medium term. >> it is going to crush them. kevin, thank you so much for being here. it's been a pleasure having you and we hope to see you again soon. that does it for us today. have a wonderful weekend, everybody. we will see you back here on monday. right now it is time for "squawk on the street." good morning and welcome to "squawk on the street" from. new york stock exchange. let's take a look at how we are setting up today because we had a huge fed induced rally. the s&p fell to 52-week highs, first time since july 2011. as for the picture in europe, again still over from yesterday's rally here in the u.s. european shares in fact at 14-month highs this morning. let's get to our road map. that of course starts with the fed. open-ended asset purchases and

promising to keep rates close to 0% for years. but as monetary policy doesn't fix unemployment, can the federally actually continue? >> it wasn't just equity. oil crossed $100 a barrel for the first time since may. gold at a six-month high. the dollar hitting four-month lows against the euro. >> we got a change to the dow jones industrial average. kraft is out, united health is in. this swap taking effect after the close today. we saw a lot of record highs yesterday, including apple. that would be the highest market cap event of all time. iphone5 sold out in the first hour of preorder. we start with the federal reserve markets here and around the world continuing to rally after the fed's position to launch a third round of quantitative easing. the fed will buy mortgage backed securities at the pace of $40 billion a month and will keep the fed fund rate at nearly 0% until 2015. what's really different is this is an open-ended program. there is no end date to this and

the message that investors got yesterday was, buy everything. the fed's there. >> i don't think it is a false message. if your goal is decided in the dual mandate to emphasize unemployment and we're at 8%, let's say you're targeting where we -- where stock prices were at one point, where houses were at one point. we know that we went into this great recession at 5%. what this says is, fiscal cliff, doesn't worry about it, turn off the idea that maybe you have one or two months of good numbers. this is the real deal and there is a search for yield. you better find something. you got to bet on o inflation. >> people have been searching for yields for some time now. now they're desperate. also anything with a spread is coming in. anything with even any real kind of a spread is going to come in. we could enter a world where -- whether it's junk or whatever, it seems dangerous in some ways.

>> if you are a money manager looking at equities and fixed income, you are running a hedge fund and you have allocations on both. you going to get priced out of credit, you're going to get priced out of equities if you're trying to actually be a value guy, in some ways. >> we're in a mode that i have not seen in a long time which is that cash killed you yesterday. if you were a competitive mutual fund, hedge fund, cash was like being bearish. i just could not believe how even 5%, 6% cash are costing you basis points here. that's remarkable if you're trying to catch up. you only got a couple months to catch up. >> i know. but i guess if you're running a big portfolio and you really want to show your investors consistency in terms of your approach, i don't know how you buy some of this stuff. not equities as much as fixed income. where you've got to reach for spread, for yields, and take a lot more risk conceivably. >> in equities you got to go buy bank of america. you got to buy freeport even though it is connected with

china. the things you've got to buy. you have to suspend believe and suspend the notion that the economy could have a downturn. >> you have to suspend disbelief. >> you can't be critical. you can't be critical. that's what happens. look at the stock that was going up yesterday. it was like companies that preannounced they were doing badly. fedex is appreciably where it was. >> the average person can't save. keeping money in a bank account is a fool's game especially now, now that we know that it is going to remain near zero indefinitely at this point. dividend paying stocks in many cases are stretched beyond historical valuation. >> i hate to be repetitive, i

like being repetitive, bristol-myers, proctor gamble, proctor still down from before the great recession began. a lot of companies still have very competitive yields versus the money market funds which are nowhere. ben bernanke said if you don't have a job, you can't save. he is working for the unemployed. that's his goal right now. is to get those people -- >> he's sticking it retirees. >> we've been sticking it to them now since the crisis began. we were at 5.5% before the fed crisis on the fed funds. we've been 0% for a long time. what about housing? i'm sure the stocks were up. >> they were unbelievable. >> they're talking they'll now take 55% of the growth on

mortgage backed securities. talking synchronized accommodation here. >> that's bank of america. remember when you go to buy a house, you have to low price with money but the banks don't want to give you a mortgage. i know because i'm in there. it's harder to get money. >> they only want to give you a mortgage if you don't actually need one. >> they want to give you this appraisal nonsense. >> maybe it will actually work. maybe it will take the rates down even lower on the 30-year. it's already pretty darn low nationwide. is it going to matter? is it going to make a difference? >> it is supply and demand. if a bank knows that it can make a loan and the house is going to go up in value, it is not as worried about collateral.

>> how many banks did you go to to get a mortgage? >> about eight banks. >> my point is -- i would loan you $50. >> i would think because you know where to find him at the end of the day. the bottom line though is here -- do you have to believe that what the fed is doing will actually impact the unemployment rate in order for you to believe in this rally going forward? >> no, not at all. >> so there is a complete disconnect between -- >> i'm not buying -- it's just not the over and under of employment. i'm not buying some security that's tied to 8%, going to 7%. buying stocks that lever the

worldwide growth. you'd think that these guys -- i know, you think they think. i know they've got that piece of paper on the desk. talking about commodities and those companies that deal in them, they were up, if you didn't notice. oil, gold, up strongly. the dollar also making some big moves on the backs of the fed. oil and gold prices surging after the announcement of qe3, gold settling at a seven-month high. the dollar, on the other hand, coming under pressure against the euro, the japanese yen, even the uk pound. and copper was up 3.5%. >> absolutely no turn other than a few pennies in copper. copper -- suspend, disbelieve, go in. when i watch occidental, that's a major that's most levered.

gold works and copper works. the junior miners are even working. i don't even like to recommend them but they're working. wow! >> i see the trade in gold and i see the trade in silver. but i think the trade in -- with oil, you can cross $100 a barrel but there is also a looming threat of an sbr release which just drives it lower. with copper we just need china to say we don't have the money to fund this stimulus program. then you got a reversal in copper. >> when you get a shell coming here buying these assets from chesapeake, they're going to be drilling, chesapeake drill. drilling in this country for oil is rather amazing. i've been watching a little sector. richard heckman.

that stock has been a great barometer of drilling. and lee cooperman, one of his favorites from the delivering alpha conference -- halliburton. these are going to work their way higher. oil service is going to do well here. >> and of course if israel decides to do something in iran, oil's going the other way. >> let's talk about this major change in the dow jones industrial average that was announced this morning. united health will join the dow, replacing kraft foods. change will be effective as of the close of trading on september 21st. this is no surprise. kraft spun off its international busine business. a big percentage of its revenues come from outside the united states and this is a smaller market cap as a spinoff so it was a logical replacement. >> i will see you first, don't buy united health.

there's very little money. my hands are different color from my face. what does that mean? there's makeup. >> the dow jones industrial average, the price pointed index which should have absolutely no meaning but they have to keep doing it that way because that's the way they started. everybody follows the s&p but we talk about the dow jones because that's what you hear about on the radio. >> this is the opportunity for the dow to go higher. kraft very levered to commodity costs. particularly we know that the big inflationary trend is food. okay? and they're a huge buyer of all of these commodities. united health, very little commodity costs so you get kind of an inflation break that deals with ben's pro-inflation strategy yesterday. >> this is the first change to the dow jones industrial average since 2009. just to your point that nobody follows the dow jones industrial average, how much money is actually in that for the djia?

$27.5 billion directly as of the end of 2011. compare that to the $1.3 trillion of the s&p 500 as of the end of 2011. that's why we talk about the s&p 500 much more. these changes are all fine and good. at the end of the day, your profl portfolio is probably not going to be impacted by much. >> this does not include the likes of apple and ghoul which have been such significant moves in the s&p. and so that's why you will see me only talking about the s&p when it comes to performance. >> when i first started as a hedge fund manager in my letter -- in's no longer a hedge fund manager, no longer can trade. when i sent my letter to my partners and talked about how i did versus the dow. by the end of my run as hedge fund manager i felt it was just a pointless to mention the dow. >> there's been some chatter

that apple could be a candidate for inclusion in the dow jones industrial average should it split. the share price obviously would take the dow hostage essentially and you wonder if this puts that rumor to rest. they made the change, they don't make the change too much and it's not apple going in. >> health care. this index is now overweighted to health care. i think it is a big mistake. it should be overweighted to technology. google goes up every day. oh, let's buy united health. no. that's not what america's looking like. america's not looking like united health. with the elderly and obama care. this is a google situation. i like that a lot better. >> i like that better. a lot more optimistic rather than thinking of getting old and decrep decrepit. apple hitting record highs. pre-orders for the iphone 5

begin. shipping expectations have been shifted from one week to two. it took 22 hours for the 4s to sell out of its preorder and 20 hours and 7 seconds to sell out the iphone 4. did drexler get his phone? i wonder. it is selling out that quickly. >> i would point out, now we're seeing these derivatives trading on the arm holdings. here's a great one. western digital puts out a horrible number. >> it was a dividend. >> apropos of the dow, here we have some technology stocks that are so -- you have intel and microsoft, very old tech. apple obviously if we're going

to start measuring a sellout by hours we're dealing with -- paul krugman would acknowledge. >> the "i" economy is the u.s. economy. it's a lot more cash on the balance sheet, that's for sure. all right. let's get to rick santelli at the cme with breaking news on industrial production. >> yes. august production, disappointing. we were expecting unchanged, down 1.2%. last month up .6%. revised down to -- excuse me, up .5%. we also have fast utilization. 78.2 is the wideness for this series of numbers. last month also revised down .1. it was released 79.3, now 79.2. we still have university of michigan confidence index to come out.

we see that the interest rates on the 30-year bond topped 3%, first time since may. the 1.31-.21 of the euro, highest since may. food yields highest since may. correlations are getting very close to the same number again in many markets. back to you. >> thank you very much, rick santelli. just to go back to the apple conversation quickly, free market. $689. it is sticking higher as we approach the open. record levels. >> the ones that are underperforming. basically just have no choice. they're being dragged kicking and screaming, cash is killing them, shorts are killing them. you go in, i got to buy apple. i got to put money to work. >> ben bernanke's telling us you can buy everything because we are there no matter what. why wouldn't you buy something that hasn't run as much for the great e data if you're essentially getting a tap on the shoulder for the feds.

>> the january 7th call you get from your investors, i didn't see apple, what kind of moron are you? i'm taking my money out and giving it to someone who saw apple. that's the greatest performing stock. >> when you see that letter underperformed, they call you, what do you own? i own intel. listen, you're the dumbest man in the world. they just call you a moron and then you got to give the money back. there is a real tendency by hedge fund manager that say i got to show that i saw apple. beat the five-year lock-up. coming up, very different areas of the market trading near very new highs. see where you should be putting your money right now. let's look at futures. looking specifically at the s&p 500. we are looking at an open up. with the fidelity stock screener, you can try strategies from independent experts

and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. in communities across the country. whether it's supporting a delaware nonprofit that's providing training and employment opportunities, investing in the revitalization of a neighborhood in the bronx, or providing the financing to help a beloved san diego bakery expand, what's important to communities across the country is important to us. and we're proud to work with all of those who are creating a stronger future for everyone.

home depot says it will close seven of its big box stores in china and take a $160 million after-tax charge in the fourth quarter. it will also cut 350 jobs. i was in china back in 2008. i met with the head of home depot china then when they were just getting into the china business and she had said that it was a difficult translation to make in terms of the do it

yourself culture here in the united states where on the weekend you might go and you might plant your lawn and you might paint a room and bill a fence. in china that's just not the culture because their tendency is to hire people when you have more than a billion people in migrant laborers, it is much cheaper to just say, hey, you, do this for me. so it is a difficult proposition there. >> stephanie link was on wapner's show. we talked after. listen, you just got to go buy home depot, there's no choice. that just makes it more after bernanke stock. you don't have to worry about the slowdown in china. i have been fixated on it. one day we're going to come in on monday, monday's always down because china does nothing. after they fighter head of china -- >> he made a statement yesterday, he sent condolences to somebody who passed -- >> so is he okay? >> i don't know if they've actually seen him physically.

>> less exposure to china right now, the better. coming up next, tcramer get you ahead of the game in the mad dash. a little help saving. for adding "& sons." for the dreamer, planning an early escape. for the mother of the bride. for whoever you are, for whatever you're trying to achieve, pnc has technology, guidance, and over 150 years of experience to help you get there. ♪

five and a half minutes before the opening bell time. ahead of the market open, cramer's mad dash. we want to talk china and joy.

electricity numbers, very hard to fool with them. a lot of people feel the chinese numbers aren't honest. bottomed in july, august has continued. electricity is coal. coal has been really good for joy members. i think this is the bottom in a very -- stock very connected to the economy. caterpillar is a xet to of joy. if we start getting more exports of coal this stock is very inexpensive. >> now what did the ceo say last night? >> he said listen, we get the numbers and the numbers in coal, they need to import coal because they don't have enough. the coal's dirty or in the wrong place and this would be a major prop for a cyclical if you remember, this telegraphed in 2008 and 2009,

great recession. it could be telegraphing a turn in china. they also have a great aftermarket business. mike sutherland is such a no-nonsense guy. when things were going bad and the stock was up, he said listen, be careful. now the numbers are turning. look how far this stock can run. remember cop per? very strong. india is coming back. i'm not a big fan of the indian economy but they use a lot of coal. the world is still going to coal even as in our country it is in a secular decline. i am not recommending any cold k coal companies. if obama wins the election i think he'll say, listen, there will never be another coal plant in this country. opening bell in three minutes.

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how far will we carry the rally into today's session? this is going to be a real test whether or not people believe in the bernanke put. >> if you see these numbers and they're so out of whack with what people are buying. it's kind of very counterintuitive for you at home, industrial production would be a sign that copper is bad and here's copper up. because we're in a very big hope mode. a lot of people are saying, bernanke's saying oil's going to go higher and i'm okay with that. they're buying the oil index. they're buying the oil service, oih. people are buying real things.

and all the banks own xlfs. they are just out of control. out of control. >> bank of america up 2.7% in this session. we are approaching $10 a share. keep in mind also, it is the fourth anniversary of lehman brothers filing for bankruptcy. that's the backdrop to this massive rally that we saw yesterday and the massive rally we're seeing in the banks stocks. >> i'm kind of fixated on what happened during that bank of america -- you would come in, be like -- bank of america. lehman brothers. merrill lynch. now i want to know what's the value of merrill lynch after the smith barney evaluation? maybe merrill is worth a lot more than we think. >> maybe. >> bank of america does have a $104 billion market. >> it is not in any way, shape or form through with its

problem, legacy issues, put-back issues. they're still out there, it is still significant. and it has disappointed along the way. let's not forget, four years ago for lehman but it was march of '09 when we really thought it was over. when bank of america was trading at -- citi was down. ge was sixth. >> i'm watching the first horizon, the bbt bank. these banks, huntington bank, they are really on the move. these are regionals that were destroyed by the great recession. suddenly coming back to life. >> you keep an eye on those preferreds as well. >> oh, my. >> rbs --

>> ing preferred. i was going to write off the ing preferred but obviously ing wasn't. looking at a buy today for sears that is on fire. david, the search for yield has brought you to a lot of wrong places, so to speak. looking for love in all the wrong places. >> i get it. >> markets are up across the board but by just a fractional amount. if you look at certain sectors, housing for one, we're seeing pretty big gains. toll brothers up 1.5%, home depot up by about a percent. this trade continues. bank trade continues. but it's not across the board today. >> next week kb homes reports. >> that's the worst of the worst. if we get a decent number from kb homes, the likes of the toll

brothers once again -- toll brothers. look at that thing. menard's. stuart miller. these are remarkable moves directly related to ben bernanke. there's bernanke. the first question he was asked, he said buy lennar. second question, buy leisman. >> aren't they already discou discounting a significant -- >> did ben bernanke reiterate -- these are what i heard. you may have heard the actual answers like qe3 and twist. i was hearing buy lowe's. even lowe's is going to go higher. some of the later questions about lumber liquidliquidators. you might have heard that to be

about inflation. >> what i still wonder is whether he's really going to be able to help people buy a home or whether he is just going to help investors. if that money will really translate into something. >> wells fargo wants you to have a paycheck. self-employed people, by the way, are having a tremendously difficult time getting refinanced. self-employed people, doctors, lawyers, they are the ones that have -- they were -- remember paul taylor? >> you could do 95% loan to value. >> 110 loan -- >> but the point is, are the banks going to extend more

credit? hey, let's give some mortgages. go to the fed. i like bernanke. i was defending him all day yesterday on twitter, i'm defending him to my trainer this morning. it's working. it's working. >> let's find out what else is working with bob pisani on the floor. bob? >> you know, just want to comment about this dow addition. united health care replacing kraft in the dow industrials. this is sort of widespread folklore about this. the curse of the dow, it's called. a lot of traders believe that stocks that get added historically do worse after they get added, after their initial pop. that isn't quite true. if you look at some of the recent histories. the problem is the financial disaster in 2008 really messed with the dow a lot. and affected it on both sides of the equation. look at bank of america. bank of america was adding february 2008 into the dow. it replaced altria. you think that was a good trade?

that was one of the great disasters of all time. altria has been fabulous, up over 30%. bank of america is down 75%. but again this was the financial implosion. it is -- what else happened here, it messed with the dow on the opposite side. kraft replaced aig. that was september 2008. that was a fabulous trade for the dow. kraft has been great. it's been up about 50% since it was added to the dow. and remember citigroup? citigroup was taken out of the dow june 2008. travelers was put in. now since then travelers has been a great performer, it is up 50%, 60% since then. citigroup is still essentially mired in the place compared to where it used to be. some of the other recent additions have actually done pretty well. good example is chevron. they replaced honeywell back in february 2008. since then chevron is just near

an historic high, just a few cents away. honeywell is just fractionally above where it was back in 2008. the curse of the dow thing is not quite accurate, at least in recent history. i'll go back at 11:00 and look at some older examples. the big question outside of this dow thing is whether there is more legs to the rally. a number of people this morning are raising estimates. so tom lee over at jpmorgan raised his target for the s&p -- 1,495 from 1,475 to election day. they're arcing for multiple expansion. not necessarily earnings expansion. more aggressive fed action, more aggressive ecb actions, guys, arguably at least for the bulls for some time of multiple expansions. >> aig, $630 million share price. that's a hedge fund rescue. >> incredible.

>> what a trade. let's checkle trades with rick santelli at the cme group. >> yesterday's news, the statement, the quantitative easing 3 is what all the rage of the news cycle is. but keep in mind, there are a couple of things we need to pay attention to. while we're still all digesting what was a very aggressive move by ben bernanke and company, we're seeing data this morning, another hot day on inflation especially, including food and energy and a very weak report on industrial production, capacity utilization. two-day chart of the 10-year, it was up to $1.84. but that's only a one-month high yield. you look at 10-year minus two, up get the curve everybody's focusing on on being long mortgages. that 1.50% is the highest level -- it's mayday. look at the 30-year bond going back to may 1st. also a may comp is actually a

little more than four months. look at 10-year bunds. look at the euro versus the dollar, that's comping back to may. of course gold/dollar, that's just a subset of what we're seeing going on. but all in all, many traders on this floor continue to have one common conventional wisdom. don't short the stock market. you could short the fundamentals but if you want to make money, stay long the actual marketplace. jim, back to you. >> that's great analysis, rick. global up four points. copper stocks -- wow. let's check out energy and metals at sharon epperson at the nymex. >> traders saying you want to be in gold if you want to make money in commodities. we're seeing asset allocation of gold changing a bit leer. some traders saying perhaps this is going to be the commodity of the year. we saw a $60 gain in gold from

yesterday's low to this morning's high. we're looking at big gains in silver, near $35 right now. copper today, you talk about the big gains there, up over 3% just in today's session. now there are some, including those who brought the research, who are a little bit wary whether this rally in metals will be sustainable, or the rally in oil because of the possible demand destrx strushuc we're seeing. barrel topping over $100 a barr barrel. the key to watch today are going to be protests happening in the middle east in light of the friday prayers. we do know egypt's muslim brotherhood has canceled the nationwide protest there. if we see those protests not really amounting to much or not occurring, that could take some of the lift that we're seeing

out of the oil price as well. back to you guys. >> thank you, sharon epperson. we got to watch the movie in the euro/u.s. dollar. this is a tremendous move for currency up by 1% right now. >> wow. >> a full percent. we are just off the session highs. i saw it at 131.24% just recently. >> how short were the traders in this thing? >> every recommendation on street practically was to short euro/u.s. dollar. >> the coca-colas of the world, i'm taking out my numbers right now. reiterating my buy. >> we should focus on the area i like to focus on, sumner redstone's companies, one going down, one going up. viacom got a downgrade today. a concern about ratings. anybody notice pbs? that's almost a double.

years ago sumner says he's going to turn content to king. man, cbs is proving that every day. retranall over the place, selling their programming to netflix, amazon, you name it. the model is working. big. there's a look at cbs. they're getting close to market cap. unbelievable. coming up, an exclusive interview with jean claude

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yet another all-time high for apple. $693.50, the intraday high set today. $693.57. you watch the tick, and this thing is just another high after another high. reports this morning that pre-orders sold out on the iphone5 in an hour. in an hour of its start. >> this has kind of an everest feel. we're always in that situation where i feel like we're at base camp or it turns out really at base camp 2. this is a rally. i've never seen anything like it. this is a hyperbolic move. >> denali. >> why don't you just get with the program?

you're politically incorrect. >> i didn't realize that. >> never too late to wise up. >> my apologies. >> did you know saturday marks the fourth anniversary of the day lehman brothers filed for bankruptcy setting off the financial crisis of 2008, the peak recession of '09 and part of '10. and here we are. >> and the struggles of '11. >> the struggles of '11, into '12. yet here we are. it is funny, i look back on that week. incredible moment as a financial journalist, starting with that sunday, trying to watch football games, realizing i got to make a lot more phone calls. i really stumbled into most of my reporting during those weeks on aig which was an afterthought. of course we were watching lehman go bankrupt, merrill get bought by bank of america for a price that we still find rather stunning. >> that was sunday, into monday.

everything was about to go. some still say we should have let it all go. there is still that argument out there. if we'd have reorganized the financial system in another way, there wouldn't have been so much push-back against dodd-frank. >> were you making calls -- i thought there was this last ditch attempt by lehman to get the koreans to buy -- >> yes. >> considering morgan stanley got mitsubishi? were they close, david -- >> no. i think it was a dream. it was a dream dick fold had. >> everybody was prosecuted. they all went to jail. >> we all remember how quickly confidence can disappear. that's the lesson of bear stearns and lehman and the financial market. like that. here we are, four years later, aig is still the most amazing

story. having sold off more than any other company, at $35 today. >> here's a company that graen sh trichet said it is a bankrupt company. the obligations they thought they'd never have to pay. remember that december 6th-7th analyst meeting in 2007 where they said they owe nothing? they had some pan professor saying things were great. >> what are you doing with it to generate any kind of yield? >> travelers is doing well. those days were so dark. i don't think people realize how dark -- these are days i said, listen, i want my paycheck, i want to be sure everything works. is my house going to be cut in value in half? who had's going to be laid off.

those were dark days. one more look at apple before we go. take a look because it really is sweet, man. >> $695.05, the new intraday high. like at the spike! this is an incredible chart here. >> $651 billion market. >> this remind you of yahoo! where yahoo! would go up every day in 1998? >> except that this valuation is still cheaper than most of t the -- >> is that a bubble? >> no, not even close. >> there is a lot more "squawk on the street" next. coming up -- yep, it's friday. but before you head out of the office and dance in the street, we've got a whole day of trading to get through. cramer will help you get in the mood with six stocks in 60 seconds when "squawk on the street" returns.

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let's get a look at what's coming up next hour on "squawk

on the street." >> extraordinary judgment from the federal reserve yesterday. whatever you think of that, we'll devote next hour of "squawk on the street" quite clearly to -- should be asking the question how do you make money out of what they're promising to do? we'll talk about the metals and the banks, emerging markets as well. we also have an exclusive interview with the former head of the ecb, jean claude trichet. disney at an all-time high. do you still buy? back to you guys. let's get back to santelli. consumer sentiment hitting the wires right now. rick? >> oh, my goodness. buckle up! 79.2. 79.2. it just blows away expectations, it blows away the notion that higher gas prices are affecting confidence. i'm almost afraid to put the number out, it seems so strong. let's put it in context. about may we had a 79.3 number, the highest since october of '07. this lodges right underneath of

course. it is a powerful number for your september preliminary read on university of michigan sentiment survey. david faber, jim cramer, back to you. >> thank you, mr. santelli. big number there. time for six in 60 seconds. >> my china watch. china may have bottomed. >> johnson and johnson. >> new person to be head of the consumer -- they're cleaning house. bringing in an outsider. >> they very rarely do that but, man, they've got alot of reputa. >> beth ba bed, bath and beyond. be careful.

>> the japanese said no more nukes. what's coming up tonight? >> a visionary importing nat gas. he's leading the challenge and the charge to export our natural gas. he has got this company -- i prefer, by the way, i prefer his mass limited partnership to cmq but it's been remarkable. >> are we going to get it all the way to japan? >> he does deals with everybody. spain, korea, japan. he's the best. >> all right. jim, see you tonight. 6:00 and 11:00. have a great weekend. got a lot more "squawk on the street" right after this. up. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up.

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welcome to the second hour of "squawk on the street." we have a july business inventories read. it is hitting the wires, up .8%. this is double the expectations. end of july number is the third quarter so it won't impact the

revision, the second quarter gdp we get at the end of the month. but could figure prominently of course as we actually close the third quarter and look next month for a first read on gdp or the third quarter. mechanical melissa lee, back to you. let's get the road map for the next hour. no surprise, we start with all things fed. we'll look at all the moves and tell you the best way to play the qe3 bounce. we are watching one stock that could yet hit another all-time high. no, not apple. disney running at an all-time high today and theme park revenue sliding. >> former ecb president jean claude trichet speaking exclusive with cnbc today. first, a judgment from the federal reserve yesterday that still has a lot of people scratching their heads, though the markets around the world are clearly basking in its glory.

steve leisman has the very latest on an important historical moment with its indefinite buying. >> no doubt you have the right adjective there, simon. the dust has barely settled on what the fed did yesterday. economists calling it a sea change in policy. but speculation already ramping up on two key issues. how long will the fed keep this going and what might be next in addition to mortgage backed securities? already saying early next year when you expect the fomc to extend its mbs purchases and initiate a new round of purchases of treasuries. those policies should remain in place until growth picks up in the second half of next year. that could set the stage for a reconsideration of the fed's current all-in stance. so we're gaming out already six months from now. hard to underestimate what economists are calling exceptionally aggressive policy from the fed to understand what fed chairman ben bernanke is trying to engineer. start with the $40 billion of open-ended monthly mortgage purchases. now tied to progress in the

unemployment rate. not a calendar date, not a fixed sum. the more monumental change came in the forward guidance. investors need to hear this. the committee expects a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. those are the gdp forecasts. that's the key right there. look, the fed saying it is going to remain exceptionally low even while it expects growth to be more potential at 3.4%. pretty strong right there estimates for 2014 and '15 and they're higher than they were previously. here's the translation -- the old idea of how you thought the fed would act when the economy recovers, that's dead. the new idea, we're going to change the way we react and stay low to incoming information. bernanke did not answer my question directly about whether this means the fed will tolerate higher inflation. but here's what barclay said. the fed's actions today indicate that monetary policy may be less reactive to higher inflation while unemployment is away from target. it is essentially experimental, guys. like almost everything else the

fed has done during this financial crisis. but academics have suggested it's been the lack of credible forward commitment that's kept these unconventional policies from the fed from really turning around the economy. bernanke taking those theories and now putting them to work. simen? >> let me hone in on one particular aspect. the very sharp sell s-off we've had in treasuries. i'm thinking the 10-year. in many cases some say bernanke shot himself in the foot because bernanke and foe have abandoned the commitment to control inflation. many of the economy is anchored to the treasury, at one point 1.85% for mortgage-backed securities. >> simon, that's a great question. nank frankly, that question cannot be answered for even a couple days or week or even more. i think part of the reason is the market expectation going into yesterday's meeting was that the fed was going to do

mortgage backed securities and treasuries. we only got mortgage backed securities so i think there is a little disappointment in the treasury market that they're not going to be out there buying them which is why i think it is important that economists already think that beginning in january, the fed may add treasuries to the list once operation twist ends. so it is a little early to tell. what we do know yesterday that the 30-year fannie mae coupon fell by 22 basis points. that's a potential sign that it could work. again, you have to wait to see how these things trade. do mortgage rates come down? they're at 3.5%. do people avail themselves of the opportunity to refinance, freeing up money? do investors, guys planting plants and equipment right now, simon, do they believe that if inflation were to tick up, if growth were to tick up, that the fed is going to still keep interest rates low? those will be the keys as to whether or not this works. >> steve, real quick, substantially. what does substantially mean when it comes to the unemployment rate? what's the number? do we have any idea? >> we don't. we don't. he specifically did not give us

one because i think the fed cannot agree upon one. it was funny what bernanke said. he said the last six months isn't it. that was the way he put it. i think it is one of those things -- i hate to say it like the famous justice said about pornography, you know it when you see it. it's like one of those things where if it starts coming down .2% -- look. bernanke thinks that if the economy improves, you could get an increase in unemployment because all those discouraged workers say, hey, count me in. >> but he also believes monetary policy is no panacea. yet's going to continue the policy until it works. there's a fundamental flaw. >> i think there is a flaw in that question in the sense that just because it doesn't cure everything doesn't mean you shouldn't use it to cure some things. >> yeah, but what they're saying is we're going to keep administering the treatment until something happens. is it not capable of curing the illness, we're still going to keep giving it and that has side effects. >> yeah.

but sometimes an illness requires different kinds of medicine, simon. i hope we don't bring the metaphor to the absurd degree here, but look, you may need this medicine and that medicine. sure, we need fiscal sanity in this country. we need to start solving these problems. we need to deal with the fiscal cliff issue. that doesn't preclude the idea that potentially bringing down mortgage rates, potentially future forward commitment can help the economy right now. >> i get it. the issue is what's the effect it will have on oil and all the rest of it. diana olick, what's your take? >> well that's a big question, of course, simon. some analysts disagreeing, saying they could push rates dramatically lower, others saying it will be a much smaller drop. rates are already 3.5% on the 30-year fishgsed. rates have come down in the past few weeks after ben bernanke spoke in jackson hole hinting about all of this. will they go to 3.25%? certainly possible though we won't see that overnight. i've already spoken to mortgage lenders this morning saying not much difference in rates this

morning. remember after the first announcement, in '08, rates came down around 80 basis points but that was a much bigger purchase and came as a big surprise to the market. the bigger question is how does this all affect the housing market. rock-bottom rates are only great if you can get them. you still need big down payments to get these rates if you're buying a home. if you're refinancing, negative equity is still a big barrier to enter. nearly 11 million or 22% of all borrowers are still in a negative equity position and an additional 3.2 million borrowers have less than 5% equity in their homes according to core logic. lenders are telling me they're actually seeing an unusually high number of refinancing borrowers now putting money in to their homes at closing in order to get those lower rates. of course not everyone can do that. the government's re-fi program for underwater borrowers called harp has been very popular and will like lily get more popular

now. what this fed move could do is light a fire under legislation now in congress to expand the government's re-fi program. republicans have fought the effort and action is unlikely before the election. but another plus is that these lower rates could help offset higher fees that are now being charged by fannie and freddie and higher mortgage insurance premiums by the fha. but we have to wait to see how to plays out. the financials hitting their highest levels after more than a year after the fed's compliment to more stimulus. which bank stocks are the best ones to bank on? tom hager is managing director of stern ag. immediately after the fed decision we did see steepening of the yield curve. it is believed there could perhaps be more mortgage lending in the pipes. so we walk through these bank stocks. which ones do you think will see the biggest boost off the back of the ped? >> well, again, we've been pretty consistent in terms of our thesis that we still focus on growth at a reasonable price. the guy that continues to take

market share can grow through a very difficult economy and low rate environment. we continue to stick with names like a pnc, wells fargo, we think they are the best plays through this particular cycle of low rates. is there we've already seen a massive rally in the bank stocks ahead of this position. at this point which picks of yours will offer further up side given if you take a look, for instance, at bank of america, that thing is up 15% in the past couple weeks. >> the banks have certainly come off the rally in august. citigroup is up some 30% in the last five weeks alone. b of a similarly has had a big rally as we had the initial bond buying program coming out of europe. now bernanke is really doubled down, equaling that conceivably open-ended bond buying program.

it is really sparking a rally in the big underperformers with the capital market related banks. that being said, we certainly see kind of a decent third quarter coming up. this rally should conceivably continue into the third quarter earnings but as your previous reporter mentioned, there is a number of challenges that still loom out there and it is really a matter of when do you pull the inflection point on the stock. >> let's cut to the chase here. if -- apart from the move on the stock -- if the fed is going to buy mortgage backed securities, it clearly believes that the bank and the mortgage process are now the transmission mechanism for what it is trying to do. if it is buying mbs, and therefore those yields are falling, how do you think, paul, that this will affect the way in which those mortgage providers lend? in volume, in price, and indeed in the profit that they take from that process. >> well, right now mortgage banking is probably the most profitable it's ever been in its history and it probably just got

more profitable yesterday. we're seeing the fannie mae bid going up to 104 for basically 3% paper. that's going to continue with the fed buying mbss. if you don't have a lot of legacy problems like a bank of america, wells fargo is one of our favorite picks, pnc, anybody in the mortgage space right now is making a lot of money. today it is more profitable than it was yesterday. >> that's the point, todd, isn't it? that's the point moving forward. i just refinanced. i know the kind of spread that these banks are getting on these loans and that spread -- that profitability where they can remortgage or mortgage is just growing. is that correct? >> it is growing. >> let's leave it there. confusing morning for all. >> todd and paul, they don't sound alike. anyway, it was a good

conversation, guys. todd and paul. thank you very much. let's head over to seema. >> watching shares of zynga today after a slew of c level executives have left the company. they announced they'll bring in an online gambling executive to head up the marketing operation. this could indicate zynga is making a more aggressive move into the gambling sector. that's why we're seeing shares outperformed today. zynga already has a couple of games already on the market like zynga poker and bingo, both of which have been able to build a strong customer base. i'm sure, simon, those are a couple of your favorites as well. >> oh, indeed. i'm never off them. >> until now. still to come on the program, we're going to have an exclusive interview with the former led of the ecb, jean claude trichet. we'll still talk about metals, gold and emerging markets in the

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michelle crew is a cabrera joins us live from madrid. >> it's been more than a year and jean claude trichet looks a lot more relaxed than when he

was running the ecb. it is easier when you're not running one of the most difficult institutions in the world at one of the toughest moments in financial history for the globe. we spent a lot of time talking about his successor's new plan. announcing the new outright monetary transactions where they'll go into the secondary market and help troubled companies keep their interest rates lower but buying their sovereign debt. claude trichet says he is supportive of this move. he thinks it comes with enough conditionality. i asked him very specifically -- will it work? he says yes, it will. >> not only making the working assumption that it will work, but i think it is of treatment importance for not only europe, but the rest of the world. again, it depends now crucially on governments individually, be the government that have to adjust and collectively through

the esf, esn to deliver. >> how worried are you about the fiscal cliff in the united states? >> i think it is part of course of the major issue that in the advanced economic world you have to cope with it. >> if it happens, does it bring on another recession? >> i mean i'm sure that the u.s. leadership, whatever you have in the present discussion of course between the two major sensitivities, but the sense of the interest on the country will prevail. i am absolutely confident in that. >> do you miss running the ecb? >> it is such a heavy, important, inspiring responsibility, but i had my eight years. i think it is a good period. >> he thought it was a good period. a lot of people look at dragey

and trichet. dragey says he bought sovereign debt twice when i was running the ecb did or the ecb did as an institution. this brings another layer of conditionality with firm commitments in advance from governments. >> michelle, you're in madrid, you know better than any of us. a big question now is whether the spanish are going to ask for that bailout. in your judgment does the prime minister have the political guts to do that after making so many promises he didn't? some say if he doesn't move fast, this opportunity that's being created by the ecb and argue pli by the fed overnight will be absolutely wasted. >> to be very precise, i don't think he's going to ask for a full bailout. greece needs money to actually

pay workers, to pay government salaries. the second option was bailout like which you highlighted when you were doing the coverage. you don't actually get more money, you get monetary help by people buying your bonds to keep those rates lower. the esm and ecb will be asked to step in and buy their bonds to keep interest rates low so they have time to fix the economy. >> the view there from madrid on cnbc. we have to take a look at the markets because we are pretty much at session highs. nasdaq composite up by 1.2%. being fueled higher by the new record highs. we are heighting an intraday apple, $695.86. next, why emerging markets could be the biggest beneficiaries of the fed decision. ...

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happy friday, everyone. watching shares of 3m outperformed in trade today. the diversified product maker is a high-quality name, it should outperform in the environment and should be well received by investors. that's from 3m, up 2.5%. we're going to ask an important question now. these markets are doing well but could emerging markets really benefit from what the fed did yesterday. tim seymour joins us. founder of emergingmoney.com. this is a really important question now. do the emerging markets balloon because of what the fed's doing? >> well, they significantly underperformed. if you lead in with that outperformance, this is a place where rotation continues. i think emerging which is about 16% underperformance on a year

of over year basis or 12-month basis to the s&p has plenty of room to outperform here. qe3 and qe in general definitely moves capital flows towards emerging markets. we've seen it. they have been outperformers each period post the first two quantitative easing sessions. i also think this is a place where effectively you see commodity restocking for bullish reasons rather than businesses holding and running high cash balance. you're going to see more follow through here. but at the end of the day emerging on a relative basis looks more interesting. given the yields are better -- the valuation is still not far off the trough loads of 2008, 2009, whereas the s&p looks to be pretty fairly valued. >> the problem is, forgive me. the problem is that we have been through this before. last time there was qe, yes, the markets did very well, but the result of that, higher oil prices, higher food costs, and local currencies that rocketed against the u.s. dollar and therefore they had to intervene. we actually had monetary policy

coming in from the emerging markets. the market slowed them down. that's why you have these underperformers so far this year. does that happen again? >> that's why i think we're in a great place. the monetary policy is actually coming to an end, at least if that was six months to nine months ago, we's seeing emerging central banks easing. currencies are actually very cheap and very competitive. brazilian real over two. this export economy which is still very important becomes very, very competitive. this is a case where you don't blindly buy em. but look at a chart, graph the eem against the spy and you'll see break-out here. this is break-out that's at least crossed to a couple of key levels. i think there is plenty of room to go here because the macro fundamentals are far superior. >> important. tim seymour there. thank you. for more global trades for him, tune in to the prime time edition of trading the globe tonight at 7:30 eastern right here on cnbc. tim and amanda, the duo.

gold has been trading near some new -- quite a few highs, let's call it, six months at least. thanks to the fed. should you be a buyer? find out next. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up.

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7:29 on the west coast. 10:29 right here on wall street. united health care will be the newest dow component replacing kraft foods in the dow jones industrial average after the close of trading september 21st. on the home improvement front, home depot plans to close all seven of its stores in china. u.s. consumer prices rose in august by the most in three years since the cost of gasoline jumped. however, there was still a pick-up in underlying inflation pressure. they be we al then we got the second-best consumer sentiment number since 2007. tensions in the middle east rising as anti-american protests continue in the region. this just days after the deadly attack on the u.s. embassy in libya, as well as other attacks on u.s. compounds in yemen and egypt. nbc news correspondent jim

maceda is live in cairo. jim? >> reporter: it's kind of the tale of two protests here in cairo today near the u.s. embassy behind me, you've got the younger, more hard-core protesters who continue to throw stones. riot police have fired water cannons at them to drive them back today. there is now a wall, a concrete block, protecting the embassy. a lot of teargas canisters have been fired back and forth as well. then you've got the groups that have been supported by the muslim brotherhood who are marching around tahrir square chanting "god is greatest," raising and unfurling islamic flags. so they're loud but they're also very peaceful, men, women an children. it's been like that now throughout the afternoon. earlier today president moment morsi appeared on state television, endorsing this nationwide protest. but he said that it is muslim'

responsibility to be peaceful and to protect foreign lives and foreign property while doing so. so ironically there aren't any reports of violence here today in cairo to speak of or out of libya. but of course elsewhere, as you alluded to, throughout muslim world there have been problems and protests. in yemen, protesters tried to storm the u.s. embassy there again today and received live fire rounds. we haven't heard about any casualty but we understand there is a contingent of u.s. marines that's landed at the airport to beef up security there in sanaa. but in fact the most dramatic pictures are out of sudan. in khartoum, hundreds of angry muslims stormed the british embassy. sounds like they're going for softer targets. they did smash windows and start fires. again, other reports in pakistan, innecknenenkneeindoe

bangladesh as well. looks like here in cairo, they're taking the advice of their president and keeping things relatively peaceful. here at the big board, bob pisani has news of the first ever fine. >> the new york stock exchange is being fined $5 million by the s.e.c. for violation of rule 603. this is a rule from a few years ago that governs the timing and deliver riff certain exchange market data. there is a proprietary fee that all of these exchanges provide to customers. then their is the public fee. the proprietary fees gives you access to slightly deeper information. you can buy these various tapes. the important thing is the s.e.c. found a slight differential on the order of milliseconds between the proprietary feed and public tape. that's now been fixed and the two are now acting in concert.

the proprietary feed and public feed are now at the same speed. press release a moment ago, nyse says it is committed to the highest standards of integrity and accountability. timing issues stem from technology issues, but from intentional wrongdoing bit exchange or any of its personnel. the technology and software have to be a little more in compliance with the compliance department. in other words, be there certainly wasn't any ruling here of intentional misconduct. there was no finding that it harmed anyone but this is a very sensitive issue now. just the appearance that certain people may get access to certain information even a millisecond or so before is of great concern out there and i think it's right for the s.e.c. to act on this an they now appear to be right in concert. melissa, back to you. >> thank you, bob pisani. let's talk about gold soaring to levels not seen since february. gld and also the miners are getting a big bounce inevitably

perhaps when the federal of the -- the chairman of the federal reserve says that he has an open-ended commitment to qe. adrian day, chairman and ceo of adrian day asset managements very kindly joins us now. half in equities, i believe? half commodities, half global equities. is that right? >> yeah. by commodities we're talking commodity stocks. yeah. >> okay. just on the subject of gold, gold has had a great performance. it's up over 10% for the month. are you disappointed that perhaps gold has not rallied more on this astounding statement that we got from ben bernanke yesterday? i ask, because silver's up, silver, palladium, platinum are up two, three times that over the last month or so. >> no, not at all. because silver traditionally, as well as platinum and palladium which have their own factors right now, but silver always has more leverage on the up side than does gold. so i'm not concern about that at

all. gold is going to continue to move up, in my opinion, but perhaps at a much slower pace than some of the others. >> what would your advice to people be in the equity space? where do you think they should buy now on the basis of what bernanke says? or does bernanke not change that much in your view? >> oh, my gosh, no. this is changed completely. this is what the gold market has been waiting for and i think there's going to be a scramble to get into gold and into gold stocks but over the coming months. now one of the things you have to realize about the gold stocks, the xau, every time we've had a major significant pullback in gold in the last ten years, gold stocks have doubled or more from the bottom. sometimes they've gone up 200%. even though we've had a good rally in the gold stocks and it is difficult to chase them, we still have further to go if you look at the history. >> adrian, i want to pick your brain on what's going on in the markets right now. all of the metals are higher except for silver. why would that be, in your view?

>> i think that's just a day to day think. i wouldn't put any particular -- any particular importance on that. silver's had a good rally over the last few weeks, better than gold, as you just mentioned. i think there's just some profit taking but i think over the next -- >> silver's actually up 25% over the last month. >> exactly. >> carry on. >> i think with this kind of monetary ease, people will flow in to gold. silver's more speculative. people will go to silver first, but then they will look to buy gold as a more longer term core asset. >> what other trades are you looking at now? what other investments are you making or thinking of selling as a result of what's happened in the last 24 hours? >> well, we're not looking at selling much, i must say. but we're certainly looking at buying and we're whying ibuyins around the world, especially in

emerging markets. monetary ease is obviously very good for equities generally but it is particularly good for emerging markets, and it is particularly good for commodities and gold. that's where we're doing the focusing. >> where in particular are you buying, adrian? >> we're buying singapore, we're buying asia. looking at brazil again. haven't invested there yet. and in the gold space we're looking at both the seniors and juniors. without mentioning names of the juniors, some of the juniors are trading at just ridiculously low levels. they're the one that are making the discoveries. but the senior companies have to buy if they want to continue to stay where they are, let alone grow. because those companies are producing 5 million ounces a year have to find 5 million ounces a year. i think we're going to talk apple right now. apple continues to wow. fast approaching that $700 mark.

the new all-time intraday high, $695.86, hit just moments ago. peter, your price target is substantially higher from where we are right now but in terms of the run that we've had even through the release of the iphone 5, does that catch you by surprise at all? >> no. we were expecting it. what caught us a little bit by surprise is how much it sole off earlier this week. there were reports that there was going to be massive shortages and that the launch would be very, very curtailed, that they would only launch it in the u.s. clearly their aggressive launch schedule shows supply issues weren't as big as people thought. >> in terms of the report that the pre-orders sold out in the first hour of it becoming available, what are you hearing about that? does that make you concerned perhaps that there might not be enough inventory out there for the demand for september numbers? >> interestingly enough, we think the pre-orders were indeed sold out in the first hour and we believe that that was a few

million units. combined we think they're going to well eclipse the first weekend of retail sales, including pre-orders, of 4 million. we're surprised it only took an hour but we done think it is an indication that there weren't enough units. we think servers were totally flooded. at&t, verizon, apple, all the servers were very difficult to use this morning. >> the pipes essentially were clogged. at this point, peter, do you think that perhaps numbers need to come up substantially given the pace of the preorder at this point and the size of the rollout? >> yes. we think numbers are too low for both september and december. we're significantly above the rest of the street for december and we think the rest of the street's going to come up to us. >> basically you're comfortable with where you are. you factored this in? >> yeah. i mean we've spent a lot of time. we combed the world for supply chain data. we think we've done the hardest work. we've acknowledged that there is a lot of bright people on wall street so we have to work a lot harder.

we think our supply chain database is the best. >> at what point do you revisit your price target of $900? >> i think once we get a little bit more data in the december quarter we get a better read for how demand is trending into q 1 of next year, we may have to make some more adjustments. right now we feel really good with our numbers. >> are you getting any indication or any feeling, just as being an analyst who's tracked this company for quite some time, that there could be a stock split in any way? >> steve was very, very adamant against stock splits and dividends and other items an we think the board has had a bit after changeover an we think tim's not as religious. tim seems far more pragmatic, open minded. for example, i think the addition of bob iger on the board is indicative of that. we think we may see a stock split. >> you have the largest company

in the world, the biggest market cap in the world, and its phone t fortune is depend on one product. not even a product line. one product. doesn't that make you nervous? i appreciate you've got the $900 price target and i wish people well with that because it is so widely held but doesn't that single fact make you nervous? >> it would if we thought that it was just a single product cycle and there was nothing more to it. stepping back, this is no different than gillette and razor blades. apple, rather than making money on the blades, and losing money on the razor, it's opposite. they don't make money on itunes or the app store. they make money on the hardware. once they get you in their ecosystem -- frankly, their ecosystem is still the best. easiest, most pervasive, absolutely a joy to use for the vast majority of consumers. that's the trick. so even though it is one product, it is the ecosystem an they have 400 million-plus accounts. i think that fact is kind of missed by wall street. >> peter, thanks for joining us.

>> pleasure. >> peter misek of jeffries. we're just about $5 away right now from $700 a share. >> let's get back to hq. seema has another market flash. >> we've got a nice literally on our hands but one stock is bucking the trend. eastman-kodak saying it will adjourn a hearing on its sale of patents until further notice. kodak says it is exploring other alternatives for digital patenting assets. chart down 14% on the day. five-year chart, down 99%. back to you. >> eastman-kodak is bankrupt. >> the play as it always is for bankrupt companies.

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is. we're back with shares of disney. they hit another new record high this morning before turning around a bit. you can see it there -- $94 billion market value. never been that high. on the cnbc news line, mr. crockett, can we go higher from here? >> i think we can. disney is trading at a 15 pe. we think we have an etf growth rate that's near that, close to 15%, 16%. i think you can maintain a multiple the stock can work from here. disney is the blue chip in a group that's great to own, the

entertainment companies. there's a revaluation for the stock. disney is a blue chip plan and they're in a good cycle in the theme parks. if you continue to own disney, you can continue to own the group. >> a lot of people paying up for content but when it comes to disney, it is not pure content, it is the parks as well. what are you seeing in terms of trends? the last numbers didn't look that great year over year in terms of attendance. >> i think what's really encouraging is when you look at euro disney, it is a hotbed for economic uncertainty and they still put up good numbers. to add on barton's point, what's missed on disney, i don't think they're better positioned than others in internet threats. i just don't think that you can get much more money from netflix than others. their sports content has shown it is to be not as effective. think that makes them a standout

against their peers. >> when it comes to cable television, close to numbers we've not seen. can those numbers just keep going on? >> espn, you can go to sleep at night and know there will be an audience. they're so dominant in sports and spend so much money. they're so big. that peer growth trend is tremendous right now. leverage over the distributors. so i think you can feel confident the top line trend continues. i think a little bit less marginal disney than disney because they have to spend on the sports rights but i think at night you sleep comfortable owning disney. >> at the bank of america/merrill lynch conference yesterday, at some point that

can't go on forever. >> the thing is that the cable and satellite guys -- they make good money. we've estimated that you can continue growing program fees, high sickle years before these guys go to a return on capital level that you might be viable. they can convert away from set-top boxes. they can make money there. an jauf set to the margin pressure. we think this story has a long ramp ahead of it. >> do you agree with that, tony, the desegregation of the business model, i know that it can take a long time, isn't that a bad thing for the likes of espn eventually? >> where a lot of other networks are. i wouldn't overlook the fact that come cast the parent company did great with the lps. much stronger than expected. and i think that's going to be

bolster for the pent-up demand in the auto market that skews more towards sports. there's an issue so far you can take some of the affiliate fees. they're introducing more assets around the globe to introduce it. >> we'll leave it there. tony wshgs -- wshgs ible. >> new highs there today. new recent highs. >> apple stock, we should mention, we haven't mentioned it at all. glad we're getting to it. >> only three minutes or so. >> has it been that long. >> apple is trading at 694. >> it's been a day since we mentioned facebook. >> we haven't mentioned facebook the entire show. >> now, we'll make up for it. >> meantime, we're continuing to

bring you the best plays, the best ways to play all of the fed's latest moves from financials to treasuries, we got the best ways to manage your positions. zblmpblts but first, rick san telli, what are you working on. >> we'll have some fun in the next hour. we'll talk about pulling. we'll talk about pushing and we're going to talk about passing along and we'll talk about all of that in the context of many government programs. because in the end, no matter you want to push banks into lending, pull people into financing, in the end, all of those get passed along. we'll talk about one more thing. open ended. how do you define open ended. i know how to defend open ended. it could be 53 days. why? come out at the top of the hour and you'll find out. but today...( sfx: loud noise of large metal object hitting the ground)

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putting themselves squarely

in the spotlight, if you think about it, mark zuckerberg, ben bernanke to name a few. a new interactive poll. we introduce, ladies and gentlemen, the ego trip. we want you to tell us who you think went on the biggest ego trip this week? good or bad? this one is very much your call. now, the conversation is already going on right now at facebook.com/cnbc. and then tune in at 12:00 eastern for the fast money halftime report where voting will begin on who had the biggest ego trip of the week. >> there are so many candidates and i would throw out there in the context of your mention of facebook, simon, mark zuckerberg, we're seeing the stock up by 4.5 pgt. the stock is now at 23.63. >> i think ben bernanke had the

biggest ego trip. mario draghi became the most important central banker, clearly ben bernanke is coming through, again, with unlimited action. all to do with the europeans. they're setting the standard for bankers. >> i like that animation for e go trip. happy to see that. very nice. we got a lot of movers in today's session. we'll give you the names that you need to know right after this. who took off on the biggest ego trip this week? stay tuned for the big reveal. maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education.

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welcome to hour three of "squawk on the street." here's what happened so far. >> we're not in a panic, a lousy recovery, a ton that washington could do. what he might be saying to his colleagues today, if we don't move now, who will? >> kraft is coming out. they're splitting the company the first of october.

united health care will join the dow industrials average effective a week from monday morning. >> ben bernanke, if you don't have a job, you can't save, he's working for the unemployed. that's his goal right now. is to get those people to be able -- google goes up every day. let's buy united health. america as represented by our stock market is a google situation. consumer sentiment hitting the wires right now. rick? >> oh, my goodness. buckle up. 79.2. >> this is what the gold market has been waiting for and i think there's going to be a scramble to get into gold and gold stocks over the coming months. good morning. we're leer hoot the new york

stock exchange. let's get a check on the markets. the dow right now is up just about 67 points, about a half a percent. under those small percentage changes, some big moves when it comes to bank stocks to home builders. united health announcing that it will join the dow, it will be effective after the close of trading of september 31st. apple the tech titan hitting a new all-time high earlier this morning. u.s. online store peers sold out of the preorder stock of iphone 5. apple will sell the iphone in nine countries. another big hour here on "squawk on the street." this is our road map. fed chairman ben bernanke pulling the trigger on qe3. what about the future?

what is now the best way to play the fact that they have unlimited buying of mortgage-backed securities? plus, if you live in california, and shop on amazon, you better get buying, tomorrow, you're officially being acquired to pay the sales tax on amazon purchases. what does that mean for california's bottom line? we got a top ranked panel line to lay it out to you. and what about the businesses that are outfitted with the old iphone dot connector woes. we'll sit down with the owner of hotels that has the old iphone radios. now, let's check the capital markets, gary, of course, i know you want to talk about the lehman, four-year anniversary about the bankruptcy filing. put your pm cam on, would you buy into this rally?

do you believe that message that bernanke is saying, buy, buy, buy? >> you may be concerned about inflation. on monday, we put up a chart, on the big board, or the world is coming to an end or you got to buy stocks. simply put, you have to buy stocks. i said it all week, i'm going to say the same thing again, stocks are going up. that chart right there is the five-year performance of the s&p. we're right back to where we were in the 2007 highs. which actually, in four years ago today, there's very few people, i would say probably no one in this building thought that we could be where we are, i want to go back to march of 2008, because that was a very unique period. that's when bear stearns

collapsed. four years ago today, four years ago today, i was at the new york jet/new england patriots game. lot of confidence in the air. it was a surreal experience on that sunday, the 14th of september, because everybody in that stadium, was glued to their blackberries or their iphones trying to figure out what was going to happen. that's the day it became that lehman wasn't going to make it. that merril lynch was going to combi combine. i bring out a little souvenir here today, going back to that period of march, melissa, this was something, a department within lehman brothers focused on creating these types of marketing products. this was after bear stearns collapsed. this is a rubik's cube.

the goals of the company. this is my favorite, here we go, demonstrating smart risk management. obviously, joking a bit, little tongue in cheek, i want to talk about something serious, you continue to hear as we approach now entering five years, that nobody has been prosecuted. nobody has been put in jail for the collapse of this firm. the people, the thousands of people were out of a job as a result of what happened four years ago today, they're not so focused on why there's nobody prosecuted. what they're focused on, why is it, four individuals who have been cited by many media sources, why to do this today, has nobody shown any remorse or any apologies? forget about prosecutions. the people who work there, dwaif their heart and soul to that company, they want to know to

this day, why there hasn't been any apologies. >> gary, thanks for those thoughts on this anniversary. in the meantime, gary, can i have that cube? >> a number of people have tried to take it from me here. this will be worth a lot of money one day. i'll work a deal with it. e i'll split. >> gary, more gary later in the show. meanwhile, gop presidential candidate mitt romney is holding a fund-raiser in new york city. some guests are just showing up. mary thompson joins us with the latest. >> simon, the breakfast fund-raiser here, people in attendance telling cnbc that mitt romney wowed the crowd that paid about $2500 a head to hear the presidential candidate speak. among the business and political luminaries in attendance, former

s.e.c. chairman richard breeden. >> it was a very enthusiastic crowd. it with us a big crowd. north of 900 people. raised more than $4 million. i think people were very enthusiastic. >> well, talking about foreign policy and the need for maintaining a strong defense, those in attendance told cnbc that romney spent most of his time his plans on fixing the economy. >> he went through his five points and particular the small business section i thought was quite good. because that hit on the key issues that we have been writing about and talking about a lot. >> now, romney's message embraced by wall street's big firms whose employees and their family members are his top donors. some protesters were here

earlier, they left once the meeting began. and. >>. >> the and be proud of people who are successful who create jobs, the small entrepreneur who goes out there by his virtue of hard work. it was very uplifting. >> today's fund-raiser follows one that romney held last night in central long island where the head of the new york state republican party told cnbc they raised $3.5 million. back to you. >> all right, mary, thanks for that. we need to get to rick santelli. >> we talked about it a little bit in the tease. pushing. pulling and cross currents. if there's one thing that i have learned being in this business, 20 years before i was at the

cnbc side and i have been here 13 years, basically, everything in business gets passed along. anything on the cross side gets passed along. because all costs have to be accounted for. businesses survive on profits. so, we had ben bernanke yesterday and company, they definitely have that bazooka out. they did things large. the q and a, he said something that i found very interesting. this is main street policy, because we're about -- what we're about here is jobs. basically, what he's getting questioned about is, is this benefiting the banks? i might say that. but many people down here, if i asked, why aren't interest rates low? because treasury needs to borrow a lot of money and they would prefer to do it at low interest rates. that's the answer that i get. is ben bernanke really going to

help housing? i talked to traders, in the first half of this year, over 40 billion in securities have been forced back on the banks, the likes of the gses. those will be passed along. maybe we'll get the banks more active, but the unintended consequence isn't that. any kind of benefits on the securities side, they'll probably end up in a lot of firms that trade mortgage-backed securities. in terms of open-ended, yes, maybe it's open-ended. a lot of things in this government that are open ended. november 5 is 53 days away. these are all major election issues. free markets for free men. now, we have managed markets for managed men. back to you. >> thank you very much, rick

santelli. a quick market flash in the beverage market. we have the latest. >> melissa, the overall beverage sector is underperforming the major indices. dr. pepper is one of the biggest decliners on the s&p 500. recent data indicating that dr. pepper brand sales are down 2.9%. amid a 4.4 volume slump. simon, back to you. >> thank you very much, in the meantime if you live in california and shop on amazon, you better do some buying quickly, time to stock up potentially, tomorrow on whatever you buy on amazon, you'll be paying sales tax. what does it mean for california's bottom line? we'll tell you next on ""squawk on the street."" this country was built by working people.

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get ready west coast shoppers, was tomorrow amazon will begin collecting taxes on what you buy in california, states like texas and pennsylvania have already forced the collection. new jersey could be next on the line. amazon trading new all-time highs. could this latest move, this trend across the united states hurt the stock? collin, this must be significant because amazon has a big competitive advantage if it's able to sell unlike the bricks

and mortars shops with no sales taxes in certain states. >> ten years ago, it was a bigger advantage for amazon for consumers to avoid sales taxes. today, not having distribution centers closer to consumers is the biggest disadvantage for amazon. we think they're turning lemons into lemonades. getting closer to consumers will play to amazon's advantage over the next few years. >> we lived a pretty ebs tensive survey of about 1100 people in the u.s., 20% of them was the avoid dance of sales taxes, the major reason they shop on amazon. you can impose state taxes. like they did in new york. we don't think you'll see a growth tax in california. >> advantages of having

warehouses closer to consumers. one would be the roll out of same-day delivery, how big could that part of the business actually be? >> to mark's point, when you survey consumers convenience and selection and customer service are more than sales tax avoidance. if you think about amazon putting distribution centers closer to consumers, whether it's same-day delivery or one-night delivery, either way it's a significant advantage for amazon to get closer to their consumers. an increasing unit sales will move that way. >> you mentioned a survey, anything in that survey about whether or not consumers are okay paying a premium on same-day delivery. >> i think the big -- the win here for amazon is the ability to get out of pocketsover spending that consumers, all of us, spend for consumers.

staples. those daily products, the tooth paste, the cereal boxes that we buy, if amazon gets closer and closer and they are getting closer and closer to same-day delivery in key markets that will expand. i would be shocked if they charge a premium price for that. that's the win to get into broader categories. >> at the same time, collin, the concern about amazon in the past has been the spend on infrastructures, et cetera, is that still an overhang as more states require this and amazon may be on the hook for building out more and more warehouses. >> again, i think amazon from a legal perspective, still has the supreme court on its side. amazon is using strategically this sales tax collection to their advantage, again, getting closer to consumers, so, certainly, spending margins are still a risk for amazon. but they're focused in the long

term. they're investing in teshg nothing and retail. >> i want to switch gears just a bit, mark, talk about the paper white, any indication for the demands of this thing especially after apple, you know, apple's iphone launch, this buzz around apple. >> no, not yet on the paper white. the new kindle product. you'll sell more $69, $49 e e-reader over time than $400 devices. simple consumer mathematics. we're starting to see a trend, the level of interest in buying stand-alone e-readers, it looked like it peaked this week. we look to see a shift over to tablets. >> all right, guys, we'll leave it there. thank you for your time.

>> thank you. >> mark and colin. fed chairman ben bernanke pulling the trigger on another dose of quantitative. the best ways to play the fed's latest move, next.

now, let's get to rick santelli with the santelli exchange, plus a special guest. >> thank you, melissa. my special guest is pat arbor, former chairman of the excan change. he's currently chairman of live vol. to me the most important issue today is that he's owned a handful of banks over the years.

tell us about the community banks that you own zbld rick, i have been involved in five community banks. the last bank that i invested was i was on the board of directors. we failed last year in july. we failed because of portfolio went down and we couldn't raise more capital. when they can't raise more capital they only have one choice -- to shrink the balance sheet. as you shrink your balance sheet, you're taking money out of it. it's not helping the average developer. every time i talk about it with various peers in the media business, they look at me like i should go to bellevue. i think the cure for community fwhan banks that you own, would be higher interest rates, am i

crazy, pat? >> no, sir. banks generally have a 4% spread. 2% if you're a good bank. and the other 2% goes for profit. to raise more capital. so, the lower the interest rates, the more difficult it is to make that 4% spread. higher interest rates would be good for community banks. in those community banks, they're the ones who lend to local pharmacist, the local developer, the local machine shop. not the big banks. they're interested in doing arbitrage spending. >> you spent a couple of weeks in italy and you were telling me off-camera, some good observati observations, give us a few. >> in italy, now, if you're an italian citizen, you can spend

1,000 euros for cash. ordinarily when italians would walk into stores, because credit cards have fees attached, they'll pay cash. the shop owner i'll give you a discount if you pay cash because credit cards have fees. everything over 1,000 euros you must pay with a credit card. they're promoting the use of credit cards which may blow up the italian citizens with debt. >> any other observations to mario, in terms of recent changes. >> yes, there are other changes going on. they're stopping owners of expensive cars like maseratis, so a thousand cars have been shipped to eastern europe for almost nothing. and they're buying fiats. 30,000 boats that have left italy have gone to croatia to

the west of france. that damaged the auto motive business. >> that's the key, we talked about it, the only way these countries, including the u.s., you'll never keep economies spending. we enable this. if you don't grow the pie i don't see a good outcome. do you agree with that? >> yes. >> all right, rick santelli, thank you so much. european stocks are surging along with the euro/u.s. dollar. we got the european close straight ahead. copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good.

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the european markets are closing now. >> the close with simon. >> western europe, a lot of green on the screen. just check out the figures there. see the power of the hove that we have had, they of course have spent the session today, their entire session, reacting to ben bernanke, split with the reaction to yesterday's afternoon. and of course this morning. that's the reaction to ben bernanke. more action from central banks boosting stocks. and of course, you'll also see them doing the same locally. lot of attention on gold and gold has done well. it's up over 10% during the course of the last month. in case you're not aware it's the other precious metals that have done e even better. this is a one-month chart. look at detail here. silver, up 24%.

palladium up 20%. stock markets across europe today, is that you see the miners from around the world, that are actually floated, quoted in london. let me show you, you won't know these names. i want to show you the sort of moves that we have. this a gold miner in russia, copper miner in kazakhstan, you see how ben bernanke has boosted asset markets around the world and that's feeding into london. you may not know this one here. the largest zinc producer in the world. you see the way in which these miners on top of the leaderboard in europe. 90% of stocks are higher because of ben bernanke.

you look at the way european markets have traded over the year, top 50 blue chips in europe as indicated by the white line, top 30 blue chips here in the united states indicated be i the dow jones industrial average. we're now more or less even of the blocks come through. you have more confidence today. it's a risk on day clearly and that is fed through, despite it's action from the fed into the peripheral markets in europe. italian yields have fallen again today. they were below 5%. but the big question, and this is where the finance ministers, european finance ministers are going into the weekend, asking, whether spain will ask for the bailout? will they have the political guts we're breaking our promise to the spanish people we're

going for a bailout? interesting coming out of this meeting, the economy minister for spain has said, we'll adopt a new set of performance to boost growth. now, effectively what they appear to be saying, that austerity that we announced in july, we're going to bring up the timetable with announcement in two weeks' time. it may be a precursor to some sort of a deal with the rest of europe to increase the bond buying. i'm unclear on that but there's some movement on that in spain. let's check in with sharon epperson with the latest on energy. sharon? >> the it's definitely in effect in the oil market, the fed action, also due to the geopolitical risk. due to what we're seeing in the middle east and knot africa. the latest reports from the wall street according to the tunisia,

proit'sers have stormed the embassy in tunisia and the embassy is on fire. that's just the latest. we have oil prices that had topped $100 a barrel. brent, poised to go back to that level. where are we going? many traders are looking back to what happened in april of 2011? when brent topped $126 a barrel after the first round of qe. after the arab spring. they're also looking at what happened in march of this year after the iranian sanctions. again, we went past $126 a barrel for brent. is that where brent heading with some of the military action that could ensue? back to you. >> sharon epperson, thanks for

that. let's bring in bob pisani. >> the rally continues. good points about the risk on trade here. you can see in what's been going on. in this kind of situation, you don't want to look at price advantage and percentage advancing you want to see volume. watch where people are going. with very heavy volume. the biggest etf out there is the financial spdr. more volume in the spdr today. emerging markets have been strong all week. the van gard emerging market has been particular strong. this is a japanese stock, it's a cheshef heavy mover. simon mentioned how strong the metals are. heavy volume, that's a clear sign where people are going.

volume is a very good indicator of what's going on. another important one, take a look at the tlt, an interesting territory on bond sell-offs. the question is, what's going to get people out of bond funds and stocks? when the pain level starts to get noticeable. we're not there yet. but we're heading there. we're now just at the point where we're 10%, off of that historic high and this was just a short while ago, five or six weeks ago. take a look at where we were three years ago. these bond funds have treated people really well. even better in the high-yield bond. look at the tlt. treasury funds, nice move up here stable. you're getting returns. and low volatility. that's what people want. they'll get out when this starts

getting really noticeable. we're not there yet, but we're heading in that direction. there's going to be an inflection point some day down the road. now, it's about a 10% correction. let me move on, how much more is there to the rally? lot of people are still raising their numbers. jpmorgan has been bullish for a while, he raised his target. from 1475 by election day. his argument is multiples are going to expand. right now we're at 13 times 2013 earnings. if you tamp down the volatility from europe and the united states, you can get to 1550. the biggest rick right now is that nobody really believes that the stock market is going to go down because the bernanke and draghi risk is there.

potential shocks from europe. nobody believes that anything bad is going to happen in spain. they're refusing to ask for any bailout. of course, now, they're saying yields are down, why should we ask for something? >> the question, bob, is a put a put? a put is only a put if you believe a put is going to work. >> that's very important nap's the point that you have been making all morning. >> does that put actually work? >> i think the answer is there a lot of people out there who are acting on that put. lot of people believe that there's a floor under the market, but they're buying a lot of protection at the same time. right now, draghi has convinced a lot of people that there's going to be a support there. >> right. bob, thank you. time for another capital markets op-ed. ed, what are you watching.

>> sometimes it works out real well in terms of what bob was saying. let me bring up this full screen. if i told you this, this is amazing fund, returned 7.3%, this firm was launched december 14th, 2009. the business is now worth more than $750 million. assets per employee, $500 million. fund ranks as the top performer. the total returner, that chart. why do i bring this up? i bring it up because barrons in the past has called him the best bond manager on the planet. when he visited with "squawk on the street" earlier this year, unlike the charts that bob just showed you, this is a bond fund

that continues to do well because he likes to think out of the box, again, probably the best bond manager on the planet. why am i telling you this? because i'm heading west next week. a little promming no iprogrammi be joining rick santelli in chicago. then we'll have a sit-down with jeffery gundlach at doubleline. this is going to be tv that you won't want to miss. every time he's been on air he's made people money. >> yeah, i want to know what he's doing with apple? he's been a vocal bear on apple and obviously, with apple hitting new all-time highs today, that has been a wrong bet. >> you know, he's ventured out in terms of stotalking about sts from time to time. i'll definitely get answer in what his thoughts are on apple.

we'll find out what he thinks about the equity market in general. if you're in the bond market, thinking about coming out right now, i encourage you to hear what he has to say about value. in that bond market. don't forget that intermediary stop. me and rick santelli. >> that will be a magical combination. >> i can't wait. markets in a full-on rally mode on the back of qe 3. tgood to speak to you both. diane, i was just asking bob, we were having this conversation about whether or not bernanke could exist a put is a put. do you believe what he announce help the employment picture or help the economy in general? >> i do think it will help the

economy and help the employment picture and also the fed is limited in ben bernanke made this statement himself with everything else going on in washington. like the fiscal cliff. i think this will end up being a trillion-dollar commitment by the fed. i heard -- i read something this morning, i had to laugh from one of my colleagues in europe, they call it the evans put. they haven't laid out a target on unemployment. where the fed wants unemployment to get, this could easily be trillion dollars. i think they'll up their game. for the end of the year. it's a long period of time. the next two years, they put this money into the economy. mortgage-backed securities are targeted. they can increase home values. that's very important. pat arbor, he talked about he

lost his bank because he lost value. >> so, let me pose a question to you like this, in terms of the market rally that we're seeing, are we rally og on the notion that ben bernanke's actions will help the market or are we rallying on the notion that the u.s. stock market doesn't have to and does not reflect the u.s. economy at this point. >> you know, don't fight the fed. now it's don't fight the central banks. i think what got everybody fired up, when mario in late july, said, promised that he would do whatever it would take to keep the euro together and now we have ben be man key joining in and promising that he'll do whatever it takes to improve the labor markets. i think the u.s. economy has been growing reasonably well. too slow for some people. bernanke has described the employment situation as grave. i don't think the monetary

policy can really solve this problem. but i think the fed is going to get some credit for an economy that was about to improve on by itself. you know, we already have record low mortgage rates. but, again, i think we'll have a second recovery, i have been talking about the possibility of a second recovery here, in the sense that housing usually leads the recovery and yet real gdp is at a record high without housing participating. now, it may participate. the downside is, oil prices are going out. didn't we see this played out in qe2. we tried that and oil prices went up, the chaos in middle east, that depressed consumer spending and consumer income. there's a risk. >> diane you said something very scary just now, you said that a program, it's unlimited at the moment, they're going to buy 40

billion dollars of mortgage-backed securities each month, could very rapidly a trillion dollars. in other words, what are you're saying is they'll massively accelerate that on the basis that it isn't working, because that's -- >> that's not what i'm saying at all. >> how can it get to trillion dollar? >> $40 billion a month. over a year is almost a trillion dollars. so, there's your calculation right there. at the end of the year, i think there's a chance they could raise the 40 billion slightly to compensate for the twist and buy treasury bonds as well. i think it's very important to point out, wait a minute, simon, i think it's important to point out, ed noted that the housing economy was already recovering, it's recovering unevenly.

the fed is going to get a bigger bang for their dollar kicking a market that's already showing, boosting a market that's already improving, a market that's deteriorating. the market critical to u.s. healing. when you talk about low interest rates, we have to deleverage. it's occurred on a widespread in response to the fed. it's really wrong, it's unfortunately, you have to look at the fed's action as not the absolute effects on the economy. we were digging ousts out of a hole. >> diane and ed, thank you. we appreciate it. >> you're welcome. coming up next -- we're sitting down with the hotel operator who's facing quite the headache after apple announced its new iphone has a new

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♪ ha ha! coming up next on halftime, the market rallying yet again, we're looking at which today's biggest movers are still a buy? also, apple closer to that $700

mark. finally, what a week, zuckerberg, ben bernanke, who had the better week? we have been talking about the new iphone corrector. one is the dallas-based chain, mike muller is the ceo of milo, is this really a big headache, not everybody is going to have this new phone? >> no, but the estimates that i have, they're going to sell $50 million of these new phones, quite a few of our guests are going to have phones that don't fit the devices we have in our guest rooms. >> don't you think they'll have adapters? >> hopefully, they'll buy

adapters. i understand they'll cost $30. whether or not they'll bring them with them when they travel, remains to be seen. they may forget them. a certain number of guests will have phones that don't work with the devices in our rooms. they cost $30 and we have 600 guest rooms. just buying the adapters would be expensive for us. >> concerned that someone would walk away with the adapter. >> whether or not that we'll ask for a deposit. we'll have some available at the front desk. asking for them a deposit is a bit of inconvenience for the front desk and the guests. >> michael, why don't you charge them $3 rental for the adapter and one you have ten guests come

through you would have paid for the adapter? >> we could do that. we don't charge guest rental for connecting to the devices. >> you're looking to handout. >> not a handout. we'll buy them at cost. we'll buy them at cost. >> a discount. all right. we'll let you know if apple calls us, mike and you let us know if apple calls you. >> i'm not holding my breath. >> mike mueller. more "squawk on the street" straight ahead. ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level.

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conversation has been heating up on our facebook page all morning. who had the biggest ego trip of the week? some of the biggest names, the likes of bernanke, zuckerberg, soaking up the spotlight. tied directly to each of their words this week. today, we're launching a new interactive poll here on cnbc it's called the ego trip. we want you to tell us who you think went on the biggest ego trip this week, either a good way or a bad way? it's your call.

our friends at halftime fast money report will pick it up from here. who had the greatest ego trip this week? >> wow. a lot of candidates. this should be a good conversation. >> it's been a big week. >> it's going to be a big one. final thoughts on the markets up next.

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take away time. gary, apple 700 may not be too far off at this point. >> you got it. you'll hear a lot of people talk this weekend about the lack of vool yum. if you look at apple, melissa, this past wednesday, $17 billion was traded in that stock. remember, as stock prices go up, volumes are going to go down. dollar volume is more important as stocks are going up. >> good point there, gary. as we watched apple hit another intraday market high. we're seeing turnaround in some of the financials jpmorgan turning to the negative. intel turning negative. apple still powering higher essentially helping to support the s&p 500 right now.