and "squawk box" begins right now. i'm becky quick along with joe kernen and andrew ross sorkin. last week, the federal reserve gave the global market as shot in the arm with its decision to launch another round of quantitative easing about weapon have baby calling it qe infinity. today well get the full story on the debate. dallas fed president richard fisher will be our special guest for an hour, this starts at 7:00 eastern time. fisher as you may know have been a vocal opponent of additional easing. but if you looked at the voting last time around, only one dissenter. we have a lot to talk to him about. also the financials, last week we talked to legendary voices in the industry, leaders sure to be in the history books.

our guests included sheila bair, former wells fargo ceo. today we will hear it first right here at 6:40 eastern time. plus the story everyone is buzzing did this morning, including all of us right here onset, comments from mitt romney at a closed door fund-raiser back in may. he says the recorded remarks were as he puts it not eloquently stated, but is he not backing town . we'll listen to the full tape and talk to john harwood. plus donald trump reacts. first let's get you up to speed on the headlines. for that we turn to andrew. >> appreciate that. joe mentioned fedex earlier. the company will be posting its fiscal first quarter results this morning. the largest air cargo shipper already warned the decline in

the economy is hurting it profits. fedex viewed as a key bellwether for the economy. so strategists will be looking at that to understand the earning season ahead. apple shares krcrossing $700 fo the first time in after hours trading. news that the tech giant sold 2 million new iphones in the first 24 hours of pre-sales. in another tech -- this other tech new, advanced meek crow devices announcing its cfo is leaving the company. thomas see fert had filled in. they want to find a permanent chief executive. shares selling off on the news. in other corporate new, dole foods is sells two businesses for $1.7 billion in cash, the deal will help -- i almost said

it like -- i get messed up with the japanese because there's no emphasis on any syllables. >> right. >> the emphasis is on every syllable. >> exactly. dole paid down its -- like nokia. nokia. every saying -- anyway, did toll dole is unloading its businesses. and toyota suspending some of its car production operations in china. the decision follows anti-japan protests that a flared across china in response to a territorial fight between tokyo and beijing. the automaker says its decision is based on insuring employee safety and a government watch dog reports if fannie mae agreed to pay bank of america a premium to transfer soured loan, the amount is about 20% more than it was contractually obligated in order to transfer the servicing

of troubled loans to another firm. in a report to be issued today, the inspector general for the federal housing finance agency will urge the regulator to ensure fan anin any applies mort any and possible refuses its contract with mortgage services. >> let's take a look at the futures this morning. right now you will see that there is some chesh. dow futures down about 44 points. s&p 500 down by close to 5. this comes after a down day yesterday for the markets. dow down by 40 at the end of the day, s&p off by 4 1/2. the losses came late in the day. a lot of people will point back to a big drop in oil prices right at the end of the day. let's call up the oil board. yesterday at the end of the day, a 3% drop. and there are a lot of people wondering what happened. was it something that happened with the algorithms that were trading or was it a rumor that went around the floor.

regulators are certainly looking into it. take a look at the ten year note. the spread between tips and regular treasuries is at its highest left since 2006. i think that level is above 2.7%. near the highest level of all-time. the yield on the ten year at this point is 1.8%, but that spread between the regular treasury and differences tells you about expectations. also take a look at dollar prices today. dollar is up against the euro. right now the euro trading above 1.30. and gold prices, you'll see gold at this point is done by $11.

>> this is great. the romney video was unearthed with the help of james carter. if you you didn't have that angle, that just makes it even that much more -- so jimmy carter helping. it that's special. >> you can understand why people would be upset. >> it's very true that that is a huge insult for the president, for president obama. and i wouldn't take that lightly at all. i'd be irate if someone did that. are we going to the global markets? i already saw ross read those quotes and, just, his expression

i think epitomized the gravity of what we're dealing with here. of course he is over in europe where they long ago, tocqueville tried to convince the united states and the way things are done here and loved the way we did things here. and tried to write about it and talk about how when -- i have a chart to show that you we really have only gotten up to the 49% number in recent years. if we have that-wil -- here's t chart. you go back to 1962. and i think it was in the teens the number of people that paid no federal income tax. and it slowly steadily has been rising until 2009 where we're at 49.5%. so even in 1970, it was 12%. and we point out that payroll taxes, they pay sales taxes, i don't know whether they pay state income tax.

>> those people paying 15.3% in social security taxes, i think it's a problem and this lays out the problems with our tax code. because if you're paying 15.3%, are you paying more than the 13.9% that romney pays. and i don't fault mitt roy in that for paying 13.9% and i don't pay the 49.5% who isn't paying either. it's a problem with our tax code. >> bring up -- i had a wiki description. this man came over here in the mid 19th century and looked around, but he came up with a democracy cannot exist as a permanent form of government, can only exist until the voters discover that they can vote themselves large he is from the public treasury. from that moment organization the majority will always vote for the candidate promising the most benefits. from the public treasury with the result that a democracy always collapses over loose fiscal policy, the average age has been 200 -- this is what

i've talked about again and again and again. if you were going to get reelected and we've seen it again and again, the president is going to tax rich people, everybody else gets health care, no tax increases on anyone. it's a very effective strategy. and that was the point that romney was making. >> do you want to do romney now or later? >> let's do it now. >> should we just -- should we peck up the tape and try to do it now? >> you can do it in the next -- >> some people don't understand what i'm talking about. >> i think people probably are up to -- i saw it on "nightly news" last night. they spent about two minutes just showing the -- >> i don't disagree with your point at all. he himself said it was an in-he will wloe quent way of wording it and i think that's putting it lightly. he should -- >> he said victims. i don't know what's in -- >> he then went on to say, and it's not my job to worry about them. now, i understand he's speaking as the candidate. >> he's saying he's not worry

building their votes. >> it was a poor way of phrasing it. >> do you not dwre it was poor way of phrasing it? >> if you take you it out of con text. it reminds me i like to fire people and he was talking about health insurers that wasn't doing their job. that was at a closed door fund-raising meeting. he was asked a question, romney, by people that are going to give him money. and as he points out, people want to know if you can win if it they're going to give you money. so he's saying here's what i need to do. 47% to start with -- and this is true. 47% are never going to vote for him because they're on the receiving end of government largesse. so there's the other 47% that producers, whatever you want to call these people that -- and then there's the 10% in the middle or whatever it is, that would only be 6%. but he said i'm going after the people -- and it's an uphill climb and we'll see whether -- >> we do have that video right now. so let's take a look.

>> this was written before this, the fourth estate still thrilling. the spectacle of reporter overs the past week hounding mitt romney it for speaking his mind isn't come as a surprise. the lead on drudge today is romney gets real. >> of course. depending on which side of this you come to -- >> now we'll get to john harwood and he'll have the same view as you you. so let's get to him. >> but i'm not suggesting it doesn't matter or -- >> who says it doesn't matter? it's hard to get elected if you're the one taking away the candy. >> absolutely. but --

>> that's the point he's making. >> but he's also -- i think it was a window into the way he thinks not just about his candidacy, and that to me is the larger issue. it was a window into how he thinks about the country. maybe you think i'm conflating the two issues, but i think that there are a lot of people who will watch this and will feel uncomfortable about it. for whatever it is. >> i don't think it's a window into the way he looks at the rest of the nation. you but i do think it's a problem for his campaign. >> but it's a window into what this election is still about. whether you think that -- >> but you've made a much more arrest tech could yk arctic could lat articulate argument. in the context of making their lives better, he was not talking nn context. he was talking about half the country being losers. >> do you have that other one, ann? because in trying to describe

what tocqueville saw and why he loved this -- and he was french. so he knew full well the way the french and european was operating. you can bring that up? he said he tried to understand why america was so different from europe in the last throes of airies to kraek. america's in contrast where hard working a money making was a dominant ethic, where the common man enjoyed a level dignity that was unprecedented. andrew is going to throw up. where commoners never deferred to elites. >> this is some sort of propaganda that we're trying to tell the audience about. >> it's about earned success versus learned helplessness. >> i'm just saying that it's tough. anyway -- >> he's tdescribing the way the country works versus -- there

are people that want an entitlement state society. and a welfare state capital list society. and you're one of them obviously. >> i'm not. >> if that comments sickened you, you have a problem. >> i think it's a hard one because i think if you play the numbers out, 61% of the economy is clearly working. 22% are elderly. and then you get to a group that clearly is in a bad place. but that's a different argument than half the country is a bunch of losers which is what the suggestion is no matter how you -- >> the suggestion was i can't get those votes. and he can't. >> if we look at this strictly as a strategy argument, this is my election strategy, i totally get that. i'm just saying there were words and other things used in it that were used in-diskretly or he wishes he used in a better way. i think certain people say -- >> i don't know if it's a divide and conquer -- >> republicans have been criticizing the class warfare aspect and this looks like the same from the other side of the coin. >> there were factual things that he was saying about who

does and doesn't pay income taxes. but viewing as victims -- there are people who do want more and more. >> i think they would trade places in a heartbeat and say let me pay 35% in taxes. >> nobody has been helped in the last four years in the middle class. >> i'm not arguing that. >> i know they say trickle down doesn't work, but if you want to try to lift everyone up by getting unemployment down to 5%, you get businesses mf- >> i agree with all of that, but i don't think that was espoused in the context of what he was saying. but it didn't feel like that and he even his goal. for some people the way you read it or watch it can make you feel that way. >> john harwood will probably -- you know, john probably will even be -- >> talking to me now? >> you'll probably be more reasonable than andrew on this i would imagine. but is this -- i don't know what i'd rather hear, the fwglun gun

religion or i can't go after that 347% in terms of getting the votes. >> the power of both of those statement, and this one for romney is worse than the other onevotes. >> the power of both of those statement, and this one for romney is worse than the other one from obama -- >> i'm not surprised you think that. >> it's derice sif fsive to the you're talking about. >> not to care about the people, not to care about getting the votes is what he said. he didn't say he didn't care about those people. >> joe, he said i can't get them to take personal responsibility and care for their own lives. >> right. >> well, that statement -- >> you do want -- eventually you don't want anyone that -- you you want everyone to be self-sufficient eventually. you want them to earn their success. wouldn't that be a much better place. >> >> but hold on a second, joe -- >> no one wants to stay on

welfare or food stamps. >> half of the people who don't pay any income taxes are senior citizens. >> i understand that. >> hold on a second. keep in mind mitt romney is leading among senior citizens. he's talk about some of his own voters, okay? and he is also campaigning against president obama for cutting medicare benefits which is what you were just describing as the free candy that these moochers are getting. in-cohere. you can't say you need to take responsibility and then attack your opponent for taking away the candy. >> but the candy is not infinite and we have unfunded liabilities that are up in the $40 trillion range. the candy is running out. it's going to run out. the promises we've made are impossible to keep. and telling the truth about it shouldn't be cast in a way that looks as if you didn't care. they'll run out anyway.

>> there are a couple aspects to it. first of all, let's talk about the straight politics. it is hard to know how impactful this will be as a lil matter. i was talking to a republican member of congress last night who said this fact and this statistic has been so out there and discussed in the political process that he thinks it will not have a great effect. >> i've said the same thing 100 times. >> i know you have. >> i've used that tocqueville quote before. and it's a hell of a way -- >> this is something that has become familiar to the of both parties. >> a hell of a way to get reelected. >> it is possible that that is true. however, mitt romney's behind in the campaign. and -- >> well, john, not in the rasmussen poll, he's not. >> joe, i'm just telling you you can't get -- i understand the rasmussen poll. scott has a particular model of the electorate that most people don't share in terms of what the turnout will be. >> you've seen polls in the

past. we had chuck todd on the other day. polls haven't gotten much better really. and we had carter was up, carter was up, mondale was up, dukakis was up. you don't know the final poll is on november 6th. it that is the poll that counts. >> okay, i'm just telling you, mitt romney's campaign is equivalent of a football team that needs two scores and they're late in the fourth quarter and they can't afford to turn the ball over and they can't afford to -- >> that's fully your characterization of it. i think i could get dozens of people that would counter that. >> no, no, you you may do that but it's not right. >> okay, five minutes left, they need two scores. fine. >> so he needs to keep making progress. that's why they were attempting this message reset. so it is problematic from a time perspecti perspective. i don't know how much additional vote it's going to move. >> he's not going to get any of the 47%, but there's a lot of people on the other side that

like what he said. >> that's what i just said. >> this is actually red meat for the producers that are on the other -- >> joe, you're repeating what i just said. >> okay. >> i made the argument that this has the potential to mobilize bases on both sides. however, i did not think that that is the argument that mitt romney wants to be having right now. i think he wants to be talking about his economic -- >> but this is the argument for the entire election when he picked ryan, john, we said this chris alizes and focuses exactly -- it becomes less of a commentary on the first four years and more on the kind of dwreks that we want to take from here on out. and we're still at that. whether this is going to be -- >> if you want to know my analysis, this is not a value judgment, that and he for the voters, but if he is going to make a full throated argument forfor the voters, but if he is going to make a full throated argument for making the people who are

now free riders enjoying the candy as you were saying and we're going to cut that back and take away the punch bowl, that is a losing political argument. >> unfortunately, the punch bowl is not -- it's not never ending. it's not like where you just keep getting more wine and -- you turn water no wine. it's not never ending. >> i want to make a count coupl points. first of all, the idea that the people who don't make enough money to pay income taxes in this country, including senior citizens, including people with disabilities, including people who work two jobs but either don't have the skills or haven't had the opportunity to do as well as you and i have done, if your world view is that those people lack values aunts h. and personal responsibility, i'm saying to me that's an offensive idea. and i know that a lot of people -- i've heard it a lot on our network, this idea that they

don't have skin in the game. these are people who are failing in this economy because of shifts in the economy that are very large and structure all that have left them in a position where they're not able to move ahead. okay? so the argument that the country ought to be having is what is a set of policies that we can have that will help everybody move ahead. >> help those people help themselves, not necessarily expand the safety net and the entirement state, but a way to get growth back, a way to get unemployment -- >> yes. >> and the president has a record to run on on where we are on that. >> one other thing about those people. it is not true, it's just flat not true, that that 47% of the run including millions of people who are for mitt romney, like senior citizens who don't pay income tas, that's not candy, that's not punch bowl, there is no difference between the values and personal responsibility of

those people and people who have more money. and let me give you an illustration of that. mitt romney -- there was a report yesterday in the new york "post" that the guy who hosted this fund raiser for mitt romney where he said these things is a guy who has had a sex -- his party was the talk of the hamptons last summer because it was a sex party with all sorts of like naked people running away. that is the kind of thing that is -- mitt romney's base of many conservative christians will find out about that and they're not going to like it and they won't think that those people are parra gons of personal responsibility as compared to people who have less money who go to church every week who are not getting ahead in this economy. >> the victim thing of it, too, i have heard a lot in the last year about no opportunity anymore in this country and about a system that's rigged and about a system that favors fat cats and a system where you can't make it anymore.

and it's been promulgated by the party that wants to get reelected again, as well. and occupy wall street, maybe the administration never really threw in their lot with it, but it was sort of -- it always germinated at the same time. and we'll see. we'll see eventually. one thing that i think back on, we still have obamacare at 43/53. that's still a reflection of the spirit that a lot of people tonight want to expand the entitlement state at this point. so the crux of this election that's why i don't know if i'd say late fourth quarter down two touchdowns at this point. that's 53/43 number is another one. and you also have all the approval rating, none of them have been above 50. that's always been a problem in the past. so we'll see. we got 49 days. i know you think he can coast, but i think we -- >> think what? >> we definitely they'd to have that election on november 6th. we can't just cancel it and say

you have another four years. >> well, of course not. >> because it's expensive and maybe we don't even need to go through the bolt with two touchdowns down, but we'll do it. >> a touch doucouch done and a goal. >> who is the quarterback? >> well -- >> is it sanchez or manning or rg3? >> if you're lucky, it will be rg3. >> you better watch it then. you got a problem. >> but joe, i just want to -- >> we got to go, john. >> i know you got go, but think about this point. i want you to think about whether you really believe that people including those elderly, the people who -- >> i don't know, don't pull on my heart strings. i'm just saying there's two different -- >> do you really think that those people lack values and personal responsibility as compared to people who are doing much better? >> no, i don't. and i don't think that you're making a blanket -- okay, john.

i don't think he was saying every person in the 347% is some free loader or something. >> i'm not talking about what he said, i'm talking about you. >> no, i don't. i just think that -- >> you're making the argument about moochers and all that stuff. >> may only point is if you promise people the moon and are never going to cut back, you'll get reelected every single time and it's much toucher to say that we got to -- >> that's not true. how about ronald reagan get reelected? >> i don't know. i don't think it can happen again. >> oh, come on. there are many things appealing about the conservative argument. >> you saw back there, we were at like 25% were paying for income ax tax. we're up at 50%. we got to go. before we go, we must note again that the video was recorded say run tissuesly and provided to the liberal magazine mother jones and also it was apparently james carter, the grandson of jimmy carter was -- he helped

find it. this was romney's response last night. >> well, you know, it's not eloquently stated, let me put this way. i'm speak ofg the cuff it in response to a question and i'm sure could i state it more clearly and in a more effective way than i did in a setting like that. >> coming up, from politics to the market, we'll ask if the bulls can put a case of the mondays behind them. and restart this september rally today.

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joining us is kevin ferry. what do you make of these moves with oil yesterday? was this some problematic trading that was going through some was this a flash crash? was it a rumor that went through about the spr? what made oil tank? >> i would say it's pretty close example of a flash crash. when the markets get spicy, they tend to break down a little bit. and so the one comment that i would make is that there was a lot of breadth to the selloff in commodities prior to oil taking the focus. it started in copper and went through the grain room and then once the market was down a bit, you you saw the oil market let go. so, yeah, i have a saying i don't think any of these things are accidents. the market just lost a little functionality there. and those type of things will be with us, you know, for a long time going forward.

>> that's scary. >> a little scary, yeah. >> we couldn't switch your appearance to tomorrow? >> i don't know, joe. tomorrow's a big day. >> aargh, yes, it is. normally we have you on on national talk like a pirate day, but we have you on -- i don't know if anybody noticed, but kevin talks like a pirate a lot. >> we've done a lot to promote that holiday. >> because all of your reports are rated arrgh. so did you do -- what did you do to oil is this we got fast trading in the oil markets now, is anything safe? what happened? >> my partner dabbles in there. i stay out of the black gold. but i would say that the key point that we were trying to getting across and you saw this last week even with bonds, these markets are getting too correlated up. the bond market was less a function of the fed than it was about asian flows and the correction of the japanese yen last week. and so as those things get

correlated up, and one of the big mistakes that people make is then to immediately see the markets move and try and make some hard macro analysis about it. these are really linked up markets and one domino begins to spill to another. so look for them to try to stabilize. in all fairness, the equity market did a good job of hanging in considering the massive movements and broad base movements that went through the commodity idea. in other words, a big run up if to the fed and then 24 hours after the fed, everybody heads for the exit. so i don't think the s&p is reallying f ing fogoing to get unless we take a look at something lower like 1442 and we're still seven points above that right now. >> it's scary that you think it was a mini flash crash. we'll have to ask more about that because there are a lot of investors who have serious concerns about that. and you tend to know what you're talking about. so thank you very much. and we'll talk to you again

soon. >> thanks. there are other ones. all i remember is rated arrgh. >> other pirate jokes? maybe squawkpedia can help us out with this. >> i remember left something on the -- i can't remember what it was. but it was dirty one. i'll see whether it's suitable for air. >> when we return, as kevin mentioned, a rapid plunge in oil futures yesterday left traders guessing about just what was going on. meantime drivers have been finding higher prices and higher -- higher prices at the pump. former shell exec will connect the do the us for us. [ male announcer ] for the saver, and a big first step.

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gasoline prices rising across the country. john hofmeister is the former shell oil company president and thank you for joining you this morning. >> thanks. >> so we know prices have been on the rise, qe-3 is now in the works. which is the biggest reason for the higher oil prices? >> qe-3 as put a floor under the oil price and unfortunately what that means is lower economic growth. because we can't have both lower -- it would be nice if we could have lower price which is we could if we had more supply, but we now have a floor, we have this open-ended iranian thing just hanging out there where we have no deadlines as the secretary of state said recently. that will lead to traders having no idea what could happen. and yesterday's quick drop, we could see repeats of that. just based upon what people feel

about what might or might not be happening. the middle east is a larger question. so we have to get to a point in this country where we actually know what we're doing, have a plan, deal with natural gas as an alternative to fuel, whether trucking or methanol for personal cars. we have to find an alternative otherwise the 47% that romney talked about, they're the ones that sufficient most. we saw the median family income number a week ago. half the nation lives on $50,000 or less. they are really suffering from the disposable income loss of the high gas price and it just depresses can disposable sales of everything else. >> do you think we see a national plan that layses this out? because we've been hearing for decades that we'll have a national energy plan and we've never gotten one. but in the meantime, our own production has increased both with national gas and oil.

>> it's around the federal government. there's a federal government that can if a absolutely no credit for what's happened whether the marcellus or the eagle ford or whatever it may be because those are private land owners, state permits and the ingenious technology of the industry. and it's the ingenious technology of the industry which through the hydraulic fracturing and drilling has throwed tremendous increases in those supplies. but it's only incremental increase. so we've gone from a 5 billion barrels to 6 billion barrels a day. that sounds a lot, but we need 18 a day. so it's not helping as much as it could unless we get the federal government involved. now we get the offshore reservoirs. which could be opened up for new drilling, new opportunities. we get the legal enablers to start moving natural gas into

the transportation system, that takes federal leadership. and that's what we've been missing. >> john, i hate to cut us short, but we appreciate your time and your message and we thank you for joining us. >> thank you. coming up, the future of finance. institutional investors take on the changing game on wall street and what it all means for main street. and at the top of the hour, the news maker of the morning. we have dallas fed president richard fisher, he'll join us onset for an hour. bob... oh, hey alex. just picking up some, brochures, posters

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institutional investor tom berkeley is here to discuss the september issue which focuses on the future of finance.

is the international editor. thank you for being here. so if attorney write this not today, which you have, but if we were to look at this backwards five years from now, what do we really think the future of finance and let's just look at the investment banks will ultimately look like? >> well, clearly they're scaling back, taking less risks, moving out of the areas that were some of the most profitable areas to be in. the fixed income currencies, a lot of the businesses is scaling back. that was half the profits of wall street during the boom years. >> we asked about your purcell what the big names would look like, would they exist in five years. do you think they'll exist in a sort of ladder that we have today? >> i think they will certainly exist. i think there may be fewer players competing in as many areas.

swiss banks have scaled back significantly, for example. so they'll be there, but they'll be there in less size, perhaps always less swagger and certainly less profitability. >> net winner who? >> amongst the firms themselves -- >> let's say future finance broadly. who are the winners and losers? >> the losers are probably a little more easy to identify because we have an industry scaling back, low investment returns for everyone from main street to wall street. the regulators are winners because they've increased clout, but it's not clear they regulate the markets effectively just yet. >> you have an interesting piece about ontario teachers pension fund. tell us about it because it really was an eye opener for me. >> well, on stereo teachers back in the 80s da'80s, they were ha troubles like many other pension funds and they set up a clear governance structure which means we'll have political oversight and we'll have half the board

nominated by the union, half by the government, but we'll empower professional teachers, professional managers in-house to run the money for the pension fund. and so they do that very effectively and at lower costs than other large pension funds. >> is this a lesson for other pension funds? >> a lot of the big merit funds would love to have the freedom of operation that ontario teachers has. >> but in terms of returns, fees, how the whole pension scheme is going to work in the future. what does it say about the larger so the of -- >> definitely they can take long term decisions, operate at lower costs so they spend much less money on wall street fees and much more money on returns. they've had a return of 10% a year. no other large fund of that size comes anywhere near that. >> you have piece on the monetary supply. we have mr. fisher coming on later. big takeaway? >> big take or oig,

unconventional policy is here sfaurs the eye can see. it generates precious little return in the economy. i think there's a difference in what central banks can do to stop the economy going off the cliff, then generate employment which is what ben bernanke is finding so hard to do at the moment. >> question for mr. fisher? >> how long does the consensus on the fmoc stay. we have only one dissenter right now. i think there's more contested sentiment among the board, but for the moment, bernanke has the votes. >> tom, thank you for coming in. >> probably 6-5. i do. i think it's probably -- no, 6-7, 7-4, or something. 11-1? >> i thought it was 11-1. >> it was. but it's probably -- >> in terms of -- that he's able to build a consensus. who told us that? >> we'll talk to fisher about it. fesh

fish you are wasn't t ish f fisher wasn't the dissenter. >> he went along with the quhwh thing. as we said, the fed making a splash, but you tonigyou don't wait for the full story. richard fisher is a voting member and he'll join us with what happened behind closed doors at the top of the hour. [ horn honks ]

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we're back and we're in the chairs. joe is reading our horoscopes. >> i messed up. he's not a voting number. >> he would have voted no. >> i'm sure. >> i thought i looked it up in the charts, i was wrong. he's not a voting member but he'll still be here and tell us what happens and what he thinks about it all. >> remember what -- oh, it's awful, i referred to paul krugman, a co-commie with dean baker. anything keynesian these guys love and say there's no harmful effects of everything. erin said maybe the commodity prices are up because of quantitative easing and fischer is one of the first persons to say that, not that a fed government would know that as

much as a head of a liberal blog. >> i tried to channel you yesterday. i didn't try but i felt for a moment writing the leading of the column -- >> with the occupy wall street? >> it will be an asterisk in the history books if it gets one at all. >> no shihtzu? >> you used to say on a sunday afternoon you could never get enough protesters into one stadium. >> people are going tailgating, the middle class is still out there. >> the argument i made in the column i think ultimately a year later there were a lot of important issues that did rise. the whole inequality and storyline, it's had impact in that it's become threaded throughout frankly the democratic campaign. >> someone that's harped on it for two years but you would have a hard time running for the election. >> i'm not arguing the protests

did anything to do that, to change that. >> corporate capitalism is the flipside of all this. no one wants crony capitalism, that ruins everything and no one wants corporations not to be able to fail. that's the whole problem. why should you be able to win if you can't lose and if they were protesting that, they were specific, i'd go down and i don't know if i'd stay there, and the filthy, you know, surroundings they had a year ago. >> they ultimately got hijacked by the vagabonds and misfits. you guys have other things coming out of the newspapers? >> i feel bad for kate kind of. >> pictures. >> the photographer was more than a half mile away. >> did you click through?

>> i didn't, but "post, all a-titter!" are you allowed to say that on the cover of a newspaper? but she's in, i forget where she was, in the solomon islands and everybody was topless i guess so they have, they caught her sort of laughing like oh god i had a problem with that last week and here we are again. >> there was just a ruling while we were sitting at the desk. >> a rule. >> some court, they have to turn over the photos within 24 hours the magazine has to. >> and it's 26 pages coming out from this magazine trying to make a name for itself which you got a subscription yesterday. that was a coincidence to what was it called -- >> i did not enter my credit card information, just because -- >> you don't do that on any of the websites. >> when we come back, dallas fed

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going behind the scenes at the fed. >> we'd like to see an economy which is strong enough that it will support improving labor market conditions. >> what this outspoken opponent of ben bernanke's latest move is thinking and why. our special guest this hour, dallas fed president richard fisher is here, first on cnbc. then real estate mogul and billionaire donald trump is stopping by. >> it's time now. we have to get the country going. >> we'll get his thoughts on the state of housing, the global economy and the race for the white house. the second hour of "squawk box" begins right now. ♪ when i was a young boy i was

told i couldn't come ♪ good morning, everyone. welcome back to "squawk box" on cnbc. i'm becky quick along wit joe kernen and andrew ross sorkin. we've been watching the futures this morning, they have a little lower, dow futures down by over 30 points, s&p down by over 3, after a day of losses yesterday for the markets. the dow was down 40 points yesterday and the moves came late in the day after a 3% drop in oil prices that came as a big surprise to a lot of people. let's get to your morning headlines. scores of japanese owned factories in china are shuttered. the japanese government urging beijing to do more to protect japanese business from trespa trespassi trespassing, looting and other damage. another milestone for apple, the iphonemaker crossing above $700 a share for the first time, the company announcing record

first day orders of the latest iphone, that stock is now up more than 73% this year and the company's market cap is $656 billion. google's motorola mobility revealing a new smartphone for europe and latin america this morning, the razor one has a 4.3 inch display, similar to the m revealed in december but its brain is a processor instead of a chip. the new phone will launch in october. a surreptitious remark by mitt romney is heard given a snapshot of the electorate that is going to raise some brows, this recording was released to the liberal magazine "mother jones." take a look.

romney later responded to the recording at a private fund-raiser in california. >> well, you know, it's not elegantly stated, let me put it that way, i'm speaking off the cuff in response to a question, and i'm sure i could state it more clearly and a more effective way than i did in a setting like that, and so i'm sure i'll point that out as time goes on but we don't even have the question, given the snippet there nor the full response and i hope the person who has the video would put out the full material, but it's a message which i'm going to carry and continue to carry which is, look, the president's approach is attractive to people who are not paying taxes because, frankly, my discussion about lowering taxes isn't as attractive to them and therefore i'm not likely to draw them into my campaign as effectively as those in the middle, this is a

discussion about the political process of winning the election and of course i want to help all americans, all americans have a bright and prosperous future, and i'm convinced that the president's approach has not done that, and will not do that. >> okay, uhm -- our guest host is a vocal opponent of bank easing, dallas fed president richard fisher joins us at this hour. we don't talk politics with you, obviously -- >> that's right. >> so we won't. >> i didn't realize i was a host, i thought i was a guest. >> you are a guest host. you are going to interview donald trump when he comes on so you throw questions to anyone but we're most excited about having you here and i'll get right to what we were talking about last week and kevin morish was here last week. after the news came out a lot of pundits said because of the, i'll summarize it as shock and awe of the latest moves that bernanke is really, really

worried about the current economy. is the current economy so bad or does the fed and bernanke, do they know something that isn't clear to the rest of us about how serious the situation is to warrant such a large move? >> start from the beginning he's chairman of a group that includes himself, of 19 people. we sit down, we present our different points of view, and our job as a central bank is to follow the dual mandates, the issue of inflation is not on the table right now, whether it's the dallas fed training, announcing slightly below 2% but we are also ordered by the american people through the congress to deal with the issue of unemployment and try to achieve full employment and give the tools we can deploy. i did argue against the program that we put together and decided. i was in a minority.

i wasn't alone, but you know, let's be fair to the chairman. he has to pull the group together and the group as a whole feels that the economy is barely steaming along. it is in positive territory and yet it's at risk, not dramatic risk like you've raised it, joe. so that was a program that was decided. now, question the efficacy of the program was debated at the table, costs and benefits and so on. i tend to as a former market operator and former business operator look at things differently than my colleagues. the nice thing about that committee is unlike congress we get things done, a. b, we're civil in our discourse and the chairman is the admiral of the fleet as i like to say and he has to pull together all of his reporting officers, we do that, a decision was made. i may disagree with the decision. i understand its logic and we'll see if it works. >> will you tell us if you would have voted would you have gone along with it or would you have

thrown your lot in with the chairman because he's the chairman, would you have voted against that? >> no, i told you this a long time ago when i first came on board, alan greenspan said, richard, just always speak to the truth, that's all we dpptex of you. i speak "to the truth" as i see it. >> you would have voted no. >> i would have voted against it. the vote rotation, jeff flacker is the reserve chairman of the bank of richmond and he voted against it. now the majority would still have supported it, the chairman pulls that group together, by the way, does a very good job of it, listens very carefully to everybody. i never feel like i'm not listened to. they may decide against me or take some of my advice but that's the way the process works, joe, and it works. i think that's the key point. here's the point i want to make. all that political hombrage we

got afterwards. if congress wants to change that, that's their business. >> their fault. >> our tools and the chairman made this clear and he's polite about it, i'm rude about it, cannot work in and of themselves. they're necessary but not sufficient and until congress gets their act together and that's their responsibility and your responsibility -- >> then to summarize -- >> -- it's not going to be as effective as we'd like it to be. >> people who wanted to immediately draw conclusions about bernanke's view of the economy, they were probably hyping the news to some extent and it had more to do with inflation is quiet, you have a dual mandate, because of that, you're compelled to do this, not because the economy is any worse than what the numbers that we see you're saying. >> we want to make sure, the committee wants to make sure and i want to make sure as an individual participant in that committee that things do not weaken. >> if we could do it are we at risk of slowing down slower than stall speed and going back into

negative growth? >> i think we're at stall speed. >> we're at stall speed which means if we didn't do this, it's possible we could have another recession. >> i think if we didn't do this we amble along. there are too many people out of work, we're following that mandate given to us by the congress of the united states which represents the american people. >> what does that mean in terms of numbers? >> 2% growth. >> are we at two? kevin was very careful, he went 1.5 to 1.75. >> that's very precise. >> i want basis points. >> decimal points is silly stuff, come on, joe. >> i know. >> there is positive growth, it's just not robust and the key point, it's not enough to create the jobs we need in this country. now, i argue and i argue forcefully, i'll give a speech on this tomorrow night here in new york, the reason we have so much uncertainty is not just uncertainty about europe and uncertainty about the slowdown in china, these are important things. the real uncertainty stems from what are my taxes going to be? what kind of spending pattern

also come out of the federal government, how do i deal with this explosion of regulatory morass we have coming out of washington. how do you budget whether you are exxon or a little bitty 20-person company, how does the woman who runs that company or the man who runs that company budget when they have no idea what their cost structure is going to be and they cannot look out into the future. >> what if you knew the taxes are going to be higher and regulations increase, at least you'd have certainty, would you be able to act on that? we need taxes to -- >> i think business leaders want more certainty. >> even if it's bad certainty. >> the fran fed came out in the paper with uncertainty is bad. with all due respect to the article, no duh. that's an old expression, i'm dating myself. >> we use shihtzu.

it's a dog. >> but it has a flavor to it. you're from texas. go for it. >> businesses are stymied by uncertainty. we don't want to add to in and in this particular program, the program was directed at the mortgage market. we had a 25 basis point reaction beforehand, pretty much what i expected but let's give the chairman some credit here, he's doing what he wants to do, has to do, should be doing for the economy. the efficacy of this program is where we disagree, there are costs and benefits. i argue more on the cost side, others argue on the benefit side, a decision was taken, and instead of hammering the federal reserve, point your fingers at the congress. the do nothing congress. >> you have been on and talked about the texas economy how it's not just oil, it's tort reform, it's low taxes -- >> it's businesses, services, manufacturing. >> more friendly to business but i just asked you, do you want

certainty that taxes are going up, do you want certainties that regulations will become even more heinous or do you want them -- i'm trying to get to you say something. >> here's what you want. >> tell me what you really, really want. >> here's what i'd like to see come out of our legislature, the congress of the united states. >> okay. >> a treatment of our fiscal condition that incents business to take the cheap and abundant money we at the federal have created and hire people. right now there's no unis enive to do that. you have to balance your revenues with your expenditures. that's up to them to decide, that's why they're there. they're elected to collect our money and distribute it, whatever they decide to do according to the american electorate. you can't do it successfully to create jobs. whatever they decide on the tax front and the spending front unless it incents people to step on the gas pedal and use all the

fuel we're providing. >> private sector. >> of course, that's where jobs are created. >> you into ed to say that around here. >> you're just worried about this guy over here. >> i am worried about him and a lot of people like that. >> it's got to be the private sector, government's going to shrink. >> okay, you can defend yourself. >> look -- >> the government has the ability to incent the private sector through tax and spending programs. get on with it. we're providing the fuel, it is cheap and abundant, it happens to be my personal view, we provided too much but whether you provide too much or just the right amount it won't be used properly unless you're incentivized to use it, that's up to the tax laws, spending patte patterns, the structure. >> there are those that argue obama's been way too friendly to business to bail them out. >> if becky were running a 30-person company or 100,000 person company, what does she need to plan her payroll? she has to understand what it's

going to cost her to hire somebody, and also has to understand what the tax rate's going to be on how she operates, if she's an s corps or limited liability, she has no idea so you go into a defensive crouch. they are stuck like velcro. >> with all the money you provided. >> that's right but if they incent the system correctly the money we provided, again i believe we provided too much but that's just opinion. the gas tanks are full, step on the pedal, move the car forward and we are not incented as a people to do that. >> i think worsch said exit is a four-letter word. >> exit is something we talk about and i'm concerned about it personally because we've never been here before. these are huge amounts of money, you have large excess bank balances on the 12 balance sheets of the federal reserve banks, excess reserves 1.6

trillion, tons of money sitting in the private sector, a lot of them nondepository financial institutions, we pay them 25 basis points, big deal. what bank is happy earning 25 basis points? there's a lot of money sitting on the sidelines, we just added to it. i would have not been supported. that was a decision made by the majority, you respect the majority in our committee and do it in a civil fashion and the question is how do we get it off the sidelines into the system and how do we exit once it begins to take? that's what this is all about. >> we're going to try to answer some of the questions after the break, if we could. if you've got comments, questions about anything you see here on "squawk" shoot us an e-mail squawk@cnbc.com and follow us on twitter @squawkcnbc is our handle. fedex expected to deliver quarterly results and offer insights into the global economy, the numbers and instant

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fed president richard fisher. we'll continue the conversation with him. you talked earlier about the majority and how these conversations go and one of the questions i had, did the majority start that way, meaning when everybody walks into the meeting at first, was it clearly delineated that this was going to pass this way? >> i think there are some obvious knowns here, each has our own tenancies, so-called hawks and doves in our aviary. the question is what is the program going to be? some members of the fomc would like to do a lot more than was announced. some less or none so the dynamic of the meeting, first of all the chairmans aa good sense of each of us. we've been together for a long time and talk in the interim by telephone, we're friends. we talk about the washington nationals for example and other things, he's a big baseball fan so we also have options that we

have very vaguely outlined before every meeting and free to comment on them before the meeting or during the meeting. the real issue is what do you come out with from the meeting and that has to be brokered at the table. ben bernanke does an extremely good job. first he's a fair listener, secondly trying to pull together all of the pieces of disparate inputs. you had this thing about the voters, it doesn't matter. each is allowed to speak or say whatever we wish to say, speak as long as we wish to do it >> right. >> there's again remarkably for washington, there's a civility and we respect each other's views. i may have a totally different view than one of my opposite counterparts in the banks or on the board of governors, i always respect these individuals. we're friends. >> richard, let me ask you this -- >> we stay friends. this isn't where we give each other headlocks and noogies.

>> when you see something like 11:1 with lacquer being the only dissent it thinks this has more support than we would have had the sense when we talk to people like bullard and others. how big is the minority, two people, is it three people? >> becky i only speak for myself, you know that. >> right. >> the point is the majority and the decision was to do what was done, that's the way it works. >> but the 11:1, is that a fair sense -- >> it's not the same balance. we can go into the entrails. what counts is what comes out and watch for effectiveness, there is a clause we're going to continue to monitor its efficacy. >> how could you have done more. more than 40 a month? go out to 2016, things like that? >> joe the decision was to do what we announced. >> no one was disappointed. we were told there's no way bernanke cannot disappoint the

markets, that he can't possible do enough. >> we're not interested in two straight days, we're interested in the long-term. and i feel strongly about this. our job is not to provide ritalin to the traders. >> people think the one thing you can control is asset values in the stock market. >> our job is to do what's in the long-term interests of the american people. the stock market provides a wealth effect but we're not interested in what happens immediately or the next day and so on. i don't know anybody on the fomc that focuses -- >> that's not why? >> no. it's what's good for the economy. >> long-term they say it's just helping rich people. >> how far -- >> 90% of the stocks, that number? >> to the extent you talk about the trickle down effect, the wealth effect when you're sitting around the table how far down do you think this measure will ultimately reach the people?

how big of the debate is that? >> first of all the measure is focused on mortgage-backed securities, one of the three sectors in our economy performing well, ooching upward, better house pricing, construction taking place, the housing market is in the beginning of a recovery. so the logic here you'll. ush it along, it will help enormously. we're offsetting the higher fees coming out of the agencies but we have seen a reaction in mortgage backs and mortgage prices coming down about a quarter of a percent since the meeting. that should assist the housing market and if we assist the housing market the logic runs, that will help with greater confidence amongst consumer and perhaps release greater spending. you have a wealth effect that drives it through the housing market and equity markets. i would argue that it is less impactful right now because the other things are inhibiting

businesswomen and men from making decisions on capex and unemployment than would be an expansion of capex and employment more direct. the wealth effect is not important. those that advocate for it are correct but i would certainly like to see people go out and build and commit to capex that's job creating in the united states and have more immediate effect. i don't think this program will have much efficacy. >> the negative consequences, other assets that happen to go up with maybe the stock market, a lot of people don't believe it. is any of the move in any commodities, how sure are you that it's related to qe? when you do qe does it move the oil markets? >> not sure. >> does it move the gold market? >> people would allege that, and gold prices have moved, but -- >> did it help the euro trade back above 130 when it had no business, some would say? >> are these opinions or

questions? >> i'm asking, we have decided if you go from 300 parts per billion co2 to 400 parts per million co2, that's why we have a lot of rain on the east coast, we've decided that you can't tell me for sure whether oil goes up with qe, what is the responsibility it moves up? >> the price of oil is reacting to countless factors. >> but you think it's a factor. >> it's maybe a factor, but it is -- maybe a factor. >> is it the driving factor behind the price movement, i argue no. it's one of a jallion factors. >> there's a drought that affects grain and meat prices. how about gold? more for gold? >> we haven't seen dramatic movement in anything. some have come down, the basic stuff has come down, the speculative metals have gone up. >> you can look at certain things, oil, gold, when qe3 was on the table months ago, you can see them taking off? >> this is the way the market

discounts things. you can't look at the wheat and corn prices and say it's because of qe, good try, though. >> we will have much more from dallas fed president richard fisher in a bit but first he's going to, richard is going to interview the donald. an interesting story out of japan, the country's biggest utility, tokyo electric power is in advanced talk to secure liquefied natural gas supplies from north america, to help reduce high import prices as japan tries to cut its reliance on nuclear power after the fukushima disaster. >> i'm supporting it. >> that's great. japan's been scouring the globe for supplies of the gas as most of the nuclear plants have been closed since the earthquake. any agreement to buy u.s. shale gas will be subject to approval from washington reviewing whether to allow export licenses. >> it's crazy, if you're talking about fixing our problems, keep it here. >> "squawk box" will be right back.

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welcome back to "squawk box" here on cnbc, i'm andrew ross sorkin. today's guest host, dallas fed president richard fisher, we're going to have more from him in a bit but first a look at this morning's headlines, we've got apple shares crossing $700 for the very first time last night in afterhours trading. the stock hit six months ago. news the tech giant sold 2 million new iphones in the first 24 hours of presales. microsoft is warning of a newly discovered bug in its internet explorer web browser, it makes pcs vulnerable to attacks by hackers. joe, i think we have fedex numbers. >> we do, andrew, looks like it's $1.45 versus expectations

of $1.40 and we have a second quarter forecast of $1.30 to $1.45, and that is below where wall street is. wall street is ats $1.67, for e full year, $6.20 to $6.60 and the estimate is $7.03. we have a five-cent beat on the first quarter, the second quarter well below, and the full year outlook being forecast well below. the prior outlook, yeah, a lot of times -- >> the 37-cent miss if you take it at the low end where it would be for the second quarter, third and fourth quarter they're expecting to elow because the full year is more than 37 cents below if you take the lowest numbers for the second quarter that's 37 cents below. >> a lot of times fedex says we didn't give guidance so we may be below the street but in this case they did have a prior

outlook, the company itself had been at 6.90 to 7.40 and now it's 6.20 to 6.60, so we have seen fedex already admit, concede things weren't as rosy as they had hoped and the company is saying earnings for the first quarter were below expectations, conceding that is the case, as weak global economic conditions dampened revenue growth. i saw a revenue number also, becky, they had to, 6.63. >> revenue growth during the quarter, i'm looking at the other numbers. they're also increasing their shipping rates by a net average of 3.9% for u.s. domestic. the full average rate increases of 5.9% will be partially offset by adjusting the full price flesh hold but they are going to raise prices. >> the first quarter revenue

number's okay. the stock is indicated down, closed at 89.28, 86.60 is the bid and 87 is the ask. >> it's got to be guidance for not only the second quarter but also full year. >> going forward, as they say. >> going forward, as they say. some of this playing into what bernanke and mr. fisher are are talking about. still to come, reaction to fedex's results. first donald trump will be sounding off on issues affecting your money from real estate to politics, we'll talk to him about mr. romney, there's nothing mr. trump won't touch. he's coming up next right here on "squawk." ♪ call me comments? questions? send them to @squawkcnbc on twitter, follow the show, and look for updates from andrew, becky, joe and the "squawk" staff. "squawk box" on cnbc, and on twitter. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person,

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welcome back, everybody. with the presidential election, rising tensions in the middle east and the fed announcing more quantitative easing gives us a lot to talk about. joining us on the "squawk" u.s. in line is donald trump, chairman and president of the trump organization. by the way our guest host today is richard fisher, the president

of the dallas fed, and donald -- >> by the way i really respect what richard is saying. >> excellent. that's where i wanted to start since he's our guest host today. i heard you on "closing bell" with maria, saying this is good for the stock market but maybe not good for everybody. >> it's artificial, we're printing money and doing it incorrectly and it looks good and makes me look good in all of the stock picks i make because i listened to your show. you probably heard that also. >> i did. >> but it's not real, it's going up because they're printing money. stocks and real estate, i should be happy about it in theory, richard, but i'm not happy because ultimately it will come home to roost and it's going to be very, very unfortunate in the form of interest rates and really some very severe things happening later on with the economy. >> you know, richard, there have been people looking at the spread between treasuries and tips and that spread is getting wider and wider to a level that

some people say it's an indication of a lot of inflation down the road. should we worry when we see that number going up? >> something that should get your attention but i wouldn't exaggerate it right now. there has been a gradual spreading. we look at the things, the ten-year tip and whatnot, but i don't think it's yet out of hand, i don't think it's out of hand. and this is a recent occurrence. we talk about inflationary expectations, and to a person at that table, and especially the chairman, this is something we talk about monitoring, what we constantly do. we cannot afford to let them get out of range and right now they're not out of range and it's only recently they've been ooching up a bit. previous qe programs and i didn't support qe2 so i'm in a severe minority here but you saw inflationary expectations coming down before we announced them. this is the first program we've done where they were actually rising and we announced into that rising, so it's not

surprising me that they've increased a little bit. i don't think they're yet out of control. >> donald -- >> and i'm a hawk, right? >> you'll defend both sides. he does that, donald, but i think he's with you the purchasing power, if the dollar eventually is worth less, who cares if your stock's worth more? you're spinning your wheels. >> joe, i think inflation will happen because of what's happened. and you know, as a real estate person, inflation is my friend, inflation is a great, great friend to those of us at a certain level of real estate. it's been great over the years. i'd loved inflation but i don't like it for the country but as an individual, inflation has always been, you know, it's made me very rich. >> don, if i may interrupt you, we're going to do everything in our power to make sure it doesn't help you. >> you know what? i'd be very satisfied with that, i'm okay. >> nothing against you personally. >> i'd be very satisfied, richard. >> i asked becky, i said is there any point in asking a

billionaire to defend romney's comments, but i'm going to ask it this way, donald. when paul ryan put forth that budget, you said he's got to be crazy putting it forward before the election, because it's not a good idea, i'm paraphrasing, not a good idea to tell the truth when you're trying to get elected. what romney said yesterday, he's saying i'm not going to get a lot of people who are the benefit of government largesse, i'm concerned with the people in the middle. that's what he was trying to say. what are your comments? i know you've seen the tape. what are your comments on what happened? >> first of all with paul ryan, i wasn't talking about truth, i never said about truth. >> i know, i was paraphrasing. >> i did say frankly why would you put it out before an election and i say it to this day and i like paul ryan very much, but as far as these statements they were very unfortunate, i guess. i don't think he should apologize. he's probably right. he probably won't get any of those votes but he should not be

apologize. he misspoke. i don't like seeing it. you say something and do you mean it, at least you mean it at the time you're saying it. he said similar things on the campaign trail, do not apologize. he's got to stop with the apologies and as soon as you apologize the other side really, really jumps on you and that's exactly what they've done right now, and he's got to go forward. he's got to get tougher, i think he will get tougher, there's 50 days left but he's got to be a lot tougher and go at home, every time there's a little chink in the armor, all of a sudden the other side comes out and says oh, this is terrible. like for instance the other day he made the statement with regard to you know what, and they said it was too early, how could he do this? this is a national crisis. >> what's the you know what part, donald? >> with, after the libyan -- >> oh, okay. >> the libyan statement. >> work with us. >> there was nothing wrong with that statement and what he did, he made the statement enthe other side attacked him for making it because it was a

sensitive time. let me tell you, if he would have made the statement five days later they would have said the same thing, you shouldn't be making the statement. it's a sensitive subject. the republicans have got to get a lot tougher or they're going to be very, very disappointed. >> check out dorothy benoit's piece in "the journal" waiting for every little phraseology, every inopportune moment, waiting to pounce, but we'll see whether it all comes home on november 6th. >> joe, they have so much ammunition. look at what's gone on with the president, look at the mistakes that have been made and it's about romney, you know, it's interesting the other day with egypt, they were blaming egypt on romney, and he had nothing to do with it but everybody was talking about romney like it was his fault and he's sitting there, he had nothing to do with it. they have to get very much tougher and smarter. >> normally the press, don, if it was bush or something, the

first thing that the press would have done, the anniversary of september 11th, were we prepared? was security really heightened in libya? that was the first question they would have asked, maybe it's finally being asked now but it's been a week after the event itself, and it's looking like, i don't know, there wasn't any enhanced security, i don't know. that will all come out. >> there certainly wasn't and it was not based on the film. it was based on obviously this was a planned attack and you can say whatever you want but this was a planned attack and that's coming out now loud and clear also, but getting back to richard, richard, keep up the good fight. i like what you're saying. >> donald, very quickly, they're going to yell at me for even asking you this but should we export natural gas to japan and other faceplaces? >> absolutely. we should export it, make money with it. >> i want to keep it here. >> they're not allowing us to drill. >> if you export it, it delays the idea of an infrastructure

being built up here that uses that. >> we have so much of it, we're the saudi arabia of natural gas, we have so much everything under our own feet, things we didn't know we had five years ago. >> i'm going to lose on every count on this one. >> it's the biggest change because five years ago we didn't know we had it. now we realize we have so much oil and gas and so many other things that we can -- and all found out because of technology over the last few years, we should be not only taking it for ourselves, we should also be exporting it. we are an unbelievable country with tremendous potential, if we're allowed to use it. >> amen. >> oh, wow! >> wow, he actually participated in a discussion. >> "wow." >> on that note of aagreement between you and richard. >> becky is right. once it starts spreading and you have to your neighbor gets fundable and it's houses -- >> i hope you're a free trader,

that's what makes our country great. >> i am but if you want energy independence why not push our way there. >> we've got to move it around. >> by the way, if you have a price effect from selling more, that will induce people to build infrastructure in the united states. >> it is the low price keeping to that, i get that. i hate all of it. >> i got it right here. >> thank you, donald. coming up, we finish up -- i wonder if he's still got that, our hour-long conversation a little bit more with dallas fed president richard fisher. the next hour, dino cos, formered if insider, will join us. so -- tell me again what happened.

i was downstairs making coffee, and we heard it. it just came crashing through the roof, out of nowhere. what is it? it's our ira. any idea what coulda caused this? maybe. i just sorta threw a little money here,

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welcome back, final thoughts from our guest host, dallas fed president richard fisher. we talked about a lot of things in the commercial break i hope we can cram into here. critics, people like paul krugman will look at what's going on in texas, how can things be so great when you have an unemployment rate above 7%. >> we have an unemployment rate of 7.2%, a fraction, the denominator that's growing so

tremendously because people are streaming into our state. we create jobs two times out of the united states, we've done it for 22 to 30 years. give you an example, if you take 1990 as a base of 200, we're almost at 160. so we have continued to grow our employment at a rate of 2:1 over the rest of the country and california has leveled off and gone down. what is the root to getting a job? yes we have poor social services and too many uninsured. those criticisms are correct but basically and i'm not saying this is my attitude, this is the ethic of texas, if you don't like it, go somewhere else. >> people are dropping out of the workforce, stopping looking for work. >> people are coming to our state looking for work and we have an expanding population, almost 26 million people, new york is down to the empire state down to 19 million and as you

know california is losing people. we don't know the exact numbers but i'm guessing a quarter to a third of all of our immigrants in texas come from california. >> given the social services argument what happens in 20 years? >> what do you mean, social services argument? depends on what we're forced to do by the federal government and we have to see how, for example, medicaid is resolved in our state. but we have a pretty good balance right now and our greatest benefit and i stay away from politics entirely, notice i did not participate in the discussion with mr. trump, that's your all's business, we stay away from it but i would say one thing texas has, state legislature meets every two years, we pay them 600 bucks a month, that's plenty, they have real jobs. if they metaphor two days every four years, they're pro-business, they incent business to create jobs and that's why we create more jobs than anybody else and our social welfare system is very weak compared to california and new

york, but why do people come there? they come for dignity, they come to find jobs, get work and prosper and we have the same monetary policy as the rest of the united states. >> the people that want to support the private sector in business, why we don't use the way different states fare based on -- >> you hear more about this, governor angler in the roundtable. >> if you run the federal government like california or like illinois, and you see that they're losing businesses, they're losing people, people are fleeing there, we can't see that. we can't measure that when the federal government does it but can't we extrapolate from what we see happening? >> i've argued this publicly, we do things in a way that appears to create more jobs as a rate of 2:1. yes we have weaknesses when we do things wrong but you're beginning to hear more and more different governors saying i want to do different things that way. >> you watch even democratic governors all of a sudden are at worst middle of the road in terms of fiscal issues.

even rahm emanuel becomes a mayor and got something to run and he becomes a republican almost. when you have to actually, that's why the senate, the senate's never going to get it. >> let me conclude here, what i'm worried about is what i do for my living and what our colleagues do for a living, we try our best to get it right. as ben bernanke said, it's necessary but not sufficient for employment creation and we cannot do it alone, and if it gets to the point where we are expected to do it alone, government has failed entirely and we get into a very difficult spot from which we cannot exit, so it's up to all your viewers, and nobody else. they own the congress, they vote for them, the senate is important, the house is important, and people blame the president who controls the purse string, the congress of the united states. get your act together, congress. >> richard, thank you. >> thank you for coming in. >> don't wait so long next time, we want to see you again. >> thank you very much. coming up next former new

york fed insider dino cos, we're going to cover it all. fedex earnings are out, reaction from the street and what they say about the state of the economy, dino is now on the set. good to see you action sir. 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. everyday delta flies a quarter of million people

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in the last hour we heard from dallas fed president richard fisher. >> the real uncertainty stems from what are my taxes going to be, what kind of spending pattern also come out of the federal government? >> reaction to fisher's comments from dina cos, former executive vice president for the new york fed. how much should the president do to keep gas prices low? we will talk to jack girard of the american petroleum institute. the presidential campaign's taking shots. mitt romney on the defensive after a secretly recorded video pops up on the internet. the third hour of "squawk box" starts right now. welcome back to "squawk box" here on cnbc, first in business

world wild, i'm joe kernen along with becky quick and andrew ross sorkin. checking u.s. equity futures we finally had a little pullback yesterday, and we're indicated down a little bit today. i'm not ready to say that qe3 is over in terms of helping the stock market. nothing goes straight up, but one thing we have to deal with today, i don't know what happens with transportation average but fedex was gloomy as far as the next quarter and the full year. >> we already knew this quarter was going to be disappointing, the company warned us about that but when fedex came out with the numbers, it gave us a little bit more insight, it did come in with better than expected first quarter earnings but again that's because it brought down guidance recently. it's the guidance for the second quarter and the full year that has investors concerned at this point. the company sees current quarter earnings somewhere between $1.30 and $1.45 a share, the street was at $1.6.

full year guidance revised lower and if you add up the numbers it is expecting misses for the third and fourth quarter from what the street had been expecting. fedex says a weakening world economy prompted customers to shift towards lower priced and slower shipping options. they talked about raising their prices as well. we'll talk to an analyst who covers the stock, in a few minutes, to find out if this is fedex specific or other companies you should be worried about as well. >> do you think they sandbagged the guidance ahead of this quarter and do you think they sandbag the next two quarters in terms of guidance? >> no, i don't think so. >> so they can beat? >> fedex is telling you what it sees on a real time basis and this economy has been changing rapidly. >> they only announced that, what, three weeks ago in. >> fedex does things to, you mean so then their stock would do better when the bad news came? >> horrible, cynical thing to say in. >> a good thing for your column, though. i mean that's horrible. >> i don't think they do that. >> so cynical. >> cynical, and that's what you

always say to me and you hate it. you hate cynicism. >> i hate cynicism, that's true. can i call it skepticism? >> you have the hope of youth, you haven't been slapped enough in your life to see -- >> i've been slapped enough. becky has news on apple. >> apple shares crossing $700 for the first time last night in afterhours trading. it hit $600 for the first time six months ago. among the catalyst news the tech giant sold 2 million new iphones in thes first 24 hours of presales. last hour we spoke with dallas fed president richard fisher, here is what he had to say about uncertainty for businesses. >> the real uncertainty stems from what are my taxes going to be? what kind of spending patterns will be coming out of the federal government, how do i deal with this explosion of regulatory morass we have coming out of washington? how do you budget whether you are exxon or a little bitty 20-person company?

>> joining us now for the rest of the program, dino cos, former executive vice president for the new york fed. thanks for coming in this morning. >> good morning. >> where you are on qe3? >> the big news was what the fed was telling you about inflation in the future. in the '80s and '90s, when the fed was asked about inflation their answer was it should be lower. never gave you a number, just said it should be lower. ten years ago they said okay it's about 2%, fine, it should stay here, and now we're having another switch because in effect the fed is saying we want it to go higher, richard fisher you were talking about the t.i.p.s. and this was different than qe1 and qe2. inflation was not coming down, it was stable or rising and the fed was giving them a kickstart and the fed said we will not tighten when inflation ticks up and when growth starts to tick up. >> would you vote for this? >> i don't have any vote.

>> you could whisper in people's ears. >> here's the thing, i think he put it interestingly, what's the benefit, what's the cost? or expected benefit, expected cost. the expected benefits probably are going to be modest, so what are the costs? and here you can get into a real, you know, debate, this is very controversial, right, because how much inflation are you sort of putting into the pipeline? the fed wants to have higher inflation. they kind of told us that, but they seem to be saying a little bit of inflation is good and we could control that. >> do you think they can control it? >> it's a big risk. the fed sort of is putting a lot of chips on the table now. it's a big gamble. >> what's your gamble? come on, you told us both sides of this argument so far. >> those are the two arguments. i would be cautious. to me the economy is slow not because monetary policy is too tight, not because the fed's balance sheet is too small, because we're going through this de-leveraging cycle, we have to

let it go through, the balance sheets have to adjust and this is not necessarily going to make it go faster. >> so this ends badly? >> let's -- >> how does it end? couple per mutations. >> a couple. one is you get inflation a couple years from now and it can't be controlled. second per mutation it doesn't do anything and you have another leg down in the economy. third per mutation, sort of like the goldilocks scenario, somehow the de-leveraging happens without much pain and everybody's happy. that's a little too cute. what you're seeing in the gold price in part is this uncertainty that there's a good probability we get one of these two bad outcomes but nobody quite knows which one. >> when you look at what happened to commodities in the past week, you have a view, bernanke going to take responsibility for this? >> look, the price of gold moved

in anticipation of qe3 and it's moved since. i think it's hard to point at other things. food -- we've got a drought, you look at metals, they're all over the place. iron ore has come down a lot, that's all about china. so it's really not about -- you can't lay every price move and commodities on qe. you can place probably a couple but not all of them. >> let me tell you about a some comments from charlie evans, this is one of the first set of official remarks given by a federal reserve official since the qe3 statement. he says this was the time act with the problems we face and the potential dangers lying ahead, it is essential to do as much as we can now to bolster the resiliency and vibrancy of the economy. i'm optimistic we can achieve better outcomes with policy accommodation. is your question the efficacy of the program and whether it actually works or not? >> it will "work." the question is how much. we are going to get a bit of a bump in the economy, not sure

how much. it's possible that they're trying to get ahead of the fiscal cliff in the sense that even if congress acts to pull back the amount of fiscal tightening you get you probably are going to get some fiscal tightening next year, 1.5%, so they may be trying to give the economy a bump before. >> dino there's a question as to whether it gets to the people who need it the most, seniors who live on fixed incomes who can't deal with the low savings rates, if you have people who are paying higher prices, you can make the argument or not but if you're paying higher prices for oil, gasoline, food, if qe3, the bad end of it, you live with all of it and don't get the benefits if you're at the bottom of the income level. >> one of the arguments about the positive aspects of qe3 it's going to help the housing market because you're going to push down mortgages so mortgages are going to go down or have gone down 25 basis points. the question is it price holding back the housing market or is it

insufficient equity that the homeowners have? is it tightening credit standards? is it the backlog of paperwork? >> trying to get a bank to loan to you, you don't have an 800 credit score, not an easy thing to do. >> was a mortgage rate of 3.5% really holding back the housing market? i'm not convinced. >> when you look at fedex's numbers today, and you start to think more broadly about where the economy really is, you think what? >> i think that it's telling us something about asia in particular. fedex is, a lot of this weakness in fedex is driven by asia, i was in china all of last week and you can kind of see the slowdown in china, which is really about part of it is investment, a lot of it is expor exports. you're seeing the weakness in demand in europe, the weakness in demand here, and china's feeling the effect and that's feeding through into fedex's volumes. i'd love to see the actual breakdowns but that's what they were hinting at a few weeks ago in their warning and seen in the last two or three earnings reports is weakness out of asia.

so we are having the slowdown in china, europe is not growing at all, we're struggling. this is not a time when you got the global boom in economic growth. >> thank you for painting that pretty picture. we'll have more from dino throughout the show. when we come back, we'll talk more about the impact of quantitative easing and fixed income, what it means to some of those saver, when we speak with barclay's michael pond and in the next half hour, jack gentlemen pardon, president and ceo of the american petroleum institute, he'll weigh in on the rising gas prices on the economy and the november election. up next, earnings central, we'll dig through fedex report with an analyst who covers the stock. stick around. "squawk" will be right back. oug. now you don't have to go to a bank is

is. welcome back, the fed's decision to launch another round of quantitative easing has some bond investors changing the way they think about inflation targets. joining us is mike pond, head of global linked research at barclays. we were starting the conversation what the fed has done. we've heard several people say this is a change, at this point they have really taken a whole new turn. what is your take on it? >> that's right. we think this is essentially a regime shift in how the fed is conducting monetary policy.

they're not just looking forward, they're taking an account of history and saying that given that the economy has been slow, even during the recovery, they're going to be more stimulative than they otherwise would be. this is a game changer when it comes to inflation expectations. they're not saying they're going to target inflations but they're indicating there will be accommodating toward higher inflation outcomes. >> the fed has always had a dual mandate, one to watch out for the unemployment rate, the other to take care of inflation. in your view is this putting the unemployment rate aed half the inflation? >> for now, given that the unemployment rate is well far from their target, whereas inflation is running about their target. back in 2003, then governor bernanke talked about this conditional response to unemployment rates saying as long as your inflation is, target is credible, then you can focus on reducing the

unemployment rate. here they're saying they're on equal footing. this is a change even from bernanke. >> so what's the danger in that, mike, or is there a danger? >> the danger is inflation starts to rise, that feeds in through inflation expectations and inflation expectations eventually become unmoored. so far we've seen a 30-basis point rise in breakevens which in the scheme of things is not much and nothing to get the fed concerned. we think you'd need to see 3, 3.5% breakeven rates before the fed starts to blink on that side of their mandate, we're just over 250. >> we've had people who have come in, including kevin warsh who say exit is a four-letter word and hard to imagine how we get out of the strategy. >> we certainly think there are risks, chairman bernanke is basically saying the risks of moving too early are much

greater than moving too late, so they're willing to risk allowing inflation to run too high because they're concerned the economy could be stuck in this slow growth relatively low inflation for too long. >> this is a high brow conversation, mike. what does it mean for the average person on the street. >> they should be more concerned about that inflation than they have in the past. >> what should they do with investments? >> what the fed is trying to get consumers do is be fearful of inflation and spend the money now. >> or put it in something that is -- >> we think as far as investment its real assets and within fixed income world that means investors are shifting alocations towards t.i.p.s., relative to nominal treasuries. >> bill gross tweeted central banks, i'm looking back but something along the lines central banks are the place where bad bonds go to die.

what does that mean? >> you look at valuations in the nominal treasury market it's hard to say there's great value over a long-term, long-term horizon so the fed is taking those on, because investors are trying to push investors out the risk spectrum. >> sell bad bonds, buy good ones. what are the bad and good ones? >> t.i.p.s. offer value within fixed income. i'm not a credit expert but clearly the fed is trying to push fixed income investors out into the credit markets within fixed income out of nominal treasuries because they're creating low yields. >> and as jim cramer said, this is a fed you can't fight. you would agree with that sentiment? >> that's right. they basically announced they have an unlimited balance sheet and aren't afraid to use it. >> mike, i thank you a lot. >> thanks a lot. as we have been talking about, fedex did report better than expected first quarter earnings but the guidance has investors concerned. joining us now on the "squawk" news line is christian weth

wetherbee, analyst for citi. we had some body language, they conceded things weren't as rosy or the company did. anything that takes us even further in this latest report? >> well i think when you look at the volume particularly on their express business they were down 5% here in the u.s. and that was certainly weaker than what we were looking for so it appears the current environment for them from both volumes trading down and moving into the lower price, lower premium product and also moving into the ground business, coupled with the weaker economy seems to be impacting and i think that's what's driving the fiscal second quarter guidance below. >> we think of volume of packages delivered and in a slowing economy, maybe people send less or that business, that business isn't as robust so fewer things are being shipped but we don't always make the point that people are willing to

forego the urgency for a cheaper method. is that really what hurts their numbers, in a weak economy? can we draw more conclusions about the economy from that fact than others? >> well i think what you can look at is within that product mix you definitely have some growth on the ground side which is typically driven by consumer activity around e-commerce so that is a secularly growing piece of their business. the manufacturing side when they preannounced early in september is really where they're citing most of the weakness and that impacts their express, which is kind of their higher revenue per piece move, higher margin moves in the air at least and that is part of the problem they're seeing, so it's a little bit of a two-fold situation with the consumer through e-commerce doing relatively well, the manufacturing side being softer, impacting express. >> we're trying to glean whether the economy itself, how much we can actually derive from what fedex is saying here about the overall economy, where kind of

our theme today, we talked about the shock and awe from the fed, and whether ben bernanke and company actually knew something was worse than they thought or whether they're doing this because they have a dual mandate. do you think that the economy is worse than we think right now, christian, from fedex? >> sure i think from fedex as well as a host of other transportation companies that we've gotten information on over the course of the third quarter, it would imply the economy is in a soft state here in the u.s., we've gotten trucking companies, preannounced at the downside, you've seen september volumes across all of transportation be weaker than expected and remember fedex's quarter ended in august so this is a further bolt onto that but yeah the bottom line answer is the economy is in a soft period right now, no question about it. >> christian, earlier in the broadcast i raised the question, do you think they sandbagged the earnings guidance. they did that on what looks like september 4th, so two weeks ago.

as you said the quarter ended in august and now they beat. >> when you have to warn about the second quarter, you can't help them. >> i'm curious how you think about that. >> well i think you look at the components of what they did in the quarter, there's three main divisions, the express division, the ground division and freight division so it's a smaller trucking division and that's where the strength was that beat our expectations. the express and the ground business are really their two core business or package movement and both were roughly in line with expectations so it seems like it was a little bit more driven from what has been viewed as the ancillary business. that beat relative to the previous guidance. >> you don't have a cynical view of this, christian. do they sit around thinking that let's lower down to where we can be? that's a horrible thing to

imply? >> i suggest if you look at fiscal second quarter guidance coming in lower than people's expectations that it doesn't necessarily imply things were all that much better. i don't think so. maybe i'm naive but i'm not necessarily cynical. >> you're probably right, they will probably beat the second quarter. >> they'll beat second quarter and might third quarter. it's too far out for them to figure out. >> christian, thanks, we appreciate it. >> i'm going to get in trouble on the e-mail i'm sure. rising gas prices bringing up familiar arguments to lower the pain at the pump like tapping the strategic reserve. how does the political calculus change in an election year, in the next half hour we'll talk to jack girard, president and ceo of the american petroleum institute. and mitt romney on the defensive after those comments he made at a private event surfaced on the internet video in the next half hour we'll talk to nbc news political director chuck todd.

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welcome back to "squawk box." in our headlines greece says it will meet its nominal 2012 deficit reduction targets but the country's finance minister warns athens faces growing strain because of the deepening recession. his comments come as pressure increases on international creditors to give greece more time to catch up. in the meantime in spain,

investors are piling pressure on madrid to request aid and trigger an ecb bond buying program. spain's benchmark ten-year bond rising to just over 6% today before falling slightly. when we come back, the role of energy in the u.s. recovery, we talk to jack girard, president and ceo of the american petroleum institute about the effect of gas prices on job creation and economic growth. also we have some breaking economic numbers, we'll get the current account numbers for the second quarter at 8:30 a.m. eastern. right now as we head to a break look at the u.s. equity futures, dow futures down by close to 30 points, s&p 500 futures off by 3 points below fair value, this comes after a down day for the markets yesterday. and a big f. for the spender who needs a little help saving. for adding "& sons." for the dreamer, planning an early escape. for the mother of the bride. for whoever you are,

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welcome back. we're just seconds away from the current account data, yeah, for the second quarter, rick santelli is standing by at the cme in chicago, steve liesman joins us on set and we're continuing to talk to dino kos, we're going to talk to you about

some fed stuff. >> you got fisher, evans, interesting both sides of the equation. >> and we talk quite a bit about whether they really see something or whether they just have -- >> i think that's a good question, because the fed has to worry every time it does something. you want to do the data first? >> rick, the numbers. >> the numbers are 117 billion, actually 117.4, and that's of course the second quarter current account deficit. we're coming off a reviewed 137.3 down to 133 and change and even down to 133 and change, it was the largest since the quarter ending of '08 so it's moderated a bit, 117 kind of fits into the loop, if you look at what we had for the previous quarter before the revised quarter was 118. so you know, it's better than expectations, looking for a number in the 124 camp.

it doesn't seem to have made a huge difference in the market but we're down about a handful of basis points this morning. we see the equities are a bit lower and oh my god, yes, it's true, the dollar index is actually high sore we have to of course monitor, because the dollar's pretty much the whipping post for the quantitative easing programs. back to you. >> steve liesman you want to talk current accounts in. >> one small issue, it's not small, it's a big issue. first of all the current account's probably going to deteriorate in the current quarter in part because of higher oil prices, put that aside for a second at the same time you have a weakening dollar which looks like it was sparked by the qe3 act by the federal reserve which could improve the terms of trade, help exports and ultimately help the current accounts so there's two forces here. the question, and i think that the federal reserve would see the weakening dollar as a

welcome outcome from their qe3 policy, as much as some people believe the better policy for the united states would be a stronger dollar. one of the bright spots of the economy has been the manufacturing sector. i don't know if dino you want to comment on that, whether or not the fed is trying to engineer a weaker dollar. >> they would never admit that, but you know, when they've talked about how qe works, that's one of the transmissions when you scratch beneath the surface, yes, one of the transmission channels is the weaker dollar. >> but reporting on the story would not be complete without mentioning two fallouts from that. the first is a weaker dollar is inflationary on the import side, eight n not necessarily decisive. the other thing that's more of a quandary you would expect that europe would want a weaker euro, and that america would want europe to have a weaker euro to the extent it would help europe so we can't apparently have our cake and eat it, too. >> everybody wants a weaker currency right now. >> it's the contest for the

world's ugliest currency that everybody wants to win. >> everybody wants the weakest currency and i'm not sure that the u.s. necessarily sort of has thought through it to the degree that you suggest that they want the euro to be weak. i think the american administration usually wants the dollar to be weak. >> i know there are a lot of economists and a lot of people who are central bank observers that think what draghi needs to do is talk down the euro, to seriously help german exports, make germany richer and help the peripheral country so to the extent we'll have a stronger euro right now, that's not helping europe. to the extent europe is not being helped is not helping the united states. folks if you're thoroughly confused it means you're paying attention. >> no european official has talked about wanting a stronger euro for years. they all want the weaker euro. >> why they keep talking about lower rates, you keep holding steady with rates. >> becky you are as usual a genius in that regard. the thinking that i've heard is that ultimately the ecb goes to parity with the fed at zero or

zero to a quart per. >> what are they waiting for? >> that's a good question. what are they waiting for? the idea being if you have a single mandate you are less free to move your currency when you're doing that. the latest number was 2.6% inflation in the eurozone, so given that mandate constraint, they can't do it. the fed can look at 8%, 9%, 10% unemployment and say with a forecast of lower inflation down the road, i can move now to zero. >> it seems to me central banks make uhm the rules as they go aening lo, when they'll do all of the extraordinary things to say yes this is in our mandate and we can go along with it? >> there's no better evidence of the fed making it up as it goes along than what happened with qe3. i will tell you i have never seen in my time covering the federal reserve which is longer than a decade now an academic paper from michael woodford presented at the end of august at jackson hole, we talked about it, become policy in less time because now when bernanke is giving us the forward guidance

to say even when the recovery begins, now admittedly they've been talking about this for a while but woodford crystallized it in the paper lsats don't really work. what works in nonconventional policy is forward guidance. >> go ahead. >> forward guidance, telling the market that when things improve, we will act differently. changing the reaction function, that was the theory in woodford's paper and now bernanke essentially made it policy. >> i know we looked at the dollar index and it was higher. when we looked a couple hours ago it was up against things like the swiss franc and the yen, still down against the euro. at this point 1.30 but it's above 1.30 still. >> i want to make one quick comment on evans. i thought evans was emphasizing the defensive nature of this move more so than the positive nature of it. there is a balance in his speech but he basically seems to pin the major reason for the fed

acting on the global headwinds and the potential for further downside risk to the economy. he says it's going to help the economy but ultimately when you read his argument certainly the first part of it is saying because of the slowing global economies, because of what's happening on the fiscal side of the u.s. the fed needed to act to ward off worse outcomes, rather than saying this is something that will lead to positive outcomes. that's in there but don't feel like it's emphasized as much as thought. i don't know if you remember but it was on this show, was it june of '11 i think it was or even '10 that evans made his comments we need to start targeting unemployment and inflation and the board has come to him. the board has come to evans. >> this is a bit of a transition fr targeting which just announced a few months in january and now they're shifting to what the economists called essentially price level targeting, because that's essentially what they've done. they've kind of done it a few months after they announced a

new regime. >> we have to move on but we need to explain the concept of price level targeting. it says i'm not looking at the rate anymore. i want to get back to a place. i don't want to get to a speed, i want to get to a place and it's a change. >> we will talk more about that, we have made comments on it this morning. thanks to rick and dino will be staying with us for the rest of the hour. the gop presidential campaign playing defense yesterday after a video of mitt romney drew attention on the internet. now that video was surreptitiously recorded and it was provided to the liberal magazine "mother jones."

joining us is our nbc news political director chuck todd and chuck, this is one that a lot of people are kind of scratching their heads about. there are two trains of thought.

one is that he said exactly what a lot of conservatives believe and this is what this election is all about. the other is should he apologize or not? what do you think? >> well, look, i just sometimes in these cases you watch how the campaign reacts. they're clearly nerve bus this, they called a late night press conference, he was in california for a fund-raiser so it was late on the east coast, did a 10:00 p.m. press conference and i don't understand why they called it, they called it to essentially say he stands by the remarks, though he could have said it better and i think what he's finding himself caught in is this idea that he's sort of writing off all of the 47% that will never be with him, in a way that, you know, and he's arguing that okay, he's just feeding red meat to a rubber chicken fund-raising dinner. that's one way to look at it. it's a pessimistic view to already feel defeatist, if you will, when you're trying to say hey, elect me, i'm the one that's going to bring a better

day, i'm the one that's going to bring economic optimism again, so you know, i think he does still have to answer some questions there about what exactly did he mean, because he sort of implies that entire 47%, you know, they're just relying on the government and this or that and while the figures may be accurate on a technicality, a lot of those folks are elderly and by the way, he's winning the senior vote. >> the question to him was how are you going to win? he goes well, 47% i'm not going to get their votes, and so if you just look at the spirit of the remark, then when you say if you say that, what was the word, the impolitic way he phrased it. the word he said they don't know but he said, yesterday the people he was talking about he said they don't want responsibility -- >> victims. >> they see themselves as

victims. "business insider" it's henry blodget and almost like "mother jones" most of the time and i was shocked with the latest tweet, they have 18 charts that show the rise of different government housing assistance, new high, medicare, it's because of baby boomers, they've got 18 different charts each showing more and more dependency on the federal government. there's no doubt that at this point in time, i mean 70% of government spending is now on things, of government spending is depending on programs like this, more than ever before so that's the thing. but most people i'm seeing on the right they're saying don't apologize for this. >> don't apologize and i get it but it's, the problem is, it's the same thing, there are more to the remarks which were interesting where he starts slicing up the electorate and had he stopped at just simply saying look i have 47% that aren't going to vote for me and left it there. >> not wanting to take responsibility in their own

lives, same things said. >> you're right. >> you think it's worse than guns and religion? >> here's the thing. timing is everything in politics. >> if he had more time. >> imagine, had candidate obama said "cling to your guns and your bible" not in april, but in september. >> right. >> do you really think he would have carried pennsylvania? do you think he'd have been answering for this? timing is everything in politics and that's been mitt romney's story the last three weeks. >> you're nbc's news director. is this a one-day story, two-day story? how long does this go on for? >> everything is a one-day story now. i do feel like it's as fast as things go. you know what i mean? we're on sort of this ridiculous -- >> by noon we will have forgotten about this. >> it's weird, that's why i questioned the decision last night to call a press conference because he sort of said okay, are they panicking? well, yes, they are. okay, we now have a factoid to prove, a data point the romney

campaign believes they're in trouble with this and have to respond but they didn't really have a response. >> is it a way to speed up the news cycle, let's call a press conference tonight so it's a one-day story instead of a two-day story come this time tomorrow in. >> that was the intent but didn't seem like romney had a lot to say. romney himself said he's got to find the 5% in the middle. the 5% in the middle, they don't like the harsh language. these are suburban swing voting, a lot of them are suburban swing voting women, places like northern virginia, arapahoe county in colorado, and the hard edge of the republican party that has cost the republicans for instance senate seats in virginia, senate seats in a senate race because the democratic party was successfully able to label the republican candidate out of the mainstream, too hard edge, unsympathetic and romney is play into that narrative. >> the people it appeals to are the people he already has, doesn't necessarily go to women -- exactly. >> one other aspect of this,

he's not a nimble candidate. can you ever imagine george w. bush, ronald reagan, bill clinton, you know, these guys were pros at events like this, and it's a reminder. >> it was provided by jimmy carter's grandson, that doesn't get any stranger. >> who is obsessed with this, mad at romney for what he's being saying about his grandfather. politics is personal. >> beautiful. >> i've always said it, politics is personal. >> chuck, thank you. >> all right, guys. up next, jack girard, president and ceo of the american petroleum institute. "squawk" will be right back.

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gas prices have risen more than 50 cents per xwal in the past two months and that's been putting a big strain on consumers. joining us is the american petroleum institute's president and cio, jack girard. thank you for joining us this morning. >> you're welcome. >> let's get right to it. who is to blame? >> well, gas prices are a function of the cost of crude oil. of course the crude oil price has been moving up since about july, and so at the end of the day, there's a lot of factors that contribute to that, and what determines the cost of crude oil, not the least of which is the ongoing unrest in the middle east and a number of other economic factors, including worldwide demand, what the production is here in the united states, et cetera, so there's lots of blame, if you will, to pass in a lot of different places but it comes back to market fundamentals, and market expectations.

>> and can you explain then, i don't know if you can, what happened yesterday with the price? we saw that big drop. >> i was reading some of that this morning and some suggested it was a technical glitch, a fat finger as i guess they called it on the street. i'm not sure we know yet what happened. it will be interesting to find out. i know the cftc commissioners, regulators already said they're going to look into it so i think it's pretty mature to speculate what happened yesterday, other than the fact there was downward pressure on price. >> you know, jack, we've had a discussion here this morning about what is potentially happening with japan looking to import some of america's natural gas prices, some of america's natural gas that's been discovered here. what do you think about that? my guess is you're behind the free market economy on this. lot of people say we're just getting to the idea where we could find a way to become more energy independent from places like opec, countries that hate us. what is your take? >> if you look at the history

over the past year or two, we've really had a game-changing situation inspect united states, producing more oil, states like north dakota the number two oil producer producing close to three-quarters of a million barrels a day, well up over where it was four or five years ago. the natural gas station the price dropped from $13 a few years ago to a little over $2, $3 now and that's what is stimulating the recovery in the manufacturing base and many other multipliers across our entire economy to create jobs. we think the worst thing for a government to do right now is to intervene. we have vast natural gas supplies, clean burning natural gas. our carbon emissions are down at 1992 levels, not because the government intervention or policy but merely because natural gas is now displacing coal to generate electricity in this country. we look at japan, which has

really had an energy review in the post fukushima world, they're looking now to import more federal gas, the worst thing for to us do now is to limit that. i was talking to the talking toe yesterday. we're hopeful there's a report coming out of the administration in the next few months that will confirm the best thing for us to do now is to allow the market to work, to produce our energy right here in the united states, create jobs, put downward pressure on the price. >> hey, jack, we've got to run. i know you're a supporter of governor romney. real quick, if he wins, what happens to the price? give me a prediction. >> i think it gets back to market fundamentals. he has an energy plan that says let's open up the united states to produce opportunity and natural gas. that's a good thing. that's what we should be doing in this country. >> we'll leave it there. >> thanks a lot. coming up, we'll head down to the new york stock exchange for the latest biz from all

state. our college savings account. how do you think it happened? not sure. i think something we bought a while ago turned out to be something else, annnnnd, i remember a lot of other stuff in there had the word "aggressive" in i is everyone okay? well, now, yeah. who knows later. ♪

welcome back to "squawk box," everyone. in our headlines this morning twitter announcing changes to its profile changes and a new profile app.

earlier this hour -- >> what we heard over and over again from our users is they want to bring more of their personality to their profile pages. so today's changes are all about bringing that personality forward, more medias forward, more photos forward, so it's much easier to see these media experiences and flip through them. >> julia boorstin will have more later today on cnbc. right now, though, let's get down to the new york stock exchange. jim and david join us. guys, what do you think about the fedex announcement? >> in keeping with what they were saying, i mean basically the last preannouncement was don't ask anything good out of us and then the stock goes from 87 to 85 and then 90. basically they're consistent with saying things aren't that good. >> they certainly weren't lying. they seem worse than we might have anticipated from the pre-announcement. >> right. i think they're very good at understand promising, overdelivering. the stock always seems to have a bid underneath it.

i don't think today will be any different except today's bad out of europe and it kind of has an ugly feel to it today. >> we did talk to an analyst who said this is consistent with what you've been hearing a lot from transporters, truckers and beyond, that we're in a slow part of the economy. would you agree we that? >> yeah. ben bernanke is looking at the same kind of data and realizes that things aren't so hot. amazing that everyone thought it was a political statement. i was talking to david off-camera saying, hey, he's got this data, it's really nothing to write home about. >> but it's not disastrous. last week we were thinking, oh, my gosh, look at the size of this. we must be heading right into another recession and fisher said, no, it's a dual mandate. congress gave us this. inflation's dead. they're looking around at what

we need to do. why not, jim? >> do you think it's worse than we think? >> i don't think it's worse than we think. it depends how bad you think it is, i don't know. >> 8.5% is a recession. i don't know. it's nothing to write home about. i come back to the idea that corporations are differencet from the economy he's talking about. >> he said it's 2% around the world. he said 2%. he didn't parse it down. 2%. you know, you get over 100,000 jobs, it's not great, but you're not headed back into a recession. >> i totally agree wiyou, joe. i totally agree. >> okay. david, i need you to agree with me too. >> in my heart, i would never say that, but i -- >> i love you, david. copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor.

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