it's going to be interesting. >> two more after that. >> yeah. all right. thank you, john faraci. >> thank you, john. >> a lot of fun. >> good to see you. >> thanks for joining us. to you as well. and good to see you. >> nice to see you. >> just the two of us. >> just the two of us this week. >> join us tomorrow. "squawk on the street" is next. ♪ good monday morning. welcome to "squawk on the street." i'm scott wapner with jim cramer live from the new york stock exchange. carl and david are off. road map starts with the dollar store dual. dollar general offing to guy family dollar for $10 million take on a competing offer from dollar tree. david fab already call in in moments. markets looking to heighten gain as tensions between russia and ukraine ease for this moment. robert schiller is sounding a

different alarm. often a critic, rupert murdoch takes a shot. google with harsh tweets about privacy. family dollar at center of a bidding war. dollar general announcing an offer to buy rival discount retailer for 78. 50 a share in cash, total transaction valued $9.7 billion, counters dollar tree's $74.50 a share, cash and stock bid. so much, jim for not everybody working in late august in the summer. somebody's working here. this is interesting. >> this was what we first thought would happen. >> exactly. >> surprised that dollar wasn't involved because it's a better fit. you can tell from the stock's reaction, people agree. i like all-cash bid. lots of overlap in the two, you'll be able to take out more cost. that's what we like about takeovers, consolidation and cost taken out. >> even icahn in family dollar

and precipitated all of this at least public conversation -- we know discussions with family dollar and dollar tree had been going on for some time before icahn's involvement. he himself thought that dollar general was going to be the best suitor from the get-go, they were having a ceo issue, a guy who was retiring. and that sort of threw the other dollar in the mix. >> i keep hearing that the guy was a ham let figure, like to be or not to be, you know carl. this made so much sense, was it kind of an extension crisis or new ceo coming in so dollar gen caught unaware? when i look at what's happening in retail, there's a vast middle, walmart, target, target's thinking about opening up more hours, i mean, no it ain't more hours, it's more people. i mean this is the segment that you want to be in. >> some people believe, people i've been speaking with, that

the dollar general ceo said he was going to retire, hoping to put off the deal with family dollar. so confusing with dollar, dollar, dollar. with family dollar, hoping to come back maybe and get it for a lower price. >> that's not going to happen. >> now obviously dynamics have change a little bit. even with this new offer, it's far from over. far from over. even because it's a higher price does not mean it's a done deal. >> dollar tree comes, makes its bid all cash. what if someone else lurking. >> what if dollar tree comes back? what if dollar general, which says it has -- is going to divest 700 stores, maybe thinks it has to do more than it doesn't want to to that, it can walk. let's bring in david faber on the phone who has more insight into all of this. david, based on who you're speaking with how you know the story, your thoughts, putting into context here? >> good morning, guys.

you know, day one, jim and i were sitting there talking about -- and i reported of course -- that dollar general was surprised by the dollar tree deal. very important than confirmed by rick in a conversation with high had earlier this morning. given that, and given the last few weeks under which they've heard from so many of their shareholders expressing their desire to see dollar general make a bid, benefits they believe considered upon dollar general if they did so, they have moved from what seemed to be a rather slow pace, as you pointed out, scott, to a potential deal to deciding they had to come up with the top here. my guess, it gets rejected by family dollar. i don't know that to be the case but that would be expectation i have though dollar wise it's above the other deal. in fact, i think the lack of cash, the lack of stock in the deal may be something that we see change. there is a desire on part of family dollar shareholders, i

believe, to be able to participate in the synergies that will improve as a result of the combination. therefore my expectation might be if you see a higher bid -- which will need to happen to actually carry the day -- it may have a stock component down the road when dollar general, i think, will ultimately win. we'll have to wait and see. dollar tree, highly levered balance sheet. for them to compete here, i think they might, jim, need to find a partner in some way if they're going to move up significantly from 74.50. >> great call. i think that dollar gen, again, you can make a case when you look at what the two companies, well, why is dollar gen up? wall street said this was the natural. the whole time almost as if dollar general was saying, it's -- let's see these two guys, maybe they duke it out, maybe we come in. but this combination has been

one i never thought dollar tree was going to be involved to begin with. >> natural, dollar general, we've talked about it so long on the show as you know there were rumors. but oftentimes i was in a position of saying, no, they're really not talking. but they always thought it was there for them. and the decision, as scott pointed out to step down, came into the mix here i think. but when you read the proxy, which was just out, we were talking about last week, you see dollar general did not know. of course dollar tree was in advanced negotiations and kind of believed eventually the deal would be there for them. as we pointed out last week when we read that language i said to you, only get one shot. if you lose this opportunity, you're not going to get another one. >> the other -- david, i love your insight, too into this other issue that seemed to emerge from the filing the other day, and that is that while dollar general may have been considering making some kind of

bid, they may not have wanted to negotiate whatsoever with carl icahn involved in the mix at all. and i'm sure you have thoughts on that topic as well, because i found that very interesting, and i'm sure you do as well. >> yeah. listen, you know, i kind of -- you know, scott, has made a lot of money quickly in the name as a result offing size in family dollar, sole down the position as we also know, choosing not to play the juror here, deciding to use capital elsewhere. i don't know how much, if any, dollar general he owns or whether he's a beneficiary today, as we watch that stock most likely go higher, as its investor base response p positively to the prospect of acquiring family dollar. pelsto the original name in 2011, still in there. there's a lot more to come, would be my sense. family dollar's not going to say

anything at this point. there is no shortage of i guess tension between two companies to a certain extent, the best way to view it. i did bring it up with the phone call this morning. he says it's all water under the bridge and want to leave the water under the bridge. we'll see what happens in terms of him and the family, of course, family dollar. and that will be continuing to be jim, in a management position in the combined company with dollar tree. >> the guy's got nine lives. ever a moment where walmart sits back and says, or target, this is the area amazon can't kill you this that is price point amazon cannot afford to play. we have to just instead of spending billions on websites, let's just go, game, set, match, own the dollar segment, not justify the $7 to $10 segment? >> you know that would be a departure for walmart to enter into a hostile, contested bidding situation, not to

mention they have time and again they want to develop the business organically. dollar general, given the synergies available, isn't in a position to pay a high price. not that they don't have the need perhaps, jim, but they seem to be going about it in a different way. my sense is this is where the thing sort of ends. we'll see what dollar tree's capable of doing, given levered on the balance sheet for the original deal. >> one think i question, do deals happen like this because you're away? >> yes, ever time. >> he's not really away. >> if i was in today, as i originally planned, i'm sure nothing going on. not that we wouldn't have plenty to talk about. >> just incredible. >> get back to your vacation, whatever you're doing. but thanks for calling in. appreciate the insight. into this developing story. >> thanks for sitting in. see you tomorrow, jim. >> talk to you soon. >> this deal's incredible. what happens is, people at home

are so used to seeing, how much will dollar general be down this morning because they're upping, no. because people recognize, if you want to grow your business, you're not going to grow it by putting up more stores. you're going to grow it by shutting stores of a combined company. >> i think that the headline clearly is, this is only the beginning, as i said and david certainly said, remaybe mains to be seen. great point throwing walmart into the mix. from a regulatory standpoint, dollar general being the biggest and family dollar, if you're saying wait a minute, how could that happen? you've got walmart getting smaller. >> right. >> they're the ones competing most directly with these dollar stores. regulators will say, this -- they can all compete together. >> there was a "new york times" op-ed or wall street, i forget which, saying this would be a mistake having dollar gen merge because we need competition. the reason i inject walmart, when i go over the walmart call, which was nothing to write home about, one area they're doing well is neighborhood store.

neighborhood stores, yes, it's really what david says, he nose walmart better than anyone in the country, quite a departure for walmart to do anything. guess what, walmart needs to do quite a departure from anything that it's doing. >> we'll follow that story. any more developments -- >> uh-oh. kate kelly. >> breaking news. kate? >> scott, breaking news at point 72, which is the family office that survived s.a.c. capital, the well-known hedge fund. the number two executive, and longtime deputy to steve cohen, is stepping down today abruptly. he'll be replaced by douglas hanes who joined the firm in february as managing director of human capital, hiring of course a priority in recent years as the firm faced regulatory and legal issues and late last year, paid a large fine for insider trading charges to settle those totalling with civil and criminal penalties 1.8 billion.

he'll stay on to the end of the year to ensure orderly transition. this raises questions about the issue withstanding at term or regulatory chapters. the only thing outstanding is a civil case between cohen and the s.e.c. which is yet to be settled and the u.s. attorney says investigations are continuing. one note, i've just got ain't hold of internal e-mail from steve cohen talking to employees about the move and he says it's mutual and amicable. he says 2008 financial crisis and 2010 aftershocks tested us and we were rocked by revelation of insider trading by former employees. describes this as having been the toughest chapter in the firm's history. steve cohen, you rarely hear from directly. >> all right. kate, thank you so much. kate kelly with latest there. >> shrinking firm. best to run as a family organization, stay out of the crosshairs.

no one wants the crosshair of the government justice department. people a. at home have to recognize the justice department calls, it's like, there goes my life. >> yeah. >> it's like -- >> if e.f. hutton calls, people listen. remember that. coming up, rupert murdoch sounding off on twitter about google. wait until you see what he tweeted. we'll fill you in. futures, there you go, looks like it's a big open on the street. dow with implied open, up 100. more "squawk on the street" live from post nine at the new york stock exchange when we return. fd where the reward was that new car smell and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great.

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futures up sharply, as we said this morning, as the threat of escalation of tensions between russia and ukraine appear to be easing. worries about the crisis resulted in a volatile session on friday in which the dow fell 138 points, before recouping most of the losses. stocks finished the week on the plus side. nasdaq closing up 2. 2%, its biggest one-week advance since may. >> we're not getting good stuff out of russia. >> tensions are easing. on friday, the stock dropped like a stone on a headline. >> it's a little bit tiresome to have sloppy reporting. convoy attack, no convoy attack, driven out rebels, rebels doing okay, russia about to rescue

rebels. we're trading on as if we know something. i thought -- look, there was a little bit of a notion that merkel talked to putin, two sides are talking. can there be as much talking at the same time have a hot war? well, yes, you see the japanese diplomats going down the steps right before 1941. the fact there is talk is making it so there's a recognition maybe something could be happening that is recognition that maybe there's a stalemate, and this market as much as we like to think it's about jackson hole, the federal reserve, as much as we like to think it's about yellen, it's as much about russia/ukraine. going to kiev, i ought to have ply apple, kiev weather. honestly, we're fooling ourselves. this is all about kiev. it's difficult to get a story out. we watched germany up. we saw the ruble go up, give peace a chance. >> could you blame people for saying, you know what, i made a lot of money in the market last

year, this year hasn't been that bad either. why bother? i am out. >> i watched biogen, celgene, regeneron, these companies keep winning, biogen, new m.s., gill add look like defeated patent challenge, regeneron, the drug works well with statin. btk, incredible. it's where the stake is. btk. >> you made the point on friday night, i believe, you've got to know when to ring the register, right? if you had some big gains, you can't fault people for seeing headlines and all of the stuff, it's time to take stuff off the table. >> i'm doing all oil on "mad money" stocks have fallen so bad. you did have to ring the register, oil did collapse. if oil stabilizes, 95, those stocks are going to be good. we see buyers coming in,

schlumberger, last time we heard schlumberger, 118 target then the stock goes down. ringing the register in oils was good but you might have to circle back to stuff that go overly rung from the register. >> you'll talk about energy. you had a leadership group, stocks doing well, sold off. some peep people talking about maybe there's a circle. >> you have go back. >> to that sick ter. >> nat gas, it's cool. i thought i ought to have a coat on. i wore a coat for the a.l.s. challenge in part because it was chilly out. >> yeah. >> also because it was more standout than the golf shirt that you wore. >> a golf shirt. that was weak. >> i do think, in the end, yeah, you know, i'm watching stocks go up that are speculative. it's a tech myra note, suntrust, more than just ebola. i've seen too many situations right now where people get excited and it would be good to

ring the register except biotech, an endless amount of money going. people ringing the register, monster beverage, too soon. that's a good situation. >> our buddy, looked like he was going surfing. i had my dress pants on. >> the idea that you should do that challenge with stuff, if i could throw you in a pool, yeah, he was ready for it. the idea was if not, it was zaina. stay focused is important. >> cramer's "mad dash." another look at futures. it looks like it's going to be a big monday on wall street off the open there's the dow. plus 96. s&p and nasdaq following suit. more squa"squawk on the street" straight ahead.

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♪ all right, seven minutes to go before the opening bell. time for cramer's "mad dash "as head of the market own. >> a thin market a huge call by goldman sachs that says, semi cycle may be peaking, get cautious, is going to drive stocks down. and xpi downgraded to sell. ma maxim. he's been negative, and the group's been a smoke show. you've got to be careful. but this is what's going to get people freaked out. lots of fear of double ordering and he's saying that the semiconductor index could be down 10% minimum.

>> ouch. >> yeah. now do i buy -- >> on intel, right? how's that worked out? >> i came in this within i did a lot of like mind -- i did a lot of mindfulness stuff, trying to learn mindfulness which kept me from saying, boy, he's been dead wrong. this is my find -- >> i would have opened the door. >> i did ten minutes of meditation, i think the guy's dead wrong. >> there's the semiconductor index. >> you and packer, you can't be positive on hewlett-packard. circle back. >> everybody's positive. >> people were negative about cisco last week. if the emerging markets turned, cisco would be on fire. as it is, i see tremendous demand for semis throughout the system avnet on recently, rick has 100,000 different clients for semis. he's saying the opposite. i'm with cisco saying things could be getting better.

i'm say avnet. i'm not with the goldman call, optional to the gigantic incredible run on intel. optional. i didn't use the word "wrong." >> right on the edge from i studied jefferson. he would have said this guy's early. jefferson might have declared it early. you now how hard it is like lincoln, with charity. >> we'll be back right after this. [ intercom ] drivers, to your marks. go! [ male announcer ] it's chaos out there. but the m-class sees in your blind spot... ♪ ...pulls you back into your lane... ♪ ...even brakes all by itself.

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who found a magic seashell.

it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ so the magic shell went back to being a...shell. get live squawks right in your trading platform with thinkorswim from td ameritrade. you are watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell is set to ring in a minute and a half. jim, it's still a market to be careful in. friday was perfect evidence of that. >> i hate up markets on monday morning. they're like -- it's just brings the bears out. brings the register ringers out, because it is so thin. i've watched dollar general --

now it's up 10%. it's like, guys, take a chill pill. it's not going to be up 15% today. friday was a particularly ugly day because there was supposed to be war this within. war meaning supposed to be lots of heat there. and in the meantime, if we're saying, isis is retreating from the dam, i'm going to go buy some intel, no, please, it's not like everything's breaking positively. take a deep breath before you come in higher. the market's overbought here. >> situations that are, you know, breaking and developing all over the globe far away from the united states. hard to get a real real-time handle on exactly what's taking place. we've seen the act of a simple headline, jim, to move the market. there's risk up and down depending what side you're on. two fridays the market was up almost 200 points on the headline. >> i like london housing going down in price, chinese housing going down in price.

we need the housing to cool. something's going on in china that's positive that no one wanted to talk about. >> well, there goes the bells. you're watching the opening bells and the s&p 500 at the cnbc real-time exchange. here at the big board, owner and operator of natural gas, crude oil infrastructure assets. at nasdaq, fastenal. you know them well. >> great gauge about the industrial economy. i have to tell you, when you see something like -- these midstream stocks have been strong and that's about trying to get oil and gas where it can be used as opposed to where it is. half of where we refine things, it's jammed up. louisiana we didn't get the big heavy crude down, that's what they set that up for. indiana and northeastern canadian refineries working

overtime. everything is wlong rong in thi country in terms of the where the energy is. union pacific train crash, we need union pacific to ship swand oil. we're in disarray where oil needs to be and companies are scrambling. that's the kinder morgan deal. why i like kmi. rich kinder said we've got to get the stuff -- >> tweeting about that over the weekend. >> rich kinder said this is a revolution. most interesting thing he said last week, i said are we going to be continental or domestic energy, self-sufficient? he said, be careful. we'll be exporting a lot of oil, oil in the -- this is just a market influx. we are changing the world's energy dynamic. right in this country, dan dicker on "squawk" we have so much oil in the country. the brick benchmark will be going away. all west texas. happening faster than people realize. >> update a stock, family

dollar, this morning 79.60. of course, dollar general making that bid of $78.3507 this story, far from over. only the beginning. however you want to phrase that. there's more room to go here. this call, jim, credit suisse saying, own both home depot and lowe's ahead of earnings. >> those stocks have been so good. both had breakouts last week. people are just forgetting the fact that spring planting season was late, maybe it didn't matter. they don't seem to care owens corning didn't have a good number, whirlpool didn't have a good number. stocks going in with expectation that is macy's like. three firms tell you macy's going to be great. i like both companies. when you have firms constantly saying things are going to be great, it's almost impossible for lungren to do the number he had to do. is the ceo of home depot, if the stock were at 81, i'd be pounding the table.

84 wow, i've got to be careful. expectations are in home depot and they've got to do a number that is just extraordinary at the all-time high here. so be careful, piling in at this level. >> part of the issue here is, as most retail report came in negative, excuses came out. people may not be spending on apparel because they're spending on the cars and spending on their homes and thus the expectations for a home depot or a lowe's seem to get ratcheted up as overall expectations on other parts of retail seem to be going down. >> i like the groups like airlines, in the penalty box, churning went on, now starting to go up. home depot never had the set back. take a look other than williams sonoma, that's home goods too, nordstrom quarter, i went over that quart this weekend, that is about spending billions of dollars in technology in order to make it so people want to go to nordstrom.com which means

they doesn't go to the stores which means you don't get to interact with those salespeople. >> the half yearly sale that they do, right, for men and women, here and there. lots of stuff on sale, got to be there to see it. >> "new york times."com became to so great, i said you know what? i'm not going to buy the paper any more. i've have newyorktimes.com. home depot, yes, they have homedepot.com. it's complimentary. i wish analysts would stop squawking how great it's going to be. the great ceo of home depot was not a promotional guy. he does not come on and just say, listen, everything's fab lups his style is to say here are the numbers, interpret it. you've got to be at 84, it's got to be like, look, we see much more room for margin expansion. i don't know. >> speaking of expectations going up, apple, your note, rbc reiterates buy. you're like, here we go again. >> look, one of the things that

tim cook has stressed over and over again you don't know how well apple's going to do. so stop the game of gaming apple's earnings. >> never going to stop. >> you know what. >> i think it's a fool's errant. you don't want to do it. it's like betting on a preseason game. i mean, hey -- >> like tonight, you mean? referring to tonight, by any chance? >>. >> i don't -- you can't bet on a preseason game, you can't get on what apple's going to done would you have out in the niners would do poorly? we're trying out players. apple woe don't know how they'r going to do. who cares about this quarter? you can't know what they're going to do because apple won't let you. we don't know what they're doing with the sapphire screen because your screen keeps breaking. stop gaming apple it's not ga gamble. we don't know if the skins will play cousins. >> we'll play rg3, thank you

very little. >> keep rg3 on the ben. so he doesn't get hurt. >> play maybe one quarter. >> no, three series, okay, three series. >> i'll take that. >> a big game. >> johnny football. we do. johnny football. >> cleveland has to get a full team besides just a quarterback. i'm saying this idea that, i'll buy apple because rbc knows something. rbc does not know anything because tim cook doesn't let you know. you're not allowed to talk about being a supplier at apple. >> look, then you know cook's guy goes out, a few months back and says we've got the greatest pipeline in the history of pipelines. >> kinder morgan has the best pipeline. >> his name escapes me. >> i can tell you if you're playing apple for this quarter -- >> waiting for someone in my ear to tell me. >> if you're trying to game shipments you're not going to do well and there's moves parts, whether ipad or the phone, and this may not be a crucial

quarter. stop it, all right? >> eddie cue, eddie cue. i was going to do a google search and segue into rupert and dole. >> eddie cue. knows a great deal about apple and analysts don't. >> the code conference, when he said like the greatest pipeline in the history of the pipeline. >> what, i'm going to tell him he doesn't know what he's doing in he's mr. pipeline. i don't like analysts playing a game that gets people sucked in. how's amazon doing? amazon tries to be opaque. so you're going to be able to tell what amazon's going to do? you can't. i mean, tesla changed the warranty this weeks end, and it's -- does anyone care? tesla's a charmed stock. talking about stocks -- tesla's up. changed warranty, it's up four. it done matter. we are in some weird moment. >> do no wrong. >> why is gill add only one a

dollar today? that's not right. >> see what it does now. mary tohompson on the floor of the knock stock exchange. >> strong move for the markets in the early going. dow up 98 points. right now up 94. strength across the board for stocks with exception of semiconductors, they're weaker today. seeing gains, slight gains in dollar, treasury yields moving higher. we are seeing weakness in crude oil. these are the groups that we're keeping watch on. housing stocks, retailers and of course, watching what happens to jackson hole at end of the week with key speeches by yellen and ecb's draghi. home builder's index, reason we're watching this group we get key data, including home builders confidence. as you can see, home builders rallied off the low of the year, starting at beginning of august, they've made a strong move since then. retailers of course also in focus. bad week last week because of disappointing numbers from some department stores. this week the story's the teen retailers. peep aren't expecting a strong

move. they've been moving sideways since the beginning of the year, weaker last week. take a look, some of the things driving the markets today, asia up overnight, europe strong as well. primary reason for that is that easing tensions in the uk, this -- yukraine. volatility index moves lower as investors say it doesn't look bad today. ukraine has been pushing the market around so in the event there's any news, it could be perceived as a negative it could cut the market rally. quick check of stocks. as i mentions retailers in focus. lowe's and home depot, reporting this week. credit suisse saying buy them ahead of earnings, home depot on tuesday, lowe's on wednesday, expected to beat numbers. and some of the teen retailers, they are higher ahead of earnings, american eagle,

buckle, aeropostale. concerns about the group because the consumer doesn't seem to be going shopping the way they used to. that's putting pressure on retailers. biogen, the fda approved a long-lasting m.s. drug, supposed to take the place of its top-selling drug. its stock, as you can see, up 4.50 on that move. dow's up 102 points, nice move to the upside. scott, back to you. >> to chicago and the bond pits. rick santelli's at the cme. rick? >> thanks, scott. you know, the best thing to do is look at two-day charts. lots of speculation and lots of markets they've had lots of liquidity over six years. it's just the weekend effect, okay? look at two-day charts of bunds, down in yield, into the 90s, back up to 1%. two day of dax, didn't recover all but you can see how much of the anxiety of a weekend there was. of course with all of the tweets and social media, nobody knows what's going on. weekends are treacherous for

speculators. let's look at two-day of tens. same dynamic. here we sit, 2.36. what's going on in maybe stories that had little attention friday, like we didn't get nine in a row on university of michigan where it had 80 handle. it slipped below 80. or the worst, biggest single month drop in treasury international capital flows since '78. what was it? nobody remembers. i do, minus 153.4 billion. now, let's look at what's going on with flattening spreads which have kept you pretty much in the long treasury trade with weak data like i described and what's going on with over seas rate. relative value trade, tens to twos low to 190s. we're not quite at fresh 14-month low narrows for the flattening trade but we're very close. foreign exchange, one would think if the real friday jitters had to 0 with going on in the market investors are effect in a

fundamental way, look at euro, look at the scale on the right, this is a month-to-date, going nowhere quickly. judge, back to you. >> all right. rick, thanks so much. check out the action in commodities. bertha coombs at the nymex. >> the issue here is headline risk or headline rally. today it's about pulling back with the headlines having been more benign when it comes to the international situation with the kurds having taken back the mosul dam in iraq and the ukraine situation, pulling back, more production seen in libya. we are seeing a pullback in prices. steven shork noticed beyond the headline risk if you look at one-month chart of the wti nymex, we are seeing greater volatility over the last four weeks up 45%. one of the things we're seeing intradate trade now is -- used to be about a dollar or so where we would move. now it's more than 1. 50 a day.

that is something to watch. one of the situations is if we don't have geopolitical headlines overall, most analysts are saying the situation here in the u.s. is bearish. we are awash in crude producing a lot. refiners, with a couple of them out, we still have a lot of gasoline because we are coming to the end of the peak demand season. back to you. >> bertha. >> wti, can't lift. >> even in the face of all of this stuff? >> iraq, maybe they were going to lose the southern oil feels. libya, nigeria. russia. people worried about bp, royal dutch, what happens? what happens during this period? west texas intermediate keeps going down. amazing story. this has to do not with demand side, as so many say, it has to do with the supply side and no place to put it. when i hear rb and energy, they

need to find salt domes underneath houston replace all of the oil, this is extraordinary. >> you said talking about this all week? >> doing a week on energy. i've got range resources and danberry, range, natural gasp we can't find places to put. we are flaring more natural gas in this country, burning it off, than we are using it. these amazing stories. and a lot of the reason you don't hear about it because it's not like new york is energy central here. >> yeah. >> it's not. >> well, rupert plmurdoch takin aim at google. weapon, a weekend tweet. one of 50 cent's album titles get rich or die trying. so here with the multiplatinum rapper has to say about his move in the tech world. [ male announcer ] don't just visit hawaii.

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well, rupert murdoch is known for sounding off about google and now he's taken it to a new level. yesterday, murdoch tweeted nsa privacy invasion bad, but nothing compared to google. >> oh, please! smart guy. but remember, google withdrew itself from china rather than playing with the prc which has created incredible opportunities for everybody from j.d., ali baba, bay due and that was a statement, freedom of speech, costs us freedom of earnings. i don't think google -- nsa, which they were better at their job. nsa tends not target good guys. google is not targeting anybody. >> he's -- he said things about google in the past. i've seen some people this morning sort of ridiculing this

most recent comment based on some of the past issues regarding privacy. >> yeah, the pot/kettle, pot/kettle. google has destroyed like amazon destroyed retail, google programmatic selling has destroyed the journalism business by sucking out the margins. advertisers rather give google a buck than give anybody else three bucks, including any murdoch operation. murdoch is -- murdoch has a good point, google is so powerful but it's not necessarily they're the nsa. it's just -- they're just powerful and a price wrecker, not a price creator. >> diana olick has news on nahb, housing information for us. diana? >> that's right, scott. the national association of home builders sentiment index jumped two points in august to 55. the expectation was for it to rema remain flat at 53, a jump to the

upside. third monthly gain since january of this year. index measures sentiment at a 50-point level. anything above 50 is considered positive and it jumped over into positive last month. so again, up at 55 is a surprise to the yuch sione side. current sales and sales expectations were both up two points to 58 and 65, respectively. buyer traffic still on the weak side, did gain three points but at 42 which is negative territory. now, regionally, midwest took a nice leap in home builder confidence, up seven points to 55 into the positive. west up four points to 56. northeast up two points. weakest in confidence 38. south one point jump up to 52. good surprise to the upside on home builder confidence. but also a report from fannie mae saying their outlook for home build in second half of the year and housing in general has, quote, deteriorated, also lowering their forecast for home sales for this year, and they

say that 2015 will, quote, not be a breakout year. fan any may not this pessimistic. sprid surprise to. upside on the builder, surprise to the downside on fannie mae. >> thanks. >> lower rates, lower prices in homes equals more buyers. interesting the northeast has not had the decline in the rate of change. people in new york, which has gotten out of control, but much of the northeast has not come down in price. many areas that diane mentioned, midwest, there's been a nice stabilization to even a bit of a decline in the cost of housing and obviously the mortgage rates are just pretty bountiful. >> going through the home builder stocks as you're speaking. what are we to make how to trade these things when you know feelings about the housing market are all over the place. >> a bit of good news and then -- >> terrible stocks. >> fannie mae throwing cold water. >> fannie mae's under siege from

lawsuits about whether they should be privatized and who belongs to -- gets the preferred coupons. i would point out that, every time you buy housing stocks, every time you buy, someone downgrades them. it's really hard. i saw horton had a decent chart, maybe take a shot. you don't have to take a shot -- i mean, look, i believed that lower rates and lower prices of homes is bringing in buyers. but that's not necessarily lower price, it's not that good for leonard toll. they got to make their margins. they're not going to get that. >> stop trading next with jim. we'll be right back from post nine. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support,

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to the fastest dsl from the phone company, comcast business gives you more for your money. why pay more for less? call today for a low price on speeds up to 150mbps. and find out more about our two-year price guarantee. comcast business. built for business. >> time for cramer and stop trading. we'll stop with ge. >> stephanie link, biography on your show last week, ge one of most frustrating stocks we've encountered. credit suisse initiates with a buy, could be margin improvement coming. top line was strong, margin wasn't great. september 10th analyst oil and gas meeting. this is one to watch. it's been behind the -- a lot of the stocks, caterpillars coming

back today, ala friday, where they got -- they got just crushed line at ge call and say it's the soul of the market. the stock can go up, then what people are saying, you know what? i kind of believe in the industrial -- i believe the gdp's going to get better worldwide. we talked earlier about gdp, john faraci, the excellent ceo of ip on squawk, talking about prices up 1%. ge needs better growth to get those margins to be better but it could happen. it could happen. >> ge getting a bit of a bump. >> but not what i would expect. not what i would expect. >> so the other industrials are getting more of a lift than ge. >> quicksand feel to ge. wow, i'll hold back. a nice call by the way i should mention, credit suisse pushes unp, had the terrible accident, but unp behind the market. ge behind the market. >> coming up tonight? >> we're spending the week

talking about oil. i've been waiting for oil to come down. oil has come down. look at range, one of my earliest recommendations, natural gas, and denberry, a disappoint. but let's see. looking at stocks, which is fracking sand, the revolution is real. it's not televised except on "mad money" and this show. >> it's been fun. >> great. >> simon hobbs with a look at next hour of "squawk on the street." >> the ceo of gulf oil, shale, where we're going with oil prices why in retail bricks and mortar may be more interesting than online for investors. and the challenge has been set, gauntlet has been thrown down, ceo of carnival challenged me to the a.l.s. ice bucket challenge. i will take the water from my good friend sarah and nominate three more as the world spins on. i make a lot of purchases for my business.

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so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review. welcome back to "squawk on the street." road map starts with the markets. after friday's stumble, markets

are in full rally mode to start off a new trading week. geopolitical tensions pushed to the back burner, once again. >> you can call it a bidding war. family dollar gets another offer, this time dollar general comes in over the top of dollar tree's bid. is this the best and final? >> how much should investors be watching the ukraine/russia boarder? updates from a former ambassador to russia. markets adding to gains. in rally mode for the dow up 135 points. nasdaq at 13-year highs. it has been reinforced by that report, released moments ago from home builder sentiment. third straight increase has sentiment now hitting the highest level since back in january. the ten-year treasury yield, watching closely, after on friday it hit its lowest level since june. as you can see, yields ticking higher, 237 on the ten-year. john rutledge, chief investment

strategist. why are we seeing a rotation as equities continue to climb to records and this continuation of buy the dip on geopolitical tensions out of bonds, more reinforced than we thought? >> we have been seeing this tug-of-war for some time, since january political risk has gone up through the roof. but it's countered on the other side by the tremendous weight of the $4 trillion of bank reserved the fed's laid out during qe. after finished with qe, reserves will be there, they'll push through into loans noosh deposits, spending and they're showing up in firming economy and firming inflation numbers. i think the fed long term is going to win this story. but they'll be periodic corrections, as russia, pakistan, china, syria, loom in the news. >> and you have these questions now about valuations. i guess it's nothing new.

bob shiller highlighting that, wrote on bubble says the stock market is expensivexpensive. what point do you have to worry about the stock market valuations? >> it's expensive today for today's earnings. it's not expensive for the earnings that are implied by the stock of bank reserved. you know the incremental earning that come out of a dollar of sales are double the returns -- the profit rates. and we're seeing firming pricing numbers, firming labor markets. that means finally we're going to get increasing sales numbers. and increasing sales numbers should be a big boost to the earnings over the next two years. but until those earnings show up, p/es will look high. >> how far then if we accept what you say, how far can the market run from here? >> i think you won't have another 20% year this year, that's for sure. the market's up five and some

change to date. but i think you can have improvements as the news comes in, like we saw today with the home builders. in particular, i'd be looking for the price and wage news, see if we have firming pricing. the big weakness in the stock market has been the lack of top line growth. all of the growth has happened in terms of rising margins. now we're going to see that reversed and we're going to see pricing come back, rising margins and people will worry about inflation hedging which is why real estate should be the number one asset class now the biggest, the most liquid, most traded market in the world, which is clearly arguing against you and that is the treasury market with the yield on treasuries, where are we, below 2.4% still. that -- that signals surely one of low growth, low inflation. >> indeed.

and the federal reserve believes they're going to see low inflation as well because they think about interest rates, not about stocks of reserves and stocks of assets. but i think the flight to quality has been very strong, as you say. >> but weren't you saying to us that in the future you will be able to get a higher stock market because earnings will be higher, i paraphrase you, companies will have pricing power because they will be able to grow revenues. that's not what the bond market is screaming at people this morning. >> that's exactly right. the bond market has been heavily influenced by political risk and the pushback into the dollar. i think we'll continue to be in the near term. but that's going to be off set and reversed over time by the firming pricing and wage growth and rising inflation. it's going to take time for that to happen. and between now and nen, there will be more comments like bob schiller, comments about the market being expensive.

i think short term you want to worery about the risk, medium, longer term, two, three, five years worry about inflation and rising interest rates. >> we'll see what janet yellen has to say friday speaking from jackson hole. thanks for weighing in on this climbing market, dow up 126. >> family dollar is at the center of a bidding war. dollar general countering the bid on the table for dollar tree. courtney reagan back at hq with more details on an interesting fight. >> this proposed combination is more what wall street expected as dollar general confirms it's made a bid for family dollar, giving us details today. dollar general offering 78.50 in cash for family dollar. superior to dollar tree's 74.50 offer at the end of july, in stock and cash. additionally, dollar general proposed nearly double the amount of cost synergies estimated by dollar tree. the proposed combination will have 20,000 stores in 46 states

with sales of $28 billion compared to dollar tree/family dollar combination, yield 13,000 stores, 48 state and canada, with $18 billion in sales. now wall street has long thought a dollar general family dollar combination makes the most sense, similar customers. dollar general ceo said in june huh we would retire next year, if the deal would go through he would stay until 2016. it's too early to discuss branning but believes family dollar would look like dollar general. dg expressed interest in a merger a few times over the last few years. >> suffice it to say for someone involved in a process, we were very surprised by family dollar's announcement with dollar tree. and i'll go one step further if i thought the asset was in play i wouldn't have announced my

retirement. >> it's water under the bridge. but dollar general has to wait and see how family dollar responses. if dollar tree responds with a higher off somewhere what the ftc has to say. this is far from over. >> courtney, thank you very much. oil prices shot up early friday amid views of tensions with russia and the ukraine. things took a turn. world oil prices down sharply, paring gains before the weekend not to mention nat gas prices down 20% since middle of june due to the cool weather in this country. let's bring in the former gulf oil ceo, joe petrowski, welcome. >> thank you. >> a different world where we are a few years ago when oil was heading to $150 a barrel. i know you want to talk about the very strong energy revolution in this country. but before we get on to that, is it also true that one of the reasons why oil is where it is is because the investment banks have pulled out of commodity

trading and can no longer hype the market the way they did a few years ago? >> i think that is a factor, but i wouldn't -- i would not say that's the big factor. it's still a supply/demand market. our suppliers are tremendously, producing more oil than saudi arabia, almost as much as russia. and natural gass equivalents ovr a million barrels a day and going higher. it's a revolution. i think jim has always pointed that out on his programs, the amount of investment in the energy area hasek seeded what we've done in construction and real estate for the first time since back in the '50s. on the demand side, there has been real demand destruction on especially transportation fuel. overall fuel has gone down oil consumption because of switch to natural gas, wind, solar.

really starting to take hold. >> sure. >> on the driving side, gasoline demand is dropping so fast that one of the big issues in washington is how to tax going forward because taxes on gasoline have historically funded the highway trust fund which has becoming rapidly depleted. we need to keep the roads and infrastructure up in the united states. >> it's fascinating to see, i mean you told one of the researchers the energy revolution here was real and implens. where does that dream take us? what sort of country could this be? what is the caveat that you're mentioning here about lack of investment in infrastructure? how does that potentially hole back that dream? >> i think the crises in the middle east and russia and ukrai ukraine, i would like to see it not happen, is actually more bearish than bullish because it's finally getting washington to focus that we can continue to

drill in this country. we should be building pipeline. we should be investing in refineries which, by the way, there was a lot of interest in investing in refineries. some of the good news in the energy markets, put ciko up for sale, mexico more inclusive to bringing in foreign capital to stop their decline in production. a lot of bearish things for oil. what that means for the united states i think is fantastic because the last time energy dropped precipitously -- i think every evidence is that we're going to see wti at 90 or below and brent maybe will certainly be a premium five or six. but we'll see lower energy prices. and i think that is a tremendous room for the economy. >> losing your satellite there. we'll end the interview.

good to see you. thanks for joining us, former gulf oil ceo, now founding partner of mccantor. >> violence escalating between ukraine and russia, both sides blaming each other. we'll speak to the former u.s. ambassador to russia about these latest developments. virtually all your important legal matters in just minutes. now it's quicker and easier for you to start your business,

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welcome back to "squawk on the street."

shares of biogen, the stock moving higher off of its highs on word that late friday the fda approved one of its drugs, long acting multiple sclerosis drug which the biotechs see as replacement. the stock up a percent on the day's trapd back over to you. >> thank you. now the latest on russia and the ukraine. ukraine acruisi kruskru accusin rebel of hitting a bus with rocket fire. there was progress made on humanitarian deliveries. let's get insight from thomas pickering, former u.s. ambassador to russia. mr. ambassador, welcome to the program. >> thank you, simon. >> the bigger issue appears to be the ukrainian government forces seems to have had great military success over the one and closing in on pro-russian rebels what happen does vladimir putin do in the situation? kiev would like a rout of the forces sunday, independence day.

can putin stay silent or does he need to do more? >> he's already moving. immediate objective is to hang on to the donetsk positions that the separatists carved out and he's supporting, including last week with apparently armored vehicles and fighters. there may be exaggerations about the numbers but something like that has clearly happened. and a complicated question because, in the end, it will probably result in some political settlement and putin would like that political settlement to give him something he can call a victory because it's important to his position in the eyes of the russian people that he continue to turn in the kind of nationalist exploits that he's been pushing for now six or eight months in ukraine. >> interesting. there was a -- you know better than i, five hours of talks led by the french and germans don't appear to have got us very far.

what in broad terms would a deal look like? does russia get more of the ukraine? >> i don't think so, because the ukrainian position is not in a -- the ukrainian president is not a position to give them that. particularly now he's got a right-wing opposition, which is threatening to march in kiev and which is going to cause him some problems on his own home front and so, the military stuff is going to go on. but the truth is that there will only be a political settlement. each side is deeply dug in with widely opposing positions. that isn't going to come soon what happen we saw over the weekend with the ukrainian foreign minister and lavrov the efforts trying to work it. the convoy, it's partly empty. my own view was that, one, it

was a cover to move armored vehicles in last week, to see if it could take off what the russian were doing on the military side. two, if it's allowed through by the ukrainians, it would be a net benefit to the separatists who need food and who need some support. if it is opposed by the ukrainians, delays at the board or shelled by the ukrainians, it will increase mr. putin's possibility of pushing for a political settlement on the grounds that he's been mistreated by the ukrainians, that he's the wronged individual and it will gin up some support for him. >> given everything you've just laid out, mr. ambassador, how likely would it be to see increased sanctions from the west, from europe and the united states, on russia and therefore a harsher retaliation from russia, economic sanctions i'm talking about? >> i think that's very likely because that represents additional leverage which i think the west is now slowly

beginning to gear itself up to use in light of what seems to be the stalemate and mr. putin's even more aggressive military stance. >> perfect segue, mr. ambassador, to my question which is, how much does putin even being fazed by the economic problems within russia, the fact these sanctions are taking their toll? is he feeling any pressure whatsoever from the russian people who want him to appear strong and mighty but on the other hand hurting in their own right? >> i think that this is essentially for putin, an ability to play short term while ignoring the long term. it's absolutely necessary that the long term question, including the energy equation in europe, be addressed if we're going to get mr. putin to pay attention to the fact that he is leading with tactical victory, or thinks he is, to jazz up his popularity ratings but he's

putting himself in a position where he's distrusted, where he's isolated, and where he could be economically isolated with the europeans to get smart and spend some time and money in reducing their energy dependence, what we hear about oil availabilities and the potential of iran coming on the market opened the door to that. but that's like a one-year to two-year proposition, something that won't happen right away. mr. putin in fact has torn up, shredded any credibility he has and he's not likely to get it back very quickly. >> good to see you, sir. thank you for sharing your analysis. former ambassador to russia, thomas pickering. a rally in treasuries all year, as you can see, the ten-year as stocks rise selling off a bit today with yields slightly higher. still, talking about ten-year below 2.40. longtime at pimco, john, a brave

soul to walk in today and sell treasuries. is that you? it has been the wrong bet for the entire year. >> yeah, no, we've been tactti l tactically trading treasuries. strong auctions last week suggested there was some real money buying into treasury and driving yields lower, concerns about geopolitical risk and, frankly, flight to quality. so that did create a bid in the treasuries, strong rally towards friday and last week. but the longer-term trend, certainly over the next coming quarters, i'm worried about inflation. i see a lot of shorter-term inflation indicators firing up, rentals here in the u.s. the u.s. economy is driving inflation up, employment or unemployment down. and ultimately that means yellen will probably be moving sooner rather than later. >> but she hasn't indicated,

john, she's worried about inflation in the least. what are you seeing that the fed isn't? >> well, the year over year inflation numbers look pretty tame. but as lower inflation prints drop out of last year's numbers, and the higheren flation prints that have occurred over the past three and six months start coming in, inflation numbers will be above target. there is certainly a possibility or likelihood that yellen will err on the side of being behind the curve. but we know ultimately that means rates would end up going higher than on a more deliberate, early, preemptive rate path. so, either way, it looks like ten-year yield and 30-year yield on the way up. >> jeffrey gunlock told me friday, 2.35 is the level he's watching. we reach that you could go down

to 2.20 but does not see us reaching 2. is that in line with the way you're thinking? calls a benign jackson hole event on friday. >> yeah, the jackson hole event probably will be benign. yellen is expected to talk about labor markets and obviously the more emphasis on labor markets the more thought of lower for longer goes. but we did get down to i guess 2. 30 on friday afternoon, now back up to 2.37. so you know, jeff's outlook, at least for the past 24 hours, has kind of been to prove but markets will move in either direction. it's hard to make money on ten-year treasury if the yield's 2.37 and even 10 or 20-basis point yield on upside would wipe out the returns. >> i'm sure is view is longer than a couple of hours.

you get the point that he's trying to make, the momentum that can exist within the bond market if you reach a certain level and there's a geopolitical risk around the world, worries about what's going to happen friday, you can see rates tick lower. >> yeah. there's been some extent a short covering rally, as short-term traders have tried to buy in their shorts and avoid the short-term pain. but the interest rate path will be driven by fundamentals and fundamentally although the globe is weak, the u.s. is strong. >> john brynjolfson, thanks for weighing in on that for us today. >> up next, why self-driving cars could be hitting the road sooner than you think. >> 25 years from now, people are expecting every car on the road to be self-driven. well, guess what? the future is now in this audi a-7, press a button, take my

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whether or not -- whether you like or not -- i was thrown off by the lebeau dancing -- autonomous drive vehicles are coming sooner than you think. honor of cnbc's 25th anniversary, phil lebeau joins us with a look how autonomous drive vehicles chak the wnge the look. >> it was not intended to be on cam rap live tv. which i should have paid attention. hey, listen guys, self-driven cars are coming. audi a-7, a taste after what we're seeing in the future. look at automakers they're working on autonomous drive technology. we're going to see partially autonomous drive vehicles by the end of the decade. global sales of self-driven car

will hit 94 million by 2035. what will it be like? check this out. mercedes-benz, we went out to r&d fast in silicon valley a vision of the future, you'll have a virtual heads up display as you're passing vehicles and there's somebody in your social network it will pop up on the screen. you're not driving a car, don't worry about distracted driving. head of the facility out there says early tests show this is what drivers want. >> we have actually brought customers into the simulators to see and experience actually autonomous driving and the acceptance level is amazingly high. so as soon as people experience it, they actually accept it. i actually believe that it's going to be widely accepted, much, much quicker than most people think. >> reporter: for something way out there. by 2039, bob lu it z, former vice chair of general motors, he

believes by 2039 our world will be dominated by self-driven vehicles. his vision for the future -- >> transportation module comes within minutes of ordering it. it's streamlined and roughly 12 feet long. about the size of a four-person golf cart. hop in, tell the module your destination, off you go. you won't steer it or control its speed. powered by highly advanced batteries the module headed to the closest freeway where you'll speed up in acceleration lanes and join other modules going bullet train speeds. on the freeway, connected to the other modules with little separation. rails burieded up the highway radiate electricity to power the modules above. exiting your module breaks free seamlessly and slows in a series of deceleration lanes. once your final destination, get out. the module leaves to pick up its next passenger or recharges itself nearby.

that's cool stuff i'm asked bob lutz, when you brought this up to people in the industry, what's their reaction? they think i'm nuts but he believes that's coming, that we will see fully self-driven vehicles by 2039. piloting us around on highways, recharging over rails within the road. >> i love the idea because i'm a terrible driver. most people are freaked out it's not safe, bill. i'm all about self-driving cars. >> that's the selling point. safe somewhere you'll have a better use of your time. >> they just have to figure out how to regulate it. phil lebeau, thanks for the vision into the future. look forward to more. and maybe even dance moves. >> why is that not surprising. >> i'm terrible, yeah. over to dom chu for a quick market flash on proctor & gamble. >> i like to be the driver's seat. but proctor & gamble wants to be driver's seat. one of the better performing stocks talking up news. reuters reporting the company

which was reviewing up to 100 underperforming brans for potential die vesture is likely to shed duracell batteries brand and shaves are brand. that stock up towards session highs up a percent in value on the day. back over to you guys. >> a lot of speculation. straight ahead, the chairman of eurasia group, david gordon will discuss what the geopolitical turmoil will mean for the markets. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review.

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looks like no resolution in sight between russia and ukraine. the latest cease-fire in gaza set to expire today with no signs of a peace deal there. david gordon, welcome. good to talk to you this morning. >> great to be here, scott. >> to ukraine first. how's this thing going play out? for the next 24 hours, you can give us, because the situation changes so often and it has had a dramatic impact on the way folks down here and who watch cnbc are running their daily business lives. >> yeah. i think the latest shift here is that the ukrainian forces really increasingly have the advantage on the ground and they're looking to get as far as they can before entering into any kind of a cease-fire. the russians now want a

cease-fire here. the ukrainians continue to press their advantage. i think the balance is beginning to shift against russia on this, but i still don't see a settlement anytime soon. putin's not going to walk away from this that easily. >> so what then has to happen? what does he need to do to more credibly pursue any kind of diplomatic solution? >> that's his problem here. he has to put a set of ideas on the table that are going to be something that poroshenko and engage with and negotiate around, that right now the kind of ideas that putin has been talking about are just nonstarter for the ukrainians and ukrainians have strong support from germany, the u.s. >> investor reaction has been curious, given the risk you're analyzing at the u rare shah

group, do you think investors have it right, they see a scary headline, sell, look at impact on global growth, supply and demand and buy on the dip. are they underestimating the risk? >> i think they have it pretty much right. i think there are a lot of political risks out there. i don't see them synergizing in a way that generates a big crisis. so i don't think gaza is going to get out of control even in iraq, it looks like iraqi and kurdish forces are about to retake the mosul dam. so i do think here, as krprices get pushed down, buying tunes are real. >> wait. you say you don't think the situations are going to get out of control? >> i don't. >> it seems well too soon to tell. >> well, i just don't see the instrument by which they impact

on each other. that's right now these are all contained. i think the only thing that could lead to them coming together would be something happening that really put oil supplies at risk, and i think that's increasingly unlikely to take place. so, i'm not saying that anything is going to get better quickly here, particularly on russia/ukraine, but putin's being squeezed here i'm done think putin is going to want to do a full bore conventional forces move into eastern ukraine. he's going to have to find a way out of this, if he wants to restabilize his economy. i don't think he's going to do that anytime soon. >> it seems like the only thing in terms of iraq goes, that the only thing that's changed is that, okay, they may have retaken this critical dam for

now and that al maliki is out of the way. >> right. >> paving the way for the iraqis themselves to come together but there's a lot more work that needs to be done before we can make a definitive statement it's going to be a success. >> i don't think it's going to be a success. i don't think iraq will come back together but i think it's going to be successful enough to prevent the kind of pressure on energy markets that i don't think the southern fields are going to be at risk here. and i think as long as those southern fields aren't at risk, you don't get a lot of pressure on energy prices. i think that's the key point to watch in terms of looking at how these geopolitical events impact markets more broadly. >> understood. david, thanks so much. >> you're welcome. >> point's well taken today, sara, wti down, yet again. >> the dow continues to push higher, up 155. up almost a full percent.

why brick and mortar stores might be more profitable than the online versions. more on that when "squawk on the street" comes back. you make a great team.

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lots of changes and challenges in retail right now. potential bidding war for family dollar, companies like amazon and ebay squeezing margins of traditional stores like macy's a surprising view how to play. brick and mortar a better bet than e-commerce says a retail analyst. i know you don't cover the dollar stores, we're not going to ask you about that but it's relevant to the point. they don't have a big online presence. why is brick and mortar more profitable. >> what's interesting you have conventional wisdom tell you online is the way to go, because it doesn't have rent it's the more profitable channel. think about them in one cohesive unit stores are a fixed cost, because you're selling something online doesn't mean you can walk away from the rent check.

seeing new reports coming out where we're changing wait we used to think about the brick and mortar versus online equation. >> who will benefit most. abercrombie you like. >> look at e-commerce as a prisoner's dilemma, something we need to be doing as opposed to something we'll have a margin benefit look at it in two different ways. one hand a sig net, jared and kay, jewelry, you'll get people that will walk in, need to feel that stone. that's the one hand. so you take an industry that won't be overcome by e come you'll benefit. to the extent you're a threat closer and shift sales online, you'll benefit. abercrombie and the rest of the teens embarked on this. >> you say that conventional wisdom suggests that online is the better bet. i mean, it's more than

conventional wisdom. there's real results right? amazon is having an impact on many businesses, whether it's costco, in some respects perhaps walmart and others we haven't mentioned. >> great point. >> man yn on your list. >> you hear everyone talking about the slift they'shift they. what is amazon's profit ability. >> it's not a lack of business. the lack there of comes from the lack of spending, not the lack of what they're drawing. maybe that's where the issue comes where you're creating fixed cost that didn't exist beforehand. when does it stop. >> profitability is getting hurt, macy's michael kors, whether it speaks to the cyclical, macro environment or they're getting pressure from pricing online. >> one hand you have gross margins and that speaks to the notion, price transparency

proliferates. you will have the gross margin issue. on the other hand extra cost, every incremental dollar, there's no scale, maybe what we're seeing with broader players, variable cost, shipping is there, fulfillment is there. extent you have rent, every rental dollar will earn you more money. >> a world where apparel retailers seem to be struggle, back-to-school shopping about to be in full tilt, if it's not already there how than going to impact companies on your coverage list? many play right into that, whether it's abercrombie or old navy or any number, the gap, et cetera? >> this is a slow and stead yo process from the online piece. some companies acknowledging it to the ton of 20 basis points. to the point of retail, gross margins are the price of entry. promaegss aren't going away now and 2008 you had massive inventories you need to clear. now the consumer needs the promotion to get into the door.

>> ratio, sales from online, some stores we cover like 10%, investors want more, they can see the double digit growth if it's higher ratio. >> growth numbers will be huge, my average group around 15%, pr probably gets around 20, 25. if if debt gets above that i worry. >> later on, simon hobbs has been challenged. >> mickey, i accept your a.l.s. ice bucket challenge. and in turn, i challenge simon hobbs with cnbc. bring it on! >> simon will take the ice bucket challenge live himself outside the new york stock exchange later on in the hour. with that bucket right there. there is ice in there, i saw that shot. >> yeah, he's going to feel it. >> controversy online about people taking the ice bucket

challenge with no ice. the water bucket challenge. >> you used real ice. >> that's ice, right there. for hobbs when we come back. so i can reach ally bank 24/7, but there are no branches? 24/7 it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates.

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monday's edition of the santelli exchange with the man, ira harris. ledge endary trader, cme. all right, ira, listen. for the last several weekends, geopolitical headlines supposedly making a huge difference. cause and effect, somebody sends a memo. the markets moving because of this or that. but you and i are questioning the gegeopolitical effects. >> you saw on friday, we got the tweet or whatever came out of russia and ukraine that ukrainians, what was the response? the stock market broke, and the euro currency which had been somewhat weak because this is where the algorithms are set up. weak stock market, oh, we're going to get out of dollar assets and start gravitating towards other. and of course the bonds. but it's insanity. >> right. and listen, if people want to look at geopolitics and think social media is going to win an award, that's their business. but in the end it really is the

deterioration of europe. and i don't see any tangible effects, for example, that the natural gas is being used as a tool yet by putin, but then again, winter's not here yet. >> right. but the bigger issue to me and the more i think about it is that if you put your money in a european bank -- any european bank -- >> i like where this is going. pay attention. >> you have to be a moron. >> bail ends. >> who last year in cyprus, they did the bail-in. we saw it in portugal. >> it's not that i'm more pro bail-ins than bailouts. let's p up that boiler plate on it. we're looking at it as a bondholder. >> don't forget, in europe, there's no fdic insurance, by the way. >> so where does that money come? if it really was geopolitical, meaning mr. putin everybody kissed tomorrow, we'd have a sustained rally. no, the economy isn't

sustainable for that rally. but in the end, it really is a deterioration that's been going on for quite a while. and you were talking about watching the auto experts a year ago. >> right. we've seen it. the economy in europe, listen. italy's negative. germany's negative. france is barely positive. there is no real growth. and there's not enough growth around the world to get them to bail out. and of course, they need a weaker currency, but they don't know how to get there. >> i got you. ira, thank you, as always. and sara icen, it's all yours. >> thanks very much. and to that point, the euro is weakening, quarter percent, 133.65. let's go to jon fortt with a look at what's coming up. you've got a big interview i'm looking forward to. >> rupert murdoch knows a thing or two about privacy violations. he says this company is worse than the nsa. i'll give you a hint, it's not his. we'll have more on that and my interview with 50 cent on his new headphone line. tie-up with a tech company on that one. and kara swisher plus ice bucket

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welcome back to "squawk on the street." i have been nominated for the als ice bucket challenge. sara eisen's greatest moment in

her career as she delivers that. >> i've been waiting for a long time to do this. >> mickey, i accept your als ice bucket challenge. and in turn, i challenge simon hobbs with cnbc. bring it on. oh, man! >> yes, the coo of carnival, i accept your als ice bucket challenge for charity. >> and i couldn't be happier to do it. >> oh! >> i got it on myself. >> that is cold. >> and applause from the crowd. >> and i now nominate the coo of priceline, darren houston, i nominate you and the booking.com team in amsterdam. the ceo of mare not, arnie sorenson, i nominate you and your team outside d.c. and i also nominate the ceo of gopro, nick woodman, to pull off an event like the als ice bucket

challenge as only, i assume, the gopro team can do. thank you, sara. >> you look very nice in your little t-shirt. the crowd is happy. how about you pick those people? >> lots of thinking. and they're good friends of the show. >> it's raised a lot of money. it's gone absolutely viral and it's huge. >> they have raised just over $15 million so far. that's up, i think, from $7 million last week, which is seven times what they had this time last year. so with these new teams, they'll make even more. >> all right. well, simon hobbs, you look great. >> thank you. >> are you cold? >> a little bit. i have to do the europe close now. see you in a minute. >> he's going to change back into his suit. with that we turn it over to" squawk alley." >> thank you so much. good morning. it is 8:00 a.m. at google headquarters in mountain view, california. 11:00 a.m. here on wall street, and "squawk alley" is live. ♪

good monday morning. i'm kelly evans. carl quintanilla is off today. and joining me all hour are the jons. our jon fortt and jon steinberg. good morning to you both. none of us here have -- no, you just did the ice bucket challenge. zploo he did it with his kids, too. >> we want to start with the markets. take a look at the dow jones industrial average, up 157 points, that's a start to a monday. 16,820, closing in a mixed session on friday. a look at some of the winners on the dow. they include united technologies, visa, ge, nike and 3m leading the way higher this morning. also shares of dollar general

rallying after the company is offering 78 ining $78.50 for co family dollar. those top the biggest gainers on the s&p 500, both higher to the tune of about 10% and 4.7% respectively. now, first up both facebook and twitter rolling out a couple of changes to their main pages. facebook is testing a new satire tag to help users tell the difference between real news and articles from places like the onion. meantime, tweets other users have favorited right into your time line. so popular tweets go right into your feed whether you follow that person or not. especially the latter one's been controversial. >> the first one's going to help a lot of people. i know on my facebook news feed, usually political news. people will be, like, oh, my gosh, i can't believe this. yeah, really? did you check the headline? it's not actual news. then the second, says i think some diehard twitter users are upset, but it kind of makes sense. if you favorite something,