2014. two days before the 11th anniversary. "squawk box" begins right now. >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. new jersey governor chris christie taking steps to save atlantic city and add more revenues to the state's coffers. it could mean allowing sports betting casinos. we will talk about that later in the day in sports in just a minute. right now, we are less than seven hours away from the big apple event. shares of the tech giant have fallen about 4% in the last week ahead of the expected products announcement. since 2007, there have been seven iphone announcements and the stock has fallen on four of those days. shares have been averaged small gains in the week or two following the introductions, but, of course, that's because a lot of stuff leaks out ahead of time. a lot of expectations are built into this. check out this chart, though. apple is up nearly 3800% in the

last ten years. we're going to talk more about this store with the tech giant in just a minute, but first, andrew, over to you. general mills is buying organic foot food producer annie's. $46 a share in cash is the price tag. $820 million in total. that's more than 37% premium to annie's closing price yesterday. maker of cheerios hoping that deal will help it expand in the fast growing natural foods market. we're going to talk more about foods and the consumer in the next hour with the ceo of kellouke kello kellogg's, john brian. analysts say global comps likely to climb by 4% last month with same-store sales have been falling by more than 2% for mcdonald's. we'll see if they can turn that around. shares down nearly 9% in the last three months. restaurant and arcade chain dave & busters is filing for an

ipo. the company looking to raise up to $100 million, listing under -- as a symbol p-l-a-y. the company pulled plans to go public in 2012. earlier this year, scrapped plans to sell itself for more than $1 is million. i don't know when it went private. >> new to you. >> yes. do you know who bought them, andrew? was it a private equity firm? >> i like the symbol. play. >> play wasn't the symbol before. i forgot what it used to be. i've never been to one. >> i've been to one. >> it's like they combine -- is it greasy food with playing -- >> but it's games and -- you know, the kids like some of the things going on. they've got all kinds of arcade games, fuss ball. >> i'm sure it's not on the list of approved meals for michelle. but anyway, it's official, home depoint payment stms have been breached. the attack was first reported by

a security website almost a week ago. the retailer says there's no evidence that debit card pins were compromised. did you find out? >> i was giving you the answer. to bring us back to dave & busters, owned by private equity firm welsh spring management. that deal happened in 2005. they tried to go public in 2012 and pulled it. capital partners has a stake in it and bought it from well springs. >> i think they have big expansion plans, like another 65 opening or something like that. >> but also, then, i should say that oak hill came in afterwards. there was a second investor. >> but we used to quote it all the time. trading in hd shares have been choppy in the last week. they're up more than 22% over the last year. same-store sales, great report, this came at not a great time. and you might say that the company bears some culpability

of responsibility. but tier doing everything right in terms of operating their business and then this hits. >> it raises the idea that security needs to be something that's addressed at the broader level. >> right. that has to be -- you can operate the company great and then something like this happened. >> it's a big concern for a lot of companies rights now. taking a look at the markets, yesterday we saw some mixed markets. the s&p chosed down by about 0.3%. but it was still the biggest drop that the s&p has seen in a month. the dow was back and forth between gains and lows for the eighth straight session. at the end of the day, the dow was down 25. relatively flat, waiting to see which direction they're going to be trading. if you take a look at oil prices, crude oil has settled at an eight-month low yesterday. it was below $93. it's up slightly this morning by about 47 cents to $93.14. check out what's been happening with the ten-year. the ten-year treasury yield rose to just under 2.47%. that was a one-month high.

this morning, it's picked up a little bit. just below 2.5% at this point. 2.49%. the dollar is up bens good the euro, as well. 1.28 is what we're seeing for that euro number. it's down against the pound. and gold prices, which were down by about 1% yesterday, to a three-month low of 1.2552. right now sitting at 1,257.$1,2 an ounce. the story of the morning, apple shares to watch today. we're just hours away from particular cook taking the wrap off the latest product. brian blair is managing director and tech analyst. he's going to be at the event and he joins us now with his expectations. good morning to you. i hear first of all before we can tell into expectations about the devices, i hear that you2 is going to be there today. did you hear that? >> i have. that's the rumor. i was in coopertino yesterday and talking about how they're going to be the ones to grace

this big stage they built. >> and what do you think they are going to be unveiling in all this? >> there's always been a music component to the fall events. there have been a lot of people that played from chris martin from cold play to elvis costello last year. if they're going to do something with a big bang, who is bigger than u2? i hope they shows up. >> they've done a lot with u2 over the years. >> that's right. >> let's talk about the devices and let's talk about these expectations which are clearly high. i think everyone expects there's going to be a phone, probably two phones, two sizes. do we see ipads today? and do we really see the watch? >> we should see ipads today, but i think there's going to be a minimal refresh there. i think all we'll see with the new ipads is the touch i.d., the fingerprint added. we'll see the iphones, no surprises, the 4.7 inch and the 5.5 inches. i think everyone will be focused on this wearable, what is it called, what does it do?

how is it differentiated from the products we've seen over the years. can apple introduce something that people want to wear on their wrist that offers functionality that matters? >> steve jobs could. that's the whole -- that's why the wooch could be important. that samsung was underwhelming. >> every one of these watches thus far has been underwhelming. >> you need to hit it out of the park. >> i want a watch with a phone. >> they had a phone, but you had to have your phone with you. >> no, but i want one that's built into the watch. >> whatever they have, they believe it's big. they're doing the event at the clint center which is where steve jobs introduced the mac 30 years ago. that's not by accident. they believe this is something that is truly ground breaking. what it looks like they're going to do is focus on health. it looks likes it's going to have some way to monitor your blood pressure, your heart rate and it's going to tie in with a platform they call health kit. i think they're going to sell it

as not just a place for notification and fitness tracking, but a way to measure your personal health. can they make something that's aesthetically pleasing enough that people want to wear it on their wrist? >> do you believe the stock has built in and you have modelled out a watch that nobody has ever seen before? >> no. because nobody knows how big this market can be. as you said earlier, this has been been anything that people have wanted to own in big volumes. so nobody knows just how big this market is because it doesn't exist yet. so i don't think we know. if apple shows something today that people believe can sell, you know, 50 million units over the next year, the stock can continue to work. but the other side of this is platforms. everybody believes, including me, they're going to announce some type of a mobile payment platform that ties into the fingerprint reader and a payment platform. that's another area that if they get this right, this is a $20 billion a year opportunity right now. >> muirfield communications, two

things, steve jobs used to laugh at muirfield communications for years that they didn't want to use that technology, they didn't think it was the right technology. android and there are more androids than iphones has the technology. most of the phones have it and it hasn't really taken off. what's to say this will be different? >> so i think the reason it's going to be successful or it could be successful is it looks like it's going to be nfc tied in with this fingerprint reader that can authenticate a user at the point of purchase. i agree, they did laugh about it, but they laughed about a lot of things and change their minds. they laughed about big phones and here they are doing a phablet. >> a what? >> a phone plus a tablet. people call it a phablet in the tech world. that's what this 5.5 inch phone is. apple was going smaller and smaller for a while. they laughed at samsung moves towards the larger screens. but now they're doing that.

>> no tv? >> i don't think there will be any whiff or hint of it today. >> brian, what is your sense of the price point of these devices? i imagine once you move to a 7.5% screen, those are going to be expensive devices. we talked about cheaper devices for asia. this will probably be the opposite direction. >> so we should still see the same price point for consumers. it still should be 199 and 299 for the larger -- you know, for more memory. i do agree it could cost them a little bit more. but a lot of the components inside the iphone has existed now for three, four years and they haven't changed much. while those prices have gone down, apple can o frd to spend more on a panel and still recognize a gross margin south of 40%. but you're right, there are going to be a lot of parts for this more expensive than the previous phones because of that larger screen. >> final question, when becky was setting up the day earlier in the show, she mentioned that the stock, at least four times

in the last -- >> four out of the last seven years. >> the stock has dropped. the expectations have been too high. people have built in magic and it hasn't got them there. what's your sense about today? >> i think today it will trade up after the event. and the reason for that is nobody has seen what this wearable looks like. and i think apple is going to get it right. and nobody has seen what is possible with this payment platform. so you're potentially entering two multibillion dollar markets at the same time on the same day. if they can show their ability to participate in those meaningfully, the stock continues to work. >> okay. and that was -- we were just showing you the countdown clock apple has on its website right now. until that event, we will be watching and, brian, we appreciate your time this morning. >> you bet. >> thanks. good luck. >> like the changing of the guard. >> this is it, this is a moment. >> no. i think this week there will be a changing of the guard in technology and alibaba is going to take the buzz about tech stock away from apple.

and i just wonder whether some of that 500 billion or $6$500 b billion market cap that apple has, whether some of that comes out of apple and goes into alibaba. it could be a two or 250 within a month, right? >> you're skeptical of alibaba. >> no, i'm not. >> no? >> no. alibaba is the real thing. >> i don't know if it's -- it's not going to -- >> the way apple has? >> apple is a gadgetmaker. this is an all encompassing internet play on 1.4 billion people. the government involved where you've got 43% margin. and you've got jack mahu, who is ruthless and gets away with murder. not murder, but corporate intrigue and whatever he wants to do, doesn't he? i'm just saying, apple has had a big run and a big day in the sun

and technology one never stay forever. novell, cisco, google, i'm saying this is a changing of the guard. >> you're saying apple is disappointing -- >> no, i'm saying i think everybody who is already sort of active with their feet in terms of endorsing apple, they're already in the stock. who is left to buy apple stock that doesn't love it and doesn't own it already? it's totally overrun, totally overloved. it's the only tech stock that -- some of that money comes out and goes into alibaba. if i could buy alibaba on the offering price, you could do a spread. >> would you buy it day two? >> i don't know how it's going to -- it's going to be hard to control this thing on the open. >> yeah. >> i mean, it's going to go above where it should. i don't know. this is one of those things where it's fun to be in business news. it's not always fun. mid summer, you know? okay. >> in other tech news, which you checked out facebook?

200 billion lately. the social network's market cap, over 200. shares up more than 9% since its last earnings reports in late july. and amazon has its hand now in many industries. it seems to be struggling with bit smartphone. the company cutting to price of its fire to 99 cents yesterday. >> i don't understand this. a two-year contract. >> what's going on here? >> you have to sign a contract, an exclusive contract with at&t. facebook faces a similar fate with there phone late last year. >> you give andrew grief every time he reads one of your reads. >> was that yours? >> yes. not that i care, but -- >> i didn't even want to read that. >> you did it. >> they switched? go back. let me see. how does it work? >> it sard becky and you read right through it. >> what about this? andrew, apple. i didn't want to read about am zoon. it was like we went right from -- go down further. no, the other way. we went from shares up more than

9% -- and then i think i looked down and then i think they might have gone past -- >> i wouldn't -- you do give andrew grief every time he does it. >> i'll tell you what, i'm going to let you -- i'm going to let you read the next few. because -- no, i just saw this article in the journal and i started reading it and then i got distracted with this. this will give me the opportunity to -- he's going to read this. >> let me tell you about what's coming next, folks. there is an un-ralphing controversy. this tmz video, ray rice knocking out his then fiancee and his now wife. that video was leaked. the ravens dropped him. the nfl suspends him indefinitely. big questions facing the league and the brand. >> and the judge saw this? >> no. >> i don't know whether the judge -- the judge had allowed the felony assault --

the baltimore ravens have suspended ray rice and the nfl has suspended him indefinitely. the nfl say they never saw this part of the surveillance tape. and commissioner roger goodell has now instituted a more

substantial domestic violence policy. joining us now is dave briggs. dave, this is painful. as a rutgers fan and a former ray rice fan, i don't understand why the nfl didn't have to see this video before. >> that's what's new from tmz this morning, is the casino says to tmz they never asked for the tape and if they would have asked they would have been given it happily.in lies the problem. everyone knew of its existence. reporters everywhere had talked about its existence and even its brutality from law enforcement officials. it seems beyond comp hence -- >> but the lowest common denominato denominator, if anyone is going to get it, tmz is going to get it. >> the hotel is asking why didn't the nfl -- >> why didn't tmz ask for it? the sneakiest sgies that are going to want to find out and show something disgusting is

tmz. >> listen, if it's not tmz, donald sterling still owns the clippers. ray rice -- >> i'm not putting them down. i'm just saying a lot of times they'll be the quickest entity just by definition -- >> they can go buy video and i'm not sure the nfl is allowed to do that. but at least you have do ask for the video. you have to ask. a new jersey district judge allowed the charges to be dropped, allowed a pretrial intervention program in addition to the da, jim mcclain. right now, there's another change that's come to light. she was pulled over and told police she had a gun in the car registered in pennsylvania though she was in neighboring new jersey, they did not allow her to enter a pretrial diversion program, but -- >> had the judge a who approved the pretrial intervention program seen this tape? >> i wasn't there for that

trial. i think we can all assume absolutely they saw that tape. if you are a judge and a da -- >> i don't know. >> that would be beyond -- >> and athletes always get -- you know, a lot of times celebrities and athletes get sort of some far treatment, even in our courts of law sometimes which isn't great. >> but i think we do need to hear from the judge, from the da, in addition to roger goodell and -- >> so ray rice's wife, she doesn't need to press charges now for this to become felony assault again given the existence of this tape. >> well, they're not going to reopen the investigation. they already did the investigation. >> you don't think he's going to be charged with felony assault again? >> i do not think they are going to reopen the case. i can't imagine that that's -- that's double jeopardy. >> the tape -- in discovery, those things come into play. this did not become a story until the -- it's the cover of

every newspaper in the country right now. >> and what happens the next time when there's no individual xwroe? how will it be handled? there's a lot of questions that need to be asked and a lot of people reneed to hear frp the. >> chris christie saying it's okay, he's going to allow sports gambling. it's probably great news for the atlantic city casinos bub it's a reversal of what he said he thought he could allow. >> it's a lifeline to those struggling casinos in new jersey. it's still going to be challenged, the nfl, nba, ncaa all will fight this, all who don't want sports gambling in any state beyond nevada. but it doesn't appear that there's any legal challenges left. it seems like the courts do not have interest in preventing tracks in casinos. but it doesn't appear that they have interest in doing so. look, the leagues fight this because they don't want games, matches to be fixed. i think it's silly to think that

year going to fix a game, which is still very legal, and then walk into a casino or racetrack and put your fij prints all over said bet. if you want to do that very legal activity, you're still going to do it. professional sports are soon coming to las vegas, then all of this changes. and fantasy football today -- >> legal in nevada -- >> why it would be legal in nevada but not other states? you're saying it's because they didn't have -- >> they don't have pro sports franchises and you cannot bet on the college there. you can't walk in and place a vet and that's something they want to prevent. they don't want to allow you to bet on rutgers. >> all that is a proximity issue. >> it's optics. >> don't talk about optics, please. >> there's a piece, i don't know if you saw it, kareem

adbul-jabbar wrote a piece, did you see this? >> he says i concluded levinson is a businessman asking reasonable questions about how to put customer necessary seats. if it's arena was filled mostly with whites and he wanted to attract blacks, wouldn't he be asked how they could de-emphasize white culture and bias towards -- >> before i agree or disagree with kareem, we have to see what bruce levinson wrote may be worse than sterling because they were made in a professional, public environment on record. imagine what these people say in private. were there legitimate concerns? absolutely. but it's disgusting.

the they're 28th in attendance. it's arguably the worst professional sports franchise town in the united states. >> why is that? >> if you're an owner, not people are from there. there are a lot of transplates. there are a lot of college sports. look at the atlanta braves. one of the most successful baseball teams we've seen in the last 30 years, failing to fill playoff game after playoff games. the hawks, seven straight seasons, they've made the playoffs. second best in the nba. they can't sell tickets. there's a problem for whoever wants to come in and buy this team. >> i'm sorry, i don't like the braves. as a reds fan, i have never liked the -- >> they come in and they have done a study and they came back and their study talked about the racial differences between other groups of people that they wanted to attract for the spectators. >> if they had said our kiss cam is a little too black.

we need more white cheerleaders and some more country music. >> on the camera, the guy said in the e-mail that the kiss cam was too black. >> and i don't want to defend the memo. the memo itself was disgusting. >> but there were some legitimate business concerns. >> and joe raised this yesterday. is there something worse that's going to come out? because there have been a lot of people who looked at that memo and said i don't really like that memo, but i don't know if you have to sell the company. >> well, keep in mind, he wanted to sell this team in 2011. levinson wants to get out from under this team. it's not the first time he's wanted to sell it, especially when you see the clippers fetched $2 billion. everyone is raising their hand and say i, too, want to sell. that's not a punishment for bruce levinson. i think the nba needs to levy some sort of fine before he's able to sell that team. you have to figure they fetch twice their worth on the market these days, especially if there's some thought they can move that team to seattle.

>> and they're not allowed to until 2018. >> 2017, '18, prior to venue pay a $75 million termination. which could be worth it to the billionaire people in seattle. could he fresh around $1 billion for this franchise? i think it's within possibilities. >> a franchise he paid $200 million for. >> right. so is that a punishment? no. it's a guy that wants out from under that bad investment. bad sports fans in atlanta. sorry, folks. great college fans, they support their nfl team, but there are some concerns. >> another nfl team is going down this week. >> why, are they playing the bengals? >> they are playing the benn a bengals. >> the falcons are going down in week one? >> we didn't talk about tennis, either. >> we have to go. >> that match was -- too short. >> didn't drop a set from the quarter finals all the way through. >> serena didn't drop a set from the tournament on through. >> dominant prvrms. by cilic --

>> nishikori was tired. fedder he was tired. >> boring. >> both of those guys came off huge, grueling matches. >> serena went out for drinks with her opponents. >> wozniak wins -- people love her. miss gone gecongenelty. coming up, a former nba owner gordon gonden. plus, nba commercial ner david stern is going to weigh in. here is a look at yesterday's winners & losers. financial noise

financial noise financial noise financial noise

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[ male announcer ] ship a pak via fedex express saver® hi, are we still on for tomorrow? tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow.

welcome back. i'm joe kernen along with becky quick and andrew ross sorkin. check out this video, dramatic images from above an erupting volcano in iceland, a river of lava flowing out on to the surrounding glacier. rivers of fire have been seen for several days. there was a piece yesterday in

the -- one of the volcanos on on the big island keeps taking more and more timber after some development on the southeast side of the big island. and when you go there -- on maui. this is the most active -- i think it's always active and the lava is starting to encroach on -- it's getting closer and closes to kids with marshmallows. >> not great. other stories, the eu wants more concessions from google if it's to end a four-year-old probe. google has been investigating dominance in search in tigz. a proposed deal doesn't go far enough, though. and disney, sony, dreamworks animation are facing a wage depression lawsuit. the companies agreed tot not to approach employees from one

another. the conspeakersy goes back to 1986 when lucas film and pixar agreed not to cold cut employees. both companies are owned by disney. tech giants whether it was apple or ghouled or facebook. >> tmz's big announcement today, what has happened with central bank and europe in the 28, we have the president's speech on isis tomorrow. hans olson, recently promoted global head of investment strategy for the wealth and management business at barclay's. when did that happen? >> about a month ago. >> you go, guy. and alec young, investment strategist at s&p oppenheimer funds, nothing to do with -- do you remember the company at all, s&p? >> absolute lit.

it was a great experience. >> so you're not mad, you're not bitter? this was your choice? a better firm, step up, more money? >> i wouldn't say better firm. different firm. great shot, great action. >> have you changed any of your viewpoints based on their overriding stance on things or you're still the same alex? >> i'm still the same alex, it's still the same job. >> what happened friday? it was a disappointing number. >> well, that was the reason i think the market ticked up friday. the problem was we gave it all back yesterday. so i think regardless of the data, some people are convinced that we're going to get a more hawkish tone out of the fed. it's probably going to be a buying opportunity. earnings probably up around 8%

this year. streets at 10% or 11% next year. it's a healthy rate of profit growth. you combine that with reasonable valuations and we still think stocks are the best place to have your money. so if we get some volatility around the fed outlook, we're probably buying that dip. >> with all this additional responsibility that you now have at barclay's, the most important keys for the market, fed? isis, ukraine, or apple alibaba? >> i think it comes back to the fundamentals, the earnings story, right? >> what are you thinking, apple, alibaba and more isis or the fed? >> yeah, it's morally baba, apple, it's more ge and, you know, the main of the market. >> so market players kind of assume that the end of the world is unlikely because it could only happen once. do you know that?

it can only has once. so it can't keep happening. you're probably going to have to return to core fundamentals of earnings for individual issues? >> i like the version of where gretzky used to play hockey. and the puck will -- it always ends up on earnings because that's what you discount back, right? if you're looking for clarity on the geopolitical front, you're not going to get it. if you're looking for clarity out of the federal reserve, you read the stakes out of jackson hole, there is no clarity. even she admitted in a moment, a clarity uncharacteristic of an economist, which is there is no easy policy cryption here, right? in quotes. the only place you're going do get clarity, i think, would be in the earnings extreme.

if you're looking at that, you're seeing revenues rising again, in big and small cap stocks. >> do you attribute any of the earnings momentum to the fed? whether that going away, in the overall economy and corporations are on their own, will it still be all right? >> i think it will. there is no question the fed has helped. >> there's no expenses in borrowing money. >> we ran a correlation of earn eggs in the s&p. .it's 94%. the biggest driver in the market over the last four years has been earnings growth. the fed has helped. we think earnings has been the bigger driver. there's a lot of gaming about whether did they make the first

move? there's a lot of gaming and once they hike once, they're going to be hiking a month for every two years. it may be a tightening cycle and stocks may be able to weather it better than people think. >> hans, do you know about mo's bows? >> mo's bows? >> you don't know about mo's bows? >> i'm disappointed. you obviously didn't watch last week. >> a 12-year-old boy, he sells bow ties. >> nicer than that one? >> really? >> yes. >> give me his contact information. >> he has shark tank. >> mo's bows. >> that cnbc show, shark tank. >> i will admit i watch it on cnbc. i'm more of a cnbc guy than nbc guy. >> i think the started on nbc, didn't it? >> no. it's your other network. >> did you buy one? >> it's the beginning of the alphabet. >> but that was just to propel

it to be on cnbc prime time where it got its true -- >> that's where they got me. >> gentlemen, thank you. still to come this morning, the race to cure rare diseases. plus, apple isn't the only company trying to make a big splash with the products release. a new video game can control the destiny of one company. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click;

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welcome back. mcdonald's is expected to roll out monthly sales coming at 8:00 a.m. eastern time. analysts expect a third straight monthly decline. the stock is trading at its

lowest level since early 2013. the senate banking committee holding a hearing today titled wall street reform, assessing and financing the regulatory system beginning at 10:00 a.m. eastern time. >> and activision's new game, destiny, goes on sale today. this is a new series and the anticipation is hot. industry watches say destiny could bring in close to $1 billion in sales now through the holidays. that is today's squawk plans and a quick reminder, the cfo, game stob, one of our guests tomorrow. we'll see how much destiny means to the retailer. when we return, we're going to meet a dad that took manners into his own hands create ago drug making a giant into a battle. he's going so be right here on squawk when we return. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last.

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one of the hottest races in biotech right now is finding medicine for rare diseases. one dad took matters into his own hands to help his child. meg. >> that's right. rare diseases are a big area for drugmakers. too many don't have good treatment options. one dad left a career in finance to change that for his son. never planning a career in drug development, two years ago, alon and his wife, annie, got the

news cha changed their lives. >> even looking at wikipedia, you see wheelchair advice by 10, 11, 12, and that most of the boys, you know, don't make it past the early 20s. and it was devastating. i mean, words can't describe as a parent how you feel. >> their son, etani was diagnosed with a rare genetic disease. there was no treatments for the form etani has. he left hs job, moved his family from boston to london and raised $17 million. with two partners, he founded solid ventures, a company to develop drugs for his son's disease. >> there are thousands of rare diseases. we find it difficult times to substantiate the economic value and jump right in. >> that is where solid focuses

to advance therapies that may be trapped in what the drug industry knows as the valley of death, a point where potentially promising medicines get stuck due to lack of funding and resources. >> we are left with a lot of patients that aredeveloped. we feel like it's part of our responsibility to marry the two. that's what it is all about. >> reporter: time is pressure. etyani is an energetic boy now. but over time his disease will worsen. they are convinced they'll make a difference. >> we're aggressive. we raised enough money to do what we need to do. we have the right people. >> and ilan's company has just done its first deals including the collaboration with pfizer and efforts in gene therapy. he joins us now to tell us more. ilan, thanks for joining us. >> thanks for having me. >> tell us where you made this collaboration with pfizer, you've got another thing in gene

therapy, suits to protect muscle function. tell us about different ways of treating the disease. >> the way we think at solid is we only have one problem. it is this dystrophy. we're looking at everything that can help these boys. we are starting with three main approaches. the deal with pfizer which we did we're very proud of. it took us time to get over impressive guy there is. we identified the experimental drug which we are going to test in fact starting on monday in a very robust way. we have a collaboration. and at the end of that process if this drug still looks like it's working as well as we think it will, we will get to pfizer early next year. that's one approach we have.

and it will certainly be complimentary to have every other drug out there and part of that cocktail we hope to have. >> when you say go to clinic, does that mean human trials? >> human trials. probably phase two immediately because we know a lot about this molecule. >> what is this drug? >> this drug is not going to restore the protein we're missing, but it will be very meaningful to deal with a lot of the symptoms associated with the progress of the disease. >> almost sounds -- >> to deal with a disease of this nature and it's a big one, you could address the actual core reason for the disease which is the protein that's missing. >> so why will that not work for most duchene? >> they are both working on exon skipping which we hope will work for many of the boys in the near future. i'm personally friends with both ceos. >> how does it not work on

certain cases? >> it's a mutation specific. >> okay. >> it can be expanded to many different mutations, but the approach both companies took will address 13% or so of the patients. >> that's it. >> but then there's a concept that can -- >> because of different -- >> exactly. we need a lot more drugs. and for example our gene therapy subsidiary is another disease modifying approach that we're very excited about that is inserting functional short version of the missing genes to the patients. >> the, you know, regulators and the government -- you normally think they're going to miss things up. but certain times like the orphan drug, that's very positive because you point out there's certain drugs that -- or certain diseases that affect small amounts of people. the amount of money it would cost is not feasible. so they came up with the orphan drug. do we need a better orphan drug,

sort of an act or something like that? >> i think there's a lot of efforts in lobbying -- in people working on finding better legislation. but we definitely have a good enough infrastructure that now incentivizes companies like mine to develop drugs for diseases. >> so you don't need a better orphan drug. >> we've got companies doing drugs for small diseases. >> diseases with fewer than 10,000 patients. they charge $340,000 a year for this. >> but then you get the pushback from people that don't really understand the business. they don't. but they'll push back and say the pill only costs that. >> first of all, many of these drugs are expensive to make. the cost of care for these patients which is really the cost you should be considering is so high and the price on the community, on the family, on society is a monster price.

>> things to explain to the people that so many times they don't understand. >> it's part of the mission. >> also what's interesting what he's doing is it's not a charity. it's a for-profit company. and they've structured these deals as subsidiaries to have financial flexibility. it's an interesting model trying to fix hiccups in the drug industry. >> there's so many diseases where the progress is so slow and frustrating, when i read this news, that's big. that's something that shows promise within five years or so, doesn't it? to really be able to deal with this? >> we have kids on that drug for three years now and they look great. >> but within five years you ought to be able to expand the mutations -- >> i sure like to hope so because one of the drugs would help my son. so yes, i'd like to hope that all these drugs get approved and come through. >> your drug-making therapy might be more -- >> yes. we're working on a device that's

easier to bring to market and patients. there's no side effects. could well also compliment all of these drugs. we think that this is a disease that deserves a lot of attention from different angles and we're trying to do our best with some good friends and collaborators. >> it's an inspiring story. thank you for joining us. >> thank you. >> and meg, thanks for bringing it to us. >> we wish you the best of luck. >> thank you very much. when we come back, billionaire investor gordon gunn is our guest host today. he's bringing some friends with him. we're getting started with all of it at the top of the hour. stick around. "squawk box" will be right back. [ hoof beats ]

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the apple countdown. ceo tim cook about to take the wraps off a highly anticipated iphone 6. but what else do they have behind the curtain? >> setting up the "squawk box" breakfast table. john bryant on pleasing consumers' tastes and investors' appetites. >> and our guest host billionaire investor gordon gunn owns the stock. find out if he still likes it at these levels. the second hour of "squawk box" begins right now. good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick.

when it rains, it pours. the drought ravaged southwest getting a deluge. phoenix having its single worst day of rain. more than 3 inches of rain on the region. phoenix usually gets that much rain all summer. we'll have more on this later in the show and the impact of what it means for that community and beyond. >> let's check the markets this morning which have been inconsistent so far during september. the dow has now alternated between gains and losses for eight consecutive sessions. the s&p is down. actually little change over that span. take a look at futures this morning to see how the market is setting itself up. right now we do have green arrows marginally up. and the s&p 500 up almost one point. investors also going to be getting a look at the sales figures from mcdonald's. and the expectations, not exactly upbeat. analysts are looking for a 4%

drop in sales in at least a year. and the u.s. sales are seeing a drop of 2.3%. of course that company has struggled over the last couple of quarters. >> the countdown is on to the main event at 1:00 p.m. eastern time. apple is expected to unveil the much-anticipated new products including the next gen iphone. josh lipton joins us now to set up apple's big day. you got nothing to show -- do you have an actual apple watch with you today, josh? and if not, why not? >> reporter: not yet, joe. but give me some time. hopefully i'll come through for you. you know, it is 4:00 a.m. here in cupertino, california. i can tell you, media already gathering. security is tight here. you're not getting near this place without one of these shiny sort of disco wristbands i'm wearing right here. right behind me actually apple has this big white building just for this event. apple pulling out all the stops

and for good reason. this is likely to be the biggest event for apple this year. certainly for the company, consumers, and investors. here's what we're expecting to see. a new size 4.7 and 5.5 inches. one important question, though, apple when it comes to guarding those closely watched margins, are they going to bump up the prices of those? analysts also think you're going to see an improved camera, faster processer, maybe also a sapphire display. apple still does control about 12% of global smart phone shipments and nearly 60s of global smartphone operating profits. that's of course a strategy in analytics. if you look at the stock price of apple this year, enjoyed a nice pop. typically you do see apple underperform the s&p 500 one, two, and four weeks after an

iphone event. but analysts think this year it could be different. the dynamic could change because apple could very well introduce a wearable device this year. we know ceo tim cook has promised to enter a new product category. so could this be the day we see it? you saw analysts at goldman sachs this week telling their investors they don't know if it'll have a financial impact, a wearable. but they think it could be another way for the company to differentiate itself from rivals. back to you. >> thank you very much. we'll be watching. our guest host this morning is gordon gund. he is the founder of gund investment corporation. he has been successful on investments and also been on the board of kellogg's for 20 years. now gordon is focusing his efforts on the foundation fighting blindness which he founded theed with his wife. he has lost his sight more than 40 years ago. gordon, we're going to talk

about the foundation later this morning, but i'd like to talk about how you're able to fund that foundation. and that's through your investments and just talk a little bit about what you've been doing over the years, what interests you. some of your big investments have been in health care, but you've also been in kellogg's for a long time. what's your investment thesis? >> it's mainly to look at -- first of all, it starts with people from my point of view. and if you like the people, that's where it has to start. but beyond that concepts that are solving problems and meeting needs that are unmet to that point. so looking at -- it doesn't matter what industry from my point of view and it hasn't over the years in venturing or even getting into sports which is certainly not viewed generally as a great investment. but it has been. did turn out to be that way for us. so also entertainment facilities because when we own the sports teams, my brother and i, we also had buildings they played in and managed those for 365 days a

year. >> let's talk a little bit about kellogg's. we're going to be meeting with the ceo later this morning. what attracted you to kellogg's? >> my family's been invested for 85 years. it all happened when my father who was considerably older when he had us. older for a father. and he was in the first world war in the cavalry. and afterwards, he found out about a process to decaffeinate coffee. and because prohibition was going on and so much concern about stimulants in the country, he bought the process -- the bought the patent rights to the u.s. they were taken over after the war. >> so i can thank him every time i drink decaf in the morning? >> yes. exactly right. and then w.k. kellogg had become interested in it. he wanted a drink that was

noncaffeinated. so he in 1928 contacted my father and bought the company for then mostly stock and cash. and there weren't deals done in those days so much for stock. so that was fairly unusual. and we've had the stock ever since in the family. >> would that be a buy and hold strategy? >> long-term buy and hold strategy. and that's -- and i, just to complete on the philosophy that i have about investing, i look at everything on a long-term basis. i'm not smart enough to do quick turns or trades. i really feel it's much better to quote something you believe in. >> i'm going to buy stock and hold it for 85 years and i want to be there when i sell it. that's my goal. >> good. >> so that's interesting though. so back then there was a -- and alcohol is a depressant although i think people thought it was a stimulant for awhile. so they thought prohibition

could affect having caffeine in your coffee. >> you'd want to drink coffee all the time because you can't get alcohol. >> who drinks coffee now without caffeine? >> i do now just because i got off the caffeine headache. i'm trying to stay away from it. i drink decaf every morning. >> why drink coffee without it? >> i realized i was reliant on it as a drug. i got off it. >> could you imagine? you drink diet coke and coffee. >> now just straight coffee. >> why'd you give up the diet coke. >> i was told it's bad at that hour. >> probably bad for your stomach. gordon, we definitely want to have -- i love kellogg. and i love cereal. but it's politically incorrect because it's carbs and it's sugar and kellogg like coca-cola and so many brand names with these crazy millennials that are going to change the world,

they're always at whole foods or gnci and who knows if they'll be healthier than we are. but they don't eat cereal. they won't eat sugary cereal, will they? >> even though the sugar content is nowhere great as it once was or as people think it is, you're right. this goes around in cycles a lot of the time. but ask john about that or i will. >> we will. >> i've gone back to eating -- i feel like jerry seinfeld. i'm eating it at night. >> what kind? >> any kind. lucky charms or honey nut cheerios. i like the packs from kellogg's that have all the different -- i just get in it. i don't even care which one i pick. i just pick any of them and eat them. >> and you think people are going to be eating cereal forever? are you worried at all about the trends that we're talking about this sort of low-carb thing? >> i love sugar puffs too. >> the category hasn't done a good enough job in describing

how relevant cereal is to these needs that even the millennials feel they have to have. they want quick energy, protein, they want something they can hold in their hand and carry around, get off quickly. even snacks. but john will come back and talk about that, i think, later. >> gordon, i want to talk also, you're not just kellogg's. you have a wide variety of holdings including some of the social network stocks. stocks like linkedin, facebook, google. >> not in as major a way. the four main are kellogg, corning. we invested in them when they were private. so we invested in the there's a three series. >> you got in early. >> and still have it. >> is there anybody else who competes with invisaline?

anybody else that figures how to do it? >> nobody does it quite like they do. and so far they keep reinvesting themselves, the technology does by continually developing the digital capabilities they have. so now they have a scanner that can digitally scan the inside of the mouth and really exactly identify where the invisalines with how they'll work and how they'll shift the bite. really their goal is to become the digital expert for dentistry. on a global basis. now they're now over 600 million in sales. >> displacing braces. >> yeah. >> and then the other one that we invested in right at the ipo was giliad. that's been great. and it dropped after the ipo, believe it or not. >> dropped to what market cap?

>> then? i don't know. >> a billion dollars? >> 60 or 70? is it a hundred now? don't tell me that. where's my machine? used to be back here. >> it's 161, is that right? >> no. it's impossible. >> i think it is. >> no! >> so back to your question, the social networking ones, i don't claim to know a whole lot about that. >> it's almost the same as merck. >> it's hiv and hep-c drugs. >> and tamiflu too. and had all the conspiracy guys. >> the fact he was on the board was one of the reasons i liked it. >> right. because you like people. people saying they created the virus and then created the cure. that's how crazy some of the conspiracy theories are. >> wow. well, fortunately gordon is

going to be with us for the rest of the program. we have more to talk with him about. john bryant will be joining us. in the 8:00 a.m. hour, wendell weeks. and then the former nba commissioner david stern. >> you say rumsfeld to someone like andrew, and you're sure there's something -- >> no. >> oh, rumsfeld? shock and awe rummy? >> i'm not making any political comment. i like the guy. >> i'll make them for you. >> you can make all the comments you want. we're going to come back in just a moment. we're going to talk about apple's ecosystem. that iphone is on the list. but what about the watch? other wearables? and perhaps even a tv. what will investors need to hear to keep the stock moving higher.

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welcome back to "squawk box" . checking the futures right now. up at this hour. trump entertainment resorts filing for chapter 11 bankruptcy. this includes trump plaza and trump taj mahal. lists assets and liabilities in the range of between $100

million and $500 million. >> how many times has that casino filed bankruptcy? does donald own that? >> he doesn't own that. for years. >> all right. as we've been telling you all morning, apple expected to unveil the iphone 6 just a few hours from now. the countdown clock is on. the week leading up to today's event, the stock is down close to 4%. but for the year shares have climbed 20%. and where does apple go from here and what else can we expect to see? stewart jeffrey joins us now. he's the telecom and equipment analyst. we all think we're getting phones. two size phones. 4.7 inch screens. 5.5. and this is the phablet. he calls it the maxi pad. >> i said they can't call it that. and i don't say it when i say they can't call it that on camera. andrew. but phablet is not much better. that sounds like some bodily

function. >> first of all, are we sure we're getting an iwatch? >> we think there's an announcement, but doesn't sound like production has started yet. looks like it will come out maybe next year. so the smart watch dynamics makes it hard. so i think they need to announce a long time in advance to get the developer on board. >> so then there is this issue of payment. how big is that? >> i think mastercard, visa, $60 billion to $80 billion companies. how much of that value can apple capture? and the merchant's not going to pay more. presumably they have to try to take a little chunk out of the credit card companies and how much they let them have is what we can be focusing on the next few weeks. >> why are we convinced this is going to work this time? the reason i ask, android's had nearfield communication devices where you can pay on your phone and it hadn't really taken off. >> it doesn't replace your wallet.

you still need your driver's license and the cash where people don't take credit. so i think they how they make this work is hard. money is money. taking a 30% cut doesn't work. i think it's going to be difficult. >> and it's a little thinner, right? >> you can probably thin that out just a little bit. >> i could. but i don't put things down in, you know, on my iphone. do you have a wallet? let me see your wallet. >> see. see? you are -- gordon, he's a millennial. he's 38 years old, but he's a millennial. how do you do that, man? >> i'm not sure what you have in there and i don't want to know either. >> this goes off when i go through because of this thing. >> i bet it does. >> gordon, you don't own any apple. would you ever think about it? >> i wish i'd thought about it several years ago. but sure depending on valuation. right now it's pretty hefty. >> you do, however, have a stake

in corning. they do the gorilla glass for the phone. their speculation is they're -- >> do you have any cash? >> can i have my wallet back, please? i'm in the middle of an interview here. there is speculation they may move from gorilla glass to the sapphire. do you have any insight on this? >> i don't. and i'm sure that one of your guests coming up, wendell weeks, does but he probably cannot talk about it. >> oh, boy. >> not directly anyway. >> what's your sense? is the gorilla glass versus sapphire thing matter? >> both ways. you're talking to stewart tho e, right? >> yeah. >> the problem is when you drop it it sheters. there's also layers of maybe gorilla glass and sapphire. but if you do a laminate, it's

tougher when it comes to being dropped. >> one of the things josh had mentioned in his record to california this morning is the issue of pricing. and how much these devices are actually going to cost. a year ago we expected them to come in with a cheaper price point. the margins may be thinner. >> so the expectation is the 5.5 one may be a good hundred dollars more. be if you look at the sales, it's flatlined for the past six, seven, eight quarters. they've seemed to have exhausted the number of people willing to use that amount. they've exhausted their footprint to the people willing to pay that much. so i think the 5s, i don't know how they make that a cheap phone the next time out. maybe what we'll see is the $250 to $300 iphone. >> we may have a different operating system with this new

one? >> it was announced earlier in the year. they'll feature that. i think there's going to be some applications and features they've kept a little bit secret including the health monitoring and stuff like that. probably hear more about that today. >> do you think the health thing is going to be real? do you think that's why people are going to buy the watch and the phone and everything? that's what this is really about? >> not initially. just because you've got your blood pressure monitored 24 hours a day. >> i see scales all the time. >> the bigger screen would sell me. >> do you want to check your blood pressure all the time? >> no. >> i know when mine goes up already. >> when we hang out together. >> when we talk about inversions of fairness or income inequality or whatever. i mean, i can feel it. i don't need it to see. >> stewart, thank you. gordon, thank you. gordon is going to be sticking around for the rest of the show. when we come back, fire and rain. an iconic coaster goes up in rain while arizona deals with

record rain and flash flooding. both those stories here on skb. act i. scene 3. open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound) isn't the cloud supposed to make business easier? get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm.

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welcome back to "squawk box" this morning. couple headlines for you this morning. the southwest inundated with heavy rain from phoenix to tucson to palm springs. at least two people have died in the tucson area. what do we have here? we've got more coming. the forecast is going to be arriving tomorrow. but it looks like it's not over yet. also part of the landmark wooden roller coaster going up in flames. look at this from six flags magic mountain north of los angeles. the decades' old colossus roller coaster. fortunately the park was closed. >> lightning? >> i don't know how that happened. up next, the nfl out with a new statement on that difficult-to-watch ray rice video that led to the ravens cutting him and a league

suspension. we'll have that after the break. then grab some frosted flakes and eggos. kellogg's john bryant cominge i. "squawk box" will be right back. e financial noise financial noise financial noise financial noise

welcome back to "squawk box," everybody. some new developments in a story we've been following all morning. nfl running back ray rice cut from the baltimore ravens and suspended indefinitely by the league. this comes after a disturbing new video surfaced of a domestic violence incident between rice and his then-fiance last february in atlantic city. the nfl is just out with a statement. the league says, any videos related to an ongoing criminal investigation are held in the custody of the state police. as we said yesterday we requested from law enforcement any and all information about the incident including the video from inside the elevator. that video was not made

available to us. so there's been different stories. the casino said they never showed it. >> that was our key question was to why the nfl -- but why didn't a judge see it? >> the casino said they never asked for it. >> the nfl asked law enforcement. if the judge asked, they can't say no to the judge, can they? did the judge ask? >> we don't know if the prosecutor asked. we don't know the answer yet. but we will try to find out. we are going to switch gears because we've got deal news. our next guest is general motors -- general mills buying annie's. we've got a lot of annie's in my house. that's more than 37% premium to annie's closing price yesterday. the maker of cheerios hoping that deal with help it expand in the fast-growing natural foods

market. >> -- do you like the bunnies? do you like the cheddar? >> bunnies. the kids eat the bunnies. >> i like the shells, the parmesan shells. have you had those? >> no. >> you haven't had white cheddar cheeses? >> no. >> you have to get out more. kellogg's is the nation's biggest cereal maker and creator of some of the most iconic brands from old-time favorites like corn flakes and fruit loops. i love fruit loops too. to more recent additions like special k or smart start. cereal sales are suffering. down with people turning to yogurt, that greek stuff. and more on the go-high protein products. so what's kellogg's doing about it? let's ask the ceo joining us, john bryant. also with us, guest host gordon gund. he has been on kellogg's board for nearly 20 years and he has a buy and hold strategy.

his family's held kellogg's for 85 years. thanks for joining us. and i ask -- it all starts going together off camera and on camera. the millennials are so politically correct. they're in gnc or whole foods, you know, no preservatives. eating crap that's probably not good for them anyway. so they don't eat carbs. they don't like sugar. it's a hard sell in this politically correct world for kellogg's now. >> we have tremendous products with a great range. we have kashi products that are natural. and there's a wide range of items people like like frosted flakes and fruit loops wonderful to eat in the morning. >> you can see, even the results, revenue -- was revenue down? earnings. it's tough. there's head winds.

coca-cola is having the same issues. first it was sugar. then it was aspartame. >> there's some avoiding. >> how do you get protein in cereal? >> we have some mini wheats here that if you add milk it has as much protein as many greek yogurts too. there's protein in the wheat. we have a go lean product as well which also has a high lel of protein. >> you probably have guys working on even ramping it up a little more with some of this, right? >> we do. we have special k protein coming out and gluten free coming out. >> i have put something else on to avoid the carbs. there's a way to do it but it's difficult right now, i would think. then input costs and everything

else. >> you're thinking about how to communicate the relevancy of cereal and all of the great products that kellogg's produces. talk a little bit about that. >> gordon makes a great point. at the end of the day, a nutrient dense calorie form. it provides ten key nutrients for kids. the protein in the milk also plays into this. we're talking about the simplicity of the food. the corn flake is a piece of corn that's been rolled and toasted. very simple, very natural. very wholesome foods. and, joe, i think in the earlier section you mentioned eating cereal in the evening or through the day. 30% of all cereal in the u.s. is outside breakfast. it's a snack food as well as a breakfast. >> it's a dessert for me. >> john makes a good point. there's some myths about processed food versus all

natural. and you might describe kellogg's position in that regard. >> clearly the level of processing is relatively small on a lot of our foods. all the nutrients and benefits are there. if you look at the benefits of the fiber, the whole grain, et cetera. >> here's the conundrum as far as i see it. you have to try to tell parents that fruit loops which look processed because they have all sorts of coloring in them are going to be attractive to kids who like the sugar and all of the things that come with that. and somehow get the parents to believe that it's an all-natural wonderful product. i don't know maybe fruit loops is the wrong example. but the stuff that gets advertised to kids -- the stuff that the kids love the most at least looks on the outside like the most processed stuff that's out there. >> well, we don't actually advertise fruit loops to kids right noup. we've been advertising to adults and it's been growing.

half of the fruit loops consumption is to adults. >> let's take fruit loops out of it. frosted flakes, tony the tiger. it's those products which you have to balance the parents' interest in this all natural idea with the kids who want the sugar, frankly. >> take frosted flakes. a corn flake with some sugar on it. there's just over two teaspoons of sugar in a bowl of frosted flakes. kids who eat frosted flakes in the morning have a lower body mass index than kids who don't. it has a sugar perception issue, no question about it. >> apple jacks, pops, i mean those are the ones my kids love. they don't have too much sugar in them? >> they're good. >> how much is international? >> about 35% of the company.

>> would you ever think of an inversion? does it make sense for you? >> i don't think so. we've been in battle creek, michigan, for -- >> that would be a tough sell. but do you wish we would do something in terms of the way we tax global profits? >> i think the point you're making, joe, the root cause is the u.s. tax system. and if the u.s. tax system is a territorial system versus the current system, i think you take a lot of this noise off the table. i believe the u.s. tax system needs to be looked at. i don't believe it treats u.s. companies as fairly as it should. i think it's an opportunity for us, government, society, and business to work together. >> how do you like the new guy down in australia? >> i've been out of australia for about 20 years. >> you're not following what's happening now? he's very pro-business. >> i like him already. >> how do you like the guy we have? [ laughter ] >> i'll try to save you with a

different type of question which is before the segment started we talked about this deal that was announced, this general mills deal. them clearly trying to diversify their business. would you ever consider diversifying your business? what do you make of this deal this morning? >> many respects we have and we acquired kashi back in 2000. it had $25 million in sales. now it has $400 million in sales. we've grown our business internally over the last 15 years. we have a very strong natural portfolio of brands. and we have also changed the shape of our country dramatically. in 2000 we were 70% cereal. today we're 45% cereal. 45% snacks. we are the leading cereal company, the world's second largest cookie/cracker company. and vegetarian burgers. >> i love those. >> what do you make of this general mills deal?

>> i think natural is a growing area. i'm not surprised people are buying assets there. >> what about the strengthening dollar? i know the weaker dollar has affected a lot of companies. it's been a problem for multinationals. is the prospect of a stronger dollar something that will help over the next few years? >> our business is fairly regionally located. we don't make a lot of products and ship it around the world. we do for pringles. it is shipped out to asia pacific and latin america. but in general we see more translational exchange. >> when i don't eat carbs, so i need a snack. okay? i need a protein snack. will you work on that for me, please? >> special k protein bars. >> let me check that out. because you know what they told me to eat? pork rinds. i can't. i can't eat those things. will you make a snack for me

please? tell me again. >> special k protein bars. >> it's a meal replacement bar. >> i need fritos. >> we have pringles. >> those aren't protein though. >> no. >> that is some shape that is incredibly sophisticated. you could spend all day writing an equation how to make a pringle. i'm serious. you like pringles? >> i love pringles. >> thank you for coming. and thank you, gordon. when we come back, the countdown is on. this is apple's website live where in a couple hours tim cook will be unveiling what many believe will be the iphone 6. we're going to talk tech and we're going to talk about tech with fred davis in just a little bit when we return. so i can reach ally bank 24/7, but there are no branches? 24/7

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whenwork with equity experts who work with regional experts that's when expertise happens. mfs. because there is no expertise without collaboration. and other car insurance companies?

yes. but you're progressive and they're them. -yes. -but they're here. -yes. -are you... -there? -yes. -no. -are you them? i'm me. but the lowest rate is from them. -yes. -so them's best rate is... here. so where are them? -aren't them here? -i already asked you that. -when? -feels like a while ago. want to take it from the top? rates for us and them. now that's progressive. call or click today. i'm not ready. let's take a look at some stocks to watch. where's the milk? >> it's right here. >> dick's sporting goods downgraded to market perform at

wells fargo. it was a little meaningful upside potential. have you guys -- becky, have you watching sporting events with the dick's commercials. they are long. they are almost like nike-esque. they're amazing. they go back in the kid's entire development and slowly go back to -- they're very good. ralph lauren up graded to strong buy. company is poised to enjoy sustainably higher profit growth. >> they put on a fashion show last night in the middle of central park. >> dick's? >> no, no. ralph lauren with a holographic fashion show they did over the pond. >> 3d is 3d, what is the fourth

d d? you can smell it? >> they have stuff that moves in your seat when it's going, and they blow in your face. >> like the bugs come out and you feel it on your back. >> people rain showhave been rat this fashion show. >> thank you. >> little extra news. >> it is. you're advancing the story. right? >> marginally. >> but newmont upgraded to outperform from market perform. does not appreciate the newmont mining process. and then 5d is the fifth dimension, the age of aquarius. right? >> yes, sir. >> crickets, please. crickets. find out what the fourth d is. >> it's called a 4d light show. that's how it's described. coming up, guest host gordon

gund's plan to change the world. how he intends to change the world and restore sight to young people losing their vision to disease. then later, apple set to take the wraps off the latest iphone today. but among the biggest mysteries about all of this, will the tech giant replace one of its major suppliers? reports say corning could be bumped as the maker of the device's glass screen. the ceo is going to join us at 8:30 a.m. eastern time.

welcome back, everybody. we have a special installment for our change the world series this morning. our guest host gordon gund. the last time you were on set with us, you announced a matching program. you're hoping to raise $100 million by next june for your program. tell us how it's going to far. >> thank you, becky. we started the gund family match. and that is for every dollar that any gives of $25,000 or more, we will match on a dollar-for-dollar basis. that's unlimited and we hope we are targeting a hundred million including the match. i hope it goes beyond that. because we really need it to drive the research that we've been working on now for 43 years. the foundation started in 1971 and there was nothing being done

about retinal degenerative diseases. they affect more than 10 million americans and many times that number worldwide they include diseases retina pigmentosa that i suffer from. these are universal diseases. they don't know any boundaries. and they do lead to blindness in most cases. we hear on a daily basis from parents of children or infants who are born blind, adolescents who are losing their sight and older people going blind and losing their independence. so we're very passionate about this. and have been over this period of time. fortunately now we're at a point where we're in an era of clinical trials. clinical trials are the last step before you get fda approval and commercialize the therapy. and we have several of them in the areas of gene therapy. one very exciting one that is in

phase three now. so soon to be approved by the fda. which is restoring sight to infants, to children that when they were born were blind or went blind shortly thereafter. had this one normal gene replacement therapy trial. one boy was given this treatment at the age of 8. now he can play baseball. and he doesn't need any assistance in the classroom or anything else. it's really quite a -- >> what did he have? what did the gene replace? >> he had something called congenital amarosis. what the normal gene does is replace the defective gene or it produces the protein that the defective gene doesn't produce. >> different than the other thing. >> yes. but there are a number of other

diseases. with research we funded now identified more than 200 genes. we thought all this was straightforward and only a genes were responsible. but everything is more complicated than it seems. in this case this was. but now we've got them -- that really informs you about the disease. you learn what the -- then you learn what the protein does in the visual process. gene therapy is very exciting. and a number of clinical trials underway. >> what's the cost of the therapy? >> it varies. but with small market diseases, probably the pre-clinical is $2 million to $3 million. to get it to proof of concepts, another three. then probably another five to ten to take it through phase three and finally get approval. so anywhere between $8 million to $15 million. and that's why with smaller market diseases, andrew, why we're doing this challenge is

because commercial companies won't pick it up until you de-risk it more. you have to take more of the risk out. and that means take it close probably through phase one or two to proof of concept. then you'll -- then i'm happy to say companies come in and make small market diseases. >> it's good because we already talked about this earlier with the gentleman. and it's good that the private sector is stepping up where there's a need. and maybe there isn't a need to update the orphan drug the we that we do that now. >> i think it's good the way it is now. it does incentivize the commercial side to get involved at an earlier date than they would. >> what's the problem in macular degenerative -- it seems that would not be as difficult a thing to figure out. >> one of the trials that we've funded in the early stages that's going on now is looking at stem cells for saving or

restoring sight for people with macular. >> what happens there? >> the macular is the central part of your field of vision. it's where the cones are clustered. >> in the retina. >> giving you the fine vision you need to read and so on. >> and that just gets old? >> it degenerates. in part it's genetic. it also is environmental. so it's a combination of the two. and there's two forms. the wet form is when blood vessels -- a lot more blood vessels are created and it obscures the field of vision. and work that is being done. lusenis is a drug for that and that's based on technology the foundation funded. >> how important is it to raise awareness? the psas you put together with lebron james and mark -- >> he was a great player in the '80s.

>> does that help to get the fund raising up for your foundation too? >> it does. it makes people aware. a segment you had earlier, they're competing for funds just as we are. i think he's doing a great job and interestingly is constructed the same way we are. we have a drug capability that moves a lot of these things through the pre-clinical and into clinical trial phases. it's very important. and it's the only way you can make people aware of what you're going. first of all, get a lot of the people who are affected who don't know about it more aware of it and get involved in helping themselves. and then also to raise money. and you asked me earlier about the progress on this match and i'm happy to say in the summer months which is a tough time to fund raise, we raised over $7.5 million. so with the match, that means we're $15 million on the way. and from only 35 people.

we've got lots of irons in the fire and lots of people we're talking to. >> lusensis is -- >> and the government knowledge that went into that was done by our research. >> gordon, thank you. all right. coming up, he helped launch youtube, spotify, myspace, now fred davis is underwriting alibaba. we'll be right back. 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. (shouting) location. here's the location that matters the most. here. or here. or here.

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♪ welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with -- do you have the box still? along with becky quick and andrew ross sorkin. >> we don't have the box. >> what happened to it? >> it was good. it was a cinnamon go lean. >> kashi. >> 11 grams of protein in it. >> we're not being paid by kellogg's to endorse this. >> we're not. but it was good. >> cinnamon crumble is the flavor. >> we both enjoyed it.

>> 9 grams of fiber. >> which for me, i would need a fiber con then. still with our guest host gordon gund. 8:00 a.m. on the east coast. it's 5:00 a.m. out west. that is info that you needed to know after i wasted all that other time that if it's 8:00 here, it's 5:00 out there. that's cupertino. in just a few short hours we're going to expect apple to take the wraps off the new iphone 6 and potentially a host of other new gadgets. it's the same hall where steve jobs unveiled the mac 25 years ago. 25 years ago in the same hall. even before anything's been announced, people are camping out at apple stores. check out this video from new york's flagship store. based on leaked information and the passengers. decided there's going to be a different sized phone and a phablet. >> and maybe a watch.

>> a watch which will tell you what your blood pressure and heart rate and -- i don't know. we don't know. we're just conjecturing. >> as we count down to that event, we want to take you back to the first time apple announced it was getting into the smartphone business. this was steve jobs back in 2007. take a look. >> today apple is going to reinvent the phone. and here it is. >> jobs was clearly joking with that first image that he shows the world that day. but the iphone as he promised proved to be revolutionary. and since the first up with hit the market, nearly 600 million have been sold. >> joining us now with his expectations for apple's newest hardware and software, fred davis exclusively on the digital and entertainment media space. he was responsible for helping

youtube and spotify secure rights to launch. also son of clive davis. and i believe you're an underwriter of alibaba. so you've got a lot going on. >> we have a lot going on. >> you have a lot going on. what do you think we're actually going to see today? everyone thinks we're seeing these two different sized phones. there's the potential for the watch. i don't know if there's a tv. what's on your radar? >> i don't think we're going to see a tv. it's kind of funny. we're sitting at -- tim cook has all these presents under his christmas tree to unveil for us today. i think we are going to see two new larger iphones. i don't know what's going to happen with the existing iphone, but we are going to see two new ones. we'll see a computer wearable device, we call it the iwatch. they haven't named it yet. and i think we're going to see revolutions in payments, the iwallet we're calling it. >> do you think there's anything musically going to happen? u2 is apparently going to be there. >> yes. >> you are a music guy. >> yes.

>> they just bought beats. >> yes. >> is there something we're going to see today? >> jimmy and u2 have a history with apple, if you remember they once launched a youtube-branded ipod many years ago. i don't think today is going to be a day we'll see music launches. they've always had musical artists perform at these events. u2 is today's artist. >> there's speculation they're going to change the headphone jack. have you seen this? because of the beats headphones. how upset would all the apple users be if they can't use the little white ear buds that break on me anyway? no? anyway, in terms of the watch, why is this going to work when every other watch we've seen has not worked? >> it's a good question. i think apple has a history of being connected with devices. the ipod and itunes worked well.

with the whole watch and health software that's going to be on the ios 8, we expect it. >> do you have a stake in jawbone? >> nothing to do with these guys. >> then there's fitbit and all these others. jawbone has opened up to take advantage of iwatch and anybody else fitbit can go on it now. do these guys go the way of the dinosaurs? >> just because apple launches a new product doesn't mean it's necessarily going to be successful. remember iradio last year. didn't make any difference to pandora. >> are you betting this will be successful? >> i'm not betting. just as a consumer i hope i like it and wear it and it's going to be fun to use. that's what i hope. >> and longer term in terms of the margin issue, we keep talking about china and last year everyone thought they were going to come up with a cheaper phone. all these new phones are going to be apparently more expensive and have tighter margins. do they have to come out with a

cheap phone? >> i think eventually they do. but right now the market isn't asked for most of the new phones shipping in china are larger than 5 inch screens. so they have to appease that market. and i think there's still room for it to grow. the question is, is the new phablet we're calling it affect the ipad sales? >> you want on this stock? >> i don't bet on stocks. >> you don't bet on stocks. okay. thank you for coming in this morning. >> thank you. all right, folks. let's tell you about mcdonald's. they are out with your august sales right now. global comps falling by 3.7%. believe it or not, that was better than expected. analysts had been looking for a 4% drop. but there are troubling signs in here. u.s. sales were weaker than the street had forecast. they street was looking for a decline of anl 2.3%. sales in africa down by 14.5%.

the street was expecting something close to that. if you listen to don thompson, the president and chief executive officer, he points out that yes there are some head winds here that they have over the long-term focusing on the fundamentalal elements of service and marketing for strategic growth. in the u.s. they pointed out that they had some issues in terms of addressing the service, value, and menu opportunities that they're doing those things to enhance customer relate advance and loyalty. . but they did say it was sluggish growth and a highly competitive market in the u.s. look at that stock right now. it is down by about 61 cents. up next, check this out. a popular philly burger restaurant posted this photo online. notice the 20 cent tip on a $60 check. when were you in philly? andrew? we'll tell you who's behind it next. and then deals in the rental car

industry helping avis budget get over the past couple months. if you caught our series the first time around, you would have made 22% in that stock. find out if it's a name ryan is holding after the break. and here are the futures as we head towards the opening on wall street. we'll be right back. there's a difference when you trade with fidelity. one you won't find anywhere else. guaranteed. did you see it? in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so. open an account and find more of the expertise you need to be a better investor.

♪ eat it ♪ eat it ♪ if it's getting cold reheat it ♪ >> i don't know if that's a reference to what we're eating around the table or this next story. check this out. if you want to take a look, there is a 20 cent tip on a $61 check. pyt which is a popular burger joint in philadelphia posted the receipt on its facebook page after lesean mccoy paid his bill and left. nobody's really sure what happened here. maybe mccoy got confused trying to adhere to the 20% rule. the 20 cent tip that lesean mccoy just left our server on his $60 check is going to come in really handy for that new official nfl mccoy jersey he had

his heart set on. that is a .03% tip. new record. he signed a $45 million contract two years ago. this year he'll be making almost $8 million. >> .20 times $61 would give you -- >> $12.20. >> .20 is 20%. people wouldn't leave, would they? >> what do you think happened? >> .2 is 20%. if you multiply times the bill, you'd come out with the right -- trying to give him the benefit of the doubt. by then adding it on either by giving him the benefit of the doubt there you must think he's really bad at math. i don't know if that's giving him the benefit of the doubt. would you rather be cheap or just that bad at math? >> or maybe he didn't like what he got. >> could have been service. >> maybe service was bad. we don't know. right. but still. if the service is bad, you leave

10%, right? have you ever stiffed? >> i've never walked out and stiffed somebody entirely. >> you haven't. >> don't look at me. >> you're not saying you haven't. i'm saying i haven't. have you ever walked out -- >> i don't think i've walked out completely. actually, once. you ready for the is? i was at a restaurant and they wouldn't bring the bill. they wouldn't bring the bill for over an hour. so we walked out. and we told them three times and said bring us the bill. we have to pay. this was 15 years ago nobody recognized me now or then. all this month we are opening up our platinum portfolio. our featured manager this morning is brian perry of the five-star hennessey corner stone fund. he joins us now with three picks back in april on the april 28th. avis budget has had the largest

return up 22% since then. huntington ingalls is up 3%. and his last pick, alaska air is up. today he's sticking with his bets and joins us to make the case. good morning to you, brian. >> thanks for having me. >> sorry about that. give us the story on avis budget. one of the things i was going to ask you is what you made. >> they've been kpu cuexecuting perfectly. they're rolling out some new markets coming up. in regards to hertz, you know, i think brian taking over is really going to be good for her. it's brian mcdonald. >> but is it bad for avis

though? >> there's always going to be some competition between the big two. i think there's still room for avis. they roll out new demand pricing models. and i think that continues later this year. and that's going to help them do better in execution terms. i really like where they are. i think hertz has got some hurdles to overcome. they're a good company and certainly will do well i think longer term. they actually meet all of their criteria at this point larger in the capital. >> give us the back story on alaska air. and are they a takeover target? >> you know, alaska is a great company. the secret is how they treat their customers. they've won zen years in a row for great. customer service. their pensions are fully funded. they're virtually debt free. they're spending money in the right areas in terms of cap

backs and replacing older planes with more fuel efficient planes. they do have head winds with competition coming into seattle against delta. but we think that they've done well operationally for the last three years. they'll continue to do well in the future. >> to the takeover target idea, could delta come in and scoop them up? >> well, that may be. we never buy something because it's a takeover target. but it certainly looks attractive, you know, when you start getting all of these airlines together. and get some synergies. you know maybe, but that's not why we would own them. >> if you were as you are an owner, would you want to sell that company? >> for the right price i'll sell any company. if somebody makes an attractive offer, our methodology is once that offer comes in, you may get a 10% or 20% in the stock. that's when we'd be a seller of it. >> give me the case for hundredthington ingalls.

. >> not really what i'd call a sexy story. but a great business. the company's done an incredible job in managing their costs and improving margins. you know, i think it's basically in this space. we think the company will do well in the coming years. they've got $7 billion in new orders this last quarter. their margins are increasing. that's a company we'd own. >> we're going to leave it there and keep monitoring these stocks. appreciate it very much. >> thanks for having me. coming e ining up, the make most famous glass for iphones feeling pressure from sapphire. we're going to ask the ceo of corning about it. and now facebook shares closing yet at $77.89. the company now valued at $201 billion. that makes it the 22nd largest

company in the world behind verizon but ahead of toyota. "squawk box" will be right back. when i'm working, things can get so hectic. so sometimes i need to find an easy way to express what's most portant 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 everyonehat 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 sometimes they just drop in. always obvious. 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." a city in europe going to the dogs. folks in poland celebrating their dachshunds.

some rode in carriages. it's the 20th year. >> it's the dog. >> it's in my ear. just what are you on? >> i'm on cinnamon cereal. i want you to know -- >> those were the most normal words that -- >> i'm just eating this. i can't keep it together. take a look at this. a water main break causes the road to buckle. look at that giant whirlpool the size of the street. one nearby home was evacuated. the water is flooding some areas -- yards in the area too. >> this is good. andrew, this is good. read these headlines please. just for our viewers.

>> let's look at some stocks on our premarket trade. >> dow components mc donalds. >> it's not fair. >> no, it's not. that was actually a smaller drop than analysts had been expecting. the avon products is sliding this morning. citi drown graded them to neutral from buy following yesterday's departure of chief financial officer. and pep boys also posted worse than expected sales. hurt by a decline in sales. >> coming up, the ceo of corning on how big of a threat sapphire is to its gorilla glass business. and later, another bad bounce for the nba yesterday. former commissioner david stern talks about the state of sports with gordon gund. that's coming up in just a

moment. first let's look at the futures. dow down by about 18 points. s&p futures down by just over one point. "squawk box" will be right back.

welcome back to "squawk

box," everyone. we've been watching the futures. right now the dow futures down by 17 points. apple holding a major product event in california. that's set to begin in just more than four hours. the tech giant expected to take the wraps off the latest iphone and maybe even some other new devices maybe wearables. we'll see. >> apple, dell, hp, lonovo, what do they have in common? they all use gorilla glass. the question today is will apple continue to use it or will they switch to sapphire glass? here to give us the lowdown on that but really probably won't tell us anything about it, corning ceo wendell weeks. gordon gund was on the board of corning for 23 years. and wendell, we used to talk all the time on "squawk box." and i was going to say

congratulations on assuming the ceo position from coo, but that was ten years ago which is frightening to me. so i understand there are certain things about sapphire that might be better, but guerrilla put -- there would not be a $98 apple stock and an iphone without grilorilla glass. at least it helped apple all along. would they be that disloyal to just totally get rid of grilori or would it be a combination? >> you're right we originally invented it for steve jobs and apple. so it's a great story that he tells in his biography. one of the reasons all the customers you named who are fierce competitors work with us, first we're the best in the world at what we do. so if you're going to innovate, you want to work with a leader. and second, we keep their secrets.

never do customers find out what other customers are doing from us. so regretfully, i'm going to keep apple's secrets. you only have to wait a few more hours and you're going to see a really exciting launch for them. i'm excited about it. >> there's some advantages to gorilla over sapphire too. >> if we're going to talk about -- i am able to talk about why do we do what we do. we've made a lot of sapphire in the past and we invented gorilla. so we can make and sell either and innovate in either. now, sapphire's good in that it's scratch resistant. that's its main feature which is why you have it on your watches. because you don't drop watches, but you do have to be careful about scratching. and that's its main feature. and that's why to date it's on around 5 million phones. it's a legitimate choice. >> it breaks easier than gorilla. >> so now let's talk about

gorilla. gorilla, first of all, customers care more than just scratch. they want long battery life. gorilla transmits more life, therefore uses less battery power. they don't want their phone to break when they drop it. and sapphire tends to be more brittle. people care about value. gorilla is about 1/10 the cost of sapphire. people care about how heavy it is. gorilla glass is about 40% lighter than sapphire and some people you would say the millennials care about how green the product is. and it uses a hundred times more energy, sapphire does, than glass to produce. >> wow. >> without giving away too much, can you mix sapphire and gorilla together? >> it is technically viable and possible to do that.

the question becomes what is the best composite material? there's other ways to do different composites to solve scratch. for us that's why we have invested strongly in gorilla as opposed to sapphire overall. and to date like i said 5 million sapphire phones, 2.7 billion mobile devices use gorilla. and going forward, they're both legitimate choices and the question will be who can innovate the materials best. >> how far away are we have having a phone that we can throw a phone across the floor and it wouldn't break? >> we have something coming up in the back half here and it's going to be a lot closer to that. still not all the way there, but it's going to be i think the biggest innovation in gorilla. >> have you seen these companies that offer these, like, peels that you can put on top and then take a hammer and break it and it still doesn't smash? >> yes. >> i would -- based on the

extraordinary program that corning has and has had for a long time, i'm sure they're going to come up with a lot of other game changing kinds of innovations certainly with gorilla glass they're going to keep improving it. and this will be your fourth generation, i think, coming up. >> you've got a great memory. >> and so just shifting a minute from gorilla which is a great product and just going to get better and better, when i was on the board we made some big bets on fiber to the home and diesel. how are you on those? >> thanks for asking. big investments back when you were on the board. the fiber to home, the problem is how do you build out full neighborhoods and connect fiber to all these apartments and houses? we did one where you can bend fiber and handle it just like copper. staple it, all of that. it makes it much more -- >> wrap it around a pencil.

>> yes. so we did a supply chain. so a customer like verizon, all they have to do is send us the blueprints of their neighborhood, we build it all in our factory and they can plug and play. that's really turned out revenues for us were up 14% overall in optical segment. we started with verizon. now it's all over the u.s. it's moved to canada, australia, europe, latin america. so it's on fire. >> one thing that's never gone away, wendell, and the future is daunting for media. but big tvs. i just don't think that i'll ever at least for me, maybe i'm not a millennial, but sports on tv at home or whatever is always going to be big. so what is the state of the art now? are there new things you're working on? is it lcd? is it l.e.d.? what is it right now? >> i remember way back when you

said i can't have a tv that's too big. >> no. and you also remember the way you made the stuff, you could cut. you'd make one piece and you could cut it in half so you can get a 50 or 55 inch. but if you wanted a 70 inch it was too expensive. is it still like that? >> no. the product we make for lcd is a hundred square foot piece of glass that's less than .7 millimeters thick. and they'll make ten 60 inch tvs. >> you can get a 70 incher and it's not going to be too expensive. when is that? we're going a house and we're going to need a big tv. as long as you're here, i use it for my own -- >> it's never too soon to get your next tv, in my opinion. >> i agree. is it going to be an lcd or l.e.d.? >> if you're going a large tv, it will be lcd. l.e.d. is just another way of saying lcd lighting system.

>> it will be corning glass. which is a good business to be in. >> let's talk about the economy overall based on what you see from consumers and what you see in the automobile industry with sales at new highs. how do you get a sense and where do you think we stand right now? >> for us we've experienced it as strong. over the last two years the revenues are up over 30% and so are earnings. we're experiencing strong, but we're not always the right guys to ask because so much of it is innovation based. gordon asked about diesel. we've invented this technology to clean up diesel emissions. if you ever rode behind an 18 wheeler. >> sure. >> that cloud of black stuff that comes out of the top, that's diesel particularly. it's bad for you, bad for the environment. so we invented this technology that cleans that up. if you're driving around here in one of those 18 wheelers, you'll have cleaner air come out of the top of the emissions than get sucked into the front. >> how many trucks have that

now? >> so now that is by regulation, all new trucks are going to have that. and that's driven us to almost 40% growth in just diesel year over year. so we're not the right people to ask about gdp. we're probably the right people to ask about particular innovations. >> i think one of the things that is outstanding about the company is its culture and values. you can see a demonstration of the values when wendell said he's not going to talk about apple announcements until after the announcement. i think that's going to be understood to really produce tremendous financial power, those two attributes of your company over time. very important. >> you make the glass for tv sets all over the world, don't you? >> yes. >> and you -- as far as tax policy goes, i mean, it matters to you doesn't it? >> tax policy definitely matters

to us. we're a big exporter from the u.s. still. the u.s. is not our biggest market. china actually is. >> how much have you left outside of the country? >> well, we have permanently reinvested a couple $3 billion outside and we'd certainly try to bring back more if we could. and tax policy matters. >> would you build more facilities here, do more here if you do it that way? >> i would say without doubt putting in place the territorial system, getting a tax rate that makes sense for the u.s. versus its global competitors will clearly lead to more exec activity and us to build more here. >> and they're probably pretty good jobs. how much you pay? hundreds of thousands of dollars? >> yes, we have great jobs. >> we would like these jobs here, wouldn't we? >> you would. we invested half a billion dollars in new york state.

this new diesel technology. they're fabulous jobs that change lives and communities all for the better. >> it seems like a no brainer. a lot of these people don't have brains from what i can -- >> i won't speculate on that. >> all right. wendell, now you can split it up -- that's really good news right there. how long ago did you do that change? >> just a couple years ago. so you're ready for a new tv. and i think 70 is too small for you. i'd go for 75 inch. >> i'm with you. size matters, andrew. >> if you're a glass guy. >> how big? 75? wow. by the way, that will be normal. >> prices are dropping and everything else. >> it's going to be great. >> why was it so long since you were on last time? will you come back. >> i will be back. if you ask me i will be back. and i will follow gordon wherever he goes. >> thank you. when we come back this morning, former nba commissioner

david stern on basketball's wall of worry. we'll get his thought on the league, the ray rice incident, and more. "squawk box" will be right back. dave & busters is filing for an ip o rks. they're looking to raise up to a hundred million dollars listing under play. plans to go public in 2012 citing poor market conditions at that point. earlier this year it scrapped plans to sell itself for more than a billion dollars. stick around. we'll be right back. starts at 6e nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours.

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welcome back to "squawk box" this morning. check out apple store's home page. it says we'll be back. we're busy updating the apple store for you and we will be back soon. this is following what apple has traditionally done before a big product announcement. if donald sterling wasn't enough, there are more controversies about racist comments. atlanta hawks owner agreeing to sell the franchise after racist e-mails were leaked. he brought this to the league's attention himself. joining us now is former commissioner david stern. also our guest host with us gordon gund who is ceo of the gordon corps. he drafted lebron james to the team back in 2003. commissioner, thank you for being here today. >> always a pleasure. >> i might add i wouldn't have gotten into the nba if it hadn't

been for david stern. he was deputy commissioner then and twisted my arm really hard to buy a team that was on its knees. >> yeah. >> or even further down. >> and in fairness to make the story complete, he made a heck of a deal. thank you very much. >> and you got none of it, did you? >> no profit sharing. just usual fee. >> he was a tough bargainer. he struck the right bargain. but we both did very well. the league having gordon who went on to be chairman of the board, chairman of this, chairman of that. you haven't lived until you get a phone call from gordon on the report you sent to me on page five, footnote six. i want to argue with you about that. i said okay, gordon. thank you very much. i don't even know what's in there. but i'll listen to what you have to say. >> david, it seems like you got

out of the hot seat just in time. there's been a lot the league had to face this year. >> it just tells you sports is this place people get opportunities to discuss issues of our time really. they don't feel that comfortable discussing them at home, at the work place. so sports does engage people about important subjects. i see the next one coming and coming. >> you didn't have twitter and facebook either. thank god. it sort of jump ramped up the volume, i think. >> that just goes to -- that's right. all of the pressure to get as many facts as you can and get them out there as fast as possible. >> we definitely want to talk about, i guess, the stuff in the nba and basketball. but i definitely want to get to goodell and ray rice and everything else. >> i'm going to disappoint you in responding. i agreed to come on because i love gordon. >> i understand. but as a commissioner you try to

do -- you can be a really good guy and you can -- it's a very difficult thing to navigate, is it not? and in hindsight it just makes it seem so hard. and with a player not only do you want to do things that are good for the sport so you're thinking about all these different things. but you also give a player the benefit of the doubt on this. we know in hindsight what needed to be done. >> i have no doubt that whatever as roger i know because i read it in the newspaper i haven't spoken to him said he got it wrong the first time. >> but there's calls for him to leave and be ousted and all this hyperbole. it doesn't seem fair. >> unless the next person does something the masses think is wrong. i was commissioner for 30 years and if you think you can please everyone, you can't. if you think anything you do isn't going to get strong outrage by some camp, you can't. >> and there's tough issues.

concussions, all of these things are really difficult to navigate. >> we're on several fault lines including the issue of race. >> right. >> which has always been particularly with the nba. >> and now domestic abuse. >> some of these will be here. when i'm sitting there watching the fact that fans are taking out bananas to taunt black players and you say are we past that and soccer. the answer we're not past that. we're not past that. we're not past anti-semitic rants at soccer games. we're not past a lot of things that we would like to think we're past. and sports is the place where that discussion always ends up

taking place. >> brings out the best and the worst. >> one thing i think is also from a business standpoint that's important is planning for your succession. david did a masterful job with that. adam silver is a great successor. and i think -- >> adam is -- you know, adam's succession was free at last. adam was -- we worked together for 22 years. in our sort of last dinner he said i've had five different positions, but he didn't say unfortunately. but they all reported to david. so he's doing a great job and he is going to be a great commissioner. >> what i wanted to ask you and we mentioned this in the 6:00 hour. there's an article kareem abdul-jabbar has published a piece on the levinson situation. he said if the ae ree that was

filled mostly with whites and he wanted to attract blacks, wouldn't he ask how to get others. how should a business person who owns a team like all this with all of the racial issues like this, how should they be discussed? >> well, they should be discussed as a matter of encouraging diversity. diversity in your audience. diversity in your workforce. diversity, diversity, diversity. and i think kareem is great. he's an author, a scholar, a producer. he has a perspective. but he's also walking on a kind of a faultline because when the old boy network as it is for business purposes i need to hire people that only look like my customers. if that were the case, we'd never have diversity in any industry with that perspective. so this is a very interesting

balancing act that could use some good discussion as opposed to going to the -- >> but i imagine the nba and other teams and leagues hire mckenzie and other consultants and i imagine there are conversations that say we need to reach a specific type of audience, a specific demographic given the affluence or the money or who the sponsors want to reach. the question of how to have that dialogue in a way that is fair, reasonable, and doesn't lead to something like this. >> right. i think it needs a certain degree of discretion on how to express yourself. i have to say that. but you're right about one thing. we talk about wanting to appeal to an 18 to 24 demographic. we are amongst a desirebly young african-american audience that sets trends and the like. discussions of race go on all the time. but on the other hand i remember stepping away from a potential

sponsor who was about to fire us because they wanted only to use us to reach a very narrow, quote, special market segment which was only african-americans. i said wait a minute, we want to appeal to a more diverse audience. so we're always having that discussion. >> didn't you press the players at one point to dress up? wasn't that something that you enacted? what was that about? >> that was about showing respect for the game. that was -- we felt and this was a joint decision by a diverse group that said you can't go to a game and come walking into the arena if you're dressed like you're going to the beach. and so this harsh dress code was for a short sleeve shirt, a collar, a pair of jeans, and a pair of shoes was thought you have to wear tails. and our players went one better and now they lead fashion. they lead the developing of designer clothing.

>> what did atlanta need, the hawks? i heard statistics earlier, ten straight years in the playoffs and they haven't sold out a single game. >> well, actually i think they need aggressive on the ground leadership and marketing.on-the leadership and marketing. the current president who is new is going to provide exactly that to them. i'm optimistic about atlanta. i think it's a great market. it happens to be -- it's a very diverse market. outside of los angeles in terms of the creative community, african-american creative community in addition to the entire creative community, it's a wonderful community. i think it's going to see great success. >> do you think levenson, this is just a way for him to sell? >> no. i don't buy that at all. >> is he arguing there weren't enough white people at the games? is that what he was arguing about? >> would increasing diversity ever mean bringing in more white

people? you don't look at it that way. >> well, if you go out to sell large numbers of suites and boxes and club seats and high-end seats, you are going to get a diverse mix. it's probably going to skew more towards caucasians than african-americans based upon the income distribution. >> just going back to your 30 years, i think when you started as commissioner, the league revenues were $118 million, something like that. when you left $5.5 billion. >> who's counting? >> i'm counting because i was there for 23 of those and i thank you very much. i think what would be interesting to hear is what you think the future of media revenue, which is the biggest part of it. >> well, the pressure is on adam and he is going to respond wonderfully. the network television is going to, i keep reading in the papers, it's going to double.

if they say that, it's going to be more than double. the digital future of the nba is extraordinarily bright because our fans love to congregate on social media. the global, as we sit here, the talk is whether the u.s. national team and spain will meet in the finals of the fiba world cup of basketball which is taking place in spain. nba games are in over 200 countries and 43 languages. i think the future really -- i don't want to put too much pressure on adam, but that number is going up by a lot. people who are saying these teams are trading at too high a multiple are wrong because the revenue flows are going to continue to increase greatly. >> thank you so much for coming in today. gordon is staying with us for the rest of the program. >> you haven't lived until you skied with gordon.

>> right. >> downhill skiing? >> and his wife is much better than he is. on so many things. >> thank you again, david. >> thank you for having me. coming up, jim cramer from the new york stock exchange. your fidelity green linea t and you'll see just how much it has to offer, especially if you're thinking of moving an old 401(k) to a fidelity ira. it gives you a wide range of investment options... and the free help you need to make sure your investments fit your goals -- and what you're really investing for. tap into the full power of your fidelity green line. call today and we'll make it easy to move that old 401(k) to a fidelity rollover ira.

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let's get down to the new york stock exchange. jim cramer joins us now. in hindsight are we going to remember what apple says today or are we going to remember how this whole ali babba thing plays out. they are both big events, don't you think? >> i think it's going to be ali babba. a lot of what happens with apple is a new device for developers to do things on. we don't find out what they are going to do with it. a watch isn't about the watch, it's about what the developers do. you unveil that. we don't know why we would want to see it and have it until other guys develop it. alibaba, as yahoo sneaks up, it's beginning to feel that it's another facebook and the public is involved. we'll have more with david faber. alibaba, if it's the beginning of a drop box, air b&b, the

market will be overwhelmed with supply. it could mark a short-term peak in the market. >> it could indeed. for apple to double versus alibaba doubling, we've got no time, jim. >> no problem. >> we never have enough. thanks, jim. see you in a few minutes. 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.

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got no time to thank you adequately, gordon, for being with us and bringing great guests. >> glad to do it. the foundation fighting blindness is in business to go out of business. you can help us. thank you. >> thank you very much. time for "squawk on the street." good morning and welcome to "squawk on the street." i'm jim faber with jim cramer. apple is hosting a big event today and is expected to unveil a new iphone among other much-awaited