and we look forward to having you back out here again soon. >> you'll stick with the national league? >> of course i will. and the red all the way. >> right? >> and i'll stick with the afc, as well. >> but i can count on you for the rest? >> yes. >> thank you. have a great weekend, everybody. we will see you next week. maybe i'll see you at 7:00 in the morning. join us on monday. "squawk on the street" begins right now. >> the apple phone 5 blowing into the big apple and other parts of the eastern time zone this hour. the gadget is debuting in stores today. welcome to "squawk on the street." i'm carl quintanilla, david faber, it's like new year's eve in many ways. we'll see if we go out positive. the dow continues to ride a 4 1/2 year high.

have not had a decline of 1% or more in about three months. some continued news out of europe, as well, continue to read every little tea leave regarding spain and rajoy. we'll talk about that, too. our road map this morning begins in hong kong, paris, now new york city where the iphone 5 goes on sales today. lines are long despite claims about apple's problem maps. >> dow is up eight friday necessary a row. will today make it nine? it's also quadruple witching day. >> earnings in line but revenue is a bit light as hardware sales tumble more than expected. can the company continue to steal shares? >> and define what is troubling other luxury retailers boosting its forecasts. comp stores are up more than 45%. we'll start with the iphone 5. apple's newest iphone finally hits the streets today.

the phone is virtually guaranteed to be a best seller with apple taking more than 2 million preorders sales within the first two hours. shattering last year's record. apple could announce as many as ten million sales this morning. his worst case scenario is 6 million. apple stock trading at a new all-time high in the premarket. the nypd guys topped at 22 locations and reports out of cities like osaka where they're being stolen by the hundreds in some cases, which i mean the demand is going to be intense this morning, guys. >> this is -- these are happening. the heir to what the macintosh was like when steve jobs was available. this is a company that just is an entertainment company and they know how to throw a show like i've never seen. that said, there was a very critical article in the "wall street journal" this morning about how the map section is not great. i love google maps on apple. but it doesn't seem to have

any -- well, it's not -- >> sparing. >> this is a remarkable thing and it's going to help the gdp. >> the front page of the journal, as jim said. "l.a. times" calls this the biggest failure of io6, calls some results absolutely horrible. and i wondered this morning on twitter whether or not we would be making such a big deal of it if is there hadn't been a relative job disappointment, as well. >> i think everyone is waiting to see where the vision ends. we know that jobs hated google. so this is something that was necessary to fulfill the vision. yes, we read all these things about bad, bad maps. remember the phone came out that had the bad antenna? apple can adjust. but right now, i don't want to cancel my contract. i don't want to break my contract. >> there's a financial cost associated with a bad maps app. about 25% of the mobile ad revenue that was spent on mobile ads were spent on things

connected with maps last year. >> it's really important. >> so it could have a financial impact in the end, but i think that it's getting a lot of attention simply because they switched away from google, a competitor, and they're going to tom tom. so everyone is looking for a reason to say, you know what? that was a mistake and this rivalry is a good one to follow. >> it's funny, the critics don't like it about this one aspect, and the critics about he other aspect said it is positive. what i'm always surprised is what are these people using? the people in line now, were they using research in motion, nokia, this morning, blackberry u-flagged at 4:00 a.m. >> they want the newest and latest. some of them are like wozniak, went to australia to get online there. >> he's an odd guy. good guy, though. >> oh, my god, great guy. >> steve jobs, totally the

figure in the book. >> some are like that, they want the latest and the newest and they want it right away. >> 6 million of them, 10 million of them. >> there are people in line with stacks of cash and they're going to buy as many as they can and they're going to bring them back to wherever the i-phone 5 is unveiled. >> have you ever heard of a product that is in such demand? >> this tends to be, you know, a tickle me elmo or a cabbage patch doll, but certainly not on a global scale, right, and not something sma everybody, even without kids, can relate to. on the map thing, we have some of the entries you can make into apple map and what it gives you instead. i think the brooklyn bridge is our first example. there it is. >> not looking good. >> doesn't look like the brooklyn bridge. the journal has an example. you ask for the golden gate bridge and it gives you a marker some four miles away.

>> looks like the bridge in "i am legend." >> do we have eiffel tower, as well? >> there's the fifth avenue store. >> of course, they can find the apple store on the apple map. >> accurate. >> there's the eiffel tower. >> it is an awful tower, it's just not the eiffel tower. >> wow. >> yeah, look, this is the kind of thing that apple -- there's someone in apple right now who is being fired and another person who is coming in and doing a better job. >> so google has had years to work on its maps application, a very important one. in fact, run by the lady who is now running yahoo!. right? and apple is not as far along in the evolution of that product, a very important one and one that is, as you pointed out, a way you get to so many other things that derive revenue, whether it be a restaurant or a store or some sort of commerce. >> they talk about first strike advantage. we were discussing online today google trucks who go through the

streets and take pictures of street views. there was one in our neighborhood the other day. google has had a lot of time to not only refine their images, but their algorithms, right? so you can put in -- snet of for monte brothers, you put in bros and it's going to find it for you, jim. >> i love the way my house in summit looks on google. >> is it bigger? >> truly, you might say it's bigger. remember that? >> yes. how can i forget? >> the place i have in mexico, it has three angles, i found in my irish public book they directed me to some of the best publics and i was never lost once. that's my kind of device. >> it is. now you're going to get to the eiffel tower. >> in ireland. >> it's going work out well for you. >> it's a lingering question, though. there's no question that the demand for the iphone 5 is strong. there's a question about whether

people will be satisfied because of the lcd sources, sharp was one of the three suppliers of the lcd screen which is much thinner than other lcd screens that have touch sensors in them. they only started shipping those lcd screens last week. there's a concern that perhaps there won't be the demand met, but the question is will that actually decrease sales in the long run or will it just push sales forward? >> i think eats a cult. in in a cult, you wait. it doesn't seem like, oh, i can't get the phone. i'm going to go and switch to another phone. that's why i say this is a phenomena that you start thinking, okay, now i be how apple got to 704. because it's generous, as we would say in law school. there's nothing like it. nothing like it. >> all right. well, let's talk to broader markets here. apple would be part of the broader markets. but the market overall is continuing its winning streak,

up eight days in a row, looking to make it nine for nine today. it is also quadruple witching day with future expiring on the same day. quadruple witching day occurs four times a year and historically september's day has been positive for the markets with the s&p 500 closing higher 75% of the time over the past 12 years. so not a bad stat here. it does help that we have this positive apple bid to the market, apple, of course, being a huge component of the market. >> and remember, every friday we come in and say this will be the weekend that the chinese act. so we've got a -- the shorter have to cover, the long say china is going to do something dramatic and then you come in monday and china did nothing. >> and then you have dalio talking to sorkin, a fascinating series of interviews where he says china gdp is in the vicinity of 6%, that you have to have some goals, that he's worried about an economic meltdown, that he's worried

about the economy forcing classes to begin warring with each other. not bullish tone on dalio today. >> and he laid out the doom, that negative scenario, but he also -- i also can say, look, he says it could be avoided. it didn't seem to be etched in stone. that was a fabulous interview. not etched in stone always gives me hope that the forces who follow him -- and many do -- will not commit financial suicide. >> dalio talked for a long time, as well, about the great deleveraging is and that is the overarching theme of these years that we've been going through. his performance has been nothing short of remarkable. over the last few years, incredible. and, of course, given the enormous ties of that hedge fund complex, if you will, which is even more amazing. specifically, when they get really big, most hedge funds lose their way. they stray from their core competency and start to put up less than stellar returns, not

the case at all with dalio who is macro focused and this is the world in which that has been the way to invest. >> remarkable interviews. southern europe going to be in charge. the weak men of europe get to be in charge, the sick ones and the ones that are healthy seem to give way. i thought that was an incredible insight. >> meantime, got some incredible news, as well. shares trading higher as investors shrug off the company's first quarter revenues miss. revenues slipped feeding the concerns of a broader slowdown. quarterly profit did increase 11% and they did come in in line. interesting discussion on the call with ellison. the question is how do you pivot a giant company to the focus on the cloud and he talked about the challenges of getting everybody motivated, saying we were doing this thing, now we're all going to do this thing. >> directv crashed. they were in the procter & gambles business. this is a remarkable call for two reasons.

one is that the confidence that they exceed at a very tough time, operating cash flow, 16% of projection, the other is how stupid people are who follow this company and trade this company. this stock was hit almost as hard as tipco was hit. those who don't have the time to read the conference call are doomed to defeat in this market. they didn't listen to the call. they traded off a headline number of revenue. when it turns out that that was not what was driving the stock and shame on the people who sold this stock down 99 cents, 1.02, without even waiting for the darn conference call. >> they sold it before the conference call, before the guidance, before any color on the guidance system which is very, very good and they're talking a lot about the growth and how they're expecting 100% growth in demand for that computer system. the one negative spot, though, is the sun acquisition. that continues to come up as a mistake. they continue to talk about it

as we're going to get to margins again that were presun margins. everything is presun. we'll get back to presun and hardware sales were down 24% in the quarter. >> that's been the wrap, the stock hasn't gotten hit because of it. larry ellison is an amazing man. there are very few people i genuinely fear in the sense if i were competing against ellison. now, mark does not fear him. they're fremenies, mark runs sales force.com. a lot of what is in this, they're competing against ibm, but i suggest they're competing against venioff. he doesn't like to lose. >> would he rather be loved than feared or feared than loved? >> like solid. just a guy you don't want to go against. >> why shouldn't i be concerned that revenues are not growing? why shouldn't i, as an investor,

be great? why shouldn't that concern me in some way? it's an enormous company with a 160 market value known as a growth company is not increasing its top line. >> what happens if things get better? the business will go to him. if things get better at dell -- i don't know if dell is going to come back. if things get better at hue let packard, i don't know. i think oracle is a winner. just a very smart conference call. yes, the sun microacquisition, not great. mark hurd, very much a team player here. mark hurd used to be at hul yew packard. >> let's talk about michael chorus. the company says it will earn more than it originally thought in the second quarter. kors also saying its quarter to date comp store sales rose about

45%. if you pull back the curtain as to where they're seeing the most growth, it is 50%. same-store sales, 4.5% in america, 16% in japan. so they are seeing growth in europe, despite what the likes of a burberry are telling us. >> i feel like i cannot stress hard enough, burberry is a screw up. they got the wrong merchandise and the wrong price. in the end, retail is having an eye, having control of inventory. kors seems to be toemthly in control of inventory and they have a great eye. pbh, same thing. vf corp., eric wiseman talking, europe, a positive. you have the right merchandise, it seems to trump anything. pbh is saying one of the reasons things are so strong are europe, eastern european travelers, that's code word for russia and asian travelers, they go to europe and it's a big deal to

buy kors. they don't just go there and knock off kors in china. fabulous. factories of course are not fit. but i do think that there's many travelers who come and buy the high-end product and think that it's the greatest thing in the world, it's working. >> the other thing about kors is they have different price points. so they really hit a broad swath of consumer and so if one is not doing as well, they can really get it from every single demographic out there. >> if the kors outlet at the mall style that i like to go to, it's next to a burberry. the outlet center that i like to cash and kors stores are jammed. i think, again, it's the rice

pricing, the right merchandise at the right time. but these are remarkable. they're on fire. and it does remind you that if you short kors, which people clearly did off of bur berry, you are getting your head handed to you today. >> it's always been this way. we're not designers. it's harder to judge, do they have the right merchandise than is their balance sheet clean. >> animal print. >> my dad and i used to camp at a place called franklin mills. the best -- i'd had in my career is a santos. my dad said, all you have to do in a mall is sit there and watch the register. the santos people say, what are you doing? i said i'm watching your register. >> i thought it was like a campground. >> no. it's another place to hang out when you've got time on your hands. no one came and no one used the register. so i did that with burberry. nobody was buying anything. what are you doing here?

i said i'm watching the register. kors, it's like an apple store. what? >> no. are they lining up? >> it's a register. >> when we come back this morning, as smartphones and tablets flood the market, the command for wireless data has never been higher. we'll talk to the ceo of american power in an exclusive interview. see how the company is keeping up with that demand. one more look at future as we said at the top, eight fridays in a row have been the same. wile try not to jinx it. k of te. introducing the entirely new lexus es. and the first-ever es hybrid. this is the pursuit of perfection. trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer

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>> the excitement is unreal. you can just feel the thing that's bringing everything together. >> wa does it look like down there? >> aits awesome. it's amazing. >> sheer pandaemonium. the amount of energy that's down there, you can't even actually put that into words. it's pretty incredible. >> today is probably not going to be a whole lot different. a lot of the articles interviewing people in line are interviewing people who have done this multiple times. >> there's camping out. there's some people that have been camped out for the last

week in new york city. can you imagine? >> have you ever camped out for anything? >> for anything? no. not even for fun. >> doug kath, you asked what's as big as this, is this bigger than the beatles, or not? >> remember how california was to get the beatles? >> on itunes. >> is it bigger than the beatles? i've tried to get beatles tickets, but i was too young. >> i still can listen to the beatles every day and enjoy it. >> incredible. >> jobs didn't like the single act, didn't like rubber soul, didn't like resolver. probably didn't like the single album. he liked sergeant pupper, though. >> he was a tamborine.

>> i'll tell you, i still want to get his boot legs. >> of dillon? >> of dillon. >> worthy of your attention, what does he think about it? stick around for the answer. his mad dash is up next. much more "squawk on the street," straight ahead. humans. even when we cross our "t"s and dot our "i"s, we still run into problems -- mainly other humans. at liberty mutual insurance, we understand. that's why our auto policies come with accident forgiveness if you qualify, where your rates won't go up due to your first accident, and new car replacement, where if you total your new car, we give you the money for a new one. call... to talk to an insurance expert about everything else that comes standard with our base auto policy. [ tires squeal ] and if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life.

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care down. they're saying a lot of stuff in this. broadcom, qualcomm, these are well represented within the new apple iphone 5 st micro. sony make the battery. one of the disappointing things around yesterday, star works had this press conference and people felt that they didn't have enough apple/iphone content and the other giants that they have are getting killed because of the apple iphone. sky works down five yesterday. could have been an overreaction. qualcomm and broadcom have been viewed as the best way to play the iphone. sirius logic not mentioned in the teardown. but they're a sound company. >> and these guys joining the growing list of hikes this week, as well. >> they gave their mid quarter update, it wasn't positive. look, i'm not crazy about tech here, but i am crazy about tech

in apple. >> we'll see you after the break and we'll get the opening bell and the last trading day of the week when we come right back. [ male announcer ] if you believe the mayan calendar,

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>> all right. there's the opening bell. for the week, the dow is up 300%. so we will see if we close in a positive or a negative. right now, realty capital, a real estate investment trust. the company had its ipo here yesterday. and over the nasdaq, green extreme. benefiting steps to end family violence, a charity fund-raiser to help victims of domestic violence. as we kick this off, some out of firm. >> there's a really incredible issue today. it doesn't taste like chicken. i'm eating a bit of crow this

morning. this is the deutsche bank. very honest. they downgraded and upgraded he's worried about a price increase not sticking. container port being the single best current indicator i have always felt of the u.s. economy. you don't get a container board increase at home if business is bad. trade up, gold up. dollar, perfect down a little. futures up, shanghai up. that plus this container board fall make me say, wait, the nay sayers, be careful. i still like the u.s. >> and the home builders continue stronger today. there are a lot of bright spots within this report. the bag log was up 33%. average selling prices were up 7.8%. delivery, new home deliverieses were up 7.3% and we see this igniting a fire underneath the home builders across the board

as well as the derivative plays we've seen higher on the back of this recovery in the housing market. they've been a classic screw-up. they set back the whole home building field that time and now it looks like these stocks next week, i think they're going to have a die na might quarter. these are homes that are not -- the american place. these are american place. uniquely american and it's very positive. >> on valuations. >> they have. >> toll brothers, another 52-week high in today's session. so for all the skeptics out there, they seem to be proven wrong for now.

>> four or five years ago, 57. so you would say, oh, man, menard's moved too much. stewart miller doing a fabulous job there like his father, leonard. i find you have room to grow there. >> menard's in the street, looking at bank lending. they are ownership of credit related instruments, up for the biggest quarter over quarter, the biggest in a while suggesting that if you believe the fed is pushing on a string, that may not be the case. >> in the morning, one of the things that is fannie mae, if fannie mae were to loosen a little bit, the thing that is killing the home building industry, it's a mid to higher end range. david, you remember this from the house foundation. people who have a good income but it's harder to prove, they've been stymies, houses not appraising. if we start seeing lending where you start lending to people who

are sole practitioners, doctors, dentists, lawyers, that will be good for the 700,000 or $1.1 million which is what you need to see ignite here. >> because you don't want to get back to the days of the pick a pay, which is how much do you want to pay us this month? it's gone 180 degrees the other way in terms of, you're right, appraisal and the rigidity of lending standards. although many would argue, better than than what we had. >> great deleveraging. >> well, that continues and that will only continue for years to come. >> i want to get your take, jim, on norfolk southern. that was one that we saw by the end of the day yesterday. it would have recovered after being digested the news. it didn't. it, again, is struggling to the green here on msg and also the entire railroad sector not really gaining too much steam at this point, either. there's a real question as to whether or not if we are to believe what you're saying and that is that kohl's is will essentially gone, secular down

turn that these guys are going to have serious issues in terms of replacing that volume. >> it's not going to be void by a 3% yield, maybe has to go to 4% yield. norfolk southern not really quantified. but you are not shipping a lot of coal in this country because natural gas is so abundant. and natural gas has changed the equation. we're seeing many, many articles about how natural gas has been quickly replacing them. that means there will not be inventories rebuilt and those who say that coal is coming back are not looking at what is a genuine not typical decline in what was at one point the most important fuel in this country. >> goldman has an interesting note about dividends, saying it's going to be a special year for dividends. companies have a lot of cash.

but we did get mcdonald's, we got texan and i wonder if you think that's going to ramp up going into q4. >> i think there's going to be a split. if congress goes democrat, you're going to raise the rate on dividends. dividends are obviously favored right now. but do you think this return of cash scene, rather than just go spend willy-nilly is something that has become deep rooted in the company's consciousness. the buybacks certainly haven't worked. cisco fought back and had been doing much more dividend friendly situations. mcdonald's, there was an inline dividend boost, just like we have better-than-expected earnings, we now have a better than expected dividend. there's an expected boost in which people aren't going crazy with mcdonald's. >> we're on a broad based rally yet again and the strength of this market overall. >> and the nay sayers. >> you've got the s&p 500 up another .5% roughly speaking. oracle is up almost 3%.

across the board, the financials are up again. there is a lot of power behind this market. that can always change and change rather quickly. we know volumes aren't particularly strong. when retail gets in, oftentimes it can go the other way. >> and here is an interesting pai pair. kors up 6%. >> almost like they're in different industries. >> kors is taking shares from someone, interestingly. >> $22.50. >> another 52-week high and they're starting to get some big orders. i don't know if you see the order flow series have included ge. obviously, fiscal cliff issues for any company on the defense and more diversify. >> quickly, if ge is a core position of someone, do you take

some off here and maybe buy down a little bit? >> only if you think there's going to be a dramatic increase n capital gains and dividends rate. you probably want to get ahead of that. we all -- i personally own ge stock. >> i think we all do. >> let it run. >> we're all listening. >> options expired worthless after ten years. >> press your option. what if they reprice your options? >> they were not that far out. it was only 28. >> oh, come on. you can only get so far. >> did that put you in the 47% instead of the 53 fers? >> mary thompson, what is moving today? >> you guys have touched on a lot of what is moving today. we're seeing the dow build on the 52-week high up 39 points. as you mentioned at the top of the show, it is a quadruple witching friday meaning you have the expiration of some indocks stock options and futures. what it means is we're seeing heavy volume. add in, of course, we're going to see a rebalancing of the s&p

500 today. that, too, is contributing. volume right here on the floor right now is about 398 million shares. and that's usually what we see through the close of trading or at least we've seen over the last couple of weeks. one other note, of course, united healthcare is in the dow the 30th. kraft is out as of the close. providing some support to the markets, good news out of europe where there are talks out of spain or talk of spain going ahead with structural reforms in order to win approval for that bailout. that, too, is providing force to the market. germany touched a 52-week high today. you guys touched on kb homes. i don't want to touch on it too much, a surprise lift there. darden restaurants opening close to a 52-week high or actually at a 52-week after after its earnings came in better than expected. what we're seeing there, of course, is strong performance of some of its smaller chains. that's helping with the upset. of course, melissa pointed out kors is higher.

the company rating its forecast. this is having a negative impact on its rival coach today. right now, the dow is up 39 points. back to you. >> let's shift to the bonds. how is it going, risk? >> well, i'll tell you, it's been one full week now since we had that statement which was a week ago yesterday from the federal reserve regarding qe3. let's take a look at one-week charts and see exactly what some of the key credit markets are doing. ten year, our ten-year is down about six basis points on the week. if you look at our 30-year, it's down about 10 basis points on the week. but here is what's interesting. traders down here, most of them that i talked to said that they still hit a home run. not because they took overright positions, but they were taking the steepening trade. if you look at ten year minus two years, it did steepen nine basis points on the week. if you look at the boom, it dropped about nine basis points on the week. so they're starting to track together again after dislocating or dislodging a bit. the dollar index b with very fascinating. let's not look tae weak chart.

let's go back to friday, august 17th. that's a friday. we've had four weekly closes lower in the dollar index. right now, we're a quarter percent higher. so this may not be the fifth. it's been tough on the dollar index. jim, back to you. >> thanks so much. let's check out the latest. energy and metal, manager moving. >> the momentum, though, jim, on this trading form is definitely in the gold market. we look at gold prices right now, that hit 1790 an ounce. open entrance at the highest levels of the year and significant interest is the 1800 strikes in terms of gold openings which expire next tuesday. so there's a lot of activity here on the floor and momentum in the gold market. several factors that may be contributing to it, technically we're looking at the 50-day moving average which is above the 200 day moving average. that's called the golden cross. that perhaps has brought some of the moment yumm players in this market. and then we're also looking at all of the reports that came out during the investment.

it's including do you have ya bank saying looking at what happened in qe1, qe3, expect prices to go much higher, perhaps 1900 an ounce by the end of october. back to you. >> thanks very much, sharon epperson. carl out this morning on goldman sachs on what they believe will be a plethora of special dividends paid in the fourth quarter of this year. now, we've seen a lot of special dividends. we've talked about the great return of share of capital shareholders, buyback, dividend increases. special dividends play an important role. you know corporate america is cash rich. goldman tells us that, as well. but also, you have the potential for the expiration of the 15% tax on dividends. could go as high as ordinary income and that if it were to happen is all part of a fiscal cliff. well, that would make dividends a lot less attractive. hence, perhaps the desire on part of the corporations to return that money to shareholders sooner rather than

later and add in the fact that special dividends tend to be announced primarily or more often in the forty quarter, anyway. take a look at corporate cash balances. we talk so often about this. remember, a lot of this cash does remain overseas which is why you will hear time and again certain corporations say, let us repatriot it. nonetheless, the corporate cash balances here in the u.s. are quite significant and, you know, carl has made this point in the past, also, what are you going to do with the money? that's the question. are you saying, well, we don't really want to put it into -- we don't see any more productive uses other than just returning it to shareholders. by the way, take a look at the corporate cash. we're up there, we're high. goldman goes on to note that when you look at history in terms of a guy for special dividend payment, you do see on average meeting outperformance of total companies with about 3.3% in the few days following, a couple of days following the

announcement and three months following, nearly 6% of these companies outperform their index. but we'll see. >> patti doyle, i had dominos pizza on last night. they did a $3 dividend and the stom stock got hammered. oh, we got the dividend, we want to move on. they got a little leverage and wanted to move on. what is the surprise factor of a dividend? what does it matter? >> or how much is it a result of, to your point, perhaps an expectation. people get in the stock, ride it up, take the dividend and they don't see that outperformance. let's not forget the impact, activist, investors who are much more aware of now in terms of worry about them and, therefore, acting proactively to return some of that cash. >> sends a note this morning, unleveraged free cash flow for nonfinancials up 22% year over year. $133 billion in large part due to lower borrowing costs which

is what you've been hitting the last few days. >> i think that is a key dynamic in this market. we continue to refinance, take money out, return it to shareholders. >> in terms of the goldman report, what i find interesting is they actually identify potential candidates who will issue special dividends. so franklin resources, transeyme and wynn resort are among the ones identified. >> the refiners are benefiting from this incredible finding of oil in this country and the disparity between what they pay and what we pay at the pump and they're giving it back. it's the only revenge i know for paying $4 at the pump while your shopping. coming, ray dalio making positive comments about gold. see what he had to say. that is next. but first, let's take a look at this morning's early movers on wall street.

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with a rare interview with the world's largest hedge fund manager. ray dalio. >> thanks, melissa. i did sit down with ray dalio. on goals, he is not necessarily bullish, but thinks about it as the ultimate insurance policy. take a listen. >> i think gold should be a part of everybody's portfolio to some degree because it diversifies the portfolio. it is the alternative money. we have a situation now where when you have too much debt, too much debt let's to the printing of money to make it easier to service. so all of those things mean that some portion should be in gold. >> warren buffett won't touch gold. >> okay. yep. >> you think he's wrong? clearly you must. >> i think he's making a big

mistake, yeah. gold is like cash. it's an alternative version of cash. so all the long-term, it's not the best investment. over long-term, it's a little bit better than cash over long-term. >> ray dalio thinks there's smooth sailing ahead for the most part when it comes to the market, but he believes there is this tail risk and it's that tail risk that has to do with inflation and what's going on in europe but has them thinking that you have to have a bit of your portfolio at minimum in gold, melissa. >> andrew, just quickly, did he say d-o-d, did i get quick ticket out of the country? dedz gold miners? >> no. people say own gold and guns. he says own gold. >> some people worry about the etf. >> he's not arguing that you should be buying gold as an investment. he's not arguing that gold is necessarily going up in price tomorrow. he's saying, look, i think that

there is some surge chance that there could be a problem ahead. he talked about flying from new york to l.a. and he says, for the most part, it's going be smooth sailing but there could be a bump along the way. by the way, if there is a bump, ben bernanke and the rest of washington won't have too many levers to pull any more and that's when the gold comes into play. >> charlie munger said gold is your -- jewish families so into their garments, civilized people don't buy gold. how he got away with that comment, i don't know. >> and we showed the clip during squawk in the 6:00 hour. one of the things, and he painted a worse case scenario, he talked about the rise of hitler and he talked about in an absolute worst case scenario, that's what he worries about the most. >> as long as they're not filled with tungsten, i think that's the key.

>> note to self-drill into your gold bars, check them out. >> andrew, thanks very much. a lot mover "squawk on the street" in just a moment. >> announcer: coming up, cramer has stocks to critique and he has just seconds to do it. find out if he can. at optionsxpress we're all about options trading. we create easy to use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! strategies, chains, positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? open an account today and get a free 13-month e ibd™ subscription when you call 1-888-280-0149 now. optionsxpress by charles schwab.

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coming up, the biggest consumer electronic launch ever in the history of the consumer world, you bet. we're excited about it. in the next hour, we'll be all over the iphone 5. talk about that, talk about shortages, talk about securing brisbane on his own. should you pinch yourself or just buy the market? and david faber will have an exclusive interview with the ceo of american talis. what more could you want? >> not much. we'll begin with darden restaurants. >> even this morning, i wrote these guys off. olive garden is back. >> conagri, upgraded to ubs. >> performing miracles, he's one of my hero peps.

>> william blair with a buy on nordstrom. >> nordstrom, kors, people making money, people spending money, the stock is going higher. >> continue to avoid into earnings. >> they've met their waterloo. >> bofa upgrades auto nation. >> autos, priet spot in the u.s. economy. >> and with 20 seconds left, emc, still the king of big data. >> this is something i mentioned last night on mad money. there are some sectors of the economy in focus. >> walk us through tonight. what's coming snup. >> i have one of my favorites i love the shop and it's pier 1. this man understood merchandising. when you get your thanksgiving dinner, like i did at the inn, 36 people, you go to pier 1, you buy all those napkin thingies and stuff, pier 1. >> i could see you with the

carving knife at the head of the table. >> i tried the turkey. that thing was in a crisp. wow, thank god i had two backup turkey peps. >> have a great weekend. >> thank you, partner. >> mad money tonight at 6:00 p.m. eastern time. the iphone 5 when we come back, for sale in new york city. we'll get some live shots, talk about the impact on the stock when we come back. when you tak.

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rad map for the next hour, apple's iphone 5 is only as great as the sum of its parts. could possible supplier problems put customers and investor owes hold? we'll find out in a moment. and a smartphone and tablet have the wireless section caught in the crossfire. can it keep up with data demand? plus, a slew of warnings ahead of earnings season. are there some bumps in the road or could we really be in for a rough ride? first, it is two hours since the appear i iphone 5 went on sales here in the east coast. it is the largest consumer

electronics launch the world as ever seen. it's a big day. >> it is. there are still a lot of fans out here. the line mind me, it snakes around and around and around. but the people in line now are new commerce. people who have been here all week camping out, they have their phones, they are on their way. we talked to one guy who had been here for eight days long and he thought it was a really good use of his time. >> oh, yes. most definitely. >> now, apple believes that they can keep up with the demand. that's not true online. if you order online right now, you have to wait three to four weeks to get your phone delivered to your house. so there's a lot of hysteria around this phone, especially because this is a big upgrade. a lot of people skipped the last generation because they taught

it was too similar to the iphone 4. but those who wanted a new phone, a new design, they're impressed. it's hard to not get swept away with the hype. one person who i do know that got swept up and got a new phone, this guy. >> we all have our weaknesses, natalie. >> we're focusing on the iphone 5 fever that's sweeping the country, wa about the components that go into the new phone? could a weak line in the supply chain cause a bottleneck? channing smith is a co poportfo manager, he's a long time apple shareholder. peter, i want to start off with you because there has been concerns going into this launch about the new lcd screen which is thinner than the traditional lcd screen and has sensors embedded in it. we heard about just from reports that one of its suppliers, sharp, didn't start shipping the

new lcd screens until about a week ago. are you concerned at all that perhaps supply summerly cannot keep up with this tremendous demand that we're seeing? >> well, given the level of demand, it's likely we would see shortages. but based on the initial concerns, we think that was false. primarily because we think the street was missing one supplier, namely sony. sony is part of japan's display and has been shipping apple, as well. we think that helps them get north of 10 million units before the end of the month. >> so the concern would be for the calendar fourth quarter, but the concern is mitigated by the fact that analysts haven't ratcheted up their analyst of the greater than expected demand so far? >> correct. we think the street is at 42 to 44 and we think our supply chain work has been a lot more details. that's where we think the difference is on sony and a bunch of other suppliers.

>> are you concerned that investors are bidding the stock higher on the belief that every single data point that they're getting about sales, that that is going to translate into revenues booked during the quarter? and they're not factoring in this potential wrench in the whole thing and that is that perhaps there's not enough screens out there to supply the phone. >> that's the number one worry is supply constraints. but if you look at the demand, it's going to be unbelievable. we saw 2 million preorders within the first hour. so the demand is there. and if you look at the news flow going into the next thee months, it's going to be very positive. we think in this next quarter when they look at the results, they're going to get a pass. the interest is going to be on the iphone 5. we might get the ipad mini which is going to accelerate the earnings and revenue story. the one concern that we'll have

is that analysts start to get overambitious about the numbers and projections. i think that might set up apple for disappoint in january. but in the meantime, there's not a better investment story out there. it happens to be in the most profitable category for apple. so the setup is very good for the next few months. >> channing, there's an article in the "wall street journal" talking about whether elements are going to be able to cope with the lte option which across america is not built up for a lot of those competitors. if there is a problem using the phone, it might not matter for many people whether that is down to apple or their surface provider. >> that could be a concern. i think what you'll see as we move into these faster data speeds, there will have to be increased investment in the infrastructure. we expect to continue to see

at&t, verizon, the big providers investing in their networks. but, yeah, that could be a concern if you start to see performance issues. but it's going to impact everybody. the android phones are going to have similar issues, as well. so i don't see it as a competitive disadvantage for apple going forward. >> peter, i know apple says that the map app is still a work in progress, but the way it's launched and the fact that it's been vulnerable to any kind of criticism, some argue, is not like them. doesn't that give you any kind of worries in this post jobs era inspect. >> well, it does give us some concern. but remember antenna-gate. steve was there, the iphone 4 was launched and literally they were swamped with complaints. so they're not unacquire of how to deal with these situations. and i can assure you that apple is working on this very, very quickly. so a bit of a black eye initially, but we think they'll get it right over the next quarter. >> and there's no cautionary lessons in there about the move to separate their echo system

from google's at large? >> well, the cautionary note is if you're going to launch any kind of new feature on the world's most popular smartphone, the single model, anyway, you better have multiple tests and you better have the software more broadly beta tested and i don't think that happens this time. so i think there's some lesson toes be learned, but we don't think it's game changing. >> this is a very important point because it cuts to what happens with steve jobs' model in controlling all the elements in the model you're selling and the need to move into web services, which is what this is, which becomes so vast. you can't necessarily own or control or add value in the way that everybody else in the marketplace is going to do. this is a fundamental point now, a strategy, is it not? >> yeah, it might be. but apple's ecosystem is what makes this story so special. and the maps issue, it's a

short-term english. they will fix it. and i think apple is going in the right direction. and what thoor doing is strengthening their competitive position and really locking out their competitors. and once you invest in this echo system, and this has been well publiclyized on this network, it's hard to get away from it. the more options and features you offer your users, the stronger that bond is going to be long-term. we think it's a positive. there's strategy going forward and we think it strength bs apple's story in the later years. >> peter, how many iphone 5s are the modeling in? and are you confident that there are screens for every one of those units that you're projecting to be sold? >> well 58 million iphones for q4. of those, we have around 42 to 45 million iphone 5s. we don't feel any concern on the screens there. and in the march quarter, we have a similar number because we think china is going to continue strongly and there will be more demand than supply. we don't feel any issues with

our numbers right now. we think those are well above the street. >> peter, channing, thank you for your time. we appreciate it. >> thanks for having me. >> when we come whack been companies disappointing the street with lower guidance as warnings systems reach critical match. plus, we'll talk to richard burnsateen when the dow is up 42 points. is an awesome place to b. introducing the all-new 2013 chevrolet malibu eco. ♪ sophisticated new styling, the fuel-saving intelligence of eassist, 37 mpg highway, and up to 580 highway miles on a single tank of gas. ♪ the all-new 2013 chevrolet malibu eco. ♪ it has everything to put you in the malibu state of mind no matter what state you live in. ♪ we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations,

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earnings season is about to heat up. although we've heard some warnings, our next guest says it might not be quite as bad as some are expecting. rich bernstein is a cnbc contributor. happy friday. good to see you again. >> good to see you, carl. thank you. the times runs this front page story a few weeks ago. then this week comes in, we get another from adobe and another from norfolk southern. and our question here at this table is when have enough piled up that you have to pay attention and change maybe a bullish view on the market? right. well, carl, what's interesting is most people's favorite stocks from six months ago or a year ago are now those that are disappointing, namely larger cap multi national companies. the reason why, it's pretty straightforward.

the dollar has appreciated over the past year or so and global growth is slowing. so that international exposure has come out and got analyst expectations very high and it's now being disappointed. but ba is interesting is that moore domestically oriented companies are doing a little better. >> does that mean that we all need to pile into the ruffle or going back so companies where there's minimal exposure overseas? >> that's actually been our strategy, to try and shield ourselves from the global economy. and i think that's still an jog going theme. i don't think that mainstreaming has caught on yet that the rest of the world is in much worse shape than we are right now. corporate profits around the world are abysmal compared to what's happening in the united states. >> certainly that's going to

bring down the large indices and i just wonder if you think in the fourth quarter there will be a put from central banks or from hedge fund managers that have to play catchup or could we look at the last three months last year? >> central banks are obviously very powerful. you know the old saying, don't fight the fed. you have to be very careful. but as you stretch out the time rise and what you find historically is there is no relationship between liquidity and stock market movement. but i think what's much more important is your original question, if the profit cycle continues to decelerate, i think that's what people want to think about and that's what people want to position their portfolios for. i still think personally that you want to look at more defensive sectors which i think are less prone to have these big earnings disappointments right now. >> rich, can you put together these two knows in the market that you want to be in more dmfticily oriented companies and

also this other thought in the market that you want to be in large deniesive companies that pay dividend yields. put those two together. >> right. there was a study done by my former firm about six months or a year ago that pointed out that it wasn't large cap multi national companies that were helping the portfolio and providing defense, it was large cap, but it was more defensive. if you're worried and you want to protect the portfolio, then you want to look at dividend paying the domestic companies. >> but you're talking about a rotation within a market that continues to go higher. >> direct. >> isn't there a point at which you pinch yourself very hard on your right leg and you go, my god, the fed thinks it's so bad

they've go the gone better zek buying mortgage backed securities. this isn't right, is it? >> oh, i have all sorts of issues. if you want to talk about the financial sector, we could spend a half an our talking about that. that is a whole different story. but i think what people are missing, and i think it's the most important issue over the next three or four or five years is whether you're in u.s. assets or non-u.s. assets and all i'm trying to draw is the distinct that i think people are underestimating the risk outside the united states and overestimating the risks within the united states. >> he's talking about the stock market rising possibly 40% over the next two years. is he right? >> god bless him. i hope he's right. i'm quite bullish. i'm not sure i'm quite that

bullish, but i hope he's right. i think if that's going on happen, the profit cycle must begin to turn off. you kneed the s&p 500 profit cycle to turn up. i think if that happens in conjunction with lower interest rates, then, yeah, i think you could about the build up. if you had that confluence of events, yeah, you could melt up. >> there also is a possibility, rich, that profit cycle does slow down, but they take all that cash and they buy back 8 billion in stock like nike or they boost the dividend like cisco. >> exactly. or they start buying smaller and midcap companies that kooem keep growing. they're eventually going to have to buy growth. it's my opinion they're going to go down to midcap and smaller cap companies to buy that growth over the next couple of years. >> good stuff. have a great weekend. >> thank you.

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fall officially begins tomorrow, but pumpkin mania is already here. from starbucks to dunkins, everybody is getting in the o on the pumpkin craze. this story was originally pitched to us i think as pumpkin being the new bacon. >> ewe. >> with pretty high praise. because bacon is pretty cool. >> just ago bacon has moved beyond its original intent, so has pumpkin. what does pumpkin cologne smell like -- i mean taste like? mm-mmm. pumpkins have moved beyond lattes. look at sara frye. she's one of the the largest pumpkin producers in the country.

sea shis her pumpkins have done well in the drought. but for the fresh fruit -- pumpkins are fruit -- the fda says retail prices are down 55 mers in a year. >> it seems like folks are holding off a little bit longer this year and waiting closer to halloween. so we hope to see a bigger bump and a spike in sales a little closer to the holiday. >> you know how hard it is to get a live shot out of a pumpkin patch? >> pumpkins are very high in electro magnetism. >> yes. >> simon is joking, by the way. i don't want people to go around and -- >> no, sorry, i was just joking. >> it's a great story. and dana goes places where the camera can't really keep up. that's how aggressive she is. >> pumpkin prices are really down year on year. so not only is it a great fad,

but it's inexpensive. >> can we play the samsung ad that people that are queueing on the pavement because android is the dominant smartphone around the world. let us not forget that on apple's big day. >> the head phone jack is going to be on the bottom. >> i heard the connecter is -- what? >> what does that even mean? >> who knows. >> all i'm saying is that they should have a priority line for people who have waited five times. >> i heard you have to have an adapter to use the dock on the new one. >> yeah, but they make the coolest adapters. >> gal ax 3 didn't work out. >> no. i love the galaxy 3. it's great. i'm just saving a spot for someone. >> that's not cool.

>> this year, ware waiting for all the things we didn't get last year. >> what did you just do? >> touching phones? >> the galaxy s3. >> hey. >> hey, mom, dad. >> thanks for holding on you our spot. >> hey, man. how is it going? >> saved you a spot. >> i moved on. >> you're not going to miss all this? >> i'll tell you what, it we minds me of the old coke and pepsi ad. samsung, i don't think they have much alternative, right? >> or the pc/apple ad. >> you almost have to poke fun at the rival's dominance. >> you say social phenomenon. what else do people cue up for in the streets these days? >> sneakers. >> really? >> yeah, sneakers. >> that's about it. >> that's it. >> but it's -- well, i guess sneakers can be a $500 product. >> coming on the program, we're going to meet the former apple executive whose company is

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about an hour into trading, some of the stories we're

squawking about, 7:3 is on the west coast. on the earning front, oshlg reporting first quarter profit increased by 11%. revenue for the giant, though, down 2% missing the street's forecast. gm recalling 426,000 chevrolet pontiac and saturn is he dans in the u.s. the automaker needs to fix to a condition that could lead to the drivers rolling when the drivers think they're in park. this affects model years 2007 do 2010. and back to apple, the iphone 5 launch could mark the biggest consumer electronics march the world has ever seen. analysts say they expect 6.5 million sales over the next three days. the days are numbered for amazon kindle giants. fortunate for matt mcginnis, he based his publishing start up

almost entire around the competitor's, apple's mobile devices. matt, good to see you. >> good morning. >> and you did work for apple, so maybe that's why you made this bet. are you confident that this is going to be the only system around or the main system that's going to be your vehicle for growth as opposed to android? >> yeah. i think what we're pretty committed to doing is setting whoever the leader is. when the iphone and ultimately the ipad were released, it was obvious those were going to be on top and that's where we kept our best place. >> why is it an advantage for you at this stage of the game to bet on one operating system as opposed to saying we're duel platform, we have ios and we're covered on android? >> we have a web client so people can access on the potential. when you're looking at the market share and you're looking at it for basically the consumer

profile of the people who use the i phone, that matches up nicely for what we offer. it keeps the product process very straightforward. it keeps the message simple for our customers. so being on is make it a very simple business for us. >> and i think a lot of people at home would be wondering what exactly inkling does and you're basic lane epublisher. walk us through your line and why it was match up better with ios rather than another operating system? >> so we've got that great platform that works on ipad, iphone and the web where you have interactive content, 3d molecules, you a kinds of great media integrated into what you probably call the next generation ebook. so being on the iphone, being on the ipad is a natural way for people to consume this kind of contend. talking about the kindle no longer being at walmart, the kindle is great for novels, but it's not a device that you want to learn how to play the ukulele

on. so it's a very different way to consume that content. >> you think textbook and you think somebody like a mcgraw-hill. explain to us how you exist or coexist or compete with the likes of a traditional publisher. >> these are not technology companies, they are content companies. we are building a software platform that enables them to build great content to the ipad, composing it, contributing it and a student to consumer. so we work closely to take their great content that lives in print today and turn it into an interactive experience on ipad. >> given the position you have and the relationship with apple and your history, it will be very interesting to hear what you have to say on a subject that we were discussing earlier, which is that the problem, as many people see it right now with apple and the disappointment that the launch has called and all the newspapers are full of it today.

and this strategy that apple wants to basically own everything that it does and pulls away from google maps and whether actually in the new world in which the ecosystem is getting bigger and the web applications are more and more important, apple is perhaps being drawn into an area that it is illadvised to be in. what would you have to say to that? >> the first would be to recognize that apple has gone from being about hardware to being a company that's about distribution. what i mean by that is they control an important media out into the platform. so they're getting control ooh r of another point unit. tekdly, apple has not in its history shown its metal in really big data. so facebook, amazon, google, these are three companies that know how to take care of huge amounts of data, personalize experiences for people.

apple hasn't shown a proclivity to be successful in that area yet. >> so there is a limit is what you're saying. >> right. i think the map is a side effect of that disease. >> matt, i know you have some thoughts on this war between walmart now and amazon, which we have more clarity on. but the games continue as to what was behind walmart's move. is this revenge for smartphone apps that allow you to comparison shop and does it set up a broader war between two retwaling giants? what do you think? >> i think it does to some degree. but i spent some time at walmart a last week talking about their strategy. walmart is looking for lower priced items, they're looking for value items, and i think that when -- they're not doing a very brisk business in books in walmart stores. i actually think it just comes down to simple revenue per square foot. i think the decision between walmart and -- the decision for

walmart to get rid of the kindle is probably really rooted in fundamental retail metrics and not something you should read a ton into. that's my take. i could be wrong. in the meantime, you're looking at a live shot of apple's flagship fifth avenue store. for more on apple and the man at i funny kwief doors, our own jackiey angelo was live in jersey. do they have the ability on the lt network to deliver what the dmers are expecting? of course, this whole question of the subsidy, it's a very big moment this week for apple. it's at&t that might be paying some of those bills. >> absolutely.

and that is a big issue for the company. but first let me set the table for you here, simon. we had black iphones running out in the last 30 minutes or so. of course, they were waiting for many days in new york, but you only had to wait since 3:00 a.m. in new jersey to get your hands on one of those coughetted phones. at&t isn't telling us how many phones this store had, per se, but we estimate that 150 to 200 people have come through these doors and gotten the new phones. most shoppers already had the previous generation of the iphone, but they couldn't resist that urge to upgrade. the android was giving them problems, too much glitches and too many upgrades needed. and at&t wasn't just selling phones today, they were selling accessories from case toes screen shields to those new chargers. a lot of people here telling me the new charger is annoying, but it didn't deter them from buying the new phone today. keep in mind, iphone sales are an important part of the

carrier's vision. at&t users told me it's the family plan and the talk and search features that copies them from coming back. they are the leading competitor in terms of sprint and verizon and the smoin sales. i asked a lot of people, why didn't you go to the apple store? they said one, we thought the lines would be shorter, but two, we were looking to trade in our phones, we were upgrading plans, changing plans and they were very friendly here, very helpful in the customer service and that's what brought a lot of people to this story. >> interesting. jackie, thank you. when we come whack, we'll talk bandwidth.

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welcome back. perfect timing to speak with our next guest. with new smartphones hitting the marketplace, the demand for wireless data is going to be skyrocketing. can the supply spectrums keep up with innovation? we're joined by james, chairman, president ceo of american's 49 thoes broadcast and communication sites all around the world. a lot of them are right here in the u.s. is this an important moment not just for your industry, but overall for the wireless data industry, if you will? the introduction of the iphone 5, which is going the allow people to do stuff on the 4g networks they haven't done before? >> right. i think it's the transform yagz event for the wireless industry. really for consumers, as well. what this does is it takes the most popular device with the most applications and brings it into the most modern wireless

technology related to being operated in the world right now. so you'll be able to do much morrow bust things as a consumer like face time, mobile, not just wi-fi, those kinds of applications. i think they will be very popular. >> are you also going to want to throw your phone through the window because you're not able to do them? face time, for example, first time on mobile. so you're talking about actually talking to somebody with your mobile phone and their mobile phone. that takes up a lot of bandwidth. >> it does. and the wireless carriers that our customers are strive to go be able to deliver that signal where people are going to need it. it's a level they're going to use it. and it's going to be a multi year process. it will take six to eight years to roll out completely. and every year along the way, there will be more equipment put on more towers and that's where we come in. right, of course. that's good for you. people have to make their appointments and put more construction up on their towers. >> that's right. in the u.s. we're building 250

or so a year. in indian we're building 250,000 a year. and we're partnering with a carrier. this worked in the u.s. and has worked for about ten years, but we're taking this business model to places like south africa and brazil and implementing it there. >> are they further behind us when it comes to technology? >> yes. in a place like south africa and mexico, they're just now implementing robust 3g services and we're now into 4g. if you go further back in the technology curve, countries like ghana and india have not started on -- >> you're in ghana? >> that's right. >> it's very stable and our partnership with mtm which is the largest carrier and we work our way into that market. >> now, it's going to take how

long to have a fully robust network. >> i assume there may be some problems there in terms of actual using the phone for all the potential applications it has. >> well, not necessarily because the carriers are working with the number of subscribers they have on that phone over time to serve them. so there are 300 million wireless subscribers in the united states. it is very exciting, but initially 10 to 15 million will be on -- only 10 to 15 million will be on that device on this network. so there is time, as people buy the phones over the next few years and trade out their old phones for the carrier toes meet that demand. it's a complicated engineering problem, but they can do it over a multi year period. >> right. people forget what goes on behind the scenes. there's a number of algorithms and there are visits to towers like yours, aren't there? >> that's right. >> people climbing up there and adding equipment as a result of trying to make a morrow bust 4g. >> exactly.

and the national carrier in the united states has about 650 to 650,000 sites, many of them on our towers. and every time they need to change a site, they're going to send a crew out to do that. that means they have 50,000 to 60,000 construction jobs they'll have to schedule over to next number of years to get that network fully expanded. >> it's a lot of cap ex given how much they're subsidizing the phone for apple. back to your business, a fairly recent change. should we think of you as a real estate company? >> i think you should feel we're a growth company that's taking advantage of the real estate trust structure. and by that, simply meaning we're going to be able to have an advantage tax division for our shareholders by electing this kind of corporate structure. and it's not changing our growth path at all. it's not changing our desire to invest and it's not changing our international strategies. we can do it allide restructuring. >> and you still see growth here in the u.s.? clearly internationally, one would expect there will be

significant growing given how many towers you're putting up. but here, it's a mature business. >> it's mature, and in that sense, most of the construct that does happen is on towers that are already there. that's great for our industry because we don't have to invest the cap ex for a brand new tower every time somebody needs a transmission. so we'll grow that way. and outside the u.s., we'll grow through that organic growth, plus the acquisitiones and building. so we're trying to ladder out our growth terms internally so that this will go on we hope for many, many years. >> all right. i carry one, too, but you have a blackberry. are you going to change to an iphone? >> i have to admit, my order is in. >> it is? >> yes, it is. >> a big change here. do you hear that? thanks. we appreciate it. >> you're very welcome, david. >> guys, i was shocked to learn that one of the board members of apple still uses a blackberry because he likes the keyboard. >> which one? >> i'm not telling you, but i found it out. >> why are you not telling us? >> i don't think he would be very pleased. i'm just saying.

still to come, we go to major upgrades on the apple iphone 5 today. why the old phones might be a gold mine to one particular company. in the meantime, rich santelli is working on the next hour of "squawk on the street." >> morning to you, simon. honestly, folks, you have to tune in at the top of the hour. this is going to be, in my opinion, definitely can't miss santelli exchange. wall street today, it's a picture of carl evans. corporate loopholes and tax laws targeted. when i first read it, i was so happy. they're going to close some of these loopholes. but that's not it. they're going after some of the companies to make sure they pay the smallest amount of tax they legally should. this is horrible. we're going to talk about this and gives you a chance to vote on whether you think tax policy is fairer in a certain instance and that instance, that's the surprise and you'll have to tune in to see what it is. oh, yeah, top of the hour. the equity summary score consolidates the ratings of up to 10 independent research providers

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morning, thema. >> morning, carl. an anti-obesity drug, viva reported that based on

preliminary feedback, the company expects the european medicine agency may not recommend approval. the formal decision of a yes or no is expected following the agency's october meeting. jpmorgan writing thiseu regulats remains around phentermine. analysts are projecting vivus' obesity drug to reach $1 billion in the u.s. and $700 million in europe. the largest impact on vivus, it may remove some of the acquisition premium assigned by some fefrs since lack of u.s. revenue makes an acquisition by a large pharma less likely. arena is trading higher on the news. carl and melissa back over to you. >> thank you very much. gold futures fast approaching a new 2012 high currently trading at 1786.70 or

so. perfect time to bring in sharon epperson at the nymex. >> reporter: it's a bullish momentum that we're seeing here among traders we talked to be othe floor as well as trading desks around the country, looking at a couple of factors, the open entrance level which is at an all-time high, looking at for this year at least they're also looking at what has happened in terms of the golden cross, a short term average going over a long-term average. the 50-day moving average over the 200-day moving average. we've passed that and then they're looking at the sheer fact that the day's high is two bucks away from the high we saw in february which was the high of the year. so all of that on the heels of central fwabank easing is leadi traders to believe we'll see higher gold prices going forward. we're looking at gold in euros which hit an all-time high and continuing to watch as well what is happening with some of the exchange traded fund action, there are a lot of traders that are already prefer owning gold in euro terms but some want to

get the etf and trying to decide is now the time to get the gld, the largest gold etf based on the bouillon or the gold miner's index, the gdx. in this quarter, we've seen the gold miner's index outperform the gld. this is the first time this has happened for a quarter in about two years' time and year-to-date we're looking at the go, ld that is nearly double the gains of the gdx right now and this quarter and these past three months looks like the miners might be the better winners. back to you. >> sharon, thank you very much for that, sharon epperson. i saw some analysis the golden cross could be negative for gold. >> it tends to be negative in the first week, in the near term. >> the last time we had a golden cross which i believe is about two years ago it marked the beginning of a run in gold, which was up double that in the period afterwards. >> still ahead on the show, lots of big movers on today's session. we'll give you all the details. stay with us. copies of my acceptance speech.

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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 while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. well, this is the place where the iphone 5 is being released to the world for the first time in the world and i don't have to wait 17 extra hours to get it in california. >> that was wozy, co-founder of

apple in brisbane overnight one of the first to get his hands on the iphone 5. i'm not sure if i love the fact wozy is doing that. does he have to? >> it's interesting the rationale, i don't have to wait 17 hours to get it in california but i'll wait five hours in australia and fly 23 hours to get there. >> i think he was there on business although i'm not certain. very affable guy, the original programmer for the first apple computer. >> he was the conscience of ap. until many senses in the early days. >> sort of become an external ambassador for the company. i don't think he has to wait in line to get one of these, at least i hope not. >> i would imagine not. >> unless they restrict it. because you very rarely get kind of pictures like hugely ahead of time, do you? i know there were leaks this time around but they keep it secret so maybe they are restricted even at that sort of level until a couple of days in. >> one can only wonder. apple shares hitting an interday high on the release. r.i.m. shares down 5.5%,

besieged again by outages that have since been solved but an outage that hit europe, the middle east, as well as africa, that problem was solved but still highlights especially on the day where people are standing in line and getting their iphone 5s, the disparity in performance. so r.i.m. is down 5.5%, apple is up. look at the other two sort of, i don't want to say pair trades but one is gaining and one is losing, starbucks and gmc, we spoke to the chairman and ceo of starbucks yesterday and over the past couple of days, green mountain shares, on top of a more than 5% loss on the launch of the starbucks single cup coffee brewing machine and look at coach and kors, kors same-store sales up 50% and coach is down 5%. so interesting sort of relationship. >> if you were a long short portfolio manager these are some of the parents you might have?

>> at this point i wouldn't put them in the portfolio but these are the rivalries that have existed among these two. one is gaining share from somebody else and these might be the pairings. >> talking about r.i.m., interesting, we're watching people line up today, those were the consumers, retail buying the iphone 5 but it is finding a place in the enterprise as well reference the last question i asked mr. takeliff from american tower, he has a blackberry but getting an iphone 5, i wonder how often that will take place as r.i.m. has trouble and enterprise starts to accept the iphone. >> interestingly you mentioned coach and kors, walmart and amazon, starbucks and gmcr, some of the corporate rivalries are getting more intense as we go into an era where maybe profit growth is more tough to come by. >> exactly. >> interesting. >> cnbc is going back on the ego hunt, a number of big named name's. >> david's favorite animation.

>> i love the rocket. >> mitt romney and his 47% comments, howard schultz taking on his frenemies at keurig and the iphone 5's failure on maps. the ego trip, go to facebook. m facebook.com/cnbc and who won on the biggest eto retrip of the week, good or bad. coming up on "halftime" the voting begins. >> "street signs" with brian and amanda. >> you have a two-hour window so you better get on it. >> we've done one of these before. >> last friday. >> we did. >> who won? >> do you know? >> no idea. >> nobody watched it. surely not. >> nobody's on an ego trip here clearly. >> i'm told tim cook even though i think zuckerberg -- >> it was tim cook. >> tim cook was the winner. >> should have been bernanke but it was tim cook. >> have a great weekend.

if you're just joining us here is what you missed earlier on. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> i imagine you're on an airplane flying from here to los angeles, you're probably going to get there okay but if you hit an air pocket and meaning if the economy goes down there is not an easy way to reverse it. >> be careful, central banks may also be containing the recovery, because of the distortions they impose. >> this is a cult, and in a cult you wait. this is not, it doesn't seem like it's competitive. like i can't get the phone i'm going to go to switch to another phone. that's why i say this is a phenomena that you start thinking now i know how apple got to $704. they have the right pricing, the right merchandise at the right time but these are remarkable. they're on fire, and it does remind you that if you take, if you short kors which people did

off of burberry you're getting your hand handed to you today. [ bell ringing ] >> all right, there's the opening bell. >> there's not a better investment story out there. this is the biggest product category we've actually ever seen and just happens to be in the most profitable product category for apple, so the setup is very good for the next couple months. >> i don't think mainstream has caught on yet that the rest of the world is in much worse shape than we are right now. corporate profits around the world are bismal compared to what's happening here in the united states. >> some fancy, new animation, good morning for friday, live here at "post 9" on the new york stock exchange. friday has been the best day for the last eight fridays we've been up on the dow. we'll see if we make it nine in a row, four days up in a row, nasdaq up 14, s&p up almost 4 points. kraft enjoying its last trading

day as a dow component before the spin-off, despite earnings guidance for 2013 coming in lower than estimates. long-term prospects for a highly focused international and kraft food group looks strong. united health will replace kraft in the do you. netflix a $70 price target, cantor says patient investors will be rewarded if they jump into net flix in what they call today's attractive entering point. let's get the road map for this friday coming in the next hour apple's palo alto store just opening, we'll take you there live in a second. as iphone 5 mania hits a fever pitch what can you do with your old iphone 4s. plus the race for the white house heating up, we'll sit down with former undersecretary of commerce for economic affairs, dr. robert shapiro. high ferequency at the

forefront of wall street's month, bart shilton, outspoken critic will bring out his thoughts on the new algorithm fears. the palo alto store opening to sell its first iphone 5 and look who is there, our own jon fo fo fortt. >> reporter: good morning, carl, crazy as usual. this has become a choreographing, they do the countdown, people scream, the ecstatic looks, one of the longest i've seen, maybe the longest, just about a block away there's a sprint store they also got the iphone 5, about 15 people in line. this isn't just about getting the phone, clearly the expectation, too. jim muenster of piper jaffray says his estimate is this will be an 8 million unit opening weekend that includes the preorders there. we talked to the first guy in line here, listen to what he had

to say about why he's in line. >> this is my way of paying tribute to apple, which is a great company, they provided me with unbelievable service and friendship as i come to the store almost on a daily basis for several years, taken collapses for several years and i'm also a shareholder in the company. >> reporter: here's what they're lining up for the iphone 5, got one right here. using the maps which is controversial in terms of accuracy, use them in the driving directions to get here this morning, they worked just fine as it turned out. this is something that we're tracking over the coming days and weeks, if the controversy over the accuracy of the maps snowballs. we have to see if the demand for the iphone 5 keeps up heading into the holiday season. back to you. >> jon, we've heard anecdotally from people who tried to get one at an at&t retail space where the inventory has been minimal. if you were to try to buy one would you almost have to go to

an apple store? >> reporter: yes, an apple store is going to definitely have probably a larger stock on hand particularly in your larger cities. something i would try is walmart. walmart was taking preorders and is getting more inventory this time around. it's worth calling ahead to the places and checking to see whether they're getting shipments and if you stay on top of the phone calls you can get a shipment timed just right, don't have to stay in too long a line. >> like getting fresh sushi at a sushi restaurant, goes quickly. thanks a lot, jon. look at this photo at a local fed ek, le fedex, packed to the gills full of i-tone 5s ready to ship out. as the photo shows with the high demand of the new iphone what do you do with your old one? mine is here. how about sell it? a company by the name of gazelle does that for selling it for $116, joining thus morning is

re israel ganod. >> good morning, thanks for having me on the show. >> has to be a big day for your operation. walk us through how it works. i want to upgrade, what do i do? >> it's an exciting day to be here in new york. we call this at gazelle our black friday. we keep it simple for consumers because consumers are excited about upgrading and getting the new one. we offer you a simple way, go to the website on your desktop or on your mobile phone, you go to gazelle.com, look up the model you want to sell to us, in most cases it will be the 4s or a 4 and we give you a quote for the phone. if you like the quote we'll give you 30 days to lock the price in for you which means that you'll get a new phone today if you like it or over the next couple of weeks, transfer the data to the new phone, make sure you're happy with it and ship it to

you, we'll pay for the shipping, send you the packages for the phone and once we get the item you'll get paid. >> right, is the officer price then, is it dynamic or 116 all the time? how rigid are you on the pricing of that used iphone 4s? >> it's very dynamic and it changes by the day. for an iphone 4s as an example, depending on the model, you can get up to $266 for it today. for an iphone 4, you're right, it can get up to $160, $170. what's interesting, it can get over $100 for a broken iphone so you can get good value for those phones. >> how do you procure your own supply of 5s? >> what we do is we provide a service to consumers to get cash for their old models. what we do then with those devices is sell them in a secondary market to extend the product life cycle and find new homes for those devices, mostly in the emerging markets. >> i'm told the most popular trade-in model was the 16 gig 4. is that true?

>> absolutely by far, this was the highest and most popular item to trade in. >> how did you get this business started? i know you were a harvard mba program for a while. how fast are you growing and how do you live in between product launches, because as we all know they don't come around that often. >> we live in an era of very fast product innovation and that was its case back in 2008, we launched gazelle and it's more true today and the last few weeks nothing short of spectacular for us to give you an idea in the moments just after the announcement last week we were accepting 30 trade-ins per minute on the gazelle website and in the last few weeks since we launched the campaign in late august we already made offers for 2.5 million iphones and put it in perspective to the 8 million that apple is going to sell over the last week as we heard from the analysts so a lot of people are excited by upgrading to the new phone and get value for the

old one. >> it will be a busy october and fall, everybody's speculating about an ipad mini. does gazelle extend to things beyond just the iphone? are there other categories apple is involved in? >> the iphone is the most important product today but we cover ipods, mac books, offer trade-ins for high-end smartphones like samsung, htcs and even blackberries. >> there's still a market for those around the world and it is an illustration of just how technology continues to march on and consumers have to jump on the train and off the train. >> might be finally a great time to get rid of the blackberry and update to an iphone. >> israel ganot, thank you for your time. >> thank you. rick santelli has a big half hour coming up, let's get the santelli exchange first, though. hey, rick. >> reporter: hi, carl. is it fair? remember, that's the question. and we're going to give you a chance to vote on this piece and

tell me whether it's fair. now what is the it? let's take a bit of a walk through time, first of all yesterday one of our great reporters at cnbc, robert frank, wrote a great piece, romney fund-raiser host use controversial attack strategy. i read it three times and opens up a lot of things that i did a little further research on. first of all this event was held on may 17th, so may 17th we have this fund-raiser. why is this an important fund-raiser? this is the one where it was caught on tape and even on video about mitt romney's comments about the dependency society and the 46%. okay, may 17th, remember that, also remember the person hosting this runs a private equity firm called sun capital partners, his name is mark ledder and along with his private equity firm and a variety of others, about a dozen, they're getting investigated for what is being called controversial tax implications for some of their strategies.

very similar to what carl levin in the "wall street journal," corporate loopholes and tax law targeted. now let's move forward in time a bit. this references that they're being investigated. when did those subpoenas go out? remember, may 17th, the subpoenas went out mid-july. so the subpoenas go out mid-july. does that not raise a couple of red flags for you? now, if it doesn't, consider this. that i am sure that those subpoenas went out and there was work that went into it so they probably began before may 17th, although they went out afterwards but consider how vilified private equity firms have been for a very long time. that dynamic is in place. now, think about how the tax policy in essence gives the government actually very large powers. you make this monstrous code, you ever tried to read any of it or think about how high and tall it is? but all these little loopholes and nuances, most of them are

there for a reason, lobbyists, whatever, but the power is the interpretation as carl levin is doing. but these firms or mitt romney, they don't do their own taxes, they hire firms, they get certified, they go through audits so it's almost as if it's a bit of a tool. now contrast all that with a quote from james koutoulis, who we've had on many times and represents the customers of mf global. listen to his quote or we should read it. his quote is on the screen and basically the trustee for mf global inc. estate has published a report that leaves no doubt that mf global senior executives committed crimes yet the department of justice has made it abundantly clear they will not prosecute obama campaign contributor jon cor design, however the government routinely attempts prosecution for tax violations against politically unfavored groups for acts that are legal within the tax code that the government itself has

written. the criminal conduct is more and more whose side you're on politically than whether you obey the law. that's james koutoulas' opinion but how about you? is it fair? here is the hash tag, is it fair? on the screen @cnbcsquawk street. tell me if i'm looking at this right. is it fair? carl, back to you. >> rick, we'll get you those results later on. bart chilton coming up in a few moments. sima modi? >> the fda lifting a temporary hold on a study testing a version of viropharma's genetic disorder drug, we're seeing shares rise sharply in today's trading. this drug used the technology from halozyme therapeutics. carl back to you. >> sima, thanks so much. 46 days until the november election.

when we come back imf adviser and former adviser to president clinton, robert shapiro will lay out his take. [ male announcer ] the freedom and spirit of malibu is an awesome place to be. introducing the all-new 2013 chevrolet malibu eco. ♪ sophisticated new styling, the fuel-saving intelligence of eassist, 37 mpg highway, and up to 580 highway miles on a single tank of gas. ♪ the all-new 2013 chevrolet malibu eco. ♪ it has everything to put you in the malibu state of mind no matter what state you live in. ♪

time to talk politics. the latest maris/nbc poll shows president obama leading mitt romney in a slew of key swing states. for more we go to john harwood with details, these are pretty interesting numbers state by state, john? >> they're interesting, carl and problemity for mitt romney.

let's run through the numbers, first of all in wisconsin paul ryan's home state, ten electoral votes, president obama leads by 50-45%. narrower margin than last time but he's still ahead. the state of colorado, swing state in the rocky mountain west, nine electoral votes, barack obama leads by an identical 50-45 margin. go to the heartland of america, iowa, the state that launched both presidential campaigns, barack obama has an eight percentage point lead, this is a state that mitt romney had earlier been doing well in. what is the foundation of that success by president obama? just run through the numbers in each of the states on who would be better on the economy, remember, that is mitt romney's strong suit. in wisconsin, president obama and mitt romney are essentially even, 45-44. in the state of colorado president obama's got a three percentage point edge, 48-45, and in the state of iowa, president obama leads by four points, 46-42, those leads are not significant for their size,

but merely the fact that romney does not have an advantage and carl when you take these three states together they have 25 electoral votes, mitt romney badly needs to take those votes away from obama, because obama beat mccain by a large margin in the electoral college so most of the states both campaigns agree obama will win again, mitt romney has to take states away, there are nine battlegrounds and at this moment, this poll shows that president obama is leading in these three, last week's poll showed another three, ohio, florida, and virginia, obama's leading. so far the only one of the nine that we can see mitt romney having a clear advantage is, is the state of north carolina, carl. >> north carolina, and john to do electoral math, not to put you on the spot, if romney does lose ohio and florida and virginia, is there still a path with the remaining six? >> no, i don't believe there is a path. i don't think mathematically it works. i did a calculation yesterday, carl, i took all the states in which mitt romney was either

leading or within four points of president obama, not ahead in those other states but just down by less than four points, still barack obama had 278 electoral votes, mitt romney had 260. he's got to turn that around, the debates are his next opportunity and a big way to do that. >> october 3rd, john, talk to you later. speaking of politics our next guest says romney's view on taxes, entitlements and personal responsibility are wrong and show romney isn't ready for the oval office. dr. robert shapiro, former undersecretary of commerce for economic affairs, joins us from washington. doctor, good to have you. good morning. >> it's a pleasure to be here, carl. >> this tape has been talked about inside and out and we're not going to do that again, but you do go to some length to compare him to of all people sarah palin. how do you make that leap? >> well, it's really not a leap. this is a man who, and it surprised me that that

comparison came to mind, because this is a man who is running for president, pledging to reform the tax system and the entitlement system, and those comments showed that he really didn't have basic knowledge about either. >> do you not believe that he was talking about political calculus in that event, talking about basically the popular vote and not necessarily tax policy as you're thinking of it? >> no, what i mean here is, he says that for example the 47% of americans who don't pay income tax are dependent on the government for benefits, and are contributing nothing. in fact, that only looks at one small part of the tax system, doesn't include the payroll excise taxes, state and local taxes. when you look at that, that 47% contracts to something closer to 10%. he also identified the 47% who

don't pay income taxes with those people who are receiving entitlements. there is an overlap, but they're not anywhere near the same. in fact, you have many people receiving entitlements who do pay income taxes, and many people who don't pay income taxes and also do not receive entitlements. >> right. >> this is apart from his moral characterization of half the country as being disinterested or incapable of caring for themselves. these people include all of our veterans, all you have our retiree retirees hard working families which push them off the income tax.

if you have two or three children you should only pay income tax if your income is fairly high, a family of five with three children and earning $50,000 doesn't pay income tax. are they not hard working people? this suggests a real fundamental misunderstanding of the nature of the tax system, and the nature of the entitlement system. >> i would counter briefly by saying that it would be dangerous to read as the entirety of his policy on this videotape. he's obviously said a lot more over the past few years. were you involved in any way under clinton in welfare reform? because in many ways that policy is also aimed at the kind of demographic at least that romney's referring to. >> yes, i was involved in welfare reform before the time then governor clinton was elected president. >> was there not a feeling at the time that there is a part of the country that does need to pull themselves up by their boot straps? >> absolutely, and the feeling was we need to give them the

opportunity to do that. we need to give them access to education and training so that they can become productive members of society. look, there is a core that, of the country that doesn't pay income tax and really is not contributing to this society. it's not 47%. it's about 7% of the country, and those are desperately poor people, and disabled people. >> the 47 number has probably gotten larger than it needs to in terms of the discussion, and the rhetoric in this country, that's for sure. doctor, good to have you with us. thank you for your time. >> it's my pleasure. >> i appreciate that very much, robert shapiro. still to come an outspoken critic, bart chilton is in the santelli house and we'll sick rick on mr. chilton in a moment. [ female announcer ] want to spend less and retire with more?

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we've been looking at photos like this all morning long, it's the new apple maps app image of the hoover dam, although you would not want to be near a dam that looked like that. apple maps being heavily criticized for its quality and apple being criticized for its switch away from the google maps app. here's a look at how the two apps compare for the same location, this is tokyo, a little more detail on the left and the cayman islands as well. yeah, not going to help you get around the cayman islands too much. the bells are about to sound across europe. we'll get that close after a short break. stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today

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the european markets are closing now [ bell ringing ] >> this is for the week. we'll get to simon in a moment. so much trading over europe in the next few weeks and days. >> the critical question, is spain going to ask for aid? is it going to trigger the buying from the ecb or is it going to squander the opportunity that has been created? rahoi, the spanish prime minister is meeting with mario monti in italy. from that meeting we have nothing firm that is coming through that would move the markets but importantly reuters is reporting that it believes that next week the spanish may announce they are going to accelerate the rise in the retirement age from 65 to 67. it will be pushed in much more rapidly than 15 years originally planned and additionally that

they might eliminate the indexation of pensions in spain. why is this important? well, because it's the sort of structural change that the rest of europe wants to see. if they lay it out next week on wednesday and say look, this is what we're doing anyway, that could be arguably a precondition to them getting aid further down the line, in other words, behind the scenes according to the financial times they're all working a way to work out a clear path that when they ask for a bailout immediately everybody goes we've already agreed to what you've done. here is the bond buying, immediately for you. so we're not quite sure what the nature is of those negotiations but clearly something is happening, some sort of announcement on wednesday, the big question remains, though, will the spanish prime minister do what has to be done to trigger that buying? because his election prom sis he won't take outside interference and importantly one of the undersecretaries in italy said, and this is really important, in an interview, he said that the program, the bond buying program

for italy and spain will only be activated when a single country is up to the water or has the water up to their necks in the bond market. he was suggesting there won't be any notion of voluntarily going forward, it will be something that is forced on us. we need the spanish to voluntarily come forward for the rest of investor sentiment to keep the yields down as they are on this two-month track because that's what of course draghi is effectively offered them by laying out the master plan. this report we had initially from "the financial times" and reuters has been seen on the euro which is about, excuse me, which has bounced higher and suffered from profit taking. can we have a look at the euro, during the course of the session as you can see and note the way in which spanish stocks are ramping higher on a two-month track, and let's have a look at that. i gave up smoking. >> happens to the best of us. >> i gave up smoking.

month ago. i'm having more difficult now than when i first quit. >> let the weekend begin. >> thank you, carl. >> see you monday, simon hobbs. mary thompson on the floor of the nyse. >> the positive own remains intact but today you see chopiness. keep in mind we have the reweighting of the s&p 500, traders say there's a lot of focus on that and of course it's a quadruple witch, too. the markets took a leg down about a half an hour, a little bit less than that ago, led by the metals market, interesting to note, because within the gold market what we were seeing is gold had approached what they call a golden cross, when you have the 50-day moving average moving above or crossing above the 200, that's a positive technical sign but it appears to reverse that so we saw a pullback in gold as well as oil and the markets took a leg down and we saw a corresponding spike in the dollar, talked to a number of traders, they're not sure what caused it. they blamed it again on the quad witch, the rebalancing, they say

it's one of the choppy kind of days but also some technical levels as you can see the dollar spiking. materials were hurt in this bit of a downdraft that we saw over the last 20 minutes or so, as you can see it's one of the poorer performing sectors today. we are being led higher by telecom stocks, they've been a winner recently along with health care which continued their march higher as do the consumer discretionary stocks which were strong performers over the last couple of sessions. one thing i want to note on this day when you see the reweighting and the quad witch, volume here is much heavier than normal, about $535 million on the floor, closer to what we see in a full day of trading and we have hours to go. >> the first ten minutes were huge according to cashman. >> thank you. for more on high frequency trading we go to rick santelli in chicago with a special guest. hey, rick. >> hi, carl, indeed i have a couple of topics but since you

brought that topic up i have commissioner bart chilton with me. commissioner, with regard to high frequency trade and after the hearings yesterday, do you have a quick comment before i get into other too earl? >> yes, they may have had something to do with the $3 drop in the 60 seconds on monday in crude. bottom line is technology doesn't always do what it woulda, coulda, shoulda. we need some control and we're working on that. >> i like your reference, what do you call high frequency traders? >> they're cheetah traders, not cheater, but cheetah traders because they're fast, fast, trying to scoop up microdollars in milliseconds. >> near and dear to my heart we're on the futures floor and two ways futures people make money, they either do execution or they have clearing business, but with all the firms that have had issues, the clearing business is really the big mighty firms now so all these guys on the floor do mostly give up business, hey, here, in this section right here, how many people here give up business for a major form of their income?

give up business? [ applause ] commission commissioner chilton explain what a give up is. >> an executing broker. >> like these guys. >> like all these guys, serving as the middleman and they actually when they do the transaction with the clearing member they give it up and the clearing member has the rest of it. at that point, there's a technological requirement that we have and it's supposed to be done by october 12th, guys that, says they have to report this but the technology doesn't necessarily work yet so we're working on some leniency, some relief, rick, to try tone sure it makes sense, maybe we put this off for several months and it's appropriate. we're ohhing on that. i'm glad you raised that. guys, we'll be there trying to work on it. >> to further the point more this is options, if i have account x, y, z, saying on goldman sachs, i get execution business, sell 50 straddles at the market, i write that on an order, i don't have the money, i don't do the margining, i get paid so many dollars for that

fill, i hand it to the clearing member, they process it. >> absolutely. >> what they're worried maybe they have to get permission before they do every order, that would pretty much put them out of business but you're saying you're going to deal with this issue. >> yeah, we have a process called no action relief and i can't guarantee we're doing it but i can tell you that if it were me we would do something and i expect we'll do something eminently to provide some no action relief in this circumstance and provide some transition period to make sure technology is there. went dough want to ask somebody to do something they can't physically do. >> the intended consequence to take the type of business that currently can survive in a computer modeled hybrid system with trading and put them out of business. >> sometimes in government we're a little thick headed but eventually you get through. i'm glad you raised it. bunch of guys have raised it in the past and i appreciate being able to explain it. >> you're here for a reason. you're giving a speech at mccormick place, third topic. tell us what you're talking about. >> i'm going through all of the transgressions in the financial

sector, rick, and talking about how there's a need for a culture shift conversation, a culture shift conversation in the financial sector, their compensation structures, just rewarding the cowboys, the guys that are swinging for the fence, rewarding the guys that save them from going under, talking about the volcker rule and technology a little bit more so i'm looking forward to engaging in this culture shift conversation in the financial sector. the bankers don't necessarily appreciate some long-haired guy from washington suggesting it but if they cut out the crap i'll quit talking about it. hopefully it will be a good conversation. >> one thing you can say about commissioner bart chilton he's never boring and i like some of the terms like chee in a and i thank h the terms like cheetah and i thank you for being our guest. lot of counting on bart chilton to make sure it works out well. >> nice way of turning the

entire floor into your studio audience. >> it's the other way around, carl, they've been asking me about this issue for months so that's one of the main reasons we brought him in. >> i have no doubt. thanks, guys. >> thank you. another market flash with the dow up 24. >> the auto name is, carl, autonation, the stock hitting an all-time high after an upgrade at b of a to buy, the analyst writing near term trends for the dealer pint point to further upside, new vehicles sales continue to pick up, the shares outrampling the major indices. take a look at a live shot of the apple store on fifth avenue here in manhattan. the iphone 5 now on sale at stores in the pacific, central and eastern time zones. we'll talk iphone 5 and its supplier components, after a break. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer.

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[ male announcer ] fedex office. now save 50% on banners. coming up at the top of the hour, i-phobe fever, will the sales actually live up to all the hype, and dow 14,000, is it the next stop, as the market continues to melt up. plus facebook's big two-week run, is there still time to get in? our traders make that call on that and so much more. we brought the boys down to your house. hope you'll have us.

>> good to have you. see you soon. iphone 5 mania hitting the globe today. look back at the very first iphone went on sale this is back in 2 tho 7. in 2007. >> the excitement is unreal. you can just feel this thing is bringing everything together. >> reporter: what's it look like down there? >> awesome. it's amazing. >> sheer pandemonium, guys, just the amount of energy that's down there is you can't put that into words, pretty incredible. [ cheers and applause ] >> right here! >> today the wait is over for appleonians who waited in long lines. iphone 5 selling out in one hour in preorders. lance and andrew, guys, good morning to both of you. andrew, in a recent note you said september 12th the event that is when it was announced not likely to be a meaningful

catalyst but we are at 704 and i'm wondering if you are standing by that call today. >> well, yeah, i'm basically standing by the call. the idea was that what we were going to see on the 12th was pretty much what everybody knew already and that's more or less how it's played out. the phone itself is fantastic. the response has been fantastic. so i wasn't sure i suggested it wasn't going to sell well. at that event i didn't see it as a big catalyst. >> lance, you've played with one for a little while. you say in your review apple achieved something remarkable making the phone bigger, more powerful, and even better without changing the way it feels in your hand. >> yes, and i still stand by that. i kind of love the fact that i don't have to wrap my fingers around something that's too large. i think apple's kind of drawn a line in the sand here and said this is the form factor that works for modern smartphones. you don't have to get a bigger

and bigger screen. the android camp will say we love the screen as big as possible but they managed to make the screen bigger by making it longer and it's still lighter and thinner. it is kind of exciting and the mood has been amped up. the apple faithful are excited about this product. >> all that said, lance, you want to try to cut through some of the hype here today and you do admit you're not sure how the 5 is going to hold up once it gets compared to other android names and the galaxy. >> right, well here's the thing. is this a phone that you switch for? i don't know. because it's not really necessarily more powerful. it's not a bigger screen. it's comparable on many features. for example they added pan roh ma shots but that has been on other phones already so it becomes a question of nuance. if you love the iphone ecosystem you're probably going to stay with the iphone and get the latest one but if you're into android and the droid devices

you'll stick with that. >> andrew, where is the real upside here? is it in the component suppliers or is it in apple itself? what would you be trading or holding or vying to hold at this point? >> i only covered ap. some that's the only one i can comment on. >> that makes it easy. >> you know, i can say i expect the demand to continue to be extraordinary for the device for the next several quarters, so if there's places undiscovered, obviously you would at least in my opinion still have some upside and certainly as we look at our estimates for iphone for the next couple quarters we think there is room for upside. >> can you characterize your level of concern about supply? >> easing, i'll characterize it as not as severe as what it was a month ago and that was less severe than what it was a couple months ago. i think they've worked through a lot of the issues and supply seems to be improving quite a bit. >> meanwhile, lance, just talking about the various

components. maps. it's on the front page of the "wall street journal," lance, just how difficult it is to work, how much it doesn't compare to google, but herb greenberg with a good post today says he really doesn't think it's going to make that much of a difference unless the buyer is already right on the fence, what is your take on that? >> yeah, that's the thing. apple made a big decision here, pushed google out, put in their own maps. they're not as good. there's a 3-d flyover mode but it ends fast. there's no transit on apple maps so you are trading in google maps which was good for something on the new iphone 5 that's just okay, but it's software, which means that apple can upgrade it. is it going to make the difference between someone buying this or not? i talked to somebody already and they said absolutely not. i can get an app for that, so i don't worry. >> and now today sort of out of the way, andrew, what's next? we're always asking that.

it's been five minutes but is it about the ipad mini and what is your expectation for october and the end of the year? >> yeah, there's two things that are next. one is just continued sales of the iphone 5. as much hype as there's been around it, the reality of the demand coming through and improving supply could mean numbers come in for december or even above what people are thinking still. and then the ipad mini, yeah, certainly that's a product we still expect will come in the next quarter and is something that we think will be pretty additive to the ecosystem. >> guys, appreciate your time, lance, stay safe out there, and andrew, appreciate it very much. when we come back we'll talk some sports, the nets officially moving into their new arena in brooklyn, the mass save barclays center. we'll go inside the nets' new home after the break.

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♪ times square, not far from there the nation's newest arena is opening for business, brooklyn's barclays center was

unveiled by mayor bloomberg and nets owner miguel prokarov. brian, how does it look? >> reporter: honestley, i've been to the stadiums across the country, it's cool. that next to the barclays sign is weathered steel, they have 600 tons surrounding the whole place and they really want to cater to what this area is like and i'll get to that in a second. the bottom line is it's been 55 years since they've had a professional sports team here and this area has 2.5 million people that's why they catered it to the populations' reputation. historically tough and contemporary cool, inside all black,ulely it i was corrected, slate, excuse me, you throw in that herringbone court and you can see why everyone says jay-z's fingerprints are all over this place but the big man today literally, billionaire owner mikhail prokarov. i asked him what is more

important, profit or popular isn't it. >> we need some time to develop some stores with merchandise, et cetera, et cetera, but it's only the second stage. now we need support of all new york city and we are ready to fight. >> reporter: he's tall, by the way. in many ways they've already won the fight, merchandise as popular as any team in the nba, 11,000 season tickets, that's a franchise record. now that means a lot of eyeballs for barclays and i had to ask, why did barclays pony up $400 million over 20 years when they don't have a retail presence in the u.s.? >> this was a pure brand play for that. when we did this deal years ago barclays was a brand that was perceived to be a big bang from the uk, they didn't have roots here in the u.s. and this gave them incredible footprint. i think it's more important to barclays today than it's ever been. >> reporter: you know it's funny, you said, is it cool? it's the nets, right, how can it be cool but i will admit, it is

pretty cool and prokhorov predicted five years they'll win a title. he has three more years to go and stands by that prediction. >> the clock is ticking on that one, brian. >> reporter: that's right. >> architecturally people talked about the stadium being almost like a wrigley, like in a neighborhood as opposed to the big outlandish stadiums we've seen in a lot of america today. >> reporter: yes, i think that is definitely true. i wouldn't advise you taking your car here to park. i would take the subway, about 250 feet from the actual arena. there's a lot of big retail, victoria's secret, pathmark supermart, a betts buy, a lot of big box retail and some residential elements across here. i will tell you that rents and everything are supposed to go way up, someone was telling me they were 100 bucks per square foot a year ago and now it's like $900 per square foot in some spots. it's pricier to live here but you will be able to go to a bar and meet friends after the game as well so that is definitely a difference. >> and with some of the

renovations of course to madison square garden there will be somewhat of a bidding war to make the experience really nice for spectators. >> reporter: yes. absolutely, lady gaga next year, barbara streisand and jay-z's soldout shows, sold out shows msg would have had. >> brian shactman on the sports business beat in brooklyn. when we come back the people have spoken, rick santelli will have your responses to his is it fair poll right after this.

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a little bit earlier on rick santelli proposed a poll online and i think he's here with at least some results, right, rick? >> absolutely. it was regarding private equity firms, and are there getting treated fairly, is it fair and we've had some interesting responses. jerry writes it's the same as fast and furious, it will be covered up. it's really political. bob writes it hasn't been fay for years but it's never been this blatant. corrupt congress can't/won't fix it. vote 'em out. and we have dutyofyouth goes the other way, says private equity gets special favorable treatment, they are free riders and they know it.

i hope everybody continues the vote, i'm interested in all of our viewers, we have a sharp set of viewers to tweet, is it fair and all the information is right there on the screen, carl. >> there are so many issues to tackle, rick. we have about a minute to play here. there is a report out of reuters today that the troika report regarding greece and their ability to get their finances in order may be delayed until after the election, they're trying not to make too many waves here in the advance of our vote. does that mean the market has a bit of a pass on potentially negative european news over the next 46 days? >> i think that's exactly what it means. to me, many of the issues, no matter which side you're on, on the issues, whether they're going to fix their economies, whether it's a funding issue that's permanently corrected, think spain here but it does buy time and i think time does heal wounds to some extent but the wounds it won't heal are the economic horsepower issues that we learned yesterday, of course, that italy is looking for some bigger deficits and smaller gdp and