>> are the socks attached to the robe. no, no, this is one of my own, special. yes, em in the lobby. there are a lot of people who are really and running around at the top of the show. >> i don't have a cd player in my room, because i did look. >> or type in rovell's bolero, if you actually ask. >> becky, we should mention that the white house adviser ahead ovd g-20 summit coming up later in the week now is saying that the u.s. is still working toward an agreement with g-20 partners to phase out subsidies for fossil fuels, which will have an impact on a lot of the discussions you'll be listening to at the energy summit.

>> the question is what does it mean for consumers down the road? are they going to pay more for energy surprises? is this something that would hit in 2012 when they roll off or read away? we have a number of ceos here to address that. we'll be getting all of their takes on what this is going to need for son umers. >> and that is not a green screen behind you. beck, the question, why not stay here, put the screen there and just say, i'm at the mayflower. who is going to know? >> shhh. don't give those ideas to anybody. >> this involves a train and going from the train station to the -- it just seems like -- >> wall, but it's now you get to

meet everything and see good stories. weeky, we'll talk to you later this morning. >> thank you. the fomc's meeting ends today. we are not expecting a cut in rates, but possibly a slight upgrade to the bank's economic view is possible. beyond the outlook, there been stories and market rumors that the fed could consider reversed repurchase agreements to drain reserves. and maybe gently tapping on the gas. >> maybe nudging them up just a hair. tim geithner heads to capitol hill today. he'll testify before the house financial services committee on regula reform proposals at 9:30 eastern of which there are

some varied and skundry option t on the table at this point. and then following geithner's testimony is rival, some would say, fdic chairman sheila bair. neen while, barney frank sent a note to his committee that said it wouldn't make financial firms abide by a requirement that des closures being reasonable. maybe people argued that that was too vague. >> vague. >> thank you, carl. i do the latin, vagutis.

they said it would be hard to enforce. frank says the revised plan will eliminate the obama's administration that financial firms offer plane vanilla products. >> meantime, the house passing a big to extend jobless benefits. norman a million people expect benefits to run out by year's end. there are already states where the unemployment benefit fund essentially is try. >> they go in 13-week increments on these things. what is that, about three months and a couple extra moment. what happen? world pleaders are gathering and

the russian about the will people at the end of the day. >> that's the prime minister. >> yeah. once he gets back -- he's allowed to do that, you can get back in. he's very young. >> he's healthy. >> and he knows karate the. uk prime minister gordon brown will be there and avenue dean jad will be there to -- hard to mamg p.m. new. >> that locates that so -- like tom things in the fast east, excut blg and now some other

pure cancers is hard. but there will be less, i guess, influence by us, right? >> that's right. trying to cut some ties. >> come out from urged the yolk, some would say. >> that's right. on the trader's agenda today, the treasury is going to auction off about 40 billion in five-year 2340e9s at 1:00 eastern time. we got yesterday's auction of 40 billion and two-user notes relatively well received as it comes to supply and demand. oil traders will be waiting on inventory numbers at 10:30 eastern time. analysts expect data to show a 1.5 million barrel drop in inventories, a 400,000 barrel increase in gasoline stocks and a 1.6 million barrel rise in distillates. some of the data yesterday, joe, was pretty bearish. it's got the dollar doing well today. >> are the futures -- they were up earlier. let's take a look at markets on this wednesday. the patient was down most of thely, but mixed.

europe has been largely in the green so far. >> futures are somehow managing to -- even if the dollar up? >> drifting a little higher. really, the fed will be the big story this afternoon. maybe if you've contend to the -- >> not worth earnings center. no. >> you know who will be walking? these the guys back here with the green screen. >> our steady cam operator. >> joe, you're part of the earnings team, too. >> i know. if you're in flus and you can call yourself part of the e team or the i-team, i think i is eyewitness, isn't it? e is -- i get it. all right. i'll be part of the e-team. >> it's worth it to be on this show, right? >> no.

i want to be on this show. okay. i'm a joiner. >> let's get overseas this morning and see what's going on around the world. christine tan is in singapore. first, though, we'll check in with london and geoff cutmore. good morning, geoff. >> good morning to you, carl. you've got ben bernanke coming up today and we just have the minutes from the bank of england, that other central bank that has indulged in kwaubt tafb easing. these reaffirmed that the easy money startsd will continue for some pounds and also to keep rates steady. as far as the markets are kermd, we are positive at the moment, which is interesting given that there is so much, i guess, commentary to come from your side of the atlantic over the rest of the day here. in terms of how it breaks down sectorwise, banks and basic resources are leading us up here.

we have autos and travel and leisure down on the session. ea easy. bo says he wants to get the french government out of his package. he says ler going to start looking at ways to get the government off her back. the surprise starts to go up. but back to i don't remember fallzation. christine, let's send it over to you. >> thanks for that, jeff. investors are staying cautious. training is lackluster. strong economic growth data from new zealand led to a jump in the kiwi dollar in early trade and that triggered a wave of selling in the greenback. the dollar is drop boosting oil and metal prices lifting stocks around the region.

the s&p/asx 200 rose 1.5% as a result. over in greater china noo, the shanghai market fell nearly % there plagued by worries of new share supplies coming on to this market. another one assurances by pt prime minister hue gyp you to, as well. banks and front stock et were lower. back to you, joe and carl. >> let's get to the futures pits. the futures are trying to get up a little bit. is it hard to go up when the dollar is up? >> well, joe, it never was. of course, we're in the new paradigm. and as long as we're in this carry trade mode, no, it's -- it's just -- we're sitting here, the dollar is not really up. actually, it's down against

sterling, it's down a little bit ge gerns the yen. it's really a mixed bag this morning. that is where the equity markets sit. >> and the futures are mixed, too. but that doesn't take away another 50 points yesterday and a 9829 quote on the dow and that's 50% now on the dow, even though the s&p has been up over 10,000 for a mile. are you going to run it all all season. >>. i l gli plan? i think we'll wait to hear from the people at 2:15 eastern people. there was a note dropped about the fed reviewing tests of doing reverse repos, which, of course, would be a way to start taking some of this liquidity out of the market.

we really didn't get much. it's just talk, talk, talk. i look for the dollar to continue to weaken. everybody is now on to our game. it is a funding currency for the gloeshl -- the new, new bubble. >> what if they did do reverse repos? would you expect people to welcome that or would that scare people? >> well, some people would welcome it. if you had steepers on, it would reasonable get rid of that coin. one day wouldn't probably do it two days, but if you tau a consistent pattern of them starting to do consistent rebows would be it would be fassty been

that is the mind-set that we're in. we're going to have to see the way that plays out. but that would become a very interesting story. >> okay, ira, thanks for your time this morning and your insight. >> see you later. >> becky is -- what's coming up, beck? >> zoe, coming up, we have your business traveler's forecast for you. plus, we'll set the agenda for today's national energy summit with one of the master minds behind it all. first, let's look at yesterday's winners and losers. click today.

welcome back. time now for our business traveler's forecast. scott williams of the weather channel is here. good morning, scott. >> good morning, joe. as we focus in on your business traveler's forecast for this wednesday, we are watching several areas as far as the rain is concerned. as we move into parts of south texas, watch out around san antonio this morning. if you will be traveling around the denver metro, an upper level low bringing a cold rain, even some snow into the higher

elevations just to the west of town. we have showers showing up north of the nashville area, moving into portions of kentucky. also, showers will be moving into interior seconds of the northeast as we watch a frontal boundary. and around coastal sections of the carolinas, doing traveling along highway 17 and in the capital of north carolina, some tropical moisture, believe it or not, remnants of fred continuing to bring downpours into this area. as far as n some of the airport delays that we are expecting as we go in time, watch out around charlotte douglas international airport for delays as we move into denver. new york city, low ceilings later on and also the nation's capital, expect some delays at the airports. now back to you in washington, d.c. becky. >> scott, thank you very much. the national energy summit kicking off the today. the council on competitiveness has gathered some of the biggest leaders in science and academia to talk about private sector response to climate change. joining us right now is deborah

win-smith, the president of the council on competitiveness. thank you for being here this morning opinion. >> thank you, beckdy. >> it's great to talk to you. this is one of those events where it's very rare for people to come together both from the am deck im world, the big world and from government. it's not edz to get those groups together. what are you hoping to achieve with this conference today? >> we're hoemg to achieve a call to action of our country, that energy is the defining issue of this time. >> you know, energy has gotten pushed absolutely to the back burner with everything that's happened with the economy. but obviously, from the guest list you have of people coming here today, you have a couple of cabinet officials who are going to be here, you have some of the biggest ceos in the country that are going to be here. when you get all these people together, what do you think is going to be the front and center

that comes out of this snm. >> there will be three issues. one, we have to be the leader to take us to this new 21 century. with we need to drive innovation and jobs and a manufactured renaissance of this country. >> that has been a huge ken. one of the questions that's been asked is america falling behind on the energy front. is america falling behind? >> well, i think we are falling behind in certain of the renewable fields. other parts of the world are saying, we're going to be the leader in solar. we're going to be the leader in the whole diversification of energy. we have to do that, too. it's not enough to have the r&d. you have to be able to make the things in the entire system and we have a skilled work for and talented people. we kneed to do that here in the united states. >> what's been missing to this point? why do we let that get away from us? >> one, we do not have a capital structure in terms of our

capital structure and our regulatory development. it's accelerating our manufacturing transformation. one of the things we're calling for today in our important efforts two years of drive is to have a camp hencive strategy to accelerate the energy transformation and sustainability to address climate change. >> the report that you have coming out today, what else does it highlight? >> it's going to highlight that we have every form of energy. we need a balanced portfolio. we've got to really move out on energy efficiency. that's the easiest energy there is to capture is to be more efficient and the u.s. has a very, very low energy productivity in terms love how we use energy. another area we're going to highlight is the need for tremendous advances in tech logical breakthroughs. >> when you start talking about energy efficiency and tech logical breakthroughs, is it a given that it has to come with big government spending to help

prop up some of this stuff and to get the private sector involved with it, as well? >> we believe that the private sector has to lead the transformation. we're going to make the business case for why every private sector has too lead. but at the same time, government is part of the challenge. the government says, the enabling conditions through our tax policy, regulations and these long-term developments in research development. >> those two groups don't always work together very well. why is it different this time? >> well, you know, the council on competitive is kind of famous for bringing together, you know, ceos and university presidents and labor leaders. but we always forge partnerships with the government. and i think the fact that two cabinet secretaries are going to be with us today and the president's science adviser really underscores the fact that this is a partnership for america and we can't do it

alone. we have to bring everybody to the table. >> a lot of this stuff has gotten bogged down in washington. is your hope that they will address the energy policy in the senate, in the house this year, next year? what's your thinking right now? >> i do hope it will get addressed this year. we have the health care debate underway. but one of the driving forces is the global climate change talks occurring in copenhagen. and it's very important for the u.s. to have a leadership role in copenhagen. but at the same time, we have to make sure that this drives economic growth and economic development and that we do not hurt and undercut the score industries on which our prosperity and national skierts depend. >> just a few minutes ago at the top of the hour, there was news that the united states is considering pushing off some of its sunsidies that it provides right now for carbon-based fuel. is that a good idea? if it let's those subsidies expire and does not renew them,

does that push the united states towards this agenda that you're talking about. >> well, you know, that question is interesting. we need to, as i said, have a balanced portfolio. 20% of our power comes from nuclear, from coal. we have to figure out carbon capture and seqe the ration. we have to figure out how to finally get the next generation of nuclear activities. so we're happening and arguing in this report that we have a balanced set of subsidies and not just favor one technology of the other. >> we have a lot of ceos joining us later. deborah, thank you very much for your time. >> thank you, becky. when we return, we'll have more of this morning's top stories, including president obama's trip to the united dm z

nations today. then, the temperature is about to rise. our energy conversations are just beginning this morning. up next, we have former shell boss john hofmeister. he's the founder of citizens for affordable energy. then coming up at 7:00 a.m., we was charles holly day and jim owens. this is "squawk box" reporting live from the national energy summit.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with carl quintanilla. and becky quick is reporting live from washington. and viewers have pointed out, becky, travel is good. i mean, it's not bad. but it's good. the travel industry, we should not tell businesses not to do this. this is part of commerce. i commend you. >> and you've been a big pusher of saying that we need to be get out there and traveling and staying at nice hotels and traveling. >> and i've been a drag on business travel and i -- >> you've been a drag. >> just a drag. but we commend b, becky, for doing your part. thank you, joe, very much. thank you, carl. i am at the national energy summit and the national

dialogue. this is being held by the council on competitiveness. that's where corporate, scientific and academic leaders are all meeting to talk about keeping the nation a step ahead. we have an all-start lineup ahead for you this morning. we will but talking about the chairman and cochair of circumstantial stainability act and. joining us in just a few minutes, a man who knows a thing or two about energy. john hofmeister is here. right now, he is the founder and ceo of citizens for affordable energy. he's the president of the national urban league as he has given a great deal of time and thought to what's happening right now in terms of energy sustainability and where we could be headed just over the next few years. guys, we're going to be talking

to him in just a few moments to get more perspective on what's happening here today. carl. >> are you getting your e-mail down there, becky? >> yeah, i haven't looked at it yet. i don't have the squawk e-mail down here, but i have mine. >> no, you don't need squawk. but paeshl john was really happy the ao is back. he mentioned it to lowery ann, happy the animal orchestra is back. oh, there you go! the hofmeister that killed carl. he's a serious guy, but appreciate he -- he knows i'll use it against you. >> as the animal orchestra, is it playing today? we haven't heard it in few days. >> it's playing today and we have a special, special treat today. >> this has been joe's main focus for most of the morning, actually. >> putting something together. we're going to transition from

one down to the ao to a famous -- >> it's a surprise guest. >> who has her own way of singing. that's all i'm going to say. what's going on behind you? >> now i'm -- oh, man. this is -- they're getting everything ready. this is a huge conference and they're preparing everything. i don't know if you've heard over, but there is apparently a big breakfast that's being set up. guys, the one thing i can say is usually you get up for a show and you get up for a show that starts and there are people walk around. that's not to be said here. the place is pretty busy. >> you have gary loch and ray hood, also. >> and the energy secretary, too, is going to be here today. >> becky, turn around and snap sdps, hey, we're trying to do a tv show here.

hey! listen up, everybody! no, i've been saying it the whole time and nobody is listening to me. they have big huge screen tvs. they have squawk playing on them. but you know we can hear in our ears for two or three seconds before it goes out on the airways. so i've been hearing it in concert all morning. >> we'll tell them when to turn it up really, really loud and following that, the surprise guest. >> and i likes the music today, "the electric slide" i just realized that was for the energy conference. >> yeah. >> and we have some others coming up, as well. meantime, we've got john harwood there, he's made his way to pittsburgh later in the week. john, we've got new poll numbers, as well, from the wall street journal and msnbc. but as the president winds his way through this week, how is he

doing so far? >> he got a start yesterday by talking about climate change with hu jintao of china who offered a new take on how china might do this. president obama is -- that issue is going to be a thread that rinse all the way through this week at the u.n., at the climate summit yesterday, at the general assembly today and at the g-20. >> you've seen these new poll numbers from nbc. we've got a few boards build here, john. one is do you generally approve or disapprove of the job obama is doing in handling the economy? in july, it was 49 approve, 44, that's august there and you can see september. it's really not moving in either direction, is it? >> no. what the president has done with this media blitz over the last couple of weeks is to stabilize his numbers.

he's seen a little improvement in health care, not a dramatic one. these are decent, not great numbers for president obama, challenges on afghanistan, which is something that i expect would come up in his remarks today because the american public is beginning to get worried about that sort of if they did in the beginning of the iraq war. but this is a president who has a big agenda and significant challenges in a divided country. >> and they asked about the congress, the approval rating of congress, which is worse. down to 22% in september. another question that you guys asked, should government be doing more to solve problems and helping to meet the needs of people, or not? those says government thoob doing more, 45, that's down from july. those that say they're doing too many things, that's up to 49. are people getting tired of the

role of government, john? >> on congress, first of all, the american public to have good as high regard of as joe kernen does. what we're significant is a significant ship. washington stepped in, you had a big stimulus package. now you see as people begin to see the crisis relief a little bit, they say we're worried about the deficit. stop putting so much money into beautifuling the economy. they're not sure the stimulus was even a good idea because the crisis has gone away and that desire for government to step in and act has moved back a little bit. especially there's been so much discussion about whether the government is doing too much, whether obama is trying to expand the role of government. >> john, i shift. i soften and harden on that.

we had president clinton on live yesterday. he was classic. he speaks his mind. i asked, i said, wouldn't it be better to do the 60 without the public auction? he said absolutely not. and apparently some of his big programs were passed with no republicans whatsoever. and he said -- and you can see, 49, 47, you're not going to get, you know with a majority either way. he said go for the 51, robust public plan. why try to appease people that don't want to play, anyway? you might as well appease your core on the left? he said go for it. i don't believe they can pass a pro bust pun pan for democrats. i think the best thing for obama at this point is the triggered options. clinton is right on this point. his economic plan passed under

reconciliation rules. only democratic votes. and what happens is if you succeed, if you get your legislation through, your numbers go up a little bit on the success itself. so this is one thing obama can hope for, even if the country is evenly divided. all of of a sudden the headlines are obama passes comprehensive health care, that's going to help him over the broad spectrum. >> john, we'll hear more from you during the day at the u.n. and we'll see you in pittsburgh starting tomorrow, yes? >> are you guys doing the electric slide back there at the studio? >> i don't know how to do that. that's a line dance, right? >> i'll bet you can do it. well, i know becky can do it. >> you can do it better than most. >> smae, yes, i can do it. i got a hard time about yesterday. >> i would imagine so. >> you can't jump, either.

>> beck. >> guys, if you have any comments or questions about anything you see here squawk, e-mail us at squawk@cnbc.com. we're going to take a quick break. when we return, john hofmeister is going to be joining us. we are live from the national energy summit in washington, d.c. xwxwxwxwxwxwxwxwxwxwxwxwxwxw

>> announcer: reporting live from the national energy summit in washington, d.c., here now is

becky quick. >> welcome back, everybody. we are here at the national energy summit with a big advocate for affordable energy. john hofmeister is the founder and ceo of citizens for affordable energy. he's the former president of shell. john, it's great to see you again. >> good to see you, becky. thank you for having me here. >> people wonder what you do at a conference like this. sometimes things get done at conferences, sometimes things doin don't. what are you hoping to get done here? >> this has been under way for two years. this has been a big deal for the council on competitiveness. i think what will happen today is we're going to set up what is going to be a classic national debate over the importance and the role of hydrocarbons because we can't do without hydrocarbons and all the things that are new and coming down the pike. the new technologies, the wind, the solar, the biofuels, also the smart grid. there's a whole lot of things

that will be discussed today. really, we have to keep everything practical. i know you're leading a panel. >> right. >> my advice would be look for those who are being pragmatic and separate them from the pied pipers. >> how do you tell the difference between what is really something potentially we can do at this point and what's just fantasy? >> there's a lot of folks that say less 1,000 flowers bloom in the energy space. there aren't that many flowers. if you're looking for energy, for the core of what energy comes from, you've got the sun, the wind, vegetation in general for biomass and then hydrocarbons or nuclear, hydropower. there aren't that many solutions out there. now, when it comes to the smart grid, you can have all kinds of grids. but there are a lot of dreamers that are looking for vc money, that are looking for, you know, the in the garage invention.

and when you get to the scale of energy, this is what a lot of people don't understand. the scale of energy is so huge that the little gadget that somebody makes in their garage, it's hard to make that much of a different. >> so you're not going to see, like, the next dell computer or the next microsoft or something like that come out of an energy innovation? >> not to make a big a deal or the big of difference of how energy moves from creation to consumption. it's a simple system to move from the creation of energy to the consumption of energy and, you know, to do it for 300 million people, 24/7, these are very, very big deals. >> but there is room for innovation. you're not saying there's no room for innovation. >> there's tremendous room for innovation. but it's not like 1,000 flowers bloom innovation. energy is a consumer product, but not really. it's the mainstay of our society.

it's the mainstay of our economy. so when the consumer turns on the switch or turns on the ignition of the car, they're really looking at a basic consumption of a commodity product. and so the kind of innovation you can do in a pc or with ipods or other kind of electronic devices, this is a different kind of industry from that. >> you know, you get some big plans that are out there and some people who are looking at major overhauls. something like a boone pickens plan. is that an idea that you think has merit because it sticks in the common areas, in these bigger areas and it's not something that -- >> if we want to keep energy affordable, we have to keep it simple. boone's plan is simple. it's using natural gas, it's using wind. i don't think it's comprehensive enough, but it would be a welcome addition. so you have to think big in all of these things. right now, i deal with a lot of biofuel start-ups. i love these people. they're really motivated, they're energetic. but some of these biofuel ideas

are never going to be scalable. >> and that is a tough message, but that is an interesting point to focus to try and get us to the next step and take us to some realities. >> and the problem with biofuels is you have to have an internal combustion engine. i'm for getting rid of internal combustion engine. let's use batteries for small short distance driving and hydrogen fuel cell for long distance driving. totally changes the game and i think it's quite doable. >> john, thank you for joining us today and we hope to see you back in studio very soon. >> thank you. >> that's john hofmeister and joe, we'll see send it back to you in the studio. >> becky, did you tell john about your car, your -- >> yeah, my windmill on back. i know an early innovator, but maybe too much of a gadget type of invasion for john to go along with. >> you're going to be sitting in

your driveway and it's going to be me and carl trying to carry on without you. you need -- i mean, we're not ready. we're not ready yet. >> i'm going to be late today. there's not much wind in new jersey. >> i forgot to ask john about the animal orchestra, too. you're a fan? >> those are the boys in the band, i love them. >> the hofmeister, the hoffenator, we love him. coming up, headlines inside and outside the beltway and beyond. carl and i will joan becky to talk about the stories catching our attention this morning. it's a multi city edition of chairs when "squawk box" returns. you're watching cnbc, first in business worldwide. these days every penny counts with everything you buy.

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my kid falls off his bike

and breaks his leg, he should have to pay that money out of pocket, out of his allowance. >> how else is he going to learn not to fall off that bike? >> insurance companies are detail oriented enough to deny claims for things like typos. if you type something wrong, do you really deserve surgery? i don't think so. >> a new ad by moveon.org. you saw will ferrell there, and a bunch of other actors moving into this phase. this ad, guys, sarcastically looks at the insurance company as the victims here, saying poor them, they can't make profits. at the end of the ad they're saying we're not being sarcastic, not at all. we asked yesterday what it's like being lionized or criticized like this. this will be one more step toward that. >> really out of character for

the hollywood types to align themselves with moveon.org. they always surprise you. >> is it like whoopi goldberg and the kerry campaign with the big fund-raiser? you think hollywood is across the board left? >> i think that moon landing, flags, rufling flag with no wind on the moon. she needs to get behind that and what the government was doing back then too mislead us and -- i suppose i can shift back and forth. you have shifted me with the moveon.org all the way back. >> you were all for public option. >> i was. i was feeling it. >> until will ferrell told you to do it. >> exactly. it's the humane thing to do for a rich country. people need to have health care. i got t i want to do it some way. peace. >> peace. >>. becky? >> i'm going to jump in the middle of this. i don't have an opinion one way or the other on this.

i'll let you two duke it out there. coming up, this morning's top stories and much more from the national energy summit. heads of two dow components leading the charge. they are here with us, joining us live when "squawk box" returns from the mayflower hotel in washington. we'll be right back. (announcer) when you buy a car what are you really buying? a shiny coat of paint? a list of features?

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we dig into the business of caterpillar, global recession and what they're hearing from the hard hats on the ground. plus, technology that grows crops. dupont, third largest chemical company sounds off on everything from modified seeds to liquid crystal displays, future of the technology and how it relates to the country's energy policy. plus, "squawk" goes underground, to the coal mines, that is. ceo of arch coal tells us about cleaner, greener energy. "squawk box" live from the national energy summit, begins right now. welcome to "squawk" here on cnbc. becky quick is in washington, a

kind of a split show. she has a great lineup from the national energy summit. we've had a pretty good hour and it's going to get better in a couple of minutes. right, beck? >> that's right, carl. international dialogue, being held by the council on competitiveness where corporate, academic, scientific and political leaders are all meeting to talk about the need for sustainable and balanced energy system to keep the nation competitive. coming up shortly, we'll be speaking with jim owens, chair and ceoo of caterpillar. we have a lot to talk about with him from this economy. also, dupont's chairman, chad holliday. they are silting here right now. we're ready to go on this. before we get to that, let's get back to joe with a quick look at the mark this is morning. >> okay, beck. we both have blue on. becky is right in the middle of this. that is a becky sandwich right

there. two pieces of bread. and there you are right in the middle. why haven't we done that -- have we done that before? >> yes, we have we've done this before. this is the first time it's ever occurred to you. >> let's both look at her. can you look the right way? >> yeah, okay. i can't believe i'm actually doing this. >> back up. back up. you guys are gross. let's look at the futures right now. the futures are indicated up two or three points today. after we saw a nice move yesterday. >> yeah. we had had that brief pullback again. >> now get to them! get to them! we don't have them. >> no charge? >> make sure you get to them, though. >> i think we do have oil. >> are you feeling like 10,000 is now -- >> yeah. >> when, not if? >> aren't you sort of -- are you feeling it? but i don't -- the market has a way of frustrating you. >> yeah.

>> and con foufounding you. i think it would confound a lot of people if it went higher. >> that 10,000. >> we only wear that on the way up, which is okay, right? some people are half full, others are half empty. i like when prosperity is blooming around the planet. >> long-term xwoel. >> thanks, joe. amid criticism of lawmakers, two banks currently enroll all checking accounts and overdraft protection will allow consumers to opt out of the service, eliminating the potential for paying overdraft fees. meanwhile, turning over more documents in a congressional probe of merrill lynch after the oversight committee will continue to assert attorney/client privilege for some documents but must provide a privilege log that the panel can review. investors will be watching and listening to world leaders at the u.n. general assembly. the president speaks at 10:00 am eastern time, followed by

russian president medvedev, nikolas sarkozy. iranian president mahmoud ahmadinejad will speak at 6:00 pm. becky, the national energy summit. just you and me this time. >> thank you, carl. appreciate that. two of the world's biggest companies are standing by right here at the national energy summit in washington. speaking at the event today, caterpillar ceo jim owens and dupont's chad holliday. gentlemen, this is a huge event today. thank you very much for joining us ahead of the summit this morning. >> my pleasure. >> thank you. >> we talk about sustainability and why we need to be focusing on energy, but it's very interesting to sit down with heads of businesses to talk about this, what it means for business. i know you both have thought an

awful lot about this. why don't you lay out a three-pronged focus you have when it comes to looking at energy and how important it is? >> one of the key reasons i wanted to be part of this summit, it looks at and recognizes the linkage between our energy policy, sustainability, climate policy and the need to retain global competitiveness. putting these three things together as an integrated thought is critically important to the business community. so, that's the big reason i wanted to participate. my company, caterpillar, we're a pretty big player in this space. we're a leading provider of machines, engines and turbines to develop all the natural gas resources here and around the world. we're a big producer of kilowatts, third largest after ge and seamens with our jet sets.

we need to get a return on our investment and finally we're a big consumer energy. we spend several million a year in our facilities. >> to be using that energy more efficiently? >> absolutely. >> chad you have similar issues on that. dupont has been a company that's been on the forefront when it comes to energy efficiency. you say energy security is a reason we need to focuso on this as a nation? >> absolutely. $4 billion in energy effectiveness since 1990 when we started our programs. every company can do much more in that area. what we see, the council has looked at this overall program, the opportunities around security. and if we generate more ourselves, we generate more clean energy ourselves, it makes a difference. just a word on the council. it's become a unique organization. large companies like cat and dupont, major research universities and labor unions. those three groups can get

together and agree on this list of 75 pages, specific ideas around energy, probably a pretty good idea to take a look at it. >> how long did it take to come up with the 75 pages of energy initiatives that you could all agree on? >> it took two years and it was a series of dialogues. jim played a major role leading around the country and ultimately many summits, regional summits leading up to this national summit today. these ideas have been tested and they're very specific. as you look at them, they're very concrete ideas of what to do. not pie in the sky things. >> are these things we're going to see accomplished in the next six to 12 months? is there a real chance of that? >> there's a real chance of doing them in the next six to 12 months. the loans are secure so you can better insulate your house. we can do that tomorrow. it makes really good common sense. >> and you mentioned that you have saved over $4 billion by looking at this. back in 2006, dupont committed to increase its revenue by $2 billion by products that create energy efficiency or

significantly cut back on greenhouse gas emissions. you said the goal was to do that by 2015. where are you -- >> we're ahead on that goal. that particular one, we're ahead. our solar systems are doing extremely well. we're a leader in supplying panels to the solar industry and we have a new capacity under construction today, even in this recession because we think it's so important. plus, the work we're doing on biofuels is very encouraging. we should have our prototype plant operating by the end of the year. >> joe has a question from back in the studio, too. joe? >> mr. owens, what was your immediate reaction when you got word that the u.s. had levied tariffs against chinese tire makers? >> what's that got to do with this morning's discussion on sustainability of energy? >> oh, are we not allowed to ask you anything but that? you don't have to answer it if you don't want to, but i have to ask you. >> of course not.

i was disappointed in that decision. quite frankly, i'm concerned about protectionist, naturalistic tendencies around the world and i think we have to be a leader in keeping world markets open and a very positive dialogue, because i think trade and the growth of trade is very important to global economic recovery. so, i was a little disappointed in that decision. >> can i ask mr. holliday about the dollar? i'm hesitant, but the dollar keeps going down. it's good for a lot of multi-nationals, chad, but do you think there's a day of reckoning coming? would you like to boost your business at the expense of the dollar? does it make sense? >> well, joe, certainly in this short term, these movements are good for u.s. headquartered multi-national. long term, we think stability is better. we have major customers, countries in japan, asia, and across the world. so, in the long run, they need to be stable too. if they can't export their products, we can't sell them products. we think the stable dollar is

the best interest for everybody long term. >> gentlemen, let me ask you about green jobs. that's something we hear that gets tossed around an awful lot. you can talk about the initiatives you have, how you're going to be growing business. if you look at this market two, three years down the road, how big is a green energy market going to be down the road? what's that going to mean in terms of green jobs? >> first off, american industry is investing a huge amount of money in energy efficiency and in our case, we're investing in a tremendous amount, probably 70 plus percent of engineering is on lowering emissions and creating new products. you mentioned the new hybrid d-70 tract. >> hybrid bulldozer. >> right. it's energy efficient and very low emissions for operations in urban environments, which we think is very important. a tremendous amount of investment is going into

alternative and renewable energy sources. i think one thing i want to adhere, we don't want to forget how important the jobs are in the traditional industries. and this report recognizes the importance of our coal industry, our oil and gas industry. we need to produce those resources efficiently and we need to find a way to clean up, if you will, those emissions from consuming oil and gas and coal. so, that's a key part of and that also creates a lot of jobs. >> jim, you mentioned the hybrid bull dozer that's been out and it's been shown around the country, different dealerships are getting a look at this. it cuts 10 to 30% -- or makes it more fuel efficient 10% to 30% over the normal bulldozer and costs a premium. i know it makes up for it over the course of a couple of years. is it more difficult right now, given the economic environment, for trying to get someone to pay

that upfront? >> we're just rolling that product out this fall. it's a very new product technology, i guess, for the industry. a lot of our customers are very interested in trying the technology. it's not only more fuel efficient, but much quieter, has fewer parts. and we think the overall owning and operating costs will justify the price premiums. reality is, it does cost more money. >> right. which is always the case. >> carl, go ahead. >> jim, again, sort of surrounding the topic of energy, all these worries that -- we had a gentleman on from the u.n. climate change area yesterday who suggested china is now taking the lead in terms of grabbing hold of the agenda, global climate agenda. would you argue we're no longer in first place on that front? >> no. i think the united states -- well, i think we haven't been in first place. quite frankly, the europeans and japanese are much more efficient

in terms of energy consumption, in terms of greenhouse gas emissions, for example. in terms of dollars and gdp. they're more efficient than we are. i think the chinese are seriously concerned about their environmental issues as their economic wealth has grown. they've gotten more interested in how they protect the environment and their citizenry is demanding change. i think they're likely to work with us. and i think that's a good thing. >> is that because they are worried about the environment or because they want to make the materials that other countries will use to improve the environment over their soil? >> i think it's probably both of the above. they want to be out in front and participate in leading technologies and industries, as we should in the united states. and they want to clean up their domestic economy. they have coal as a big natural resource in china. they're building a lot of coal-fired plants. i think we need to develop coal

sequestration or carbon sequestration in this country. the faster we can develop those, the better we can use natural resources and create cost competitive kilowatts. >> chad, you were at the u.n. yesterday for that climate change dialogue. what was your takeaway? >> yesterday, we had 40 heads of state, 110 business leaders together for four hours, trying tond what is the right match here between energy efficiency, greenhouse gas, dealing with the climate issue. and it was an extremely interesting dialogue. we had a number of companies committed, the statements they would make to try to encourage the heads of state to take steps to go farther. what hit me from that data is the green jobs you asked about earlier. you asked about the green jobs and japan wants green jobs, and china wants green jobs. if we're going to get them in this country -- that's what our

proposal, drive coming out today says. we need to be the leaders, we need to put the infrastructure in place where we can attract those jobs here. i can guarantee you china wants those green jobs in china, and they're giving strong incentives to bring them there and we need to be equally as strong here. >> let me ask you about your overall view of the economy, are we coming out of a recession, as many economists say we are, as ben bernanke says we are? >> jim is an economist, so he's the right man to ask that question to. we're stabilized, coming out and have some very good forecasts. this is a different kind of recession than i've ever seen before in my lifetime. what's different is how quickly we went down. the idea of the whole globe moving down in six weeks is unheard of. >> right. like somebody flipped the switch. >> so, models were out the window a year ago, but all the models that are going to work coming out might be a big

assumption. i wouldn't be too overly optimistic yet. >> but what you're seeing, is it some signs of recovery or is it still too early to say? >> i think these are early signs. again, this has been so different, i think to model it. but great majority of economists certainly would say we're at a bottom and we ought to be coming out. how we come out, how many jobs are created, how quickly the consumer feels it, you have to be told. >> how august sales were not necessarily picking up, things do not look great yet, but what do you see down the road? >> i think chad is right. the magnitude of the drop in global gdp, not just u.s. but already in pretty significant recession in 2008, but first quarter, second quarter, third quarter on a global scale, gdp declined at unprecedented rates in anybody's working lifetime.

what we're seeing in the third quarter in the united states and globally is stabilization. i think there will likely be positive real gdp growth in the world economy. we thought that for a long time. sluggish, probably, at first here in the third quarter. at least we found the floor and it's beginning to move up. so, it will affect different industries at different times. quite frankly, the pick up and activity is varying quite a bit around the world. >> jim, chad, thank you very much for joining us. and for inviting us to this conference here today. we look forward to hearing much more. >> thank you. >> appreciate it. that's caterpillar's jim owens, dupont's chad holliday. become to you in the studio. >> thanks, beck. our address is squawk@cnbc.com. when we come back, we go to the u.n. in new york where the president is getting ready to speak this morning at about 10:00 am eastern time. john harwood is there with a preview. "squawk box" will continue after this.

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appear on u.s. currency? the answer, martha washington, who appeared on the $1 silver certificate in 1886. welcome back to "squawk." tonight is a cnbc world premiere. david faber revisits walmart in an all-new documentary on the retailer. whether leadership is implementing real change at the company. here is a sneak peek. >> how many supermarkets, in total, are there? >> there are three regional and national. housing in the area is reflective, 70,000. >> definitely people that would be potential customer. >> probably 50% art, 50% science in what we do. a lot of understanding of demographic barriers, physical barriers, drive time distances where people currently shop and what their shopping patterns

are. >> what did you think of the site? >> a few things to figure out, but i think it's something that has a real high likelihood of making it to our real estate committee and potentially becoming a store. >> when you talk about a lot of potential, give me some sense as to what you mean by that. >> potential in terms of the ability to get the project done. that's one of the things we look at, how much risk we have to take and whether or not at the end of the day through the different hurdles you face whether you can actually get a store built. >> make sure you catch the full documentary here on cnbc, "the new age of walmart" with david faber tonight at 9:00 pm eastern time. it's been widely anticipated. we've been waiting for this. >> you remember g-1 and ng-2, sequel to "godfather," this is probably the most critically acclaimed cnbc has ever done, and ratings. every time it runs, dupont,

peabody scripts. time to go back. it's been about five years. not just for our ratings, to start running something special, but to check in. so much has happened to walmart since he did the original doc, tea time. >> hard to believe it's been that long. >> it's going to win another dupont? is that the question? it's 1 1/2 hours? >> yes. >> that's why it's at 9:00 and 10:30? >> yes. >> long time in bentonville. >> that's right, other than work on -- >> that's why it's so good. council on competitiveness. becky is there at the mayflower where political leaders and others are meeting to discuss the need for sustainable and balanced energy system. ceo of coo nstellation energy will join us.

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welcome back to "squawk box" here on cnbc, first in business worldwide. i am at the national energy summit being held by the council on competitiveness this morning. coming up in this half hour, the ceo of constellation energy. first, let's send it back to carl with the headlines right now. among the stories we are following this morning, federal prosecutors say about half the accounts held by bernie madoff's customers did not lose money. that's because those customers

withdrew more money than they originally had invested. a review of accounts does show customers suffered net losses exceeding $13 billion over the past four years. expecting vehicle sales to increase, as much as 11 million vehic vehicles, rising to 12.5 million next year, maybe 14.5 by the end of 2011. and chief executive meg whitman has officially announced her bid for the governor of california. she plans to tackle the state's extremely poor financial condition. we were thinking she would run. now she is. >> is the l.a. guy running? >> the mayor? >> running? >> perhaps. i'm not sure. it's interesting. we've seen a lot of people from silicoo n valley dip their toe.

>> what is -- >> she worked for mccain's campaign. >> right. interesting meg whitman. >> governor whitman? >> friend of the show. that will work for us. >> we'll talk to her soon, i think. treasury secretary tim geithner will be before the committee to testify on finance proposals. member of the house financial services committee, senator paul kanjorski, joinses us from washington. good to see you again. >> nice to be here, carl. >> we remember the president coming to wall street, i guess it was, last week or the week before, wagging his finger, saying some of you guys have ignored the lessons of lehman. are the things he is proposing, watchdog agency for consumers closing loopholes among the various regulatory agencies, are those being taken seriously on the hill? >> very seriously. we've been working on the president's proposals now for months, actually. many of them are reduced to

actual draft legislation and will be starting a series of hearings for the next month and then after that, we'll be doing mark-ups. i would not be at all surprised if some time around thanksgiving until christmas we'll actually be passing this legislation through the house. >> do you think the consumer protection agency -- i've seen you quoted as perhaps saying that that is not -- maybe it's not the smartest thing to go through with that? >> no. i think i was quoted in the wall street journal to the effect it's delaying other things and it has had a cooling effect, because it seems to be the focus and target of a lot of resentment. just yesterday, chairman frank issued a paper on seven issues that are making it much more attractive and less ownerist. i think there's a spirit now in the congress and on the hill to get this done and to try to get it done in a more bipartisan way. i hope that's the way it all d ends out and think it easily could. >> what do you make of those who say the market is up 50% from

the lows? banks are making record profits. bonuses are up, that it's a little bit late? little bit late to leverage the fear that we all have had back in february and march? >> no. we're not legislating from fear here, we're legislating from recognition that there are certain fundamental errors in our regulatory scheme. there are certain areas where the regulatory scheme has not kept up with the product and that we've got to correct that. that's what we're working on. it's a very comprehensive reform. some of it, around the edges, some of it deep and certainly looking at the s.e.c., and to make that a more functional agency. all in all, we're trying to eequip regulatory reform so we can have another 75 years of uninterrupted prosperity. >> what do you make of the front page journal this morning? some of these remedies aren't exactly being seen the same way here and in europe. will there be a fight brewing over this in pittsburgh this week?

>> i don't know. there are strong feelings. i spent ten days in europe two weeks ago, and i can tell you there's a strong urge over there to work in a coordinated effort with the united states, because we recognize that between the european union and the united states about 80% of the world's securities are issued. so, if we can standardize and cooperate and coordinate our effo efforts in regulatory reform, it can set the standard for the world for the next century. >> the administration wants the fed to be the super cop. chairman dodd would prefer to see a bunch of agencies put together into a super agency. which is going to win out? >> well, i don't know if either of them will actually win out. i think they're coming close to a different pattern. i would not put my money on the fed and it's going to be very difficult to combine all of the agencies. i think we will get a consolidation of some of the regulatory agencies and i doubt whether the fed is going to get a type of power in an agency

that's required there. it's going to be more diffuse. not a lack of trust on the hill, but a lack of desire to put that much economic power, more strength in the presidency of the united states in one single appointed official. >> if the fed's powers aren't broadened, is the fed in danger of at least coming under more oversight? is the ron paul push gaining momentum or losing momentum? >> the ron paul push would really go into full gear if, in fact, everyone held that the fed is going to become the super regulator. i don't think that's going to happen. i think there's a lot of feeling that probably a little more oversight has to be exercised. it's a terribly important balance that we don't overweigh the feds independence by meddling by the congress or the american people in establishing a political weight for the regulatory system in the united states. that wouldn't be the right way to proceed, in my judgment.

>> should chairman bear go to treasury for money, for credit, or should she take loans from the banks? >> that's up to sheila bair. she has been a great regulator, and has a lot of support on the hill shall bipartisan support. i don't think it's going one way or the other. it's what's more efficient, what's more effective and what can be done quickly? we have to allow her judgment and look at it later on. y think there could be any fundamental error there that could cause extraordinary problems one way or another. it's a matter of convenience. >> are you worried about how many bullets the fdic has in the revolver if, in fact, a huge number of banks start failing as we head into the end of the year? >> we certainly have to make sure it's well equipped to handle any failures that occur. we know there's a possibility of 300 to 400 very weak banks, many of which probably will fail. but so far, they've been very successful in either merging

those banks, taking them out over weekends, reconstituting them. now they need some support either from treasury or a bond sale to have the sufficient funds to accomplish that. that actually is a little problem compared to many of the problems over the last year. >> we've had bankers on the program who say 1,000 banks will fail before this whole problem is done. >> it's possible. back in the s & l crisis, we lost 1,000 financial institutions. these things happen. they can happen. at this point, i think we've stabilized it more than i ever thought we would in a year. i think we've got a lot of optimistic projections out there of what could happen. and now we're going to stabilize the system as best we can to get the least failures possible. failures are going to occur. you don't go through a financial crisis and not have failures. >> we get reminded of that every friday night, it seems, mr. congressman. good to see you again. >> nice seeing you, carl. say hello to joe for me. >> i will, congressman paul

kanjorski. now back to washington. carl, up next, how does nuclear figure into keeping the u.s. competitive? we'll be speaking with the ceo of constellation energy, making his way to the set right now. "squawk box" will be right back. could someone toss me

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go n go like a pro. since 1990 when we started our programs, i think every xp can do much more in that area. the council has looked at this overall program, big opportunities around security and if we generate more ourselves, create more clean energy ourselves, it makes a difference. >> that was dupont's chad holliday talking to us about an hour ago. we're talking to top leaders about many issues ahead when it

comes to energy. president, chairman and ceo of constellation energy joins us now. thank you for joining us this morning. >> thank you, becky. glad to be here. >> one thing that stands out versus everybody else you're looking at is what a strong nuclear component you have. and nuclear energy is a huge focus on this -- at this conference. in fact, it is one of the recommendations put forth by this group, saying that we need to push this country to be much more reliant on nuclear. how does that come about? >> constellation is one of the few lead operators of nuclear plants. five plants out of the 104 in the country. there are not many fleet operators. origin of the business was build a single plant sbun of the big issues associated with the existing fleet of plants in the united states, they're not standardized. as a consequence, they do get too costly and we're hopeful in the renaissance of new nuclear we move down a path where we can share costs between and actually lower the costs associated with

them. >> there has been a nuclear plant built in this country in decades, but is it your guess that in the next ten years, we will see more nuclear plants? >> that's our objective. we built up a lot of the components to building a new nuclear plant. obviously there are many, many hurdles to overcome. certainly capital is one of them. we've developed a very strong relationship with the largest nuclear operator in the world, edf. >> right. >> with the prospect of building the first plant actually in maryland, next to two of our existing plants. there are also other capital formation issues like loan guarantees from the federal government. there's a long process of getting licenses completely through the nrc. we feel that nuclear power has to be part of the energy complex going forward. as you suggested, the plants are, in fact, between 20, 40 years old.

there hasn't been one built in 20 years. and in order to get a renaissance, we need all the supply chain issues to fall in place and develop a whole new manufacturing base of supports to build out nuclear plants as well as a new labor force that has to come along. those are things we're focused on at this point. >> another one of the big focuses has been on building out the smart grid. i know at baltimore gas and electric, a plan has been working through this, an initial plan. what are the ruls of that? what can we expect to see? >> we've applied for a very ambitious market program in the bge area. and really what it entails is having smart meters, people generally associate that with being able to understand how to react to price signals. if energy is very high, say, during the afternoon of a hot summer day, you don't run the dishwasher. you run it at night when price of power is much lower. people react to real time

pricing. i think the idea that a lot of this conference is about is to get us to the point that we have a system that building generation because you have certainty about what the price of carbon is going to be or in a household where people are reacting to how they use power. a lot has happened in the last few years where people are better educated, lowering their use of energy at key times and this smart grid is oriented at having a methodology that puts power of those decisions in the hands of our consumers. >> power use anl, what do you see right now in terms of the consumer and in terms of industrial use? where do we stand on our footing for the economy? >> industrial use, you've probably heard, is down around the country between 3% and 7%. >> that's holding right now?

>> it is. we refer to it as demand destruction, closing down on of plants that have moved offshorks just not economic because of the energy costs associated with the production of their product are simply too high. that number is the number that presumably comes back in an economic recovery. the interesting thing -- >> you're not seeing the beginning signs of that just yet? >> not really yet. on the residential side, there are more interesting forces at work. i think the education about power pricing and usage is really taking hold. incentives are being put in place around the country for people to reduce their power consumption. they are becoming more efficient through better use of appliances and just their general use within the household. >> we've got to run, but very quickly, if cap and trade passes, what will it mean to your consumers at bg & e? >> we have a healthy balanced mix in the maryland zone, especially since we are heavily nuclear oriented, emission free. one of the great ambitions we

have is to really use nuclear as the driving component of addressing climate change. if we could move the percent of power to 40% through nuclear, it would make a huge difference in our ability to power electric cars, change the transportation industry and really reduce carbon emissions. >> mayo, thank you for your time. we appreciate it. >> thank you for having me. >> mayo shallick. back to you. more from washington and the national energy summit. plus day two of the fed meeting. central bank is expected to -- widely, anyway, keep rates near zero. perhaps to deliver more optimistic comments on the economy, we'll preview that decision with former governor lawrence meyer. that's not the animal orchestra. but it's close. we'll explain this music and

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♪ man, what is that? >> that is dolphin tones, plastic band. >> as in oh, no. >> not as in yoko ono? >> combined yoko with the animal orchestra. there was a time before the beatles -- i don't know whether they had just broken up or not, but yoko did cut an album. i bought it. you couldn't really listen to it. >> kind of like right now. >> kind of like right now.

take a look. >> you're just daring viewers to stay with us. we dare you to keep watching. >> hello, yoko. good-bye viewers. no, i don't think people realize that was actually -- i think john was part of it. you were not born yet in 1969. >> no, not quite yet. >> is it not worse than the animal orchestra? >> yeah. i love animal orchestra after that. >> all right. we've got a whole file of those now in our audio library. let's start with general mills, which is really going to be sharply higher today, carl. $1.03. $3.52 billion in revenues was above. with guidance went to 540 to 545. previous guidance was 420 to 425

up. you see the new thing you see with stocks with the walrus. it's becoming more institutionalized, carl. more people like john hofmeister that say they like it. if you can't beat them, join them. >> any given day, disappointed in our ratings -- >> auto zone reporting 443. two cents below expectations. revenue was right in line. domestic comps were 5.4 versus 4.4. gross margin was in line and they repurchased 3.8 million shares. palm price, 16 1/4 through goldman and jp morgan, size was increased, one of the biggest winners in the past year, from low single digits back to 17 on a company that was written off. blackberry has a monopoly.

obviously, some people have decided palm is the way to go. >> yeah. >> burlington northern, up graded to hold from sell at citigroup. carnival, downgraded from neutral to outperform credit swiss and remove from the europe focus list. black rock upgraded to buy from hold at deutsche bank. equal weight to overweight at morgan stanley and finally striker was downgraded to market perform from outperform atwells fargo, the firm noting that the stock has reached the vaulation range of 45 to 48, noting there are fda issues that continue to overhang. becky, if you want to go out and buy that song, the actual name of that song that you heard was "we're all water." which also by yoko ono, which

also seems -- animal orchestra, we're all water, we're all in water. >> joe, i don't ever like to criticize. i think it's important to make people feel good about what they're doing, what they're saying, but that is the worst sound i've ever heard in my life. they were playing it on the break beforehand and i had to take my ear piece out. i love the animal orchestra. that's horrible. >> i wanted to show you there was something worse than the animal orchestra. >> you're right. you're right. >> on a relative basis, animal orchestra is painful to listen to. >> blue album, beatles -- >> it explains a lot about your musical taste. >> okay, beck. >> all right, guys. >> we won't do it again. coming up, we are counting down to the fed decision. former insider who is going to tell us what the exit strategy should be for ben bernanke and company and what to look for with that statement later today. plus, much more from the

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it does look at and recognize the linkage between our energy policy, sustainability policy and the need to retain global competitiveness for u.s. manufacturing industry. >> the work we're doing on biofuels is very encouraging. we should have our prototype plant operating by the end of the year. >> the ceo of arch coal this hour and president of the national manufacturer's association. don't forget about the fed, chairman bernanke troping hints the recession could be over. former insider gives us his expectations.

"squawk box" begins right now. welcome back to "squawk box." we're back to this kind of music now. "squawk box" -- it was a melody. "squawk box" here on cnbc, first in business worldwide. becky quick down in washington. we'll have more from d.c. in a minute. first let's check on the markets. u.s. equity futures have been improving this morning. at least before we played that -- okay, it's still up. i didn't know what it was going to -- there is a song she sings called "don't worry". >> she says that for -- >> five minutes, chanting it. wouldn't that be good? don't worry, don't worry? you like music of all time. >> i'm not sure yoko ono would calm me as an investor, saying

don't worry. >> to each his own. >> would it calm you, joe? >> i like the animal orchestra. so, yes, perhaps. you've got some headlines? >> i've got headlines. secretary tim geithner will head to the hill, according to some prepared testimony he will tell the house financial service committee that financial reform needs to you include that new watchdog consumer protection agency and enhanced regulatory authority over those firms that are too big to fail. at 1:00, yesterday's auction of two-year notes about $43 billion worth was well received. and mortgage apps rising almost 13% as interest rates tumbled below 5%. that's the largest jump since may. the president speaks at 10:00 am eastern time at the u.n. general assembly. john harwood is standing by, outside the u.n. on this side of manhattan. we'll be watching what is said today, john, just as much as we'll be watching some of these

poll numbers from the wall street journal nbc news poll that argue, a, he's losing ground on foreign policy and specifically afghanistan and, b, independence now seem to be no longer his friend, or at least to a lesser degree. >> he's down. he's in net negative territory among independents, has lost ground with whites as well, with senior citizens. although in the last couple of weeks, he has come back among seniors on the health care issue. but there's no question that the partisan divisions that have been existing in our country for some time that have been very powerful have not been wiped away by barack obama and, in fact, have reasserted himself over the course of his presidency as he pursues such an ambitious agenda. at the u.n. he will be talking about iran, nuclear proliferation, none of those will release that as you see

different views. >> as you look at the week, john, and he goes through all these bilaterals, speaking to the general assembly, going to the g-20 later this week, how worried should we be about differences between nations ending in a stalemate, financial reform, capital requirements end up going nowhere, because we can't get our story straight around the globe? >> reporter: well i think they're going to go somewhere in a big sense. all of these countries move together on the g-20, and financial institutions was seen as a success. we're not likely to get a big, new announcement. but we do see countries across border pursuing financial regulation in different ways, different approaches towards things like capping executive compensation. to me, carl, the bigger difference that is a challenge for obama and his agenda is how to bring the world together on

this climate change issue. that is a linchpin of obama's economic policy, policy for transforming the foundations of the american economy and he has to find a way to have a combination with china and these other developing countries that see the demands of europe and the united states as somehow unfair, given where they are in the growth curve. >> all right. we will continue to watch the president today as he speaks later on this morning, john. o a lot more from you during the course of the day. thanks. >> you bet. top market story this morning is the fed because it's the end of that two-day meeting. decision on rates is expected as we always get it, shortly after 2:00. you'll be on the set. steve liesman, with what we should expect to hear from the central bank. do you conjure this stuff up yourself or do you check in with people? >> icon junior it up myself, go in a closet, close the door and

try to -- >> cone of silence? >> cone of silence, and try to figure out what the fed is thinking about. that's how it happens. >> how strongly do you feel your assertions here are accurate? >> my assertions this morning, joe, are going to -- we talked a will the about what was going to be in the statement today, in yesterday's statement. i want to talk about what's not going to be in the statement and this don't worry thing from the fed, which is interesting. when interest rates are not expected to change, markets watching this pretty closely. there is much on the table. quick thing, reviewing what we talked about already, how much the weakening dollar plays into fed policy. could it cause the fed to sound a bit more hawkish than it otherwise would? how much is the fed uptake on the economy? the economy is growing, we'll take account of that. and what does it say about the planned end of $1.25 trillion in purchases and treasuries as well? the real $800 billion gorilla in the room that will not receive a lot of attention in the statement, though it's the main

potential source for inflation down the road, the excess reserves on the books of the banks, byproduct of the fed's credit easing programs. when they buy security, the dollar ends up as a reserve and potentially when they're loaned out in the economy. cnbc the feds had a plan for keeping these reserves in check, he said. >> we have tools to manage our balance sheets so we're not going to have an inflation outcome, bad inflation outcome. we have the ability to pay interest on excess reserves, which will basically allow us to keep inflation in check even if our balance sheet stays enlarged. >> growing course of fed critics point out that the plan might make sense on the surface but has not done here before in the states. how will they know when to raise interest on reserves, how much of a hike will be needed to keep how much reserves in check? can bankers -- you have to rely on rational bankers. can you rely on them to keep

reserves on the account? paying interest on excess reserves makes the problem worse. increasing excess reserves with interest on reserves being the key part of the fed strategy, the fed has provided little reason for confidence that it will work. not what i'm hearing from a bunch of different fed watchers out there is that they may push information on all this stuff off until november. they don't have to make a decision on some of these key exit strategies. you have people crying, worried about the inflation because even though inflation numbers are low, is that the fed has not articulated this exit strategy. how will the excess reserves works? this reserve repo thing that the feds will use to take securities or dollars off the market. very little detail on how this stuff is going to work. >> sometimes silence creates a trade in and of itself. >> exactly. in this case, that may be right. >> yeah. >> larry meyer, advice chairman and former fed governor into the conversation. larry, you obviously think rates

won't move. >> that's obvious. >> the extended period language will stay. >> also obvious. >> you think the securities purchase is the main topic, right? >> that's the issue on the table. there's no question they don't absolutely have to make the decision at this meeting. that's the only thing they have to talk about. it seems to me it's much more likely they make it at this meeting, the fate of that program is exactly the same as the treasury program. they'll taper the sales, extend the period over which they take place, but not expand the size of the program. >> larry, how much possibility is there today of a descent from one or more of the board members to the extent that some of them, like jeff lacquer, has been out there really with concern over whether or not the fed should continue some of these credit easing programs out there? >> i don't really think on that matter that there will be any. it was suggested it might be appropriate, given the strengthing of the economy not to continue with the full amount of purchases. that is a very minority view and

i don't think they hold that strongly enough to defend on the basis of it. >> what about interest on reserves, which the fed has come forward and said this is the way out? a lot of people i've been talking to, larry, say, you know what? maybe but we don't know the details of how they would implement this program. >> i don't think that's really right. if you follow the fed, listen to the speeches, certainly can talk to folks at the fmoc, it's pretty clear. one has a lot of uncertainty about when it will happen but it's pretty clear that when they get ready to raise interest rates, the instrument will be raising interest on reserves. now, that is likely to be effective. but there's some angst that it might not be. at the same time they raise interest on reserves, they're sure to begin to shrink the balance sheet and withdraw reserves from the system. >> when does that day come in your opinion now, larry? >> we say it's certainly not

going to be at the end of this year when the unemployment rate is 9% to 9.5% and inflation near 1%. at the end of 2011, and even at that point -- >> hold on. underscore that, larry. the end of 2011 is when the fed does what, begin to raise interest rates? >> raise rates for the first time. >> let me probe you a little on this. does the fed begin checking its balance sheet before that? >> the balance sheet will be declining from a peak of 2.5 billion -- trillion above the 2 trillion today. it will be declining because of the exploration of the liquidity programs and because of runoff from the portfolio. by the end of 2011, it will still be $2 trillion, about where we are today. >> so, you're going to take off the next, what, 24 -- almost 16 months now, larry, because there's nothing to say about fed interest rate policy until the end of 2011? >> well, there will be a lot said about interest rate policy over that period. a lot of debate about it.

but the question really is what are the metrics that drive policy? what is the level of interest rate that is too high to begin to tighten monetary policy? is inflation rising or falling? is it about where they want it or is it well below where they want it? those are the metrics that matter. >> you put a time stamp on the words extended period. that's extended. >> absolutely. i think that fmoc is a little puzzled why the markets don't seem to believe the extended period. but they mean it. >> how can -- but you do expect the statement maybe to adopt a warmer tone, right, in the near term? maybe today? >> no question. it has to be upgraded. last time they said the economy was leveling out, i don't think anybody disagrees that the economy is expanding faster than most people believe, forecast in the third quarter with momentum

into the fourth quarter. >> larry, does a 148 euro play importantly in the room today? >> i don't think it will be mentioned. >> why not? they don't care about the dollar? >> they don't have a dollar policy or dollar target. they need to know where the dollar is, what's the direction of change and integrate that into the forecast. that means stronger than growth otherwise, higher inflation, otherwise. is that enough to change the fundamental course of the economy, unemployment and inflation? at this point, no. >> larry meyer, are you anywhere near sweating it over the dollar? >> not at all. not at all. as long as it declines gradually, it's fine. the dollar is treasury's business, not the fed's business. >> all right. it's going to be fascinating, even in the absence of what we normally would consider big news, larry. thanks for the inside. >> my pleasure. >> larry meyer, economic

adviser, former fed governor. thank you to you, steve. you'll be working hard today. over to you in washington. >> guys, thank you. by the way, at home if you have comments or questions about anything you've seen here this morning on squawk, e-mail us at squawk@cnbc.com. we'll take a quick break. when we return, ceo on arch colon fueling our nation's energy supply. stick around. you are watching "squawk box" on cnbc, first in business worldwide. sciplined trader. by selecting from eight advanced triggers, your order gets executed, even when you're busy. and with trailing stops to help you lock in profits and minimize risk, you can be confident in your strategy, no matter which way the market moves. find out why more and more active traders are turning to fidelity for a smarter way to trade online. trade like a pro. trade with fidelity.

welcome back, everybody. arch coal contributes 12% of the nation's coal supply, provides fuel for a portion of our electricity as well. steve leer runs the company, with us at the national energy summit. steve, thank you. great to see you here. >> great to be here, becky. thank you. >> we were talking off camera a little bit about coal and how important coal is when it comes to powering our nation, getting the electricity that we need. coal makes up about 50% of the electricity needs we have here in america every year. the question becomes, when you

start looking at some of these alternative energies, how quickly can they ramp up? how much of a part do they play? >> and it's a question of scale. we've talked and when you look at the u.s. and then the globe, coal is the fastest growing fuel we've had for fossil fuels in the united states at 50%, it's enormous. and the scaleability of renewables today are about 2%. so, they're going to double, triple, quintuple. we have energy derived from renewables. people forget to do the math. it's the scaleability, the massive numbers that are required. we see all the fuels are going to be needed. when you look at the global needs for energy and developing asia, particularly, it's such a big number that's going on that if you look at china, they're developing everything. i think it's a very smart policy. and in the u.s., we need to do

the same. >> you think we should be working on all these things, but can't forget that the fossil fuels aren't going to go away or our need and dependence on them aren't going away overnight? >> we can whittle away at it, but still will be heavily reliant on coal, natural gas and oil. >> which gets us to the point where we ask, what can we do to be cleaner about using fossil fuels and to be cleaner about using coal in particular? one of the big points that's come out, one of the recommendations that's come out froms panel today has been the idea of looking and focusing more broadly on carbon capture sequestration. one recommendation was for ten commercial projects by the year 2020 to come out? >> i would agree with that 100%. stabilizing co2 in the atmosphere, the only way to achieve it on a global scale is to develop carbon capture

squestration. those technologies have to be developed. otherwise we're just talking politics. >> not that i'm a novice or anything. but if there was a novice out there, what exactly is carbon capture squestration? >> capturing cartilage bon and combustion process or precombustion process of burning fuel whether in your car, refinery or power plant and storing the co2. >> that it doesn't break up the greenhouse gas emissions? >> right. >> so it's not emitting them? >> right. you take at salt water. look at the ocean. salt water can hold 50 times more co2 per unit of volume than air. so, there's deep salt water aquafors deep in the earth and part of the theory is that we could dump that co2 down in there and it would be dissolved in salt water.

pierre water is naturally occurring co2 in water. it's not a unique process in the world. obviously we've never done it on the scale we're talking about. >> what do you see when you look around at the economy? obviously you have a real good feel for who is using energy and how. are we coming out of this downturn? >> i think we are. we're seeing definite signs of economic activity picking up. some of our manufacturing pla plants, steel mills particularly have picked up. not robust movements, but certainly positive mochls. we predict 2010 will still be relatively week, but will be a growth of probably not more than 2%, but beats the heck out of the minus five we saw in the first half. >> beats the heck out of it, but doesn't necessarily indicate we'll see a real snapback in the economy? >> no. i don't think we're planning on a snapback in 2010, but moving the right way. and, you know, you have to walk before you run type attitude.

>> steve, thank you very much for joining us today. we miss you back on set and hope to see you back in the studio soon. >> that would be great. thank you. >> steve leer, who is joining us from arch coal this morning, ceo. guys, we were talking a lull bit about some of the antics this morning. joe, he'll be joining us back there very soon, we hope. >> really? >> yeah. >> good. good, beck. i'm monitoring this here. people didn't like it. but a lot of people think yoko is awesome. decision day at the fed. we would love to have steve come on. i think he was a guest of ours before from arch coal. >> yep. trader talk of the town. as we head into break, check out the price of crude. "squawk box" will be right back. they've served for decades as a golden, tasty sidekick...

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futures hanging in to some positive action after a decent day in asia. europe has been up as we await the fed statement later on today. when we come back, we'll go to chicago, check in with rick

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live from our nation's capital and the site of the national energy summit, here now becky quick. welcome back to "squawk box" here on cnbc, first in business worldwide. we are one hour away from the opening bell. this morning we are at the national energy summit being held by the council on competitiveness. coming up in this half hour, we have john englishler, former michigan governor and president of the national association of manufacturers. we'll be talking to him about how manufacturing is moving to try to get ahead and stay competitive in the area of energy. first let's send it back carl for a check on the markets. >> thank you. quick check of the futures on this wednesday. we are waiting the fed statement later on this afternoon.

five-year notes. lots going on. we've been hanging on slightly to positive territory after a mixed day in asia and pretty good morning in europe. larry levin, in chicago, and steve liesman is here in studio with us. larry, we had another larry, larry meyer, tell us that rates aren't going up until, steve remind me, end of -- >> end of 2011. >> meantime, traders are free to work as dollar stock trades. go for it. >> yeah. absolutely. the stock market is on the highs for the year, s&p traded higher yesterday. we're already in the overnight markets again higher. it's really amazing. 10,070. i had a hard time believing they would get above 1050. the next point, obviously, is 10,000 in the dow, 1,100 in the s&ps, fund managers are watching those levels. >> is there any fundamental basis to the trade of buy stock,

sell the dollar or is it simply a trade you guys are doing down there because it works? >> yeah, absolutely. professional traders in these areas are looking for things to stick with the trend, the fundamentals to me are a joke. i've talked about this many times on this show. that's okay if you're a real trader, tactical is all right. you have to stick with them. fundamentals, nothing you can pin your hat on with that. >> nothing wrong with being agnostic as long as you stay in the green. >> sure. >> overseas and foreign growth, that's one. but my understanding is that it's about 50/50. they need growth in the states and growth overseas. they just can't do it on a weak dollar. rick, i think larry is absolutely right. it's completely a technical trade. i talked to a bunch of traders down there. that's what they said, no fundamental basis. >> we don't have to believe in it, just make it work. rick, i assume you agree with most of that? >> there was a great story about

aig in the newspaper today, "the journal." substitute the dow jones or the s&p for where they have aig, unintended consequences of government involvement and the notion that maybe the market priced in a different scenario than is playing out. none of that matters. the reality is that that price is the only price and technicals are the only fundamental that seems to make a difference to traders. something has changed in the last 24 hours, and viewers, the magic area in this comment i'm going to make it time. but there's lots of whispers going on about reverse repos. some selling come in pretty quickly after that. some of the fed funds. there's other commentators who think the whispering of taking out a mop out of the federal reserve closet is going to mean something. i think it will. but mohow many months or years will it take? >> the idea that the fed would go out and essentially sell

treasuries or sell securities off of its books to mop up dollars as part of the exit strategy, i think it's actually a little louder than a whisper, rick. it seems to have been out there in the press and there's some talk about whether or not we get some formal announcement about a pilot program or whether they push it off until november. you're right in the sense that it's coming. i guess the question becomes, does it make you any more about the inflation outlook that they're starting to talk about this kind of exit strategy stuff? >> i would think the answer is yes. i've also learned the last year that talk is cheap and action is all that really matters at this point in time. >> right south florida so, let's see. >> larry, conversely, as steve asks rick with the answer to the inflation concern, is it enough to scare traders from way out on that limb, bring them back? >> i don't think so. at least not at this point right now. certainly, as i said before, the trend has been higher. anybody who has tried to short

these markets because they think fundamentals or inflation will come up upon us or anything else for that matter that we haven't heard about has not done enough to bring these marks back down. the only play at all. like i said, fundamentals don't represent that. technicals sure do. lot of technical places to buy this market long. that he the only trade there's been. >> aig with that 20-1 reverse split is -- i think it's back to $2.25. that doesn't -- i mean, that doesn't seem like that much of an insane -- the question is, is it worth anything when we pay the government back, i guess. >> well, you know, i'm just making a point that something emotional can get involved in, be the only dynamic that lasts a long time pricing, anything. >> i hear what you're saying. when people start throwing money at stuff, could be the dow jones, could be -- even some trading in the lehman or something, isn't there? >> yeah.

>> you're actually seeing some movement? >> absolutely. i remember how gm traded before the bankruptcy. i'm not saying, viewers, that this is wrong or not accurate. it is what it is. you need to identify why you're in a market with a position because when those factors come home to roost or reverse, you need to know when to get out. >> that's the discussion, as to whether or not -- whatever the fundamentals are, reassert themselves and begin to matter to guys like larry. if he can make a buck trade in the technicals, he will ignore the fundamentals as long as he can. the question is whether or not inflation is a real concern out there and whether or not we hear stuff today from the fed that makes people a little bit more confident that they're going to come forward and take the stimulus and the credit way at the right time. i thinkeer hearing some members of the fed want to do it now and some are out there -- the majority of the board is out there, let this thing ride as

long as there's not 10% unemployment and 1% inflation, guys out there are playing the gold trade saying, they get this not just wrong, they get this badly wrong. and that's another -- i don't know, technical or fundamental that's worked for them. >> do you believe there's any coincidence, the timing of this reversed repo chatter and the timing of the? >> no. the fed gets a chance to talk the markets into something for at least a period of time. the kind of chatter about reverse repos works for a while. eventually they have to put up. when you hear stuff about reverse repos, exit strategies and interest on reserves, it works to put something of a cap on inflation concern for a while. it doesn't work forever. talk say little more than cheap for the feds. >> i agree. that's one of the reasons -- another reason equities are up. because the talk in the fed is

they're going to keep rates low until i play basketball for the knicks, basically. that's helped to fuel a lot. >> different team, rick. >> yeah. >> lebron -- you and lebron would have come as a package deal. we know that. rick, larry, thanks, guys. steve we'll talk to you later on. >> thanks. >> becky? >> carl, up next, we'll be talking about tangled up in green. former michigan governor john engler, president of the national association of manufacturers says don't hold your breath for all those so-called green jobs. he'll tell us next on "squawk," coming up.

i'm concerned about protectionist naturalistic tepdencies around the world and i think we have to be a leader at keeping world marks open and very positive dialogue, because i think trade and the growth of trade is very important to global economic recovery. >> that was jim owens of caterpillar earlier this morning on "squawk." our next guest is not holding his breath for green jobs, saying we are simply not there yet. joining us now, former michigan governor john engler, president

of the national association of manufacturers. thanks for joining us. >> good to be with you, and the gang in new york as well. >> you said don't hold your breath for green jobs. why is that? >> that number of a million job sincere only half of what we've lost in the last 19 months and we're still limping along at about a 66% factory utilization. we would like to see some of these good old red, white and blue jobs come back, areas in infrastructure. trade. we need our exports up. we think there's a whole host of opportunities with tried and true technologies while we invest and do the research on what the green jobs of the future are going to be. have somebody out of a job today be holding their breath for the job, it's not about my job. it's about their job. and there's 2 million of them we would like to see go back to work. that's what the economy needs, is capital spending to give us a lift. consumers aren't going to do it. >> that's the big focus of this summit today, is trying to focus on competitiveness and keeping

america competitive. what went wrong? why did we lose our way when it comes to some of the green initi initiatives? >> we got complacent. that happens. better time, people start to relax a little bit. i heard ceos talking about in this recession, they've paired down, cut back. you'll see, as the economy -- it's very, very slow recovery. as it comes back, i think you're going to see a lot of increased production without very many hires and that ought to be the risk -- one of the things we said to the administration is you really need to have a growth strategy. i don't think there is a growth strategy in america today. that's what we need. in this conference, we talk about green jobs. nuclear power plants are green jobs. let's get some of those barriers torn down. energy efficiency is something the manufacturing sector has been leading the way on. we're aing about reason that carbon emissions have been going on even without kyoto, waxman

markey. it makes good economic sense for companies to reduce emissions and reduce their energy spend. >> what does the administration say when you say you don't think they focus enough on jobs and finding the growth areas? what's the response to that? >> there's too much of a little bit of congratulations that we didn't go into the abyss. you often hear, we avoided the worst. okay. we avoided the worst. but what is the growth strategy? in the stimulus package, for example, which they took a big leap and faith and we supported that early. impact on infrastructure has been pretty negligible. the fall-off on roads was so it really got us back to level. there was no significant gain there. >> are you redpreting the decision to go ahead and support

the stimulus or are you working behind the scenes? >> no. we thought the situation back in january was pretty dire, something needed to be done. and there was a lot that the congress loaded up in that bill that didn't need to be there. there were some things we thought would help. imagine if we hadn't replaced some that have local road money, state road money, what the chaos would be. contractors around the country said some of our prominent road builders in this state are at risk. we need to get that going. >> at risk because there's not enough work? >> not enough work. >> or not capital? >> not enough work. there's no jobs. and we need to have -- we shouldn't be putting off the transportation package for a couple of years. that's something we ought to be saying here is a seven-year bill. who here is how much we're going to ramp that up. we ought to be finishing our air traffic control system, big capital project. redoing the transmission lines.

big energy savings there. that's a green job as well. so, it depends how you label these things. i think just a lot of capital expenditure of the country and much of this actually has some revenue source attached to it. it's not even a -- if a company or state were doing this, you would get bonds for it and do the investment now and enjoy the benefits while you paid it off over a number of years. we have the capacity in some of these assets would be really good investments for the nation. >> i believe joe has a question back in studio. >> what do we do with things like tariffs and tires and behinda? it keeps jobs here. might be better to make a lot of tires here. we have a lot of companies that china is so important. how do you walk the line? what should we do? >> well, we approach it this way. we do think we need market access to be able to expand

trade. we look at the 15 largest trading nations, joe, in the world. that's about 90 plus percent of all the trade in 15 nations alone. we're right at the bottom in terms of exporting among those countries. we need to do more of that. we've got a tax system that's stacked against us. some of the president's tax talk on ending deferral, those are unhelpful. at this point, brazil, india, china, to an extend, i would say they're holding out, not offering much in the way of additional access. we think u.s. companies can compete but they've got to have this playing field leveled up a little bit. some of it is our own burden. it's been interesting in the waxman markey debate in the house of representatives. they spent a lot of time because they knew that climate legislation significantly would hike energy costs, raising the cost of production here, and it would make us less competitive at a time when we need to be

more competitive. so, i think we better pay attention to regulations like that. they're far more dramatic in te terms of the potential impact on our ability to trade and ex-sport and any of the tad negotiations. final point, remember that big fight, congressman all wrapped around that? $1 billion in the caribbean. today it's a $6 billion surplus, just in a couple of years. how that has changed, that's a good thing. that's why columbia and panama, where we have the votes in the congress ought to be submitted by the administration so that we can vote those in and the u.s. bulldozers to the panama canal. >> governor, thank you very much for joining us today. great thing you're here. we would love to have you back in the studio with us soon. >> love to be out there if we get better beatles music. >> the governor wants real beatles music. i said yoko was the beatles through marriage.

is that not -- >> isn't she responsible for the breakup? >> yeah. >> long and winding road may be to deal with energy. >> exactly. she may be responsible for the breakup of the animal orchestra now as well. we hope not. thanks, governor. thanks, becky. quick look of the shares at xylinz, after the company raised its revenue target for the quarter ending in september from 1 10%. i used to love to say what they make, steeled programmable gate arrays, which are tipped. one player like grape, one likes cream soda. you can program it right there.

>> that's a joke from probably -- >> ten years ago. >> 10,000 -- >> for people that think this show has declined, it's always been down. when we come back, from the economy to today's political events, floor of the nyse, trader's edge in a minute. this is john park's restrictive calling circle.

he's saying "toodel-loo" and switching to sprint - with any mobile, anytime. - hi, john. now, on the sprint network, he can call any mobile phone, on any network, anytime he wants. without worrying about the meter running. so he's decided to call every mobile phone in the country. he'll finish... just after his 93rd birthday. welcome to the now network. get unlimited calling to every mobile phone nationwide when you switch to any mobile, anytime. only from sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

time for the trader's edge. one question most important today, art, to ask you. you know you look for inflexion points, things that might change that could derail something. let's say this reverse repo story is true. would the stock market be happy to see the fed start draining some of this or would that be an inflexion point that would take away some of the liquidity? >> it could be, but i don't think it's going to happen, joe. i think there may be more to this story if it may not be a change or adjustment to monetary policy. it may be the fact that there are billions and billions of dollars in treasury supplemental bills that will mature and rather than have it flood the

banking system with $100 billion in prereserves, that's probably why the fed is doing all that talking about the reverse repos. they've got to do a good job about explaining what they're doing. i don't think it will have much of an impact. were it be a change in policy, it could have a dramatic affect on the stock market. i would say bad. i don't think any of the observers believe that the economy has shaken off what it could accept even a minimalist tightening right in here. it's really rather tough. i do have to ask you one question. you have the animal orchestra and when youed a oko. what about tomorrow, fingernails on the blackboard? >> we're going to go the opposite way. >> art, i think he knows he might have flown too close to the sun today. >> you were giving new meaning to close caption, joe. >> i know. i know that. tomorrow i've got something.

art, stay tuned. it's going to be a little bit different. >> always stay tuned to "squawk box." >> thank you. i appreciate that. i was going to mention, gosh, is it great to own a food company like general mills if you're a shareholder? did you see those numbers today, art? that's the place to be, huh? >> well, people keep eating. if you look at places like walmart and others, the increases in sales that they're seeing are in the basics, food and energy. and that tells you, you know, people can cut back in a lot of areas, but not when it comes to food usually. >> even revenue. you you get everything there. and xilinx, xilinx raised revenue guidance. maybe technology would be the place to see it first. >> they knew you were going to feature them especially on the show this morning. >> maybe that was it. all right. i think tomorrow right around 7:50, art, if you're wondering, think about what you would play to totally counter act? what do you do to counter act yoko ono? >> silence.

let me think that. silence would be a blessing. that's fine. >> all right. thanks, art. >> that only gets you back to even. >> stimulus sort of -- >> i need the reverse ree po. i need to drain some of the tones out of the ecosphere, wherever they went. when we come back, energized final conversation with becky at the summit in washington. you're watching "squawk box" on cnbc, first in business worldwide. could someone toss me

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all right. futures have been the building theme very slowly. we started up positive four or five points. but at least it hasn't been in the other direction. by the way, happy birthday to the boss. >> 60 is the new 35. p. >> you keep calling yourself that. >> i heard that yesterday. and you know what? this also than 30 seconds ago someone said what about bruce "glory days." that won't happen. we are happen to suggestions, requests. you're right. we need to do it. we're in new jersey. 60 years old. >> looks great, too. >> i know. >> in fact, you looked great down in d.c. today. did you have fun? >> learned a lot. i think the biggest question is

going to be how you can try and focus on new energy forms without massive disruptions to the old energy set-up and the old energy jobs that are out there right now. but the people here sound like they have some really good ideas. it's good to be here today. and look forward to being back tomorrow. carl, we're going to pass like ships in the night. >> unfortunately we're going to be at the g-20 tomorrow in pittsburgh thursday and friday. but we'll be back together, i think, early next week as we get ready, joe, for earnings season to start the week after that. >> hair, makeup for me -- >> i'll be on the show. >> you'll be able to hear. >> make sure you join us tomorrow. becky, i'll see you in studio. carl, safe trip. "squawk on the street" is next. fed policymakers getting set for the second day of their two-day meeting. their latest pronouncement on the economy and interest rates is about 2:15 p.m. eastern time. general mills shares are higher after higher than expected quarterly profit. the transportation

department says u.s. highway travel rose 2.3% july compared to a year earlier. just another sign of roring economy. that's cnbc.com news now. i'm courtney reagan. live from the financial capital of the world, this is it, "squawk on the street" starts right now. good morning, everybody. i'm mark haines. one hour from now president obama will make his you nate nighted nations sents s unite debut. he will live up to their responsibilities. >> and an interesting picture of the sky. i'm erin burnett on wall street. investors focused on what the fed will say when it wraps up its two-day meeting this afternoon. particularly what they have to say about their exhibit strategy and the things they've been buying in the mortgage market and the treasury market. any comment on unemployment? any improvements therein, would

also get a lot of attention. haines. >> sticking with the economy. just a short time ago, caterpillar ceo telling cnbc he sees the economy stabilizing in the third quarter. >> there will, i think, likely be positive real gdp growth in the world economy. we've thought that for a long time. sluggish probably at first here in the third quarter. but at least it's beginning to move up. >> should recall he and julian robertson were the two who called the recession in the fall. >> that's right. i remember. >> on that difficult, remember? >> yes. >> we had jim on today and julian will be on tomorrow. reports out of washington, house financial services committee, chairman barney frank, mark, wants to scale back the new consumer protection agency. that's what he wants to do. >> barney issic backing away fra that. >> they say treasury secretary tim geithner will be testifying on capitol hill