say, listen, i'm going to start this small business because it's something i want to do. rather than say them we're going to overwhelm you with regulation, overwhelm you with taxes. >> just get out of the way. >> not get out of the way. just be there to encourage people to take risk to create jobs. that's the way you create jobs. >> thank you, senator. make sure you join us tomorrow. "squawk on the street" is next. >> good luck with your daughter. good tuesday morning. welcome to "squawk on the street." i'm carl keent knee na with kelly evans look at the new york stock exchange. melissa lee, jim cramer, david faber are off this week. latest s&p case-shiller home price index just released. results at the bottom of your screen. 1.2% year over year in the second quarter for the second consecutive month all 20 cities in both composites had monthly positive gains. we'll talk to david blitzer from s&p in a few moments to break down those numbers. in the meantime take a look at futures. lot going on for week before

labor day. moderate weakness. talk about what's leading to that. europe as well some surprising headlines. decent auctions out of italy and spain. some surprising news as well from mario draghi in just a moment. our road map starts off on off the gulf coast where tropical storm isaac has almost reached hurricane status and is expected to make landfall today or tomorrow. the question is where exactly. what's next for gas prices with nearly all oil production in the gulf halted? mario draghi canceling on jackson hole citing a heavy workload over the next couple daus. what that means for the fed conference and whether something important could be brewing at the ecb. tough times for old tech. lexmark laying off 13% of its work force. says it will stop making ink jet printers as the journal says do not trust the turnaround at another pc giant, hewlett-packard. we'll begin with crude oil prices rising back above $96 a barrel as tropical storm isaac has led to refinery shutdowns in the gulf. gas prices also rising due to

isaac. the latest survey from aaa shows the national price for a gallon of regular gas edging higher to more than $3.75. the president expected to issue a statement on tropical storm isaac in about an hour from now. we'll get that to you live. people are beginning to talk about a rise of about 10 cents a gallon given the fact that almost 80% of production in the gulf is halted. storms moving relatively slowly. which might mean less wind, more water, which is obviously a big concern for the gulf coast this morning. >> we've seen gas prices all year just at such high lechls. remember going into the summer driving season, throughout it, we just never got the relief you might have otherwise kpmted as the market was selling off and people got worried about the global growth picture. whether it was supply disruptions here or abroad that's consistently been the theme. it continues to erode the spending power of lowest income americans. >> as far as the gulf goes, this has been called not a new orleans storm even though that's obviously a big center of attention but a gulf coast storm. mandatory evacuations in louisiana and alabama.

1,500 national guard have been called to mississippi. they're talking about a storm surge of roughly 12 feet. as anybody who's ever covered a hurricane knows, it's not the wind necessarily that gets you. it's the water. so there's going to be a lot of discussion about the ability of levees to hold. >> the $14 billion refurbished system. this is a major test of that capacity and, ok, of all of the various improvements. communications systems and everything we've seen put in since katrina. can they now sort of step unand at least help mitigate some of the damage. >> of course, the irony, the poet schism has lost on nobody tomorrow is the anniversary of katrina. this is no katrina we should point out. katrina was a category 5. this is not yet a category 1. katrina made landfall as a 3. this is nowhere near as strong but probably slower moving which might mean a little more rainfall. some said, look, silver lining, we've had a drought in this country.

this will bring a lot of rain. a little late in the season and not exactly to the areas that are going to need it. >> the last thing you want is a scenario where you have a repeated pattern of droughts and flooding. that may help a little bit but it's certainly not going to be a formula for kind of long lasting, you know, improvements to a lot of these crops that really need it. >> an update on the forecast for the gulf coast in a moment. in the meantime as kelly said the markets awaiting the fed chairman's jackson hole speech coming up on friday. european central bank president mario draghi says he'll skip the event. he was expected to speak and jackson hole and is attributing the decision to a heavy workload ahead of the ecb's key meeting on september 6th. a heavy workload foreseen in the next few days. >> this was an interesting dynamic to watch play out. for the last probably four to six weeks as traders in europe were so focused -- again, when you're trading and investing in europe, all you care about is timeline and policy action. when you look at morning notes

that get sent around, it's all about dates. this draghi date, september 1st jackson hole thing, was looming larger and larger, especially given the sequence of events after that moment. the german constitutional court ruling on september 12th. ecb meeting september 6th. it meant there was so much speculation about what he would or wouldn't say. you have to wonder if the ecb finally didn't say, look, let's try to get ahead of this and quell it. people are saying what does it mean they're doing right now? >> paul vigno at the journal this morning tweet third-degred tea leaf reader's dream. what could be so important you'd cancel this late in the game? we've known the schedule for a while. it's hard to imagine he was somehow surprised. the question will be and i'm sure the question in europe is, is there something brewing we don't know about? >> i will say it does seem as though people in the market for the most part have dialed back expectations of what to expect from bernanke and what, if anything, they would hear from draghi. perhaps some of the headline risk has been taken out of this weekend. at the same time it seems likely

no major, big initiatives are going to be announced on either side of the atlantic. >> meanwhile people are going to start focusing. obviously it's going to be a clean fed speak conference on friday with bernanke giving the main speech. economist mumbo jumbo. >> he'll go over lessons learned from the crisis. part of the reason we may not hear as much from bernanke this time around as we have at the same meeting the last couple of years we've had in the fed minutes an outline of what additional pressures or steps they could take when conditions warrant. there's not necessarily the need to lay those out. we know what they are. it's more question of whether conditions are soft enough to justify further action. that's not something a couple of -- that we need to hear about on friday necessarily. >> right. the outlieier surprises at this stage it's argued would be something like talk of a gdp

target. >> nominal gdp target. >> or open ended quantitative easing. the kinds of things they've not gone near yet. >> for get qe-1, 2 and 3. qe with a little infinity sign following it. basically that underpins the market with this expectation they will continue to come in and support implicitly the market but more broadly the economy. until it gets to a certain level. also implied by the ngdp target. the journal flagging the fact that even though we have finally in terms of real gdp recovered to prerecession levels, in terms of per capita gdp it could be early 2013 before we really hit that rebound. if they were to pick either a level like that or, again, more of a nominal gdp target to support inflation in the mix as well, don't be surprised. that's what he's saying. crazy sounding measures seem less crazy by the day. >> that's one reason he expects him to argue as you get closer to the zero bound as we call it, accommodation has a tougher row

to hoe. it's more difficult to get some traction when you're so close to these levels we're seeing. >> what's so remarkable, think about the role rhetoric has played. whether it's the fed or ecb. r rhetoric alone, forget policy, that's underpinned and driven the target through august. they're talking about what they may do in the future. it's become such an important part of central bank policy. >> someone tried to argue the draghi move is a win/win. he look like he's paying attention to details. also allows him to let the fed go first and bat clean-up, as somebody wrote, later on when the ecb meets. is that fair argument? >> that may be the case. i think if anything he's just trying to avoid the risk that whatever he says is taken to mean more than it necessarily is intended to. just want to mention, too, we will hear from draghi, i believe, september 3rd there's an eu parliament debate. september 3rd. then the ecb meeting september 6th. the german constitutional court

ruling, fin inish elections september 12th. >> everybody comes back to work. media starts firing. courts start ruling. september is going to be crazy. new signs of tough times for old tech. lexmark announcing its exiting the ink jet printer business. lexmark says it will now focus on more profitable imaging and software businesses and meantime this morning's "wall street journal" shines a spotlight on hewlett-packard saying there may be no plan b for the company as tablets and cheaper asian rivals take a toll on hthe pc business. the "time"s did a similar story yesterday. the journal says no plan b. tougher now to separate pcs which was, of course, what they were going to do before they changed their mind. the debt levels now at hp are starting to make acquisitions even more difficult. >> absolutely. nice piece. drawing attention to the challenge that the lot of these old tech companies, as we're calling them, are now facing.

reminds me again, even yesterday, the acquisition of -- ibm's acquisition of kenexa a new social networking services oriented company. clear where the trend is heading. also clear if companies ala rim, hewlett-packard, don't act they'll be left. >> we seem to be talking less and less about anything related to pcs. more and more tablets and phones. day two of apple/samsung. apple requesting this injunction on not some of samsung's newer phones. although they may come back to that. more stories on how google is now ready to play defense. >> amazon does use an android based system for the kindle, for the kindle fire, et cetera. as they look to make those an important part of their product line will they face any challenges as a result of this ruling? >> yeah. back to the s&p numbers from case-shiller. the home price report shows all three headline composites did

end the second quarter with positive annual growth rates for the first time since the summere s&p 500 index company. >> pleasure to be here. >> let's talk about some of these composites and the monthly gains, quarterly gains. how significant is this? >> i think this is a very strong report. it's very good. if you discount the pop up in 2010 which was all from the first time home buyers tax credit, we're seeing the first year over year gains since the end of 2006. since essentially when the housing boom turned into the housing bust. i think this is a clear sign we've turned around. we have all 20 cities headed up for the second month in a row, month to month. as you mentioned all three composites are up month to month. all three are up year over year. so it looks like some really solid numbers here. and given all the other news we've seen about housing and so

on, the big complaint that comes out in most of the stories lately is the supply shortage. so that doesn't suggest to me prices are about to turn back down. >> david, real quick, can you clarify whether these figures are seasonally adjusted or not? >> the figures in the headline are not seasonally adjusted. if you look at seasonally adjusted numbers you'll get pretty much the same story. i think maybe one or two cities month to month that were weaker. the seasonally adjusted. the overall trend and so on is about the same. year over year numbers, i thipg probably the most significant, aren't affected by seasonal adjustment. after all, if you compare june of this year to june of last year there shouldn't be any seasonality. >> it's remarkable. we've got cities like phoenix up 14% year on year. atlanta down 12%. it does seem some of the recent strength is pretty broad based. >> it is. there are a couple of spots. atlanta is one that has been

swamped by foreclosures over the last several months. then tothehe'splaces. phoenix and las vegas which i think a year ago we would have written off as dead are looking good. looking at the come pposcomposi or 6% from their bottom. it doesn't mean home prices will be 20% higher a year from now than they are now. but it does mean the chances that they're the same or somewhat higher are very good. >> finally, david, "usa today" this morning takes a crack at whether or not prices are actually rising faster than case-shiller can quantify. other surveys like trulia, others that don't wait for the homes to befaster. you think things are better than you think? >> these numbers are for june. we tend to be light in some people's eyes.

we want solid numbers. there's a general upward trend that started sometime in the first quarter. and appeared to be gathering strength. if somebody's got a good guess for july, it's probably showing at least as much if not more strength than we're seeing in june numbers. but our sense is we'd rather have a number that's pretty solid that's not going to suddenly get reversed than to rush to be the first guy out. >> better to be safe than sorry. david, thanks so much. >> thank you. >> david blitzer over at s&p. when we come back this morning we'll talk live with senator david vitter of louisiana. one more look at futures. mild weakness here. i was just told ernie els is going to ring the opening bell. got to see that. a lot more "squawk on the street" from post nine in a moment.

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new orleans is bracing for tropical storm isaac almost seven years to the day hurricane katrina devastated the city. senior correspondent scott cohn is in new orleans with the latest. scott, what can you tell us? >> reporter: kelly, at this pace the storm is likely to make landfall exactly seven years to the day after hurricane katrina. that would be sometime early tomorrow. that may be where the similarities end. as you can see, it's not so bad out here now. we just had the very first little bit of rain from the outer edges of tropical storm isaac.

still tropical storm, just on the edge of being hurricane status. we'll see how that goes. let's look at where we stand. the storm right now is still a good 150 miles south of new orleans. 105 miles or so from the mouth of the mississippi river according to the national hurricane center. models continue to shift the forecast a little to the west which may be good in terms of a direct hit on new orleans. but it means new orleans gets what they call the dirty side of the storm. a lot more rain, potential tornadoes. it also means that the storm moves more into the path of some of the bigger refineries in central louisiana and into texas. so, of course, we're keeping a close eye on that. this is also the first full-scale test of the $14.6 billion levee system that basically they completely redid after it failed so cat strofically after hurricane katrina. it is not anywhere near the limits of that system. the army corps of engineers

tells us, they're ready. >> based on the levels we're seeing, we're not going to be anywhere the design levels even on lake pontchartrain. the system is designed to handle it. we'll operate the way we need to, associated pump stations to hold back effects of this thing. >> reporter: what they're doing now is closing some of the big floodgates and the flood protections. they were in the process of doing that this morning just to make certain. because one of the big issues with the storm hitting the louisiana coast is storm surge. the storm actually lifting up the surface of the gulf of mexico. and making more water come ashore. that becomes an issue. that, of course, is what swamped the city after katrina. they're determined not to let that happen again. this city may be known as the big easy, but hurricane katrina fresh in their minds. they're not about to let this one go lightly. they are definitely making preparations here. carl and kelly? >> scott, thanks.

i wonder, too, what preparations people in new orleans are taking at this point? what are they being told about what to do or not do as they continue to figure out when and how the storm is going to hit? >> reporter: well, they were told beginning yesterday to make the final preparations for this storm to hit. and these people here certainly know how to do that in terms of making sure that they have fuel, making sure that they have food and supplies and things like that. there are -- there have been some mandatory evacuations along the gulf coast. fr frankly as we drove into new orleans last night there were some people leaving, not a whole lot. there were a lot of sport shortages of gasoline. people were topping off the tanks early yesterday. a texaco station we stopped at sold out of all their gasoline within five hours yesterday morning. they gives you a sense of people talking precautions and not taking this lightly even though

the forecast calls for at best a category 1 storm. >> scott, thanks for that report. carl, it's just fascinating. you know this is when you start to see price gouging in these situations. shortages, they raise prices. >> yeah. i was reading one account yesterday of someone who went to five gas stations trying to find gas cans and was basically laughed at at every gas station. people are taking it seriously, no doubt. our thanks to scott cohn who's going to stay down there. in the meantime, art cashin up next with market words of wisdom ahead of the opening bell. a tea party in the morning. we'll talk with minnesota congresswoman and former gop presidential candidate michele bachmann live from the rnc convention in tampa. a lot more "squawk on the street" from the nyse is straight ahead. perfect photo... [ man ] nice! [ male announcer ] isn't always the one you plan to take. whoa, check it out. hey baby goat... no that's not yours... [ hikers whispering ] ...that's not yours. [ goat bleats ] na, na, na -- no! [ male announcer ] now you can take a photo right from video,

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♪ great ernie els going to ring the opening bell in a few moems. meantime head of the european central bank mario draghi called off his trip to jackson hole, wyoming, due to a heavy workload foreseen in the next few days according to an ecb spokesperson. our squawk on the tweet question. aside from the european financial crisis what is draghi so busy with he can't even attend jackson hole. tweet us. we'll get your responses a little bit later in the morning. viewers will have a fun time with this one, i think. >> i think he might be trying to catch the u.s. open in new york. counting down to the opening bell. six minutes away. let's bring in art cashin, director of floor operations with ubs financial services. what are you watching?

>> like everybody else i'm watching the speculation about draghi. i think it's pretty cut and dried. his position was becoming untenable. people were talking about which speech do you watch? do you watch bernanke's or draghi's? that's kind of like going to your best friend's daughter's wedding an up staging the guy at his own daughter's wedding. it was untenable. he couldn't give a forceful speech and up stage bernanke. he couldn't give a bland speech because everybody was waiting to hear what are the details that i'll do anything. thirdly, you have his meeting coming up next week. if he said the wrong thing, he could get attacked in europe. so the wisest thing to do was to withdraw. that, i think, is what he's done. what's interesting to me is, as you and carl said earlier, it's caused some speculation that something's going on. it has raised the euro slightly. i think it's for all the things i just said. >> has the european issue, you think, receded from headlines a little bit? do you expect it to stay that

way? are we going to head into september with all these events coming up, even if we're not going to hear from him saturday, and back to a european driven market? >> it will remain a european driven market although we will become more focused now on what will bernanke be saying on friday. will it be detailed. i think there again it doesn't look like he's got the whole fomc on his -- onboard for what he wants. i think he may talk about what's worked, what's hasn't worked and what we may do in the future as possibilities more than -- >> that would make the market vulnerable to risk off sentiment if that happens or are expectations low enough? >> expectations are reasonably low. it could be a little bit of a surprise. then you have the diversions of the two conventions and a hurricane going by. >> and ernie els. >> and ernie els going to ring the bell. i think the speculation here on the floor that the president may in his speech coming up in about an hour decide to release some

strategic petroleum reserves. it's perfect cover for it's not politics, folks, it's a hurricane. >> what we need is the strategic gas reserves to be released. opening bell in just a moment. don't go away. [ male announcer ] let's level the playing field.

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one of the greats. golfing legend ernie els ringing the bell at the nyse. coming off his fantastic victory at the british open last month. running behind adam scott until the last minute. his fourth major title. first since 2002. >> ernie els raised a ton of money for autism. his son has it, i believe. >> the els for autism foundation. they just launched a big capital campaign to create a new center for education and therapy. does a lot of good work in that air wra. by the way, he's here officially kicking off the deutsche bank championship. tenth annual golf tournament which kicks off on the 31st of august. and over at the nasdaq.

that brings us to a tuesday. hopefully a little more volume than yesterday which once again -- >> wouldn't take much. >> the lightest volume day of the year. people are hoping a lot of that was because the uk was closed. london reopening today may give us a little more boost. >> it's the last week of august. i'm not sure how much of a boost we'll get. things certainly will pick up into september. the question becomes whether that's risk supportive or not. >> the big three, gm suspending production of the volt. sales have been below expectations even though it's still a relative novelty. 10,000 volts sold in the u.s. so far. expectations were more like 45,000. we'll keep an eye on the big three. also discussion on how they are running close to capacity, if not above capacity, adding shifts, adding workers, having been burned in the crisis, not really adding new facilities, per se. >> it's such a difference when we're over in london and the headlines we get about auto

production are consistently that facilities in italy, france, spain are being shut down. workers laid off. the difference in the strength we're seeing now in the u.s. versus europe. >> chevron is going to get some notice as well. journal today talking about the company amassing a bit of a war chest. the ceo not talking explicitly about acquisitions. but saying they could do some big moves if they wanted to. you begin to think about other companies like a yahoo! which has raised some money. >> there's a lot of cash. so you can look at it on a company by company basis and explore acquisitions or broadly step back and say why is it companies have so much cash and should we realistically expect them to put it to work? they may if they ultimately are worried it will be taxed or taken away from them if they don't do something with it. >> disney another one to watch. iger talking to the journal. discussing some of their long-term plans that have paid off or are paying off now.

buying marvel studio. even know john carter was a big bust this summer, they sailed through it. the chart looks almost like a diagonal line. >> the theme parks. it's a pricey visit. it's a pricey vacation. they continue to do well. they continue to raise prices in this environment. it's extraordinary. >> journal argued price to earnings ratio still looks cheap when you consider their ability to ride out the occasional misses which in the film business are going to happen. >> unfortunately sometimes when you put a lot of money into big misses that will happen. marvel for them has been a big winner. >> we discussed lexmark cutting jobs. we touched on apple briefly. seeking this injunction over some of samsung's phones. the eight galaxy phones. the u.s. district judge is going to rule on that coming up next month. they also have another suit pending against some more recent devices. we saw $12 billion lopped off samsung's market cap yesterday.

hard to tell whether the damage is done quite yet. >> i still think this patent 915 is the one to watch. one finger scrolling and pinch to zoom. there was a "new york times" article where one of the people they spoke with said getting a patent on that is like getting a patent on the circular steering wheel. it's like kleenex or band-aid. >> google got about 12,000 patents when they bought motorola mobility. discussion this morning about how it may not be exactly a lot of ammunition against an apple. motorola was no apple. a lot of those patents might not effective in defending themselves against a legal onslaught from apple. >> right. this is the argument from microsoft, too. they have the pat tents. do you bet on the people with the patents or the people with the products? i'd bet on the products. >> papa sani is on the floor

fresh off his amazing diamond documentary last night. >> good morning. wonderful time. 80 carat ring which i tried to get on kelly's finger. didn't happen. sorry about that. it would have looked fabulous on you, my dear. the big story is where is mar wroe, of course. i don't care what you say. i'm disappointed. i don't care if everyone else thinks it doesn't matter if he's coming or not. i think it was important. i'll tell you why. people were expecting some kind of hint of what might happen september 6th. that's when the ecb meeting is going to be. bottom line, it's not going to happen. we're waiting information how the eu bailout fund is going to be used. are they going to do something with it? are they going to fund a sovereign fund at all or are they not? is ernie els going to be here? good to see you. welcome to the new york stock exchange. happy to see you. how does it feel to be walking around with that? >> feel pretty good. i'm with my friend -- >> papa sani. welcome to cnbc? >> you going to come to golf?

>> are you kidding? i'm a terrible golfer. joe kernen and a couple friends will be there. fabulous tie. thanks for coming by. looking great. thanks for coming by. the important thing, guys, i want to get in what i have to say about mario draghi here. the important thing is the german constitutional court is going to rule in the following week on the constitutionality of the bailout fund. mr. draghi can't say anything about what they're going to do. he's not going to make any comments. instead we're down to very nerdy little things. all sorts of notes flying around this morning about revamped collateral frameworks. like basically the ecb is going to say we'll take anything collateral from the banks from now on as a way to pave the grounds for a new ltro. third ltro out there. basically make it easier to put in collateral and get cash for it. never mind that's not been the problem with europe. lack of demand is the problem. not actual access to cash. the important thing here is they're probably going to get the third ltro within the next

couple months. meantime big story spanish ltro is deepening -- excuse me. spanish recession is deepening. did you see new gdp numbers out in spain? 1.3% for the second quarter year over year, much worse than anticipated. spanish bank deposits, we have talked about this a couple months ago, confirmed. down 5% in the month of july. today catalonia now asking for $5 billion in euro aid. the bottom line is they've got a fund. they've got $18 billion euro found out there. catalonia asking for a third of that. already that fund is looking very seriously underfunded at this point. the spanish prime minister is going to meet today with the european commission president. that's the big story. they're going to try to figure out what conditions the eu is going to want for spain to ask for aid. almost certainly, with these numbers today, spain's going to have to ask for some kind of aid. let me just conclude with movato. numbers fantastic.

five-year high. very smart. those guys are making watches for people like tommy hilfiger, juicy couture, hugo boss. you want aspirational brands that don't cost a fortune. smart people in movato. they're based here in new jersey. back to you. >> thanks very much for that. moving on, tropical storm isaac is tops on the energy market's radar. out to sharon epperson at the nymex. sharon? >> we're seeing a lot of gyrations in the energy markets, kelly, because of tropical storm isaac. in fact, we're seeing energy futures in the opposite direction than they were trading yesterday around this time. we do have oil prices slightly higher right now. we do get the weekly report on oil inventories coming up in the energy department tomorrow. that will reflect, of course, what has happened before the onset of tropical storm isaac. we are expecting to see a drawdown, according to analyst surveys, that is part of the reason why some traders are saying we're seeing slightly higher oil prices. also the fact that as many traders had speculated we might see some type of release from

the strategic oil reserve, f with not seen any official comments about that happening. some believe politically that would not be a smart move for the u.s. administration to do so. that which was causing oil prices to scale up now not as much on the radar of many tra r trade traders. also profit taking in gasoline futures which were at the highest levels we'd seen in about four months. we saw as much as a 20 cent jump just in a 24 hour period in the cash market for gasoline along the louisiana coast in yesterday's session. in terms of the metals market, keep your eye on platinum and palladium. south african situation a little bit better there. that is what is easing those prices. back to you. >> thanks. more than 80% of the gulf's oil and natural gas production has been shut down as tropical storm isaac makes its way towards the gulf coast. cnbc's brian shactman is at the port of new orleans. he joins us now with a look at the storm's impact on the oil industry. 80%. that's a big figure. >> good to see you state side.

new orleans pretty much dead quiet. over here in the mississippi river, narey a barge to be seen on the river at all today. the oil and gas industry is almost completely shut in. we really need to separate oil and gas production from refining. because we're finding it's really the biggest concern here. gas prices as we noted already high. venezuela had the huge explosion. chevron had an explosion in early august. about 10% of all gas produced in the u.s. is offline because of this storm. it could be a while before that changes. >> even should the refineries by some miracle escape the wrath of this storm, you still have to move that product by pipelining. hopefully there'll be power available to generate the motion of this product toward the user markets. >> this is just about all the major players are involved here. drilling and refining. exxon, chevron, bp a huge

presence in the ghoulf. conoco. murphy, apatche, diamond offshore. a lot of analysts think the federal government's itching to pap the strategic petroleum reserve. guys, you well know bringing more oil to market doesn't bring more gas to market. that's why the refining issue is the biggest issue right now. >> we'll see what the president says when he talks in about 20 minutes, we think, brian. thank you so much. brian shactman from new orleans. when we come back, the republican party counting on hef vu h vy hitters to express its message. one republican who's not at the convention. senator david vitter of louisiana. he's obviously in his home state. we're going to talk to him about how he's preparing for tropical storm isaac. as we go to break, take a look at this morning's early movers. back in a minute. my volt is the best vehicle i've ever driven.

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looks to make the case for mitt romney as the next president. joining us this morning john harwood. things are going to start to get interesting tonight, john. >> reporter: carl, you may hear it get revved up in a moment. we've got a rock band rehearsing its number here. i'm thinking they're going to stop when the speakers are going tonight. they're not stopping for my hit. this is the day they really get going at the republican convention. i think everybody's relieved not only tampa wasn't really hit, but it looks like this is not going to be the kind of catastrophic event on a scale that would really interfere with the coverage of mitt romney's convention. tonight you've got two big speakers. one is chris christie, governor of new jersey. might have been selected as vice presidential running mate. a lot of people wanted him to get into the race himself. he's got a pugnacious style. he has taken on democrats in his state. he's also going to talk as he told matt lauer on the "today" show this morning about ways in

which he's gotten things done with democrats in the new jersey legislature. >> what i will tell you is i'll use new jersey as an illustrative experience about what can happen if you stick by your principles and look for ways to solve problems. if you look at over the course of 2 1/2 years, we've compromised on significant pension and health benefit reform that few other people have done in the country. capped property taxes. done a number of different thipgs people said we weren't going to be able to kbet done. >> reporter: compromise and bringing people together is one of the messages mitt romney wants to send to independent voters, swing voters. ann romney can help him do that. she's also going to speak tonight. her speech may be more important than chris christie's because one of the things that mitt romney has struggled with is forging a personal connection with american voters. on likealkt people rate president obama higher. ann romney can talk about why he loves her husband. the challenges they've faced through her multiple sclerosis

and breast cancer. ways to humanize the family so they look more approachable and not just rich, beautiful people ordinary folks can't relate to. that's one of the reasons why they moved ann romney from monday night to tuesday. because they knew that tuesday night between 10:00 and 11:00 is when the networks are going to carry this to millions and millions of people. >> all right, john, thank you very much. you were right. we can absolutely hear the band. >> reporter: right on cue! >> john harwood in tampa for us. see you a little bit later. meantime tampa, ok, getting spared from tropical storm isaac. louisiana is bracing for the worst declaring a state of emergency. latest models show isaac is zeroing in on the gulf coast. the same region, of course, devastated by hurricane katrina seven years ago tomorrow. here first on cnbc, republican senator david vitter of louisiana. good to have you with us. good morning to you. >> good morning, carl, good to be with you. >> i'm not sure whether to be heartened or not by the relative weakness, i guess. relative to some of the fears here. army corps says it's not going to test the design limits of the

levees. are you -- is it too soon to breathe a sigh of relief. >> we're all hopeful that it will remain weak. we're all also taking it seriously, preparing for the worst, taking every precaution as we should. >> how would you characterize the army corps' preparedness, how would you characterize fema's preparedness? >> i'll do a lot more about the corps in a day or two. because i'm actually going to go into their headquarters, get imbedded with them today. spend the storm and the night with them. just to see how the whole system that they're in charge of performs under these conditions. hopefully this will not be much of a test of that new post-katrina system. but it will be important to observe. so i want to be there at their headquarters. >> they're still talking about a 12-foot storm surge. as we know, the levees are really beholden to the rain. not the wind. so 70 miles an hour might seem encouraging. but a storm that doesn't move quickly over you guys will not be as encouraging.

>> yeah. the rain could be the biggest story at the end of the day. we'll see. of course, the city of new orleans in particular has to pump all that rain out over the levees to clear the streets. that could be a challenge. >> senator, that likely would mean a lot of flooding. what protections exist for those ohm owners who'll be most affected by that? >> if it's flooding from rain, the issue will be pumping capacity which is local government in conjunction with the corps pumping capacity to get that water out. at some point, heavy, hevy torrential rain, the pumps can't keep up. these are the biggest pumps in the world, literally. but at some point with extremely heavy rain, they can't keep up and there is some street or even modest home flooding. we'll have to see. >> what about flood insurance for those who are affected? >> well, everybody here depends on the national flood insurance program. thankgoodness a couple months

ago we got a five-yearlong-term reauthorization of the program. we have stability in the real estate markets and in that program. that's important for the country. certainly important for south louisiana. >> obviously in tampa, senator, they want to throw a party. you want it to be an energetic showcase for the party overall. how do they ride that balance given the knowledge of what you're going to be going through over the next 24, 48 hours? >> first of all, i'm sure folks will be very sensitive to set the right tones, starting with mitt romney himself. secondly, hopefully, this will be a relatively minimal hurricane event. again, we're taking it very seriously. taking all precautions to mind. hopefully at the end of the day, it'll be a relatively minimal hurricane event. >> in terms of the convention itself, what are you most looking forward to? i mean, expectations are high for governor christie's speech tonight. obviously ann romney. but there continues to be this debate about where exactly the platform needs to fall.

>> well, i think the average american is not going to be worried about the fine points of the platform. they just want a gut sense of who they see starting with mitt and ann romney. and i think that visual and that gut sense and that gut feel for them as people, as human beings, is the most important thing. but having said that, quite frankly, i have a feeling i'm not going to be watching a whole lot of the convention. at least maybe until thursday night. i'll be hunkered down with the storm. >> does it, senator, complicate the gop's message at all that this convention falls at a time when looking at efforts in louisiana or across the gulf require a big help from the federal government to make sure the protections are in place and that there are relief funds for those who need them? >> i don't think so. look, nobody thinks the federal government should go away. a lot of people including me think the federal government should be smaller and leaner and do fewer things a whole lot better. in my opinion, a major problem with the federal government is

it doesn't have only one program for every conceivable need, it has four or five. as a result, it does very few things well. i think we need to focus on the essentials of what the federal government is really about and do those right, do those well. that will always include major disaster relief. >> speaking of government, senator, the president's going to talk at the top of the hour. some in the market think he might reference the strategic petroleum reserve. if that, in fact, happens, would you be in favor? you've got a lot of oil interest in your state. >> i would not be. because, unfortunately, i think it would be playing presidential year politics with a national security asset. you know, that reserve was created for really national security and other major precautions to have a hedge against bad things. this event certainly doesn't rise to katrina or anything else. i think it would be an excuse as a trigger more than a real valid

reason. >> senator, we'll be thinking of you over the next couple of days. thanks for coming to the camera. >> thanks very much. when we come bab, tweet time. ecb president mario draghi skipping this week's jackson hole event. aside from the financial crisis, what exactly is keeping him away from jackson hole? tweet us @cnbcsquawkst. as we go down to break, s&p losers. the dow down 11 points. our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. though all energy development comes with some risk, we're committed to safely and responsibly producing natural gas. it's not a dream. america's natural gas... putting us in control of our energy future, now.

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squawk on the tweet. mario draghi is not going to go to jackson hole, calling off his trip to the fed conference. we're asking you, aside from the european financial crisis what's he so busy with that he cannot even attend jackson hole? scott writes he's busy sending out his resumes to all industries except central banking. he heard there's an opening at mcdonald's as a fry cook.

nyc jay tweets because berlusconi invited him to his end of the summer bunga bunga party. you've got to know recent european history to get that one. >> i hear it's a great party. >> a friend told you? when we come back, breaking news on consumer confidence. the president's statement on tropical storm isaac. a live interview with michele bachmann from the gop convention in tampa. keep it right here.

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here comes 60.6 is the consumer confidence number. last week revised down to 65.4. this is -- it's bad but not a terrible number. in the 60s somewhere is okay. it reflects six weeks, seven weeks of numbers that are getting slightly better. this probably fits in okay to the stock market. stocks town initial reaction about three handles down in the s&p. i think it should stabilize there. what we're really looking at is jackson hole and whether or not the chairman is going to signify qe-3 or allude towards that. i personally don't think he's going to. it's scary because it seems like everyone is on that side of the boat. as far as consumer confidence goes, bad but not awful. back to you, carl.

>> really quickly on richmond, minus nine? is that above or below expectations? >> the survey was minus ten. it's a little bit above expectations. which is not bad. on balance, consumer confidence was worse, that's a little better. consumer confidence is probably a little higher in the hierarchy of numbers. all in all kind of a little bit of bad set of data. >> market has taken a bit of a spill on those numbers. thanks so much. another dose of breaking news. fdic with its 2 q earnings report for major banks. eamon javers in dc for that. >> a fairly rosey picture coming out of the fdic this morning. look at the in your opinions nu see what i mean. earnings up 20.7% compared with the second quarter of 2011. banks earned $34.5 billion. 63% reported higher earnings in the second quarter. noncurrent loan balances declined for the ninth straight quarter. another piece of good news.

total loans and leases grew by $102 billion. banks increasing their lending. that's good for the overall economy. the fdic's problem list of banks fell from 772 to 732. carl, some good news. at least on the margins there in a lot of different categories overall from the fdic. back to you. >> eamon, thanks a lot. eamon javers in washington. simon's made his way to post nine. kelly's going to stick around for another hour as well. we should know, we're awaiting the president's remarks on tropical storm isaac at any moment. road map for this hour, rare tea party in the morning. we'll sit down with minnesota congresswoman and former gop presidential candidate michele bachmann live from the rnc, next. it's an eerie case of timing as today marks the eve of hurricane katrina's anniversary. so is tropical storm isaac marches toward the gulf coast. we'll take you live to the scene for the very latest on the storm's path. one of the leading voices of the gulf coast recovery effort post katrina, louisiana senator marry

landrieu will tell us how her state's prepping in the final hours leading up to isaac's landfall. first up, after a one day delay the rnc gets under way today. the tea party has already been busy in tampa holding a unity rally in advance of the convention. minnesota congresswoman michele bachmann is the chairwoman of the house tea party caucus, of course, was a candidate for the 2012 republican presidential nomination and joins us from tampa. congresswoman, good morning to you. >> good morning, carl. good to be with you this morning. >> you've been through a few of these. i'm wondering to what degree the tea party impact is greater or lesser than past years? how is the tea party changing the rnc this year? >> i think we feel wildly successful. the three main principles that define the tea party, the fact we believe we're taxed enough already, the average american wants government to spend less than what it takes in in government, and third we want government to follow the constitution. those three mainstream prince pms ap

pls are now a part of the republican party platform. we're extremely happy. we feel the voice of the common man in the united states has finally been heard. some real common sense. we're grateful it's a part of the republican party platform. >> we've seen a lot of delegates rally around ron paul, of course, after his last race. you suggested that the delegates for him should take a victory lap. what do you mean by that? >> they should take a victory lap because now in addition to also the mainstream principles of watching out for taxes and watching out for the bottom line for the average american, we need to recognize that even though we don't always get 100% of what we want, we've advanced our agenda. because the number one focus of people across the united states is how can we make life more affordable? how can we have more jobs and higher paying jobs? it's really the tea party's sensibility that's weighing in on our platform. and with our nominee, mitt romney and paul ryan, paul ryan is a very strong guy dealing with getting our budgets to balance. he has all of the insider knowledge of how the u.s. budget

works. that process is known by no one better, nor anyone more respected than paul ryan. mitt romney has the real world experience of proving that he can be a success story in american business. you couldn't have a more powerhouse combination with romney and ryryan. we're all very excited our principles are behind these two great men. >> we're talking business here this morning, covering stocks and so forth. percentage likelihood that we really get some traction here on a gold standard even if this would be commission has a nonbinding resolution. what kind of chances do you give that becoming actual reality? >> actually passing it through the united states congress? >> yeah. >> i'm not sure what those chances are. i think what it says in principle is that we're tired of phony money and phony currency. and we're tired of seeing our currency devalued and watered down. that's legalized theft by government. we don't want to see that anymore.

because no one is hurt more by this than senior citizens on fixed income. so we want to see our dollar actually hold its value. we think that's good for the country. i think the fact that we're even talking about it and putting something like that in our platform is frankly good for the economy as well. >> congresswoman bachmann, tonight we're going to hear a lot about mitt romney as a mormon. in 2008 there was 17 million republican evangelicals who failed to vote for mccain. how many do you think of those evangelicals will not vote for romney because he is a mormon? >> i think you're going to see a lot of votes for romney. romney is a very decent man. he's a family man first and foremost. he's a committed husband to his wife, ann. and also he's been a wonderful father and a grandfather. he has five sons and he has numerous grandchildren. you're going to see a very decent man who loves his family. i think what evangelicals want is someone who will respect religious liberty.

unfortunately with president obama's health care initiative we saw a rejection and a denial of religious liberty. no matter what a person's faith is, it's important that our government accept and tolerate people's faith. and not force people to violate their moral conscience. unfortunately, that's happened already under president obama's health care plan. no one should be forced to violate their moral conscience, which is catholic church was forced to do with president obama. we don't have to agree with each other's faith. but we should respect each other's faith and not force people to violate their religious liberties. that's what president obama did. that the american people reject. mitt romney won't do that. >> congresswoman, we've been looking and focusing a lot on the tropical storm bearing down on the gulf coast. it's a reminder of the $120 billion i think that has been spent on hurricane katrina relief efforts. do you support that spending or would you stand in the way of any federal government spending on the storm this time around? >> well, of course, if people are suffering, that's part of what a basic duty of government.

we need to be there for people in times of stress, in times of disaster, in times of need. what we've seen is that centralized government bureaucracy and planning doesn't always pan out real well. fema doesn't have a great track record. this time around we want fema, hopefully everyone has heads up and they're ready, prepared to act. because when people are suffering we've got to be there for them. the faith-based institutions were actually the ones who were really on the ground during katrina. we need to all work together and we need to all pull together, all of us hope, everyone wants this tis aster averted. we hope it doesn't hit land. if it does and if there is tragedy, we all need to be there for the people in the gulf coast region. >> congresswoman, can i take you back to mitt romney the candidate? it was suggested by his senior adviser during the campaign that as soon as he was nominated, i.e. as soon as we got to where we are now, the republican convention, that then he might hit the reset button.

an etch-a-sketch moment. do you think actually it's politically a good idea for romney to do that at the moment? because there are so many independents who might very well argue that they are fiscally conservative. but actually are not very pleased with the war on the social issues that your parts of the party have driven so far. >> remember, the driving force behind all of this has been the obama re-election campaign. they do not want to talk about the economy. because they've been a dismal failure on the economy. so they bring up one tdistortio after another, one distraction after another. realize where that's coming from. it's not coming from our party. it's coming from the obama re-election campaign. that shows clearly a desperation on their part because they don't want to talk about over 42 months of straight unemployment above 8%. of course, we just found out from government numbers that if we continue with the obama plan, remember, president obama hasn't given us any new indicators that

he's going to deviate from his current economic plan. if we continue down that road the congressional budget office tells us in the fourth quarter of next year unemployment will be over 9.1%. we're not going in the right direction under barack obama's plan. >> i want to say a few things about tropical storm isaac. the steps we're taking to keep people safe and minimize the damage. i just got an update from secretary napolitano, administrator fugate, the head of fema, and dr. rick nabb, director of the national hurricane center on preparations that are under way in the gulf. this storm isn't scheduled to make landfall until later today. but at my direction, fema has been on the ground for over a we week, working with state and local officials in areas that could be affected from puerto rico and the u.s. virgin islands to florida and, more recently,

louisiana, alabama and mississippi. yesterday i prove eapproved a d declaration for the state of louisiana so they can get the help that they need right away, particularly around some of the evacuations that are taking place. right now we already have response teams and supplies ready to help communities in the expected path of the storm. as we prepare for isaac to hit, i want to encourage all residents of the gulf coast to listen to your local officials and follow their directions. including if they tell you to evacuate. we're dealing with a big storm, and there could be significant flooding and other damage across a large area. now is not the time to tempt fate. now is not the time to dismiss official warnings. you need to take this seriously. finally, i want to thank everyone who has been working around the clock to get ready for isaac. the hardest work, of course, is

still ahead. as president i'll continue to make sure that the federal government is doing everything possible to help the american people prepare for and recover from this dangerous storm. and as we get additional updates from the hurricane center as well as from fema in terms of activities on the ground, we'll be providing continuous updates at both local and the national level. thank you. >> let's bring in our own john harwood now for a quick debrief on the president's comments there. john, your thoughts? >> reporter: kelly, the president has a responsibility in storms. fema has a responsibility to respond. and he's demonstrating that the administration is on it and politically it's useful in this election year while republicans are having their convention for the president to show, i'm doing my job. i'm governing. it creates a more nonpolitical appearance. it's pretty much par for the

course except for the fact that we're in the middle of an election season. and i'm sure the white house is mindful of that. >> john, there was some speculation we might hear president obama say something about the strategic petroleum reserve, which he did not. >> no. i spoke earlier today to jay carney, white house press secretary. he said all options remain on the table but we've got nothing to announce. typically the administration is not going to tip its hand one way or the other. i would be surprised if they do it. that's something administrations consider an option of last resort. but should you have a serious disruption of oil markets, i think the administration could take that step. >> we heard senator david vitter tell us earlier he thought it was an issue of national security the president shouldn't play politics with. john harwood, thanks for your reaction this morning. >> let's check where we are on oil. consumer confidence arguably doing more than the emission of any comment on the strategic petroleum reserve from the president. $96 where we are on wti crude at the moment. up next, we return to

focusing on the preparations for isaac. hurricane warnings for the gulf coast abound. states of emergency declared as you'll be aware probably in louisiana, alabama and mississippi. the latest on the storm's track plus a live report from the coastline, straight ahead. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.

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meteorologist todd gross for the latest on isaac's path back at headquarters. >> we are definitely watching this with a hawk's eye. let me tell you why. the inside scoop, the meteorologist talk about this, is that there is no longer any question on the path. as you can see, the storm is moving from a southeast to northwest direction. the only question left now that all the computer models agree that new orleans is right in the path of the storm, the worst part of the storm, in fact, question is what happens on the north side. you see how it's dry right now? that is right from new orleans, the panhandle of florida. there's nothing there at all. that is what we call dry entrainment of air. it inhibits strength of hurricanes. we're hours away from this turning into a hurricane. you can see the organization of the storm is getting better. but the impact on new orleans is specifically related to how strong this storm is. there's other factors. there's flooding that could occur both from the storm surge, but also from the rainfall. but the wind and the storm surge

that's related to the wind, that's going to depend on the strength. and it's going to be many hours before we know exactly how strong this storm is going to be when it makes impact on the coast of louisiana. it looks like that will be first thing tomorrow morning. we'll keep you posted every step of the way. we're here watching the storm and we're here watching the track. but so far new orleans is still likely to get hit first thing tomorrow. that's how it's shaping up. >> thank you very much. let's take people then live to new orleans where our own reporter scott cohn is assessing the situation there. scott, what are you able to tell us at the moment? >> reporter: well, obviously it's raining. so we're seeing the beginning of the impact of this. and that was interesting to note about the path of the storm. i can tell you that there is a great deal of preparation here. i know a lot of talk is going to be about politicians wanting to look ready, wanting to make sure that they are tackling this the

right way, not wanting to be it shall -- to compare to the disastrous response at all levels seven years ago. what they're doing now is probably what they should have done seven years ago. for example, a big police presence here on canal street and around downtown, the french quarter, the central business district. police presence that we did not see in the days immediately after the storm when there was all sorts of pandemonium breaking loose. the squad cars are driving around. humvees are driving around. at the new orleans convention center which was quite literally the scene of hell on earth seven years ago, there are already people standing by. seven years ago evacuees were ultimately directed there even though it was never supposed to be an evacuation center. they're certainly making a show of things. but it's more than a show of things. and we'll see what happens. better safe than sorry, so to speak. you heard the president a short time ago.

we've heard the mayor of new orleans. here's louisiana governor bobby jindal yesterday afternoon. >> we know from previous experience in other states and other storms and other storms here in louisiana there are a number of injuries and sometimes even fatalities after the storm due to localized flooding and downed tree lips and downed power lines. we encourage everybody to be extremely cautious in dealing with the damage afterwards. >> reporter: of course, the key to all of this is whether people respond to it. and near as we've been able to tell, since we got into new orleans yesterday evening, they are responding. there were people that were evacuating. even though at that point it still was unclear whether it was going to be anything more than a tropical storm or category 1. they were filling up on gasoline. they were loading up on essentials with the idea that they could be without power for a time. so those are good signs. we'll see what happens with the storm and whether there's legitimate reason for all of

this preparation. back to you. >> we'll talk to one of the senators responsible for the new systems and the technology and some of the businesses preparing alongside you, scott, in the next few minutes of the program. for the moment, thank you very much. scott cohn live from new orleans. a quick look at lexmark shares on the back of the company's restructuring plan this morning. that is substantially higher. up about 17%. it's going to dump its inkjet printer business and cut 1,700 jobs as well. the state of louisiana officially declaring a state of emergency. the brunt of the storm expected to bear down, of course, on the state tonight and tomorrow morning. still to come, we'll sit down with senator mary landrieu of louisiana in a first on cnbc interview to see how louisiana's prepping and talk the lessons learned from katrina a little bit later. so, what's the problem? these are hot. we're shipping 'em everywhere. but we can't predict our shipping costs. dallas. detroit. different rates.

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jewelry maker tiffany lowering, of course, its forecast citing weakness in global markets. should you think twice about investing in luxury brands exposed to trouble overseas? we trade the globe now with president of regal research and cnbc contributor. david, what's the considered view? >> i think we do have to be a little cautious. tiffany, burbury. these brands are relying more and more on china for growth and sales. they still have a huge commitment to europe. that's a big source of their market. bigger than the united states for some of these companies. i think as this economic trouble drags on, i think we need to listen to what they're telling us and be a little cautious about some of these luxury brands. >> you see there's certain parts of the luxury market that seem more resilient than others. oddly enough the more luxurious you are, i'm thinking within some of the european portfolio like lvmh that seems to stand up

much better to pressure than perhaps lower margin areas, for example, coach. >> that's exactly right. what you're talking about here is sort of the upper middle band of luxury. of course, there's always going to be this group of people that are going to be able to afford anything. yachts and watches and fancy liquors and so on and so forth, as you say. what you really need to keep an eye on is the true religion, coach, tiffany. those kinds of names that have more mass market appeal. but people can choose to not make those purchases. >> david, are you suggesting investors should reat a time out of names that are more exposed or overexposed to china and into ones that have less exposure? >> it's not just china. i think you've still got some concerns in europe as well. absolutely right. i think you want to look at some of the names that have more just u.s. exposure or move a little down market into something else other than luxury goods. let's think about food. kraft foods, for example. unilever and some of the personal products more consumer

staples. they may be somewhat a discretionary purchase but not a higher end luxury purchase. >> thank you for your time. david reidel joining us. you can catch more global trades every we can night on "fast money" and tuesdays right here, kelly, on "squawk on the street" you can tune in from london. >> i'll stay up late just for it. up next, live to new orleans where louisiana senator mary landrieu joins us as her state prepares for tropical storm isaac's landfall later tonight. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account.

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exactly one hour into trade. the main stories we're squawking about. consumer confidence index has hit a nine month low falling in august to 60.6 from a downwardly revised 65.4 in july. the market relatively unmoved on that. it's certainly a tough morning for two of the big tech names down here. shares of dow component hewlett-packard falling to a fresh eight-year low. dell now trading at lows not seen since may of 2009. heinz one of today's bright spots, up more than 2% to new all-time highs. the food maker says it expects fiscal first quarter earnings and sales to beat wall street's expectations. want to take you to a live

picture from mckinney, texas. the seen of a natural gas line explosion. it occurred near the intersection of state highway 121 and u.s. 75. traffic, we're told, shut down in the area. so far no injuries have been reported. some dramatic pictures coming out of mckinney as we continue to watch situations, guys, in which oil or gas or petroleum runs into problems in the supply chain. >> exactly. yet more supply side disruptions. meantime, president obama declaring a state of emergency in louisiana as powerful isaac takes aim at the gulf coast. isaac is still a tropical storm but just barely. it's expected to grow into a category 2 hurricane before onshore tonight or early tomorrow. joining us first on cnbc to talk about preparations, democratic senator mary landrieu of louisiana. senator, good to have you this morning. welcome. >> thank you so much. >> what's your best read on how serious this is going to be? certainly we like to see these lower category numbers than the higher ones. >> well, absolutely.

we're hoping that this is not a devastating storm. but all preparations are being made by local and state officials, the president, fema, the secretary of homeland security has sent us a much better fema than the one that showed up in katrina. of course, we didn't wait until just last week to start preparing. we've been preparing since katrina. the federal government has made an enormous investment in this gulf coast area. upwards of $50 billion since katrina to help make this region more resilient. and we hope and know the benefits will accrue back to the nation over time, because this is america's energy coast. it supplies fisheries for the nation. so we're very grateful to the federal government, particularly for the extraordinary investments they've made over the last several years and for a smarter, more cooperative fema. >> people talk about fema being a lot better prepared. are there specific examples of

just how they're better prepared than they were in katrina. >> well, absolutely. i mean, they were here a week ago. fema didn't really show up until after really the levees broke in all practical purposes. the storms are so totally different. what people have to realize, the gulf coast has weathered dozens of hurricanes. camille, betsy. just to name, you know, two of the most famous. of course, gustav and ike after katrina. what happened in katrina was not the hurricane. it was the failure of the levee system that flooded a great metropolitan region with water up to 14 and 20 feet. that covered homes for miles and miles. that is not going to happen. this storm is not that powerful. the levees should hold. we've got our fingers crossed. we've invested in some of the most sophisticated investments in the world. so that is very unlikely. all pumping stations have been

improved along the gulf coast, particularly in the metropolitan area. that's not to say that everything's been done from the federal level that needs to be done. we still have places outside of the levee protection system that need help. but it's a much different day. significant investments have been made in this region in the last few years. >> senator, nevertheless, there's some concern about the rebuild homes in some parishes not being elevated. are you focused on that at all? are those, perhaps, overlooked in some of the major infrastructure investments that have been made since katrina? >> the fact of the matter is we knew we could never elevate all the homes along the gulf coast. many are raised already and have been raised for centuries because that's the way they were built. it was really the exodus in the '50s and '60s where homes were built on slabs that is really the problem. it is just cost prohibitive to

raise them all. what we have to do is build a stronger levee system. then, of course, take the money from the bp oil spill which is, i'm very proud to have passed that piece of legislation, the president has signed into law, take that money and invest billions of dollars to help with restoring our wetlands. because that is really the first level of protection for the whole gulf coast are our wetlands. and then our levees. and then smart building inside of those levee systems. we're much better prepared than we were. as i said, there's a much smarter fema that showed up this week. >> senator, obviously hurricane season's not over yet. i just wonder, i mean, we'll take these things one at a time. let's pretend we did have a 5 headed toward us this week. are you convinced that the levees would be ready as of today? >> no one knows for certain if the levees would hold up. you know, katrina wasn't a 5. katrina was a 3. >> 5 in the water. >> yes. levees broke with a 3. we know the levees will hold.

there's been more concrete poured in one of our surge barriers, a two-mile surge barrier, than almost the equivalent to the hoover dam. we went to the netherlands right after. we didn't just look around the united states. there is no model for this in the united states. we went to the netherlands to find world-class flood control structures. have designed similar ones down here. again, remember, this region, it's not about just protecting the people of new orleans and louisiana. it's about keeping that river similar open, keeping the oil and gas pumping out of the gulf so there's not disruptions to the economic general economy of the nation. that's why these investments are a smart investment for the gulf coast. we produce a tremendous amount of tax revenue just offshore to replenish the federal treasury, if you will, for a strong operational economy down here. >> i just think about it, senator, and whether it was bp, whether it was katrina, i mean, hurricane seasons in general, now that we have a drought that has the mississippi trying to

keep nine feet deep, do you ever wonder sometimes what else they can throw at you? >> that's exactly what we're thinking. i mean, i was with a mayor. he looked out last year and the water was coming over into his town. now he has to go and look down to try to find water in the river. it's just been a quite bizarre set of circumstances. but, you know, again the local officials are much better prepared. the federal government is so much more proactive now. we just have to handle what comes our way and be grateful for the support that we're getting from around the country. >> senator, appreciate you taking a few moments to talk to us today. >> thank you. >> senator mary landrieu of louisiana. we'll keep our eye on the gulf coast over the next couple of days. >> extraordinary outpouring towards new orleans on social media. how unlucky that again they have to face what they fact. quite extraordinary. >> in a way it's part of the city's charm. it's been able to live through centuries of this kind of thing. >> hopefully this one as well. quick market flash here for you. kayla tausche has it back at

headquarters. >> we're watching shars of pvh soaring to levels not seen since the company went public in 1968. up nearly 6% after blowout earnings after the bell yesterday. the ceo saying on a conference call this morning back to school across all sessionments looking great. those segments being calvin klein, izod and tommy hilfiger to name a few. third quarter could look even better for pvh. energy markets, of course, keeping a very close eye on tropical storm isaac. let's get back out to sharon epperson at the nymex with the latest. >> kelly, we were talking to energy analyst andy lipow a few moments ago. he anticipates though we have not seen a total shutdown in refining capacity there in the gulf we're going to see pretty much that happen over the next 24 hours or so. we're talking about 2.4 million barrels a day of refining capacity in the new orleans, baton rouge area. that will probably be down at least at reduced processing rates for at least a week or so. even after the storm passes.

and although it may not be nearly katrina's strength, it could certainly have an impact. a lot of traders are anticipating the impact will not be as great as they thought perhaps a day ago. they are taking some profits here. we do have oil prices that are slightly higher on the session. the flip side of what we saw yesterday. again, we're going to get an inventory report from the department of energy that will show a decline in crude supplies likely. and that is something that was already factored in before this storm. in terms of the rbob contract or gasoline, it hit more than a four-month high in the previous session. we saw prices in the cash market for gasoline on the louisiana coast that were skyrocketing some 20 cents yesterday. so today it's a bit of profit taking. reassessing where we are here in terms of the possible impact on refineries there. and that is what has caused a bit of a pullback in the rbob market. what to watch, of course, over the next 24 hours is exactly where it hits and what is impacted. but the infrastructure that we're seeing there inland, that should be fairly okay. what we're seeing, though, of

course, with the refineries, that's going to be something that a lot of folks are going to be paying close attention to. back to you. next on the program, we will link you live with a gulf coast restauranteur who had one of his businesses entirely wiped out seven yeerars ago by katrina. what precautions is he taking this time round? small business preparations for isaac. stay with us. well another great thing about all this walking i've been doing is that it's given me time to reflect on some of life's biggest questions. like, if you could save hundreds on car insurance by making one simple call,

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residents around the gulf coast prepare for isaac's impact. the tropical storm is already ripping through parts of the local economy in places like biloxi, mississippi. that's where we meet a small business owner who's preparing for the worst after hurricane katrina had such an impact on his businesses seven years ago. rob stinson joins us live. welcome to the program, sir.

welcome to cnbc. >> welcome yourself. thank you. >> i was trying to work out how many businesses you have. you've got the bay back, the lookout. how many restaurants do you have at the moment? >> actually, lookout, salute, back bay seafood and a sports pub. four restaurants here. >> what was your experience during katrina? >> well, katrina was not very nice. katrina destroyed the restaurant called long beach lookout. our new lookout is kind of a reinvention of that. and obviously we're staying very closely watched to what's going on today. >> are you actually on the water? are the premises on the water? >> yes. yes, they are. >> wow. what do you worry about more? is it the wind storms or the storm surge and the flooding? which is the most important to you having experienced it last time around? >> there's no doubt it's got to do with the storm surge. you know, the storm surge just

completely destroyed our restaurant. >> so what decisions have you made this time around? obviously you are employing people. so i'm assuming their safety and what they want to do figures very highly in the decisions that you make. >> yeah. i mean, i think the most important thing today was we closed all four of our restaurants so our employees could be with their loved ones and make their preparations. some of the people might want to leave town. most of the people here are going to weather this storm. >> i wonder, too, what changes you made when you were rebuilding your restaurants, thinking about whether to relocate them given their vulnerability to the last storm. what did you do differently this time around or wish that you had? >> you know, i think that we're positioned where we wanted to be. we didn't want to lee the waterfront area. we have the best seafood in the world. we have the best cuisine in the world. we wanted to be right here where you need to be for tourists knowing that there's always that

chance, you know, we're here with casinos, we roll the dice. we always do take a chance. but i think we'll be fine in this. i think our area will do fine with this. >> what about insurance or coverage? what precautions do you have if you do suffer damage? >> you know, i think the key with the insurance was, one, to build correctly. and there were certain standards you built to. so we did that and our insurance is in place. you know, i really do believe that this is not going to be anywhere near the devastation that katrina was. and tourism will be back here this weekend. that's certainly what we're banking on. >> yeah. i think you're right, rob. although you mentioned some of these people who are going to ride it out. do you think the sensitivity to evacuation has changed at all since katrina? i mean, if this were a 3 or a 4, then would we be talking about large-scale evacuations? have people been scared at all by that experience? >> oh, i don't think there's any doubt in the world. if this was a category 3 or 4

storm, you'd see a whole different -- you know, i wouldn't be standing here talking to you in my restaurant right now. you know what i mean? we're getting ready to cook for a lot of camera crews right now at salute. i don't think we'd be thinking about that. most people have got enough common sense. i'll tell you something else. the emergency workers here on the gulf coast, they've been down this road so many times. we have the best response of any area in my opinion. i think they're ready as well. >> when you've cooked for the camera crew, will you lock the restaurant up and go home or do you stay in the restaurant through the night? >> no. you know, i'll be coming back and forth. i've got friends in the emergency relief side. you know, we may get phone calls. we're one of the caterers that will be handling things should there be areas that are devastated. we're really kind of on alert ourself here. >> rob, we'll leave it there. stay safe. i hope it's a reasonable

experience in the circumstances. thank you for joining us. rob stinson there, executive chef and owner of several residents. >> maybe he can send us some of his cuisine, too, onset. >> be careful. camera crews can eat a lot as we know. still to come this morning, congressman tim scott will join us live from the gop convention. a look at some of the key issues on deck today in tampa. first, though, i love this. jane wells venturing through a very large farm in boone, iowa. jane, what are you riding? >> reporter: this is a case ih tractor so advanced even i can drive it because it drives itself. you'd think with the worst drought in century it would dry up equipment sales. why analysts are saying that may not happen. we'll have that after the break. tdd#: 1-800-345-2550 when i'm trading, i'm so into it,

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zirchlg as we showed you moments ago our own jane wells is live from the nation's largest outdoor farm show in boon, hanging out with a pretty large good-looking tractor there, jane. i understand you've been sorting through the sales data from some major ag machinery companies. >> reporter: this is just amazing. this one is 340 horsepower.

only about $320,000. with this summer's epic drought affecting the corn, will farmers buy this stuff? well, at the show expected this week are 200,000 people at the farm progress show. they're going to kick some tires. equipment sales jumped double digits in north america. especially for tractors over 100 horsepower. can that last? >> there's nothing here. >> reporter: farmer carol miller represents a potential nightmare scenario. she'll start harvesting next week, and only then will she know what she has. miller will be at the show here, but only to window shop. >> we're going to hold back. we want to know what we have and what we can afford. >> there's a lot of wait and see right now. people waiting to see what insurance payments are going to be, what their cash flow situation is going to be at come november and even going into december. this year is going to be quite a bit different than previous years. >> do you expect a difference in timing of orders this year? >> no, we don't.

our fourth quarter order board right now is very strong, and we've opened up our first quarter 2013 ordering, so we're moving right along on schedule. >> taking a look at john deere. piper jaf ray is overweight on deer, but says dear dealers in i wille i will, indiana, missouri, are consider reply more bearish about 2013. it's neutral on case i hi, although we found the drault commentary to be less dire than investors had feared, and adco is projecting sales because farmers have strong balance sheets because of the last few years, and here's really the deal. these corn farmers, most of them have crop insurance, which will compensate them for 70% to 80% of the loss in average yield, and most them will still have some corn that they can sell at these high prices, so some of them are going to end up making more money this year. the question is they want to wait to see what they have. they want to see what their insurance checks are, and then they'll decide to save it or spend it and we may not know that decision until december or later.

back to you. >> interesting stuff, jane. that is one big dire. jane wells in june, iowa. that's according to the atv spokesperson. our question this morning is what is so important that he can't even go to wyoming and hang out with some fed people? tweet us at cnbc squawk st. we'll get your response. >> what could possibly be more important than hanging out with ben bernanke? >> back in a moment. at merrill lynch, we understand the importance of your goals. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch.

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tomorrow we will continue to track isaac. we have former fema head and john hoffmeister who knows what it means to have energy shutdown. >> all of this in relation to the rnc. if you woke up this morning a bit of a surprise, mario draghi, saying he is not going to go to jackhole, after all. what is so important that he can't even go, you know, be friends with better thanning ainky for a few days, do fly punishing? that's our tweet question of the morning. patrick writes he got a great bargain on the greek island getaway backage. that's -- alissa is cruise tooing. he is still trying to figure out a $7.15 discrepancy on his july bank statement. eric tweets he can't worry about jackson hole when he is too busy digging his own. >> the truth is he is at home practicing his crowd-pleasing steps tore september 6th when he

has to kind of entrance the whole world. >> that's the argument. do you believe this frees him to clean up essentially after whatever bernanke says on friday? >> either bernanke is really so relevant on friday that he will go, well, a bit of this and that. >> imat an sure there's going to be much to clean up, but any reaction that is necessary, he could have accomplished. >> there is a big difference between the fed and the ecb, of course, which is why his task is so much more complicated. it's much easier to keep the foc on board than it is to keep the governing council of the ecb on board through the process. >> it is -- to your point we will be hearing, i think, from bideman this weekend. he constantly pops up in these policy debates sort of trying to put the brakes on whatever drawi drawing draghi is up to. there's a real idealogical split there. >> they say we will have a bomb-buying program. eventually they got halfway through and went, no, it's too much effort. actually, the process -- if he

is going to embark on a big process, he has to really get everybody on board because the national interest will change month to month, and they could vote down what they're in the middle of, and then the policies are broken. >> it's not the ecb only to get on board. it's the spanish government that have to say, okay, we will agree to these programs in order to get those funds. >> meanwhile, state-side dow, a day of indecision. up one point. i think it's interesting. you know, ween continue to see hard data in this country get a little bit better, whether it's housing or jobs, manufacturing. we got some decent kay shiler numbers today. the soft data, the consumer confidence stuff, not as strong. the worst since august, i believe. >> look, i think it points because if you look at the guts, what you saw is a droop in confidence. you saw an increase in inflation expectations that usually happens when people are feeling the impact of gas prices. given some of the action we've seen with just this tropical storm now, it just is another reason to potentially look tore a bit of a head wind there. >> hard to know where political uncertainties also weigh on consumers' minds. >> cliff for most people. never mind the gas.

what about the fiscal clifr? >> exactly. thanks for helping us out again today. see you in the morning. simon, we'll see you in half an hour as europe closes. in the meantime, here's what you might have missed if you are just tuning in. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> both parties have been focussing on manufacturing. everybody in america is talking about the promise of manufacturing to bring our economy roaring back, and we really need to see our policymakers adapting policy that is will do exactly that. >> we may want more infrastructure spending than you want, but the reality is that there's a lot we can do right now that is bipartisan. by putting the spotlight on what is working and helping those entrepreneurs gain their businesses. >> what could be so important that you would cancel this late in the game? we've known the schedule for a while, and it's hard to imagine that he would somehow be surprised. the question will be, and i'm sure the question in europe is, is there something brewing that

we don't know about? >> the acquisition is a new sort of social networking services oriented company. it's clear where this trend is heading, and it's also clear that if companies ala rim, hewlett-packard don't act, they'll be left behind. >> golfing legend ernie els ringing the bell at the nyse. >> we need to focus on the essentials of what the federal government is really about and do those right. do those well. that will always include major disaster relief. >> we're tired of seeing our currency devalued and watered down. that's legalized theft by xwovt. we don't want to see that anymore. >> good morning. we're live here post nine of the new york stock exchange. the dow once again rying to find some traction. either direction it's been limited on the gains and losses. right now we're down almost two points. s&p is roughly flat at 1,409,

and the nasdaq down two points, 3,071. hewlett packard says it will cut 1,700 jobs. then yelp falling sharply today. one day ahead of the expiration of the lock-out period for shareholders to sell their stock following the company's ipo back in march. interesting road map. now that apple has defeat samsung in court is the tech giant getting ready to wage a war with google and our facebook's days machined? we'll wrap you will all the headlines and tell you what it moonz for your money. as isaac does gather strength in the gulf, cell phone companies are preparing for whatever the storm could bring. is your carrier ready for that? plus, oil production in the gulf brought to a near standstill as the storm approaches. we'll see how isaac has affected her region. what it might mean for gas prices. the republican convention moving forward today. we're going to talk to congressman tim scott who is expected to speak at the rnc later this afternoon. get a preview of the speech and see what he thinks about the

romney-ryan ticket. all that and more is coming up in the next hour. first, though, tropical storm isaac gaining strength today on the verge of becoming a category one hurricane as it nears the gulf coast. meteorologist todd gross is back at hq with the latest on the storm, and hopefully, todd, some clarity on where exactly that eye is going to hit. >> there's no problem there. it is moving in the worst case scenario for new orleans. basically it's moving from southeast to northwest, and it is iffing to make a direct hit late tonight or tomorrow morning. that's a given now. just about a given. what isn't such a given is the strength of the storm, and let me show you why that is so important. we take a look at some other storms that were very, very similar in terms of the path, including katrina. you can see that they all took the same path. betsy in 1965, of course, katrina in 2005 and the one that most folks forget is andrew because andrew hit florida so severely that when it hit

louisiana, it didn't get as much press. halves also a devastating blow to the louisiana coast. there was only one of those storms, katrina, which brought the levees down, and the reason for that, of course, the strength and the civil engineering problem, but in this case it would take an even stronger storm to do the same, and at this point it doesn't look like we'll quite get there, but the storm surge even the way the storm is now will be six to 12 feet. no matter what, this will have a major financial impact, but how much of a devastating storm this ends up is yet to be seen as it strengthens this afternoon. we'll keep you posted every step of the way, carl. >> todd, any possibility at all that it does not achieve hurricane status before landfall? >> i would say no, and i'll tell you why. i have been looking at the satellite photographs myself and personally i think it's already reached hurricane status. it just hasn't been announced yet. it is so close. i don't think there's any way it won't reach hurricane status by

the time it makes landfall very first thing in the morning or late tonight. that's pretty much set in stone, but whether or not it's a category one or category two, now, that's still a big question. >> todd, appreciate that. obviously clear stuff. todd degross joining us back at hq. i mean, the republican convention is ep getting underway after a delay thanks to isaac, but with a rel 'til subdued tone. our john harwood is there live with a look at what we might expect today, and especially in primetime tonight. right, john? >> exactly, carl. it is getting going up with a somber tone. in fact, a spiritual tone behind me. they're rehearsing ""amazing grace"" as we speak. this is the night when the republican convention really gets going. chris christie is the keynoter. he is known as a pugnacious republican and somebody who is a big, big star among conservatives, but he also indicated to matt lauer on the "today" show that he is going to emphasize parts of his record that shows he can get things done. mitt romney could too. >> what i will tell you is i'll use new jersey as an

illustration of what can happen if you stick by your principles and look for ways to solve problems. if you look at over the course of two and a half years, we've compromised on significant pension and health benefit reform that few other people have done in the country. capped property tacks. done a number of different things that people said we weren't going to be able to get done. >> there are other speakers tonight, of course, who are not in primetime. people like john boehner, the house speaker, scott walker, the governor of wisconsin. that's paul ryan's home state. john kasic, the governor of ohio, all of whom are popular about an the republican party. the real important speakers are the ones who are on network television tonight. that's chris christie and ann romney, maybe the most important of all in her attempt to humanize mitt romney and make him more appealing to a wider swath of voters. president obama, meanwhile, is trying to show his executive leadership to somebody who is keeping watch over hurricane isaac or the tropical storm about to be a hurricane isaac. he came out into the white house today and told residents of the

gulf coast not to ignore the official warnings. take action to protect themselves. >> now is not the time to tempt fate. now is not the time to dismiss official warnings. you need to take this seriously. >> this is the inevitable result of what happens when a major natural disaster occurs in an event like this. republicans hoping the devastation is not so great that it gives people a queasy feeling about the convention going on at the same time. the republicans are reasonably confident that's not going to lap. >> day one as we get started here. a lot more tock. john harwood is in tampa. meanwhile, samsung plans an appeal after apple seeks a ban on sales of those eight devices in the u.s. we're going to wrap up althe latest in tech this morning with tim bradshaw, technology correspondent over at the financial times. tim, good morning to you. >> good morning to you. >> a lot more discussion today about exactly what apple has in mind and just how far they're going to take this thing. to what degree google has to

worry, whether they'll go directly at them and not just through some of these device makers. what do you think the future holds? >> well, i suppose what it shows, first off, is that google's acquisition of motorola, which was $12.5 billion, a large portion of that was supposed to give them a patent arsenal to defend the android ecosystem from this kind of attack. it's obviously not worked so far. there have been some kind of early skirmishes between apple and motorola around some of the kind of things we saw apple win so convincingly against samsung, but nothing really on this scale. i think -- i mean, the appeals process will kind of drag all of this out, but it will be interesting to see how far apple really does go after google directly, and with the motorola acquisition google has that opportunity to do so. even though android itself doesn't really make any money, which rather kind of limits the potential for damages. androed is a free operating system. any handset maker can use it,

and google just gives it away, so it can make more money from advertising and buying people into its services. it's revenue that are not very good. >> right. dillon 20, by the way, joins us. dillon, good to have you with us. >> it's good to be here. >> with all of this discussion since the weekend people keep referring back to that moment in walt other isaacson where he called android a stolen product, and almost on his death bed seemed to vow revenge. is this the first chapter of that? >> yeah. i think it really is. i mean, he said basically is he going to go to thermonuclear war. he was really, really upset about android, and felt that it ripped off a lot of aspects of the iphone software and the design. you know, as i see it, like the samsung victory is a great victory for apple. you know, pending appeal, obviously. but it's only the first stage. it's kind of like in a video game, you know, apple has gone through and collected a bunch of gold coins, but now they've got to face the big boss.

>> right. i mean, and then you have this injunction which is not even going after the most recent samsung devices. is the next step obvious, to go after those things that samsung is cooking up now? >> well, it's hard to say. obviously, samsung is going to try to make devices that less obviously imitate, you know, the iphone and the ipad. actually, they have a bit of a more open path in the tablet arena. this should be encouraging to other android tablet makers because that's the one patent, the design look of the ipad that samsung was not found to be infringing. at least for now it looks like the path is clear to continue making rounded rectangles, as long as they're tablets, not phones. >> tim, this morning the ft takes a look at -- the f.t. or the times takes a look at the disparity and valuation between apple and facebook. if you extrapolate some of the arguments they're making, has very not encouraging things to say about the future of facebook. have you seening the piece, and does any of that weigh on you

right now? >> i think what's interesting is we're already looking towards the launch of the new iphone, which is expected in a few weeks in mid-september. even if the current generation of smart phones, you know, apple has won the design war in the courts, if not quite in the kind of market share. it's got this big new product that's coming out. everyone has something to look forward to. there's rumors of an ipad minifollowing on the heels of that. possibly even a television. that looks less likely. there's an ob where yous pipeline of big exciting developments coming out of apple, and this court victory underlines those excitements coming up. facebook, what's their kind of iphone coming down the line? i'm not quite sure what investors have to look forward to here apart from more insiders selling out. i know they're -- >> i imagine they would say something like sponsored stories or, i don't know, dillon, thoughts on that? >> the big difference between facebook and apple is that apple actually has a lot of products

that people want to buy. facebook is a social network, and they're selling ads, but it's not clear that those ads are doing that well or that they command a very high price. you know, the one advantage that facebook does have is they completely understand social network and apple has proven again and again that they don't. if they figure out how to make money from that, they might be a threat, but right now, you know, it doesn't even compare. >> yeah. i mean, we keep going over this 900 million users. even the smallest germ of an idea doesn't have to go very far. you have the scale. right? >> well, i mean, google had that too, right? they had a brilliant search engine, but it was really the invention of this auction marketplace for ads that made google into the multibillion dollar business it is now. facebook is kind of in a position that google was before they had that marketplace. you know, thief got a great idea, but they haven't figured out how to monotize it yet. >> i wish we had more time. i hope you guys come back. >> my pleasure.

thanks. >> thanks so much. want to get back to courtney reagan at hq this morning with the marketplace. hey. >> hi, carl. well, the ceo h.j. hines surprising shareholders at the meeting a day ahead of earnings. he says that he expects to exceed consensus. the market likes what they hear. you can see shares up almost 3%. he still notes a weak economy. thanks to some growing developing market trends, they expect to beat tomorrow. carl. >> yeah. one of the big names we're watching today. thanks, courtney. when we come back, tropical storm isaac gaining steam in the gulf. threatening mobile communication in that area. the question is are wireless companies ready? we'll talk about that after a short break. [ male announcer ] let's level the playing field.

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♪ cell phone service sure to be affected by isaac's heavy wind and rains. our mary thompson is live at at&t esgloble network operation in new jersey where they're prepping for whatever the storm may bring. good morning, mary. >> good morning to you, carl. here at the gmok it's it's called by at&t, this provides them with a bird's eye view of the global pet work that connects over a billion devices. your cell phones and i pads and old land lines. it's also here where at&t starts to prep for major ooefrts,

whether it be call-in shows like "american idol" or hurricanes heading towards the gulf coast. joining us now is the director chuck kitchen ner. thanks for joining us today. tell us, first, when did you start planning for isaac? >> we started last week around wednesday, and there's a series of checklists that all of our folks go through. apparently those impacted areas. they simply go down through and make sure that the generators are all fired up and run properly. that fuel tanks have been topped off and that they'll take a walk around buildings to insure that the roofs won't fly off as well. >> tell us how you monitor the storm from this area. >> we have a wall board that everybody in the gnok can see that tracks weather. we it tell at my point in time the assets that will be impacted in the path of that storm itself. we begin to plan around that. >> meaning your cell towers, et cetera? >> absolutely. cell towers, central offices, fiber routes, all of those. >> once the storm passes, how do

you prioritize what gets fixed first? >> well, we've activated in the isaac areas our local response centers, and they'll go through a triage process to insure that they deploy the appropriate equipment into areas that bring back the service as quickly as possible. >> do you prioritize customers? are there certain customers that get attention first before others? >> we'll work with our customer care counterparts, and they'll provide us a list that allow us to be able to do that, but we do pay particular attention to hospitals, police departments, and those areas that need human assistance quickly. >> and have you deployed additional personnel down along the gulf coast ahead of the storm, or is it just drawn from the region itself? >> we have folks that are on stand-by right now within the region itself that they can quickly deploy if needed. >> last question, i know that for a company like at&t, you learn a little bit from every event, so looking back on hurricane irene last year, what is it that you learned that you're interesting employing this time around? >> there are small, small items

that we picked up on, and we'll tweak our processes according so that those checklists that we need to identify and work with on a daily basis are updated based on our -- >> thank you very much for your time today. we appreciate it. chuck kirchnor, director of at&t's network global prax center. back to you. >> mary thompson in new jersey. when we come back, congressman tim scott will join us live from the gop convention with a look at what issues are on the agenda today in tampa, and we'll count you down to the close in europe. a lot of news out of that continent today. about ten minutes and 40 seconds to go. back after a break. [ male announcer ] while many automakers are just beginning to dabble with the idea of hybrid technology, it's already engrained in our dna. during the golden opportunity sales event,

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scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. after a one-day delay, a bezy rnc in tampa. it includes the formal vote on the natural nation of mitt romney, remark from ann romney and the keynote address from chris christie. one of this afternoon's speakers is congressman tim scott, and he joins us this morning from tampa. congressman, good morning. good to have you with us.

>> thank you, carl. good morning. good to be with you as well. >> interesting week shaping up here. isaac aside, you have said recently that romney needs to hone his attack this week and carry that out up until election day. what do you mean by that? >> there's no question that the truth is on our side, so the bottom line is that the more we articulate our position on things like medicare reform, not affecting anyone over the age of 55, i think it creates more traction with the american people. right now we have a fact versus a fiction election. the other side is doing a pretty good job of marketing fiction. we need to do the very same very strong marketing opportunity for us to market the facts and there's no question that when you look at the romney plan, you look at the ryan budget, we'll find things in there like the fact that we restore $716 billion to medicare to keep us all, but while the other side takes that away it has a major impact on one out of every four seniors today, our plan does exactly the opposite. we restore the funding, we

strengthen medicare, and we do what's right on behalf of the american people and the greatest generation. >> i take it you think the campaign has not been clear enough up until now on that front. is there something lacking, do you think? >> well, i think the other side is doing some strong marketing. we all remember the granny going over the cliff. that was good marketing, but it was not fact-based. what i'm suggesting is we ton to push forward on the facts of the case from medicare to the fact that under the current administration it's been almost 8% for three and a half years, and we need to make sure that the american people need to understand and appreciate what mitt romney does to bring that down and why we have the solutions that face small business owners like myself for the last 14 years and other business owners around this nation, what we as republicans do on their behalf. >> you know, the parties going into the convention behind on hispanics, behind on african-americans, todd akin has raised the hackles of a lot of women in this country. are there things this week that

we're going to see in the convention that address those deficiencies? >> there's no doubt that we have a very diverse party, that we are growing our diversity, that we need to grow in diversity, without question, but i think that's happening right now. when you look at this convention, you'll see folks like myself and mark row rubio, and more importantly what we need to do is articulate the fact that there is one america xshgs there is one central message for all americans, and that is that the unemployment rate is significantly higher than it has to be, that the job of the president is to help bring that down to a large extent. the current president in the white house has not done that. mitt romney has solutions, and i believe that he has the opportunity to articulate that position, then we win as americans. >> we have heard from are some prominent republicans -- i'm thinking of bob dole in particular, who agreed with you on that fiscal front, who do think that that message needs to get out there. they're weighing the party down, keeping it too far to the right, make it more difficult to find

those minority and independent voters. does he have a point or not? >> bob is a great guy. i'll say that i'm not sure he has the coin on that particular topic. there's a conservative aspect of the black community and the fact of the matter is that you find that social kwvshgz are as much african-americans as they are any other americans, but would i say, however, that this election is really about the jobs market. it's about the fact that our economy has been imploding for three and a half years. it's about the fact that we've had $1 trillion deficits for four consecutive years. about the fact that we have answers and solutions for the american people, and mitt romney helped us bring that into frame, and that is really good for america. >> congressman, i look forward to tonight and the entire week. it's going to be fun to watch. >> thank you very much. thank you, carl. >> thanks for your time. tim scott joining us from tampa. a few moments let here in europe's trading day. we're going to get the close and the details on how it might impact trading here this afternoon with the dow down just seven points. back in a minute.

sfla we have a bumpl of news from around the world. japan downgrading their assessment of the economy. decent options out of italy and spain. we'll see how this shapes up. >> my concern is that we might be getting a catch 22 setting up in spain. spanish prime minister was holding a news conference today with the head of the european council. he suggested he is not going to apply to the ecb for assistance, further assistance, until the ecb details how it's going to

reduce spanish borrowing costs. that's not what draghi has on the table. draghi says apply to me, and we will give you some help. oh dear. >> the european markets are closing now. >> slightly lower, as you can see. london comes back into bla after yesterday's public holiday. what is interesting just to point something out for the sake of it is the way in which you've seen during the course of the session in particular the german and the spanish markets move lower. no great moves there. just a general broad base move down across the components of the index, whereas other areas, other countries have stocks that have made gains and, therefore, they are flat overall because it kind of eenz out. some of the banks, could you argue, the argue the weaker banks around the euro zone are lower. just because they are. forgive me. as carl mentioned, some auks. i don't think that's particularly driven.

let me just mention a couple of individual corporate stories and research notes that have come through. nokia, of course, did well in the wake of the decision. we got friday night on apple against samsung. that decision on the west coast. the argument was well maybe nokia can benefit. partly because of the microsoft deal that it has on those phones that are coming out at the beginning of september. merrill has a real scathing report out today suggesting actually the price target on nokia should be 1.08. if you can't get ahold of a samsung phone, thereby many you would buy before nokia. they're also suggesting they might -- that samsung might sell stock that is not offloaded in the united states dumped effectively around the rest of the world, and that could hurt nokia's profit ability there. it's margins. they're not talking about the patented which is one reason we rallieded, but we've undone the gains we've had on nokia, and finally because i like to keep you abreast of the travel ledger

industry on this program, let me tell you that some of the cruiselines are doing well today. royal caribbean carnival are higher. city have a note overnight where they spoke about improved booking trends. pent up demand generally in the industry, following the concordia disaster as well as promotional activity here m united states. north americans bookings they say are accelerating. 2013 bookings are also solid. i should mention that rachel rothman has been the head of this. she had proprietary research that she put out at the end of last week which also suggested that the downward pressure that we had on pricing was now abating and that things were becoming more stable, but can you see those stocks are beginning to rise carnival and royal caribbean. a tnl update for you, carl. >> an industry you know well, sil simon. >> always there. >> let's get a check on energy as well. so much attention being paid to the sector.

sharon eperson at the nymex. >> no real big swings. in fact, we're looking at oil prices that are only slightly higher right now. a lot of traders saying they believe that president obama did not mention a release of oil from the stlat eejic petroleum reserve, that's part of the reason we're seeing prices come back up after the sell-off that we saw on the previous session. gasoline, a little bit -- coming out of that market and that gas. we know there's plenty of that gas. we're not seeing much impact even though there's been some shut-ins in the gulf area. in terms of gasoline, now, that, of course, is the key that traders are watching, and the fear premium coming out a bit because of the velocity of this storm not as high as was expected, and the turnaround time in terms of the refineries coming back on the line that, may be a bit shorter too, depending on what actually occurs and what type of power outages we see in that area as well. that is the big question for the refineries along the gulf coast. in terms of the crude oil market, keep in mind that we also have inventory data coming

out. this inventory data is going to show what has happened in the last week. we're expecting to see the canadian imports fell. that's according to tradition energy, and that could cause a big drop in food supplies for the week. that is part of the reason as well that we're seeing a little bounce here in oil prices. we'll keep our eye on that and, of course, next week's report is going to be key to actually seeing what kind of impact came from isaac. >> sharon eperson over at the nymex. speaking of oil, don't forget to vote in the yahoo, cnbc finance poll. at what point should the president use the reserve? the results coming up on power lunch in the 1:00 p.m. hour. bob joins me here. a friend of ours tweets that we're worried about a would-be hurricane isaac. markets worrying about hurricane hunch. >> we need to get some action, and things are going to move very quickly now. spain is in serious trouble. the prime minister is meeting with the e.u. president today to

try to lay down the conditions under which they might expect, but this all may seem far out in the future. the dow intraday fairly narrow trading range. we did drop a few minutes ago. mr. fisher from the st. louis fed gave an interview to reuters where they said easing is nott preordained or predestined. not surprising markets have dropped a little bit on that, but i would say this is a fairly tight trading range. earnings basically over, but i want to note a few stocks. novao, this is an historic high for movato, they are a well managed company frnew jersey, a they make watches for people right in the middle. let me show what you they do. this is very clever. the museum watch is very famous. it's about $1,000. by and large they make watches for the tommy hilfagers of the world, coach. these watches are a few hundred dollars. you can spend over a thousand in a few cases, but it's right in

the middle. they're fancy. they're people who want to be seen wearing them, but they don't ko a fortune. that's the perfect sweet spot, and sales have gone up for these brands and these names here. perfect company that's running right on the right part of the market right now. elsewhere not a lot of other movements here. creeken processors are having a good day. sanderson had great numbers. chicken prices are up notably, and that really helped them beat the earnings overall. a nice day for the chicken processors. elsewhere, some of the sectors for the month. everything in an equal lib yum right now. we're continuing the trends, so tech and financials and energy have had a very good month overall. they were declining, and all of the people who are dividend pairs, the utilities and telecom, they haven't done everything. this is the same pattern for about a week and a half. we started strong in the risk on groups and energy's financial materials. it's basically holding up and the people who are in the area

of -- that are collecting dividends are not doing as well here. finally, i want to end, carl, by noelgt we've been talking about how how home prices have stabilized that are improved. guess what's happening. one part of the would that's not happening. connecticut is continuing to have big problems here. prices declined 4.7% year over year, and in fairfield county that is the biggest decline of any state so far, and in fairfield county well known as a center for the hedge fund industry, prices are down 12.9% year over year. carl, that's the second worse. i think the national association of realtors tracks 147 counties. i believe that's the second worst other than detroit, and the reason this appears to be happening is this is the center for financial services which are now contracting rather notably. here's the part of the world that's playing catch-up with the declines that they've seen elsewhere. >> on the highend in the hamptons has not rebounded the way people had hoped. >> although manhattan is doing very well right now. they're holding up. they're getting 30% of sales on the upper east side.

people outside the united states. >> russians trying to get their money out of the country. >> russians, venezuelans, you name it. >> thanks, bob. keep our focus on the market and the economy. consumer confidence unexpectedly weak in august to its lowest in nine months. what's ahead for the market and the economy? jerry, president and cio of castle ark management and steven chief u.s. economist with mizuho securities. good to see you both. let's get this draghi thing out of the way first. i mean, you know that you're going to have a busy week well ahead of this friday conference. what do you think is behind this cancellation? >> well, i mean, again, like everything else, i think they're searching for answers in europe. just as if they're searching for answers at the federal reserve. to the extent that they're looking to get this done with the ecb meeting coming next week and the german constitutional decision coming a week later, there's a bit of a view that, you know, maybe it's more appropriate for the ecb head to

be in europe than to be wandering around in jackson hole at a time like this, and i think that's really what's driving this underlying decision wraern any kind of conspiracy theory that they have anything new yet under the table that they're going to be sur fa saysing in the next couple of days. >> you still think maybe we do get some of that extension of some guidance on friday? >> well, from the federal reserve, i think you're going to get hints that there's going to be being more to come, just like in the f-1, and there's going to be nothing specific out of the bernanke speech that takes place on friday. you are going to wait until the f-1c meeting that comes out on september 12th to get that answer, and then i think you're going to get an extension of guidance. you're not going to get a third round quantitative easing. yet there's no deflationary pressures that are evident in the economy, and as a result of that, the federal reserve is going to be cautious, but supportive and go towards extending guidance. >> jerry, some might argue that's a disappointment. you say lean bullish. >> sure. whether we have today or

tomorrow, next week's ease or cautionary detail out of a central bank, i think is irrelevant the big picture. all central banks around the world with in particular china and in particular the ecb are in a full easing mode. what they say this weeks or next are irrelevant to the fact that over the next year all those banks are going tobacco dative of a faster growing world economy. that's not been reflected. even at 1,400 in the s&p, that's not reflected in stock prices. stock prices are still worried about shoes that haven't dropped, and i just don't see those shoes falling the way the average investor views them today. >> you would go first wra where? you look at energy names? >> it's got the call option. the call option for the growth. it's got the call option on things like the venezuelan refinery -- the hurricane in the gulf of mexico. more importantly, it's got the call on what is serious in terms of middle eastern geopolitical

risks. you have all that, and you get three 3% or 4% yields and higher in some of these names. these are really some of the best balance sheets in the planet, and some of the best growth names. >> even today people writing about the war chest chevron has. >> yeah. >> finally, steven, housing, another data point today. kay shillor. it does look like the bottom is in. why would the fed embark in more direct mortgage purchases if, in fact, housing has recovered? >> again, with the low level of interest rates that we have right now i don't think they will. in fact, the yield curve even further to drive long-term rates down by moving the guidance out even further, and that works through the forward rate structure. i don't think there's any good argument to go out and do quantitative easing at this particular juncture. i think it's something the markets have been hoping for rather than what will actually come through. >> guys, interesting week set up. even all the people on vacation are missing a good one. that's for sure. thank you very much, jerry. we'll see you later. >> let's send it back to courtney reagan at hq with the

market blast. >> take a look at shares. we're sitting here looking at session highs. extensive channel checks. they say the demand for back to school is much better this time of year than last year. they've got a bye target with 104 for their price target. carl, back to you. >> all right. not bad. straight ahead, energy companies are evacuating off shore rigs shutting down gulf coast refiners as isaac bears down on the region. what is that all meaning for the oil industry? we're going to discuss that with valero after a break.

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♪ smoet ♪ welcome back. up next on the halftime report, well, some investors may be sleeping the week away. fast money is not. the trades you can make today to get set for september. crude is moving higher as isaac bears down on the gulf sparking rumors of an spr release. what are the chances that will actually happen? what is mario draghi up to? what is he so busy with that he can't be at jackson hole, and what does his no show mean when it comes to an ecb bond buying plan? does this mane it's in the works? see you at moon. >> monica, good questions. see you in a few minutes. meantime, more than 80% of the gulf's oil and nat gas production has been shut down as isaac makes its way towards the

gulf co-. brian schachtman has a look at the stornl's impact on the oil industry. brian, good morning. >> good morning, carl. you know, it's interesting we're at the outer edges of the storm. we'll have these real bands of heavy rain and then total calm like we have now, but the oil and gas industry is high pressured prepared for anything but total calm. they're fully prepared, and the storm which has slow but not necessarily strength and that's good and bad news for the industry. the chances for a lot of damage have gone down because it has strengthened that much and it's not even a hurricane yet. the slowing down is a bit of an issue because the slower the storm, the longer the production delays. i really wanted to narrow it down for a lot of people because there's been a lot of numbers. oil production about 1.4 million barrels a day from the gulf. almost a quarter of all u.s. production. refining almost half the capacity for the entire country. now, because the region isn't just about oil and gas pumps here, i also wanted to show

people what comes from other places. north dakota ships 100,000 barrels a day into this region. st. louis, barges down 60,000, and we're talking about a pipeline that supplies a memphis refinery totally shut down. that could be up to 200,000 barrels being moved somewhere else. andy lipau of lipau associates says if there's no damage, carl, we're looking at two weeks to restart and get things up and running for the most part. that's if there's no damage. back to you. >> all right, brian. thanks so much. when we come back, we'll hear from valero and see how they're preparing their refineries in the gulf as isaac gets closer. back after a quick break. tdd#: 1-800-345-2550 when i'm trading, i'm so into it, tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me.

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welcome back. i'm courtney reagan. there's won clearance for the surgical stapler system. it will be on the mark in the fourth quarter. the company says there is no other product exactly like this. as can you see, shares up more than 24% year-to-date. carl, back to you. >> energy operates as an independent petroleum and refining company. a third is subject to supply issues. joining us on the phone is the company based in an santonio where bill day is executive direct of media relations for valero energy corporation. good to have you. good morning. >> thanks for having me on. i know it's a busy news day for you. >> for you too.

walk me through the live of the shutdown. is it the biggest of the year? how much is just out of caution versus the actual strength of the storm? >> this is the first refinery shutdown that valero has had storm-related this year. occasionally we've had storms come through the gulf, but this is the biggest one. as a precaution, we did a safe and orderly shutdown of our two louisiana refineries, and as you mentioned and brian mentioned, there's other refineries around the gulf coast that have also shut down. as a precaution, i really -- really the main fear is losing power while the refinery is running. as always we were unsure about the level of water. to what degree are shutdowns buffetted by those two factors? what's more dangerous? >> usually the water because refineries are constructed to

with stand very high winds. wind damage is usually not a problem especially for the refinery production unit. loss of power is an issue because you can't run a refinery without a lot of electricity, and if there's any water damage especially to electrical systems, that could k take some time to repair. the good news is after hurricanes katrina and rita and the other storms that we've had, the industry has applied lessons learned and they've done things to shore up their refineries and move electrical equipment higher so it doesn't affect by flood. it probably won't be a big issue this time around. >> we've obviously have to worry about hurricane season as we do every year, but explosions in venezuela and problems with operations in -- with various companies in california. does supply get talked about in the industry? is this year looking much different than years past? >> it's different for a couple of reasons. you mentioned the explosion in venezuela. that really won't have an affect on prices here in the united states except to the extent that

we might see more products, more refined product like gasoline and especially distolate leaving the u.s. to supply market that refinery would have supplied. the real difference this year is the huge amount and the increasing amount of domestically produced crude oil that we're seeing from eagle ford many texas or whether it's bachan -- that is going to revolutionize refining here in the united states and it's going to be a huge competitive advantage. >> talk about a geographic -- a seismic shift in our economy that people probably don't appreciate quite yet. before we let you go, walk me through the process of restarting. once this storm makes its way inland and you're relatively sure about power supply, how quickly can you get these things ramped up again? >> it can be a matter of days. if you have a steady power supply, and that's the most crucial thing, and you don't have damage from wind and you have all your utilities, whether it's electricity, hydrogen,

things like that, then you can start the reset start process and have production in a few days to maybe a week. >> and is the worst case scenario a track that leads into the new orleans area? is that where most of your operations are centered? >> we have one refinery that hes west of new orleans and one refinery that's east of new orleans, and they appear to be right in the middle of the storm's target area, we're going to be watching very closely and we will do a damage assessment on the plant in the storm path. >> bill, appreciate your time today. i know it's busy for you. thanks for coming to the phone. >> thank you, carl. >> bill day with valero, taking a look at interesting and important stuff given all the diselates and supplies that come out of that company. the heads of the ecb mario draghi calling off his trip to jackson hole due to what they're calling a heavy workload. we would like to know aside from the financial crisis in europe, what is draghi so busy with that

he can't go to wyoming? we'll read some of your answers after this short break. one is for a clean, wedomestic energy future that puts us in control. our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. though all energy development comes with some risk, we're committed to safely and responsibly producing natural gas. it's not a dream. america's natural gas... putting us in control of our energy future, now. we make a simple thing.

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>> i love atoday's squawk on the street. we have the head of the european central bank mario draghi calling off his trip to jackson hole, wyoming, so we're asking you, aside from the whole financial crisis in europe, what exactly is going on? why is he so busy that he can't even attend jackson hole this year? tweets make tweet wrshz he is possibly trying to develop more acronyms for future bailout schemes. michael writes draghi is vacation with the u.s. congress. lone watchman tweets draghi is off on stret leave. in europe you can get leave for stress, and have i no reason to doubt that whatsoever. about a 90 seconds or so from the top of the hour. take a look at some big names here. watching shares of yelp as we hold you earlier on. the lock-up expiration tomorrow addotology weakness here. the stock, though, recovering just a bit. down about 2.3%. also keeping a close eye on lexmark. layoffs of 1,300. that's about 13% of its work

force. it is the top gainer on the s&p. up $2.50. 13% gain aas it tries to reinvent itself. stop making injet printers. watching kla tencor, citing a risk of simultaneous-quarter booking slowdown in 2013. it's adding a lot of weakness to tech here today. disney is another one -- good one to watch as well. bob giving an interview to the wall street jushl saying the company's long-term plans beginning to pay off. he is citing the prech of the marvel studio. a piece of the pe looks relatively cheap and has enabled the company to ride out rough summers, especially when movies disappoint like john carter. keep an eye on hp. we mentioned lexmark today. the journal says don't necessarily trust the turnaround over at hewlett-packard. it might not