2014. "squawk box" begins right now. good morning. welcome to "squawk box"er here on cnbc. i'm andrew ross sorkin along with joe kernen. kayla tousche is here today for the vacationing becky quick. wall street is buzzing about the details of bank of america's record settlement. but we'll also be talking about one of the most notorious names in the crisis. angela mozilo, preparing a lawsuit against the countrywide staff. as many as ten other former countrywide employees are expecting to face lawsuits. people didn't think this day would come. here we go. outside the world of business, we're learning more today about a failed u.s. commando mission

to rescue americans being held by isis. pentagon officials saying forces stormed a terrorist compound only to find the host aemgs weren't there. we're going to have a live report from our nbc colleagues covering this in just a bit. carl icahn is at it again. the activist investors revealing a nearly 89% stake in hertz, the rental car company. icahn says he will pressure the company over pricing issues and operational failure and he may even seek a board seat. shares of hertz plummeted over the last few days after the company withdrew its full year forecast. they are up slightly in after hours trading. as of yesterday, some hedge funds talked about potentially trying to replace current ceo mark viscora, as well. but this seems to be bit of a low hang fruit at this point. >> as of the last quarter.

>> late 2013 is when he originally took that stake. we know hertz and we like mark. but it is low hanging free fruit, i guess. >> the high on the tock is 31.61, its all-time high. and it's at 30.33 and the low is 1973. so it's action weird. >> but it sells 15% on the day. >> i'm not saying it doesn't. that's the first one i saw and i was like, it just doesn't look like it's been -- at times that tough. >> also in that time period, we completed the mergers and it was a long time coming. hedge funds like that, but they couldn't really deliver on that merger. >> and we just saw what happened. maybe it made some of the -- you know, came back.

>> it's less than uber, though, if you can believe that. >> amazing. oh, yeah, as far as icahn goes, when he buys in, i think he has no idea about the mechanism of the biotech drugs. inclone, did he know that was going to work? motorola, did you know how to go? >> when do you think that -- >> i think he understands this. don't you think? when is the last time he's been in a rental car? i even understand this. they get a discount, they rent it out. >> i have to say, i've rented many a rental hertz car this summer. i don't understand how the rental company cannot be sailing through the i'dance. >> the experience that i have. i go there, the car is there totally red, if you're a hertz one customer, my name is there.

i get it. but when i turn it in -- no, i do not. you're the one -- i own two cars. lease. but then when i take it back, seriously, you pull in, there's a person there. they look at a couple of things and they hand you something and you're done. they've got it down. the stock doesn't look bad to me. >> it doesn't look that bad to me. look at the longer term chart. but when you look at it this way -- let's see it. one week? up over one week it's 4.5%. >> i'm trying to see some trouble there. but i've got much bigger trouble with 17 billion here, a shakedown. >> some of this is about getting money back to shareholders. the buyback. >> it will be interesting to see when icahn got in. you do see that it was at lower levels in the june/july period and has bounced up from this.

>> there is another icahn investment in the news this morning. that's dollar general. >> dollar/general has made its own buy. saying during the june meeting, you never told dollar general that there were discussions with another buyer. levine, the ceo of the combine family dollar dollar tree. can you blake the ceo for wanting to keep their jobs in this scenario? >> psychologically, you can't blame them. but in in particular instance, if there was a better bid on the table, clearly he wanted the

gig. >> custodians of shareholder value. >> that's the job. >> optimistic for shareholders. >> but you would argue traditionally and even in his case, there were enough campaign things build in that he was going to get paid either way. when are we doing the junior banker thick. you have a guy that's been very concerned about wage growth. and, you know, you'd like a minute monthly. then i see these bankers. they can help the economy. but in my mind, i don't think you would think that this is a positive when junior bankers are making more money. it's not like mcdonald's workers making money. this is bad. that money that they're getting could've gone to the people that

actually need it. >> if i have a thought on this, which i will tell you at 6:30. >> i can't wait for that. i saw the glum look on your face with these guys. it's basically move money around, they're going to be keeping more. >> i have a view. it will surprise you. >> ooh, that's a tease. your view at 6:30. >> he's a big tease, as you will see. meanwhile, another corporate victim of a cyber attack. 51 of its stores have reached agreements. a ooups company says they're not aware of any front. they say it happened in january and august. there are a lot of people who went through u.p.s. store

between january and august. >> are you a fedex ex or u.p.s. guy? >> fedex. i like u.p.s. but if i had a choice, one way or the other -- is the guys are cuter at upstairs. i mean, they've got -- brown and -- >> the purple and green. >> not the guys at u.p.s., but have you seen them? >> yeah. we have a hotty that comes to my building. i'll just say that. >> he has since been rea-sunni se assigned. >> are you going to tell fred smith that you have this

recover. >> this should be on the men of u.p.s. after the men of "squawk box." this morning's developing story, details of the record shattering $17 billion bank of america settlement, kate kelly has been following every twist and turn and she's here this morning to walk us through it. good morning. >> good morning, andrew. bank of america expected to disclose a settlement with the department of justice of nearly $17 billion over charge eggs that have misled investors about the quality of levels and the issuing and pamging of mortgages to certain buyers. within the last ten months, jpmorgan paid $13 billion and citigroup paid $7 billion. the same logic worked here, but

not until after months of negotiations between tony west and lawyers for bofa. late last jump, the attorney general eric holder called the bank's brian moynihan. the eventual results, a cash penalty of some $9.6 billion in cash and another 7 billion of so in consumer release office. much of that will be forfeited ref knew rather than cash and may be tax deductible. but the 9.6 billion will not be. today's deal should bring bofa closer to its liabilities with the amount of this settlement roughly 80 billion in regular or regulatory payouts. it's a victory for the justice department, which many say has been too slow to punish arrant

banks for the financial crisis among other things. countrywide being a prime example here and where they'll ever consider such moves against when the liability has been clearly drawn. >> two questions. one is what did bofa do wrong? not in terms of the merits of what they've been accused of in this case, but 234 terms of the negotiations for them to end up with a south side 17 billion fine relative to they're not good big. so maybe the negotiation was at fault. i was told by if much more than

17, moynahan would need to worry about his job. but it's still a heavy phrase. >> is there any indication that these types of numbers, $17 billion, $13 billion, the $7 billion that citi played that it somehow play kays the american consumer? you're talking about the individual issue. is there any sense that, you know, the moms and dads out there who are watching this with saying to themselves, oh, they got liz. >> yeah, and there's a little by of -- i don't think they go how much money they're having to pay as legal disputes is part of that as well as they're having to address the wrongs in the mortgage market.

unemployment is only recently getting down to more healthy levels. it doesn't feel good. >> tell us where the mozilo is going to go. >> that hasn't been heard yet. this sounds like it would be parallel to the s.e.c. suit which was settled in 2010. >> how much did he pay -- >> he paid $67.5 million. but remember, this is a man who earned $500 million. >> when you think about what bofa pasd for these companies, they paid 2.5 billion for countrywide in to 308. $50 million for merrill does there ever need to be a big bank deal ever again after what we've seen? >> well, i don't know. we were having this discussion with steve liesman out at

jackson hole and said some of the folks are talking on the sidelines about this. it's a real concern. i don't know what this add men administration or the justice department is thinking that aspect of it through. >> can we ever attempt another clandestine rescue in a foreign country at this point? >> right. >> i don't think we can probably do that now that we've detailed exactly what we tried to do. they will probably have this right now. this is not thinking about a lot of things. >> well, here is one point that -- >> optics at this point, either, right? are we worried about optics? >> well, that's -- yeah. >> i said this was my last collection. >> you had to like the speech, right? that was one of the most strident speeches he's made about overseas, right? >> you would know, but i wouldn't. >> can i just make one point?

>> at what the halloween, maybe. >> and you're in orange today. >> i think that's a good look at times. no? >> can i make one more point about the financial crisis, though? >> it was six years ago. >> okay. i just -- >> what can you possibly say now that hadn't been said? >> i think there's a distinction to be made between jp morgue yaps's purchase of wamu and citiba citibank's purchase of worldwide versus bear stearns and was a true bailout. >> but it means both companies did their civic duty. they would be disinclined to help out the next time someone comes and asks me. >> right. i'm just saying -- >> all night in the bathroom, can you please bail me out here?

i say no. kelly, thank you for joining us. talking techs this morning, there is a tale of two stocks. let's start with hewlett packard, joe. shares falling after hours despite revenues. earnings were in line. then we have to talk about apple. apple shares broke $100 for the first time since that stock split and they also hit an all-time high. good morning to you. help in the whp piece. they cleared on the revenue side, but the prots, they can't get it together. >> i think the work at hp is continuing to be a work in progress. personal computer systems are very strong. they have to get over to the areas that create the highest margin, which is enterprise

growth and software and kind of get away from the desktop. and until they do that, you'll see these benign top line and bottom line growth numbers, which is basically what we saw in this quarter. >> you say until they do that. do you think they're on course to do that? it doesn't sound like extra the teejicily that's the way they're moving. >> they still have a long way to go to kind of get there, but if they want to do more than just be a free cash flow generator, right, and a stock purchaser and a dividend distributor and grow, they're going to have to get into expanding, for example, software more than 3% of revenue, which is what it is right now. >> you can buy a share of hp or share of apple right now, what would you do? >> well, we own both stocks. we have two kind of strategies. one is kind of a growth strategy, a core strategy, and we have a dividend strategy. we typically divide the hp

shares in a dividend strategy. we own both in both strategies. >> and where are you on apple now? is $1100 too much, too little? we talked about there always is a run up in this stock ahead of big announcements. we imagine we will be getting bun of those in a couple of weeks in early september. what kind of product are we actually going to see? >> well, we still like the stock in toerms of the new product that tim cook is saying he's got, a whole new product category. everybody knows, is it the watch, is it the itv? does that have to help in northwest. obviously, there's a larger key size without having a whole new question category. the stocks are, what, 15 tins times earnings looking at maybe

111% trade growth. you don't have that much downside on your multiples. but to answer your question, we're still buying the stock. >> dan, we're going to leave the conversation there. we should tell our viewers this morning that our own david faber is sitting down with meg whitman today. "squawk on the street" and you do not want to miss that. >> she loves him. >> did that wonderful documentary, one of the first documentaries done on this network. >> walmart is the one. add we head to break -- and then there's a walmart, too. check out the shares of sears, clothing numbers coming in from that company, reported a much wider than expected loss. revenue coming in below estimates. ceo edly lampert saying second quarter performance was unacceptable.

still to come, china's manufacturing versus, the story of the chinese economy is so big that we've asked our colleagues from "squawk box" asia for help. wow. >> wow. >> and i saw susan in makeup. the i get star struck whether i see people that i watch on tv. yeah, squawk in asia. susan lee will join us when we return. s.

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welcome back to "squawk box." the firm saying a proposed rules for currency will have far flung consequences. the chinese bitcoin players arguing the u.s. rules are too broad and should only apply to businesses with meaningful connection connections to the region. >> who can claim the title of "squawk box" anchor and we are fortunate to be joined by one of those few. she's the coanchor of "squawk box" asia and, susan, i'm sorry because i started right away by asking you about bernie lowe, what is he like in person, is he really as funny and as nice in person as he is on air. what can you tell me about him? we all sort of -- we know him. >> we love him. we love him. >> he's fun to work with. >> actually, they call him the joe kernen of asia. >> they do? >> yeah. >> they call me the bernie lo of

america. >> but his hair isn't at good. and i can vouch for that right now. >> but i can refer him to the right people. >> never been on "squawk box"? >> this is my first time. >> does it get any bigger? now i'm switching to where this is the big -- no. >> go ahead. >> are you going to tell andrew about bitcoin or we're just going to talk about whether china is going to zero growth at this point? >> well, actually, china is back. >> are you sure? >> decree. >> we need china. >> you do need china. it's going to grow at 7.5% this year. i think that's consensus. and you have so much firepower. they're spending it, but in targeted measures because they don't want to happen. asset bubbles happen once again. we saw last year. >> it would be nice if they were continuing to like our debt at

2%. is that -- >> they do. they own over, what, 2 trillion? >> they don't need to were about that? >> no. they need to stay diversified. and i think they like holding that carrot over at the u.s. >> so as we've been watching less than -- less growth than we've seen previously, has some of the dislocates and bubbles that we've been worried about, whether it's been, you know -- is that being rated? >> the credit bubble was -- the big one that everyone was talking about, we saw lending contract. >> that's right. >> it was at half the rate that the market had expected. >> so we let the air out a little bit? >> yeah. we let the steam out a little bit. we saw that with the pmi numbers last night, we had a three-month low with hsbc flash numbers. that was kind of expecting given the declining activity that you saw in the previous numbers and also -- >> is everybody really anxious we call the shadow banking giant

in china? >> a little anxious. when i talked to some investors, they say take a look at what china is doing now compared to the u.s. in 2008. we don't have a credit event in china. >> what i worry most about -- >> the -- the thing that scares me most about china, and i hear two things, and that is that social media, 1.2 billion people now know how the rest of the world operates in terms of private property and free press and the ability to demonstrate and push back against the government. they seem to understand that, you know, if there is total chaos, that wouldn't be good, either. so they sort of go along with the party. when did they actually say look, we're not moving fast enough here. we need more of what everybody

to deal with. they call this a capitalist economy. by i -- >> you've been in the finest hotels in all these places, too, right? he's actually had a butler at most of these hotels. >> not true. >> so you think that they -- the consumer society from the export society, that's going to be possible? >> yeah. so when i ask people, what do you think about the communist party? can they survive another 50 years? china historians, political watchers, they say the number one goal for the communist part right now is to stay in power. whether it's going after corrupt officials, to look better in the eyes of the $1.3 billion population, they're going to do everything they can to stay in control. >> the one economic event that i'm watching in this quarter is the alibaba ipo.

is there alibaba fever in china? it's expected there's going to be a lot of wealth coming into the economy because of that deal. are investors rushing to get a piece of that? >> i think it's going to be split across the region for the institutional investor. there's as much stock as the american investors. there's a lot of controversy there, thinking this is a chinese company, why can't we buy in as much as american consumers? yes, you know, there is a lot of talk about alibaba. they set up pick up locations in long song starting yesterday. you come and pick it up at these certain locations. >> kind of like amazon lockers? >> yes. >> did you go to the "new york times"? right? >> we did a global conference in hong kong. and then i helped host -- >> that's what i was going to ask you. bernie, did you irritate bernie as much as -- did you guys get

into it that much? >> i did not. >> you ir stated him. >> no. >> he watches. so he didn't get -- no? did you see the interaction of this? >> unfortunately i missed it, but i can tell you that all my female friends in hong kong showed up for andrew's book event. >> wow. >> yeah. >> whoa, whoa, whoa. >> she's laughing. yeah, i get it. that's funny. that is good. susan, thank you for joining us this morning. >> can i -- on a sign up note, can i just say to joe that he is welcome to come to hong kong any time and we are going to go clubbing. >> what's what i'm talking about. >> maybe we can do the same thing you guys did for andrew, which is play the highlight reel of him trying to pronounce all

the name of the guests in asia. >> we could do that with the guests here in the united states or the guy coming up from cinevus. thank you. i'm coming. i will some day. >> we'll see you there. meanwhile, when we come back on "squawk box," the bank is starting to hike salaries of junior employees by at least 20%. but first as we head to break, a look at yesterday's winners and losers at the market. a.top the list, coal.

good morning and welcome back to "squawk box." bare naked ladies. i love that. save that to band. save that for the year-end review. i'm joe kernen along with -- >> it doesn't count when you cut the sound bite. >> you can do whatever you want now. we've got it. >> bare naked ladies concert in college. does that help? >> the band? >> the band. >> yeah, that counts. that's good. i'm joe kernen along with andrew ross sorkin and kayla tousche sitting in for the vacationing becky quick. making headlines, jpmorgan, bank of america, goldman sachs are reportedly planning to hike salaries of junior employees by

at least 20%. at goldman, the first year pay would be at about $85,000 and that's before collecting bonuses. good or bad for the world? >> fine for the world. and it's fine for these young men and women who work unfortunately for them 24 hours a day and on an hourly basis you will not be impressed. so there. >> i'm happy. i'm happy that you're coming around. i'm glad. i just don't know. i have to ask. >> if there were another industry that were losing talent to another very specific industry, they weren't getting as many applications, the quality of applicants wasn't as good, wouldn't this be the competitive way to reattract them? regardless of whether this is finance or another industry. >> i want everyone to do better. i do. i'm just trying to get him on the same page. i mean, it seems like it's good for consumer spending, it's good

for tax revenues, it's good for -- i want to raise everyone up to the high end. i don't want to bring everyone down to make it equal. at the lowest level, bringing that up is very good. >> what's that? >> at the lowest level is actually the most important because that's when they actually then spend the cash and goes back into the economy. >> all right. uns we get this, you don't necessarily want to bring -- you don't want to bring everyone down. >> i'm not trying to bring everybody down, not everybody, just you. >> you do. >> it will be interesting to see if this works, though, because they've been trying to help with their hours, as well, and the mentoring program. >> not as many people want to go into this. they want to go out and work for -- a company you would understand. we had kevin ruth on this program and talking about how there were more people applying to teach in america than to work on wall street. moving on, joe. >> oh, me again.

market today will be focusing on the fed heads in jackson hole. data housing. here to gis an early read on the trading day, don lufskin and here on set, dan larue. don, do you send everyone a lot of -- i get more mail from you in my -- and you have a lot of important stuff to say. i read it. >> thank you. >> you're very welcome. i already know what you're going to say. you know our viewers probably do not. so when is the first rate hike coming, in your view? >> i think it's coming in april. for goodness sakes, janet yellen at her first fomc press conference back in mid march, some enterprise reporter asked her, how long is the period when you'll start raising interest rates from zero? and she blurtd out six months. that sounds like next april to me, so let's take her at her

word. >> why make it any more complicated? we had someone the other day saying late 2016 or early 2017. the economy might hit a rough patch. do you think? >> no. god created the word might on make statement like that true. anytime a fed official speaks, it's to admit that the labor market is improving at a much more rapid rate than they ever anticipated. so this is on. but the key to understanding the yellen doctrine is she is coming in at a period when approximately we're ready to come off zero, but she wants to emphasis, don't obsess with zero as a number. it's just another number. doctrine is even when we're not at zero, she's going to keep rates lower than they would be under circumstances essentially forever. she's bought into the secular stagnation area. she believes it needs to be easy

even when the fed is back at its maximum mandate. that's quite a statement for a fed chair. let's take her at her word. >> we've got don and dan. dan, there have been people that ever come on and said as soon as the fed starts raising rates, a lot of times it might not be totally wrong. half the position is to get out complete completely. other people have said many times in the past low levels, rising interest rates has meant good things for the stock market because they're rooid rising for a good reason. >> look at the banks. they've underperformed because of the -- you know, the slope of the yield curve currently right now. it's been difficult for bank earnings. that should be a positive if you get steepening from that. i agree that if interest rates begin to rise, it's because it's rooted in better earnings, better overall economic environment. last quarter earnings were very good within the small cap space we particularly track closely.

technology earnings are up 16%. industrial earnings were up 9%. so it's a very, very good quarter. for the first time, i'm hearing that reinforcement phase within the economy that things are looking better, ceos are looking like they want to spend a little bit more. just overall, the confidence factor just seems better. maybely because i think the revenue line was better than most people expected. >> so we can do -- well, you're not an economist. will you get to 3% eventually? do it for a couple of years time. don, do you think that? >> i think that's just for openers. we're five years into an expansion that's not an expansion. we had the biggest reception in our lives and followed by the weakness in expansion. i think we're getting to the point where we can finally get that big surge that you normally get when a business cycle stands. we're just going to get it five years late. so i think we're going to have a couple of years here where yield growth has four handles, five handles, maybe even better. talk about a black swan.

nobody expects that. i think it's in the cards. >> so you would say that the after effects of this financial crisis was worse than the -- the preeffects of 1978, '79, '830, '8is, you think it was the worst period because of what? i can give you other figures that show you in our lifetime that was worse. >> well, all i know -- >> do you remember? were you in the business -- >> economic xangz, we've come back to full employment in about a year and a half. we're at five years and we're not there yet. this is a very slow expansion. >> some people think that's self-inflicted from the way we handled -- what, both before, during and after the crisis. >> no doubt. but the point is, it's five years after, we've learned by doing. it's trial and error. we've gotten to the point where the economy has repaired itself to where it can finally achieve liftoff. all you need to do is look at the trend right decline in unemployment.

we've got a world right now where in term of short-term unemployment, everyone person can get a job instantly and we're now making major process in reabsorbing the record number of long-term unemployment. so you cannot deny, looking at the numbers, the acceleration is happening five years into the business cycle. normally you would say it's mature. but you would say it's just beginning. >> we've got to go, but you expect the participation rate to go back up again some day. >> i sure do. >> really? >> by the bottom. >> what do you say? >> within tech, i like ultimate stuff where it's a -- based company similar to siebold systems. within the energy space, barracks group. the i think we're entering an m&a super cycle is right now. i got in this business exactly 40 years ago. >> do you own greenhouse? >> yeah, we do. >> i say just curious if you

think there's -- >> i like lazard because they have the emerging market asset business which is now almost 200 million in management. i started when the ten-year treasury was almost 10%. every time the market hits a jitter, my phone rings off the hook from the media about is this the beginning of the 5%, 10%, 20% correction everybody is looking for. no one is asking w457d when bond yields start to do what don says they're going to do. i think there's a whole generation of bond issues that have never seen a bear market. the pension funds have never seen that before. >> would you buy stock in dealbook if you were able to? >> i don't know a thing about dealbook. >> the founder of dealbook is the -- acquisitions part of the new -- you would. >> never heard of it. >> you won't be back. anyway, thank you.

>> there's a lifetime to be on squawk. coming up, gold flaring. when the natural gas released in the oil drilling process can't be captured. guess what? it's burned off. morgan brennen is g going to jo us from north dakota. more on the state's plan to crack down on this practice. we're back in just a moment. i got to be pretty good at managing my symptoms, except that managing my symptoms was all i was doing. when i finally told my doctor, he said my crohn's was not under control. he said humira is for adults like me who have tried other medications but still experience the symptoms of moderate to severe crohn's disease. and that in clinical studies, the majority of patients on humira saw significant symptom relief. and many achieved remission. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal infections and cancers, including lymphoma, have happened; as have blood,

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welcome back to "squawk box." north dakota is booming with production surpassi ining 1 mil barrels a day. morgan brennen joins us now from in north dakota. she's got a lot more on this

story. good morning. >> good morning. this is natural gas and some collection of oil wells here in the ray area just about 40 miles outside of wilson north dakota. there are thousands of these flares on fire across the bakken. there's so many, in fact, astronaut ves captured images of this flaring from outer space. why are we seeing this? we see 11,000 wells focus on crude oil, which is more valuable and can be transferred different ways. but the gas that comes out requires pipelines. they're at full capacity so they have to burn off this natural gas. it's sparking chas action suits as an estimated $100 million worth of gas is wasted each month. many of these flares are on residents' properties like tom wheeler whose hay field i'm standing in right now. tom is not taking part in this

regular paycheck or drilling in his property. but he hates to see this resource wasted. >> it's a waste. there has to be better ways to do it. we're easy to get along with. don't lie to us. we're not asking for the moon. we just want to be treated fairley. >> so last month, north dakota passed new flaring standards by october. at least 74% of gas generated at existing wells must be captured. the industry is already close to that. this will continue to increase to 90% by 2020. keep in mind, that 10% flare rate is still 10 times bigger than other states like texas and alaska. regulators here say that any wells that don't adhere to these new standards are going to be curtailed and the most at risk are wells that don't have any kind of infrastructure in place as many as 1500 wells. but there is a company that has a potential solution to all of

this. we're going to tell you more about that and their technology in the next hour of "squawk box," andrew. >> excellent. an important story. an amazing image. >> that's a stunning shot. >> and we will very dangerous. >> it's very warm, too. >> i believe it. thank you, morgan. we'll see you a little bit later on. when we come back we bring you all kinds of economic indicators on "squawk box." but up next, the indicator that matters most to youngsters. we'll tell you how much the tooth fairy is cutting back this year. plus oktoberfest is coming, and if you still haven't picked up your lederhosen it's not too latest specially if you live near cincinnati, ohio. that story when we come back. id 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.

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welcome back to "squawk box." the tooth fairy is cutting back. a survey from visa finding that night time visitors leaving 8% less this year than she did in 2013. the average left for every tooth, you want to guess? you can see it. >> $3.40. >> $3.40. of those surveys, dads reported higher giving figures than moms. i think that's true. the dads always give more than moms. >> you asked me yesterday, you know i can see the teleprompter that you're reading. >> i am aware of that. >> so he's -- >> you can't ask me to guess. you're making me seem smart. >> how much do you give? >> i'm embarrassed to say. i don't give -- i am receiving

the stuff. because as you will see as you get a little bit older -- the permanent teeth start falling out. >> so i have one quick question -- >> do you get more for a crown? >> because it costs more to get more back on. >> i'm a parent will little 4-year-old -- almost 4-year-old guys. we haven't had this experience yet. >> for the baby teeth yet. >> how do i make sure i can get the money under the pillow while they're sleeping? my guys wake up like every -- >> if you go in their room? >> they're not heavy sleepers at all? >> they are -- you're going to have to yank them and move them out of the way. >> do it before they go to bed. >> my dad used to pretend to be an alter ego, tina the tooth fairy would bring me long scripted letters. i'd bring them into the school and tell them the tooth fairy is tina. tina was like my idol. >> what did tina look like? >> she had a short, blonde haircut. she looked a little like morgan brennan. she worked for converse sneakers and a big tutu. yeah.

i miss tina. >> there's a lot of things bouncing around and none of them are suitable at this point to actually say. i will just tell you that, the tooth fairy turned into hercules. going whatever his name is the rock. played the tooth fairy. he is now playing hercules. so that is an actor. that is a range. is it not? that is range. tooth fairy. >> it's one range. it's one range. >> anyway, a major lederhosen making its first u.s. store in a brewery in cincinnati. the company is the official supplier of the lederhosen, from the munich oktoberfest. it says it wanted to show americans in their words, that you can wear lederhosen with chuck taylors. you don't have to wear the sis penders. and this is a huge deal in the queen city, oktoberfest. you know that's my hometown. >> and andrew said he's been

there. >> no to the one in germany, right? >> yeah. >> coming up bank of america's record $17 billion settlement with the justice department. in india we have 400 million people

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bank of america, settling with justice over toxic morgan securities. the damage a record $17 billion. and former wells fargo ceo calls the deal nothing more than extortion. find out who he wants to see behind bars. the housing market picking up steam but with cash buyers flooding the market, and refinancing stalled the real estate recovery may be in jeopardy. builders and lenders weigh in. and the barclays center wants to bring democrats to brooklyn. the owner of the new arena

laying out his plan to bring the democratic national convention to new york for the very first time since 1992. the second hour of "squawk box" starts right now. good morning. and welcome back to "squawk box" on cnbc. i'm joe kernen along with andrew ross sorkin and kayla tausche sitting in for the vacationing becky quick. wall street is waking up this morning to details of bank of america's record settlement. kate kelly joins us with the full story. it was on, it was off. they were going to do it. then it was too much. then this was the number they were talking about all along though, wasn't it? >> no -- well, midpoint of what the spread. >> i thought they said no to 17, it's too much. >> i think b of a was offering 14 and doj wanted 20. >> what would the midpoint be?

>> well, 17. >> exactly. you work fast. how did you come up -- >> that was my original asserti assertion. i'm just defending it. >> so they came up with 17? >> yeah. >> where does it go? >> 9.6 is a cash penalty and about 7 goes to consumer relief. so, yeah, we're waiting this morning for the public announcement for this landmark deal between the justice department and bofa. they're settling charges that they're accused of engaging in fraud and selling of mortgages in the run-up to the financial crisis. the total is about $17 billion. $9.6 of that in penalty payments and another $7 billion or so in consumer relief. details of exactly where that consumer relief money will go, as well as the penalty in in terms of federal, state, and individuals are expected by 9:00. when justice holds a press conference in washington with attorney general eric holder. just back from ferguson, missouri, of course, and bofa is likely to issue a detailed press release, i'm told as well before the bell. shares are up minimally in

anticipation of the deal which has been telegraphed now for about two weeks but wasn't finalized until the overnight hours. whether this clears up what has been a significant overhang for the stock is another question. bofa is the second largest bank in the nation in terms of deposits. and two of the companies it bought during the financial crisis, countrywide and merrill lynch, have now generated close to $80 billion in legal costs. that's with today's anticipated announcement. the penalty portion of the settlement alone amounts to more than the bank has generated in profit during the past four quarters combined. still, with much of the mortgage put-back litigation now behind it, and today's deal tying up a number of pending investigations by state and u.s. authorities over the mortgage packaging and sales issues, bank of america should be eliminating much of the uncertainty that has dogged it in recent years over yet to be resolved litigation, guys. so, probably it's a win for them. >> and in general, the residential mortgage-backed securities, fraud, working group that justice had set up just a couple years ago that was sort of the, the precursor to the

tens of billions of dollars in settlements, do we think that this is the last one at this point? >> i -- well, i'll put some caveats on that. yes, i think it's the last major head line civil settlement. we've now tied up jpmorgan, bank of america, and citigroup. there are some other negotiations afoot. but the numbers will be nowhere near like this for other banks. that said, a jpmorgan for instance, the u.s. attorney in california, who is involved in helping to prepare that settlement, still has a criminal aspect of his case, that's under investigation, and you know, we've been told could lead to criminal charges. there are also u.s. attorneys involved in this one, notably paul fishman from new jersey who will be at today's press conference, among others. they don't rule out the possibility of future criminal cases. but certainly, this would seem to tie up a lot for them. >> okay. kate, thank you for this. stay where you are. joining us to talk more about the massive bofa settlement,

former chairman and ceo of wells fargo. good morning to you, dick. >> good morning. >> you look at the numbers, $17 billion. is this justice or is this politics? >> it's definitely politics. it has nothing to do with justice or restitution to innocent victims. in fact, more of the money is going to the coffers of the states, and the various departments than is going to the victims. it's a pattern that continues. it's really no surprise, however, if, indeed, jpmorgan should pay $12 billion or $13 billion for the sins of bear stearns and washington mutual, certainly merrill lynch and countrywide did two or three times the volume of those two companies. so, they certainly should pay more. but, this is just simply a political stance, and theater that has been going on for five years of bashing financial institutions.

again neither jpmorgan or its employees, or bank of america or its employees, did anything wrong here. they just bought companies that did wrong. >> well, dick, let me ask you a question about that -- >> -- and therefore, they did a lot of political value by having press releases and press conferences. >> dick, to the extent that there were wrongful or illegal acts that took place at the institutions that jpmorgan and bank of america acquired, who should pay for that? >> well, let's just -- legally, you have all the rights to go back against the buyer. but, but why are we charging stockholders, instead of going after the people who did wrong. corporations don't engage in criminal behavior. they don't take advantage of innocent people. people do.

and the reason they're going after corporations is because they can. >> and because, dick -- >> they aren't going against the individuals because it takes a long time to do so. there's no political value in -- in winning a case five years from now. you want to win something a couple months before an election. >> how would you describe a $17 billion fine then? i mean where do you think a number like that comes from? is there any metric that gets you there? >> no. it just happens to be a lot of money that people can agree to. >> well, no doubt the numbers will be divided up among state and federal authorities, then there will be the consumer relief measures. dick, i just wanted to maybe push back on one thing you said which is the majority of this isn't going to troubled individuals, homeowners. i mean, i think $7.6 appears to be going in that direction. and then of the 9, fipically what we've seen with the recent cases and we'll get more details this morning at 9:00 a.m. i think is that it's actually a minority of that that goes to justice for sort of general government purposes. other portions of it go to

states who may engage in their own consumer relief measures. and help modify loans, principle forgiveness, what have you. educating the public. so this could be a win, i think, for the consumer who's been hurt. >> well, you can say that. but, if we want to deter criminal behavior, you have to arrest and try and convict and put people in prison. stockholders are not the reason why we have problems. it's people we have problems. and we don't do anything about that because there's no politicalville u in doing so. >> did you call this extortion? >> yes. that's what it is. >> elaborate on that, though. you believe that the government is extorting the banks? >> yes. i -- because they can. they are -- when you -- listen to the press conference. they won't talk about countrywide and merrill lynch. they'll talk about bank of america has to be held

accountable. no employee of bank of america, no stockholder of bank of america, no executive of bank of america, did these criminal things. >> but, dick, no one except for the attorneys that have all of the facts and the documents in this case in their hands, none of us know exactly what evidence may or may not have been there against certain individuals. we can't rewrite history. these are the settlements that have been inked. but with this -- with these proceeds essentially that the government's received how do you think they should be treated? because i've heard analogies that these are akin to local police writing more tickets for revenue purposes. i mean the fact that the government has been making tens of billions of dollars, should there be an escrow fund? should there be an inspector general? if this is how the government's going to go about it, how should they be treating it? >> well, you know, all those things were important questions, but they're almost irrelevant. the motivation here is not to find guilty parties and punish them. the motivation is political.

and until we change the motivation of why we are doing things, we're going to have the same solutions here. >> do you think -- >> go ahead and investigate all this. but why should we need to investigate it. shouldn't the motivation here to be finding guilty weathers, and if they broke the law, they should be put in jail. >> well, dick, are there guilty parties to be found? >> well, of course there are. we haven't found any guilty parties yet. right? >> well, on the note of holding individuals responsible, though, i'm just curious. we're starting to see some investigations of subprime auto loans. and auto loan-backed securities. i don't know where that's going to go ultimately, but, are we seeing a possible example of a case where the system is not necessarily better? we're still seeing dishonesty when it comes to the terms under which loans are provided, or packaged and sold to investors. do you think the system's better than it was before the financial crisis? >> well, if no one's been

indicted, they're still out there. they're probably still working in the mortgage business. they're still probably in the investment banking business. so, of course. and they'll probably do it again, because there's no penalty for an individual to behave irresponsibly, why wouldn't you think that they'll continue to do so. >> dick, we had a report yesterday and we talked about it earlier this morning, about a potential case against angelo ms. leo, civil crowd case, do you believe that he did wrong in this instance? >> well, i don't know whether angelo did wrong or not. there's no question that countrywide did wrong. i mean everyone knew it. they were taking mortgage reps from wells fargo and saying, you will be able to make mortgage loans that wells fargo won't allow you to make. so come on over here, and they're all on commission, and hundreds of them did. now who is responsible for that? i don't know. but someone in countrywide, not

someone, a lot of people in countrywide, knew that they were doing irresponsible, and unlawful things, and none, to my knowledge, have been punished for doing so. >> okay. dick, we're going to leave the conversation there. always provocative thoughts. we appreciate your time this morning. >> thank you. >> talk to you soon. >> the other breaking story at this hour an american doctor treated for ebola at an atlanta hospital has been released. kent brantly contracted the disease or the deadly virus while treating victims in liberia. he was treated with the experimental drug zmapp. emory will hold a press conference this morning because he's doing much better. real quickly. >> yes, sir. >> i'm really addressing this to you, but you were both here yesterday. you know how there are times when you write like your thing on tuesday about taxes are much lower for corporate and i always ask you who is your -- >> effective tax rates. >> do you have an editor that plants these? and you say you come up with -- >> i come up with this stuff in my own head. >> do you remember yesterday

both of you wanted to talk uber and i said this is the richest thing i've ever seen, to see david plouffe going to make millions at uber. >> right. >> after being an anti- free market, anti- -- >> right. >> the journal didn't watch so here's one of the lead story op-ed pieces. plouffe for free markets. obama strategist discovers suddenly the virtues of capitalism, and says we couldn't have said it better. it's nice to see the man who helped elect the most anti-free market president since richard nixon now extolling the wonders of business competition. but when i tried to talk about it yesterday, you both looked at me like i was speaking some foreign language and had no idea the connection between those two things. and you see i'm not crazy. i'm not crazy. anyway, go ahead. >> as you said, i've written crazy things. so just because it's in the newspaper -- >> no i'm just telling you. do you know david -- yesterday i told you i get all this stuff from barack. what did it say, it said thanks, joe.

joe, this that and -- now i'm convinced he doesn't watch. now. after reading that yesterday, if he's still thanking me he is not watching as much as i thought he was. >> joe gets some form letters. >> how do you know it's a form letter? it says joe on it and it says from barack obama. and it says thanks joe. >> because someone donated $5 -- >> michelle sends me stuff all the time. plouffe sends me stuff. so i see his thinking and it just seemed weird to be joining the private sector to make millions. >> i didn't disagree with you. but my take was more that uber as a company has become a political lightning rod. the gop wants to support it and standing behind it as well writing their own op-eds in the chicago tribune about it and now plouffe is going to uber, certainly seems like that's the company that people want to be seen supporting because it's so popular. >> we'll give you a heads up, i'm going to talk to you about a story, let's see if you can find it. it's on the huffington post. which one would have gotten my attention. so we'll talk about that. >> while andrew -- >> research during the break. >> we will take a small break. still to come on "squawk box," a

broader look at bank lending with housing starts picking up speed we'll talk to a home builder and a lender about their expectations for the rest of the year. and what the fed could do to boost that recovery. "squawk box" will be right back. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you.

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looks like the dow would open up higher about 33 minutes higher. s&p 500 about three points, the nasdaq about four points heighter. shares of sears are under pressure this morning, quarterly results falling short of wall street estimates. ceo eddie lampert -- any time i see ceo and eddie lampert next to each other -- >> because you don't think of him as a ceo. >> i think of him as a hedge fund manager. saying the performance was unacceptable and steps are being taken to address the company's problems. >> some people might say that the management of sears, he really hasn't been a ceo. because it hasn't really gotten that -- there was always value in the real estate but the operations of the company, in the last -- how -- i mean time flies. he's been there a long time now, hasn't he? how long has it been now? >> over a decade? >> i'm thinking -- >> i remember -- >> but is there a human being alive that could have turned around sears? or:mart? >> that was a great idea. >> how can i make it better?

how about buying kmart. >> it's always great when a ceo is an accidental ceo, right? >> yeah. >> when they either own so much debt that they become the figurehead. >> we have a guest that we need to get to. i thought we were going to -- okay, talk to you later andrew. >> we are honing in, we're going to hone it on two key facets of the housing industry, mortgage lending and hope construction. joining us now to talk more about rates in lending is chairman and ceo of lending tree and gives us the pulse of home builders and roger craig is president and ceo of ab homes. just to keep it the news, you know, about what we were just talking about with bank of america there are people that say these huge settlements, dog, that they actually make -- they're counterproductive for the government because they make lenders even more reluctant to open up the coughers to lenders. is that any truth to that, doug? >> i think there is a lot of truth about it. the biggest fear that lenders

have had is that they sell loans off to fannie mae and freddie mac and no matter what any time a loan defaults a lender -- the government basically comes back and says, you know, digs threw the file and tries to find some issue with it and says oh, you have to buy that back. so because of that, until very recently, you've had lenders that were underwriting even narrower than the fannie mae and freddie mac guidelines because they're afraid of these loan buybacks. it's almost like you bought insurance but you get cancer and the insurance company says sorry that doesn't work. >> doug, don't you think that so many times there are good intentions here? doug do you think the government or this administration or justice or whomever, do you think they want to hurt the housing industry? and therefore don't consider the consequences? is it purely political to slap the wrists of bank of america? we never know we don't know if anyone spends the money in a wise way and certainly takes

away from shareholders. what's the upside to doing this? >> nobody does anything intentionally to hurt the housing industry. the housing industry is doing fine. it's coming back. the private sector is working. i think you have people inside of organizations and countrywide was the riskiest of lenders and unfortunately bank of america bought the company and there you go. the good news is you've got alternative lending platforms that are sprouting up all over the place that are filling the void that the banks aren't actually doing. >> turning to you, roger, we -- you just heard housing is better, things are going a little bit better. but it's never going as well as we hope. it seems like. and what are the negative things holding us back from reaching, you know, an optimal level in housing, roger? >> yeah, good morning, joe. i think when you look at what's going on in just the labor market, that's the biggest part right now.

i think job growth certainly has been something that has kept the housing slower. and certainly the foreclosures that came on the market, a lot of investors were in the market, as well, and i think that kept people out of it but right now it's more about jobs. it's about wage growth, as well. and those that can qualify for mortgages do. and can buy a house. and we're seeing really a mixed bag across the country. there are different markets that are responding differently. you know, you look at the texas markets for instance. doing very well in housing. and that's because the job growth is there. in other markets we're seeing much slower. but overall for ab homes we're in the phoenix market, we're in florida, the carolinas, we're seeing good, good traffic in our communities there right now. but the buyers are relatively slower to pull the trigger to purchase a home. >> we hear it's multifamily, and you know we hear a lot of people are renting, but you know, are we back to at least a more realistic level where home ownership should be? not everyone should own a home,

probably. if it was 90% home ownership we'd probably have another crash because not everyone really should own a home. did we learn our lesson? >> yeah, i think we did learn the lesson. coming through the downturn, in the late 2,000s, you know, we did see the, you know, the people that probably shouldn't own a home, and i think we realize that. and making sure today the underwriting standards are much stricter. and you know, certainly that's the difference in the market today. >> all right, gentlemen. we appreciate it. in a nutshell we'll keep it short. thank you, doug. doug and roger -- >> thank you very much. >> all right we're going to go to break. but real quickly, you still didn't -- you figured out one of them. you know i'd talk about that gwyneth paltrow article because she mentioned her ex-husband with or i guess they're not divorced yet but for the bucket chool edge. >> for the bucket challenge. >> yes. >> and you've done some imaginary coupling with gwyneth and that's okay. i mean i think, she's got her own -- her matt lauer thing and

stuff like that. there's nothing, everybody can do that. it's an open -- but i was thinking with her, you would dump water on her and i think it would come out ice after it -- after it actually so i question that. but the serious thing that i was talking about, was -- >> cry. >> i messaged you a couple of times to be able to do this. i never heard anything. i'll talk to you about the other one later. coming up -- >> i'm looking forward to that. >> "squawk box" goes to the farm for another look at the real economy. falling corn prices, skyrocketing beef costs and what may surprise americans at the grocery store.

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coming up, she's throwing the party of the summer in the beautiful mountains of jackson hole. it's such an exclusive gathering that some of the world's most powerful central bankers are calling in favors to get an invitation. don't worry, kansas city fed president esther george is offering you an all-access pass. her conversation with steve liesman, right after the break. we're back in a moment. f the bus might have a song that he has in his headf the bus but he just can't get out. with the technology of cloud, we change all that. i can sing something into my device, up to the cloud it goes, back down it comes, sounding better. we break down the walls of creation

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some breaking news this morning. the american doctor treated for ebola has now been released from the hospital. kent brantly was given zmapp a trial drug and flown to the united states this month. he was released from atlanta's emiry university hospital this morning. brantly contracted ebola treating victims of the deadly virus in liberia. >> let's get to jackson hole,

wyoming. central bankers gathering there for the annual symposium. steve liesman is there joining us for a special interview and maybe an update on if he did catch anything really large yesterday. steve? >> yeah, joe, no bad fishing yesterday, lots of rain, couldn't get out. always hopeful. kansas city is the host of the conference, and esther george, the president of the kansas city fed, sat down with us for a pretty rare interview. i began by asking her whether she thought the markets were too complacent about how long it will be until the fed raises interest rates. >> there's a lot of complacency right now. if you look at the market path for interest rates relative, for example, to the median, the fomc's projections, you will see that those have been far apart. and i think that that's a risk that will require us to communicate, as we continue to discuss. >> let me get to one area here.

can you explain how you balanced the risks in your mind? there are those out there who say the economy and the markets absolutely have to live on zero interest rates, and it could all come tumbling down if you raise rates. on the other hand the excess that are creating some of the problems created by keeping rates too low for too long. could you explain how you balance those risks in your mind the way you come out? >> well, i think the economy is already showing signs. so as we look ahead, does the economy look like it's able to sustain this? i think it signals a very important decision point for the committee, to say, we will have to move at some point. i don't want us to be behind the curve. and beginning to normalize interest rates. if you look at some of the policy benchmarks that policymakers can use, they would suggest that it's time to be having that conversation. >> so you don't think you're behind the curve yet? >> we'll see. when you see the economy getting as close as we are to full

employment, to stable inflation, it would suggest to me that the time has come to do that. it's a process, though. we're beginning the discussion about normalization. we're finishing the asset purchase program, so it will be a process to work through this systematically. >> so now i have to ask the most direct question of all which is the markets look for a rate hike on average in the summer of 2015. should they be thinking about something earlier? >> i think the market should always be looking at how the economy is unholding. because i doubt that the committee will be picking a date, or able to say that. so, as the committee talks about how the economy is unfolding, it will be doing its best to communicate clearly. about its reaction to that. and i hope markets are listening to that, as well as looking at the data. >> guys, i'll be back at 8:30another piece of this interview where george is going

to talk about her concern about bubbles in markets, and i also asked her about stan druckenmiller's critique of the federal reserve. we'll get her point of view on that. joe? >> that's cool, steve. you know, this -- if you ever get the chance, if you are asked to be on the fed at some point, steve, you got to do it. because the amount of just credibility, and just importance it gives to a person is amazing. like i heard you were going to talk -- i don't even know esther george. i heard you were going to have an interview, i was like oh, my god he has an interview with esther. from now on esther george is going to be esther george from the fed. and i saw her and she seems like a smart, nice -- you just get a huge rep from that don't you? it's amazing. we say their names so much. and they meet behind closed doors and they decide what's going to happen to the entire world, and i mean it really does give you a lot of, you can use that for the rest of your life. >> you mean as opposed to -- joe kernen of cnbc? >> as opposed to a talk show host? >> who has no credibility at all

is what you mean? but she's -- >> i wouldn't say that -- >> what's that? >> she's been in the fed system for a long time. she was the chief operating system of the kansas city fed and she's continued this tradition of operating out of kansas city. what's interesting is when you talk to her as opposed to reading the headlines, her points of view make a whole lot more sense and i'm glad she was able to sit bounce -- >> hence why you had to change into a suit instead of making the fleece continue working overtime. >> i tried to show her a little respect as opposed to my feelings towards you guys. i figure this polo will be fine. >> first of all so kansas city has been -- let's just find out once is kansas city actually a city, though? does that -- in your -- >> qualifies. >> it does? >> qualifies. >> oh, you learned your lesson. >> i learned my lesson. >> all right. anyway, thank you, steve. the thing -- >> see you at 8:30. >> you can't figure what i'm laughing about in huffington post. there's one of the headlines is a momentous, momentous

endorsement of obamacare. >> yes. >> so i find this guy jason linkedin who i would sue him for taking the name linkedin, number one. but anyone, this is momentous and i said oh, my god. who is it? a leading republican. is it the majority -- minority leader? is it someone in -- or is it a hospital chain? is it --. no, it's actually a democrat, a senator who actually voted for the bill at one point, who is now admitting that he voted for it, even though he's up for re-electi re-election. it's never been done before. never happened before. this is senator mark prior, and he didn't give a rousing endorsement. he basically said well i did vote for the bill which i'm not going to home but it made it so that pre-existing conditions so that you wouldn't be able to disallow insurance -- and he didn't even call it obamacare. but he kind of admitted that he voted for it and he's in a re-election up for re-election in november. so at huffington post, that qualifies for a momentous --

which shows you, after all this time, where this bill still is in the minds -- hearts and minds of the american public at this point. i just think it's classic that huffington post would call that a momentous endorsement from a guy who voted for it who is a democrat. you see what i'm saying? >> his last name is lincolns. >> no it's linkedin. jason linkedin, isn't it? >> lincolns. >> up next democrats could be storming the barclays -- no response. >> i will not act as a foil on this particular -- >> you just did. completely. >> just by sitting here? >> storming the barclays -- but that is momentous. to find a guy that admitted that he voted for it? i mean, democrats, it's just incredible. anyway, democrats going to be storming the barclays center in 2016. developer bruce rattner has moved the nets and islanders there. why not? a democratic national convention. he joins us next to talk about that. plus his other city moves. check the futures at this hour.

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hopes of holding the political party's 2016 convention in new york. joining us now bruce rattner, executive chairman and majority owner of developer of brooklyn's barclays center. so -- >> good morning. >> first of all, thank you for being here. go thank you, andrew. >> handicap it here for us. who are you playing against, and how does this work? >> well, basically i think people think that we're playing primarily against philadelphia. the other places columbus is one, phoenix is another, and i don't even remember the other one. >> take us behind the scenes. what happens over the next sort of 12 months as everybody sort of campaigns. how does the campaign work? >> well it started first by visiting barclays center last week. we had 12 or 15 people from the dnc. they came, they toured brooklyn. they toured manhattan. they came over the barclays center and they loved it. i think they were you woulded and wooed. next thing that happens is they visit the other cities. and then there's a process which

nobody's that clear about, exactly who decides. is it going to be the prospective candidate possibly? is it the president? is it a dnc? my guess it's a little bit of everybody. and then probably by deuce, january they'll make a decision. >> and the value of the convention coming to both barclays center itself, and the area around it. and i assume more around brooklyn than the impact it would have on anywhere in manhattan. i don't know. is what? >> well i don't know of the exact number. tens of millions of dollars. it's a huge boost for any city but particularly a place like new york where you've got the best restaurants. we've got the best hotels. so you've got an impact, an economic impact that far exceeds any inconvenience or anything like that that's going to happen. >> let me ask you a political question. would you do this for the republican party? >> absolutely, yes. i'm a great american. i may vote democrat, i may vote republican. but this is important for the country. it's important to have it at a

place like new york which is the media capital, the center of our country. a lot of ways the center of the world. it's important to have an event like this in a city that's so important. so, whether it's the republican or democrat doesn't make any difference. >> how much harder do you have to sell the dnc on coming to new york, given that new york is not a swing state? not even close? >> well, you know, it's not clear that it makes much difference if it's a swing state. north carolina, didn't make any difference. in fact, democrats lost. i would argue that being in new york where everyone's going to pay attention, and brooklyn. brooklyn is the hottest place now in the country. it's the coolest place, it's way cooler -- >> don't tell -- >> brooklyn is so complicated. it's got so much in it. i could talk about brooklyn forever. it would still be cool. it's cooler than i am. so it's the kind of place where it sells itself. and new york sells itself. and it really is a stage for the world. and it's the right place for democrats. it's had -- >> it's the right place for democrats i'll tell you that much. i think it does sort of just, if you want to get the rest of the country sort of not to think

that way about -- and the that it's more conclusive. especially after the last sort of five or six years where we really thought the the democrats are controlled by the far left side, the new york sort of centric side, the coasts -- >> i don't know if it makes it feel even more -- >> i think -- >> really? >> i don't think, look the united states is diverse. at the end of the day, the old united states is different than the new united states. >> it is. >> the new united states is just a different place than when i grew up. it is diverse. we have a lot of respect for diversity and that is brooklyn. the issue of liberal, not liberal, it's all about people. and brooklyn is the place. everyone comes to visit here. one out of every seven americans -- >> if you were going to try to get the most popular major league baseball team and to go to the rest of the country to try to sell the most popular major league baseball team do you know how hard it would be the yankees loved here but they're everyone's villain. they come into town everyone wants to see their team try to beat the yankees.

>> talk about the dodgers now. brooklyn dodgers. that's -- the brooklyn dodgers. everybody talk about brooklyn dodgers. all over the world. >> i see new york plates all the time. >> when i was growing up you saw new york plates and you just pulled over because the people were going to run you right off the road. >> i grew up in the midwest. you're right about the yankees. but think brooklyn dodgers. >> you've got something to sell here, i'm not buying it. >> i'll tell you the most exciting thing and what i was -- i would give you kudos forever for taking the chance on putting up -- and the success -- must be worth ten times what you -- >> the thing that's -- >> an amazing. so are the nets and so -- >> think about philadelphia. philadelphia, w.c. fields said once i spent a year in philadelphia, i think it was a sunday. so that says it all. >> wait, whoa, whoa, whoa. >> i knew i'd get you. >> you really are getting me now. what do you think of comcast these days? you think i'm going to let you disphiladelphia right now? the city of brotherly love? >> he's doing a little trash

talk. >> he's throwing it right back. >> where do they throw snow balls at santa claus? philadelphia. boos. >> we've got to -- >> one second. >> while we have you, rather talk about real estate. >> absolutely. >> is brooklyn overdone? would you spend a dollar in brooklyn i mean is brooklyn already peaked out and now everyone's going to queens? >> no. let me tell you something the city of new york will grow a million people in the next 15, 20 years. and that's what's going to happen. and so all of our boroughs, brooklyn, queens, manhattan, staten island, we're all growing. there's still room in brooklyn. brooklyn real estate is going up and up. as is queens. the whole city is really on fire in the real estate area. >> most business executives hate the mayor. i know this is a hard question for you because you have to work with him. >> strong words. >> you think i'm going to -- >> the mayor is great. >> i supported the mayor very early on. the mayor is very, very good. look on the housing area he's got it completely. 200,000 housing units.

he was correct about pre-k. the substantive things he's done is quite good. whether it's vision zero about traffic accidents. >> wrong about the sandinistas. >> you know what? -- >> if you love -- >> i don't even know what the sandinistas are. >> they don't remember. i know. >> did you love mayor bloomberg. >> i like mayor bloomberg. >> it's impossible to love both, right? >> no. my goodness no. they were both great for the city. we had a great mayor in mayor bloomberg. >> you really didn't mean that. you're channeling me. >> i'm just trying to suggest that once is supposed to be the antithesis of the other. >> i think it's mean what you're saying. >> yeah. >> you know you have to look what people do. you have to look what people do. our mayor has done a very good job so far. >> seriously, i -- just back to the barclays and what it's done just for basketball. i mean, now the clippers. you see hasry bought the bucs for like -- that's worth over a billion dollars already. >> it is. >> brooklyn has breathed life into the nets and also putting

that there suddenly brooklyn is the hottest place. >> it is the hottest place. it's made a big difference. i'm glad to be part of it. >> i don't know what your investment is worth now. i'm sure you are glad, right? right? >> it doesn't hurt. you're an investment program probably so -- can you get those floor seats for like me and andrew if we -- >> i think as a guest. >> have you done that yet? >> i cannot accept anything like that, as you would know. >> we can't accept anything like that. >> but you're an on-air editor so you can, right? >> that was years ago. >> we'll have an official ruling. >> you're pals with j.c., right? >> the answer is i know jay-z very well. >> they staying together? >> of course -- >> i've got to ask. he may know. >> -- very positive. the answers are they're both wonderful people and they're going to stay to the. that's my prediction. >> you turn the gray lady into the most tabloid is that what they teach you at that place? this tabloid stuff you keep -- >> i learn it from the best.

>> do you -- >> do you hate the mayor? do you hate him? >> i didn't say did he hate him? i said there are business people who have very sort of adversarial views -- >> i don't know. >> i'm with you -- >> brotherly love. >> listen. my stepson went to school in philadelphia. and it is a great city. >> when do you think the dnc will make a decision? >> december, january. >> that long? >> yeah. >> all right. >> republicans -- they took cleveland? >> i was just in cleveland and they were very excited by it. >> ohio is a state you need to win. >> yeah, made me feel good. >> great to see you. >> thank you. >> when we come back the farm economy. agriculture, farmers are up to their ears in corn. mean time, cattle ranchers keep stepping in it as prices continue to fall. find out what it means for you at checkout at the grocery store. up next ranchers versus drillers. morgan brennan is looking at the bakken boom and she joins us with a preview. morgan?

>> take a look at this natural gas flare. so much natural gas is being flared off here in the bakken that experts say it's enough to power 1 million homes per year. we'll tell you what companies are doing to try and cut down on that waste in the next few minutes.

if you're an avid viewer of "squawk box" last year's massive stock market gains or the quiet

august rally, that's not news to you. but most americans can't say the same. a gallup survey finds only one in nine people call themselves savvy about investing. and more than a third of those polled thought the market only increased 10% in 2013. the s&p, of course, was up 32%. during that year. the survey sample audience was investors with at least $10,000 in stocks, bonds, mutual funds, or retirement programs. a full 20% of respondents thought the market was flat last year. >> hmm. 32 is good. we need three straight 30s. that's what we had in the '90s. i've been begging for that since the mid '90s. please let it happen again. >> we're a third of the way there. almost there. >> got to have a good fall. >> we told you earlier this morning about flaring. that's the burning off of natural gas when there's more supply than the pipeline can handle. but that's not to say it's the only option for dealing with that excess. drillers in the bakken are getting creative to cut down on the controversial practice.

morgan brennan joins us again from north dakota. morgan, over to you. >> hi. thanks, kayla. this is the biggest issue in the bakken right now. this natural gas flaring. and as more crowd oil production is coming online and with it natural gas, it's overwhelming the infrastructure. we just don't have enough infrastructure to keep pace with that production. the pipeline network for natural gas some rating at full capacity, and with new flaring rules going into effect this fall, drillers are really scrambling to come up with short-term solutions until more pipeline can be laid. so take statoil. the norwegian company is the sixth largest player in the bakken and it's partnered with general electric and a canadian gas logistics company called ferris for what they're calling the last mile fuelling solution. instead of flaring natural gas it's collecting and minimally processing that gas, and it's stripping out the natural gas liquids like pro-bane and butane and selling those off separately then the remaining gas is compromised and stored in a large box that can then be

transported by truck to a nearby statoil rig where it then helps power operations and cuts down on diesel costs. >> it reduces costs here by burning the cheaper natural gas, and we reduce emissions by burning the cleaner burning natural gas instead of diesel. soiths a win-win. >> reporter: statoil plans to power all six of its rigs and its fuel-time fracking fleet using this tech by this time next year and it's cutting down on flaring and cutting down on the fuelling costs. as for ge the company says it's talking with the bakken's biggest drillers to use the same techs. >> the age of gas is here. there's cheap supply of gas available. and we're looking at opportunities to expand that horizon. and to really service the market on a broad perspective. >> so ge believes that this

technology could ultimately fuel cars and help power homes, but in the mean time we went and visited statoil's pilot location where this technology is being used yesterday. when they turned all the units off a big 25 foot natural gas flare popped up, and when they turned the units back on that died back down so it certainly seems like something that could cut down on flaring in the mean time. guys back to you. >> great. it's quite a shock, morgan. it was even dooler when it was dark. but still looks good. we appreciate it. thank you. coming up, what happens on the farm hits your wallet. as we know. at the checkout, a closer look at the farm economy when we return and later, i think gopro for football helmets. one company is making the pitch for in-helmet cameras to help coaches and players and maybe even broadcasters. and check out this with shark week just ending, it's understandable that you may have a carnivorous fish on the mind. and think that such a dangerous

predator should be available at all costs. a certain grouper clearly didn't think so in this video, a goliath grouper swallows the four foot shark whole. which that's something you don't see every day but you do see one, remember the small fish that's eating that big dish and the bigger fish eats a bigger fish. unreal, "squawk box" will be right back. i make a lot of purchases for my business. and i get a lot in return with ink plus from chase. like 50,000 bonus points when i spent $5,000

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failed rescue special ops mounting an unsuccessful operation in syria this summer in an attempt to rescue captured american journalist. details leaking out over the past several hours about how that operation went, and what went wrong. the latest from the middle east is just ahead. >> "squawk" is on the farm. farmers are up to their ears in corn. cattle ranchers find themselves mooing about prices. how are prices going to impact the american consumer? and what stores put on their shelves. and the ice bucket challenge has come to "squawk box." >> i now pass the challenge on to andrew ross sorkin at cnbc -- >> now it's my turn to take the icy splash and nominate some big-time corporate media moguls as the final hour of "squawk box" begins right now.

welcome back to "squawk box" here on cnbc, first in business worldwide, i'm joe kernen along with andrew ross sorkin, and kayla tausche is in for becky. she's outside right now filling up -- did you see the bucket we're using? >> yep. >> it's a big bucket. >> wow. >> i -- >> i'm going to eventually -- i'm going to eventually dump on him. that sounds redundant. dump on andrew. >> with the bucket? >> you've been waiting to do this forever. but you get to do it every day. >> i can't believe someone volunteered me for doing this. it's a challenge for als awareness. mark bart linney issued the challenge. andrew's going to make his nominations later this hour. futures are indicated higher

today. is that not the fed helping out? >> it may be the fed melting up. breaking news to bring you right now, though. just crossing the wires literally moments ago, family dollar's board announcing that its board of director has now officially rejected the proposed offer from dollar general. they say that they're doing that based on antitrust issues. you might remember we broke the story earlier this week, dollar general had offered $78.50 a share. that compared to the $74.50 that had been agreed to earlier with dollar tree. the board of family dollar saying that they are against the deal worried about the antitrust issues. they actually then come out swinging, the ceo of the company, saying i would also like to note that dollar general's letter sent late last night contained blatant mischaracterizations and did nothing to address the antitrust issues in dollar general's proposal. we should also note, we talked about this before, nelson peltz

has a huge stake in family dollar. has a board seat through ed garden, co-founder and part of trian, and they say that they are on board with this particular transaction, the lower -- the deal at a lower price, dollar tree, and so, here we are, it's sort of, you know, just quick sort of side share analysis here the tough part is if you come out as family dollar and say there's an antitrust problem, it's hard then to accept a deal at a higher price. right? because you're signaling to the -- >> not at this price. >> at this price we won't take it. but at a higher price we might. it's unclear where it goes from here. that is the news. they are rejecting that bid for now. we should take a quick look at that stock. you're looking at family dollar now at 79.81. it says unchanged. is that still right? >> it might be halted. >> could be halted.

we will continue to monitor this. >> that is kind of a scorched earth policy, right? i mean does it make you think they really don't want to accept an eventual offer? >> the other piece of it which we've talked about earlier is that the ceo of family dollar, howard levine, does get a role in this other -- in this combined company. which would not necessarily -- not even not necessarily, which would not probably be the case if dollar general were the buyer. and it is true, we should note, that dollar general is a much bigger company than dollar tree. you put them together, and there are a lot of antitrust lawyers that do say that you would have to divest pieces of that business. so it is not completely an irrational view. >> so you saw our anchor from the far east say that she grew up watching "squawk box." >> yes. >> you know that i don't really like hearing that. but with miklaszewski who we're going to toss to right now, i can say it to him. so that shows you how long this guy has been around. one of the originals at cnn,

actually, nbc love that he's on today developing story we're learning more today about a failed u.s. commando mission to rescue american in syria by isis. and nbc's jim miklaszewski joins us now from washington. mik, how you doing? >> i'm doing well, joe, thanks. >> i need to talk to you at the end of this. >> okay. >> to pick your brain about the whole thing. because have you ever seen anything like this? am i wrong to think this is kind of strange that the way this came out? >> the information about this attempted hostage rescue? indeed it is. it appeared to be a well engineered and executed mass leak, and apparently by the white house. but i can tell you, there was serious concern for the safety of those hostages when last july there was intelligence that james foley, that journalist who was executed on camera, and other hostages, were in danger. so the u.s. launched this mission, delta force commandos lowered from stealth

helicopters, at a site in syria, quickly engaged the enemy, they killed an unknown number of isis terrorists. but then found the hostages were not there. they were there apparently, and had been moved a short time before that. the delta force commandos left immediately. in a fierce firefight, only one of the commandos suffered a slight wound. a helicopter pilot, to his hand. and that was it. but it was -- it was a well thought out, well planned, well intentioned mission that unfortunately in the end, joe, failed. >> so the questions that i had. when it first came out, jim, i thought i understood it. okay we're trying to do all we could. this didn't blindside us yesterday. we were certainly worried about these guys. and we tried to get them out. and to me that looked like a calculated political move to let us know that that was true. but then i started thinking after watching i think bolton, the former u.n. guy was on and i

watched him, and he talked about the notion of doing this, and the downside, and the reasons not to outline all the details of something like this. because next time they know we might be doing this. whoever leaked the information of where these guys were supposedly being held now their life is probably at risk. it failed, so it emboldens isis to say look at these losers. they had no idea -- there are so many reasons not to do it. and the only reason to do it was purely a political calculation to try to say we were trying to help these guys out. >> i can tell you, joe, that military officials we're talking to, several of them are really concerned about the fact that this was leaked out. the pentagon during this entire time was in total lockdown. i actually had to storm in to a two-star's office, and he had his pants off. he was in the middle of changing into his sieve veries. that's how quickly everything was moving last night. but i can tell you the concern

about this is that the way that mission was executed, the feeling was, that isis had no idea that the u.s. had the intelligence that the hostages were there. as far as isis was concerned, this was just a u.s. military attack on their fighters. that is one of the deepest concerns that now there probably is no hope of ever launching a successful rescue mission for those hostages. >> were, that was the point that was being made. that, leave well enough alone. you get in. you get out. no one knows about it. no one takes any satisfaction that it failed. i mean you remember -- we remember the helicopters in iran, that was just -- that was like the low point of the whole experience with the hostages in iran, was the failed mission. it looked like we were totally impotent or the gang that couldn't shoot straight. i don't know. very odd the decision making process, mik. >> i think people in this building share that concern.

>> all right. thanks for coming on today, jim. good to see you. >> you bet. >> okay, well the fed is in jackson hole talking inflation and wages this morning we're looking at the real economy. checking out the things that affect our everyday lives and trying to make some sense of what it is the fed is concerned about. earlier it was on-the-ground view of housing now it's food corn prices and they are plummeting while beef is at record highs. so what's this all mean for the prices from the farm to your dinner table? cnbc's jane wells brings us more on that story. jane? >> andrew, there's a real disconnect. and here's what has yet to happen. corn has fallen. it's really collapsed into the mid $3 range. so that is no longer an excuse for high meat prices. and yet high meat prices continue. ground beef prices at the retail level are up 15% in a year to $3.90 a pound. sirloin up 12%. there's a lot of sirloin right there. i know the herd got a lot smaller because of the drought and i know it takes about a year to get a cow to market. but profit margins should have ranchers rebuilding back up

supply and these prices should be dropping. they are not. feeder cattle, cows coming off the range into feed lots are now over $200100 weight. that's over $2 a pound. that has got to come back down, especially since summer barbecue season ends, you can see it dropped a little bit. then there's the pig. suffering from a deadly virus killing off newborns. pork prices up 20%. exports growing, despite the sticker shock. however the virus has abated in the summer heat for now. and feed is so cheap that lean hog futures have been coming back down. but you are not yet benefiting at the grocery store. i'm going to go to the farm progress show in iowa next week where we're going to hear just how big the bumper crop of corn is going to be this fall and whether farmers will hold back and store their own grain until prices get better. finally, the drought in california, really hitting fresh produce. lettuce prices up 25%. at retail. lemons up 20%. but check out the prices for these. watermelons and pumpkins, grown into shapes.

they're not carved. they're grown with special molds. they're selling them to retailers, including some whole foods and urban fair in canada for $100 wholesale. wholesale! and unlike some square melons from japan, these are edible. >> it's simple if you know how to do it. but the learning curve obviously is very steep. there's a lot of things that have to be done. that if you don't do it just doesn't work. there's, you know, i've tried 27 different varieties to get the right variety to make it work. >> it is the craziest thing i've ever seen. he says it took him over four years and $400,000 to figure it out. he expects to be in the black this year. guys these are retailing for $200. people are buying this stuff. back to you. >> wow. >> unbelievable. all right, jane, with all things either livestock or pot or farm, there's only certain things that she'll even agree to do for us.

>> exactly. and chocolate. and bacon. >> yeah. >> and chocolate bacon. or bacon chocolate that we've seen as well. >> with coffee. >> let's bring in some men with some real farm experience who also know the commodities market. jerry gulke covers commodities and currently farms more than 500 acres of corn and soybean crops in northern illinois. and on beef we have bob mccann the president of the national cattleman's beef association which represents all the major cattle producers. beef processors, and packers. he joins us live from his working cattle farm in texas. where are we now, guys? and beef has come down a little bit. i know how much it was before. but historically, how -- how much off the all-time highs, jerry or bob? >> we've seen a drop in feeder battle, live cattle and hogs as well, because much of this is market perception with the low

prices of gain that you're going to see meat supply goes up and that's total meat supplies. the poultry guys want to take advantage of this and most of the analysts suspect the hog guy will, too, because there's a lot of money that can be made with $3.50 corn versus very little money made at $7.50. maybe we've bottomed out the supply limitation in livestock. >> jerry you've got a kunch of cutups on the board of the cme group marking cow sounds. tell them to be quiet. that's not funny. oh, is that coming from where you are, bob? >> yeah, that's here on our ranch in texas. >> oh. all right! i thought those cutups down at the cme. this year's going to be great overall for grain prices, isn't it, in terms of the supply's going to be really good, bob, and that should help everything? >> well, it's a classic example of supply and demand. in the cattle market right now. cattle producers are enjoying record high prices.

at the same time, we've got a very low inventory of cattle numbers. the lowest we've had since at about 50 years. so, that combined with the increased demand that we're seeing domestically, and globally, has created some high prices at the meat market. >> so, bob -- >> but that also -- yes? >> no, continue your thought. well that also sends a signal to cattle producers across the country, as long as we get some beneficial rains, throughout the country, i think the signal is our cattle producers want to expand. i think everybody's got it in the back of their mind and many, many cattle producers have already started expansion. i think they're probably expecting to see this herd in the next year and a half expand probably close to 2 million cows. and that will certainly take some pressure off.

>> so, bob -- >> but you know, again, i will say it's dependent on the weather. >> we're seeing a lot of companies start raising prices, chipotle being just one of them. i'm wondering, you remember companies like tyson foods and jbs. how much of that rise in prices can these companies effectively pass along to the consumer that's showing up at the grocery store and looking at the price tag on a pound of meat? are you asking me? >> we're very worried -- >> for bob. >> yeah. we were really concerned that the high prices were going to turn people off, and back towards other proteins. but we haven't seen that yet. people seem to be willing to pay the prices, and from what we're seeing, and our polls show that you know 80% of all beef consumers are saying they're going to continue to eat beef, and maybe this year, and maybe more. we think prices will probably

subside a little bit. they're forecasting maybe a 3% to 4% increase in 2014. which we've already seen some of that. and so, you know, if we can kind of get this cow herd up a little bit it will be good. but of course, i will say that it takes two to three years, in production stage, from the time a calf is born to the time it goes to the consumer. so, you know, it's not a real slow process. it's going to be tight for a little while. >> all right, thanks, gentlemen. appreciate it. jerry and bob. a couple of those sounds were fake. did you hear a couple of those? it was so obvious that was coming from the other -- >> i think it's real. >> did you want to ask about kale futures or tofu -- >> quinoa? >> yeah, do you eat any beef at all at -- >> angus. >> who's he? >> coming up, we're going to kick the tires of the used car market for dealers, it's far more profitable.

but how long will it last? we're going to head to the mayhem auction for a rare look at the business of making money on used cars. ♪ ♪ [ male announcer ] during the cadillac summer's best event, lease this 2014 ats for around $299 a month. hurry in -- this exceptional offer ends soon. ♪ here at fidelity, we give you the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity.

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welcome back to "squawk box" live a look at chicago right there. used cars may not have that sexy look or the smell of new leather. but used vehicles do have -- have become far more profitable for dealers. phil lebeau joins us from the mannheim auction site in madison, illinois, with that story for you. good morning to you, phil. >> good morning, andrew. this is an interesting day to be here. aside from the rain that's moving through here right now we are going to see about 3500 vehicles bought and sold here today. the auction is going to start up in a little bit. they're getting some of the cars behind me ready for that auction. this market, the used vehicle market, has been red hot over the last six years. in fact, take a look at the change in wholesale prices when it comes to used vehicles. you go back to 2008, 2009, you had used vehicle on the wholesale market selling for about $9,000.

in july, they were selling for just over $12,000. the used vehicle market is red hot. and it's getting better profit margins than ever before for the users dealers. in fact when you look at the used vehicle profit margin last year it was about $2300 on the used market. you can compare that with about $1200 for new vehicles, and that's the reason why dealers are looking for those used vehicles. they're also seeing greater demand for certified pre-owned cars. those cars that are between one and three years old. remember, as the industry ramped up production of new vehicles, coming out of the recession, there was a surge of those vehicles that were built. many of those are now coming off lease and they are in demand. >> we have so many cars coming back off of lease, so many off-lease vehicles. you have to remember four or five years ago people really, really couldn't get credit. they can't lease a car. they couldn't buy a car. that eased up, when we see that three or four-year lag we're going to have so many cars coming to the marketplace.

and i think people will find better deals and that will fuel a strong pre-owned car market. i believe for the next four or five years. quickly as you take a look at the used car dealers carmax has been having a heck of a run. sonic just announced it's going to be coming up with a used vehicle showroom. an independent showroom, as has the asbury automotive group. there's a lot of people who like to say well the used market is not sexy. but you know what? this is where the money is made. we're going to be here all day long and when the auctions start up, that's when you'll want to watch because the action is a lot of fun watching how they're bidding on these used cars. >> thanks so much, phil. we'll be right there with you. >> isn't it pre-owned, phil? aren't you on board, man? it's pre-owned. >> yes, joe. it is pre-owned. it's not used. have i got a deal for you. >> pre-owned, man. >> come on. >> he's got the shtick down. >> joe i bought a used car and i tell people i bought a used car.

don't give me this pre-owned stuff. you sound like you're at some marketing class. >> i just am politically correct. i thought -- all those things. >> anyway. on the other side of this break our thanks to phil, not all ice bucket challenges go smoothly. you've got to see them to believe them. some ice bucket epic fails. >> oh, gosh. >> let's hope it doesn't happen to me today. >> "squawk box" will be right back. your 16-year-old daughter

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welcome back to "squawk box." the ice bucket challenge for raising awareness for als has really taken off. but not all go as smoothly as planned. take a look at this. these girls were enjoying a day at the lake until they decided to do the ice bucket challenge and one of them decided to take a dunk to cool off. she probably could have just poured the ice bucket on her own head. and then look at this. when you dress up like super mario and va bottle of jamison in your hand, you probably deserve to have a glass bowl broken on your head. here it comes. and then be careful with pets, some animals are not water lovers like this guy's cute pup who decides to take off with a construction horse of some sort. you might also want to make sure that you can actually lift the bucket. the idea is to get his on your head. and if you really want to impress your friends you can do what professional hockey player did, hire a helicopter, the

hockey player used a chopper, glacier water and dizzying heights all while in a speedy. and this, i was just handed a towel. this is the towel i'm going to get for a little bit later today. this is all they're giving me to wipe my brow with when it all goes wrong. kayla, over to you. >> and to wipe off that garbage pail full of water. we'll see if that works. >> it's mostly ice. >> mostly ice. yeah, i've been there. >> jagged ice. >> going to hurt. when we come back, "squawk box" will be right back with breaking economic news on jobs. [ male announcer ] since we began, mercedes-benz has pioneered many breakthroughs. ♪ breakthroughs in design... breakthroughs in safety... in engineering... and technology. and now our latest creation breaks one more barrier. presenting the cla. starting at $29,900. ♪

welcome back to "squawk box." breaking news, initial jobless claims, moved down 14, is 14,000 from a slight upward revision down to 298,000. and here's something you don't see every day, continuing claims. big round number. 2.50000 million. 2.5 million. so we want to continue to monitor this, of course, i contend changes in the duration, length of how different states deal with unemployment benefits, of course, have changed the dynamics of this number a bit.

interest rates, hey they're creeping up. like a little over one week high at 2.44. i never thought i'd live long enough to make 2.44 a high yield but it's a super significant yield. remember, 2.44 and change rounded to 2.45 was the low yield close of the year it occurred in may and then we usurped it several weeks ago. we haven't closed above it. add three basis points so you're going to see a lot of technicians having their stops at 2.48-ish. the market has weekend coming up. we all know tomorrow, fed issu s s jackson hole will take a heightened to the third place. home sales that's a biggie. data was on the spongey side. china, bad news is bad news. chinese do get some things right. back to you. >> rick, thank you for that. we're now going to get over to jackson hole to where the fed heads are gathered along with senior economics reporter steve liesman. the head of the fed heads.

he joins us with reaction to the jobless claims number, and more of his interview with the kansas city fed president. >> steve. >> thanks, andrew. just a quick word that jobless claims number is one that economists will say is consistent with overall payroll growth around 200,000. that's been the consistent trend here. and it's definitely shifted a little bit lower. talked to esther george, the president of the kansas city federal reserve who is the host of this conference this year and the topic of the conference is labor. but i began the second part of the interview talking to her about stan druckenmiller, guest on "squawk box," also at delivering alpha this year, who's asked the question, if -- how can rates be so below normal while the economy is so much closer to normal. i asked about drinken miller's critique of the fed. >> i think it's a fair question in this sense. monetary policy took very aggressive actions during the crisis. during a time of panic, if you will, in the market. if you look at where we are today it looks very difference.

and i think the question is at what point should monetary policy begin to normalize. and of course that's what the fomc has been talking about. >> so there's a whole discussion about normalization of rates. can you explain what that process will look like? >> well the minutes outline the nature of the things that the committee has talked about. talking about how to control the short-term interest rate. talking about timing of policies. so there are many factors involved, and a policy which is extraordinary, as the one we have today and that is very much the focus over the last few meetings of the fomc's discussions. >> what's your view of labor stock right now in the u.s. economy? >> well, i've been encouraged by the labor markets over the last three years. so we have seen progressive increases. in people getting jobs. we've seen more broad based improvements in the labor markets this year in particular. >> there's a bunch of research done by princeton professor alan krueger about this issue that

long-term unemployed may not be coming back to the labor market. what's your view on that? >> we are beginning to see the long-term unemployed come back as the labor market improves. i think the question for us today is, where are we table to match skills? >> the minutes came out and suggested that maybe you're making faster progress than expected. is that your view, as well? >> it is my sense. you know the economy has disappointed on some fronts. and on other fronts, such as the labor market, it's actually shown more progress. so, i think we are beginning to see more broad-based progress. >> there's been a lot of concern expressed about possible bubbles created by low interest rates. how much concern do you have along that score? >> trying to decide when risk hits the point of its peak, or being a bubble is really difficult to do. but what you can do is see when incentives to reach for yield are present. and i think you see that in various parts of the market today. with negative real rates, you're going to see that kind of reach for yield. and i think policymakers have to keep that in front of them as we

think about as we think about responding to the current state of things. >> esther george is big on the issue of banks and regulation and wants to see more of it. we have a huge lineup coming from jackson hole that you can reveal. we have john williams at 11:30. later in the day, charles plosser the philly fed president pep and later in the afternoon dennis lockhart, and before that tomorrow morning on "squawk box," right around this time, i guess it's 8:00 we're going to have jim bullard for and extended interview. four additional fed presidents. >> wow, steve, thank you for that. we look forward to the interviews tomorrow. >> there it is again. jim bull ard, steve. you have jim bullard. there it is again. >> what did i do? >> no, with how there's so much import once you're on the fed for awhile. it's like oh, my god you have jim bullard. everybody goes wow. when you're there for awhile it's really good.

>> if you are offered a position, take it, steve. >> i don't think so. i like my job too much. >> you do? then we do, too. up next a football helmet that's all the rage among nfl and college teams. maybe that would work if you were worried about all the ice. because that whole garbage can is filled with ice. it lets coaches see the game from a players perspective. and it could be a game changing for leagues and tv broadcasting. the ceo of the company behind the technology joins us next. and then later today, don't miss eric schneiderman on the halftime report today. he'll talk about the government's record $17 million settlement. see that small? with bank of america. out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments.

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welcome back. it's one of the most famous lids of the year. now fharrell's hat that foal the show at the grammys going on display at the museum in washington this week. there it is. that's going. the newseum. can you believe that? >> no, i never saw that. i didn't see the grammys. that's a different happen. >> it's called the smoky the bear hat. >> oh, yeah? >> i'm going to put this hat on. this is for the next segment that we're doing here. >> okay. >> this is to protect myself for later. >> why don't you keep that for later. i guess you don't remember -- >> when you pour the water for

the als. >> you don't remember michael dukakis why he lost the election? >> the helmet. i do. >> but you put it right on without even -- >> tell them about this. because this is a special helmet. >> the countdown to the nfl -- >> i should wear this every day, actually. >> countdown is on. for the nfl and college football season. preseason's already started about -- you know. i don't really care that much about that. check this out. a new helmet with a camera embedded in the design allows you to see exactly what the players see on the field. it's been picked up for use in practices by more than 20 nfl and ncaa teams and the helmetmakers are in an advanced deal talks with two major tv networks for broadcast rights. joining us now is j.r. letterman founder of sports innovations. we like it. how much different is it than what we're used to with gopro and things like that? >> it's not comparing apples to apples. you know, one is a camera. that's a helmet. it's the only helmet in the

world today that's got an integrated hd video system. nocse compliant. can be worn by any player on the field in full contact, game conditions and practice conditions. >> wow. >> how does the content get used? is this primarily for people watching at home to get a field level view or something that coaches can use, too? >> yeah it's dual purpose, right? so we've got the entertainment side which you referred to, which is the broadcast application. we did that in the arena football league this year on some broadcasts with cbs sports network and espn2. where we were able to show replays during the game. and then from the coaching standpoint they get to see what the player sees on the field during practice and have coachable moments with the player after the fact. >> is there -- i assume there's wi-fi in here? >> no we're in advanced development of the wi-fi. >> so it doesn't transmit at the moment. it just records. then how do you get the information out? i mean how would you --

>> there's an sd card in the rear enclosure at the bottom. the button on your right is a power button. you can push that if you want. and then it automatically starts recording. takes 720 hd video. >> and how long does the battery last? >> 2 1/2 hours. >> so less than probably a normal football game. >> less than a normal football game if it's turned on and off and then typically lasts during the practices, practice times, as well. >> it's expensive. you've got to drive the price down a little bit. you know, only because of the news cycle do i think that there's potential other places for this. eventually maybe all law enforcement officers should have a camera jurs for so that they behave properly so that people know that everything's, you know, what i'm referencing. i mean is it possible to drive the price down? >> oh, yeah, we've been working with all different avenues. >> still too expensive though. not every -- >> let me address that with you for just a moment. because for one what teams are investing in is the technology. also, two, we did a very limited production run starting out. so we're only talking about 200

helmets that were built. as you know as demand goes up you manufacture more parts. imagine if you only manufacture 200 iphones what would they cost. >> all of that is kind of playing together. it hasn't been a point that's, you know, hurts sales in any way with the division i and the nfl teams. obviously, you know, us and schutt want to make it available at all levels of football. >> do you worry players are going to play to the camera? meaning there's going to be harder, bigger hits. people are always trying to stunt for the camera and now that you know that it's right there, and by the way is there audio attached to this? >> there's no audio. we left that out for a reason and it's been the right choice. >> the reason people you don't want people trying to stunt to try to hit as hard as possible? >> no, no, no. let me address your first question. i've been traveling across this country -- >> xxx. >> i travel across this country for practices and games and i tell you football players hit hard all the time. so the fact that they're going

to have a camera on there, is not going to change that. and it's one of the reasons why having protective equipment on the field is so important. that's the great thing of shuth vision, because it's nocse compliant -- >> i hadn't thought that through in terms of what's said on the field. >> we didn't want to create another barrier for the coaches. coaches are very protective about what gets herd. you see these mic'd up players on these specials, that's all very controlled, very secure of what gets out. so we didn't want there to be a great play on video that gets squashed because there was audio -- an audio issue. >> so you produced 200. how many are in circulation? at $1200, how many can each of these teams aford? >> we have teams tat have as many as 10. they range from one to 10. you know, it's -- it's -- you know, again, what the teams are investing in is that what it does but how it does it.

you know, again, to be able to capture and utilize that technology, and that content from full contact situations, is huge. i just spent two days over at rutgers, where they're utilizing the helmets with the coach and he was talking about all of the information that he can get, any information that he can get to help him coach elite players is something that he wants. and so it's an investment, really, in the coaching and teaching aspects for the schools. >> you thought about for sports that they'd show -- for me, every reality show ever made, none of the situations -- i ask that about every situation that they go through. the cameras on, the fights are fake, everything is fake on every reality -- andrew you need to ask the most important question. >> what's that? >> is that water proof? >> it is water resistant. >> not waterproof. you -- we're going to do the als challenge a little bit later. >> yeah. >> if i dump a whole -- >> it's a garbage can full but it's mostly jagged ice and heavy and could cut him. >> yeah. >> will that be okay? >> yeah. i would think --

>> will he be okay? >> we have' helmet equipped to do that back in the green room. so we're -- >> it's a huge bucket. >> that's a big bucket. >> and they're not playing football in ponds any time soon. >> this is kind of heavy. i just want to say this is a heavy helmet. >> you put it back on. now we need to ride around in a tank and you'll never be -- >> in the marketplace today. it's just under four pounds, and so yeah it's one of the lightest ones. >> i look like a natural. >> you do. you look like a natural. >> i don't know. >> a natural what. >> no comment on that. >> you're giving him an opportunity to give you more of a hard time. >> that's what people don't understand -- i've been watching the last couple of days and i'm like man, he's relentless. >> yeah. that's why you need -- >> that's why i need the helmet. >> you should wear it every day. >> this and a little bit of kevlar. >> our goal is to have this on the field in the nfl and the ncaa within the next -- later this season or next year. it's going to change the way the fans experience football and it's already changing the way the coaches and players coach

it. >> jr, thanks for coming by this morning. >> thank you. >> up next, jim cramer on this morning's market movers. and later, that ice bucket challenge is going to be very cold on andrew. it's going to hurt, too. wait until you hear who andrew is nominating, though. that's another "squawk" moment you can't miss to afford. before we head to the break jimmy fallon helping one viewer complete his nomination of lindsay lohan for that very ice bucket challenge. take a listen. >> here we go! i'm sorry. i didn't want to do it to you. with their electrical vehicles. but you can't take a trip from lisbon to stockholm if you can't re-charge along the way. the green emotion project, funded by the european commission is using the ibm cloud to make this possible by creating a single charging and billing network across 28 countries. so drivers can travel as far as they want to go. take your business further with the ibm cloud. the ibm cloud is the cloud for business.

welcome back, look at the futures at this hour, still strongly in the green. they've been there all morning. and that despite a slightly more hawkish tone from the fed minutes yesterday as well as data showing sluggish growth in eurozone business activity. jobless claims dipped below 300,000, one more positive data point the market will look at today, joe. >> okay, kayla, jim cramer joining us now. i don't know where you are at hp at this point, but you will not play in this, will you? what do we need to know from

whitman? >> we have to figure out why printe printers, i know a core franchise, did not do as well as i would like, and enterprise not as well as i like, personal computers, maybe it goes down. analysts defending the stock, there's a hospitlot of cash flo. that's true. what happened is there's great turn around story, and i feel it's played out. we'll see what david has to say. i just field that the quarter was okay, a lot of the companies in that segment have been doing a little bit better. >> we were talking about, you know, the family dollar stuff too, jim, and there's a appointment that if you immediately, you know, throw the flag on the the antitrust stuff, how do you come back later if you try to get a higher offer, and you, you know, let the genie out of the bottle? do they want to resist, or -- >> yeah, i think they do. >> yeah? >> it's interesting you say that. i thought time warner would do

antitrust against fox, and they didn't, but i think that's because time warner ultimately wants to make an acquisition itself. i think it's serious. i think this government, this justice department takes the issue very, very seriously, so this is a killer. it's just such a good deal for them, but the flag is going to, i think, have real gravity here. >> you don't have a change of clothes. >> i think he's showing courage. >> where did you go after you're soaking wet? >> i was cold. >> just drove home like that? yeah, you know, you play it like a man, not a guy wearing a t-shirt and golf shirt and shorts or something. >> that's what our friends, colleagues did it that way. throws them under the bus here. >> i had a really nice v

organization le-- tie destroyed, a suit, what can i say. >> the way to be done. >> a man with courage this morning, told the truth. how do you get valuations? just like, hey, wow, whatever, write a check. i couldn't believe dick had the courage to come on. that was the most courageous interview. i don't know if people realize how courageous what he said is. it's amazing. >> i would cut a few bites and run him for eric sniderman. have the judge run those, see how he responds to those things. >> everyone feels like he's the only guy willing to say it. >> exactly. >> he's a heck of a guy. >> yeah, he is. he's very outspoken. anyway, as you are. see you. >> thanks. >> preowned hair. is that like -- that's what i'm going to start. that's politically correct. >> it's yours.

>> right, it's mine, but might be preowned. next, we go for a walk. it's about to get wet and cold and icy. andrew, look at the size of that thing, for ahs awareness, make nominations. i got the opportunity -- >> he has the helmet in the hand. >> i get the opportunity of pouring the icy cold freezing water on him, no change of clothes, has one square of toilet paper to dry off. "squawk box" will be right back. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure.

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welcome back. time for another als ice bucket challenge, and this time, it's my turn. ives ca-- i was called out by t aetna ceo. >> i now pass the challenge on to the cleveland clinic, andrew at cnbc. >> i accept the challenge, and in turn, i will nominate a couple of people. my boss, comcast chairman and ceo brian roberts, you're up, interactive, diller, your turn, and murdoch. you didn't get time warner, but

you got the ice bucket. going for gold here. >> wow, wow. >> he's fun. >> to donate, visit alsa.org, and i'll donate as well. >> off camera, andrew's like, well, are you sure? do we try? we showed mishaps. we're not going to do this big thing. we have one over there. >> stand over here? i think this is the mark right here. >> okay. hold on a second. first of all, let me look at this because, okay, j. crew. >> okay. >> hold on. >> you're not -- you don't have a microphone on. >> i don't. i'm not going to get shocked hopefully. >> get ready. >> listen, count to three. >> looks like you're going to throw it into my face.

>> start at three and count down. >> wow. pretty good. >> pretty good. >> i think ice in my ear. >> i have collateral damage here. >> well, there we are. >> cold, was it not? >> it was very cold. >> i think this is when you are supposed to officially challenge the other people. >> oh, well, my challenge, i made my challenge here. i got the towel. >> you could poly take back the brian roberts at this point. >> who do we give it to? >> two people to call out quick, warren buffet has been challenged. he's not done it, and i think we should -- we don't have any wall street guys on the list. maybe lloyd should take the challenge. he's got some dough. >> product in your air, never looked more attractive to me when it was slicked down like

that. you look good right now. >> thank you. >> i got's in my ear. >> thank you. >> did that work for you? i just did it right away. >> thank you for that. >> you're welcome. >> i appreciate it. >> are we done? >> back to you. >> oh, join us tomorrow, and "squawk on the street" begins right now. good morning, welcome to "squak on the street", i'm david faber live from the new york stock exchange, carl is off today. the justice department where eric holder is expected to announce bank of america agreed to a nearly $17 billion settlement that would end a probe into morgan securities that the bank and its units and, of course, those that acquired in country wide and merrill lynch sold. we'll go live to holder once he begins remarks. we have a live and exclusive interview with the