cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. it's the morning after for nfl fans. a big sunday of games with several big upsets including the patriots losing to the dolphins. a couple of overtime games and on nbc last night manning sees manning. three touchdowns to beat his former team. much more on sports coming up in a bit. in corporate news, general electric is selling its appliance business to electrolux. the price tag of $3.3 billion. both boards have approved the deal. electrolux will continue to use the ge brand. we'll talk to the electrolux ceo coming up first at 7:00 eastern time. andrew, good morning. good morning, becky. hope you have had a great weekend. alibaba is set to kick off the ipo road show in new york today. the chinese ecommerce giant is looking to raise more than $21 billion in the u.s. public offering. the expected per share price range set between $60 and $66.

this would help the company or value the company rather at up to $163 billion making it the largest ever technology debut in the united states. and joe was reading that story over the weekend about mr. jack monn in "the new york times." >> the entire column allocated to "the new york times" -- i spent on alibaba did not see that in "the new yorker" or something. >> "the new york times" magazine. >> so it was not in "the new yorker." >> "the new york times" is a magazine? >> you have it in front of you. >> that's your copy. i didn't bring that in here. andrew, i will tell you what i did -- what struck me is that all of the weird corporate structure did make it impossible

to list in hong kong, so hay had to come here. >> they are technically in the cayman islands. >> yes. and a 42% profit margin versus amazon's 0. >> you think it's a great business. >> no, because -- >> why are you skeptical? >> normally because if there was a free market competition, they would go from 41 -- that's what i mean. a bunch of government officials are owners, too. >> yes. you have to say that under your breath. >> we are not on over there. already, the government -- as we start to talk about alibaba over there, i don't know, i read it and there's so many different types of -- it seems like the corner market on all internet. >> it's the combination of e bay and amazon. i remember when that was happening -- and the way he -- you know what this -- you

remember jack ewing. nobody gives you power, andrew. you have to take it. and he did. and today -- >> former schoolteacher. >> and he says, now, you get 40%. they own 70% and he says, no, you get 40%. have you met him in davos? >> not in davos but elsewhere. we'll tell you about other stories in the world of tech this week. and is set to unveil new i-stuff at a product event tomorrow. that's the one we are waiting for. among other things analysts have been buzzing about is the iphone 6, oin two different sizes. and there could be a mobile phone as they struck a deal with ammex, visa, mastercard and

others. and we'll see what the famous iwatch looks like. most of the reports on the iwatch say if they tell us about it, we won't see the device in stores immediately. so while we may see iphones within a week or two after the announcement, it is unlikely to see the phone. a lot of people say you won't see the phone in stores until 2016. there has not been a lot of rumors and speculation on the manufacturing side about the iphone. usually you hear leaks and things on this but that has not happened a lot. >> you have never gotten excitement from a tim cook -- they are saying this might be it, but what would that mean? they may have a bigger ipad but they can't use the obvious name for it and have to come up with something else, obviously. >> is that trademarked? >> i just don't think you want to call it that. >> you mean the opposite of a

minipad. >> a maxi. there is hope -- remember at the very end he used to surprise us. >> one more thing. >> and they are hoping that might be a quick look at apple tv. >> could be. and so what happened, the other question i have is, if they just do a phone this time and think they are going to do the watch in a month or two, is that going to disappoint? or if they announce the watches but tell you that you cannot buy them until after christmas -- >> is there a way not to disappoint? or have we already become -- the expectation has been lowered so much in things recent -- >> i think every time they think the guy is going to show up with something magical. and that's a high bar. >> i don't know whether it is because we have been used to, like it wouldn't take much of a high bar for us to say it's a high bar given that there habit been a high bar since the guy died, right? steve jobs' death. what else was i thinking about? i'm interested in ge with the

electrolux. this is a long-time coming. they couldn't sell it -- refrigerators, ovens, all the stuff. did they get a longer price this time? >> they still will have the ge name, but the question is how long will they have the ge name for? we'll see. >> right. they can do it -- maybe they can make money. with the economy in this scale they could make money because it was not a great business for a long time. i feel like my chair is low. i'm just trying to get used to being back here. hello! we're in the news business, business, business, business. is anybody here? here, here, here. is anyone out there? >> yes, right there. >> where is -- we need -- yeah, anyway. thank you for the crickets, john. he's in there, he's asleep, our audio guy. he's asleep with everybody else.

back on the farm -- is there a rooster out there? it's a little quiet. charles plosser has a warning to his colleagues. he wants the fomc to change his language on interest rate policy saying the wording should reflect an improving economy and pave the way for an interest rate hike, except the markets were up 70% not on the good jobs report but on the bad jobs report because it means these guys may get cold feet about exiting in the crack-addicted traders, all they care about is free money. they are -- maybe we'll get it longer. see how this is working today? >> not so well. >> down 7%. >> on an annualized basis, not on the lee-month basis, but on the annualized basis. 7.2%, i think. >> which is bad because it's not

up. >> right. >> yeah, okay. 7 is not bad, what are you saying? >> no, just on the annualized basis. i thought it was on a quarterly basis and i hit the ground. then i thought, do we do it on the annualized basis? >> if you head down 7 -- >> that is bad, i'm not arguing that. they are in trouble. it's because they raised sales tax. and it hurt both businesses and consumers. >> so did plosser. they could debate the forward guidance at next week's meeting after a number of members suggested that the current wording needs to change. we'll check on the markets this morning. pretty nice session on friday after all is said and done. immediately when the jobs number hit the futures turned around to trade higher. today they are giving back a

little. check out the oil. oil has been nothing like watching -- not much has happened for six months in the trading range. the ten-year was up 2.5 immediately when the news started to head south in terms of the yield. we'll check out the dollar, i would figure the euro is back above 1.30 but it is near 1.26. and finally gold, we'll look at the world falling apart everyone at 1267. the wgoal is to keep the winning streak alive. we have charles campbell, mkm partners executive director. charles, what happened on friday was a little bit of a surprise. you have terrible numbers on the jobs report yet the market seems to like what it sees. is that because they think the fed is in this for even longer

than we expected? >> becky, good morning. i think what is going on is bad news is good news. that is it encourages investors to move out the risk curve and take on riskier assets. the reason is because the implications regarding moving off of zero lower bound and moving fed funds higher sometimes in 2015 gets pushed a little further back. and the fed is having more room to make that move and take ma decision. >> charles, let me and you this, even though you think the fed is hanging in there, do you think the numbers will be revised above 200,000 eventually? >> the data is not consistent with what we're seeing from other indicators. initial claims, the high-frequency indicator we get it every week, cycle lows, new order components and the manufacturing component, the lowest reading since 2004. consumer confidence cycles in highs, so i expect it will be revised several times, probably higher. >> jim, how about you? >> absolutely.

i mean, certainly in general during the recovery there's a tendency for the first prints to be revised up, but the tendency is strong in august. and if you look at august, the revision from first print to two months later, the average is 77,000. that's why we were looking for a sub -- >> when do you think the fed actually raises rates, in the middle of 2015 or as some people have suggested, not until 2016? >> i think it is 2015 for sure. the debate of the fed seems to be more march or june at this point, but some people may say september, but the vast majority is on board for 2015. i would say march is a good chance. obviously, that's assumed friday's number is not the start of a weaker trend, but you listen to fed officials, at this point a lot of them are centered around the middle of the year, some a little earlier and some later, but very few people would say 2016. >> jim, what do you think is happening around the globe with japan showing this huge drop for its gdp with china now showing a

big trade advantage to it just because of weakness domestically, what does that mean with china and japan slowing down? >> they are relatively weaker than u.s. growth. you saw that last week when the orders component isn't surveyed just jumping to 67 or so, the highest in ten years. >> is the u.s. higher to get dragged down by japan, china and europe? >> certainly the rest of the world is not collapsing. you look at the export orders with components in manufacturing that captures that from the u.s. perspective. at the 55, it's at 67, the overall look, growth looks particularly very weakish. japan looks very weak. the q2 number is exaggerate affidavit the surge in q1 ahead of the tech site, but globally, especially the industrial world, growth is still weak. >> charles, do you think we can continue with the goldilocks phase, is that good news for the stocks for how long?

>> well, we have a number of factories coming around. we have the situation with russia that taking place. and the cease-fire is tenuous at best. we have a leader in russia who is, what you might call unbridled ambition, and i think he knows that western leaders don't have an appetite for military conflict. the markets take that as a sign that with the absence of the conflict you don't have to worry about it in a significant way. and so barring that there won't be an electrical storm to markets. and in europe we've got five of the economies in the eurozone having deflation. italy reporting lower prices for the first time since 1959. so draghi is probably behind the curve there. carney at the boe is prepared to move higher and the markets should catch up and they have done work for him. so we have policy accommodation in place, but it's a situation that's going to be fluid and will change going forward. >> corporate earnings looked pretty good. >> the new orders component to

the ism which is a good proxy for growth, as jim said is at the lowest level since 2004. >> what do we head from here? what are we looking at for the s&p? >> we have had decent gains and we are thinking from the start of the year, low double-digit ups with more to go. as we enter into the final quarter, the hedge fund managers will look to lock in some of the gains with positions a little more defensively. >> jim, what is the next number to watch as we look at the jobs report as an anomaly. >> the surge for unemployment itself, we look at the week from last week, they stayed low and encouraging. the big numbers are regional sales on friday. we'll see if spending bounces back after last week. auto sales roar back to a new cycled high. the other thing of note, on

thursday we get the quarterly services survey which has become very important for the rescission to gdp that they ultimately get more information than health care spending. so right now q2 is going to revise up from 4.2 to 4.4 based on the latest numbers, but that could be affected quite a bit. from the market, it's the retail sales number that is the most important this week. >> gentlemen, thank you for coming in today. >> thank you. coming up, baby news from across the pond. and then later this hour, mary barra on the road ahead for the auto industry and the changes that are to be made at general motors. check this out, while the nfl was kicking off it was derek jeter day at yankee stadium. a lot of big-time guests showing up for the captain including michael jordan and cal ripken jr. "squawk box" returns after this. he was literally crying on his way out yesterday. financial noise

financial noise financial noise

some royal baby news this morning. princess kate is suffering from morning sickness as she was in her first pregnancy. she's being treated by doctors at kensington palace. and bruce levenson says he plans to sell his controlling interest in the team. this comes after a letter he

wrote two years ago after the black fan base said he made rationally charged comments he's now sorry for. >> what is your story on this? are you afraid? >> am i afraid to talk about this? >> you told me you had an out of consensus viewpoint or something. >> i have an out of consensus vie point. while the memo was typed, clearly he stereotyped, he had racial stereo types in there. it seems to me, i imagine, within all sorts of companies, i bet there are memos like this. when proctor and gamble is trying to figure out who to target, most of the memo was about who they want for the season tickets, who has the money and this and that, and i'm not saying they should sell or not sell the team, i'm not making a point on that issue. i imagine when you have a ma n

makenzie come in to do a study, hope they do not like exactly like that. these were generalized stereotypes, but i wonder if the memos got out, what we would think of a lot of consumer product companies. >> i don't know anything -- i've heard of the guy, i thought, okay, so there's an investigation into things that happened two years ago and he immediately says, hey, hey! i'll sell. i'll sell. i don't know whether there's more or whether he saw what happened in all the stuff that came out about sterling and the way it was handled. he said, i don't want the team to go through all of this, or maybe there's other stuff. maybe this is the tip of the iceberg. >> i don't understand, it said he reported this before the start of the investigation or the investigation started because of this. >> he knew it was going to come out. it's not a great e-mail. >> i've read it. >> it's not a great e-mail, but i would not put it in the sterling category either.

>> right. >> they also point out he's probably going to triple what he put into the team when he bought it. what was it, five years ago or so? >> so is this an excuse to sell the company? not an excuse but a faith-saving way or way to say -- >> now this diffuses seeing his name in print that much more at this point. he moves on and has triple his money. >> would you move on or would tmz or somebody out there threatening him with other things he might have written, is that what you're suggesting? >> i've been watching a lot of "dateline" re-runs, and i just don't trust anyone, any husbands, people are doing stuff on e-mail that i just can't believe. seriously, we go on demand and it's ridiculous -- and on "48 hours." >> you changed your view of the human race.

>> the husband always did it, i can tell you. it looks like a great marriage, it usually isn't. there's something going on a lot of times. you don't really hear about it. i'm telling you, that's why i was unable to read the magazines. >> you were busy. did you read his e-mail? >> whose? >> he's already forgotten about it. but see, there's a point made. he's forgotten about it. >> it was on market share. >> like 70% of the fan base and something that he said 90% of people hanging out in the bar afterwards. it was a complaining about the mix of the fans. that was the issue. we'll tell you about a new story. a new survey says the u.s. employers are planning to give pay raises averaging 3% next year. the average raise in 2013 and 2014 was just under that at 2.9%.

>> that's better than mid-flat. >> that's better than flat and miss yellen, technically. >> and in keeping with our crummy gdp growth, which now is suspect again, is there going to be another -- i don't know about the number. people say august is always slow, but for whatever -- >> is it suspect just because of the jobs report? >> yeah. from whatever you want to look at, this is a grinding uneven recovery. and 200 is good. it's the best in seven years when we do -- but there are times when we have been to 350 or 450. >> mohammad olarian is joining us during the 7:00 hour. >> he may look at us like we have no idea what we are talking about. he may patent all these corners,

multi-universe, all that stuff. i did hear yesterday, i'm trying to congratulate me on the bengals. >> because he wanted you to congratulate him on the jets. >> on the jamets who also beat the reds. so he complimented me on one team winning and i had to send back congratulations on the jamets. >> very good. >> i was happy for the jets, too. gino looked good. >> he said it was kind of a disappointing win. oakland isn't that bad. >> watching the jets, i have a very acute memory of sanchez. and it just did not -- gino looked good. i'm worried about the bengals. five field goals. five field goals they get. and they miss one. so they get 15 points so that

the other team scores and they are ahead. suddenly they are ahead and andy norton had to throw a hail-mary to win the game. >> whipping ugly, however you want to win, look at the scoreboard. >> and it was the ravens. so it is really good they beat the ravens, but you get down there five times, you shouldn't have to throw an 80-yard pass to win. if they got two out of five touch downs, then it wouldn't be close. >> don't fret, you won, take it. move on to next week. >> manning says, he didn't talk to a single soul about the super bowl and said, i just wanted to get back on the field. >> i was watching tennis. >> i watched tennis. it was not that interesting to watch. >> are people going to watch the finals tonight, though? >> it's a true changing of the guard because if you saw -- i

watch watched federer get beat. he did seem lethargic. >> it was hot outside. >> and what an athlete. i can't wait to see this guy, he's 6'6". so tall. >> we can talk more about tennis and chairs. >> let's focus on "the new yorker." the new york magazine. when we come back this morning, president obama's strategy rollout for isis and immigration moving further down the agenda. that's next with john harwood. "squawk box" will be right back.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernan along with becky quick and andrew ross sore kip. reports say the low-cost irish airline from boeing is said to place a $10 billion order for boeing's new 737 max jetliner. also, tesla's ceo says he would not be surprised if there was a significant deal with toyota in the next two to three years, but there are no definitive plans as they supply certain batteries for electric vehicles. toyota has a deal with them already in place. the larger question is now they

could move to the hydrogen fuel cell. the question is whether they will bypass batteries altogether. >> no, toyota. >> the machine is flickering through. you know how i am? >> ocd, you have an issue. you come back to a different set that is blinking and flashing at you. >> out in the middle of nowhere. where are we? englewood? >> i've been here -- >> 22 years. two days away and all of a sudden -- >> i went places with andrew. >> not cool. >> we were in notoriety. >> oh, i didn't see that. that's why you have remorse of being back here. in the meantime, disney's "guardian of the galaxy" winning the box office again as the

biggest grossing film of the year with $295 million in ticket sales since the august release. and looking a the markets, on friday the markets turned positive after the lousy jobs report to save things five weeks in a row to see gains for the market. this morning we have red arrows with the dow futures indicated down 35 points and the s&p futures down by three points. in europe in the early trading right now there's also red arrows. there are the biggest declines coming with the ftse down by 58 points in london. in asiaover night, look at what happened. china's surplus hit new highs and you can see the hang seng down by .20%. the shanghai was higher. the nikkei was higher by 36 points. even japan's gdp slupg at the fastest pace in more than five years. take a look at oil prices with a lot of pressure on them over the last week or so. down by 72 cents to 92.57. and the ten-year note at this point looks to be yielding

2.434%. and taking a look at what's happening with the dollar, the ecb yesterday or last week with the big decision, the announcement of what they are not calling quantitative easing but everyone else is putting pressure on the euro flatlining at 1.295, so below 1.30. and gold is up slightly at 1,267 an ounce. and president obama is planning an address on his strategy for dealing with isis. he sat down with cnbc's chuck todd in an exclusive. >> this is not going to be an announcement on u.s. troops. this is not the equivalent of the iraq war. what this is is similar to the kinds of counterterrorism campaigns that we have been engaging in consistently over the last five, six, seven years. >> let us get to cnbc's chief washington correspondent john

harwood who is joining us now. i have a few things to ask you about, john. i don't want to -- i don't know, i just don't feel like putting you on the defensive today with all this because it's been a rough couple of weeks. but i will ask you this, about the immigration decision, so if he did it before the election, he figures it could hurt some republicans or some democrats' chances because some people may not like what he's doing. so he says he's still going to do it but it's just going to be after the election. now does he think that the people who are voting are so stupid that if he doesn't do it before the election they can't put two and two together knowing that he's going to do it after the election? couldn't they make their decision on how they vote in november based on knowing that he said i'm going to do it after the election? >> well, republicans are going to do the best they can to make sure that they do, but that's

sort of not how it works. you get the firestorm when the thing actually happens. >> even when everybody knows he's going to do it. he did it beforehand, so -- it's just not the same. i mean, i get your point. the voters are stupid then. they think, they are stupid and know i'm going to do it afterward so i'll put it off. he really alienated some of the people that are certainly his supporters on this, too. and it's weird that you get a chance to have boehner and his supporters say this is just a grossly political move that just is from auction nearing. >> it is political for sure, but the supporters, i think, you know, they need to remember that what the president is talking about doing, this is why it is so controversial. it is pretty extraordinary. depending on the ultimate breath

of the decision, but to talk about yunilateral action to people in the country, that's a big thing. so the supporters who were disappointed, that disappointment is going to be short-lived because we had an immigration law in 1986 under ronald reagan, you know, you go through cycles with these things. george w. bush tried hard to get one but couldn't do it, but the idea of doing it on his own was something we didn't even think about. so this is a function of the president being very aggressive about interpreting his authority. it might be a bad idea legally, he could lose in court, it could backfire politically, but it's a big thing. and so if he ends up doing it, that's going to be a substantial achievement from his point of view for better or worse. and the job for republicans as you just suggested is making

sure people not only have heard he might do this but to try to generate some of the emotion that they would have gotten if he did it today. which is when we originally thought he was going to do it. >> do you think he helped or hurt his cause when he said looking back at the gulf shots after the terror beheading, when he says that it was more of -- now i understand that the optics weren't great for that. and that i hope i can go on a vacation sometime where the press isn't following me. it just almost sounds like i have no problem with what i did, it's just i wish someone hadn't been watching when i did it. did that help or hurt him in terms of -- >> i'm not sure it made a difference either way. >> really? i think "the daily news," he lost more. this is not "the new york post." this is "the daily news."

the stuff he usually writes is so pro-obama, but to get to this point, he made somebody -- he ruffled somebody's feathers. >> look, i think his view is what he did in substance was not wrong but the fact that he did it in a way that he was seen, it was covered and just opposed against the foley situation, the call to the parents, that was the problem, the appearance of that. so he fessed up to that, i messed up the appearances, does that help him move? maybe. >> his staff says it is really important because it energizes him when he plays golf. so i just figure, he must be really energized at this point. he must be like that bunny. i mean, if he getter energized from playing golf, he must be bouncing off the walls at this point. what do we call him, the skins now? for you, you're so politically

correct in all other instances, they didn't -- i like that team and like rg, but do we call him washington, do you know? or -- >> i call them the redskins because that's the name of the team. >> that's a much worse term than the other one, actually. >> i call them the redskins because that's the name of the team. it's going to go away and it's going to go away sooner rather than later, but until it goes away, that's my take. >> dennis miller was tweeting that a lot of ranchhands in texas are really asking the cowboys to change that name. that they think it's disparaging. but -- >> joe, i don't know if the cowboys necessarily goes away, but every one of these team names, hawks, braves, blackhawks, indians, they are all going to go away eventually because all of them involve, at some level, objectifying a group of people, and that's the core motivation for changing these names.

so the redskips, first of all, the redskins team is really bad, we saw that. their team name is doomed and a lot of team names are doomed. and i think where we are headed is for all sports teams to be named after weather phenomenon, like thunder and hurricane and lightning, that sort of thing. >> animals. >> we may need to change your name. someone was writing in that you have the ultimate war name, john harwood. that is if you say it right. one little slip and it becomes a pretty darn good one, doesn't it, john? well, i was hoping for -- i want washington to be good, i really do. >> did the bengals win? >> we were talking about that. five field goals. and the other team scored one touchdown and they are losing. they beat the ravens, which was good, but andy dalton had to throw -- this is how they won. a.c. greene, yeah, they had to

do that just to win. because it was 16-15 after five field goals and a missed field goal. so score some touchdowns when you get to the red zone. see you later, john harwood. he's a pirate. when we come back, the self parking car and the self-driving car. i don't know if you saw this, but phil lebeau is going to join us talking to gm's mary barra with the future of transportation in a "squawk box" exclusive. we are coming back in just a moment. ibm watson, on the cloud. ingredients are just data. watson turns big data into new ideas. and not just for food. watson is working with doctors and bankers to help transform their industries. today there's a new way to work. and it's made with ibm.

big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

welcome back to "squawk

box." phil lebeau is there landing big interviews this morning. >> reporter: hey, andrew. we have the leading automakers, tech firms and suppliers. they are talking about the car of the future. and we had a chance to sit down with mary barra yesterday who announced general motors is committed to building vehicles that have vehicle-to-vehicle communication and vehicle-to-vehicle infrastructure meaning stop signs and step lights. and some of the technology we had a chance to drive in the past. we have been at the milford proving ground outside of detroit and have seen the vehicle-to-vehicle as well as autonomous vehicles they are working on as well as the hands-free vehicle that should be on the highway by 2017. i sat down with mary barra to

ask where the company is right now as it continues to come out of the recall crisis. she says they expect to have all of the parts for the recalled cars to be done by the end of october. and that the fix will hopefully be done by the end of the year. as for the victim compensation fund run by attorney ken feinberg, she has not talked to ken feinberg since the fund was set up. >> i talked to ken at different points as we were going through and accomplishing the protocol. since the protocol, i have not talked to ken. he's running an independent process and that's the way we want it. i have utmost respect for ken and how he's doing the project, but there's a clear separation. >> reporter: by the way, the first awards from the first victims compensation fund we expect to come out within the next couple of weeks. ken feinberg started taking applications, if you will, or submissions from victims' families. back on august 1st, that is.

so they expect to have those in the next couple of weeks as we look at shares of gem motors. connectivity is coming to the automobiles. next hour, you do not want to miss a "squawk box" exclusive sitting down with the chairman of the ford motor company, bill ford, as he talks to us about his vision for the autonomous vehicles. some of the technology is already here, but the question is how quickly we see it in our vehicles. >> have you guys seen the lincoln yet? >> no. >> the lincoln ad -- matthew mcconaugh mcconaughey. he almost looks like his character -- i think it's very cool he did it because usually the daytime actors won't do it and say, i don't want to be associated. he's so above and beyond after "true detective."

>> you know what, phil? lincoln needs it. hopefully this helps lincoln trying to turn the corner. >> you were just talking about the autonomous ford news. there's a lead on the self-driving cadillac car. >> in traffic. >> you don't have to drive your car. >> phil, we'll see you in a little bit. when we come back, a whole new twist in the gender pay gap debate. word today that the nation's highest paid woman ceo was actually born a man. that story is next in chairs.

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welcome back to "squawk box." we're taking a look at some stories that are grabbing our attention this morning. this was on my -- right outside my door when i woke up this morning. this is "new york magazine." the highest paid female ceo in america used to be a man. and this is martin rosenblat. she is -- he was part of united therapeutics. used to be -- this is before he

was martine. this was martin. and it's a story about their family and being a ceo and all of the things that accompanied that. >> i think i met her last year actually. >> you met her last year? >> yeah. >> and did you know she was transgender? >> it wasn't something we talked about. >> it wasn't something you talked about, but anyway, fascinating story. it's a story not only being a ceo but being transgender and all the things that accompany that. and some of the leadership issues that revolve around that and running a company. >> in this case i guess the an sl that it's a ceo that's very highly paid because it's not anything that we haven't sort of -- i mean, the t in lbgt is transgender. i want everybody to be happy. if you feel you're miserable, everybody should live as happy as they want.

this is all i'm going to tell you. let's say you have two brains in a jar and you come down and they're both there, they're indistinguishable what gender is. and if two brains meet each other and it's a platonic -- >> it's a meeting of the minds. >> exactly. so it becomes the physical body that becomes less and less important as we advance. >> it's interesting how much money she makes relative to men. and the other issue that was fascinating, she made a small fortune. she was a satellite lawyer for sirius before it merged with xm. she was a he at that time. but nonetheless, fascinating story if you get a chance to check it out. >> and that's in "the new york times" magazine. >> no. this is "new york magazine." >> we're going to talk about the article in "the new york times" magazine of bill gates. >> wait a minute. "the new york times" has a magazine? >> yes. >> does it cost more? does it come with -- >> it comes with the subscription on sundays.

>> actually it shows up on saturday. >> you subscribe to "the times." >> i big one up every sunday. you know why. i got to read the weekend review. maureen dowd has been a little by -- >> it's an enmay thing for you. >> it is in most circumstances. even the front page in most circumstances. know what they're saying. i read one thing. what was it i read? oh, it was incredible. i wanted to read the last paragraph to you but i can't remember what it was. the damage control for something. and it was like you can't pay -- putin could not get better damage control than what was just done on this front page. i'll remember what it was. >> are you still on a no-carb diet? >> i oscillate. >> all right. so this is not for you. olive garden is about to come out with a huge gimmick to try to lure people in. a hundred dollars. you buy this pass and it's all you can eat pasta, bread, salad, and soda for seven weeks.

you can continually come in again and again and again. this is a straight carb diet. the key is there are only a thousand of these passes. they go on sale today at 3:00 p.m. get online at 3:00 p.m. today and try become one of these. but they're trying to bring people back in here. a lot of -- >> what do they cost? >> it's a hundred bucks for seven weeks. and you can go as many times as you want over seven weeks. >> it's bad to just eat all -- i eat all meat. that's bad too. >> moderation for everything. >> when we come back this morning, we're going to talk about a new home for ge appliances. the ce rks of electrolux will speak to us. that's coming up right after this. this.

it's monday. a brand new start. your chance to rise and shine. rylink trusted technology , you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support, we help you shine every day of the week. centurylink your link to what's next.

. the ceo of electrolux talks about his plans to buy ge's legendary appliance unit. ♪ we bring good things to life >> the next step for the markets. the jobs report is out and the ecb made its move. mohamed el-erian brings us the new normal. i think behavior starts with me. i've got to lead and demonstrate by example. >> now bill ford will tell us what's on the horizon. the second hour of "squawk box" starts right now.

good morning. welcome to "squawk box" on cnbc. some baby news from across the pond. the duke and duchess of cambridge are expecting their second child. that's prince william and kate. gets complicated. we don't do things like that over here. you're not born into royalty and wealth. princess kate -- we don't have titles. princess kate is suffering from acute morning sickness as she did in her first pregnancy. i remember that. she was in the hospital for the first time being treated by doctors. >> this child, though, may not be able to lord over scotland when everything is done. >> did you see that? the latest polling showed that scotland wants to break away. >> i don't think that's going to happen. >> apparently the queen is furious about it. >> neil wrote something about -- i think the more courageous thing is to stay is what was

his -- more or less his -- >> is he british? >> i'm not sure. >> or is he scottish? >> if you think about the difficulties to come. >> and will they form some type of alliance? >> if they do secede, they have to figure what to do with currency. a lot of big issues. we also want to tell you about other big news this morning. sweden's electrolux is buying ge's appearances unit for $3.3 billion. electrolux's ceo keith mclaughlin is going to be joining us to talk about that deal. also alibaba is set for the biggest u.s. tech ipo. the chinese e-commerce company is going to sell for $66 a

piece. the company begins its investor road show today. stocks now on a five-week winning streak. this despite a dpoiisappointing jobs number over the week. revising all kinds of forecasts. steve leisman has been crunching the numbers for us. >> what did you do this weekend? >> i wa ched a lot of tennis. >> my band played a benefit at the st. jude's hospital. and i spent the weekend looking for an economist who believes in the weakness of the friday jobs report. >> find one? >> i failed. i failed. >> can't say i'm surprised. >> let me show you what my friend luke thinks. we think there is a very high probability that friday's reading will give way to a number that's much closer to 200,000 by the time the second revision is published in early november. there are a lot of folks who are saying that. something like 85,000 is the

revision over the last eight years. one of the past eight years has there been a downward revision. the appropriate response to me is leaiesman, why didn't they figure that in ahead of time. it's hard to figure in an expected error. you could do that if you're aiming for the moon and saying i need to correct to the left. but let me show you some reasons why they remain skeptical. last week car sales, 17.5 million. we haven't been there since some time in 2005. construction spending beating estimates. trade deficit lower than expected. ism manufacture less than expected. ims services best since august 2005. and our gdp tracking forecast remained unchange. ten economists come in and move this for us. 3% is the number. we're inching higher on q2 for

revisions. the range 2.5% to 3.5%. what about the effect on the federal reserve? you saw a slight reserve. jpmorgan over the weekend saying the moderating rate of job creation should remove any urgency for policy makers to signal faster path to rate hikes. no real change in the sense of optimism on the job market. but also maybe taking off some of the risk of -- and i think mohamed is going to talk about that in a second. about the language in september. big important week this week when it comes to data. today we get consumer credit. we'll be following that. and the jolt survey which is a part of people's thinking in the jobs market. we'll be following that tomorrow. wednesday up wholesale trade and look at the new thing there. the fed labor market indicators calling it the one jobs indicator to rule them all.

what it is is it's a collection -- >> you're a geek. lord of the rings reference on the data? >> yes. it's a single indicator derived from 24 different indicators born of our time. if you think about what the fed statement says, it says a series of labor market indicators suggest underutilization. so what kansas city has done is lobbed them all into one. and say how do we measure these things. that's what they're doing. moving on the quarterly service indicator. on thursday that was a big part of the revision to gdp that came up. and then friday i think the most important one which is the real question in the economy right now has been the consumer and consumer spending. and we're going to wait to see what happens with retail sales, see if that auto number which we know is strong did it create weakness in other areas. there's ban bit of a back and forth. >> steve, stay right here. let's introduce our guest host

this morning who we haven't showed on camera yet. mohamed el-erian. i'd ask you what you did this weekend, but i think it says it all with what you're wearing here. >> absolutely. i wanted to recognize that it's so unusual to be with you the day after the jets win despite lots of mistakes. i couldn't imagine a better day. >> it's been an hour. >> every hour we have to update this. >> because i said that i had a send db you were fishing with me that congratulations on the bengals. and know i'd have to say something back to you. i was watching the jets game. >> i brought you a jets -- >> just at the end i don't think -- i think that got a little dicey there. you had this won and here you are all of a sudden oakland scored with a minute 30 or something. >> lots of mistakes in the first a. anyway, here's your jets white

towel for you to cheer on this team. because we need a lot of cheering. >> okay. all right. i can do that. and the mets -- >> going to use it to wipe his brow or for the dog or something. >> so you're go toing wear that for this entire time? >> not the entire time. just the first few minutes. >> it's okay prp you like all these economists? when the numbers are good they never question them. they make fun of people that question the numbers. it's just known they must be better than this? >> you don't make fun of people. we just make fun of you. no, no. >> how many people have told you you're not funny? but go ahead. it doesn't work. but go ahead. keep trying. keep trying. you're batting about .180. >> that's not bad. >> if my fielding's good you can stay on the time. i don't think that's the general thing about people who make fun of the numbers. >> it's good to have steve here

because it diverts. >> people write in immediately. when it's a good number -- >> what about from aei? really, we look at a broad range of economists. it's hard to say and i don't want to take time from mohamed here, but this one was negative and the other six were all bad were all the wrong ones and anomalies. >> my reaction when it came out, it's not that bad. okay? if you look at what happened to long-term unemployment down by 192,000. if you look at the improvement in the unemployment rate, that was genuine. so if you look at a holistic view, it wasn't a bad one. the likelihood that steve says of 142,000 is going to be revised up, this is not so bad. >> so what happens next in terms of our expectations? this is a one off.

when does the fed actually raise rates? >> so i don't think this changes the fed. so my baseline for the fed is they exit qe by october. the first rate hike will probably come in the middle of next year. >> we had someone last year that said he didn't expect it to happen until 2016. who was it? it was on thursday of last week. i'll go back and figure out who it was. >> so if they focus just on the economy and don't care about financial stability, i could see how it would be. they're getting more concern about the risk taking that's going on. and therefore i think that ends up with a -- >> amount of risk takes place in the market place you mean? >> in the market place. i think they go back to the phrase that chairman bernanke said in august 2010 you must always look at the benefit costs and risks. and there is a point where you start to have to focus.

>> it rings hollow at this point. now they're finally coming to that conclusion. just ringing hollow. this could have been two years ago, they could have thought that. no? >> they could have thought that two years ago but if you look at the extend to which the crisis -- market prices have diverged from fundamentals. >> you've been saying this for years. >> exactly. but they waited and waited. now the economy is responding. so beforehand the economy wasn't responding as much. and now -- i think that now much more understanding that there are also structural issues the fed cannot address. and the ecb is very outspoken about this about how it has to be simultaneous not just on the monetary policy but on fiscal and fluctuation. >> what are the risks on the market place? do you mean with stock prices? ama activity? >> couple of things. first, if you tell people in the market place two things. one is the fed will sit on volatility and will repress

volatility. and two that the economy is in goldilocks mode. it's not going to take off or collapse. then you are encouraging them to leverage every single risk factor. that's what we've seen across the board. >> if some of these people that are now, you know, moving out are in a position where they shouldn't be taking risks, that could come back to haunt them. >> at the end of the day, there's two things to worry about. a policy mistake. but a market accident, that's the higher risk. >> you mean what? >> people takie inine ining muc. >> people who don't think they're taking risks. people who bought european equities that have a currency in their portfolios. >> what are junk yields now? and if there was a slowdown. >> yeah. >> i'm ready to sell my house and buy alibaba. i am. >> can you live in alibaba?

you said you didn't want to be in business with jack ma. >> but i think it's going to double on the ipo. don't you? >> is that part of the risk that's out there? is this fed craziness in alibaba? >> that is the perfect example. >> that's what i'm talking about. i think i might sell everything and buy that. >> you can't drive your alibaba to work. >> and then i might borrow some more and buy it. >> but his example is what companies are doing. now they feel tremendous pressure to take that cash and put it back in the market place. >> you mentioned fisher but you think -- >> which fisher? i think fisher is interesting to think about. >> reminds me of -- >> alibaba. >> yeah. was he in the great robin williams movie? ali ababwa.

pretty close. electrolux ceo keith mclaughlin first on cnbc. i'm type e. my golden years will not just be gold plated. i had 3 different 401(k)s. e*trade offers rollover options and a retirement planning calculator. now i know "when" i'm going to retire. not "if."

ge is selling its appliance business to electrolux for $3 billion electrolux ceo keith mclaughlin joins us on cnbc.

is it safe to say you can do more at this point in terms of synergies with this appliance business that it's worth more to you than ge at this point? >> i think the way i'd say it is the global appliance business has become quite competitive and it has, in fact, globalized. and as it's consolidated you need to have large scale global competitiveness in order to compete. so i think the combination of the ge appliance group with the electrolux group is a significant opportunity for us to enhance our competitiveness. >> so you certainly would be able to compete better against the whirlpools and everyone else. you've needed a bigger footprint in the united states. to be truly global, you've got to be a big player in the united states market, right? >> so this, in fact, doubles our size in the u.s. with this acquisition. the combination with ge

appliance doubles that. and that combination also increases the size of the total group. it has a significant leverage scale effect. >> the number, whatever -- is that seven times is that on a mid -- >> i think it's a fair deal. i think it's fair for both the respective shareholders of both companies. >> is it worth more to you because of inversion and tax considerations than it was to general electric? >> i think it was the synergies that come from it. >> what about -- >> we get a step up for sure zplp how long do you get to keep this ge brand? >> right now the agreement is

for about four decades. so about 40 years. then both companies will look to -- >> do you expect to keep it as a separate brand for the entirety of that duration or is this is couple years and you mix it in? >> i think we plan to keep it. it's a very well-recognized and well-respected appliance brand particularly in north america. >> i don't think we're going to be wearing clothes or eating food off dishes within 40 years if the singularity works out. you won't need a brand by then. >> i think consumers always want trusted brands is my view. >> does it create more confusion for you or for ge itself for a separate entity to be running a consumer facing brand like this? >> does it create more confusion for us? >> in terms of the complication, is it more complicated for you or ge the company to have a separate entity running around with your brand?

>> obviously they're not doing this casually. so we have agreements in place. they know us well. we've agreed to maintain the positioning and the integrity of the general electric brand. so there's clear arrangements and guidelines so that -- and they know who they're selling it to. so i think there's a good arrangement here. >> keith, would you characterize this as a defensive or an offensive acquisition in particular? consolidation means fewer jobs and investment or does it mean you now have a bigger platform to expand even more? >> it's the latter. it's clearly an offensive play. it's a consolidation, yes, but it gives us a much stronger balance sheet with all the assets on a balance sheet to leverage it in order to fund further growth. so growth in emerging markets, growth in new technologies. >> what do you do with the service arm of things? do you have one of those thiher?

do you put those guys together? will there be layoffs from all the guys that do this service for ge now? >> to your point we have a service group, of course, as well as they do. so we'll bring those groups together and we'll be able to provide better service to consumers. a big caveat here is getting through regulatory approvals. >> do you think -- how is the quality of general electric viewed right now? i mean it has not been the most important asset to general electric over the last couple of decades, i would say. i mean, is there -- are there questions there? >> actually the company has invested heavily over the last three, four, five years. reinvested in the business to have it be competitive. so there's been significant amount of capital injection into the business. >> i was talking ge's, not

electrolux's. >> i was talking ge's appliance business. >> i'm talking about ge's appliance business. all of their plants are state of the art, new platforms, new products, lean manufacturing. it's a well-capitalized and invested business at this point. >> all right. we'll be watching. keith, thank you. >> thank you. >> you're not worried. for four decades it'll still be ge. >> four decades. >> then they can go from there. >> and then they can re-up from there. coming up, bill gates' plan to revolutionize education. we'll talk about it when we return. return. location. location.

(shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do, and you gotta do it fast. before the competition does. it's tough out here; you better be on the right cloud. today there's a new way to work. and it's made with ibm. so i can reach ally bank 24/7, but there are24/7branches? it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do...

try a new way to bank, where no branches equals great rates. welcome back to "squawk box" this morning. bill gates well known for his philanthropic projects. i got a look at his plans to revolutionize education in a new program called the big history project. joe, i would think as a scientist you would appreciate this. because what he's trying to do is take history and mix it. it's not his original idea. there's a guy named david christian, an australian professor, who has taken history and mixed it with chemistry and

astrono astronomy. the idea is this sort of takes the entire universe and puts it all together. is that interesting to you? >> no. >> have you take than class? i would have thought at m.i.t., a guy would -- >> i got to think about what you're saying. the one thing i've tried to impart to you that you don't buy with the singularity discussion is when you plot that out, major quantum leaps, that it's getting shorter and shorter. the amount of time. so that by -- i mean, i look at history through that prism i think already to some extent. >> this would do that. bill watched this class. this was a class that was taught in australia. it was on dvds. he watches dvds every morning of different classes. science, history, whatever. sees it on his treadmill and decides this should be in every high school in america. and it's on its way. 1200 schools this fall are going

to be teaching this class. there's a little debate about the class as well. >> i like our friend's take on it. >> brian moynihan's brother sent us an e-mail. >> he did. >> there's a big influence about money and whether somebody like bill gates should decide this. >> he's got the answer because he's got $60 billion. >> we're back in just a moment. . opportunities aren't always obvious. sometimes they just drop in. . cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

e financial noise financial noise financial noise financial noise

welcome back to "squawk box" this morning. janet parker's winning two seats on the board of walgreens. they have come under fire for disappointing results and perhaps more importantly we talked a lot about it, deciding not to proceed with a tax inversion. campbells soup's latest match

results. it warns the environment likely to remain challenging. it's the season for beer festivals. and in germany this weekend one man set a new record. he carried the most full mugs of beer at one time. the total number, that's 27 beers. does he get to drink all that. i don't know how that works? marriott ready to give investors reasons to check in on their stock. they plan to add up to 1300 hotels around the world over the next three years. that's the tip of the iceberg in its look ahead. we're going to talk about it. here to talk with us about it, arnie sorenson joining us for a "squawk box" ceo call. good morning to you. >> good morning. >> help us. you just put out a release on this. 1300 hotels. >> that's right. we're holding an analyst conference and we're going to talk about the marquee that opened just a few months ago. but we're going to talk about what our business looks like in

2017 and we're going to really talk about unit growth. we're talking about 5,000 hotels by 2017 around the world. and with that and are the growth in the united states and other parts of the world, we ought to see it grow at 91%. >> so what's the model? >> we'll own almost nothing. >> you'll own almost nothing. okay. >> that's right. we think from 2014 to 2017 we'll invest a couple of billion dollars in our business. close to a of that we will recycle. so the miami division h buildi it. >> and you have all these deals lined up already? when you have these number of hotels in mind? or this is our goal? >> well, the future is never certain, obviously. but we're talking about opening

200 to 230,000 new hotel rooms. we have a signed pipeline today of a bit over 200,000 rooms. so tre of predictability in the hotel industry. >> in terms of how you're thinking about the economy, because this is clearly a bet over the next couple of years. the brands that you plan to be using, is it upscale higher luxury, lower end. how are you thinking about it? >> we continue to want to have a brand for everybody's travel purpose. so that means middle of the market all the way up to luxury. and also united states as well as the rest of the world. so you see obviously different dynamics in different parts of the world. the u.s. recovery the best thing about its moderate shape so far is it may last a little longer. we've seen supply come back in the united states slower than in prior times.

so that ought to give us a little more time. the rest of the world is different from market to market. we see still bright spots in big parts of the developing world. >> arnie, we've seen so much turmoil this summer it seems from conflicts around the globe to even things like the ebola breakout. do you see the problems in terms of your sales? >> well, we watch them carefully. we've had a negative impact on business in russia, for example, this summer. we're seeing some negative impact in nigeria today. and the rest of the middle east obviously is a big market. it is a concerning time. we don't have any hotels open, though, in markets like syria or iraq or afghanistan. some of these places which are the most difficult to predict. we've got to watch carefully. and one of the risks we could all see in the years ahead is

some expansion of those conflicts into broader areas. >> arnie, we see from the outside you've regained market power in a big way. what does it take for you to say we're not just going to build them, we're going to own them as well. and whose money are you using to own all these properties? >> one of the great things about our business is there are lots of folk who is want to invest and own the hotel real estate. we're a big company, but we're not that big. and if you look at adding 230,000 rooms on balance sheet, that would be a $40 billion or $50 billion proposition, probably, minimum. we're a $20 billion market cap company. we wouldn't grow as quickly if we were trying to do this all on our own. the partners bring not only capital but tremendous expertise. i would shudder to try to develop a hotel on our own in china. >> and a heavy appetite for the liquidity that comes with owning all this? >> they have the appetite

because these hotels troid pretty decent returns. and with each passing year of third party investors in this space, the deals are more transparent. >> give us just a global breakdown in terms of the 1300 hotels. where do you imagine they're going to be based? >> we'll probably have about half, maybe a little less than that in the united states. the balance will be around the rest of the world. china will be the fastest-growing big market. but we'll see china and india and brazil, sub-saharan africa. >> that's a bullish call on the united states. i would have thought that, you know, it would have been flipped with asia being the big oner or africa being the big winner or something like that. >> no. business conditions in the united states are great. i think again because it's been relatively moderate gdp growth in the u.s. if it lasts longer that would be a big thing. >> black swans just aren't something you can worry a lot

about, i guess. >> again, it might be madness on some lel to talk about how we'll perform in 2017. some companies don't give guidance for next quarter. >> we need, you know, serious action taken by different governments around the world to quell some of these elements that could really throw a renwrh in it. we really do. maybe you don't think about these things, but you're assuming that things go along pretty well. and that different countries are able to manage things like ukraine, things like isis. otherwise i don't know. i'd be afraid -- i guess every ceo can't really take into account the risk o after black swan. you would pull your horns and never do anything again. >> i think we can and do run our business to make sure we're as ready as we can be for the unexpected. solid balance sheet. >> remember a couple of planes go into the world trade center. that shut down travel for five

years, didn't it? >> no, it literally shut down travel for a month or so. and of course sales were down. but in 2003 we were growing again. to be fair, that's a stunningly negative event. an event like that would have an impact. >> with so much going on in china, i would think both the risk and reward is just beyond belief. that when 1.4 million people move into the middle class and start traveling which is what people do when they have a little money. i mean, just incredibly positive. but then you worry about some of this other stuff. you've got to go forward. >> to prove your point, the chinese will go from a million outbound trips to 200 million annual outbound trip over the course of two years. >> a million to 200 million. >> yes. and a target of 500 million. great stuff. >> arnie, before you go, the new

moxie. this is a cheaper brand. i don't know how you could make money doing this. 55 euros a night. in milan. >> yes, we just opened in milan september 1st. essentially this is a great partnership we've got with the real estate arm of the ikea fortune. and an operator in norway. they came to us saying we want to work to reinvest the economy sector. >> is there any margin on that? >> absolutely. >> how tiny are the rooms at 55 euros? >> they are 17 square meters. so about 180 square feet. but you look at 2 million -- >> that's bigger than the average room in europe. that's like a suite, isn't it? >> it's a great room. the room that's been designed is fabulous. and with 2 million economy rooms in europe, our folks say that the existing industry is underdemolished. >> you're going to get into the mausoleum -- some are like

mausoleums. basically in a drawer. they make those. they do. you're not going into those? you're like a drawer. it's like the kramer, the "seinfeld" business. >> he'll be in the hostel business soon. >> i don't think so. >> arnie, thank you for joining us this morning. >> you bet. up next, we do have cnbc exclusive. bill ford talks to phil lebeau about innovation in the auto industry. plus how much will it cost you to fill up this week? you'll find out of the break. "squawk box" will be right back. .

it's monday. a brand new start.

your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support, we help you shine every day of the week. centurylink your link to what's next.

checking the futures right now. they're down about 30. 39 almost 40 points right now after a pretty good session on friday. the price of a gallon of regular gas dropping 2 cents over the past weeks. that brings the decline at 25 cents over the last 11 weeks. this should be good for everyone. the latest lundberg survey shows falling crude prices are driving the declines.

and louisiana has the lowest price with $3.11 a gallon. san francisco, the highest at $3.88 a gallon. have you ever worn out a horn? >> no. >> new york puts me in a bad -- it's the east coast. i never was like this before. >> are you kidding? >> i never was like this before. >> i think it has to do with age. how long have you been here? in new jersey. >> 22 years. yeah. they're horrible drivers in new jersey and new york. just rude. you know? >> yes. >> you go other places and within a couple of days you can't act like -- you can't act like that in georgia or somewhere. >> no. it slows down everywhere else. in lines, waiting for coffee or something. >> life is too short to deal with guys like you. you know what i mean? >> it's good to get out every once in awhile and remember that. >> yeah, andrew. into the flyover states where people are nice. >> you know i love cities in the

middle of america specifically. >> when there is one, you'll love it. >> denver, dallas. >> too late. >> these places feel like home to me. >> and you love toddlers in first class. you're going to take back everything you said? >> kids in first class, bigger issue for me. >> we were just talking with arnie sorenson about what the future holds for marriott. now we're wondering for ford. phil lebeau joins us with the cnbc exclusive. >> thank you very much. i'm joined by the chairman of the ford motor company, bill ford. big day for ford. let's start off with why we're here. the i.t.s. conference. are you a little bit concerned that we might be getting ahead of ourselves expecting driverless cars just around the corner? >> yeah. i mean, to be just around the corner. but i think what you'll see is a lot of the technology that will

allow driverless technology will be here soon. it will be a non-event. a lot of the stuff you'll see going in whether it's park assist or lane keeping or grabbing control of your brakes during an accident-type situation. lots of that technology is already starting to go into the vehicles. >> so within the next few years is it realistic to expect that at least with highway driving where it's easier for the algorithms to understand what the cars are expected to do, we should see that? within two to three years? >> you will. but you'll also have driver in control. and i think that's something that's going to be true for some time. right now we think in a controlled environment autonomous driving works. uncontrolled driving still needs more work. >> is society ready for it? are the regulators ready for it? we talked with the transportation secretary yesterday that sade we're going to be ready. and others say we're not

convinced. >> well, i think we're not ready today, certainly. but i think it'll be an evolution. and as a lot of this technology goes into vehicles, people will get more comfortable with it. by the time it happens, i think we will be ready. one thing i think really needs to be said is that technology sake makes no sense. if it's saving people time and money, then it probably shouldn't go into the vehicle. >> downgrading the ford stock. the auto cycle has hit its peak. there's going to be a changeover to the f series and there's a rough transition. >> we have a lot of watches coming. a lot of great products. we think they'll do great in the market place. so i actually feel very good about our future.

i think that the f-150, the launch is underway. so far it's going very well. >> what about northern american probability? not just for ford. do you think we've got room to go here? >> we do have room to go. i think it's a question of what you mean by room to go. we're running pretty good volumes right now. margins can always go up. and as i say, as we launch new products i think we'll do well in the market place. we feel very good about where we are. that's one opinion. but the launch of the f-150, it's a big deal for us. so far so good. >> we've got an increasing number of consumers in this country who are taking out 6.5, 7 year loans in order to buy a new vehicle. does that worry you when you hear people are taking out seven-year loans? >> i think we have to be careful. because we don't want to get into a situation like we did before where consumers are overextended.

and that doesn't do anybody any good. we've been relatively conservative at ford about those types of things. but, you know, it's the underlying strength of the market that is still very good. >> let's talk about matthew mcconaughey and lincoln. those are pretty cool ads. >> you liked them? >> i do. joe was saying earlier he's got a bit of "true detective" look to him driving around in the lincoln. >> he does. i think he projects an air of authenticity and a bit of edginess. >> certainly what the brand needs. >> exactly. >> finally, big day today. season opener for the lions at home against the giants. i've got a new yorkers to work with. anything you want to say to them? >> i hope you enjoy the game and i hope you go to bed crying tonight. >> there you go. oh, the producer is saying wrap. he doesn't like that. he doesn't like that at all. guys, back to you. >> phil, tell bill the bill murray movie "lost in

translation," he goes to japan to sell booze. that's what big stars normally do. to agree to that i think mcconaughey at the height of his career decided to do a lincoln commercial. >> they wanted to let me pass along to you they think it's cool that mcconaughey at the height of his stardom is not going overseas to sell a product. he's doing it here. >> it is cool. as i say, i think it's unexpected. i think people are responding to it. >> there you go. hey, guys. back to you. the man's got to get ready for a football game tonight. >> that's right. all right. thank you. >> thank you, phil. when we come back this morning, what the jobs report tells us about the state of the economy. we'll be asking our guest host after this. and at the top of the hour, keeping america competitive. a new survey showing the middle and working class still need help. we'll hear from harvard business

professor michael porter. r mich. when i'm working, things can get so hectic. so sometimes i need to find an easy way to express what's most important to me. like, with my crew, i use shorthand to talk to them and tell them what i need... and when i need to talk directly to my fans... but the most meaningful shorthand of all is the one i use when i'm about to drive: "#x." it's an easy way to tell everyone that i'm about to drive. and i do it every time before i get behind the wheel. use #x to pause the conversation before you drive. because no text is worth a life

philadelphia fed president charles plauser wants the fed to hike rates sooner than later. he says the central bank should start signaling. plosser is worried about the potential inflation risks that come with improving an economy. fed policy makers are going to meet again. let's get to mohamed el-erian.

if the world is deflating, how can we inflate? jim paulsen's big worry about the united states is inflation that we're not taking seriously enough. >> so i'm not really worried about inflation in goods and services overall. i think that the economy's too weak for us to have an inflation spike. what i do worry about is asset inflation. >> why do you have to -- okay. so you definitely have to separate the two. >> right. >> you do? >> oh, i think you do. i think you do because between these two things you have structural issues. >> what's more debilitating to an economy long-term do you think? depends, doesn't it? >> oh, i think right now we are ignoring things that will undermine not just the future of this economy and the global economy but also that of the next generation. i think this issue about needing to act on structural reforms are getting understood but they're not being addressed properly. >> i would think rampant

hyperinflation and wage price inflation, that's bad. but then i look at what happened with the housing market and the asset inflation and the bubble and what happened following that. and i don't know which i would pick as being more long-term damaging to our economy. >> so the hope right now, the shoep that highest asset prices act as a catalyst for activity and you validate the higher asset crisis nap is the big bet. >> you've been saying that for awhile. >> yeah. and if that happens, your worries go away. >> well, we thought that ownership in housing would validate greasing the skids for housing prices. >> look, joe. i'm the first one to keep on repeating. there's a reason why we call it the financial service industry. because it has to serve to be an economy. the minute you think finance can be so powerful as to pull other

things up is when you get into trouble. okay? it's there to serve the rest of the economy. >> all right. so you are worried long-term? >> and short-term look at today's show. we would have spoken about scotland. we would have been been talking about the eu about to put on more sanctions on ukraine -- on russia because of ukraine. we would have talked about the geopolitical factors. but there's so much coming to the market directly through electrolux buying and putting cash or through marriott leveraging somebody else's money that that is right now what matters most for the economy. the amount of money coming in. up next, larry lindsey says we're at the bottom of the barrel when it comes to foreign markets. but before we do that, a little nfl news. no, i know.

>> it's your read. >> jadeveon clowney's nfl debut was cut short when he landed awkwardly on his leg. the texas rookie will now miss four to six weeks with a meniscus tear. before leaving the game, the number one draft pick had one tackle for a nine-yard loss. then it happened. then it happen.

dad,thank you mom for said this oftprotecting my future.you. thank you for being my hero and my dad.

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a monday morning deal. >> a significant opportunity for us to enhance our competitiveness globally. >> details just ahead. the most hated stocks. a look at names out-performing the market yet analysts remain bearish. what gives? plus larry lindsey on why the fed have gone off the rails. the final hour of "squawk box" begins right now. welcome back to "squawk box." i'm joe kerner along with beciy

quick. we're going to hear why larry lindsey believes the fed is off the rails. but first a deer running across the golden gate bridge. traffic stopped. they got off the bridge safely and by the time california highway patrol officers responded, the deer were long gone. but can imagine if you live in marin and you find yourself in san francisco, what are you supposed to do? >> that's the only way to get there. >> exactly. so there should be a time when they're allowed to do that. i'm not a big fan. they wreak havoc on cars and they're everywhere because no one can hurt bambi anymore. >> and i have a problem with babies on airplanes so -- >> but they're everywhere. when's the last time you saw a deer? >> outside the other day. >> because they're everywhere in new jersey. >> i see them every morning. every morning i drive by them. >> and everybody's like, don't -- you know. >> don't be mean to bambi.

>> i stop for them and let them go. >> they do terrible things to your landscaping. >> they do. >> cars are the only natural predator. >> right. >> at this point. >> larry lindsey is here. >> and robin williams had that -- when we were looking at his work, deer in california walk around like supermodels like this. no one comes near them and look at them like how dare you. and they go over deer fence and turn around then flip off the people who put up the deer fence. >> i'm going to prance a little bit. let's tell you about some corporate news this morning. ge is selling its appliance unit to electrolux. the ceo telling us about the deal first here on cnbc. >> you need to have large scale global competitiveness in order to compete. i think the combination of the

ge group and electrolux group is enough to enhance globally. >> and trading higher in european trading this morning. it's also a big week for alibaba. the chinese e-commerce giant set to kick off its road show today. making it the largest in america. it warrants the consumer environment likely to remain challenging. and this just crossing the wires. hertz announcing its ceo is stepping down. companies citing personal reasons. they will look at internal and external candidates. shares sharply up on that news. and we all know the ceo of hertz. >> they're citing personal reasons although last week they were -- had issues. that's a new high now.

>> but when mark came in, this was a company that was left for dead. private equity originally. they came in, there were a lot of articles claiming they were going to flip it and strip it. but it's been a success story if you look over the years. clearly. >> well, so then do you believe the personal reasons part? >> i like to take things at face value, but you never know. >> but then last week we have the other things. i'm sure there'll be more to this. >> yeah. all right. as we mentioned today, larry lindsey, he is the former economic director and ceo of the lindsey group. thanks for being here. >> pleasure. >> steve joined us in the last hour and he said he spent all weekend to find an economist that believes the jobs numbers. do you? >> they're as good as any other numbers to go from. there's less and less evidence to support the fed's view. there are all these people out there who are going to come

rushing into the labor force now that things are going to get better. the number of entrance were down half a million. the number of those morningally attracted to the labor force was down 200,000. that's this year compared to last year. if you're actually going to have all these extra workers out there to give the fed the run room they've been looking for, those numbers would be higher, not lower. >> so what do you think is happening? >> i think there's a lot of things happening depending on different age groups. you know, mature, responsible people like joe and me. we're having no problem getting jobs at our age. but the big problem i think is with middle aged people, middle skilled people we've really changed the entitlement process. so if you're a family with children, by the way 30% of families with children in america now get means tested benefits. and there have been studies out of the urban institute that says the tax rate including loss of

benefits of middle ages people coming back into the labor force is between 50 and 80%. people aren't -- no one leaves their jobs to get benefits. but if you've lost your job and you rearranged your life and child care arrangements and you're facing a 50% to 80% marginal tax rate to come back, you're not going to do it. i know nancy pelosi said they can follow their dreams instead of being stuck at a dead end job. that may or may not be a good idea, but not good for labor force participation. no matter how you cut it. i think the fed has been hoping for something that isn't going to materialize. >> that makes it sound -- we just had mohamed el-erian here, he said there's a point where it runs out. you think that day is here. >> i think it is. it's been here for about nine or ten months. we call it qualitative exhaustion. a different kind of qe. we're just out of good ideas.

and when that happens, you've got to focus on improving the policies you're now conducting rather than simply dumping more money into the market or having larger deficits or whatever. we really need restructuring. >> larry is our guest host. he will be with us this hour. >> and now a key finding is that companies and workers are moving in opposite directions in the current economic recovery. that's fascinating. we're going to talk about something elsewhere michael porter, professor at the harvard business school. great to have you here. >> joe. >> you wrote a big piece on bill gates. were you able to prepare for -- you've seen the note ossen the show. >> i have. >> all right. let me read this. professor porter leading authority on competitive strategy. identified in various rankings and surveys the world's most influential thinker on

competitiveness and management. he's from harvard. in massachusetts, a liberal, elitist state. he's an academic. did you read what he said about inversion? >> yep. >> is he going to be able to bring your thinking around to more current and more -- >> we'll see. >> professor, here's -- basically, the world has become a different place. and we need to stay competitive. i think what your main thesis is our tax rate doesn't allow that and inversions are just one symptom, a sensational one of an underlying problem and that band-aids could actually be counterproductive rather than fixing the underlying problem. >> i think that's nailed it. i think the inversion assist is a symptom. companies that actually are doing relatively well, our american companies.

they're growing. their profitability is relatively good. but what's not going well is america as a place to invest. and america as a place to create jobs. if you're highly skilled, you're doing well. if you're not, you're doing poorly. >> so why won't a tourniquet since we're not going to do big tax reform any time soon because it's supposedly too hard while we're hemorrhaging even though it's $10 billion over ten years. it's ludicrous. >> it's a situation facing america. >> then do we need the tourniquet to make sure nobody else leaves at this point? >> you know, i don't think that's going to ultimately help. >> how would it be counterproductive? >> well, i think it will -- i don't think companies -- it will just -- we can stop that, but the investment is still going

abroad. >> right. >> they'll use whatever means they can -- >> still an outflow of capital. and the greatest economy in the world is not attracting capital. we can't get our government to make it a fertile place for global capital attraction. >> that's correct. >> that's pathetic, right? >> right. and that's a question of policy and tax policy is the number one issue. >> all right. >> now that you've led with every question. >> let me shake your hand. that's what you do at this point. >> that's good. >> let me ask you a different question. >> why this is your issue. you've got to talk about inversions, right? >> i'm not going to lead the witness. >> let's see if you get anything out of him that makes sense. >> i agree as i think everybody does that we should change tax policy, the underlying policy. what i don't understand -- and i also appreciate that if you don't put a tourniquet on it right now, it actually might

create a bit -- enough of a wedge that it forces the issue. and so i get behind that to some extent too. but if you told me that there was no way we would truly get the tax reform we want, then on an emergency basis i can't let every big american company leave this country and whatever tax base goes with that. it's not just -- and i think you'll agree with this -- it's not just the taxes you're go going to lose on u.s. sales, but all the gamesmanship that would go on with how they move it around so the tax base is even more eroded. do you agree with that? >> i think the dynamic that you describe is happening. there's immense effort and creativity in moving things around, moving intellectual property trying to get taxes out the u.s. i don't know. it's a very hard question.

i'm a strategy guy. i think about the long-term. >> absolutely. >> and this is not going to have any impact on the long-term if we stop this. it might just make things worse. but what's so fascinating is we have this disconnect in the economy right now which is what our work has shown. firms in general if they're relatively large firms and doing well, we have announcements aefrt. firms are doing well, but the average american is doing very bad. >> let's talk about the average american. if we repatriate the money which is something else we also talk about in the context of tax reform. that money goes where? >> does it matter where it goes? if it doesn't go into job creation? what if it goes to dividends and you get $800 million in taxes? >> i think it's going to net net go into areas directly and indirectly that grow the u.s. economy. rather than what's happening now. so i think we're better off.

>> how could you not be better off? >> you appreciate the political dynamic -- >> i don't appreciate it, no. >> let me just get it out. there's a political dynamic which is to say i would argue a lot of democrats believe that if you repatriate that money you will create more inequality, not less because you will not create jobs. you will create dividends and other forms of payments that would go to those who own assets, not to those who don't. and it won't improve the case. >> you made the case. >> i'm not saying it's right, i'm just saying that's the argument. >> okay. >> again, the political discussion on this is truly mind boggling. the the democrats are for the average worker. right? >> you can see how well they've helped the last worker over the last five years. >> who do the tax policies hurt the most? the average worker. the company's doing fine. they're able to -- they can escape the weakness. >> but here's the question. if companies are sitting on more

cash than they've set on in their life, they're not spending it anyway. i'm not suggesting we shouldn't have comprehensive tax reform, i'm just suggesting the notion there's something on the other end, i think there would be disappointment as to where all that cash goes. >> you want the $2 trillion over there or back here? if certain people had more here, is that a bad thing really? we got to keep everyone down here. >> as a board member of multiple companies, companies do do their accounting on where the cash is. >> of course. >> and you literally look for foreign deals because your cash is overseas. so that clearly is going to be cash to the u.s. but what you're pointing out is there's a lot more going on here than just corporate tax reform. >> that's where i'm trying to go with this. >> we have skill erosion. we have a public education system that is not performing. every age group in america as we've gone -- >> but think of the asset holders. these people down here are going

to stay the same either way. so the asset holders either stay here if we don't bring it back. or they get up here. is it bad that that money came back and they came here if they stay the same either way? you'd rather have it over there than with the asset holders there? >> no. but i would like to find a way to help those down here. >> the government can do something to help. not the private sector. we'll talk to larry. larry, you probably have some -- >> i have some thoughts on what andrew was asserting. >> thank you. appreciate it. i'll shake your hand after the break. coming up, carl icahn betting on returns from hologic. should you? an alibaba taking its sales pitch on the road. what the chinese e-commerce giant is set to tell potential investors. "squawk box" returning after

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welcome back to "squawk box." look at the futures right now. after a decent day on friday, dow opened down about 32 points.

s&p 500 would open off as well about three points. and the nasdaq would open up down about 4.5 points. bank of america now upgraded to buy from neutral. >> right now time for an update on our platinum portfolio. david katz, he last joined "squawk box" on april 9th to give us his three stock picks. today he is sticking with his bets. let's take a look at those. the first one, we'll start with the bad news. eaton corporation. but hologic. and then capital one. thank you for joining us this morning. >> nice to be here. >> let's talk about those picks. eaton is down about 5.5%. but you're sticking with them anyway. >> they're a wonderful company. they're in the industrial

electronics and power management. they have had setbacks over the last two quarters. the stock has been off significantly. i think that puts management under the gun to do better at selling at about 14 times next year's earnings. 2.8% deal. we think the selloff creates a better opportunity. so if you own it, we buy more or definitely stick with it. and if you don't own it, we think this is a very attractive price to enter. >> hologic was up about 16% but you think this stock has more room to run. >> they have two quarters of beating expectations. they have a new ceo. the ceo has done a terrific job. he's really gotten control of the business. >> steve mcmillan. we've had him on the show recently. >> we're pleased with him. it is gaining traction. we'd never bet against carl icahn. he's long this position. we think the stock easily gets to the high 20s, low 30s in the next few months.

>> is there a point where you say i get out of it? >> right now our target is about 30 or 31. that's a moving target because the ceo is really doing better in terms of includreasing the earnings power. we expect earnings to drift higher. >> capital one is another one of your stocks that's done well since the last time we saw you. up about 9%. you're sticking with this stock too. is that a bet on the economy? >> it's a bet on company-specific things with the economy providing a nice tail wind. capital one missed a lot of the financials rally over the last two or three years. they made some acquisitions that were diluted to earnings. that flipped in the second quarter. so we're expecting an acceleration of revenues for the back half of the year. the first revenue in a long time. business is good. it's getting better. credit trends have been very good. use of credit cards is going up significantly.

so we think capital one should get up to the high 90s, low 100s over the next six to twelve months. >> thanks for joining us today. >> thanks a lo t. >> that's mcmillan. our guy. where was i when he was here? >> you were on vacation. >> i was? that's mr. striker. >> yeah. he's back. he had interesting stuff he was talking about. he was on in the last month. it must have been when you were away. >> yeah. remember striker was something weird. i couldn't figure out -- yeah. back with hologic. good for him. coming up, the most expensive home on the u.s. market. if you want a shot at it, you'll need about $140 million. and later, the most hated stocks in the s&p 500. why analysts are bearish on names like kellog's and petsmart. petsmart.

what if we finally had a backyardthat would be amazing. hey what if we took down this wall? what if this was my art studio? what if we were pre-approved? shut up. from finding to financing. how'd you do that? zillow.

welcome back, everybody. apple is set to unveil new i-stuff tomorrow. an iphone 6 maybe with a chip for mobile payments and apple's launch into the wearabilities market with possibly an iwatch. and with a new home at $139

million, it takes the most expensive listing at least on the public real estate market. the hillsboro beach mansion is currently under construction. it is said to draw inspiration from the palace of versailles. here are some of the features. an imax home theater. not just any home theater. an imax. a 1300 gallon aquarium. >> is this the versailles they made the movie about? >> i don't know if this is it. a garage for a parking for 30 vehicles, 17 bathrooms, 60,000 square feet of living spate. outside there's an invinty pool with a waterfall and water slide. >> i wonder if it's the same one from the movie. >> there's a agreement documentary. the queen of versailles. >> but didn't they not finish it? >> i think they still own it. i think they still own it. >> i'm going to look this up. >> i think this may be them selling it. we will see and we will tell you the answer when we return as a

tease. how about that? >> i'd rather by 10 $14 million houses, i think. wouldn't you? i would. up next -- and i don't even need that many. maybe five. up next, alibaba taking to the road. plus gm ceo mary barra speaking exclusively to cnbc. is she really changing the company? and what is the future of driving to her? when "squawk box" comes back to her. here's a look at u.s. equity futures still trading down about 35 or so. 35 or so. while every business is unique,

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even develop a customized energy plan for your company. think of it as a way to take more control over your operating costs. and yet another energy saving opportunity from pg&e. find new ways to save energy and money with pg&e's business energy check-up. welcome back to "squawk box," everybody. taking a look at that, i don't think that's the same house. i think this is a different mansion. robert pererra is a associated with this one. >> did you decide what you want? you got $140 million. what should we do? >> how about one house and find something else to do with the rest of the money? let's look at some of the stocks in the pre-market trading today. hertz shares are rising. the chairman and ceo is departing for personal reasons. the head of the company's

equipment rental unit brian mcdonald will serve as interim ceo. also shares of gaming technology company multimedia games soaring this morning. it's been bought by cash access by $36.50 a share. that represents a 31% premium over friday's closing price. you could see the stock up about 28%. also automaker ford was downgraded to underweight from overweight at morgan stanley based on the idea the u.s. auto cycle is peaking. >> prospects for the u.s. auto industry, among the topics being discussed today. phil lebeau joins us from the motor city. hello again, phil. >> hey, joe. first the news coming from general motors when it comes to autonomous drive vehicles. gm announced yesterday it does

plan to have a semi-autonomous vehicle within the next couple of years. there will be a cadillac with hands free, foot free when you're talking about driving on the highway. and the company will be having vehicle-to-vehicle communications within the next tlooe years. i've gone out to drive some of these vehicles. you're going o see more of this coming into their vehicles. yesterday when we talked to ceo mary barra, we asked her if you could pinpoint a time for fully autonomous vehicles. she said no then she talked about what she experienced with these semi-autonomous drive vehicles. >> i've been out there several times and have driven the vehicles. you know, one is the working tunnel of super cruise. it is something that takes some getting used to. that's why it's so important as

we move towards autonomous driving and we believe it will happen in steps over the next several years that customers understand that and they understand the benefits of the technology. if customers are going to trust it, it's got to work 100% of the time. >> meanwhile, the other story this morning, ford shares are lower following a downgrade from morgan stanley as you mentioned earlier. morgan stanley raising concerns about not only profits coming here under pressure but the changeover to the aluminum f sears. bill ford said he doesn't see it that way. >> we have a lot of great products. we think they'll do well in the market place. so i actually feel very good about our future. i think that the f-150, the launch is underway. so far it's going very well. we're comfortable with where we are. >> again, take a look at shares of ford and gm.

certainly some concerns being raised by morgan stanley today. >> is there anything that works 100% of the sometime? it's the same issue with drones, isn't it? that we can get it, really? but you can put an eye out with one of those things. with a car, what if it's 99.9%? all of a sudden you're staring into the teeth of a semi because something's wrong. it's got to be 100%. >> i understand that, joe. joe, but if you've got to chance for autonomous drive vehicles to cut the fatality rate in this country about 32,000 people died in highway accidents last year. if you could drop that down to 10,000, wouldn't you take that technology. >> like if the average person is 95% reliable and this is 99.9% reliable, this would be better. >> is there any concern out there about declining credit quality? the auto market? i think that's one of the reasons people from morgan

stanley are thinking that the cycle is peaking. are they concerned about it? >> no, no. i'm not hearing those levels of concerns. i think that is a small concern that is out there that frampgly has gotten more media attention than people in the industry believe it deserves. when you look at what's going on with the subprime market while it was increasing, it's still less than .07 of 1% of all loans that are out there right now. that doesn't mean you shouldn't pay attention to it, but to equate it with what we're hearing other people equate it with which is the mortgage crisis of a few years ago doesn't mix. doesn't mix at all. that's why people in the auto industry say we're watching it but we don't think it's a huge issue. >> mary even made reference to it. consumers have to get used to it. at least i know if i do something wrong, it's my own fault. and what happens when if the day comes where machines really

don't like us all that much anymore where we become sort of -- >> what if you lose connectivity? which we do all the time. all you need is to lose connectivity for five seconds and there's the semi. >> is it like drones? we talk about drones. they better have those things working really well before -- >> yes. and by the way, they may. >> this is similar, isn't it? i worry. >> we will see. before we get to this next story, by the way, the versailles where we showed you the mansion. robert frank e-mailing to me. this was not versailles. versailles still owned by the seagulls which was the big documentary. it's still being completed. that's not orlando. this is a different property. >> it's at hillsboro beach. >> that's what the back story is. let's tell you about alibaba this morning because it's now taking to the road for the hard sell over the next two weeks. the e-commerce giant looking to raise $21 billion. joe, i don't know if you want in on this or not. the question are more buyers

lining up? kayla tausche has more. >> reporter: good morning, guys. alibaba is in he home stretch towards the offering on friday which will be is the largest ipo in the u.s. ever. that started very early this morning. 6:00 a.m. at citi group headquarters downtown. all the underwriters and forces were there. then they're moving up here to the waldorf astoria for a private lunch. and investors like viking, black rock. this is just the first of ten-plus days in which executives will find themselves back-to-back with these meetings. alibaba is planning to sell 320 million shares. at the high end of the rage, $66 per share, it would raise up to $21 billion. it would value the company at $163 billion. it's a massive deal. investors want a piece of history, but they're also weighing unique risks on this

one. number one, china's economy. many people don't know this, but alibaba's order accounts for 60% in the country. it will grow from the consumption economy. number two, transparency. has a complicated operating structure. so just how much information will shareholders get about the company? and finally control. founder jack ma is no longer the chief executive, but he still has a 9% stake and is still in the driver's seat where strategy is concerned. that is the focus of a piece on ma over the weekend. but ma is the brains. he's the brawn behind this company. it's a global juggernaut and he is the attraction for the hundreds of investors coming to the waldorf today. >> okay. kayla tausche, thank you for that. joe read that story, every word of it. >> i did. >> instead of my own. >> i know. coming up, three stocks that

get no respect kind of like i feel like rodney dangerfield sometimes. >> change your opinions. >> -- by 3% or more. find out if they're in your portfolio. then later president obama set to roll out a military strategy to deal with isis. at least that's what he's now saying. larry lindsey sounds off on the handling of the extremist group when we return. when we return. you know what my business philosophy is, reynolds?

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daily. don shu brings us some names. >> out the stocks in the index, 30 of them have 3% or higher above where they currently -- below where they currently trade. now take a look at some of these. we've picked out notable names. staples, maybe back to school season will be good. but currently analysts have a target price that's 11% below where shares of staples are currently trading. if it does go down, maybe not great for shareholders. petsmart has an average target price of 65% implying 10% downside. the next two are interesting here. first of all campbells soup down 7%. food stocks have been hot.

but campbells soup right now has a target implying a 7% downside. and the last one here is kellog's. a large company when it comes to food. it's kurnd target prices are on the share. analysts are always trying to update for catalyst. the question then becomes what these companies can do or what investors will do that gets analysts to take notice and perhaps revise those targets. >> thank you. help us here. is there any argument to be made that kellog's should actually trade up? >> well, there's a push and pull when you think about kellog's or campbell or any packages food stock. the negative is that these are in the past 14 years i've been doing as some of the worst fundamentals i've been doing with kellog's with a 5% decline

in their cereal business. very discouraging as consumers seek other kinds of foods. on the other hand, a 5% cash flow field. 2% in government bonds? then even the bonds of kellog's you get a 3% yield for a ten-year duration. that would be your bull case. >> with don suggesting it would be 3% down at the moment, do you actually try to short this stock? does that make sense? >> with kellog's, maybe not so much. kelloggs is a management that has been taking on risky -- >> what's the chance this company gets bought out? there's an assumption that someone is maybe going to take them over. >> well, there's certainly some possibility of that for any

assets. in kellog's case, it's been independent for a long time. i put that in as a possibility. >> we're going to go, but here's your big chance. what would be your question for the ceo of kellog's we will have on tomorrow. >> my question would be what can be done to turn around the share with a consumer seeking other kind of breakfasts over the past 18, 24 months. >> thank you. >> thank you. >> more sugar, i think. more cinnamon. more sugar. >> it's all carbs. >> i have been eating some at night lately. because it's -- i'm starving for carbs. i am. let's get back to our guest host

larry lindsey. i want you to address some of this stuff. but just overall i just get the notion that the zietgeist in this country means when companies go well that's not going well. so that people are conditioned. you've got to help me with the whole notion of how that works. >> i don't want to help you with this question. >> i think he's leading the witness again. but i will answer the question. you know, the best thing you can do for living standards is to make america the best place in the world to invest, start a business, and create jobs. simple adds that. our tax laws don't do that. what i'm struck by is really the

ill logic behind stopping them from going behind. your going to be competing anyway. in andrew's example, suppose they brought the dividends home. yes, that year income inequality would expand. but the value of the corporate stock would go down. so wealth equality would increase. so i think the -- you need a little bit more rigorous thinking on the side of the people who want to stop the inversion. because it just isn't there. the supreme court said you have no obligation. either legal or in terms of patriotism to overpay your taxes. that's what it comes down to. if you're a free society, you -- you set the rules. >> if we were to get whatever we lose, the 10% that we get in corporate taxes. if we found a way to tax individuals, just by definition, does the left just want to punitively tax corporations

because they owe money for having to make profit? if we could make it up with individuals, could you see going to zero? >> i think there are people on the left who believe what you just said. i think there's a large contingent on the left who believe it. >> if the whole world went to zero but we made it up -- >> wait a second. would you be okay with that 10% coming out of a 10% increase to your personal taxes? >> wherever you make it up. >> would you be okay with that? that's the problem is trying to get people -- >> tax dividends. whatever flows through the corporations or -- >> joe and larry, are you on board with the idea that everything is at least neutral in terms of revenue if not more? that's my question. that's a serious question. part of the thing i think we forget about is we have to pay for stuff. and my other anxiety beyond everything else -- >> that was the whole premise of my question. if we made it up with -- >> at $20 billion over ten years, this is, i'm sorry,

frankly not a revenue issue. >> most people believe that number is very, very low, though, you've heard that be . before. >> suppose it $10 billion. that will cover the deficit for about four days. >> it's about 10% of what we take in. >> absolutely you need fundamental tax reform. and the way all tax reform in the end generates revenue is by increasing efficiency and attractiveness to invest here. so i think you have to avoid getting overly hung up. >> are you scoring it dynamical dynamically? that's then the issue. >> i think there's reasonable dynamism. you can't make pie in the sky assumptions. but when you do a multi-year score, you've got to think about the effect on the economy. it's quite obviously that ultrahigh tax rates have not helped this economy grow. if you look back at the budget of five years ago, we are collecting less revenue than we

thought because the economy has not grown as fast as they thought it was going to grow five years ago. now, each year it kind of gets revised and revised and revised country is not working out. >> but, andrew, right, there are people that do believe, corporations, it's a punitive thing. >> i don't disagree. >> you can win elections. >> yes. if the republicans say i'm going to lower corporate taxes he can lose the election. the disconnect between corporations doing -- >> republicans say i want to make corporate rates low and raise personal taxes. >> we're at the owned of the rope. >> stick around. ck around.n i h? i'm looking for a phone plan. it has to be a great one, and i don't compromise. ok, how about 10 gigs of data to share, unlimited talk and text, and you can choose from 2 to 10 lines. wow, sounds like a great deal. so i'm getting exactly what i want, then? appears so. now, um, i'm not too sure what to do with my arms right now

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down to the new york stock exchange. jim cramer joins us now. you did have to stick around for that second half, because i -- early on i thought, wow that guy from oregon is so good, they're getting killed by jacksonville. what happened? i saw you tweet, jim, something i said, what's he talking about? and then i saw, they scored like 38 pointed in the second half, didn't they, or something? >> yeah. unanswered points.

darren sproles, 43, broke through, for the longest run of his career, amazing. other than that -- before that, four dogs on the field catching frisbees. i never seen so many receptions in my life, certainly not philadelphia. and i think, when you came back, it was like a rejuvenated team. the first half bad. the second half the best i've seen. >> new england, i don't -- we had bob kraft on -- >> offensive line. >> i was kidding, are you afraid of miami? i didn't think it was going to to happen. >> steve ross, amazing gig. >> we did have steve ross, amazing. all right. we should talk business. but there were other highlights, too, in notre dame, what got into notre dame? >> holy cow! shut out. an amazing game. >> i know. >> michigan, remember when they used to be a power? no offense. it's a great school, but wow. >> you think rutgers is -- becky still holds out --

>> we won over howard this week. >> who? >> howard there howard? >> we played howard university, we won. >> jim, anything in the market, quickly? >> you know, the hertz change of command will move that stock up more than it's already -- i think you've not to buy that stock. once frissora's gone, there's -- anybody who runs that company can do better. right now all that guy did was make avis work less hard. >> the stock's done well. jim, thanks. when we come back this morning, are the president's policies helping or hurting the economy? guest host larry lindsey will sound off. later on "squawk on the street," the ceo of maserati on the company's exclusive design deal to make a one of a kind car.

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welcome back to "squawk box." back to our guest host, larry lindsey. we teased before we got to the break views on how the president's handling isis i suspect i know where you're going to go with this. >> well, i think he's got a problem. >> what should he do? >> i think the first thing to do is take a note from teddy roosevelt, talk softly, carry a big stick.

i think part of our problem we're setting artificial deadlines, red lines, which in the end we're not going to enforce. i think that came true with ukraine, i think it was true in syria. i don't think there was any benefit, aside from political benefit to rush out and say, when you said you didn't have a strategy thursday to say on wednesday you're going to announce a strategy. sorry, strategies don't evolve in five days. so if i were he, i would focus on doing rather than talking. i think that -- i think that would send an important signal. >> so many different hot spots and issues and it feels like something could bubble up but done seem to be priced into the market. >> a lot of economic history in this. markets do not pay attention until a crisis, until the very, very last minute. great example of it, world war i, it wasn't until days before the hostilities that bond markets adjusted. >> a lot of mileage by not engaging us and not getting into something that we don't want to

do, but soon or later it can all come back. >> short-term, long-term trade-off. government is the quintessential short-term decision make somewhere that's what our problem is going to be. >> larry, thank you for joining us today. pleasure seeing you. join us tomorrow, right now it's time for "squawk on the street." good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and dave faber. s&p at a record high of five straight weeks but the premarks soft here. europe's down on what could be a broken cease-fire in ukraine. some worries that scotland voters are made be leaning towards independence. alibaba kick off the u.s. road show after announcing details of what would be the biggest u.s. tech ipo ever. >> shares of hertz jumping in the premarket. the company says