andrew ross sorkin is off today. we start things off with the economy. the bank of england and the ecb are both holding policy setting meetings today. that boe decision is due out at about 7:00 eastern time. the ecb, alphabet soup, 45 minutes later. both central banks are expected to keep rates unchanged. we'll have more from our colleagues in europe in a few minutes. in news out of asia overnight, the bank of japan voting to maintain its monetary stimulus. the boj offering a few more upbeat economic views than last month on growing signs that its expansionary policy is working. the numbers are still hard to get your head around. they'll be expanding the monetary base at an annual pace of 60 to 70 trillion yen. >> you added a boj to the boe and the ecb and the adp. so you added another one. >> yep. >> the yen is apparently when you're going to talk about now. >> the yen, in response to everything. look and you'll see what happened with the yen. trading now at 99.83.

all right. let's get more alphabet soup for you. in the u.s. today, adp. the adp employment report is in the headlines this morning. >> what's coming at 10:00? >> at 10:00, well, we get the ism, of course. but also coming today -- >> so confusing. >> for adp, forecasters saying 178,000 private sector payrolls were likely added last month. also on the agenda, we have weekly jobless claims, 8:30 eastern time. and the revision to the second quarter productivity and cost. then at 10:00, as joe pointed out, we have ism nonmanufacturing and factory orders. >> think if this is the first time you tuned in and you happen to be channel surfing -- >> weppi today too. >> let me see what this business news is about. they don't even speak english. what language is that? what is the dow doing? >> the dow? the dow. the markets, the dow is coming

off its best day in more than a month. the s&p 500 and nasdaq had their biggest gains in nearly two weeks. >> and auto sales. >> huge auto sales. >> jackson. >> see the numbers we had, 16.09 million. >> lovely, nice. >> versus something like just over 17 million they were looking nat 2000. people are on a roll again. >> 11 years old. >> they're 11-year-old cars. >> your husband, a new car for him. >> last time i bought a car was two years ago. >> doesn't very an 11-year-old still. >> 15. >> 15-year-old car. >> he likes the classics. >> like me. >> exactly. >> you're not getting old. you're getting better. like tom brady said yesterday. >> tom brady said that. i'm hanging on to diana nyad. she used to work here. she used to work at cnbc. i remember having koconversatio with her in the cafeteria. i remember i gave her the

bearcat -- you can tell what year it was because i gave her university of cincinnati at the beginning of the final four, and made it to the beginning of march madness and made it to the final four. whenever that was in the '90s is when she used to be here. she goes, wow, you gave me the -- i should have taken you up on that. but, yeah, so we were both much younger. >> she's 64. >> i have worked up to swimming one >> she's outpacing you. >> 110. >> yeah. >> in the ocean. swimming through -- without -- swimming through jellyfish. >> last time it was jellyfish that stopped her. >> yeah. she had the mask. she was apparently swallowing so much sea water, she was throwing up the entire time because of the -- that is -- >> can you imagine staying in a the sea if you're throwing up. >> and trying to get water and nutrition and 54 hours. i don't -- when i'm out in the -- when you're in the -- i look at it and it scares me to think of being stranded there.

looking at it, just scares me. >> without a cage, i thought, why? why would you? >> the sharks aren't scary, just the turbulence of the ocean and you can't swim very well when you're -- you get knocked back every time, you know -- >> sharks scare me. >> sharks do scare you? yeah. sharks, smack them. >> still swim in the ocean. >> smack them in the nose, see who -- yeah. i get scared when i see any fish. >> yeah! >> any fish. >> anyway, the futures this morning as we showed you, the dow slois looking like it is indicated weaker. s&p 500 futures off by half a point. nasdaq futures indicated up just slightly. if you look at the ten-year note, this is the story once again, the ten-year note is moving up towards 3%, pushed above the 2.91% we had seen. now sitting at 2.938%. and the question is, can stocks actually hold on as the yield continues to push higher on the ten. >> becky mentioned, the ecb, the boe and the boj and the adp.

♪ abc easy as 123 ♪ >> we're talking about comments interest some fed officials. san francisco fed president john williams says he's open minded about reducing the stimulus this month. he's open minded about the taper. finally. >> john williams. >> yeah. >> finally, good. finally. ♪ >> what will you play for kocherlakota? >> that gentleman you just mentioned -- >> narayana -- narayana kocherlakota. >> that dude, right, he's the minneapolis guy. and he argues that the central bank should actually do more for the economy. so he -- one guy has an open mind about tapering and another one says maybe we ought to just stay where we are. >> what are they going to do? >> nobody wants to go down ten and go back up ten. >> no. >> better be certain this is the real beginning.

>> right. >> look, everything is riding on friday's number. >> and, you know, got some things going on in the middle east apareparently too that it so weird. i just don't, you know, does cost money. sometimes war is stimulative to the economy, but you don't know what the repercussions are for oil and it is just -- it is more uncertainty. just makes everyone sort of pull their -- the analyst spirits get dampened. in corporate news, blackberry's board hopes to run a fast auction process. it could result in a sale of the company by november. the wall street journal reports a special committee of board members narrowed its list of potential bidders. i don't hear from those -- >> who is bidding? >> good question. but those crackberry bloggers, the haters --

>> i even shut up about it. i love blackberry. >> it is funny the way it works in the past. they're very loud and a lot of hubris until the lower the stock goes, the -- the nasdaq says that the system at the center of the exchanges three-hour trading halt had a six-minute outage yesterday for a small number of stock symbols. >> again? >> the processor -- >> do they know what happened? >> no. i didn't happen to place a trade during that six-minute period. that was -- how many of our viewers were in the market trading, even for the first time? it affects such a small -- you got to be able to trade stocks when you think you can't, or the whole -- >> trust in the system. >> exactly. yeah. it is a processor who receives all traffic on quotes and orders for nasdaq stocks. down between 11:35 and 11:41

a.m. for symbols pc through spz. the nasdaq says the issue has been resolved and trading was not affected. a small deal this morning, japan's atsuka farm suit farm acquiring astex for $886 million. this company specializes in cancer products and its product pipeline includes treatment for leukemia and other types of cancer and is indicated a big winner today. that doesn't show it there. that shows it on the chart. but doesn't show it at the top. will move somewhere from the high $6 range up to $8 or so. >> sprint has priced its previously announced bond offering and it now holds the distinction of the largest junk bond offering. the sale increased to $6.5 billion to $2 billion. this offer came in two parts. eight-year and ten-year bonds.

t after a month of anticipation, and running through all of the different potential logos here, yahoo! has actually adopted a new logo. this is the first change for the company since shortly after its founding 18 years ago. yahoo! has been around 18 years? the logo is the one in purple, spelling out the word yahoo! with no letters touching and ending with an exclamation point in full. which one is the new -- the old -- what -- >> they're both new. >> oh. okay. >> so they're using both colors? >> doing it in different -- i guess must depend on the background. >> we need to look at old one. the old one, the letters were touching apparently. okay. i remember when at&t used to be capital letters and then small letters and then back to capital

letter. ge had the old sort of cursive. >> full disclosure, cnbc and yahoo! have a business alliance to share and co-produce editorial content. >> i would say once united airlines said we need to -- >> venator. >> this great -- this great brand, woolworth or something, wasn't it woolworth. >> and they said -- >> how about venator. >> the duke of death and he goes the duck of death. and the guy goes, no, the duke of death. i say it is the duck. i say it venator. the senate foreign relations committee offering a response, 10-7, yesterday.

this is weird for me to watch, ayman. you have a report prepared for us, but sometimes i wonder whether the leadership just goes along with it, but i! university don't know about the rank and file. maybe these guys are just -- they want to be convinced or something, but i see all the weird holes and, you know, where -- the way the congressmen are getting the calls that are 10-1 against. i just don't know what to think at this point. maybe you can help us. >> look, joe, it was a tough vote yesterday. the president got the vote he was looking for in the senate foreign relations committee. as you say it was 10-7 and that's a fairly narrow margin and one senator voted and said he'll wait and decide how he feels about all this. he said they'll begin some committee -- some floor action as early as tomorrow. setting up a vote for next week in the united states senate. but a lot of senators say they're still not sold on the syria intervention. take a listen to senator rand paul from yesterday.

>> i don't see a clear cut or compelling american interest. i see a horrible tragedy, but i don't see that our involvement will lessen the tragedy. it may well make the tragedy worse. >> effective authority of congress and the president is -- >> and this is an authority that -- >> congress should have to give the authorization. >> specify -- >> so clearly, guys, you can see some of the members of the senate committee are fighting over every single word that happened in this resolution, including the word whereas, which got some debate during the course of yesterday. a lot of the senators don't like the syria intervention, not happy with wait this is going, and to your point, joe, it is a very tough vote. and leadership has said they support the president on the republican side, speaker boehner said he supports the president, but he's also said at the same time he's not going to necessarily whip his members into line here. he says this is a vote of

conscience for the rank and file. he'll let them do that they want. normally you see leadership out there putting the squeeze on members to vote the way leadership wants. in this case, that's not going to happen. on the house side, a lot of skepticism yesterday from republicans in particular as they were dealing with senator -- secretary kerry and secretary hagel who were up there explaining the rational for this strike. a lot of house members are deeply uncomfortable with this. a lot of them on the republican side don't trust barack obama personally and they're suspicious about this. and they don't want to go along with it. so whether or not boehner is for it, that's another question. they think maybe sometime toward the end of next week they might have a vote on the house side. that's a timeline here. a lot of questions still up in the air as you said. >> pretty nasty. we see the way they -- you watch british parliament and stuff like that and people have strong views and they all walk out of there, not holding anything against you. there is one thing, it is really weird, because the strange

bedfellows, the far left aligned with the tea party. it is because some people don't -- i kind of fall in this camp, because if you read the steven hayes piece in the journal today, he says changing the murderous regime in damascus should be a goal. a limited taylor attack, and in the senate bill, the resolution talked about changing the momentum on the battlefield. because you got this murderous dictator. but then you see the cover of the new york times, got the poor syrian soldiers or six of them, and there is a prayer being said. this is moments before they're shot to death by the rebels. these are the guys that are -- this is our choice. you got assad or you got rebels that there is some good ones and some bad ones. this -- >> even chuck hagel who was pushing for this yesterday, he's the secretary of defense, he's

up there trying to sell this intervention on capitol hill and they asked him about the makeup of rebel forces. and he said, you know, that's one of the big difficulties here, there is a lot of uncertainty about who these folks are and who the united states should be aligned with in this conflict which is very messy and very complicated. even the guy tasked with selling this intervention is talking about exactly the point that you're talk about, exactly who will we be supporting here. on the other side, you have john mccain who insisted yesterday that he wanted a broader resolution, he wanted that language in there about changing the momentum of the civil war, that's why it went in there and what he's trying to do really is allow the u.s. mulilitary to be brought in to balance the civil war. >> otherwise, what are you doing? very strange. want to hit you, but don't want to hurt you. i saw one guy that irritated me. i'm on the far left. he said to secretary of state kerry, he said, can you promise me you're not lying to us this time? >> yeah.

>> which is going back to -- for all that happened in iraq, obviously, there was some -- i think someone said saddam hussein's generals thought they still had chemical -- they said let's use them. saddam hussein is like -- but to say that -- >> the result is -- >> deliberately lied to -- he was just making a political statement yesterday, ewiyou usi john kerry to make his statement -- it seems to me this is a more reasoned debate. >> can you imagine me asking, just tell me you and the president are not lying to me. convince me you're not lying. >> after iraq, after wmd, after 4,000 american soldiers dead, washington has a boy who cried wolf problem when it comes to weapons of mass destruction in the middle east. >> we have definitely have that problem. here we are, we want a regime change because of wmds in the middle east. >> we have the president of the united states, he's landing in st. petersburg, russia, as we

speak, right now, for the g-20 and he's going to have to deal with a whole range of foreign leaders who have that kind of deep skepticism about u.s. military power in the middle east and what it is that we're doing here in syria. it is very tricky for the president to make that sale overseas and even in his own congress here at home. >> eamon, thank you. the perfect jumping off point. the g-20 is our next focus. syria is a big issue there. the g-20 meeting in russia is where we find steve sedgwick. what a difficult situation the president is walking into there. why don't you tell us about how things have been set up. >> yeah, exactly. the president, putin here in russia, and president obama, have pretty much been at each other's throats this the rhetoric in the buildup to the meeting. we know now that because of the edward snowden issue as well, they will not be talking to each. they were due to have a bilateral one on one meeting with each other in moscow ahead of the st. petersburg meeting.

now we can't even get confirmation that they'll be speaking to each other here in russia. i spoke to the g-20 sherpa, a lady running the russian program from the president's office, all the way through. so quite a close aide to president putin and asked her about five times in a row, will they be speaking? he she said, i'm sure they'll be speaking. will they be speaking to each other? i couldn't confirm that. how do you have a situation where, let's face it, back to basics, the g-20 is representing 90% of the world economy. they are trying to find a way out of what has been a crisis space into a growth phase globally. but you've got the host nation not talking to the leader of the world's largest economy. they're not talking to each other. i said, this is a really big issue. they said, that's true. we must understand how international relations work. you have the rhetoric from the leaders about syria, but there

is a lot of other stuff going on where they are working towards each other. less glamorous stuff, less headline grabbing, who wants to talk about a 15-point oecd tax reformation plan for the global economy when they can talk about syria. i'm afraid to say that's pretty much how the media is going here. all i'm hearing is syria dominates, syria dominates and then speak to the key people. i spoke to the sherpa, the secretary-general of the oecd and spoken to the boss of the ilo, the international labor organization. i've spoken to the boss of the russian direct investment fund. first question, syria dominates, yes? they go, syria dominates no. yes, it is a big issue. it is a tragic issue, a contentious issue in washington in st. petersburg, in new york at the u.n., globally. it is a massive and tragic issue. is it going to dominate the talking and the official agenda here, absolutely not. there will be bilaterals. hollande will speak with president obama. putin will speaks to the chinese about it.

whether there is dialogue across the board remains to be seen. if you talk to me about this very same issue in late june, back when i was with the g-8 and then we recall it was basically the western nations versus russia, we had a lost chat tht then. i said how did the bilaterals go with putin. he said, very well. we're here in the situation now. even if we had formal dialogue what would it lead to? it would lead to similar contention if we had them talking. if all the markets can hang on to the oil price, i suggest many people out there look at the level of syrian oil production. it is not much. other ramifications i think people are worried about. back to you guys. >> very true. he's a name dropper, isn't he? i remember talking to the president -- i asked president obama. hey, what about -- isn't he, though? i was talking to -- >> me. >> you earlier.

thank you, steve. coming up, you know, used to be leningrad. >> yeah, instead of stalingrad. >> instead of st. petersburg. the body is still sitting somewhere, out in the open. we don't do that here. >> no. but they do it in a lot of places. china. coming up, good news for home buyers looking for a jumbo mortgage. and we're going to try on that new samsung smartwatch. i don't know. it is the first one. it is too big, i think. "squawk box" will be right back. ♪ ♪ i've got something for you too. (announcer) fancy feast delights with cheddar. a meal that is sure to delight your cheese lover. now available in the classic form she loves. fancy feast.

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time now for the executive edge. this is a daily segment focus on giving business leaders a leg up. jeff bezos is visiting the washington post for first time since he agreed to buy the paper for 2 $50 million last month. he's meeting with employees including reporters and editors and among his comments reported by the paper, the amazon chief said all businesses need to be young forever. if your customer base age is with you, you're woolworths or venator. the number one rule has to be don't be boring. >> too late. >> too late, you think? >> for the washington post? i tell you, the reason i read the washington post, jennifer rubin. >> okay. you talked about her before. >> i have.

the rest of it is like i'm in the beltway, they tell me things, the economy is the government, the private sector is the government, blah, blah. i go down there and i feel it. and i start getting the stockholm syndrome like you go to europe. if you're in the beltway, you become -- government, government, government. and government runs -- >> an interesting read to see how washington perceives it. >> i think it is going to be great to see -- no. no. i think it is going to be great if bezos shakes things up a bit. and he's already, i told you, who was that -- which guy was it? someone said you better -- it was that guy come on the show once in a while, from ford or from fortune, alan whatever his name is. >> slump? >> yeah. you better declare your politics, jeff bezos. you better say what you are, because if you're not a far left wing liberal, you're not going to be able to run this paper. and he can.

>> bezos knows how to deliver to customers. all about the experience with him. and i'm very eager to see what he does with "the washington post" from that perspective. >> and, you have to explain this to me, because, well, front page story in today's "wall street journ journal," first time ever the average 30-year fixed rate conforming mortgage is 473 and the average is 471. in a free market where there is no government like -- why wouldn't someone who borrows more get a lower rate? when you buy stocks -- >> particularly if you -- that's true. if you buy stocks -- >> 100 shares or more, if you go to costco and buy more, it is less. the reason it is happening now is i think, you know, everybody is looking at credit. if you can afford a jumbo -- you can sell them all kinds of other products too. and you can induce them with a lower rate on the mortgage and then do all their other

financial stuff because they have much deeper pockets. this could last for a while. i'm not surprised. i'm surprised it wasn't like this before. >> you had fannie and freddie and the government playing a large role in the mortgage market, they still do. they're still playing a massive role. >> that's why -- it is subsidies which got us in trouble last time. >> you also want the idea of the american dream. that's why fannie and freddie were supportive on both sides of the aisle. >> we don't really view it as -- >> that's what got us to -- >> we wanted home ownership. >> probably average around 68%. >> one at 70. >> we wanted to push that number. >> you like this. have you read this one yet? >> i have. >> i stau lasaw it last night. >> the question is, do you wash your chicken before you cook it? they say rinsing your poultry before you cook is ineffective of killing the germs and you spread the germs all over the place, including the sink.

>> it gives the bacteria a place to swim to other locates, spread itself out. >> i never washed it before. the idea of getting it all over my sink disgusted me. cook it. i can't believe this. check out this animated germ vision youtube clip. researchers show you with this how the bacteria can ride on the misting water droplets. it is not just going in the sink, but all over countertop to a two to three foot radius. this is like the toilet flush. do you close the lid before you flush it? >> a good rule. shouldn't wash your chicken or choke your chicken. those are good -- >> rules you live by? ♪ >> no, but i do not -- i don't know anyone. >> you don't do what? >> i don't know anyone who washes their -- >> i don't either. >> and -- but chicken, everybody remembers the documentaries where in the chicken processing places, where they rip these

things -- and the feces is everywhere -- >> stop, stop, stop. >> you try to get it out. they used to test in the packages and you could almost find traces of -- why wouldn't you. you're ripping them apart. do you know how many pounds -- both my kids went last night -- i don't know if they'll eat chicken again. 81 pounds a year the average person eats -- >> of chicken? >> yeah. >> that's a lot. >> my son found out nuggets, he couldn't connect nuggets with out in the barn yard. and it was kind of hard for him to adjust to eating live things. the gadget everyone is buzzing about, has an orange band, but this is the new watch. >> the face is pretty cool. >> mine isn't like that. >> mine is a fancy one. >> myine has a digital thing.

look at this. you go like that. did you learn how to do that yet? >> yes. >> this replaces the blackberry or the device you're carrying around, i guess. i didn't understand the whole watch idea. >> you can have all your names. >> i have a photo gallery of all my pictures. >> whoa. i like it. it is cool. not as big as i thought. some of the other ones i had seen -- >> i can understand the idea of carrying this around. i'm not a huge fan of the orange band, but i can understand carrying this around. has a gps thing in it. >> how much does it cost? >> i don't know. >> $300? >> that's not a lot. you wonder what to do -- >> you couldn't get the band on. you didn't know how to tighten the band.

watching you do that, that was, like -- >> a little complicate gld you said it didn't have one -- it had one. >> i get it. you drop your blackberry all over the place, your iphone. >> i like tim cook and wish him well, but i hope -- this works pretty well. >> this is inspector gadget-like and just the idea of not losing it. do you know how many times i lose my blackberry? >> do you really? >> i leave it all over the place. i have to call it to find it. >> i know where mine is all the time. >> that doesn't surprise me. when we come back, the countdown to friday's jobs report. it starts now. we have the adp employment report right after this. ♪

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just one more day until a release of the august jobs report. this is a big one this time around, the fed is watching closely. we do have the adp report coming out at 8:15 eastern this morning. joining us now to talk more about all of it is steven risotto, the mizuho security chief economist and michelle girouard at rbs. is the jobs number on friday, is this the end all, be all for the fed? >> i don't think it is the end all, be all for the fed. it is one link in the chain. i think to a certain extent the fed boxed itself in already. >> you think they have to -- >> i think the market is so anticipating it that they get themselves in a bit of a quandary in their own discussion, if we don't do it, we become more accommodative. they get wrapped up in third and

fourth derivative questions all the time. if they change nothing, they don't add to accommodation. if they begin to pull back, they begin to tighten. i don't buy this argument it becomes less accommodation. >> i would agree with that. tapering is tightening and doesn't even matter. it is a different direction. >> exactly. that's the important point of it. unfortunately, i don't think the data is there strong enough to do it. i think minneapolis fed president said the other day is actually right. i think the discussion about the unemployment rate, the discussion about inflation are all correct. i think you already start seeing what is happening in terms of the slowdown in mortgage activity and the slowdown of housing, auto sales appear to be topping out. >> auto sales were pretty phenomenal. >> they're good numbers. they're good numbers. just not able to get much better than that. doesn't add much more to greowt as we go forward. >> i'm of the pin it is accommodation to a small greer. i completely agree for the market, this is the beginning of policy normalization.

whatever or however long it takes, this is the beginning of the process of which we ultimately do see the fed raise interest rates. >> does the taper -- >> i think it happens in september. i don't think it is as close of a call as the markets may think. like steve said, i think this is -- the fed led us there. to not do it at this point. and if the numbers were really weak, maybe we would see a smaller amount of tapering. i think they want to get the show on the road. >> then the markets reaction to all of that is the next thing we try to figure out. is it good news if we see a really strong jobs number on friday, because we realized, okay, they're going it taper, we get back to a normalization process or a freakout because we think we can't stand on our own two feet. >> back to 3% quickly. we're moving there anyway. we'll get there. the question is what happens after we hit that milestone. traders have wanted to get back to that level. >> at the beginning, it was a pretty harsh and fast turn. but over the last couple of

months, a gradual push. >> it has been a gradual pushback. i think the key to remember this is when the fed announced it would be moving towards qe, we had a situation where the market rallied into it. would it be at 3%, above that, when the fed makes its decision in september? and then we're probably going to see a relief trade in the environment of pullback to a lower level. and then begin the process of grinding higher again. then the data starts to deteriorate again and the market takes over and begins looking at the inflation numbers. they'll sit there an say why are we at these levels and investors are grabbing for yield, which is the dominant issue. >> i agree. i certainly -- that's our true we're likely to see a rally, if you will, a by the fact kind of thing when they sell off into that and then rally back. and there are reasons to think, again, in terms of the rise in rates, how far can we really go when you're still not talking about the fed raising interest rates until 2015, maybe the

front end is anchored, inflation is low. there is a limb how far yields can rise. >> what should we expect with the adp number and the jobs number? >> i don't think it will be different than recent months. there not a lot to suggest market conditions have changed very much. last month was first month of adp overpredicted employment. the truth is, it has been missing i did relatively small amount. i think people use that as a guide to figure out whether people can get any kind of surprise. a big surprise at adp would feed fears of a direction. the message is going to be kind of close to what we have been seeing in recent months, seeing with the payroll numbers on friday. >> michelle, steven, thank you for coming in today. appreciate it. joe, you've been over there playing with your watch. >> chicken? no, i took a picture of you. >> let's see. >> right here. you can see where you are. >> did you put something onny head? >> i didn't put anything on your

head. they look like mouse ears but they're lights. >> push the button again. >> right there. there she is. anchoring. >> halo. >> you point it like this, the top of the watch. >> i was just figuring that out. >> there it is. >> how do you shoot? >> press it. go to apps, press camera, and then it will come up -- pretty cool. does a lot of stuff. there is a sync type thing on here. coming up, are companies becoming more socially responsible? we'll ask a representative from the u.n. next. >> i have a pedometer. it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here.

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the united nations out with its global corporate sustainability report this morning. joining us to talk about it and a little bit about the situation in syria, george kelvey.

not your, i guess, role to talk about syria for the united nations as owe spokesman, obviously. but if you look at a context of economies and that part of the world and how difficult it is to move to progress, moving forward in terms of what economies do for society is when civil war is going on. it is impossible to do anything, isn't it? >> well, i'm talking about all of business and society, my job is to lead the world's largest corporate sustainability movement with now 8,000 companies from more than 135 countries. and business has a role to play in supporting peace. companies can introduce measures

to contribute to peaceful collaboration. we have a big program going on in business for peace worldwide. but obviously politics are another game. >> you don't know how many times we have talked about different countries in the middle east and what the issues are, and so complex, but one thing always comes back, if you have a job and able to feed your family and support your family and have some type of future, it makes a big difference in the stability of the country and the entire region. >> absolutely. we started ten years ago, as you know, poverty was still widespread worldwide in the last decade or so, the biggest progress has been made in human history, reducing poverty. that's largely due to private investment. it is a big story really. business led. >> not a story that make the headlines very often. it is the opposite. >> it is very important that business is responsible and our report documents in a very comprehensive way business in

promoting responsibility to proactively deal with human rights, social government, environmental issues, including the supply chain. in our annual report, corporate sustainability is serious business. it impacts long-term financial success. imagine today, more than 50% of corporate boards and we serve more than 1,700 companies decide on sustainability issues at board level and 65% of the ceos themselves introduce them. that is a big paradigm shift from only a few years ago. yes, there are still big challenges on implementation, especially the tricky issue is human rights, anti-corruption, when you deal with systemic issues or violence. but there is enormous progress and the longer companies are actually engaged in the global compartment, the better their

performance. business leaders understand for risk mitigation and market building purposes, you better be proactive. if you're not proactive, you're running big risks, you also won't be able to trust in communities where you invest, and the big story behind this story really is that today investment is largely about building markets. what used to be resource takers now are market builders. companies have a direct stake in contributing to stability. >> a lot of time they don't need to be told. if there is a timber company, they own timberland, they're going to replace the trees. you know about the tragedy of the commons. if it is not owned by someone, no one replaces it. it is obvious they should do that. i wish we had more time. maybe we'll have you back on again and thank you for everything you do. >> wonderful. thank you very much. when we come back, luxury

vacation s like you've never sen before. robert frank brings us the details. speaking of the good life, a special ride outside our studios this morning. the new mercedes s class. stick around. "squawk box" will be right back.

>> you heard about around the world in 80 days, the wealthy are doing it in 20 days. it costs a lot of money. these are fancy have a indications. >> they're plush. this is one of the newest travel. it's around the world for the wealthy. you get a private chartered plane. you two to the best hotels, you get chef cooked meals, expert guides, all these tours, 80 to $100,000 each per person. they're all sold out. we want to take you a tour of private jet tours around the world. the founder of abercrombie and kent. he is traveling with jeffrey kevenlt he takes 50 guests, starts with a sail down the amazon, dinner with the famous peruvian chef. downhill sledding. you go to samoa, new guinea, bali, madagascar with a lemur

tour and a plantation tour. you get to hang out with lemurs. >> you don't eat lemurs. >> national gee dprafk getting into the act. they're run, six jet tours, the scientists, photographers, all the experts they take to historic monuments. petra, famous sites. they're not for profit. all the proceeds go back to their mission. four seasons getting into the act. 56 guests take a shuttle to four seasons hotels around the world. they start in hawaii. volcano, paddle boarding, spa treatments. bora-bora. sydney, drafting along the river and chef prepared meals, to the jupgle resort in thailand, tanl ma hal, turkey, london, then home. this is sort of for the wealthy that don't have much time. it's a bucket list, you can get

-- >> can you get in all that stuff doing it so quickly? >> when everything is so orchestrated and planned, it's very efficient. you don't have to worry about transferring flights or booking a restaurant. it's all done for you. >> the great wall, okay, time to go. >> you are seeing a lot in 20 or 26 days. that's a good chunk of time. for the wealthy. they want experiences less more than stuff today. it's about the memories and moments. so these trips are all selling out. people can't start enough of them. it's really a fast part of growing. >> it's a big plan. >> 757s, 737s. they'll outfit them really plush for 50 people. it's not quite as -- >> this aber trom by -- abercrombie and fitch. >> abercrombie and kent. >> i know that company. i can't remember what it was from. >> he's the guy that pioneered luxury sa far are is in africa.

now he's taken it around the world. the guy has traveled everywhere. he takes you to his favorite spots, favorite chefs. >> it's not just him all the time. isn't there some outdoor experiences, too, for abercrombie? like rafting or something? >> they do wild life stuff. his core business is africa, these luxury sa far are is. they take you to thedowns of na my bia for a cocktail. >> you know who should have been here, he loves to travel. he been to some face places, like his room was the floor to ceiling windows bs there was a watering hole right there. you are sitting in your room, there is likely ones walking around. see, i can't appreciate this. i'm from ohio. >> you know, i was a correspondent for seven years, i lived overseas. i still hadn't been to a lot of these places. i cover a lot of cool stuff, cars, this is 21 of the things i

was coverling, i want to do this. there are so many cool rivers. >> the river, you drop that in there quick. pretty cool. >> i did live in bali. it was a two-hour flight. you'd go there for the weekend. it was great. travel is one of those things for the wealthy. >> discretionary income. that's where it goes. >> that's right. >> maybe even when you boyuy a yacht. you love your lifestyle. you got to get the accent down, caviar wishes. >> policy decisions from the boe and the ecb, plus a strong auto sales. a key part of yesterday's market rally. we'll hop into the new mer said f class the most serious redesign since 2006. ♪ .

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good morning, everybody. welcome back to "squawk box" on cnbc. andrew has the day off. we have been watching the futures this morning. so far, no major moves. although, you can see right now, everything is sitting around the flat line. >> that is some slight improvement from what we saw earlier when we saw negative futures. we do have adp coming out in a little bit. bank of england is just out, leaving its key interest rates unchanged. let talk more about some of the things we expect coming up, adp is expected in just about an hour and 15 minutes.

the full forecasters say 178,000 private payrolls were probably added last month. also on the economic agenda, we have weekly jobless claims. >> that comes up at 8:30 eastern time. blackberry's board hopes to run a fast option process that could result in the sale of the company by november. a special committee of board members narrowed its list of potential bidders. for the auto industry the recession is in the rear view mirror. new car sales jumping 17%. stocks rallying yesterday on that news the dow was up by about 100 points. we have autonation ceo mike jackson. he will be joining us in ten minutes as our guest host the remainder of the hour. we will ask him about those numbers and much more. mercedes benz, usa, ceo, steve cannon will join us to talk about the luxury brand and s-class sedans, joe. >> the president clearing a major hurdle in his push for a military strike.

aymanaft javers jins us with mo. >> yesterday, the committee approved authorization for a military strike by a margin of 10-7, one member of the panel voting simply present. >> that itself not an overwhelming victory. now it will head to the senate floor. on the house side, very contenttuous over there. one member of the house panel yesterday in very testy interchange here with secretary of state john kerry. >> is the power of the executive branch so intoxicateing that you would abandon past caution and favor from pulling the trigger on a military response so quickly? >> i'm not going to be sit here and told by you that i don't have a sense of the judgment with respect to this. we're talking about people being killed by gas and you want to go talk about benghazi and fast and

furious. >> that gives you a little bit of the sense of the political difficulty that theed a men stwrags has. it's only going to get more difficult for the president of the united states. here you see him arriving in st. petersburg, russia, for the g 20. the i want there is no categories he will have any meeting with vladmir putin the russian leader. aids do say they will have some interaction on the side line, whether or not we will be able to see that on camera, for the telling bid language as this syria debate plays out is another question. obviously, the president at the g 20 is going to make the case as he did in sweden for intervention in syria, wlmpbt he can sell that with his g20 colleagues is another question. deep skepticism from many countries, including, obviously the russians, who said they don't support this at all. it's going to be a very difficult couple of days for the president here both in russia and here at home in washington. guys. >> okay. ayman, thanks.

we will talk more about this now. joining us from syria is bill burrton global strategies managing director and former deputy press secretary. it's good to see you. we got to talk about all these things because you are a strong supporter of what the president wants to do. you make the progressive case for going along with the president and yet at the same time, you know, the front page of the new york times today highlights that some of the most liberal members of congress and the president's biggest supporters may be the biggest problem here. how do uconn vince them? >> well, that's a part of the reason that i wrote the piece. it's clear that there are big questions that folks on the left have, folks on the right also have very serious questions that they're asking. but i think when you look at this issue. when you consider that bashar al-assad is not a good person. he is evil. this is different. a chemical attack is different. there is a reason that there is an international ban on chemical

weapons. if they don't enforce it, it will be used again, when hundreds of children are gassed, i think the united states has to act. i think that has to be made to progressives. >> bill, there are some people with what you just said, he is a bad guy. he should not be able to stay -- we two years ago said there should be regime change. it's been stated by the administration there should be a regime change. some people aren't supporting this, because kind of a half measure that seems to be just designed to make sure that we live up to our red line comment just doing it and not trying to affect the outcome seems fruitless and nobody, you know, children being gassed is horrible. but it's 1,400. there are already 1,000 dead, also some of your liberal and people across the aisle would say, what if we kill more, what if there are civilian casualties in our strike.

what if we add to the bloodshed by doing something that's not designed to change regimes. >> right. and i think that all those are important questions, the ones that ought to be addressed but at the end of the day, this red line on chemical weapons has existed for 100 years. it was one of the great international progressive victories of the 20th century that put rules in place that say there is a limit to the amount of brutality one individual can inflict on others in a time of war. i think the enforcement of those kind of rules and living up to an international standard that says that actually you cannot do this sort of thing to children, to men or women, or there will be consequences and if the united states doesn't stand up now, then we'll just see a side of these weapons again. we will see north korea, iran, other countries think they can use them with impunity, the united states will have no credibility on the issue. >> you're sincere, can i hear

it. now it makes me think, one of your points is that syria is not iraq and barak barak is not george w. bush. there is a chance that these guys in congress not known for necessarily i mean they are elected by people. a lot of teams they don't have, you wonder what they're doing within they seem to be doing things for political reason. there is a chance this doesn't go the president's way. so if it was that important, you say he's not george bush. there are some that say that the president, the buck stopts here the journal is talking about where is harry truman. if you really wanted this done, why take the chance, why not make the decision where good or bad or whether it works out or it doesn't, it was your decision. it may not go his way. he may not be able to do it. if it was that important, maybe george bush would have just done it. >> i think at the end of the day congress will do the right

thing. >> what if they don't? >> it will make it harder for the president to act. i think the president's calculation here was that -- >> was it a political calculation? because that shouldn't have been doing what he was doing in this context. >> that makes a lot of people cynical. when day of the axelrod one of his key advisers said, he wanted to make sure the person that caught the bus was congress, not him. >> that makes everyone more cynical. >> i think that haveing the force of the u.s. congress standing behind the u.s. president makes a stronger case in the international community. not just for the president's politics here at home. for our case to the world. when you saw the measure go down in parliament, i think that was a big blow to this argument, that we should act and that there should be a responsive force to what assad did in syria. so i think what the president did was try to make the use of force here an even stronger statement about where america stands and make the international community look at

this as something that's important not just to the president but to the spoir country. >> as a strong progressive, i come maybe from a different viewpoint at times. we both have to agree, this is very strange to see the different alliances and to see a president, president obama just trying to get at some international support and getting it from france of all places. i remember, do you remember the debate when problem said, you forgot about pom land? it just sounded so crazy that, i don't know how many -- we had the coalition of the willing. a lot weren't willing. i guess kerry forgot poland and now we got president obama, you know, just appealing to allies to support him on this. the world is like topsy turvy. >> well, you know, it was disappointing that britain did not come along. but, frankly, i don't think the prime minister david cameron made a very good case why there should be action in syria. president obama put out the evidence of how we now that

assad was guilty of this crime against his own people. and and then said that congress should put it to a vote. if parliament, they didn't put any evidence forward. so there couldn't be a public debate based on the evidence that they had. >> you know, bill, in a world like this, you could, with what's done in north korea to people and what's done, we read about things in china and some of these regimes that, you know, that operate this way and it would be tough to go and take care of every atrocity committed against the country's people. that's the other thing, why is it always us? >> well, two things, one, there is no doubt that it's impossible for us to police every single bad thing that happens in the world. you know, there are a lot of places to go and make a difference. it doesn't always make sense. it's not necessarily our responsibility. but when there is chemical weapons, there is a reason they have been banned for 100 years

and a reason we shouldn't enforce those rules. it's the united states, we are the sipping lar super power on the globe. we need to act responsibly on that role. >> everybody has a good case here. that's another one of the problems, thanks, appreciate it. >> thanks for having me. >> up next. the economy, auto sales for aupth surging in all areas of the market. >> thank you. >> we have autonation ceo mike jackson. he will be joining us to talk about what he is hearing from doerls and what those numbers say about the overall economy. later, how will the conflict in syria play into investment decisions in these areas? we'll ask morgan stanley's head of emerging markets. lots of buzz about the samsung wearables revealed yesterday. here's the watch, a little gadget here. we are brought up to speed on the galaxy gear from samsung. "squawk box" will be right back. .

. >> check ec futures right now. we got a lot of our move up yesterday. we den know what will happen with syria. >> that hurt last week. it's harder for the handicap what will happen. a strike still seems like something that will happen, market hates uncertainty, auto sales helped yesterday with the move. >> it was incredibly impressive as you watch this. there were more than 16 million

vehicles. we were on an annual case for more than 16 million. there was 1.5 million sold last week alone. mike jackson is the chairman and ceo of autonation. he joins us for the hour. you know, mike, you talk about these numbers that came out yesterday. 1.5 million on pace for over 16 million. you warned us at the beginning of the year, this would be a big year. has this surprised even you? >> well, i think, you know, i was one of the most ambitious forecasters at the beginning of the year saying it's going to be mid-15 for the full 84. actually, if you go back two, three years ago, i said we would be knocking on the door of 16 million in a few years. so in that sense, i'm not surprised at all. we announced our results for new vehicle sales up in the month of august this morning, the best sales month in a decade. just over 30,000 vehicles up 32%.

that's in all brands, all segments. it's great to see the housing stakes, like florida and california come roaring back. our california business is up 37%. i should point out, though the way the industry calendar fell this year, labor day weekend is included in august sales. >> okay. >> labor day weekend was very strong. now, that gets corrected with the seasonal sales rate that you pulled out of 16 million. we haven't seen 16 million since 2007. and the forces driving these sales are very compelling. they're not going to stop. we had a depression in auto sales, pushed out the average age to 11 years. people node to do something. >> crazy. >> and the products that are there from the manufacturers that include addressing the fuel efficiency issue but have great design, great quality, from all the manufacturers, poem come in, what they see they really like. we have the full spectrum of

financing because they're in the downturn, everybody is still paying for their car. even today, if i lock at you know late payments in the auto industry. it's far below 1%. if mortgage industry is still at 5%. >> what is the norm for the auto industry? >> we stayed around 1% for the whole disruptive period. >> it's hard to go ahead credit for a long time. >> you couldn't get credit in '08 and '09. that's what really depressed the stock sales for all those years. >> anybody who walks in with decent credit and can prove they've got an income coming in. >> they have lots of choices for different finances, institutions that will lend them money at a very attractive affordable rates. >> when we talked to you earlier this twrooer year, i remember you pointing out trucks were doing very well. you tied that to the housing recovery. at this point it's much more broad based? >> well, the sales are, you know, when you are running at a

16 million rate, everything is selling. but, you know, the, i have been saying that the u.s. economy has moved to a self sustaining recovery for about a year, the drivers being the auto industry the bomb in energy, the innovation in technology coming out of northern california. there are a lot of drivers in the u.s. economy that were not totally dependent on the fed. it has to end at some pint. >> it's been noise to finance cars with all that money sloshing around, hasn't it? >> agreed. but you can't have a free lunch forever. >> believe me. i can't wait to get out. >> i believe it's time the exstrord fare measures, which is asset purchases, begin to taper and we begin to formalize, because this economy, while it's not the robust growth we'd like to see, it is self sustaining. it's a virtuous circle now in

the u.s. economy. >> we had a couple economists on this morning that pointed out so many risks and uncertainties, does that raise questions and make you worry that the economy would take a hit within the propping up? oil prices are at $108? >> yeah, oil prices at $108 is a bit hard to comprehend why it's even there. the gasoline consumption in the united states is still below 2004 levels. that's despoit the fact that the economy or the population has grown by 20, 30 million people since then, but between better fuel economy and then you lock at the production of petroleum in the u.s., you really scratch your head why we are at $108 a barrel these days, be you the american consumer has had justed to $3.50 per gallon, most importantly, we have an answer. you got to buy something smaller.

it goes slower. i'm a good car salesman, that's a tough sell. the american people don't like to go backwards, today with the new technology, you can have the same size vehicle. >> 450 might give people. >> $5 a gallon today is the precount number. coming back to the auto industry and the 16 million, which haven't seen since '07. here's the interesting thing in '07, 16 million units was the break even number for the xhern e american automobile manufacturers. now sweet 16, they're making, they're extroemly -- >> what down? 11 grand? >> i think 11, 12 million is the break even. >> we will talk later. when you were making those prediction, you could have told us you person speccing like a car salesman. >> you got to give me credit. >> i do. i didn't believe you. because you are trying to sell cars. are you at autonation. >> i am a new jersey car

salesman. >> 15-and-a-half, a car salesman. here we are. you are clutely right. mike will be with us. up next, here's the new watch. they told me to hold it up. samsung getting ahead, i will give you one of these as a birthday present. you start on the hottest trend in tech revealing the galaxy gear wearable wristwatch. .

. >> welcome back, everything. samsung unveiling a part is watch. did samsung make the right move by getting ahead of apple and it's announcement, joining us on the wearable technology and the war that's taking place between

all of this is jon fort. >> good morning. downsided it shows how early it is on the west coast. 4:24 a.m. i am joining you. hey, this watch should last about five days, battery-wise, because of this screen. >> that one by street signs, unless you have trouble. that's right out the gate. it's interesting. take a look at apple's cart year-to-date, the thing that this signals, these watches coming out is that the smartphone market is getting pretty saturated in the number of market. it's over 55% saturation in the top 15 markets. u.s. is only around number 13 or 14, according to a number of the numbers out there. what's in these watches? well, the price looks leak they're likely to come in around $300 bucks. they will rely on a smartphone in order to work t. one you got there, the galaxy gear, the

latest galaxy note 3 or tablet to connect us and work with the galaxy s-4. this one here is also going to require either an android or ios smartphone and the battery life varies. the qualcomm talk which i got here was unveiled yesterday as the galaxy goer was. they really both are niches at this point in that they rely on smartphones, reminisce sen to the the ipod market a little over ten years ago. it's interesting. i tweeted yesterday days of battery life with the bare minimum, the cost of entry, if you will do a watch, somebody who favored that tweet of line, the father of the ipod, he's now working on nest, which is a connective thermostat that's controlled through the phone, so this postmark phone era off to its start, guys. back to you. >> john, i got some questions about it. we are out of time. we will talk about it a little later. i think the biggest thing is it

needs a device, instead of being the device, itself. john, we will check back in with you. thank you. when we come back, we will be talking about higher global br rowing cost itself. we'll go global right after the break. then later, the new s-class is here t. company is spending big money on a redesign t. latest sales data shows the company is lagging its counterparts, what gives? we will ask mercedes usa in just a bit.

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>> welcome back, everybody. the bank of england leaving its bond buying program alone. the ecb will make a policy announcement in about 15 minutes. also, l brands, reporting it rose 2.2% the street expected. in other news, costco cuts topped the street's forecast, the boat comes despite lower fuel prices and weak foreign exchange rates. >> recent currency plunges

taking a toll on american market, joining us from new york, morgan stanley investment management, ahead of emerging market, he is author of the book "breakout nations." thanks for joining us. we had leah mizell. she started implying if we are not near ra buying, an entry point, we are awfully close. is that where you are or is this the beginning of something that could get worse? >> no, i think it is a fundamental reset in the emerging markets has come to an end and treating all emerging markets as an entity, i think it is over, emerging markets are 14% of the global economy. to speak of them, i think that era has come to an end. we have to depreciate. but the conventional wisdom of the last decade, which you can

buy any emerging market and get good growth i think that view has been shifted now. >> really? so it's not that they'll all be doing better than developed countries and just some even better than the others. now you actually will have some that will underperform developed country? >> yes. you know, for example, i think that even in economic growth terms, my own view is that brazil, south africa, russia, these economies are likely to grow any faster than the united states over the next three to five years. that's a very disappointing outcome, because the per capita income of these economies is one-fourth or one-fifth the level of the united states so that makes a risk reward very different with investing in these places. of course, there will be some breakout stars, philipines is growing at 7%. mexico across our boarder has serious economic reforce. >> that will help them. it's a differentiateing landscape. last decade, a synchronous move. everything in the emerging

market boomed. now what we are seeing is cracks are emerging in some of these stories and depreciate rather than treat them as a homogenous entity. >> what happened? >> i think that many of these markets were aligned to fund their growth and to start reforming. so the reform, it makes them lack in many of these countries. they buy up too much debt, particularly after the debt crisis in 2008. a lot of credit like china, brazil, the debt went up very significantly. now, they are paying the price for that. the reform to come back in some of these companies, instead, with eseen complacency build up over the last decade. >> your view in brazil is not consensus at all. that's a place where a lot of people love brazil, right? for people that are considering it or already down there, they probably should be listening to this interview, i think?

>> brazil has been underperforming the last few years the love affair was too strong it takes time for it to unwind. you know, the stats are there for everyone to see. the brazil economy, who had 1% last year, this year, i don't think the economy will grow much faster than 2%. >> we don't have much time left. i want to get as much out of you as i can. you know the consensus that china passes us and there is no stopping them t. things that you said about overleverage and reform slowing down, couldn't you say that about china, too? >> yes, the chinese economy is slowing down, it's the growth rate of 14% in 2007. we are down to 7% starting. and it's quite likely that china growth rate slows down to 5 or 6% in the next three to four years. i think these extrapolations about china overtaking the united states by 2025 or 2013, i'm not sure it's going to work

out that way. and what we are seeing just now is the first stage of a major slowdown in china. you have a definite slow down. i think this is a big change which is happening if china as well. >> good. i don't want them passing us. >> or taking your pork. >> or taking my pork or my swine. >> it looks like they're going to get it. >> look. richard, tell me, what's are the three best place, you said mexico, for specific reasons, where else? >> when i think of the philipines still locks quite good, because this is a country with a new leader who came in and reformed after a long period of the place lagging. the other sort of thing i like is the frontier markets. >> really? those are too scary, like where, in africa? >> there are parts of africa, even sort of maces that can scare you even more. like pakistan, i think those

places are getting a comeback. having said that, i think within the main stream of the emerging market, eastern europe, it is a recession, opposite up the opportunities there. because they already had the cycles and they're coming out of that. so i think you have possible opportunity in emerging market, mexico, philipines, parts of eastern europe, possibly tieshlgsd but you got to pick your spot. the last thing of buying all of them and sitting on them, i think that is something which is over. >> all right. great. richard, thank you. i might get that book. that's interesting. what's the name of the book again? do you know? >> there it is "breakout nations." . >> so it's not going to be all of them. non-consensus thinking. especially about china and brazil. you wait, everybody is waiting. okay, is it down enough to boy? >> you have been ahead of the market. when we return today, we're going to talk more about the luxury car sales. it was certainly a bright spot

if yesterday's sales numbers. we talk to the ceo of mercedes f-class redesign what he is seeing in the high end market. don't forget, nfl season officially under way, the baltimore ravens take on the denver broncos. >> what a game start. >> it starts at 7:30 tonight only on nbc. . "squawk box" will be right back. nascar is ab.out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights

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. >> welcome back, everybody. the yield ab pushing higher. it's the highest level we have seen in two yeempls you have to go back to july twin 2011 to see fields like this. a lot of it is bouncing off of what happened with auto sales yesterday. that's been a huge part. we are waiting on jobs numbers today. >> i should say in the auto industry, you know, all our business is at the shortened of the curve. both for financing inventories and financing our smer's contracts. it's all money priced from 30 day to five years. >> right. >> i think it's going to be quite some time until the shortened interest rates begin to move. because when we go through this whole process of tapering.

it's a long journey from 85 billion a month down to zero. then when the economy is going to have to be much stronger for them to actually begin to raise rates. >> right. >> so for the auto industry, i'm looking at low rates for several more years. >> here's, your thinking has to soar beyond just mundane here. i want to talk about a lot of things. number one, there are a lot of really good cars. i mean, the malibu is a pretty good car. ford has a bunch of good cars, right? can we believe the malibu is a really great car. >> don't they take different ones every year? and is the tesla the greatest car ever made according to like consumer reports or -- >> first and most important, the renaissance of the products -- that part is real. >> the fusion. >> -- it's real, genuine. they have a pipeline of great products coming. what i find so fascinateing, if you step back and look at it, here you have the american auto industry in complete disarray,

'07-'08. we had to have a restructuring with bankruptcy and everything else. what really changed, though, coming out of that? we changed four or five executives at the top. the engineers and the designers are the same talent that was there. what they were told to do and poem at the top of the company was different. they're the ones who have created these amazing products and -- >> do the new ceos that come in, do they have a 56 for this stuff or let the engineers go? you go wild, you come up with your greatest thoughts? >> this is hard to believe, but i would describe the difference between the old detroit and the new detroit, today they build with the customer in mind. what do people want? what will fascinate people? how can we innovate that they are emotionally engaged with this product? >> make the product like mumbai. >> let's build something somebody wants to buy. >> whereas in the past, they simply ran the plants that

covered their fixed costs and then stuffed the retailer like a thanksgiving turkey to make them go away. it's a real transforming. so, joe, to your point, they have great cars and great trucks. >> all right. suvs, there's places where i go where i can't even find a car, all your suvs. they're not going anywhere, are they? >> as far as demand? >> there is more popular as ever. >> you have family here. >> they get better gas mileage. >> yes. >> they still run on hydrocarbons, mark. they still run on hydrocarbons. >> but the industry has transformed utility vehicles, moving off of heavy, rugged truck platforms to car platforms, but giving people the space to the ride hike and everything that comes with an suv. so you get dramatically into fuel efficiency. >> that will continue to improve. the cafe standard that are now being, trying to be put into

place by people that hate hydrocarbons, are they doable? is 40, is 50 doable? if we're going to be on hydrocarbons, in your view, not electric, 25 years from now, will you be putting gather lean in your car? >> oh, absolutely. >> 25 years from now the combustible engine will be the dominant. >> it will be more than 50% of the power plants and vehicles. 25 years from now will be the combustible engine. the advances made on the internal combustion engine, nobody predicted or counted on. it's one of the reasons hybrids and electrics remain less tan 5% of the marketplace because of the advances that can continue to be made. >> i don't know why it has to be made that way. i guess there is infrastructure. you talk to me about tesla, you told me not to get too excited when i read stuff about it. it is as far as stocks go, the fastest growing stock and market cap comes from 26 to 170. you know, they have quality. it's a beautiful car.

i don't know. i couldn't use it. i couldn't drive to work, in fact. >> tell me about the subsidies, how much of it is first? >> we should talk about the product. it's an excellent electric car. you know, if you take the fisker, a terrible car. the car is now bankrupt. if you take tesla, an outstanding car, the company is finding its way. now, as far as trying to say, is the market cap correct or not? i think that's another whole story. >> tell me, how much does the federal government pay the company? >> you boo i in california, you will get a $7,500 check from the government. >> a check, not a writeoff? >> a check. >> whether you pay tax or not, you get,500, you will get a credit for putting in a home charging station. you get a lot of money. >> in california. >> in california. >> what does the federal government give tesla, directly? >> the federal government and

the extend california has created an extended credit for cars that gives tesla another 16 million a quarter from other manufacturers looking to get their electric car credits. so if you take the fact that the governmentplay pays its sales and marketing costs, they get credits that are probably not sustainable. they don't expense their stock option expense. they don't want to take gap accounting on their leasing, sales. you know. >> you can't sell them, either? autonation doesn't have teslas? >> no, teslas has a direct model at the moment. i think when they want to go to higher volumes, i think they will need a different retail model. i would be completely opened to selling teslas. it's a marvelous product. >> would you change your story in. >> i just said, they're a great product. >> no, i'm kidding. you are not that -- >> if you ask me about the multiple. >> it becomes one of your children? you love all your children the same? >> as a product.

the separate market cap and the multiple. that's not my area of expertise. that's selling cars. >> i believe you on these things now. i don't think you are just a car salesman. i seen it happen. >> i am warm. >> you are like a renaissance man. all right. >> for those of you awaiting that decision, the breaking news is no news. they left rates unchanged at 0.5%. when we come back, mercedes going through a billion dollar makeover. we will talk about how the s class is looking to take down tesla. we'll head outside to check out the new redesign. "squawk box" will be right back. .

. >> it's bright out here. i need some shades, i would look cooler. we are behind the wheel this morning on a billion dollar makeover. the new mer citizen s-class. it's the first serious redesign since 2006. steve cannon, mercedes benz ceo joins us now with more. i thought that was a misprint. >> mark cannon. >> no relation. >> you guys go back far enough. there he is over there. you'd have to be related. >> probably. >> why does a company decide to, it worked for you, obviously. it's been seven years, right?

what causes you to decide to redesign something? >> so our life cycle is every seven years twt advancement in technology just to keep up. every seven years we launch a new product. it's a huge investment in the car business. the flagship, the s-class is not just our flagship, it's the flagship for the whole industry. all the technology on board points the way the rest of the industry, many of the technologies you will see here will find their way. >> you will see it eventually in a lexus, whisper, these other cars? >> or toyota. sure. >> so what's new? what are some of those? >> so, outside of the stunning good looks of this vehicle, this is the most intelligent car on the road. it has 360 degree vision. so it takes radar sensors together with the first ever stereo scopic camera and essentially fuses all that information together and allows the car to react to help the driver this difficult situations. >> if i'm rabbit to go into a lane where there is a car, i

can't see the blind spot. >> it will nudge you back in. >> it won't ding something? >> i will nudge you back in. it has staring assist to keep you centered in your lane. if the guy in front of you sees something and goes into emergency brakeing mode. >> because it will pick up the brake lights from the guy in front of you? >> the sensor senses the closing distance is too fast. >> if are you driving down the road, you happen to be adjusting the radio, the car will intervene an stop you. >> if i want to cut someone off and giver them a brake job, can i still do that? >> obviously, can you override all of the technologies in the car. it's designed to help, assist, make you a better driemplt it's not replacing the driving functions. >> google talks about the driverless car. this is a reality in terms of the car helping you out, taking over. >> outside of test prototypes, this is a really significant step on that road towards autonomous driving. with restill years away from

that. legislation not withstanding, the whole idea is to assist the driver and essentially make him better and avoid accidents. >> do the seats move when i'm turning and stuff? >> the seats move. they will give you -- >> excuse me. >> you get a hot stone massage if there. the level of comfort inside of this vehicle. >> a what kind of ma sanilac. >> essentially heated bladers. >> bladers? >> heated air bladers apply pressure points. >> he's not kidding. >> i can't turn around and hug the thing? >> no, it hugs you. >> so ambient lighting so you control the atmosphere if your cabin. it even has aroma therapy. >> come on, aroma therapy? >> it gives you a scent, a light skrent that atomizes into the air. >> what's the scent? what's the smell? >> four different choices that you can get at your mercedes dealer or you can bring your own in. so aroma therapy, lighting.

>> i have a massage on my back and a roma therapy, i will fall asleep, it better drive itself. >> there is an assist on board that will tell you to take a coffee break. >> a little light comes on. >> there is not the starter mercedes. >> this is the top of the line. >> this is going to be very important for us ear in the u.s. 120? 150? >> we will release pricing. under 100, yeah. and at a bargain at that price, joe. >> you know, i want to wait until we go to be right back and see what i can get this massage seat to do, you for the ewhat i'm saying? >> we don't want him. >> it will be a big part of our business in the u.s. the united nations is now the largest market for mercedes in the world. biller than china. >> how many? >> we are going to significantly increase sales. we will run out of the old

model. in the 20,000 range. it's still a very exclusive car. othink that we're on record pace this year and we haven't even launched this car. so in the next two months, we're launching first this car, a flagship for the whole industry. we're launching a new car, ucla under 30,000. mercedes is flexing its muscles up and down the product range. >> i can move the back seats. >> back seat driver. >> you know what. >> it's got a rear seat package, executive package. it's like a first class cabin. you can recline, seat back up. so essentially for those toex that like to get driven. >> it's so nice. if you had a driver, you could afford the car to get your driver, this is i think the car. there is so much room back there. i will talk to andrew, task, about that. yen what he's riding in now. we needed him for a couple reasons, on the rich guy vacation and now on. >> that's the radar sensor.

>> don't touch that. >> short, medium, long range radar measure the car in front of you. it has adapted cruise control, so it dynamically speeds up and cloe slows down. >> that sounds good. >> like a bank vaumt, joe. >> we got to go. iech getting us out. >> thank you. >> mike, thank you. >> are you not mark cannon, you are steve cannon. thank you. >> thank you, steve. >> all right. >> when we come back, we have a preview of tomorrow's big jobs number. we bought the private payroll numbers just ahead. we will have reaction. cheng out the futures barely bunling, the ten-year note has been pushing that yield much higher. we will talk more about this and then come right back. ready to run your lines?

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>> first an early number. >> productivity numbers hit the tape at 8:po. we are joined on the impact of the jobs data on the fed's exit strategy. plus the first senate hurdle cleared for military strikes in

syria. but support in the full senate and the house is not a sure thing. we get a live report. >> it's thursday, september 5th, 2013. and the third hour of "squawk box" begins right now. ♪ . >> welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew ross sorkin is off today. u.s. futures are waiting, watching, waiting for stuff to happen, adp, things like that. watching the overseas markets, you can check out asia. we'll take a look at europe quickly to see if we are getting a coup on what to do. the hang seng is the most notable market there. nothing happening in europe to really speak of. we were waiting for ecb and boe. >> both of them came out.

>> the ecb, the key interest rate unchanged at half a percent. the bank of england left its rate unchanged. overnight, the bank maintained the monetary stimulus. offering an economic view that the policy is working. the bottom line is from all these central banks, status quo this morning. jobs data, less than 15 minutes away, we will be getting the adp employment report from adp. forecasters say 170,000 private payrolls were probably added in the last month. and the president clearing a major hurdle in his push for a u.s. military strike against syria. ayman javers joins us from washington with more on that. >> reporter: good morning, becky. the president did get the vote he wanted in the united states committee. now the measure will move to the full senate, also moves to the house of representatives, where it's unclear whether or not they can get the vote. they expect to have that by the

end of the week next week. meanwhile, president obama touching down in st. petersburg, russia this morning. where he will meet with the g20. this will be another headache for president obama. he's trying to round up international support for a military strike on syria as payback for that country's use of chemical weapons on its own people. it's suspect that's deeply unpopular among many countries in the world and no more so than with vladmir putin, who is the host of the g20 this week. slatd mir putin just yesterday said secretary of state john kerry has been lying to the american people when john kerry says that he is fully confident that they're not many members of al qaeda or al qaeda sympathizers among the rebel group in syria, putin saying that's a lie and kerry knows it. that's the kind of atmosphere the president will face here as he meets with world loaders, adding another layer of complication to that. the brazilians at the g20 are demanding an apology for nsa

spying in that country. that came forward as the result of the disclosures from edward snowden, the nsa leaker, who, of course has been harbored by president putin in russia, hasn't been seen since he landed in russia and left the airport there. a lot of very interchecked, very complicated, very tricky situations for president obama to hand him as he is dealing with the international community in st. petersburg, guys. >> you pointed out the president got the vote on the committee. it was a close margin, 10-7. was it -- >> it was 10-7 with one senator voting present. i have been reading some stories today about how congressmen say they don't know a single congressman whose e-mails an phone calls are if favor of this. obviously, that shows the american public is not behind it either. >> yeah, what's interesting, becky, is that there is more support in washington, inside the beltway for this than there is in the country. this poll is very badly. a number of public polls have been out there on whether or not we should strike in syria.

the americans generally are against it. in walk, among elight opinion makers, this is a more popular option, but it's just going to be very difficult for these rank and file members going back and facing their constituents back at home. >> ayman, thank you very much. we will check in with you a little later. >> you bet. the dow having its largest one-f day gain in five weeks after fed data showed expanded economic activity. joining us is the chief u.s. economist at ubs and ed keon quantitative portfolio manager. friday has another jobs report. >> yes. another jobs report. >> how is that possible? >> i don't know, it seems like there is one every month, doesn't it? >> it happens every month, the months, that's my great line, as you get older, it seems like you have breakfast every hour. >> it used to be when i worked at a firm no longer in existence, i used to announce the payroll report and announce which one of mine it was 120th,

1s21st. i stopped doing na because it was how old i was getting. >> what is your 10,000th report going to show on friday? >> it's trend-like, it isn't anything that will get the fed to change its opinion of what it will do. simply put, i think it's funny, the fed doesn't look at this individual report. they kind of look at the trend, the influence of the fed thinking, there has to be something dramatic that maps in this report. i would say the thing that would stand out to me the most would be a big increase in average hourly earnings, which would get people worriedant unit labor costs and inflation going forward. >> we are told the backdrop, we haven't seen you in a while, syria, tapering. where are we in the economy? if you had the slightest change or nuance in what you have been telling us since you came on? >> pretty much the same positioning for the portfolio now is what we had the last couple of years. we have continued to sell bonds and boy stocks over the course of this year, really over the

course of most of last year. i think we will continue to see rates creep higher on the ten year bond yield. i think stocks have flattened out a bit this summer. i think we will gain traction. we will end the year at new highs. >> within stocks, is there anything you favor? >> well, on a global basis, we favor the u.s. compared to the rest of the world. we are having a debate, is it time to rotate towards europe, where the valuations are quite good. we think the economies are starting to get better. so far, we have maintained a big overweight in the u.s. with our overall portfolio. >> drew. we above stall speed? >> there is no such thing as stall speed, so, yes. >> if we taper, will we need to re -- put more in, add it back in, will you do it in september? >> i would do it. i mean, i would have never started it. >> we never started this qe 3

thinning? >> no. >> you wouldn't have -- >> that's why 23 are where we are. >> it's done nothing except distort markets. the sooner they distort the markets the better the economy will be. >> people think it saved the economy from the depression. >> good luck proving that. what it did was, it's created an environment where no one knows how to act. to one has been in this environment before. you can make a good argument for qe 1 stabilizing the economy. probably do okay with qe 2. twist, find, whatever, it's a portfolio of allocation story. but qe 3 had no justification, no reason. all it did was expand the fed ambulance sheet. it's making people making decisions nervous. they put off making decision, you end up with this 2, 2.5% growth we would see. >> you agree with all that? >> no. >> you like qe 3? >> i think the main effect of

last qe was that it helped confidence. it helped people take on a bit more risk. so far, i don't think it has much effect on the real economy at all. most of the money is still sitting in banks' balance sheets and reserves of the fed. >> we had mike jackson on. he did talk about how it certainly helped in places like the auto industry, where it makes loans more likely. >> i this i the economy is getting better. i don't think qe is the reason the economy is getting better. you look at auto sales the pain driver is the fleet is getting much older. >> you still have the fleet that's ooemp 11-years-old. >> it's 11-years-old, and the auto industry is driven by short-term interest rates. not so much long-term interest rates, the purpose of the qe. i think the fact is that a private economy is gaining a lot of traction. so the private economy goes up 3.3% in the second quarter. that's after being kicked in the gut by the fiscal policy with the big tax increase to start the year as well as stend spending cuts. i think the economy is

accelerating on its own, i don't think we need qe anymore. they will start to taper pretty soon. i think as we look into next year the effects of the fiscal drag eases off, we will see a good acceleration of the u.s. economy, the next leg of the equity market in my view will be driven by stronger earnings as a result of a stronger u.s. global economy. >> i would add the rise accounts rates isn't necessarily a bad thing either. it's about the magnitude. we're talking from going to low levels. in that kind of environment, you have to think, banks need to lend money at a rate at which they want to lend money, right, if you push the rates too far down, banks just go, you know what, there is not enough return on the risk and they take a step back and when people tuque about the inability to get credit, bart of the problem was the rates were too low, banks were willing to take the risk given the price they were allowed to charge. >> we all agree, we need to get back to more normal conditions, fewer disruptions.

so normal conditions are that interest rates or long-term bonds are more like 4 or 5%. not 1 or 2%. i think it will take a couple years. we are moving if that right direction. at the same time, we need to debt the labor market healed, maybe not dramatically rising right away. on a positive path. i think we're on the verge of that. it will seem much more positive by this time next year as it does now. >> ed, thanks, i appreciate it. drew will be with us for the rest of the show. we got these watches, before we take a break, if you haven't seen the latest ganlet from samsung, take a look. they're unveiling a smart watch. okay. it was unveiled yesterday. i bought the to res this little button here. then you can go and it zuz does, it works like sort of a -- >> we have a poll on cnbc.com asking would you buy a smart watch? 71% said no so far. 17% have said perhaps so far. so not overwhelmingly hugely

positive response so far. my biggest question is, you have to have the tab. >> you have to have that around. and people, why does someone boy a $5,000 watch, a $50,000 watch? this is going to be 300. they talk about that being a price point if i were a watch maker, i would worry about these becoming really functional and really goodment then they're saying that $300 is a entry. what about an entry on $10,000 for a beautiful watch. you don't buy -- a watch is jewelry. it's not always functional. this would be a c change and two from something that's partly, totally functional. but it would have to be awfully functional. at this point -- >> i like it. i like the idea of bringing my device with me. if i have to bring it with me, it makes it less appealing. >> you love your texting and e-mailing and stuff. you would have to have great

voice recognition or you'd say really ridiculous things. people get it and say, what? it's very odd things get -- >> i did not understand what you said. all right. exactly. >> when we come back, we are a machine eight what i from the adp private payroll numbers for august. as we head to break, though, take a look at the u.s. equity numbers. 's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

. >> adp private sector payrolls were up 176,000 in august. >> that is almost right if line with consensus estimate of 178,000. joining us is the chief economist at poody's analytics and rick santelli from the cme in chicago. marge, why don't we walk through these numbers, this is what the street was expecting? >> steady as she goes, 176,000 jobs, that's close to the last few months, right in the strike zone. >> so what does the tell us about the broader economy? >> it's okay. it's doing what it has been for the last couple of years.

job growth is just, in fact, it's remarkable how stable job growth has been over the past couple of years. the god news in the report, though, it's broad based across lots of industry and company sizes. so every industry is now participating in jobs recovery. so that's god news. >> do you have, and i talked to michelle in earlier, girard, we were frying to figure out total jobs lost in the gait recession as they call it. >> 8.7 million. >> how many have we gotten back now? >> 6.7 million. not including the august data. >> so we're still down 2. >> yes. >> so it seems like what's happening is going to happen, if we get back to a normalcy and doing the same things, satisfying the same amount of consumer demand and everything we are doing. it seems like a for the-brainer woe should get those 2 million jobs back, just to get where we were. so we shouldn't be surprised it's been remarkably stable

because we have to do something stupid to crew it up. it's only natural you get those back. all said and done, seven years later, we are flat on jobs? >> in the sense if you look at history the economy zigs and it zag, right, it doesn't move in a straight -- >> it's the best economy. this should have probably happened faster sample in a more typical recovery, we would have gotten more recovery. >> you throw in the fed and the stimulus. >> a big part of that is government job loss, though, right? we lost 750,000 approximately government jobs. in a normal typical recovery, you'd get 650,000 jobs. that's one of the biggest differences. >> that almost accounts for almost all of it then. >> almost all of it. the shortfall. >> let's bring in rick. rick, we've noticed the futures haven't moved much, this morning before we got this adp number, we have been watching the bonds market, the yield tends to steadily bush higher here. i think the highest level since

july of 2011 was hit on the tenure. >> yeah, i think on the five year, the high yields of the day are a little over 180, i do believe that we are now pushing back through july 2011 on a five year into may. so i think that the onward march of interest rates is fascinating. it seems to supersede the issues of syria. it supersedes the issues of taper or not to taper. it supersedes the issues that the u.s. economy and the global economy might not be good enough to support higher rates. i think what it really tells us, is that in the end, will is a lot of logistics involved in positions. there is a lot of funds and investors that are pulling money out of fixed income. and i think every threshold of higher interest rates will magnify that. so i think that, you know, we have to be cognizant of how pushing people into treasuries

during early days of quantitative easing, we'll extract a price that will be most likely larger than historic norms used to benchmark and quantify this upward margin breaks. >> that is a really good point. drew, you lock at the numbers here and what the bond market has been telling us, trying to physical out what this all means for the fed as they sit down next week to try to decide what to do in terms of tapering. >> my view is that it hasn't said a lot. it's steady as she goes, as market pointed out. i'd be curious, do you have data? you talked a little how health care may or may not be impacting if job growth. is there any evidence in this month's report the health care laws have an impact? i know that carl was talking act the hours number, whether they're saying sort of unpublished data you have on ours? >> earlier in the year, looking at the adp data. job creation, it felt like to me, having an impact.

by the summertime, that all disappeared. job growth is back to. >> what, did you get a phone call? >> no, you don't see it. you don't sigh it. i'm predisposed to see it. no, i see those at leisure companies, retailers. >> when you know -- >> joe, let me say this -- >> the industry is saying, wooer going to stay at 29.5. you know it's happening. >> you love this article. >> by definition, this is happening. >> this is a counterfactual argument. right. so stimulus -- >> which i have been sympathetic to. >> you see huge amounts of part-time jobs over full time over the last ten or 11 months. >> you didn't watch steve liesman's report yesterday. >> i did watch it. i don't agree with it. i don't agree with his numbers. i afree with peter maurisi's numbers, he numbers are larger. if you do believe steve's number, i believe the issue is, of course, we saw after the credit crisis part-time jobs left. we have things like the

affordable care act that are keeping them at very strange and perverse levels that didn't exist prior to the credit crisis. which, by the way, will be five-years-old and none of these programs if you told me mr. zandy, we would still be debateing them five years hence, anybody might have voted for some of the insanity that we've done in the name of better jo bs. >> we will be debateing these 50 years like the policies of the grey great depression. >> you are on apologyist with an apology. >> let me agree with you in a sense, i think the health care reform the sequester, the job spending cuts have had an impact. i do think that if we didn't have those cuts, if we didn't have the healthcare reform, the job market would be doing better right now. it's almost by definition, right? fiscal us a territory is cutting 1.5 percentage points from gdp growth. >> that will cost jobs. yes, i think the economy would be performing better. >> this is what i had seen, i

guess richard trumpka. he's on bird. he will be off off the resser vacation, union guys are mad their platinum plans won't be as good. all of a sudden, wait a minute. >> with the cadillac plan, whatever. during a recent interview, trumpka says employers are in wist his words restructuring the work force to get 29.5 hours to they don't have to provide health care. >> again, this makes sense. i don't see it in the hours worked. it's really not budged. it's come down a little in the last couple months. >> you adjusted for the job growth we had in the lower industry industries, it's almost every individual industry it's higher. >> exactly. the mix of industry, where the job creation is occurring. even in the part time, maybe. it's been the last three months we have seen a bing increase. >> that's been sesquestered. >> so, you know, i have expected it. i have. i haven't seen it.

the best argument is the counterfactual argument that it would have been better. >> to be fair to mark, he was saying it when no one else was saying it. >> hello, this is mark -- oh, sorry. >> by the data. >> mr. axelrod -- >> sitting there, staring you in the face. >> no more lunches in. >> we'll see you back here tomorrow for the jobs report. >> are you going to come back? >> i'll be here. i need this abecause every morning. >> i get my abuse at home. >> i'm teaseing you. i enjoy it. i'll be back. coming up, more jobs data still ahead, we'll get weekly jobless claims, second quarter productivity numbers right at 8:30 a.m. eastern. thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future...

by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it.

. >> welcome back to "squawk box." a new study worries about more people are worried about internet and sharing more information online than ever. and that's that. i didn't the for that. the pugh research center. i have never, that's why i have never bought anything on there. the internet, unless they can, unless they can know how i type, i never put a credit card number in, an e-mail in. i, no, no, no, no, i know about private stuff. you got to do that.

for anything. i don't do. you are going into this delete history. >> no, i don't even want cookies. are they good? anyway the pew research center. found that 50% of americans are worried about their personal data online from 33% in 2009, 86% said they'd tried at least one tactic to hide their activity online, such as deleteing their broudzing history. we got jobless claims and productivity numbers straight ahead. stick around. i turn ed 65 last week. i turn the math of retirement is different today. money has to last longer. i don't want to pour over pie charts all day. i want to travel, and i want the income to do it. ishares incomes etfs. low cost and diversified. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing.

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. >> initial jobless claims dropped 9,000 from a slightly revised 222,000 to 323,000. continuing claims a week further back in the rear view mirror 2.591 million from a whisker under 3 million. non-farm productivity second quarter final up 2.3. this is almost double up 2.3. unit labor costs unchanged. listen, productivity is a great

thing. free market love productivity. people unempyed may not be as fond of it. if you look at interest rates, we have been through 180 in a five year. >> that in and of itself is staggering. the belly of the curve has led the way, going back to may of 2011. not far behind a 295.10 a. 385.30. the 30-year definitely lagging, just consider all the other maturities are making new high yield closes going back anywhere from 24 to 25 months now. not the 30 year. it's still stuck at its august two-84 comp at 3.92. it's eight basis points away from that. there have been some curve wiggles. back to you. >> i thought 3 would be it. i to the 3 would get us down the road a little bit, rick. you know, here i get worrisome if we start going through 3 and get going, wouldn't it? >> why worry? worrisome isn't the word which

should be using. listen, the normalization is going to occur. why worry about it? >> if it go es too quickly, people aren't prepared. people, there is dislocations. >> so what happens? companies that should have seen the plug pulled on them that have been finding keep capital would disappear? that's not a bad thing. the bad thing is that zombies are 21 to watch. we don't want them inhabiting the economy. >> for more on the data, let's go to drew madison, are you surprised that we get to three on the ten year and it keeps going? >> no, i agree with rick on that one. you know, it's going to happen, how it happens? i'm less concerned about. i mean, you'd like it to be more gradual to allow people to adapt. at the same point, you will get there. there is no point in waiting around for it. i look at those claims number, you look at the productivity number, you look at what's happened to auto sales. it's hard to make the argument that we need the stimulus we are

getting on the economy right now. >> hey, rick, do you think if it starts going up quickly, do you think that makes the fed more likely or less likely to withdraw more quickly? i can argue either way, they see it go up too much, they're like, the last time it went up too much, they started taking back stuff they were saying. they were worried. but i would think if it went up quickly, they'd say, we got to catch up to where the markets are, they think they're responsible for it. it's their fault, their problem, which makes them start tempering their comments when it goes up to quick. >> i think there is going to be more men in sales in the fomc committee. a lot more pers separation, no doubt about it. maybe tail try to fight it. i can't speak for them. believe me, i don't want to. but i would, if i was part of that group, i would embrace the market normalization, if there are effects that they're

uncomfortable with. i would try to mit fwat them through explanation, but, indeed the process of normalization is fully going to be some day in the category of the unintended consequences of the end of these programs and i do believe that there is going to be many more unintended consequence, just outside the realm of normalization of interest. >> so the stockmarket, drew, is going to have to dole with a couple of things. it has to deal with the el-erian says there is wedge between fundamental also and where the market is. that's the fed, it was holding the market up. it has to deal with that slowly coming out. so you would hope the economy is going to come up to the pointed -- and the markets also have to deal with, doesn'tly, there is some place else, maybe it's a high yield. maybe it's some place else. it's not the only game in town as interest rates go up. >> there is that part. i would actually take why were with the idea that the equity market was actually. you didn't think qe worked? >> i don't think qe worked.

i think if you look at the market, you compare it to economic surprise indices, they are how well the data is coming out. you track very closely, that is coming out. >> well, the market usually doesn't do things in a logical way. you would say it's been moving for the right reasons, then? >> when things move for the right reason, when yields moves up, whether the fedps them oto move up or not, the market can tolerate that much better. the biggest risk, in my opinion, if the fed pushes back against this market move, if they take it as some sort of, we den think what the fed is doing is right, the fed tries to reenforce its control over markets and, you know, decides to put off the taper, whatever, in order to teach the markets a lesson, that's a bad sign. we get all the people a little worried about inflation, much more worried about inflation. people can think those inflation worriers are crackpots, the simple matter is they actually help to drive market

expectations and inflation going forward, which actually nooed feed into actual inflation. in some ways people believe innation can happen, it can happen. >> do you andrew attend the same midnight meetings, sneak off in kass da blank ka? you guys are of the same mine, aren't, you, you andrew? >> free markets, free men, i think we see eye-to-eye on many issues. i think today what i found fascinating is that little article in the journal hobbit how jumbo mortgages for a brief period are trading at lower rates than conventional mortgages. and the reason i find that fascinating is because the bankening system and those involved in lending money are actually starting to take some risc, because the capital is going to get deployed. i think the higher interest rates go, the more of that you are going to see. so just like how, it's not intuitive to put out an oil fire like in hellfires with john wayne with an explosion. i think to get the economy going

and get the trillions of dollars of capital that are collecting dust on the side line, i think higher rates will make that more profitable of an endeavor to deal with that capital under current prifk rick parameters. i think it will show marked improvement. i am ultimately optimistic. not because of the fed's program. >> all right. excellent. drew mattis will be with us another 23 minutes. when we come back the first congressional hurdle towards military action in syria has been cleared. a full vote in the senate could come as early as next week. up next, we will talk to christopher dickey the mid-east editor for the news week and daily beast. .

>> the senate foreign relations committee authorize military action in syria. joining us to talk about it is chris dickey the news editor at the daily beast. when the president said he was seeking congress's authority. you said he was averting a crisis for now. what happens if congress actually passes the? >> well, i think the senate resolution gives us a kind of an outlook for the war we had, which is an air war that could last 60 or 90 days and is a

pretty dramatic event. it's in the just a symbolic gesture, one of those one or two or stwle day air operations like we sometimes saw in the ''80sment this is going to be a full fledged air war, it looks like, i think it's going to have very unpredictable results. it could lead bashar al-assad to go to the negotiating table. but it could also create millions more refugees and thousands more dead in the situation that's already extremely volatile. >> we know about a lot of the potential problems that would arise and serious issues that would come up. what's the best case scenario in all of this from your perspective? >> the best case scenario would be the kosovo air war in 1999, which i happen to have covered on the ground in serbia and in kosovo, where you had i think 78 days of bombing, 38,000 sortties, the collateral damage

was relatively small. i think there were only about 500 civilians killed by the air operations, according to human rights watch. and all the objectives eventually were achieved, kosovo wanted independence, mill so millzo oovich was brought down. >> what if congress does not end, does it take it off the plate? what does that mean? >> not necessarily. i think if the military and the president are confident enough in this type of design and they retain the support of the key players on the hill like senator mccain, i think they could still go ahead with it. i think the relationship with the house has been so fraught. if the house says no to this president, a lot of people, even people who oppose the war will say that's just the house trying to block obama again. >> what about the sentences? we need 60 votes. >> we don't need 60 votes.

rand paul is trying to push through a procedural ploy that would say you feed 60 votes in the senate. but you don't need 60 votes in the senate. >> you do if they decide to get up and talk endlessly. >> you do if they decide to filibuster, yes. >> so i guess it comes back to the point that this is already a human tragedy on so many levels. there are already so many refugees spilling over the borders into neighbors like turkey and jordan's area. do you think the u.s. has to act here? or do you think this is a situation, what happens if we don't? >> the u.s. could make things worse. we could certainly make things worse for us. but on the other hand, if it's allowed, if the situation is allowed to go on and on, it's not going to get better any time soon. we are already looking at 2 million refugees outside of syria. of those, a million are children and 750,000 are children under the age of 11. this is a horrendous situation. and the question of refugees was

part of what motivated the kosovo war. you had this ethnic cleansing going on. i think we will see a lot of that in syria, with or without the air war. but without some measures taken to bring assad to the negotiating table, you will have a situation where this will just go on and on and me tast size through -- metasthecize the region. >> if you look at who the rebels are, you do have people who were there fighting for their freedom. you also have as richard engel has pointed out, a huge number of jihadists who have infiltrated these dprups. what happens? >> well the longer the war goes on, the worset the jihandi element is being to become and the bicker it will come. it is a classic syndrome in wars, the longer they go on, the more the rad cam almosts come to dominate, because they're the ones who will fight blindly almost insanely to keep heading

towards what they see is victory. >> is it too late, though, richard engle pointed out as many as perhaps 60% are already jihadists. >> loose, i respect richard. how does he know that? i don't know that. i talked to some of the best people on the middle east that i can possibly traumatic to. one of their worries about this situation is that we are flying blind in terms of the opposition. we tend to know the people who are outside the country. it's very hard to giej the people who are directly engaged if combat in the country. we know there are jihadists fighting jihadists, al qaeda versus al qaeda. we know they are fighting the moderates, the moderates are fighting them, sometimes they actually fight the assad government. it's a very disjointed and dangerous opposition and one of the things that the obama administration is trying to cope with, i'm not sure it is doing the best possible job and could have acted earlier, is this fractured open six, what it doesn't want is for assad to, for assad's government to collapse. he wants to get rid of assad,

through some kind of negotiated transition. >> you know, chris, it's so hard to, we're so, not good at trying to do, you know, to get the outcome that we want over there, there is no reason to think we will this time either. it just, it's almost as if, we never get thanked, either. we would do this and we can't see these little kids that say, where were you when this was happening to us? you know, two or three years from now, we worry about if the same thing would have happened in kosovo, why wouldn't you help us? we do it, the arab street hates us even more. they're saying we made up the wmds, that assad, they don't believe he has wmds half of them. it's thankless. we got to do it. because we're good people, i guess. >> well, you know, if, we're doing it for gratitude, wooer making a huge mistake. >> that goes back a long, long time, in many, many wars, in many places, glat feud is not a big part of the middle east. >> i know. >> but you know it's just going to poison.

it will make us hate it even more over there when we do this. >> some people do remember what we did for them. i say the kurds of northern iraq will remain very thankful. >> christopher, thank you very much for joining us this morning. >> thank you. by the way, folks, take a look. we will be looking at live pictures of the shot of russian president putin, greeting world leaders at the g20 meeting at st. petersburg. >> it's a beautiful super bowl ring he's -- >> look at it. its glistening. i can see it through the car. coming up, we will kick off the nfl season with soup irbowl winner phil mckonky. he is focused on hiring u.s. veterans. [ male announcer ] i've seen incredible things.

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everybody knows this guy, our next guest, made the transition from the nfl to wall street. joining us now former super bowl winner, president of academy securities, a a broker dealer firm that focuses on hiring veterans on wall street. all remember the super bowl, i guess, right? >> sometimes it seems like it never happened. sometimes it seems like yesterday. >> is it surreal? >> sometimes it feels very surreal. >> i just referenced the missing bob kraft super bowl ring.

they're all different roorks it? >> they're different every year. people see this and they think, wow, that's something special. when you see the rings of today, this is dwarfed, this is tiny compared to the ones of today. my wife likes to joke. these were made by jostens who makes the class rings. today they're made by tiffany's. >> still pretty sparkly. >> it certainly is. >> i remember in the past, you've been doing this for a while with wall street. how long after you left football did you start this? >> pretty much right away. almost a natural transition for me being in new york city, playing for the giants, and financial capital of the world. it was a natural for me to just fit right into the financial services world. >> i was a stock broker for ten years. i used to call up and say, hi, this is joe kernconcerkernen ca maryland, boston, so they would see merrill lynch. maryland, boston. can you imagine in people would get on and figure out who i was and slam it. the rejection is unbelievable. can you imagine, hi, this is

phil, is he in? >> phil? in new york? must have been easy for you to build a business. >> it's half the battle. if you don't have anything to deliver, if you can't add any value, they're going to kick you out. >> you get through to everyone though. >> again, half the battle. >> people probably want to deal with you, too, don't they? >> but you've got to deliver. >> same thing at academy securities, disabling veteran firm, institutional broker/dealer. provide trading, mu ninicipal banking. we believe that that combination, the dynamic of bringing an industry, veteran, combined with a military veteran, we're trying to change the dynamic of the way wall street works. bringing the best of the military culture to financial services. loy caal loyalty, integrity, financial services. so we're going that, changing the dynamic. again, it helps get us in the door who we are. designations. we've got to deliver. and we are delivering. >> awesome.

>> how many employees right now? >> just about 40 employees headquartered here. >> what's your -- eventually you would like to have offices everywhere? >> everywhere. jpmorgan is our mentor protege program and one day we'll maybe mentor them. >> how do you find -- i meerngs it would be nice to be right about the recommendations that you're giving, too, right? >> well, i think, to be able to provide services as a broker, you know, to go to municipalities and help them as they're issuing debt. >> full service. it's not as much about -- you do your best and take care of your client the best you can and it's going to work for you. >> absolutely. that's what we try to strive for. >> so one of the reasons you're on today, so how would someone try to get involved if there's a vet out there that it wants to, how can they do it? >> there are so many incredible programs going on right now. our country has really embraced these military veterans coming back. unemployment rate is a bad number for everybody. you've got companies now that

have the outreach programs that are searching and seeking veterans to bring in because it's not only the right thing to do to hire our veterans, these people that protected us, that serve us. it's the smart thing to do for any entity, for any company to bring in people that have those qualities that i had just mentioned. it enhances your organization, our country, these are optimistic, hardworking, persevering people that have prorved throughout our history to be able to come back after these wars and transition and be extremely productive and help our country. >> we look forward to your plans. how many offices now? >> we have three offices. new york, chicago, san diego. we would love to be in dallas and florida and san francisco. so those are the next potential cities for us to expand to. >> and these guys -- do you hire back office guy or financial associates? >> every position that opens up within our company we're looking for a military veteran, first.

obviously some of those people don't have the experience so there's training programs that we need to undertake for them. jpmorgan helps us with that. they've got 100,000 jobs mission. they almost filled. jamie dimon is talk, that's not just a floor, a ceiling. let's continue. they can't do enough. not only to help us, it's a small company, but we become a conduit to something much bigger than ourselves. so not only a corporations out there, the veterans administration. for people to understand not only the veterans to understand the great benefits that the government, the veterans administration is providing like half a salary for six months if a company hires a veteran. but for the companies themselves to understand all the benefits they could get for hiring a veteran. housing allowances for the veterans. i would encourage companies to not only hire veterans but go out and seek these benefits that are provided to them and the people they hire through the veterans administration. >> awesome.

thank you. >> thank you. >> good luck. and i'm glad you talked about jpmorgan and people at home are going, the same jpmorgan because of all the -- >> they're unbelievable. what they do for these veterans. they have an office of military affairs inside jpmorgan. they spend an incredible amount of research. >> thank you for doing that. >> people -- if all you did was read "the new york times" you wouldn't know that about jpmorgan. >> completely different. let's go. football tonight. let's go. >> don't forget the nfl season officially under way tonight when the ravens take on the broncos. when we return, our guest host for the hour will have the last word right after this. ♪

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okay, who helps you focus on your recovery? yo, yo, yo. aflac. wow. [ under his breath ] that was horrible. pays you cash when you're sick or hurt? [ japanese accent ] aflac. love it. [ under his breath ] hate it. helps you focus on getting back to normal? [ as a southern belle ] aflac. [ as a cowboy ] aflac. [ sassily ] aflac. uh huh. [ under his breath ] i am so fired. you're on in 5, duck. [ male announcer ] when you're sick or hurt, aflac pays you cash. find out more at aflac.com. european central bank president drahgi taking it to

minus 0.6%. they left the key interest rate unchanged at half a percent. >> i want to thank you for joining us for the hour. great seeing you. come back again soon. >> you made a lot of sense today, drew. congratulations. >> i try to do that from time to time. >> that does it for us today. join us tomorrow for jobs friday. right now it's time for "squawk on the street." ♪ good thursday morning. welcome to "squawk on the street." i'm kelly evans with simon hobbs and brian sullivan live from the new york stock exchange. carl, jim, and david, they're all off today. on this morning after the dow's best day in five weeks, here's a look at futures, dow is just barely in the green. the implied open for the s&p is to add a couple of points, five higher for the nasdaq. we'll see if we can build and turn this into something more of a rally this morning. weekly jobless