tv Squawk on the Street CNBC September 12, 2018 9:00am-11:00am EDT
of the great success and that was not something -- your college education had nothing to do with taking a company like this the way you did >> it was unbelievable opportunity, i call it a gigantic do over because we are able to create our own coverage. great to have you today david novak. >> "squawk on the street" is next, watch andy tonight at 10:00. ♪ >> "squawk on the street," i am james quintanilla with jim cramer and david faber talking to david backish
our road map begins with apple's big moment introducing their new products tl easte the eastern sea board is bracing for the storm. we'll hear from hank paulson and geithner apple also introducing a lower cost model as well there is some reports that maybe they gave some away on their website, maybe some names and color schemes, as usual, it will be a big event at 1:00 >> stocks run you have and the reason why it is not the right thing because you will get them and there is mainly people say it is not what we thought and it
is not that great. ex pepectations are too high. there will be people say well samsung has a phone that opens up there are nay sayers everywhere after apple moved up and got hit by tariffs >> david, at the event where you are there are all kinds of media deals being announced today. who knows if apple wants to join it out west? >> it is really funny. i don't think that's the case. jim, as you noknow well, they a spending more and more general on contents and certain things as they increasingly focus on having a larger ecosystem, something we talk about all the time for all the new products that's introduced today of the reoccurring revenue stream that's gotten so much larger the last couple of years that's more and more of the focus for some
investors, is it >> i think it is a billion phones have been sold. you get these phones that are, you are talking about big percentage that are two or three iterations behind. the app store has have been a b w win. if you don't preserve your pictures, you miss basically apart of your life i don't know if you see, david, there is as line in your piecing. you see it, right? you just paid for your apple and every month you just pay for it. it is one of the great sources of revenue and i am not thinking about it they sent me a million razors. give me a break. >> it is great you can't stop it.
look, i got to shave and throw one out everyday i am doing just fine here. the apple -- >> it is incredible. >> just like netflix and costco and amazon prime yeah, david? >> i get them once a month i don't know what you are doing with the razor thing it comes once a month. >> did you order it in seven different channels >> doobin is out and cook is in. >> sort of this leads us in a way of what's happening with chips. goldman downgrades some equipment. >> listen to me i had nxp on last night i was hoping that you would say we are not that much the autos are a tremendous source of weakness they're talking about worldwide.
this micron downgrade is devastating. it is not going to happen now but there is of supply this is the kind of downgrade that -- numbers are going to come down for these companies. micron is selling at four times earnings that meaning earnings estimate are not going to be met. one thing that's bugging the heck out of me, you got cisco, and hpq, they are a huge winner in this. apple, apple, for deram so we can all sell everything on this downgrade and we realize wait a second, this is an intergral
part and it is over built. it is time and again they have done this >> sure, we do this with hotel rooms. and the cyclical is legendary. >> you see how much business they have. these have been collapsing over and over micron had money at the peaks and they'll buy back a lot of stocks you can't get rid of the cycle the cycle is not cyclical. internet of things are tricky. don't interpret it meaning it is no demand. it is the opposite it is the fact that they built too much >> before we get to hurricane coverage today you want to give us a quick curtain razor of what you got.
we mentioned backish, there is a lot going on today >> there is always the key questions of the changing world of contents and the way it is distributed and all the things we have talked about, whether you are a distributor or content. discovery announced a big deal we'll talk to zaslav about that and backish of things to discuss with the ceo of viacom and just overall what's going on there. the turn around is paramount and cbs certainly. carl, as always it would seem to be a lot of things to discuss and a lot of buzz here >> i think jack ryan is the beginning. that's a paramount production, that's the greatest thing we have ever seen this is amazon and paramount have you seen it holy cow it is fantastic. >> all right
>> "ozark" and "jack ryan" are the two hits of the season >> i am talking about backish. when we come back an exclusive with zaslav and we'll get into the storm that's threatening north virginia and north carolina >> more "squawk on the street" >> more "squawk on the street" from post nine in a minute directv gives you more for your thing. if you've been waiting for a sign to quit cable, then herigns. ♪ quit cable it came from the toaster.
what you call comprehensive for live and for on demand program i was looking at the calls when are you going to be on and more of teahese bundles and you are doing it today how long will it take to get here >> first, over at hulu focusing on the contents that people love we struck a deal where we'll have eight channels for hulu which is a great deal for us we have great contents with the second largest tv in america we reach more women. if you offer a package of services, you have to have tlc and id and food. we have been knocking on the hulu door and it is a big deal for us not only we have eight channels on hulu but we offer a lot of
contents where people can catch up on a lot of favorite series there. they're embracing the idea of non-conviction and being compelling >> they're asked five our yours and it is all discovery now. >> together we'll have eight channels >> what does a deal like this look like? would they be similar of your typical distributor? >> they are favorable. they have to be because we have these structure and most favorite and our bread and butter are providing 20 or 25 million subscribers. we need to make sure we got a favorable deal we are able to do that with hulu and we think we'll provide a lot of values to them. people want to see our channels. >> are people watching hulu, subscriber fees are great but you want advertisements. are they advocating audience on
these things >> you should have randy on. he's a perfect guy they have almost a million subscribers and they're big on spod for us we are now, it is just another platform we are on there is a hipness to them and they have a younger demo and a content that'll do well for them and people really wanted it and now they get to see it >> i keep on hearing it again. i was reading a lot of your calls zi knand i know what's go on are there other potential deals or have you done other deals perhaps with sling i know you are on a number of them already, at&t watch, what about something like a sling >> there is real questions of sling and dish just by things coming together, this is a big moment for us as a company. we have a very big carriage deal which you saw roll out with direct tv and where we are eight of their 30 channels and we have
a strong relationship with stanky and randall they have been real supporters of us. we did have a deal coming up with charlie >> charlie with dish >> effective before the end of this year, that deal will be extended it will be effective before the end of the year where our existing dish deal will go forward with favorable economics and favorable we think for charlie because our channels have gotten better and growing big audiences. it is part of our traditional deal not only our channels will be carried but we'll get more carriage for some of our channels that'll do particularly well with the dish audience. separate from that, we have a commitment that'll be carried on sling before the end of the year we'll be carried on sling orange as well as sling blue. and so as a company now as a content company, we look at ourselves and say how are we
doing on in terms of skinny bundl bundles. with the hulu deal and now with the sling deal effective before the end of the year, we hit the end of the year in 19. >> you will be virtually on all of them. >> not youtube >> we are not on youtube yet we right lane >> you spend a lot of time talking about direct consumers and i remember when the scrip deals happen given you are doing all this, it seems like directive consumers are put on the back burner >> when you look like at a direct tv where we have eight channels of 30 we only get eight channels on hulu >> direct tv now >> yes, as these skinny bundles roll out which we have been calling for it aggressively. this is the only country that serves with broadcast. >> sports come in and ruins it
>> skinny bundles are great for consumers. we have got about 20% of viewer sh ships. >> we have women watching one of our channels now go to the skinny bundles, there are 30 or 40 channels. those environments outside of the u.s. in many cases where you are getting 40% or 50% of viewership for us, it gives us a chance not just to be viewed in an aggressive way but to have broad carriage we sit here today where almost on every platform in america where basically set. our mission is to continue to grow hg and food and id and discovery. if we do that we'll have a much healthier outlook here in the u.s. now that we are carried on
the skinny bundles >> i don't want to hear too much on direct consumers. >> we own all of our contents and we have 18 channels here in the u.s. we own all of our contents anywhere in the world. that allows us if we want to take all of our contents to go with direct consumers here in the u.s. and go with our individual brands like we are doing with motor trend and velocity we announced that we'll do global deal with the pga and we'll have some more announcements with that but we are taking golf on globally. we have the amendmebility, davi offer with big consumers with ourselves or with big distributors >> i remember discovery is a fast growing company you are not growing at the rates
you did a number of years. you are still growing, i don't mean to say you are not, not descri subscribers but everything else. you are talking about free cash flow of $3 billion >> right >> right now you are paying down debt and you are going to get down to the three and a ha half time. >> we'll be below net leverage by the end of this year. >> right >> our strategy is get to 3.5 by paying our debt down and then we see a path not too far away to get to $3 billion and that's not our end goal it is just a near term target. let's get to $3 billion in free cash flow. that makes us a free cash flow machine. >> what do you do with those free cash flows when you are not buying debt? >> i would not say we are not a
growth company we said our advertising is going to accelerate several hundred basis points we'll go from seeing very low advertisement growth to seeing some meaningful advertisement growth we expect for it top continue for third and fourth quarter i can reiterate today all of our second quarter guidance which was meaningful in terms of the growth that we'll see the end of this year and next the trends we are seeing are favorable. we were strong in the up front we own all of our contents and our cost of contents >> meeting your target of 3 billion. >> what do you end up doing with it that's been beneficial but nobody would say that necessarily aided their growth >> what the $3 billion gives us is something that no other media companies have it gives us flexibility.
we can invest in initiatives that we have like global pga or owning golf around the world or owning sports in europe, we are the leader in sports and going directive consumer, more aggressively we can see what's working and invest more. we have the ability to do mma, we'll be below two and a halftimes leverage we bought the $15 billion company and we integrated and showing better growth and we are on every skinny bundle and we'll be less than 3.5 times leverage quickly. we'll digest that company and we'll often running and we can buy back our stock which we are looking at right now, based on what we look like here in the u.s. and how we are growing. for instance, in the last quarter, we were down 1% the rest of the industry were down 8% and 9%
we are already the second largest tv company in america. when our peers are declining where the broadcasters are, if we are holding our own because we have brands that people love and we are doing a good job. there are a lot of our channels are actually growing our ability to grow our share in the u.s. is going to continue to accelerate and we soar in the up front of a broad reach of women and men in america people think discovery is an advertisement cable company, we are much broaden than that >> we got to end it there. >> do we have to >> it is great to see you. >> and you >> congrats on the hulu day and the sling day. david zaslav, back to you. we'll get cramer's "mad dash" and count down to the opening bell "squawk on the street" continues "squawk on the street" continues in a moment.
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quarter. not looking so good, interesting in the united states and united kingdom and france and austria i just think that they have not fixed the android problems yet i keep on pointing out that people are not talking enough about this in many ways, i thought he's a brilliant guy. when the adult leaves the room, it is anc, it is devastating >> rich greenfield >> red bush up their target because the change of management subjects increase their value. >> i know they're paying cfo a
lot. he's from amazon if fusions go down you think it is a new and improve on a can but if a dog won't eat it, it don't matter >> let's get to s&p here opening bell today celebrating a chinese car electric car company. we'll talk to the cfo in "squawk alley. pricing demand does not seem to be all that reboast obust of an. >> why did we give a green light to a company that we thought sold a lot of equipment to iran. without a green light or any quick protocol qualcomm was allowed to buy nxp. why did we allow these companies to live? while the president is focused
on trade, we allow a lot of things to happen i am always surprised that the president says there are too many chinese ipos. he was never that close when he speaks about the ipo market. the io markpo market is where e chinese kind of dominate >> we won't do it for fees in this country a pound of flesh, i will have my bond if you want to try crack down, and the shanghai index is horrendo horrendous how much money do they have to have in order to prop up they can't repatriate. >> if we in a trade war. the next big punch would be enough with the ipos the president's deeply connected
with aluminum and steel and focused on luggage -- air buds that's not fake news by the way. that's actual news >> it is actual news, you are right. >> the president used to listen to stocks. >> he still does he should know another one and another one. all you got to do is say you think there are too many and just tweets. >> we talked about the downgrades of micron and snap. tiffany did get an upgrade >> yeah. i think tiffany is a lot if you go to tiffany now, you a will be shocked with the new line they have fresh line of very, very reasonable priced jewelry i mean i just went through like five graduations, boom, boom,
boom >> we had this conversation a couple of years ago, tiffany needed to turn to a company where you did not go there on engagements or christmas >> i find tiffany to go to where you go to get presents i buy presents at two places, etsy and tiffany when you go on etsy, you can't find that stuff at elle brands when they open it, they see things they have never seen. let's say you come on tv and you say something about your wife and it gets back to her, tiffany is a good answer and flowers stopped working for me a long time ago >> and chocolate, too. >> tiffany has impacted, man, did i screw up they should have a box that says man that screws up
>> netflix is the walmart of subscription of videos and hbo is the tiffany of subscription vide videos >> really? i did not see that he did speak here carl a short while ago of the ongoing litigation of the u.s. government and the appeal of the doj and the ruling against them. and hbo is in many ways the tiffany. i think of netflix more of everything, don't you? that's the point sort of the in some ways behind the discussion of zaslav and i had a short time ago. you got younger people don't think of anything else beyond netflix because they don't need anything else beyond that. that's the key question. maybe the walmart but seems to me anything they want them to be given how much they are spending of eight plus billion dollars a
year on contents at netflix. >> yeah, david, i think it was so interesting that zaslav's interview was incredible and he's a terrific guy. how about when he said we are down less than others. down less than others, i got companies that are doing 40% or 50% growth and i don't want to hear down less than others there are a lot of companies that are up 40% or 50% in stocks just because you are beating the rest, does it make it that you want to buy. but, in the end -- >> cisco right now >> right >> the interview is fantastic and zaslav is right. the acquisition is terrific but there is a vast panel of stocks and you don't need to own entertainment. if you do entertainment, you want to own netflix. the core cutting israel.
roku stock is real when netflix do something new, people watch it. >> they do >> it is interesting i know there is been a deceleration in court cutting and you heard a great deal about it the long-term trend, everybody knows where you are headed it is hard to imagine in the world where younger people are paying for the same service that we have for the overall bundle a lot of these companies, many of them presenting here have to come up with a new narrative it has been for some time. they have been sustained for strong free cash flow and buying back enormous amount of their stocks and eps and to be fair discovery has 5% of their growth or a bit more than that. you are right, it is a different world now. that was why i was focused on
free cash flow with him. okay, you are not the double digit grower but you do produce cash flow, what do you do with it and how do you go about using it can you find your right investor base for that? it is not the group of investors who are accustomed to much stronger growth. >> that's a great point. i think adobe has empowered people to create their own content. david, i think that the idea of empowerment of individuals and instagram and how we watch things is much, much stronger than whether a housing channel i think that one of the things that individuals, younger people do is create content and put it on youtube, and they lover it. i know alphabet is down. when you sit down with anyone in the world that you are talking, it is like okay, well, youtube
got a lot of good stuff but wait until you see what we are doing. i have been waiting for a long time you see the ads, we work for nbc. we are the most watched channel. >> i will go along with that >> yes, we are the most. >> zaslav kept on saying he's number two and we are number one in terms of viewing in the united states. >> that's right. >> les moonves, that stock during the period where netflix went nuts, his stocks did nothing. he's mr. tv, well, if that's mr. tv, i want mr. netflix >> yeah. >> listen they bought backup an enormous amount of stock for a long time and benefited cbs from retrans that created this huge revenue source for them that did not exist many years ago that's a while now on that front, there is talk
guys that at some point your cable box won't need an an ten ten -- antenna you do wonder of retrans and how sa safe it is and jim, to your point having to spend enormously that got them their name and competeing ting likes like amazon? it is an interesting time when it comes to content. >> speaking of amazon, the senate commerce committee had a statement out, september 26th, they'll hold a hearing on consumer data privacy and the witnesses including reps from at&t, twitter and google again and apple and charter. >> who do you think alphabet won't send this time they got someone there i am sure i am sure they got someone
deeply involved with how to plug in a vcr >> that was my laugh of the day right there jim. speaking of amazon, more speculations of hq 2 bezos is going to washington tomorrow washington post is bringing more board members people are saying does that mean he's trying to get some board approval decisions. we don't know. >> still waiting for the city. he still gets prime. they use a word that's far too often used on wall street. they unpack the current state of prime. i really believe that amazon, that prime has been forgotten. they say gross merchandise -- it is turning up. that have been a declining metrics. amazon goes much higher. >> really quick on retail.
fedex sees record holiday volume and they're going to go six day as week on ground to try to get this volume taken care of. macy's is hiring 80,000 unseasonal >> 23,000 of that 80,000 is going to go to fulfillment center >> that's where it is. what you want to see is not a lot of new people because you have done your supply chain because that's not -- i want to break in for one thing the fda is saying that really about banning all flavored e-cigarettes and you are seeing pm moving up this has been a very big jewel this is what we are talking about jewel. those stocks can all fly >> dow is up 22.
s&p large let's get to bob paisani. >> hurricanes and concerns of many things going on of the semiconductor sect semicondusem semiconductor sector >> oil stocks and negotiations going on healthcare have been a big mover. banks, sideways for months semiconductor have been down, you heard the guys were talking about it lam research, that's a new low for lam. western digital had a new low aside from the semiconductor
moves down is the whole situation of tariffs jp morgan, hard to put a number on how this is going to affect earnings jp morgan tried to do it today if they put in the entire that's being talked about including china tariff and everything, it could not $8 or $10 off of the s&p. they had of 165 or $1,808 of the full year. this is all the tariffs, you throw them all in. i think this is important. the corporate emphasis has been shifting from tax cuts to trade wars they mentioned that in the recent conference. they brought up tariffs as a potential issue down the road. this is why the market moves on tariffs. shout out to jp morgan trying to put a number on a difficult situation. elsewhere we are looking at a
couple of interesting ipos nio, this is a big competitor to tesla. we are waiting for this to open. it is priced at the low end of the range there. $6.25 to $8.25 cents a bit of a big disappointment, they were talking a couple of months ago they could raise as much as $2 billion don't try to go public in a bare market second is you got the performance issue with tesla that's an issue because their competitors directly and people look at that the chinese have performed poorly if you look at huya, $12 went to $50 and got cut in half. chinese ipos have performed fairly we have nasdaq at 111, online pharmacy
has not been priced yet. we are looking at 14 or $16. we'll keep an eye on that and you saw those nice pictures of those shiny bright electric cars we do not have an indication on that yet >> carl, back to you >> see you in a little bit bob pisani, let's get to rick santelli at the cme. >> good morning rick >> we are down a couple of basis points of maturity except the two-year is slowing down we did have ppi data it was not ice cube cold but it was on the cool side especially the month over month data and that really does represent an issue of conundrum if you will we see there are a lot of people and a lot of jobs and some of the recent data like jolts and jobs reports underscore jobs maybe more plentiful for people to fill them we saw wage components go up the traditional measures of
inflation although many of them elevated don't seem to be moving in a more elevated scenario. if you look at the one week of twos or one week of tens, they have the same pattern. the yield curve is slightly at ten to ts to the twos. it has carried the both long end and short end. look at the dollar index about a week ago, we had a lot of sub 90 closes we don't we are going sideways. we have 3% higher than the dollar index closed. one week of the pound considering tomorrow, both european and central banks, there is an upward bias there. news is going to start to trickle out. if you look at the yuan, you can
see it is climbing again we are not on the highs but we are resuming the same types of trends and we have been talking about the weakness and equity markets in asia. it is a big deal carl, jim, and david, back to you. >> still to come, david faber's exclusive with bob backish dow is hanging onto a 36 points gain on this start of today. gain on this start of today. we'll be back in just a moment risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time,
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east coast bracing for this major storm and hurricane florence wvit moeteorologist is with us o talk about what's happening now. hurricane florence i expected to strengthen as we head through the next 24 to 367 hours there have been significant changes. the national hurricane center bringing florence up to the coe of the carolinas by pre-dawn
friday but from there that forward speed will slow significantly, stalling off the coast of the carolinas we might not see landfall until early saturday with this stalling motion, we are talking about a prolonged period of storm surge the longer it sits offshore, the longer that wall of water will be pushed into the carolinas and the further inland it will reach. so this has upped the threat for storm surge flooding as we head through the next few days and we're keeping an eye on the hurricane warning as well. we'll bring you the latest as we get more in. carl, back to you. >> this week, cnbc has been highlighting the tenth anniversary of the financial crisis, what unfold add decade ago and the lessons learned. watch our cnbc documentary crisis on wall street, the week that shook the world andrew ross sorkin will interview former fed reserve chair ben bernanke, tight and
hank paulson who we have seen the last couple days there was kind of sense of we shouldn't let -- let's punish the bad guy s. i think the punishment didn't fit the crime. no one went to jail but what happened is the system really almost broke systemic risk and i think that these guys really know where the bodies are buried i hope they talk about that. >> we'll see what andrew can uncover with them when he talks to them later on this morning. dow is up 25 we'll get stock trading with jim in just a couple minutes in just a couple minutes don't go away.
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the group and this is meaningful, we don't have any approval but i think r.a. sufferers will be glad to hear there's somebody working on a better mouse trap, so to speak. >> a lot of news in biotech between gilead, some other news in far la? >> we know the semis are going down but there's good news bausch had a nice settlement so let's not lose sight of the fact that pharmaceuticals and hmos are doing quite well. >> how will you follow last night's show tonight >> all right one of the -- no, the hottest retailer in the country is five below. and this stock has added 100 points it's a great concept, a lot of people shorted it for no particular reason. it's a regional national story the old peter lynch method to find the best stock. it may be five below i have to remind david it's not like rei, it's not about clothing, it's about trinkets
♪ go big or go home, go big or go home ♪ >> good wednesday morning. welcome back to "squawk on the street." i'll carl quintinilla with sara eisen who is back at post nine at the new york stock exchange favor faber is in new york. in a few moments he'll be joined by viacom's bob bakish, his first interview since national amusements and cbs settled their dispute this is week first, a check on the markets, dow is up 33, s&p unchanged as we watch several fronts today, nafta talks, the apple event, east coast time, and of course hurricane florence which has made a dangerous turn left. >> apple, though, big iphone news coming. apple set to unveil the latest batch of its most valuable
product. we'll look at what to expect. >> hurricane florence gathering strength as it flows in on the carolina coast and an interview you won't want to miss ten years after the financial crisis, andrew ross sorkin will sit down with former federal reserve chairman ben bernanke and former u.s. treasury secretary tight and henry paulson coming this hour. first up, apple's big day. the world's most valuable company set to introduce a new collection of product this is afternoon east coast time. josh lipton is in the event at cupertino, apple's headquarters and joins with us a preview. morning, josh, big day. >> morning, carl so by sum estimates there are around 500 million current iphone fans on a device that is at least two years old are those fans ready and willing to upgrade when they do, what model will they upgrade to? we're expecting through new
models here. one is the high end 6.5 inch device analysts say that would be a big deal that's a big change in form factor, in design. you put carl that 6.5 inches just in context here, remember, the iphone x is 5.8 inches analysts are quick to say display size matters bigger phones tend to sell better and given how we use these devices, how much content we consume, how much we create we're also waiting for an a 5.8 inch device and then a 6.1 inch lcd phone. for the wild card, what will apple charge on the street you have a debate. i was talking to someone yesterday who thinks if you see this high-end 6.5 inch device, he thinks the most apple will charge would start he believes at $999 and i asked him why and he felt listen, in his opinion
that is probably the celling of what people are going to pay others say they think that's too low. that the iphone 10 is a strong seller, they know there's demand so why would tim cook leave margin on the table. that was the point jean munster made to me munster thinks the new device would start at $1,150 and then money going up depending on the configuration that will inform what we think revenue and asp will be. consensus expectations are muted. the street called for 2019 thinks we'll see 219 million iphones. that would be flat from 18 and asp is only ticking up so the street thinks about five bucks from 752 to 757. more information soon. back to you. >> certainly that will be a headline when we get the
pricing. what else are you expecting on other products the i phone is most important but what about the home pod or apple watch and other incremental revenue drivers? >> we would expect updates to the watch and air pod. i thought it was interesting, apple has been lifting the curtain about how those products are performing in july tim cook said wearables generated revenue exceeding $10 billion over the fast four quarters we are expecting an update with a large display, also air pods some analysts will think we may see a water resistance feature there. when we talk about those products, apple told us the proposed u.s. tariffs on $200 billion of chinese goods would impact some products and they specifically called out the watch and air pods, guys >> finally, josh, we know today
is about products but i mean how much weight do youive if to speculation we may hear something about a streaming service? >> it's been rumored we've heard about a video streaming service for a while now. i haven't heard analysts place their bets i've heard some people say they think they expect the streaming service in 2019. we know they've been putting so much time and effort and money into original content. ed lee was on cnbc yesterday he said his sources are telling him close to $2 billion being spent on original content so we are expecting the video streaming service whether that comes today, we'll wait and see. >> big day for you and the first trillion company apple we'll stay tuned thank you. let's get back to david faber live at goldman sack's
communicopia conversation. >> this guest has nothing to do with the media conference under way except geography played a key role in having jim joining me now, he's the current c.o.o. of douw dupont but seven months from now you'll be the ceo of dow itself, materials sciences, consumer care infrastructure packaging, an enormous company in its own right the form 10 was just filed detailing what will happen so we are happy to have you. >> thank you for having me. >> one of the key questions i get is what will change in terms of the culture of the company and to put it more bluntly the lean expense culture many investors are looking for. what can you tell me >> the now dow will be a $50
billion company these are capital intensive businesses so we have to be low cost and best in class, we have to have a culture of benchmarking to make sure we can be competitive so as we've gone through the dow/dupont deal, we've had a chance to look at all three of these divisions. so this is about creating from the ground up three new divisions and that's allowed us to look at all kinds of things like our structure, our legal corporate cost structure and get that corporate cost down to where it is competitive with our peers but we have to look as we move forward with the businesses at our investments and making sure they're low-cost investments and will be the highest-returning projects in the industry. >> for example, people look at
the deal you've done with aramco, i think you spent $20 billion? >> that was a big venture. >> a new petrochemical complex in saudi arabia. should people make assumptions in how that's informing your future decisions or what the new dow will do when you look at opportunities like that? or perhaps avoid them? >> we've done two things we've invested in a large group of assets in the u.s. gulf coast to take advantage of shale gas and we invested in our joint venture. part of the strategy was we viewed that the u.s. would be a base to service more of the americas -- north america, latin america -- and we viewed sidhar to support our european business so we look at it as a capital.
it was $20 billion to build it but it was 26 manufacturing units and a supply chain to service all those markets so it's a massive scale, a big undertaking. >> when is your investor base going to see a significant return on investment >> they're seeing that now, seeing year over year improvements so we'll have a $250 million year over year improvement there last year and that will continue at the end of this year we'll finish a lender's reliability test which allows us to look a the financing and covenants around financing which will help us as we move forward in the new venture. as we move on, we have a base to do other things as we grow out the asia-pacific business. we'll look at how we can bring more capacity out. as we look at our future growth we're looking at more brownfield organic lower capital intensity
higher return on investment capital investments and those will be a faster paybackfor investors. >> to the portfolio itself, as you emerge as a newly public entity six, seven months from now, how should investors think about the portfolio businesses you have is this what you want? is there further streamlining to do is there perhaps the opportunity to do merger and acquisitions? >> well, the structure of the portfolio and the portfolio that we have today is very powerful and we're very happy with it, we think it will be one where we can be a world leader. we have great positions in packaging, we have great positions in infrastructure. we just announce incremental expansions in our silicones business to keep up with the growing demand there so i think when we look at the portfolio, everything fits today. what we need to do to increase value for shareholders is is to
look downstream. we have two ways to make money, one is innovation and growing downstream with the customers and there are huge demands brand owners put on us everyday and one is cost position we have other players coming in that want to play in the low-end commodity space so for a company like ours we need to innovate to keep those margins high for our shareholders. >> jim, we're short on time today given other going on in washington, d.c. but appreciate you taking time with us and look forward to visiting with you when dow is an independent entity jim fitterling, the future ceo of dow back to you. >> david, thank you very much. you mentioned activities in washington our andrew ross sorkin is sitting down right now with former federal reserve chairman ben bernanke, former treasury secretaries tight and henry paulson on this tenth anniversary of the financial crisis live at the brookings institute. paulson is talking right now let's listen in. >> i call midwife wendy, i told her i'm scared and she
immediately brought me back to one of our favorite verses from 2 timothy that the lord has not given us the spirit of fear but power of love and a sound mind and i immediately snapped back and it was fine and the related event was ten days later it hit me i had my brother, a best friend, who was a senior vice president at lehman. >> it just hit you >> just hit me the reason it just hit me is that week -- it was stunning the number of things we were dealing with we had the focus on morgan stanley and goldman sachs, need to go to congress for tarp. >> did you call him? >> aig, the money markets so i called him and when i called him
he was just terrific, he said listen, i knew you did everything you could i was worried about you, don't worry about me but it was -- but it was -- there are plenty of those as i think back on and i don't want to think back on all of the different moments but there are plenty of them. >> tim, your moment. >> i don't know, just that crushing burden of fear about whether we could get our arms around it. just tired it was easier when we decided but the hardest thing was sitting at the table with my wife with her reading about what we were doing and just seeing on her face that mix of despair and
doubt and and i -- that i believe she felt we were ethical people trying to do the right thing but she looked at what we did and she was like, really i think that was the hardest thing and that was mirrored by what we faced across the country and that gap between what we thought was the best of the available options, the gap between what we thought was going to provide the broadest benefit and with what people thought was fair and just. i think that was the hardest thing. >> i want to get back to that and the questions your wife had in just a moment because those questions may be the questions the country is still grappling with but, ben, real briefly, your moment, because i know you had one. >> aig tuesday, i think, market is in chaos, we organized an $85 billion loan to make sure the world's largest insurance
company would not collapse hank and i went to bush, got his support but he said go talk to congress so hank and i went to talk to a group of congressional leaders and explained what we were doing, why we were doing it, will it work it could work. will you get your money back we hope so so the questions went on for a while and then it died down and harry reid was leading the discussion, remember this, hank? >> gosh, yes. >> he said mr. secretary, mr. chairman, i want to thank you for coming down here and explaining this situation to us. he said but i want you to understand one thing, nothing you've heard here tonight constitutes congressional support or approval for what you're about to do this is your decision and your responsibility and i remember feeling so alone looking over at hank and saying this is the kind of thing we're going to have to do. >> and the question before that is where do you get the $85 billio
billion. >> you're the professor on this channel. you grade people for a living. >> you don't understand how it works at these ivy league universities [ laughter ] >> grade or measure, if you will, your own performance and the performance of these gentlemen. how do you think about it? how should we grade it >> it's not a fair question because we don't let students grade themselves i think my general sense -- we didn't anticipate the full -- all of us had various concerns about the financial system, about the economy, none of us anticipated the full ramifications and extent of the crisis so we were la late
we were successful in stabilizing the financial system and there was a paper about comparing how quickly it happened at what cost, how quickly the economy recovered and we look good compared other advanced economies that have had crises in the past so that communication issue i think is still out there but we did respond to the cry cyst et cetera and brought it under control quickly. >> tim, what do you think you missed what was the big miss in all of this in we go to the central issue of how we got here >> it's a common thing that happens across lots of economic policy which is it's the general failure of people to appreciate the damage that might come from the remote implausible low probability event it seemed to most people living in this
country that the type of financial panic, a run on the banking system that was part of the great depression was not something that could happen in modern times and you could say that was the failure of imagination. as a country we were living with a financial system that looked more stable over time. that made people believe it was going to be more stable in the future but we ran into a dangerous moment in the world with a system that didn't have the tools to break panics and in the similar way way it's the failure to anticipate, act early enough to reduce the risk of the existentially damaging event that seems remote and implausible. so when you look at the numbers
that you have put together and your teams have put together ten years later, is there data that you wished you had focused on more and that today you'd focus on instead hank is there any piece of data that you think -- i don't think -- >> i don't think this is about data because my strong belief is that these crises are unpredictable in terms of cause or timing or severity when they hit and there will always be someone that can say look, i called it but that person won't get it right the next time so to me the huge take away was that we were dealing with an'm i can
once every 75 year financial crisis a severe crisis. and to me the biggest takeaway was you -- we weren't able to put out the fire without getting the fiscal authorities we needed from congress, without getting the tools we needed and so the -- there was nothing more frustrating than -- because by early 2008 we knew we needed more and to know you needed more and can't get it is a tough situation to be in so to me -- when i got there we knew how flaw it had treasury system was we worked on a study looking at
the lilt stations. to me it was missing the magnitude of the event. >> this is you, hank paulson, on the debate this is what you actually said was one of the things you wished you could have done better you said i was never able to convince the american people that what we did wasn't for wall street but was for them. >> right. >> i want to ask you all three about this this, to me, is the central issue. if you look at where we are today and describe it as a success economically, there are many in this country who don't believe it and the question is from a policy perspective both in the policy itself and in the communication of the policy, was there another way to do it >> well, i will start because you're looking at me
[ laughter ] but i would begin by saying one of the issues was that we were early relative to work some other countries have stepped in to deal with these things. so we stepped in before the banks had collapsed and we did some things to fix the financial system that are very hard to explain because they're objectionable things in the united states of america if you take risks and succeed that's great but if you take risks the government shouldn't be there that you don't want to reward the arson iist.
the definition will be hard to defend the second thing is how can we explain what we were doing was for wall street and not -- you know, that it wasn't for wall street and it was for the american people. so it's very hard to explain that the system is so complex, so interconnected that we had to go to the source and wall street was like the heart and we had to stop -- we had to go to the heart -- we had to go to the source to stop the leading otherwise it was going to kill the economy and what we were doing is like putting a tourniquet on it but it's very hard to explain that finance is the lifeblood of the economy we tried
all of us stood up there ben did something on "60 minutes," tim talked about it all the time i tried to explain that if you want to take money out of your atm, if you want a loan to send your kids to college, whatever, you need finance but it's a hard case to make and we were unable to make it. >> i think the premise of your question is that somehow the current dissatisfaction, populism, the remaining obvious economic problems there are are traceable back to the financial crisis i think that's a wrong premise financial crisis didn't help we know the crises intend to increase but people have been saying the country has been going in the wrong direction for 40 years there's been a long period of slow waynes and increasing in slow upward social mobility. we've had rising concerns about trade, china's entry into the k wto in 2002, so there's a whole
gamut of things that are feeding into the popular mood. i think the financial crisis exacerbated that but i don't think it was the primary source of the politics we're seeing today. now, on the communication, it was tough. none of us is experts in communication. i went on "60 minutes" and spoke at military bases but we had gifted people like tim's boss president obama and others who couldn't turn around that narrative and i think that's hard to do. >> let me ask about policy issues themselves, though, in terms of the development of tarp, in terms 60 questions about whether you want to help homeowners more directly that's something you thought about principle reduction. do you look at that and say had we gone in that direction from the policy perspective we'd be better off economically or politically. >> i think in general the
country would have been better served if we had a stronger program of -- you might call them fiscal stimulus, tax cuts, support for states and local governments, a whole range of things like that so las vegas less burden on the fed to carry the burden of trying to get the economy growing again after we put out the financial fires. we did put in place a quite large sustained program of that but that put a big drag on the recovery that would be weak and damaged coming out of the financial crisis we were not successful enough in that housing is tragically complicated and the broad thrust of the programs we did were not large enough to offset a
substantial part of the damage from a recession which millions and millions of people lost their jobs the approach we adopted was to try to make sure we brought mortgage rates down. keep the mortgage market open and functioning so prices would rise again, people wouldn't suffer massive additional loss of wealth. those programs which are done as a result of gse conservatorship those were very powerful the programs we did to directly limit the risk people would lose their home unnecessarily, they helped nine million people benefit from lower payments on their mortgages and millions of people refinance who were underwater but they were not large enough and they came late in the process they came too late and it would
have been better if they -- if the stuff we learned in the process of trying to make those things work, we learned that more quickly and delivered it better. >> i know one of the issues you think about a lot is fannie and freddie and how that did ultimately help homeowners >> i don't think it. it did imagine, imagine how far housing prices would have fallen if fannie and freddie were the only source of mortgage financing so that made a significant difference so i can't imagine what would have happened if they hadn't gone into conservato conservatorship. >> what led you to go into conservatorship? what was the spark for that? the inflection point >> the spark was these were these huge entities that, you know, they had, like, $5.4
trillion in securities outstanding that were getting ready to implode their securities were $1.7 trillion out side the u.s., they had been treated as if they were -- add this implicit government guarantee but these were entities that auctioned off sometimes $20 billion of debt in a week they even had an auction that had gone wrong so i started working in the fall of 2006 with barney frank, got permission from the bush white house to compromise and to -- the president encouraged me to work out a compromise and we were working for a long time but it
took -- it took at the end just getting ready to go down to have to get those emergency authorities. >> one of the reasons i ask you the question is i think about the geopolitical issues we deal with today and i remember in your book you write a sequence about a phone call you got. >> that's paulson, bernanke and tight talking to andrew ross sorkin in the brookings institution in washington, d.c you can continue watching that interview live on cnbc d.com and his documentary airs tonight steve liesman joins us to weigh in on what we've been listening to and it echos the broad point of view that fb if youy from they got the policies right, they got the politics wrong. >> i'm a little amused by the conversation, i think andrew is asking can right questions i don't think there's a way to get the politics right if i call up and say dad i wrecked the car, how do you
guild that particular lily these guys as far as most americans were concerned were in charge of the financial system whether or not they had any actual responsibility for its downfall we can debate but americans don't want to care or think about the financial system it reminds me of one of my favorite twitter feeds, you had only one job and people messing up the one john they had i'm not saying they messed it up but then you go to them and say we need $700 billion to bail out the financial system what is a happy way to say that, carl i don't know these guys i think did their job, in my estimation i think they did it well i don't think there was a way to sell it to the american people in a way that was palatable. what is relevant about that is what happens next time around and if americans want to go through another system financial crisis -- which i'm sure they don't -- and do so without the help of the federal government, my recommendation would be have at it and good luck. i think what the federal government did backstopped a
brewing and even bigger or worse financial panic and whether or not history looks well on that is kind of irrelevant i think for the personalities there but only relevant for the policy. >> and i just wonder if we reflect on that question whether we can trace the backlash against globalization and institutions like the wto and populism to this fact that it hasn't quite been sold. >> i want to make one more point because there's been talk about whether or not more should have been done for individuals. it's worth pointing out that my colleague rick santelli's famous rant that launches the tea party happens as a result of his opposition to mortgage insurance or mortgage bailout for individual americans so it wasn't even so much the bank bailout but the idea that somehow we were helping americans whose mortgages were underwater that launched his rage and i think the rage of a lot of other people so the idea they could have or should have
done more is belied by the history. >> certainly the human color on how this colored their own family discussions, tooiim geite talking about the look on his wife's face. and bernanke talking about aig. >> aig tuesday, trying to save the largest insurance company. steve, we'll have more analysis on andrew's interview all day on cnbc the whole conversation is streaming on cnbc.com and be sure to watch "crisis on wall street, the week that shook the world" here tonight at 10:00 p.m. eastern time and pacific. let's get back to david faber live and sitting down with another big guest. >> sara, thank you we are joined by bob back kikish ceo of viacom. >> great to be here, thank you for having me. >> i had david zasloff join me
and they were discussing news. they have added discovery networks to the hulu over-the-top platform and sling as well. you're on sling and directv, two of the biggest but you said you want to get on all of these platforms. why aren't you yet >> there's a lot going on in the distribution landscape we've come from a world where everyone in the u.s. had the same product to a world where description is fragmenting by price but you have people at $40, people at $10, $11 and you have people paying nothing which was the old free to air now. and in that environment we're focused on having the company representing viacom brands across that and in the ott space which is typically this $40 space, we're on directv now, we're on sling, we're on philo, we're a small equity owner and
we continue to look for opportunities to be represented in other places. so for example one of the things -- and i should step back viacom is a story of turnaround and evolution and on the turnaround side we had a lot of progress on distribution. >> and i want to talk to you about that. >> coming back to it so on the evolution side which is where this fits, we've announced recently we're ramping up our studio production including under our flagship brands like mtv and comedy central, nickelodeon and that's about getting those brands represented in third party platforms so consumers who might not have a full bundle has access to these brands, still think of them in their entertainment and peerentertai me ment experience. we're very active in the mobile space. i've long talked about entertainment, skinny bundles and the power of mobile. when at&t watch was announced and launched two months ago we
were part of that and we continue to be and so our company continues to work to get incremental carriage across this landscape. sometimes it will be a carriage of your existing bouquetover linear feeds sometimes other kinds of product carriage. >> i would think the end hope is that everybody watches you wherever they can when ever you can. you need to have some kind of platform available. >> but part of what is going on is exclusive product so amazon prime video. we're carried on that. we have nickelodeon product there, we have a new paramount series jack ryan so i don't think it's reasonable to assume your traditional linear bundle will be everywhere consumers are. you have to deal with the distribution landscape where there's true in certain pockets and you have other representation in other pockets. >> you've talked about trying to find a low teens product that
excludes sports that sort of is this skinny bundle have you succeeded in figuring out a way to bring that to people >> we got the first one. that's exactly what philo is, a low price point entertainment skinny bundle delivered via ott. it's now moving to its second phase. it just did a round to enable it to market the product. they never market it had product. they wanted to shake it down first. so that's the first of what we hope are many. at&t watch is essentially that, too. there's no broadcast, no sports, it's all entertainment product, it's a limited selection so we think there's more to come and, in fact, in every mvpd cable deal we did in renewal, our extension in the last year and a half it includes provision that will be added to any ott skinny bundles they have so there is more product to come we're in the middle of a distribution transition and we're feeling good about the progress we're making. >> you're controlling shareholder national amusements reached a settlement with a
different media company known as cbs but it's a company that for quite some period of time, your directors were negotiating a potential transaction. there had been an agreed-upon exchange ratio so there was progress there, is that a deal when you think about cbs in the landscape that could still make sense for viacom >> there's been a lot written about this topic including very recently and for me it's easy to get distracted by stuff like that but from the beginning back to november of '16 my focus was and continues to be running this company, moving it forward, delivering a turnaround, delivering an evolution and we got proof points and u.s. distribution where we've sequentially improved our distribution revenue every quarter this fiscal year, growth in the fourth quarter and growth in 2019. we've improved audience shares
and turned around paramount. >> i know you talk about it a inaugural, it would seem to be early declaring victory. it may be profitable second half of 18 but what gives you the confidence to say it's been turned around? >> it's on a clear trajectory. it starts with different strategy, different management team that management team led by jim giannopolous is a best in class management team. they've done it with stuff they've inherited whether it's "a quiet place" which was a niche film that turned to be a breakout hit. >> that was agreement by the previous administration. >> but he got there three weeks after so they dealt with keeping it on budget, they did the marketing. that was a hit he inquired "book club," small film, turned out to be a nice
mid-size hit and they're doing well in the transactional window right now think of that as pay-per-view. and then there's "mission" sixth installment of the franchise, it will be the largest. that typically doesn't happen. that speaks to disciplined approach to production. >> you guys will make money on that, not just all tom cruise getting it on the back end >> tom will do fine but we'll make money, too. and the late for '19 we are tremendously excited, it's a tyler perry film starring tiffany haddish "nobody's fool." screened very well so we're happy with the film business, the tv business, $400 million from zero will grow from 2019 as we go from nine series on air to 16 it's making hits "13 reasons why" "the alienist" and now "jack ryan."
we're on the cusp of building a new business and that's making films specifically for third parties including streamers so i'm 100% comfortable with the direction pair mount is going. it's a fantastic asset and the team is doing a great job. >> so when your investor base thinks i think there's a turn around in place, bakish is doing a great job, but they're met with the prospect of controlling shareholder who wants cbs and viacom together. what do you tell them? >> i tell them to focus on the turnaround and the evolution that's what we just did and the proof points are very clear. on the turnaround side, it's our domestic distribution relationships are in a totally different place. our networks are doing better from an audience perspective on the evolution side, we are building new businesses for the future we weren't doing that before now we have a studio production business that business will be a billion dollars in a couple years. >> do you still need, bob, to be part of a larger entity given
the magnitude of the changes that have been seizing this industry >> there's no question that scale is valuable and part of what i did when i ran international was create scale there. we're doing the same thing here, rev r leveraging the combined assets also our production business it's a wider deal. we're creating scale with companies we don't own look at our ad sales business outside the united states where we have a number of sales houses in place including a joint venture with discovery and fox so there are a lot of ways to get the benefits of scale. we're getting them more and more inside our company we're doing small targeted mna to accelerate our strategies we're feeling good about that. >> during the course of the negotiations with cbs i had
reported there was an objection on the part of les moonves to your being involved in any way and your controlling shareholder led by sherry redstone wanting your place in the combined organization did that upset you during the course of that that this guy mr. moonves on one side didn't want you a part of any organization that would have included them both >> in a word, no the world is a complicated place, i have to focus on doing my job my job is to turn viacom around, make sure it's vibrant for the future to benefit our employees and partners people can say whatever they want we'll let the facts speak. >> as somebody who took over a did. situation, again, something i spent a lot of time reporting on when the changes took place and you took over and the board clanged, do you have any advice for joe ianello who is step into an equally if not more difficult
situation at cbs >> i'd give him the same advice i give anyones which have a plan, build the best team you can and execute, execute, execute. don't get distracted, just go. >> do you have any thought on moonves' legacy at all >> it's been enough written about that that i don't have anything to add. >> something i know you have added on and one of the reasons you may be irritated with us today is frustration at the stock price. it's around five times, it's low multiple. >> that's for sure. >> when you do think you break through? what will change the narrative to a certain extent or the points i was trying to make earlier? is there always going to be a cap on the stock price that there will be a deal between cbs and viacom >> as you said, it's frustrating, we are focused on putting points on the board. coming out of our third quarter
we started to get recognition for that coming out of our fourth quarter we'll get respect for that when we talk about the numbers paramount is generating we'll get respect for that and you don't know what the catalyst to turn it is but we have had a real change in sentiment and that's important. >> do you need a new investor base that doesn't expect the rates of growth that might have been the case previously for companies like yours you're still dealing in a world where you're having subdeclines for the traditional distributors does it demand over a poferiod f time that people look at it as a free cash-generating machine that is turning it around? >> the fundamental thing we need to do is shift the narrative the constraint we have is people are saying yeah, yeah, you're a domestic pay tv company. that's wrong we're a multiplatform global entertainment company and that's why this evolution point, building these new revenue streams, whether it's studio production, advanced marketing
solutions business, advanced ad business which the strategy is to husband that that to offset any decline, that business is growing over 30% you'll see that growth on a percentage basis accelerate in '19. why will it accelerate we will have more product in the form of vidcon, in the form of who say. you mentioned sling and directv now. sling inventory is now 100% addressab addressable. we can deliver a spot to you the direct inventory is on the merge of becoming addressable. meyer price, higher yield. so people have to understand that the narrative is changed. that this is a different company with a future ahead of it and people are starting to see it and i think it's a great time to get involved with the stock.
>> i'll leave you there on that nice bit of cheerleading, thank you. bob bakish, ceo of viacom. sara and karl, back to you. >> thank you very much s&p has gone negative to the tune of five points although the dow hanging on to minimal gains. a lot happening as we watch the interviews, waiting for more developments on canada trade, some comments from mexico's economic minister suggesting that things are moving along but nothing official, obviously. >> nothing yet just watching also shares of apple, the other big story of the day. biggest loser in the dow but has been such a winner leading up to this afternoon's event, up 15% over the last three months david's conversation there with viacom ceo bakish was interesting because it didn't hint at any sort of deal with cbs though he did talk about the merits of scale and david asked doesn't it help to get bigger.
scale is valuable, perhaps a clue some were focused on. >> as we go to break, a quick check on neo-going public this morning. sometimes called china's tesla shares down about 3% don't miss an exclusive with david tepper tomorrow on noon eastern on the half. a lot to talk to with tepper from alepp news. "squawk on the street" is back in a moment. don't go away.
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mervyn king will be with us. he was leading the bank of england during the crisis. affected more than 20 countries, even though it started here in the u.s. it's an interview you won't want to miss. 3:00 p.m. eaerstn. "squawk on the street" back after a quick break. dow higher by 10 points. who would have thought, who would have guessed? an energy company helping cars emit less. making cars lighter, it's a good place to start, advanced oils for those hard-working parts. fuels that go further so drivers pump less.
welcome back to "squawk box. i'm dominic chu. as you can see the markets are hovering just near their lows of the session off by 0.2 of a percent. technology the worst performing sector chip stocks are leading the way to the downside. check out what's happening with smh. micron among the worst performers in the s&p after goldman sachs warned about deteriorating chip demand. back down to you guys. >> all right, dom, thank you. evacuations continuing this morning as hurricane florence charges near the carolina coast. it could be the strongest to hit the region in decades. contessa brewer is with us this morning from charleston, south carolina contessa. >> sara, the preparations are intense right now at the port of charleston you can see these bmws are going aboard this car carrier.
they're moving them out to sea away from the risk of any storm surge and flooding the port is typically very busy. in fact it set a record last month for the number of containers moved, up 16% over previous years this accounts for $53 billion worth of economic activity in charleston or in south carolina and that is 9% of the state's gdp. this storm is already having a massive impact for instance, volvo has shut down its brand new plant that it just opened in june because of the storm. boeing has evacuated all of its workers. 6,000 workers now free to leave with their families ahead of this storm mercedes-benz opened a brand new sprinter factory it is shuttered. rail cars diverted boeing sent all of its finished 787s to everett, washington, to get them out of the storm's way. these ships will continue to move thousands of cars out of the port out to sea through midnight tonight and then the port will shut down its
operations entirely. it's opening that it can be back up and running by sunday, but flooding will be the big question here. charleston floods even with a few inches of rain in a normal rainstorm, so this one could be devastating. >> amazing some of these forecasts on the rainfall, contessa when they say evacuations, it means a lot more than cars, that's for sure. when we come back, countdown to a apple. they ueinvl their latest products at 1:00 p.m. eastern time dow is up 6.
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