about risk and reward. we would put american and delta at the top. >> i would imagine you probably haven't had to factor it into your thinking. but i remember how shocked i was after september 11th me devastating effect on the airline industry. there's no reason to spread any fear at all, but if it were to get more out of hand than it was right now, it would be affected. have you even thought of it? has it gone into your thinking at all? >> melissa and i chatted about this on her segment last kweek. thankfully right now ebola is difficult to contract. if you're a health care professional, you're put at higher risk. as an airline passenger,
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frankly, you'd have to engage in rather kinky behavior with your seat mate. >> you could see the travel being shut -- if it got pandemic-like. but then everything, the entire economy at that point, i mean, airlines it wouldn't be specific to airlines. >> all bets would be off, of course. >> right. >> walter, you're on the board of united. vp you had conversations at all about ebola? do you fly to west africa? >> i can't talk specifically about united but i do think tom frieden who runs the centers for disease control, they are looking at this well and they've got a good sensible decision to screen people as they come in but don't want to shut down places that could backfire on the crisis. >> jamie, before you go, tell us -- because i always wonder about it. what happened to alaska air? are they going to remain
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independent? there's consolidation potential out there? >> there is. i think the bulk of consolidation headlines have largely wrapped for the time being. we've seen five large brands essentially consolidate away over the last seven years. we're not looking for any further acts of consolidation in the near term. obviously some competitive pressures with what's going on at delta right now. but we're not looking for near term. >> okay. jamie, thank you very much. >> thanks. >> and don't forget, read more about who's who on the street on cnbc.com. still to come this morning on "squawk box," we have the results of the all-america survey. plus the ceo of "time" sitting down to talk about his first year at the company. check out the futures this morning. a little bit of weakness there, but not nearly what we'd seen earlier this morning when it was down 75 points for the dow
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futures. now only 28 points down. "squawk box" will be right back. you want to cut through the noise of an overwhelming amount of analysis. [ all talking ] you want the insights that will help you decide which ideas to execute and which to leave behind. you want your trades executed in one second or less, guaranteed, and routed with institutional-quality technology. look no further. open an account and find more of the expertise you need
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because health is everything. take a look at stocks to watch this morning. amazon.com is going to face a european union investigation over a tax deal struck in luxembourg. regulators are unhappy about
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deals being struck by companies with individual eu member states that effectively amount to a government subsidy. and keurig green mountain was upgraded to buy from hold at goldman sachs. shares jumped 80% so far this year. big stories about people buying winners. buying winners is better than buying losers. >> yes, it is. >> goldman says it sees sales accelerating over the long-term. i'm going to get one of these thin things. a keurig thing. do you have one? >> i have two of them actually. you don't waste a whole pot. >> i want to do it. >> it's easy. you know when i got it? when i was home on maternity leave. because i didn't have time to brew a pot of coffee. this is push one button. >> you put it in and throw away the -- i'm going to do that. speaking of coffee, jeffreys
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cutting its rating on dunkin' brands. at this point would push the stock higher in the near term. and shares of farm maker equipment agco are getting hit significantly down almost 10% in premarket trading. cut its outlook for the year. for the second time being hit by broad decline in sales and also currency fluxuations. >> all right. coming up, how confident are americans in the handling of the president's economy? i bet you know the answer. but we'll give you the exact results of the all-america survey. they may surprise you. we're back in a moment. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized.
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welcome back to "squawk box," everybody. in our headlines this morning, shares of sodastream dropping big time in the premarket. check that out. down 15% after the company said its third quarter revenue would come in well below expectations. we'll have more on this story in a few minutes. we're going to talk to an analyst too. >> they forecast much lower than expected revenues. blaming it on lower sales >> weakness of the u.s. market. we'll try to get more specifics.
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>> that's what they told us. also the national retail federation says that holiday sales should rise by 4.1% this year in the united states. if that forecast holds, it would drive spending to its highest level in three years of holiday shopping. but the group says that shoppers will continue to aggressively look for discounts. so we don't know what that means for the profits exactly, but we'll be watching. >> okay. we've been teasing you all morning about the results of our new cnbc all-america survey. they're being released right now. steve leisman joins us with a look at how the president rates when it comes to the economy. mr. leisman. >> the confidence in the president is at an all time low. despite the unemployment rate dropping below 6%. and the numbers lurching to an all-time low. we asked are you extremely, quite, somewhat, or not at all confident in the president and his economic policies and goals.
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you can see 74% in the lowest two categories. this was asked by the nbc/"wall street journal" poll. then absolute confidence in the president down to 24%. by the way, this comes with 44% saying they're not at all confident in the president. i want to just show you what happened here in this poll. confidence relative to the last time, the quite, that's like the guy who is -- the people who rated the president with a "b," that fell by 7%. and not at all, giving the president an "f" on the economy, that lurched eight points. people went from giving the president a "b" to an "f" in this poll here. 805 americans surveyed around the country. maybe only the saving grace for the president here politically anyway is that the gop fared worse. here's confidence in democrats in congress and the gop in congress. those in the bottom two categories, that's highest for the gop.
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and stop two categories, lowest for the gop in congress. the president didn't even farewell or as well as you might think among those who are doing well in the economy. those who rate the economy as excellent or good, only 18% of the population. he can't get to 15% in the top two categories when it comes to confidence in the president. the stock market up about 145% over the president's tenure here. he can't get to 30% with those people. again, the president's loss does not appear to be at least the the poll the gop's gain. look at it by party here. he can't get to 50% in the highest with democrats. fares better with democrats than does with republicans. interesting lack of support for the gops in here. i think that's the last screen
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here. >> what happened? why do you think the ratings come in so low? he can't even get 50% of democrats to say he's doing a good job? >> i was shocked by that. i think there's been -- i think all the polls for the president when it comes to other issues, foreign policy, overall favorability rating are down. and i think that just drags it down. it's really surprising. i mean, it sounds like in washington or in the public today there's a pox on both their houses when it comes to washington in general. what's amazing is the president is 15 points lower in his approval rating on the economy than he was when the unemployment rate was 9.5%. now you actually reverse those two numbers, it's 5.9% and the president's 15 points down in that regard. >> i was going to bring this up at some point, the jerry sobbs piece. that a gop senate, his case is it could be a win for obama
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because the president is able at that point to say, listen, i've got a house and senate against me. i need to trim my ideological sales. and i was wondering, walter i'm not going to say you're necessarily representing the liberal contingent. but if the progress in the last two years came at the expense of the president moving away from his deeply held liberal convictions because he can at that point say i had to do something and i was against it, is that progress for the company? the country, or not progress for the country? >> when you see both ratings so tanked, you have a country that says why is it you can't figure out some common sense things that you can get done? but there's a huge disjuncture here. unemployment is down. gasoline prices are usually the things people care about. those are down. consumer spending going up.
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>> as the article on cnbc.com says -- take a look at that -- the recovery at beast has been lackluster. you get a sense here -- it's just a sense from the poll that people may have given up on the president here. >> i think they've given up on washington. >> either way -- >> and you can't really blame them for giving up on washington. >> it's almost as if they can sort of feel that it's maybe not completely founded in reality. we're here at 5.9%, the fed -- all the stops have been pulled out for five years. even with all this extraordinary help, we don't feel flush. >> why do you think people did -- christmas spending is going to go up then? >> well -- when we had the nrf economist here he said it's still the haves spending more. >> even among the haves -- >> don't you think -- i think
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that and i think you pointed it out a lot of the other stuff, the golf came after the beheading, a lot of the other stuff goes right into the economy stuff. you're just mad about everything at this point. don't you think? then you ask about the economy and even that -- the president always had one thing going for him and that was personal likability with people. i think even that has been shaken to some extent recently. it seems aloof, sort of detached. like, hey, i've done everything i can. i'm sort of ready to -- i don't know. joining us now is jay campbell and michael roberts. did anyone -- do either one of you agree with anything anyone's said so far? jay? >> well, you guys have said a lot. i do agree that this is a pox on both their houses. i think it is a mistake to put this entirely on the president.
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this is -- >> you're our democratic pollster? >> i am. i am. >> all right. good. how about mike? are you? do we get some from the other side or two of those? >> well, no. i think -- yes. there is a lot of -- there's a lack of confidence in washington. lack of confidence in this president's policies. and i think that this has been baked for a long time. this has been baked in for a long time. and our poll shows going back two years that people have been pessimistic about the future and pessimistic about the president when it comes to the economy. that's been in the 60% range for over two years. >> i hear what you're saying. you spend the first three years blaming bush and the second three years blaming the gop congress. i mean, you reap what your sow. this is where we are right now. so you got to find someone else to blame. the buck has to stop somewhere near the oval office, doesn't it? >> oh, absolutely true. the one saving grace for the
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president here is he's not going to appear on any ballot in a month. congress needs to be worried. not just the republicans, democrats too. because if the president is getting an "f" as steve said, then the congress -- >> that was big of you to admit that maybe some of the democrats might have a problem in november in addition to-- aftermentioned gop. thanks. got it. >> i want to say that we had a republican and democratic pollster. >> should have told me before the poll. >> for better or worse, right? micah, i want to ask you how republicans are going to view this? i was astonished at the republican support for the gop in congress when it comes to the confidence on the economy. and it's one thing to say something in a poll, but is the president's loss here the gop's gains at the actual poll in
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november? >> 80% of republicans say they have no confidence on the president's policies in the economy. that is a message that is resonating with republicans. it's going toic ma people come to the polls and say we need something different. and republicans are the people on the other side of the ticket who are going to offer a new direction. >> and why can't the president get over the 50% line with democrats? you would think at least he'd have their support. >> you know, i think it comes back to what someone mentioned a little while ago. this is just a drag. it's been going on for so long that even with the base -- by the way, the drop. you mentioned that the president is in an all-time low. the drop is really sort of primarily with his base and with democrats because they had the furthest drop to begin with. at the end of the day when the economy is going so poorly and people continue to feel that things are not going well, it
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does as joe said, eventually come down to the president. people are tired of it and want things to get better. if things are not getting better, everybody gets the blame. >> i don't quite get it. the economy's not doing so poorly. is there a failure to communicate here? >> i don't know if it's a failure to communicate, but i do think the job rate being as low as -- unemployment rate being as low as it is, that's not what people think about. what people think about is their own jobs, their own difficulty of paying student loans, of paying for their kids' college education. when things are improving, albeit very slowly, people get tired of waiting. that's the long and short of it. the stuff you guys report on every day or the stuff people care less about. >> can't have it both ways. either the income disparity is a horrible, terrible economy that we're all subject to with no wage growth, or it's a good economy we have. which is it for you?
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is the american dream dead and there's no upward mobility for the have nots? >> the economy is clearly getting better. now, obviously income inequality is a moral, political, and economic problem in this country. certainly on this show, you can hold two truths in your head that slightly conflict. >> it's a wave sceand a particl. >> that's what einstein told us. >> certain sli you're smart enough to -- >> he does that all the time. i do it with him too. i go, how will liberals explain -- >> the real paradox here is the trajectory of each. right? >> yeah. >> we know the economy is generally getting better. job growth's been strong. but how is it that the president's numbers are falling through the floor here? >> it's also like -- >> i'm not saying the economy is going through the roof. >> it's funny with the different political hat. liberals love fed trickle down.
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that's fine. they hate prosperity trickle down from the private sector. republicans like private sector trickle down. >> catching on the dualties too. >> it's all just a paradox. >> micah and jay, thank you. >> micah was the name of the sheriff on "gun smoke." >> really? >> yeah. when we come back, the ceo of timeinc. when we come back. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life.
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welcome back, everybody. shares of time, inc. down 8% in the last three months. the new stand alone company trying to figure out how to change the media land scape now it is no longer part of time warner. julia borisen joins us right now. >> right now i'm -- one of the few men here, warren buffett sitting here in the front row. joe rip is thrilled that this conference which costed $85,000 a head has a 250 person waiting list, people in line to hear from mary barra and others. making money at events like these are key to the turnaround plan for time, inc. >> being able to create products and services that cut across our brands does help. we have the largest female
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audience of any publisher. it's working well for us. >> and he's applying the strategy across time, inc. titles. 550,000 people attended the essence festival in new orleans this summer. it's building with new advertisers. and it's not just conferences and these as he calls them. we could look for the company to sell a lot more product like its uk bpublication. gains are outpacing declines at several of time inc.'s public sales including simple, essence, and southern living. despite virtually limitless competition and a number of players like buzzfeed. ripp says he's not concerned. >> if you want to advertise ten ways to feed your gerbil, you can do that. but if you want to advertise to important stories time inc.
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deliver, you'll find we're much better at delivering messages. we're fine with this. >> ripp says one ching he'd made that's doing well is doing fewer bigger deals. allowing them to buy across all of time inc.'s advertising platforms. coming up in "squawk alley" we'll have the next lineup of interviews. we'll hear from the woman whose job it is to make pinterest profitable. >> thank you. walter, do you have views on the approach joe ripp has taken? there have been people inside who now think they're mixing the chinese wall coming down. >> i worked with joe ripp. he was a colleague of mine. i'm supportive. but i think the main thing time inc. has broken away from time warner. it gets back to what we said earlier in the hour is being focused on what you do.
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and things like live events. you and i are going to one today where, you know, magazine companies, media companies, are putting on live events. i don't think the chinese wall is a problem for me. i do think high quality journalism will have its value and you must protect ut. you must make it clear that it's pristine. i see no real problem with that right now. it's something i would keep an eye on. >> i write for fortune so i also have something to disclose on that front. the idea of media being in trouble is one thing. the idea of loading up time inc. with a lot of debt is another thing. they have to be able to do this and get through what time warner put on their heads. >> obviously i wish time warner had not put as much debt on time inc. >> it combines the struggle. >> yeah. you know, it's -- you want quality media companies to survive. not just for economic reasons, but for the good of society. i mean, i'm looking at "the
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washington post" making a comeback which is great. you look at their ebola story and say that's why we need major newspapers. you look at "time" magazine every week, to me i'm prejudiced. i love the magazine. but it has stuff in it that's good for society. >> i liked the football cover they just had. the football cover on "time" really put things in perspective. it's one thing when you look at the nfl and another with if you want your kids to play. >> you don't want laden debt on companies like that. >> thank you for that. coming up, the cnbc next list is out. now we're going to talk about it more. young leaders and innovators are looking to change the world. we're going to get views from walter isaacson who's looked over the list and may have suggestions for us when we return. if you want to see it for yourself, check it out on
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welcome back to "squawk box." cnbc's next list is out naming the innovators who will be leading the world in the next 25
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years. our next guest has a new book called "the innovators." i want to know who you're betting on and mighting missing from that list? >> the thing to bet on. one is people who can find easy ways to make payments. you see a lot of people on this list whether it be square, paypal or whatever. i think we are going to the next stage where bitcoin will be a platform. people can pay easily on the internet for certain things. >> you are a believer in bitcoin? >> not as a speculative cyber crypto currency, but as a platform upon which people can build in order to make quick, easy payments both online and in the real world. i also think that the whole banking system needs disruption now. i've invested in the akim bo card. you can put money on the card and give it to people. it has a visa things on it. those type of things those will
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be the next disruptive things. >> i have a hard one for you. we like him on the show and he watches. tim cook is on the list. should he be? >> absolutely. he's taken over apple. he made apple personal. when you look at that watch, tim cook loves sports. he works out every morning. he knows something personal about that watch. that's his product. >> did you argue for him not to -- with the way, the tone of your question, i would like him to take a good look. >> i think you need to have a theme in any country. >> no i thought he might -- we talked about this before.
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>> tim cook? >> i want to talk about your book. >> thank you. "the innovators." you started working on it 15 years ago. how did you come up with it? why did it take 15 years? >> when i was running digital media for time inc., as we were moving from online services in the early 1990s, aol and compuserve. someone said who owns the internet? >> i thought, that's the most clueless question. how did it get built? even the people who in the original pentagon thing developed packet switching on the web. then i had the chance because i was at "time" magazine to interview all these people. i interviewed bill gates about it.
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he said you should do a story on the entire digital age and how it unfolded. i wanted to look at the various innovations, leaps in the digital age and say how did they happen? it's not just one visionary. it's somebody who can put together a team. that's what happened all what it through the digital age. >> that makes it sound like a big circumstance of luck where everything falls into that. >> no. you have to have a team that has vision, can execute and whether that's building the first pcs or internet or transistors or microchips. these are the inventions that have totally shaped our lives. most of the viewers don't know exactly how did the microchip come about? what does a transitor do? how did women leading the
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programs of the first computers, which have been written out of history. all the way up to google. what is it behind the magic of the stuff you've got sitting in front of you? where did that magic come from? to me, these are exciting people who did it. innovation is a word that's been so overused, sapped of all its meaning. i wanted to look at 12 major steps and say who did it and how did it happen? >> in all fairness, blue states do love being charitible with other people's money. >> we still have more to come. warren buffett sings it his way. we have the video. stick around. we believe outshining the competition tomorrow requires challenging your business inside and out today.
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on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm. ♪ i may have made lots of mega bucks ♪ but my grammar stinks >> that's warren buffett belting out the tunes last night at the fortune most powerful women's summit. the billionaire and paul anka
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singing "my way" in dedication to carol loomis. >> who just retired from "fortune." a fantastic journalist. >> one of the greats. >> walter, thank you for being here with us today. appreciate it. congratulations on the new book. >> thank you very much. >> that does it for us today. right now it's time for "squawk on the street." ♪ turn it up ♪ scream it loud >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber. a number of profit warnings today. container store, samsung, soda stream. first some breaking news from the imf. sarah has details on that. >> international monetary fund lowering its outlook for world economic growth. it now predicts that the world economy will grow 3.3% this

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