welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. preorders for the iphone 6 are off the chart. the applewatch has people talking and everyone with itunes got a copy of u2's new album, songs of independence. that a half a billion accounts around the world. it turns out, though, that not everybody is a u2 fan. we'll explain the sour note apple hit. investors will have to wait until the end of the two-day fomc meeting to legislature what the central bank has to say. some policymakers expect to drop the language that says that the fed will be keeping rates low for a considerable period. if that happens, the market is likely to interpret it as a sign that we are getting closer to rate hikes. you have to wonder what that would end up doing to equities. investors, take a look, you'll see the nasdaq off by about 48 points. it had its worst session since

the end of july. facebook shares falling nearly 4%. although you can see the last pick on that was up by about 0.25%. this came after the company raised -- after the company's shares have risen 36% year-to-date. technology was the worst performing top sector. futures at this hour look like they at least at this point look like they're going to be indicate indicated down slightly. dow futures down by about 16 points below fair value. we'll be talking more about the markets in just a few minutes. in the next hour, we'll be talking with jeremy siegel, making the case for why he thinks people should be staying invested. andrew, over to you. >> thank you, becky. one of the rationalezations for the sell-off in tech is some investors are selling top performing tech names to make room for alibaba. jim cramer has made this comment. the e-commerce giant, of course, set to go public this week, boosting the price range now on

its ipo to $66. from $66 to $68. somewhere in between there amid strong demand. 88% of americans have never heard of alibaba. i'm mott sure whether that matters because i think only 1% of them even have a shot on goal of buying the stock. shares of tesla regaping ground in extend hours trade. as we just mentioned, that stock was hard hit. the stock was crushed yesterday following a morgan stanley research report. the firm's analyst warned he doesn't expect the stock to appreciate so consistently in the future. but good news for the company last night, massachusetts's court drew out a lawsuit seeking to block the luxury carmaker from selling its cars directly to consumers. if you remember just a week ago, i believe, we had elon musk on and he thought his stock was overvalued. >> he's said that in the past,

too. he's been pretty open about the idea. he thinks over the long haul -- >> he says for the long heal yes, but in the short-term, too high. >> our charts show this morning's trading, right? >> close at 78 on fridays. close like at 74 and change yesterday. why are we playing desire? was that desire,u2? >> it was. >> because i have a desire -- >> to not hear it? >> nope. i have a desire for a sausage and egg mcmuffin with cheese. you mentioned mcdonald's breakfast and i immediately started thinking about -- really? okay. so both of those stories are coming up. but you play desire and you

mention mcdonald's. i don't know why -- why would i draw that connection? >> it's so pavlovian. >> it is, yeah. cool.. they don't have any kale products for -- would you ever eat a sausage and egg -- >> would you ever eat a -- >> maybe they would introduce a kale product. >> appeared rue would have eaten it until recently. the diet is a new thing. >> that's right. i've been on that. >> you're not constantly moni r monitoring, it creeps back on. in other market news, companies are buying back pace. "the wall street journal" reports that in mid-august, about a quarter of nonelectronic trade executed at goldman sachs involved companies purchasing shares. since 2008, companies with the biggest buy back programs have

outperformed the broader market by 20%. just minutes ago, humana announced a $2 billion buy back. we're going to have biederman on. all he watches is how much stock is available for how much money is out there. the more people retire stock and the more it's brought back, supplies are lower and stock is more dear. >> yeah. >> that was an example of that and we're right near highs. but it's scary -- maybe i shouldn't have a pen with one of those things. >> why, because you click it and click it and click it? >> yeah. i'm putting it over here. you wonder about those high flyers. even janet yellen mentioned biotech. there are some extended areas of overloved areas. that was my point with allibaba. doesn't that -- that looks like what's happening. cramer was talking -- when we talked to him today, and by the way, the eagles look great. >> yeah. came back. >> with the no huddle.

they're a different team. they look good right from the start. andrew luck had never lost back to back games before because he's a gamer. and we'll talk to -- they won it. i didn't see it, but -- >> calpers is dumping some hedge funds. the nation's largest pension plan is pulling all $4 billion that it had invested n funds, arguing that they're too costly and too complicated. about half of all u.s. pension funds do have some exposure to hedge funds. >> one comment. i believe that that story that you just read, the two sentences, is the most important story that we will talk about in the next -- not just today, but perhaps weeks if not months. because if cahpers is willing to get out of every hedge -- this is not just out of a certain number of hedge funds, this is outs of the hedge fund class. and $4 billion, while that's

deminimus in the scheme of all pension funds, the question becomes weather others decide to ditch hedge funds. they lead the way on oolt of things. the funds will get hit, by the way. loungedale partners, calpers return over the next several years, only 4.8%. >> they have too far 8% to pay off the returns. >> 7.5% is their goal. this past year, they made 7.1% and they paid $135 million in fees. they have not been getting tremendously better rates than everybody else. so the question is whether you're new jersey or whoever ever, whether you're going to look out and say i want my money out and then you're going to have it -- >> look at returns just in the general market. this also is telling of something where we've had four

or five years of very good returns in the market. when things like that happen, it makes people sit back and say, wait a second, i'm paying so much for average returns? the hedge funds will tell you they are there for when the markets turn down. but in 2008, a lot of them did not perform like expected. >> i don't know if you saw those. the nasty comment by anthony scarmuchi, in the "new york times," who runs a fund to funds. he says, it's an admission by calpers that they don't have the right staff or the right managers. it was sort of a little -- >> maybe they need a fund to funds to help them. >> that was the suggestion. but i spiktd over the next year, you can see this end. that means those funds are going to have to get back money over the next 12 months, which means they're going to have to get out of the market. >> if you have money that flows out, at least on a temporary

basis -- >> he used to be something for us. or something? >> he was a contributor. >> but now you see that business insider piece, cnbc. business insider are so cool, the people they have writing those things. big loss. big, big, big. it's like, excuse me? really? right? did you see that? >> i did. >> that's quite historic. wow. who was that, one of the -- anyway. >> let me tell but another fund. plaquestone reportedly wants to raise backside 16 billion for its latest buyout fund. "the wall street journal" saying the firm has issued marketing documents for it. and a truth of sorts today in the battle of bill ackman and allergan. the two sides pending litigation yesterday and agreeing to hold a special shareholder meeting in december. ackman made a hostile offer for the botoxmaker back in april. they sued allergan alleging that it was trying to avoid a special meeting to give it time to find

an alternative deal. allergan is still urging shareholders to reject valiant's offer calling it grossly inadequate. in washington news, democratic senator ron waddy says the congress may still legislation this year, joe, to curb inflation. people thought this was off the table, but the suggestion late yesterday that it's still back on the table. >> yeah, right? really? they're going to write lection that's still not passed. they should do it quickly, too, i mean, if they have any chance before november. it's going to be even less likely to pass after november. >> did you see there was an article over the weekend that suggested that hillary clinton was actually against legislation to curb inversion. >> wouldn't surprise me. she's much more reasonable than the people that are -- that make up those -- the left side. >> or closely aligned with business interests. >> of which obama is sort of the

cheerleader for that section of the democratic party at this point. he appeases those. >> look at all the things that -- what i can't believe is that immigration, that he -- nope. any backbone on any issue? sorry. >> it's just -- you know. but i digress. i saw something -- no, go open the. >> let's get a check on the markets this morning. as we showed you, things look to be indicated lower this morning. yesterday the markets were split with the dow up by about 43 points. s&p down by 1.4 points and the nasdaq down by 48 points. nasdaq did have its worst day since july 31st. let's have a look at what's happening with oil prices. oil prices for wti down another 11 cents to 92.81. so below $93. brent crude up just about two cents to $97.90. also, the ten-year note at this point looks like it's indicating

2.565% on the yield, so a slightly lower yield than where we were yesterday. the dollar this morning looks likes it is down against the euro, the yen. it's up against the pound, but the euro trading right now at 1.2955. still below 1.30. gold prices yesterday rose for the first time in six sessions. this morning, up another $4.20. $1,239.30 an ounce. >> as we talked about at the top of the show, the fed kicking off its two-day policy meeting today. markets started the week with the dow up and the nasdaq down and the s&p flat. can investors expect this mixed mood to continue until we hear from yellen and company, joining us now, jim dunnigan, chief investment officer at tnc wealth management which has $130 billion in assets under management and paul schatz, president of heritage capital. and we still do -- >> are coming together in support of -- >> oh, that's interesting. >> i think we're hearing

somebody else. >> yeah. we had -- >> is somebody from capitol hill. >> they're coming together to support something. i don't know. that doesn't sound -- sounds look it might have been a blast from the past. i don't think they're supporting anything recently. anyway, jim, we saw with the jobs number that the fed still matters. it was a weak jobs number, the market traited up based on traders still want a -- you know, the rates to come later rather than sooner. do you think we're going to hear today that they were moved considerable and will that make the markets a little bit cautious? >> i think we will, joe. we'll get a current assessment of what the fed thinks and new projections on both growth rates and interest rates going into 2017. so most market participants will be looking to connect those dots as to what the future will be.

most likely they will cop va they will be data dependent going forward. >> so we've got to go through -- we've prepared for this for so long and we're finally going to see it. so you think that early '15, mid '1 '15? when do you think we see the first quarter point rise or whatever it is? >> pnc's forecast for the rate rise will be in july 2015. so about mid year next year. >> where are you on that, paul? does that sound reasonable? >> yeah. i think the fed is signaling that rates are going to go up, probably to 1% sometime by q3 of next year. i don't believe it. i believe it, i don't agree with it. but that's what the fed has been signaling. i think they continue to fight battles that aren't there. joe, there's no inflation. money velocity is going straight down since '98 and it's probably at the lowest level in 40 years. it doesn't make any sense. our economy, it's not in okay shape, it's teetering. i cannot figure out the life of me what the fed is seeing.

you know, you have richard fisher and plosser who both wanted to raise rates when lehman was collapsing. i don't understand what they're seeing, what's the rush to raise rates right now or even in mid '15. it doesn't make any sense. >> there's a huge conparticularent on the other side of that that says that the money is just sitting around, no one is using it, anyway, and, you know, when you're not getting any positive effects from it, except maybe inflating asset values, that it's time to get away from the emergency accommodation and when things are going much better. kwo -- paul, you're one of the few that they think ought to just stay at zero? how long should they stay at zero? >> stay at zero forever. >> joe, look at history. post financial crisis recoveries. times of fed works. they need to wait through the next recession. i think that's the problem. every time we get a post financial crisis recovery, go

back to the '30s. go back to argentina, japan, look at the mistakes the fed makes. they see this ray of sunshine and they think, you know, the green chutes and they all of a sudden start beating their chests like mission accomplished. our economy is far from normal. it's a very uneven, it's a frustrating recovery. they need to wait until we get through the next recession, which probably comes in the next year or two from -- and china based, japan based, european base and we get a little ripple here. but, again, there's to reason, there's no rationale to raise base. just because money is not being used, it's a not a rationale to raise rates. >> that's definitely an outlier opinion, eric. do you adhere to that at all? >> no. i would disagree with that, joe. i think the economy is improving. we're looking for 3% plus growth for the balance of 2014 into 2015. and this expansion probably lasts for two or three years.

so i think we are approaching an escape velocity. i think it's probably, as we get to the middle of next year, time for the fed to let the economy stand on its own is get back to at least neutral real rates, which is a way to go. but it would be somewhere around 2016 by the time we get to that. but as we see job growth improving, earnings improving, i think the backdrop is pretty positive here. >> there are more people, i think, that would argue mistakes central bankers have made in the past have been by staying easy for too long because of all the dislocations build up and you get these mispriced assets that eventually reprice that people aren't prepared for. it seems that this common sense would tell you it would be great to stay easy all the time and, you know, it's always the harder things to do that are usually the right things to do. you look at what volter did. we all remember him as probably one of the great fed maestros of all time for raising rates. i don't think it takes much

courage to stay at zero, paul. that makes no sense to me. >> no, i think it takes a lot of courage to stay at zero, actually. >> really? >> because the pressure -- >> let the good times roll. no interest on any -- you can borrow money, as much money as you want for no interest and there's never any negative consequences of that. it's when people actually charge money for borrowing that you get a negative -- that makes no sense. but we'll watch. we'll see who is right. i have no opinion. i'm just looking at -- anyway, we've got to go. >> plain old joe. >> thank you, gentlemen. we'll see. >> thanks, joe. >> call stan up and tell him how misguided he is on this. >> druggel miller? >> yeah. >> when we come back this morning, a corporate sponsor decides to pitch the vikings over the adrian peter sorn controversy. plus, mcdonald's raises the stakes in the breakfast wars at least for the next two weeks. not a u2 fan? there's an app for that.

apple dealing with some sour users, find out how on squawk.

live shot of the capital. music downloaded automatically for apple, with u2.

but quite a few are not a fan. apple is now releasing a support page that will allow users to delete the music. so you automatically got the muk, and now it has to teach you how to get rid of the music. you know, no good deed goes unpunished. >> i like u2. just in case you were missing search for the last 13 years, it is making a comeback thanks to pressure on social media. coca-cola is bringing back surge. it's a lot like pepty accepts mountain due. it will be sold on amazon and it sold out twice. it's $14 plus shipping for 12 packs. it's 130,000 followers, raised $7,000 to spend on facebook advertising and to create surgemovement.org. have you ever tried this? >> i have not. >> mountain dew i like. surge, i don't know that i've ever had. >> a lot of caffeine. joe. >> yes, andrew. oh, your favorite topic.

a much more beautiful day with an egg mcmuffin, but it's empty. i don't see anything around. mcdonald's taking the breakfast wars to the next level starting today. and for the next two weeks, the fast food giant is going to offer a free, small coffee during breakfast hours. it's the second time mcdonald's has launched a free coffee give away. that's it? that's it? >> you want a free egg mcmuffin? >> a free small coffee? no. i want some news. this is not going to -- >> it's not going to satisfy you? -- >> they've been some issues out there trying to get things restarted. this is one way to do it. bring you in with a small coffee and then they figure maybe you'll -- mcrib, bring that back? >> no. >> it's like the chicken nugget machine. >> front page of the "wall

street journal" and they brought it back temporarily. >> did you get, by the way, what i sent you over the weekend, the dust mites? >> no. >> yes, you did. >> no. >> i sent it from twitter. it was a microscopic picture of a dust mite eating skin. >> oh! >> yeah, and it was in color. and they looked like this. they've got these -- >> i'll go back and look. i missed it. >> how could you -- i do that over the weekend for you and i get no -- >> you do things to creep me out. >> i get no reaction. why do it, then? >> i'm looking, i'm looking. >> while you're looking -- >> i sent the e-mail from twitter is what i did. >> oh, no, you must have gotten blocked. i never got that. i didn't block you. it probably went to my spam. >> let's tell you about the radson hotel chain suspendsing its sponsorship of the minnesota vikings, the decision coming after star running back adrian peterson was charged with child abuse in texas. the hotel aes sponsorship includes a press banner that you

see behind players and coaches when they speak at those news conferences. guys, i would argue this is one of those potentially -- you just don't know if it becomes something more, be wuk talk about sponsors abandoning the nfl or abandon teams. that's when it becomes -- >> i saw the vikings yesterday. their response is you know what? there's something called due process in this country and the due process, we'll see what the courts do and what the police decide to do and then we'll make our decision. >> sure. but for a sponsor, it's very different. >> i'm not talking about the responseser. i'm talking about -- where is the daily news on this? >> the issue becomes if the sponsors leave -- >> getting bad public publicity -- >> the process doesn't matter. >> but it's yellow journalist, andrew. it's sensationalist yellow journalism. >> hold on. i actually happen to support roger goodell. but having said that -- there's

a real problem inside the nfl and it would not surprise me if sponsors decided that they -- >> what is the clear problem in the nfl? that they haven't cured domestic abuse in this country? >> look at the numbers. we've talked about this. look at the number of threats, whether it's -- >> arrests. >> it's not a cross-section of anything. you have young people with lots of money and they're coddled and arguably the envelope has not done enough to create a culture where you're not having these problems. or at least not having a problem to the extent that -- >> people now are taking it to the point that if you're hitting people on the field -- >> rosie o'donnell said that yesterday on the new version of "the view." >> i'm so glad she's back. but i hear "the view" stinks at this point. that there's no arguing, none of the -- >> i just read it. it's toothless. it's 17 years old and none of

the original people are there. what is it? >> also change over time. >> you know what? i'm not worried about that. i'm worried about what are we running at 1:00? something really compelling quality squawk alley. you don't think he can trash the view and get away with it? unbelievable discussions between fortt and quintanilla. there's a lot of the same issues between those two. they're metro sexual types. they talk about all this stuff. they do. better than "the view" does. coming up, fighting ebola. president obama expected to announce plans to help stop the outbreak in africa. will it be too little too late to get the epidemic under control? we've got that next. as we head to a break, take a look at yesterday's winners and losers.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen alons with andrew ross sorkin and becky quick. why send you things if you're

not going to -- folks, we are going to make a full color picture of a dust mite feeding on human skin. did you see it, though? >> i did see it. >> beautiful colors. it looks like an alien, doesn't it? those three things coming out of it -- it's going to take us a couple minutes to make it, bull we'll talk about it as soon as we can. chinese regulators reportedly questioning toyota's lexus division over parts pricing. this coincides with similar action against sales units of vw and chrysler. both of them fine this month to proximate fixing. mercedes benz and land rover are being probed. china is coming up global scrutiny for companies including microsoft and qualcomm. a lot of this quid pro quo, things happen in global relations, global trade. and merck plans to seek fda approval for its long delayed

experimental osteoporosis drug. the pill proved effective in late stage trial, but it was sociologied with what are pretty rare thigh bone fractures that are seen with standard treatments. and new york's attorney general wants to -- the manufacturer is illegally driving patients to its newer patented drug saying the company wants to avoid losses from cheaper, generic alternatives coming out next year. recent subsidiary. which didn't happen too long ago. forest labs. every time a company did this, schneiderman got involved. over the last 20 years, the

excel version, this version, that version, all that stuff. and rightly so, the drug industry has been criticized for not developing new block busters, but for figuring out ways to extend their patent protection by just slightly changing the formulation of a best selling drug and then they can avoid the -- >> but the generics can still sell the old version. >> right. >> first, andrew will tell us something else. >> president obama visiting the centers for disease control in atlanta today. he's unveiling a strategy to contain the ebola outbreak. joining us now, dr. scottlieb. meg terrell is also with us this

morning. before we get to what the president is going to do, there was this headline that blaired yesterday that either of you can speak to which suggested the cdc sent out a notice to hospitals in the united states that said be prepared? >> yeah. we have a reason -- >> was there anything more to that than we should be prepared generally or is that because they know something we don't? >> look, it's prudent. the first cases are going to show up in the u.s. in hospitals that probably see a lot of people coming over from the region from the affected region. so hospitals like queens and elmhurst i would suspect are on alert right now. >> scott, you said it's a given, the first cases will arrive at these hospitals. >> i think everyone now assumes we're going to see some cases here. we could see isolated clusters or infections, small outbreaks, maybe close contact telling members coming over.

i think we feel confident here that we can cane it assuming that the virusist doesn't migrate and change how it spreads. >> really, the concern is does this mutate and change into more easily transmissible. right now, the u.s. government is emphasizing they don't consider this a risk to the u.s. or are trying to make that clear. but what's expected later today from president obama is expected to ramp up the efforts in west africa. they're getting the military involved now. they're going to send as many as 3,000 people to west africa to set up demand there. they're setting up engineers to drastically set up the number of beds available to 1700. they're going to try to train 500 health care workers a week in west africa. they're drastically trying to ramp up the response. are these military doctors they're sending? >> doctors, engineers, folks trying to be on the ground to set up these efforts and they're sending, you know, folks to train burial teams. they send 5,000 body bags to the w.h.o.

right now, the death toll is around 2,400. they're expecting it to get worse. >> just look at the calendar. are we late here? this has been going on for six weeks if not more. >> yeah, it's a huge criticism. >> we are late, but this is clearly a robust response. the response is very much focused on liberia and at this point we should be treating western africa as one big hot zone. the virus itself isn't going to respect national boundary. we need to pulse resources into other nations there, as well. >> so we're going to be sending our troops there. what is the possibility of contagious for them? >> they're going to be very careful about that, clearly. that is a concern. they're trying to make sure of is surveillance. you're trying to make sure this doesn't spread across boarders. they're trying to make sure to be very, very careful, surveillance efforts, contact everybody. they're trying to provide a lot more protection gear for people there. all the suits that you need to

wear, they're wearing thousands of them over there. they're sending 400,000 kits. >> they want lockdowns in higgs neighbor. would troops go along with that and be serving to help enforce that? >> they're trying to participate with everything local governments are trying to do. it's something they're really, really emphasizing. >> that's been hugely criticized. >> they pulled back in quarantines. that's a losing strategy and it shows how desperate the nations were. >> this virus has been around forever. why would it all of a sudden become airborne.? >> it's sloppy how it

reproduces. so it trades an excessive number of mutations. when a person gets infected, they a lot of arrant sort of viral reproduction. so it's going to migrate. it would be unusual for a virus to mutate in the way it changes its mode of transmission. people are clearly concerned about that, though. because of the scope of the infection, you couldn't see a lot of migration. >> and i learned from you, it's a high titer, so that people that -- relax. people that do have it, there's a lot of viruses in that so there's a lot of opportunities for a mutation, right? >> right. that is exactly right. >> i have a political question. we're going to spend $88 million -- >> we've spent $175 million. and the pentagon wants to reintegrate another 5 million.

>> this morning, the w.h.o. is sending resources. the u.s. is considered one of the bigger responders here. it's trying to coordinate an international response. i would like to see -- this is where? western africa? it's a big place, obviously. i can't imagine -- maybe this is a good time to get a good deal, i guess. you would avoid the continent at this point, wouldn't you? >> i think you would have to be worried about going into the region. the european space is probably a biggest risk than the u.s. does because of immigration patterns. they should be doing much more. they haven't stepped up in the way the president has here.

>> just with that -- signs of life for tourism and everything else. scott, thank you for wake up early in los angeles with us. and coming up, the spaceman. how amazon is getting involved with nasa. as we head to break, a quick check off what's happening in the european markets right now. want to change the world? create things that help people. design safer cars. faster computers. smarter grids and smarter phones. think up new ways to produce energy. be an engineer. solve problems the world needs solved. what are you waiting for? changing the world is part of the job description. join the scientists and engineers of exxonmobil in inspiring america's future engineers. energy lives here. e

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welcome back, everybody.

the two-day fed meeting kicks off today. we'll have the results in the next hour. then we get data. we get the producer price index as expected at 8:30 a.m. eastern tim. later today, the house foreign affairs committee will be holding a hearing on the obama administration's isis strategy. john kerry is spec'd to testify. that is today's squawk planner. jeff bezos knows about shopping. the amazon founder's start up is part of a bid to deliver astronauts. the firm is called blue origin. it's building a nasa spaes tech theme to carry astronauts to and from the international space station. coming up, get ready to get grossed out. few have been had breakfast, you may want to wait a few minutes. plus, dominic chu will name

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oh, no, no, happiness. >> "usa today," people have these polls about where the

happiest places are. i've seen polls in the past depending on the way you study it and the parameter webs they're suspect sometimes. the united states never comes in very high. and it is true, working and succeeding and people say we live to work where other people work to >> okay. but you know, here are the winners here. number one, happiest people are in panama. panama. >> why? >> they did stop playing that britney spears music really loud to get noriega out of his -- remember they were doing that. they finally turned that off. that made people happy. this makes a little sense, andrew. because they're expanding the panama canal so there's lots of jobs everywhere. and apparently panaman people have jobs. el salvador is number seven. el salvador? it's a nice place and everything, but it almost makes me think they must be gentle nice people too because they don't have -- i don't think of

el salvador as being quite as easy a place to live as the u.s. guess who came in last. >> united states. >> no. no. they're 12th, andrew. >> who? >> syria and afghanistan. they apparently have had a -- on the three measures they look at, they're really bad on all three measures. >> tell us the measures. >> there's all kinds of -- >> we need to know how this calculates. >> i've seen where they measure prozac prescription rates and that takes points away i. i've seen the weird way. it's the media. apparently some places that have high obesity, they think they're the healthiest in the world. that's why the government can then design some culturally sensitive programs to try to cut down on that because people think they're healthy. >> i know the true gauge to happiness. happy wife, happy life, correct?

>> yes. >> i think you would both -- >> i used to be comfortable discussing that, and now i don't know. >> why? >> it seems gender specific. >> there is a new study by rutgers who studied 400 companies who had been married on average 39 years. overall this group rated themselves very happy. five out of six. but it turns out it's entirely reliant on how happy the wife is. that's because women have a tougher time of brushing off the frictions of day-to-day life. men can kind of push that off a little bit. i can say this. it's true. >> are you going to attack the source of the news? >> i was going to say, well -- >> the study was rutgers. >> i think it's true. >> then it goes on to say in marriages where the men were happy that it didn't help at all in terms of the women being happy.

>> no. >> i don't know what to say about that. really. >> it means pay attention to us. >> it means i'll let you talk about that one. but in my own life, i am very happy. and it does correlate in large part. there's a high correlation between. whether penelope of pilar are happy about this. >> you're being very quiet about this. >> happy wife is happy life. she's the boss. >> i see the way you whip him. >> not true. i want him to be happy too. >> what is that sound i hear? yeah. >> i have a story in today's paper which by the way was hard to write. >> the atlanta guy. >> the owner of the atlanta hawks. really this issue of racism -- >> what did you write? i don't read your column. >> i know you don't like to read.

>> normally it's anti-corporate -- >> i tell you, the issue of bias in business has -- is something we don't ever really talk about. >> oh, here it is. >> it's an issue in wall street we don't talk about. there have been discrimination suits for everything. wells fargo paid $130 million years ago because of me mortgages. look at newport cigarettes. they specifically target african-americans nap is the business. and i imagine if you were to go and look through their correspondence and marketing news. you think about remember the guy who came on and talked about the yoga pants. lululemon discriminating against effectively fat people. or you have the guy from abercrombie and fitch who said he will only hire attractive young guys with six packs so it

becomes very complicated. race is a very different thing than some of these other kinds of things. >> have you got a conclusion for this long, drawn out article and discussion you're having here? what is your conclusion here? >> the conclusions is we've got to be careful. which is a copout. >> stop the presses. you're breaking news. >> it's an interesting setting to see how attitudes change. >> it's interesting try to watch him write a long piece without getting in trouble which is what is interesting. especially with "the new york times" and the pc police at that place. anyway -- >> that's not true. >> what's not true? >> the pc police part. >> there's no pc police at "the new york times"? >> no. self-policing. >> and there's no dust mites crawling up your leg right now feasting on your skin. this is what it looks like. i told you it looks like the thing from aliens. and it's a beautiful color picture. >> how is that human skin?

i'm more freaked out by that. >> i think those are actual pictures of three dimensional individual cells maybe or something. >> gross. >> the skin might be the background and the other stuff might be a big turd behind the thing. i'm not sure. it looked like he squeezed that thing out. that is unbelievable, isn't it? look at that. and bedbugs and other germs. >> sorry i missed it. >> it looked like a cartoon. >> it's a cool color, isn't it? >> when we come back this morning, former honeywell chief jumps on the debate about inversions and how to handle the threat of isis. plus jeremy siegel joins the conversation. he will tell us why he believes the dow will end the year at 18,000. "squawk box" will be right back.

the fed and investors waiting for the next word from janet yellen and company. the professor jeremy siegel will tell us more. >> into the bear's den. >> i immediately regret this decision. >> find out which five well-known stocks are down 20% from their highs. >> the sneaker wars. nike stepping on the court with the new lebron 12. under armour is a player coming on strong. which stock will be the real winner? the second hour of "squawk box" begins right now.

good morning. welcome to "squawk box." i'm andrew ross sorkin along with joe kernen and becky quick. joining us is larry bossidy. we are watching the weather this morning and a serious late summer storm. check out these pictures coming in at this hour. hurricane odile causing serious damage to buildings and infrastructure in mexico's baja or should i call it baja, california? the storm has been downgraded. but continues to barrel through the region. odile is one of the worst storms ever to hit he luxury retreats of cabo and la paz. >> it is odile. >> odile. >> now to today's top stories. federal reserve policy makers begin a two-day meeting today. when the central bank issues its

statement tomorrow afternoon, many expect the fed to remove the phrase "considerable period" for how long ultra low rates might last. we need to tell people that are on the radio, down 24 on the dow. down 24. and the s&p down 1.93 points is where it's indicated for an implied open. the 10-year which got to 2.6 is now 2.56. but if you just look at the last three weeks or so, it has gone from about 2.3 up to 2.6 pretty quickly. pretty sharp rise. we'll see whether it turns back down and stays in that -- you can see the resistance. you can't if you're on the radio, but there's resistance at 2.60. one says we g back to 2.80. and if this continued, it's

probably not. and allergan will hold a special meeting on december 18th. hoping to replace board members with his own nominees at that meeting. sears turning to its own chief executive for its latest cash infusion. esl investments will lend the retailer $400 million giving it enough cash to get through the holiday season. the loan is secured by company property that matures on december 31st. that could be extended another two months if necessary. leisman says -- oh, oh, oh, oh. oh, boy. uh-oh. the term is not considerable period. >> what is it?

>> considerable time. he entitled us not to be picky. and then he goes on to say the phrase is "considerable time," not "considerable period". >> for fed watchers, every word -- >> he needs to dress me down a little on this one. so that's what i got to look forward to. i'm going to get attention. justice. >> our next guest says the economy strength will impact the risings interest rates. he is standing by his prediction that we'll by b hitting dow 18,000 by the end of the year. joining us is jeremy siegel. he is professor of finance at the university of pennsylvania. and professor siegel, it is great to see you this morning. i know you have been right for a long time with being bullish. but 18,000, that means the dow

has about a thousand points to make up in the next four months. you really think we can get there? >> right. but a thousand points is about 5%. that's not that big an increase. and my belief that second half of this year gdp growth is going to be between 3% and 4%. we're going to hit very near $120 on earnings. and even if interest rates go up a bit on the long run, we're not going to get any fed hike, i think, until spring or summer next year. >> you also think the fed will likely drop that phrase "considerable time." if that's the case, you don't think there's a knee jerk reaction just to kind of clear out of equities for a bit as people think maybe the rate hikes are coming sooner rather than later? >> yeah. i do think -- i think they're going to remove "considerable time." i think there will be a bump on

wednesday when that happens. remember if you take a look at the fed funds futures market, they are below the rates that the fomc members believe are going to prevail at the end of 2015 and '16. that's why we've got some fomc members saying that really the market is behind the curve. we usually think the fed is behind the curve. but maybe this time the market is a little behind the curve over here. so i do think there's some room for some volatility in the market over the next week when they realize that, yeah, this period of zero rates is going to end. but if you take a look at the big picture, rates are still so extraordinarily low that money i think will continue to flow into equities. >> professor, i'm hoping you can weigh in and maybe larry as well

this morning. i argued this is the most important story of the morning. which is calipers announcing they're going to get out of hedge funds. they're going to take $4 billion out. and the question is whether this is the beginning of a trend. whether we'll see other public pension funds or even private funds take money out of hedge funds and what it all means and whether it's the right decision. >> well, the hedge funds have lagged considerably. they've generally been way to bearish on the stock market. the stock market has been the leading class gainer. so when index funds which cost investor is virtually nothing. charging 2 in 20. i can understand some discouragement over there. you can say that marks maybe the end. they're getting too bullish. but i don't think so. i still think this bull market is going to outperform equities. take a look at what happened to

commodities just over the last few weeks. and i think that's very, very bullish. those inflationary pressures i was worried about in the summer have really just about dissipated now. that's certainly going to be very good for interest rates and good for the stock market. >> larry, kal pers spent $135 million in fees in the last year. are those fees well spent on a 7.1% return? >> i think hedge funds is a different investment vehicle. i mean, they're short. they're long. they're playing a lot of different market mechanisms. i think there's been a trend of late to go to index funds that are long-term equities. i think that's where they're going to get a return. not only have they lagged over the last year or so, hedge funds, and that they're expensive. they're also not playing the market as some would like to play it fop the question you asked at the outset, do you get a good return on that $135 million? they obviously said no.

>> do you think other public pension funds -- you ran a big company that has its own pension fund. >> right. on the other hand we farmed out our pension fund to different investors with different strategies. and we didn't have hedge funds at the time. so i think hedge funds have done a great job. but in certain markets they're not particularly as appealing. you got -- you can't play both ends against the middle and get a return that you're going to find satisfactory. >> you need more than calipers. there's always going to be a place because you need something more correlated. if you never are protected -- >> the question is whether it really isn't correlated. right now it doesn't look correlated. >> it depends. >> other times where gary says a lot of funds, he calls them closet indexers. >> i wouldn't cry too many tears

for them. >> some are more appealing than others. >> professor siegel probably would agree with that. >> and another factor, you know, is the active pickers of stocks that have gone into equity continues. this is something we've talked about for decades that very few active managers can beat the index. even when they are long. so when they take 2 and 20 on top of that and go into other asset classes, i can see why they're discouraged. >> you're listening to dan vogel down there. as you know that's what he's been telling everybody for 20 years. >> i know. he has been stay -- we have been saying the same thing. the data keeps on coming out and yet hope springs eternal for investors. gee, i can beat the index. i guess it's human nature. we're always going to have those people trying and mostly failing.

>> chip kelly can show you that one man can make a difference. all right? am i right? >> absolutely. >> it's a different team down there last night. right with the first drive? >> it was incredible. i knew i was going to be on early today, i didn't care. i wanted to stay up late for that game. i'm glad i did. >> jeremy, thank you for joining us. we'll see you again soon. >> thank you, becky. >> let's drill down with our guest larry bossidy. always have things to say about the economy that are cogent and useful. i see one of the things you want to talk about. something made me think about this, larry. i told you the happiest play on earth is panama. you know why? because of the panama canal, they're expanding it. jobs are everywhere down there. so people are walking around smiling because they have jobs. and your point is we're not doing enough to foster private sector job creation. >> we have a lot of good

positive statistics now. but the job market is still choppy. decide having a dysfunctional congress as well as the tax code, we're not doing anything to create jobs. hard to get green cards for talented immigrants. not to mention the fact they come over the border illegally almost daily. we've had had trouble with tax inversions. we don't do much about it. i don't think they're bad, but if people do, what are they going to do about it? and thirdly, it was important to me that the nlrb which is now stocked with liberals tried to charge mcdonald's this summer with being joint employees of the 3,000 franchisees. even though they have to do with terms ands can conditions of the business. we don't make the environment for business as nearly as positive as it can be. another example is we won't approve the keystone pipeline.

so i do think that we can do some things which in the aggregate can be positive for this country. >> whey always make a point in, people are on both sides of the aisle on all these issues. i'm not going to get into a discussion about whether it's good or bad. but helping out people at the bottom with a $2 increase, that's not going to make anyone -- it may help a little bit. a lot of those people with second jobs. but creating $80,000 a year job, creating $90,000 a year job, high paying jobs where they're needing, that would seem to me if i was going to stand out in front of people and hammer home a theme, that's the theme i would be hammering. private sector creation of good jobs. >> i agree. one of the ways you can help

with this, this student debt now is out of control. $1.3 trillion across the country. if they want to be helpful, they ought to put some more pressures on these colleges and universities to contain costs in a better way that makes education more affordable and also help the kids who come out of college with the enormous debt. they'ral ene atalented kids who to work. we have a lot of graduates who can't find the quality jobs they need. so raising minimum wage, i wouldn't fight. i think it's going to hurt the people who are trying to help. but i sure do agree with you -- >> get that out of the way to get to actually creating the jobs you need for the private sector. >> people who drive the country. >> i thought the nlrb, a couple of those guys, i thought they found they were appointed illegally. that's probably still under appeal. >> it's under appeal. >> he'll be out of office before it gets settled. >> i hope so.

they're confirmed liberals. they're not going to help the job creation market in any sense. it's difficult. >> all right. we'll have more with larry throughout the show. up next, we are bear hunting in september. a host of big names are down more than 20% since the market last hit new highs. our dominic choo will be long for a game of stock show and tell us if stock show and tell when "squawk" returns. and tomorrow don't miss peter thiel. if you have a question for him, post it on our facebook page or on twitter.

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♪ welcome back to "squawk box." we're bear hunting in september. dominic chu is here with a covert direction of name ta stock. the market still close to record highs. you have some names and a little bit of a game for us. >> in a bit of a game. 86 stocks in the large cap russell 1,000 is in what we call bear market territory. so we want to share a few of them with you.

so let's kick off our guessing game. each of you got five paddles in front of you. they've each got stocks on them. i'm going to give you and our viewers clues and your goal is to be the first one to answer. for those listening on sirius radio, try to name the stock. since hitting a high on march 7th, shares have fallen around 20%. the lions share of its net revenues nearly 2/3 comes from andrew's favorite state. is nevada really you're only state? >> only because i like to call it nevada. >> fair enough. you're right, becky. >> i'm following becky on this one. >> you don't have to be one of its high rollers to enjoy the profits. >> you just gave it away. >> you got the right answer. >> joe is like, no. not so much, joe?

joe's just not playing the game. >> stock number two. >> all right. here's a stock whose shares have falled since march 5th. still some consider part of the group internet 2.0. not so much that one. if you listen carefully, you can hear the active user tuning in. >> pandora is the big winner. >> ding ding ding. there you go. so internet radio company, that stock is taking a hit. >> these questions, you're giving too much information. >> well, i want to keep this moving because we got a few of these to get through. >> please do. >> joe's fallen down. our last one here. it's been a rough ride for the stock. the single biggest drops since its highs in 2014. it's down 70% in that time. $2.5 billion company. the company's hq is located in the same town at brigham young,

university. it's come under scrutiny because it is a multilevel marketing. >> bam. >> i had this early. i'm going early. >> nuskin. >> you know i'm looking at all the charts. >> you're cheating though. >> yes, i am. yes, i am. >> i'm the winner then. thank you. >> you are the winner. >> i had nuskin look. i looked but i had it up first. >> you looked? >> yeah. >> you cheated. >> larry, you saw me doing this. >> would you cheat on the golf course? >> no, i won't. >> but you'll cheat here. >> bill clinton use -- never mind. >> what you got? >> just to cap this off because we've got to move along here, there is one stock in there that is actually near its highs of the year. already hasn't fallen at all. >> i looked at all of them.

>> bewell, that's unfair. we're playing a game. >> i have my information there. >> you're not able to look them up. >> you never said that. >> have you ever played "the price is right"? >> i didn't say that. >> larry played well. >> do you push back at all? >> i don't. >> you don't? >> no. >> basically may i have another? >> in fact, come over here. coming up, the new -- >> that was fun. >> coming up, a new business model in the death business. how about a drive-thru funeral home. that's next. p breath in...

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if you do not like lengthy good-byes, this story is for you. a michigan funeral home has come up with a drive-thru option to view the deceased. a window displays a body inside the funeral home and mourners get just three minutes to view the body as music plays overhead. there's also a guest book to sign and a deposit opening where you can leave some donations, cards, or other items as you pass by. at least three other funeral homes are offering a similar service. >> you look at this and think it's odd, where i can see it makes sense is where older people can't get out of the car. where you want go and pay your respects but you have a little

trouble. >> or where there's big lines. big people you wait in line for an hour or so. it's a little coldhearted. >> it is. coming up, what's a word worth? a lot when it comes to the fed. a simple change of language. we've got that next when we come back.

welcome back to "squawk box," everybody. among the stories front and center this morning, roco announcing it has sold 10 million of its players in the united states. the trump plaza is closing today. analysts say gamblers have been abandoning trump for newer ritzier properties. it's the fourth atlantic city casino to shut down this year.

and a wind-driven wildfire near the oregon border. the fire has damaged or destroyed a hundred homes and forced at least 1500 people to flee. more than a thousand homes and businesses are being threatened. it is the moment you've all been waiting for. it's fed week. that means steve leisman is here with the results of cnbc's exclusive fed survey. going to kick it over to steve. >> thanks. wall street getting a little more bullish and a little more hawkish at the same time. they upgraded the outlook for growth and stocks at the same time. they brought in their time period for when they think the fed is going to act. the prior survey shows the first rate hike, people thought it was going to happen in july. and it's now in june. by the way, it's the second survey in a row we've done this. it was august, two surveys ago. how about when the fed will let the balance sheet decline? that's the same. december 2015. but the amount of balance sheet

reduction now seen at about $80 billion next year opposed to a slight increase in the prior survey. and the next big action comes all the way the fourth quarter of 2017 for when the fed would stop hiking rates. that's been brought in a quarter. now the fed is seen finishing its hikes in the third quarter of 2017. so overall, a touch more hawkish. earlier rate hikes and quicker to the end point. how about the funds rate path. could you zoom in and get the difference between the blue and green line. a slight upward shift in where our 37 respondents think it will be. 2.13% in the end of 2016. but the story was we told you yesterday is not this number but the difference with the federal reserve. here's the median for the fed. and the feds itself 2.4%. and look at the difference in

the end. our respondents see this rate at 3.22% or 3.2%. here's on the issue of considerable time, 41% of our respondents think it goes in september. 42% in october. 24% in december. overall, more people think it comes after this meeting. but a plurality say after this. here's what stewart hoffman said about the issue. quote, there it is right there, the keshl time reference in the statement should be dropped and replaced with something like current and anticipated progress toward dual mandate. and tony overall says the fed in the months ahead will begin to say a long good-bye to its extraordina extraordina extraordina extraordinary. i'll be back in the next hour with what this group says about

how to fix tax inversions. also you can read the entire survey and see all the data on cnbc.com. >> see you in a bit. >> when you read that, couldn't you have read that the way cony talks it. >> i'd like to see your impression. >> no. you need to tune into the reality show "squawk box" that shows all the off camera antics. >> i'll see that. >> we'll see you in a bit. in meantime, let's get reaction from larry bossidy. you see something like that where it looks like people are now expecting the rate hikes to koom sooner and faster. does that match up with your view of the economy right now? >> i think the economy looks pretty solid right now. there's no sign of inflation. i think the call for a midterm in 2015 first rate hike is

sensible. at the end right between 3.25 and 3.5. there is one thing i'd like to conjure in terms of the balance sheet is now $4.2 trillion. i don't know if you can do that for $4.4 trillion. so it's going to take six, seven years it seems to me to get the balance sheet back to a reasonable position. and what impact will that have on the economy, i think that needs to be looked at. >> bernanke has suggested they let it run off. >> that means he extends the time period. i think you have to do that. >> he said that things done in the past aren't -- they may have to get to the point where "fast" just the bully pulpit where they tell banks what they need to do to reduce that. then you're assuming that the banks are going to listen to them. >> then you got to know what the

impact's going to be. that's going to have some rate impact, it seems to me, at the end of the day n. that scenario, they'd rather loan at one rate than a lower rate. >> that's one of the questions i'd like to ask steve. where the fed is thinking the terminal rate, the ending point is 3.75%. for some reason the economists are saying it's closer to 3.2%. why do you think -- do they think we're going to run into another recession again? >> i don't know. it seems to me they think this chairman of the sfed going to move slowly and the economic conditions are going to be sufficiently calm which will be able to do that. therefore the rate increase will be more mild than at least the fed thinks. >> the other point that steve made on this was that 41%, that's not a majority but it was

the plurality to come in wednesday's meeting will be stripping out the considerable time phraseology. if that happens, what will the market reaction be? >> i heard some people say it might make a bump in the road. but i don't think it's going to be a big deal. while there may be a one-day or two-day distortion, i don't think it will be a long-term problem. >> you're in the board room of a major u.s. company. is this is a conversation you're having? >> in terms of how you run your liability side of your balance sheet. are we going to face a higher rate environment? and if so what can we do to optimize in terms of our debt? if the opposite is true, should we take on more debt now to take advantage of the situation. >> is everybody trying to do the limbo right now? >> i think they're going to. good company loaded up with long-term debt. they basically arbitrize the

difference. if things go north then you'll have to change your strategy. >> same thing if you're a homeowner. if you lock in a 30-year rate, keep that fixed rate for a long time to come. >> also has to do with your expenditures. if you have to finance things, this has been the right time to do it not because the demand is so good, but the cost of doing so at least the finance has been extraordinarily low. >> excellent. larry is our guest host. he's going to be with us for the rest of the program. up next, nicki unve-- nike unveg the new lebron james sneaker today. is rival under armour ready to put on a full court press? plus taking streaming business to europe. how the french are going to greet "orange is the new black." will it get lost in translation? get it? "squawk box" will be right back. so i can reach ally bank 24/7, but there are no branches?

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leisman on the to en. welcome back. hershey shares are poised for robust returns after a rough six months. which saw the stock fall by 15%. >> it is the biggest rivalry in sports right now. nike versus under armour. right now nike makes ten times the revenue of under armour, but they're going after it for athlete endorsements. today nike is releasing the latest lebron james shoe. under armour has added gisele. so who will win this arms race? let's ask the senior research analyst at stern ng. >> thanks for having me. >> we laid it out there. nike is ten time this size of under armour. five years from now, will under armour be nike? >> no. but under armour could be a

big -- they're doing 40% of the business in the united states. they have huge opportunities and they've been methodical about what they're doing. nike, a friend of mine who worked for nike was so happy, this was seven or eight years ago when play makers was on and it was all under armour all the time. the nike people were furious. >> in terms of growth prospects, under armour has a greater shot on goal than nike. zpli mean, it's just not as mature of a business. you have a nike business that basically picked up almost $3 billion of revenue last year which is basically their increase was the size of the under armour business. >> let's talk about some of the crazy numbers. this is on the sponsorship side. the situation of kevin durant, they spent over $300 million to keep him after under armour tried to pay $287 million. >> something that n that range. >> will they ever make that

money back? >> i think so. because i think it's a -- it's a really -- how they position the brand over time. you have to remember how much money nike spends on their marketing creation. they spent over $3 billion last year. so finding $300 million over ten years is not that hard to find. and they could cut it out of so many things nobody around would know they cut any marketing spending. >> my guess is lebron sent kevin durant a case of champagne, right? because if he got $350 million, think what they're going to pay lebron next. >> that was my concern when i heard this was lebron probably had a deal to say well, i'm the highest paid guy and now they've created a little arms race within themselves. and that is more -- i more feel for that. it creates maybe a bad precedent going forward. >> is durant worth the money?

>> from everything i hear about him, yes. his shoes are selling exceptionally well. i think on the sell through rate from what i understand, they sell as well if not better than the lebron shoes do. jordan is still the leader of the pack. >> gisele. $25 million. that worth it? >> it's funny i was just talking to -- i was just at a trade show yesterday talking to the under armour women stuff with her wrapping up her fists in a boxing thing. >> do women love gisele? >> i think it depends on how they use her. the more interesting thing is the -- >> you're treading again. everybody loves this. >> everybody loves gisele. >> what are you saying? just perverts love her? just guys that are leering at her? >> no. the women buy clothing. >> you're going in all these horrible places lately. you know? you talk a good game, but then

your true intentions -- what are you saying exactly again? you don't know what you're saying. i'm going to seav save you agai. we have one name for her now and she's no longer asking to be paid in euros. remember when -- >> i'm not sure she actually did. >> supposedly she did. but now she's like -- it's definitely not as -- >> what happens to reebok and adidas now? they seem to be left at the side of the road. >> sam was scared. >> i was frightened. what happened with adidas was -- the difference between adidas and nike and under armour. is nike and under armour want to get better and be rt. adidas came up with good ideas and then they take a deep breath and say we figured it out and then the other guys cruise

forward. it's very difficult. i was in london two weeks ago and noticed at one of the discount retailers had far more adidas on sale than the other brands they carried. so they're leaving the door wide open for both nike and under armour. >> one other strategy question. under armour has pursued a digital strategy. they're creating shirts that are going to be able to do your heart rate. doing sorts of tech stuff. nike basically got out of that decision. is that the wrong decision for nike or wrong decision for under armour? >> it is because of the way they're using it. it's small. they bought -- i'm losing the name of the company they bought -- but they're using it with an existing platform. nike was trying to build their own. and they use it a lot for like the combine and stuff. app lot of that technical stuff they're using is really used so

literally if at the nfl combine the scouts and everybody can have on their ipad, see what the heart rate is and the speed and everything going on because of this technology. is it going to transfer over to be sold every day? maybe. but it's much more about i think an umbrella situation for the brand which i think is a very good umbrella. >> sam, thanks for joining us today. when we come back, the isis risk. "squawk box" will be right back. also with some stocks to watch. got a comment or question for venture capital guru peter thiel? he's our guest host tomorrow starting at 7:00 a.m. eastern. reach us on twitter @squawkcnbc and use #askthiel. "squawk box" on cnbc. profit from it.

♪ check this out, everybody. amazing video from this past sunday night. a meteor skirting earth gave folks in new jersey a show. the american meteor society says the name for that is a fireball. it skipped along the earth's atmosphere and lit up the sky from new jersey to ohio.

more than 190 reports have poured in. we've been watching a lot of this. you might think people thought that was a ufo, right? >> but it's not an asteroid -- or what is it that -- something comes through and burns in the atmosphere and pieces of it go through. that one just skipped off. that kept on going, i think. meteorites are the ones -- >> that come straight through. >> let's take a look at stocks to watch this morning. regeneron. eylea eye treatment, a breakthrough therapy which will allow for fast track approval for the company seeking to market a drug or expand uses. microsoft was rated outperform

at rbc. that stock finally has been -- the company saying that it is creating value with its shift in emphasis -- >> to pay for the clippers. >> yeah. >> with the stock includes this year. as soon as he left. >> yeah. >> as soon as he left. exactly. so that was a good move in two ways for shareholders. united airlines is offering flight attendant severance packages up to $100,000 if they voluntarily leave the company. as it works to match its staff levels to its flight schedule. and astrazeneca can earn up to $500 million from a new alzheimer's drug partnership it has with eli lilly. coming up, streaming in

paris. netflix moving to france as it pushes its european expansion this week. we'll break down what it means for the company and investors. and yet another twist -- is this in the -- you won't believe. is that? >> lesean mccoy. >> you know you won't believe how much someone is willing to pay for this receipt. i forgot about this crazy case. we're coming back in a moment. ws work with equity experts who work with regional experts that's when expertise happens. mfs. because there is no expertise without collaboration. 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.

whenwork with equity experts who work with regional experts that's when expertise happens. mfs. because there is no expertise without collaboration.

-- hits isis positions in iraq as air strikes get underway. the latest on fighting in the middle east and what it means for your money. france is being invaded by netflix. a closer look at the company's expansion overseas and what it means for the streaming service. and tech disruption in the classroom. board member and ceo of amplified talks about the future of education, rupert murdoch and much more. the final hour of "squawk box" begins right now. ♪

♪ my darling i love you and i always will ♪ wow. >> welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. barbara streisand making her first show appearance in over 50 years. she decided that would be on the right show on jimmy fallon. they sang a duet together. that's an ugly word. as she promoted her upcoming duet album titled "partners." did you see that? >> it's amazing. >> it was. and she was promoting it. she wasn't hyping it.

i don't think. whoever wrote that, i don't know. you've got to be nice to her. >> let me tell you about the headlines this morning. calpers dumping hedge funds. the largest pension plan pulling all $4 billion it has invested. half of all u.s. pension funds, some exposure to hedge funds. we will see whether this is a beginning of a trend or not. and soda stream is in talks to sell itself to an unnamed british investment fund. the price is in the $30 per share range. be careful on that one. i don't know if you remember, we had a situation a year ago there were reports pepsi wanted to buy soda stream. caution is the word right now. also good news for joe. m.i.t. topping a world ranking. the list comes from the firm qs.

if you want to job, the firm says head to the uk. but if you want money, harvard university is said to be the best bet. >> there was a ranking a couple of weeks ago, wasn't there? m.i.t. was seventh. do you remember who that was? >> i don't remember that ranking. was that the one that was in terms of bang for your buck? >> i don't know. i'm going to look it up. it was number six. >> there was one i saw recently that had very different schools at the top because it based how much you were paying for tuition and how much you'll make down the road. let's get a check of the markets. after a mixed day yesterday, you'll see there are some red arrows this morning. dow futures down by about 20 points below. s&p futures off by about two point. overnight in asia, there was a change. shanghai market down by 1.8%.

the nikkei closing down by a quarter of a percentage point. and in europe, some red arrows there. declines of about .5% across the board. a suicide bombing killing three and wounding more. it comes amid a months long campaign. the taliban claiming responsibility finish that attack. the international security assistance. came out september 9th. all right. u.s. news. princeton, harvard wl yale, then some were tied. dartmouth. anyway, u.s. air strikes hitting a stream of targets in baghdad to help the seize by isis.

and ammayman mohyeldin is in london. what can you tell us. >> they build the coalition of countries to try to carry out strikes to defeat isis throughout the course of the past several weeks. it has entered a new phase of its operations inside iraq. for the first time they carried out against isis positioned southwest of the capital baghdad. the reason that marks a change is the u.s. had originally stated it only attacked isis to u.s. personnel. but now it seems that the u.s. has gone on the offensive to target positions that can give the iraqi military an upper hand in its fight to try to reclaim territory it had had lost to isis over the course of the last several months. but there is still a lot of uncertainty around whether or not the u.s. is going to carry out strikes inside syria.

right now after several days of zploemtic efforts by the u.s. secretary of state john kerry, there's a coalition of countries. but there are a lot of disagreements about inside syria and whether or not to arm the rebel naps seems to be gaining some momentum in the u.s. congress. there is now a request to arm, train, and e women syrian rebels that are moderates. but right now it does not seem there is an authorization or an agreement among all countries to carry out strikes inside syria. guys, back to you. >> ayman, thank you. allen henning was shown in an orange jump suit after the beheading of a fellow brit david haines with warnings he will be next. how effective with the plan be? joining us now is colonel jack jacobs. also our guest host this morning larry bossidy is here.

colonel, welcome. thanks for joining us. >> thanks for having me. >> how effective are these strikes? >> the air strikes support ground troops. you won't hold terrain unless you have people on the ground. and it's not going to be americans. it's going to have to be people on the ground from the region. and not only taking the terrain you free up by bombing the bad guys. you've got to hold onto it. holding onto it over a long period of time is what it's all about. i don't think anybody's got any staying power for that. i don't think that's going to happen. >> colonel, we seem to get ourselves in a box in this country in the sense the american people are understandably unwilling to commit ground troops during afghanistan and iraq on the one hand. and yet we undertake these conflicts with almost one hand behind our back in the sense that we're trying to bring together a coalition of people many of whom haven't liked each other for a thousand years. and the ability to do that is question nl which puts the whole

strategy into question. i can see another long-term expensive foray into the part of the world with no conclusion or satisfactory outcome. >> i don't think there's going to be a satisfactory outcome. and the coalition the president's talking about is just wallpaper. they're not going to do anything. i know there was some news that saudi arabia wuas going to participate in the air strikes. but you need a regional coalition that includes all gettingget ing on the ground and staying there. it's easy to drop bombs from a great distance because you don't expent resources. and the whole plan here it's kicking the can down the road. there will be no satisfactory outcome there. colonel, if you see at this point, is isis the one changing factor that this might actually

motivate local governments, regional governments to step up or risk losing their borders. >> i would like to think they're right. but so far there habit been a demonstration they're really there. the guys who are really a problem at the moment, we haven't heard from at all. that's turkey. you got the continuing criminal enterprise of isis pumping oil through turkey. nobody's made an effort to close off all of the financing that this provides. squeeze the banks involved with that. or squeezing turkey to prevent them from supporting isis. now there's a recent report that a large percentage of the recruits to isis are coming from turkey. >> it's on the front page of "the new york times" today. and they're extensively a nato ally of the united states. you don't see our capability to influence turkey being exercised. it's a mess. and i think it's not going any place but down the drain.

>> unfortunately isis poses a threat to the united states. >> it does. it presents -- as you just segted, it presents a bigger threat to these guys in the region and they're not doing anything about it. >> one of the things that have been suggested is that there's been some suggestions, not a policy statement, but some suggestions. we have to make a deal with assad. can you think of anything more repugnant than that? terms of our ability to go about in combatting isis? >> we had to deal with saddam hussein because he was opposing iran until we decided we don't like him anymore and we deposed him. most surprised guy in the world. when we went into iraq with saddam hussein saying i'm your guy, what are you doing. i think a real practical government in the united states or in the west would make a deal with anybody to take care of isis. but we're not practical. it's mostly a media event.

i don't think we're going to do anything in which we start at the end, what is it we want to accomplish, and then work backwards and find those courses of action which give us our objectives. we don't do that. >> so you're actually saying a deal with assad would be the right thing to do. >> if you want to get rid of isis because they live there in syria, deal with assad is the right thing to do. we're not going to do that. the guys we're picking, the rebels, it's a very small number of them. we don't know -- we're only going to vet the guys we know. that number is extremely small and not big enough to oppose assad or not be taken over by more extremists in syria. our courses of action are limited because we don't have the capability of making a strategic estimation of what it is we want to accomplish. and then projecting our will not just onto our friends, but those in the region who really are at

risk. let's see -- i would like to see the first effort i would like to see be a diplomatic effort with turkey and get them on board. >> i was looking up another piece. a non-ally was the opinion piece in the journal yesterday. they're not helping at all. >> they're not only not helping, they're not standing by. >> is that the united states in general? is the obama administration messed up turkey in some way? what's the problem here? >> well, turkey went its own way as all countries do -- >> it's hard to understand what his -- well, you know, he's a populist islamist. not an extremist. but yes, the succession of american governments made the sujs that turkey was on our side. >> member of nato. but long ago stopped acting like a friend to the west. >> we did not use a diplomatic

issue of power in order to affect them behind the scenes. as a result that contributed to turkey being where it is today. >> do you think at the end of the day when this strategy doesn't reach its accomplished goals that the united states will have to commit ground troops? >> no. short answer is no. and i think the reason is the american public is not prepared for that. there's no political will in this country to do any more than what the president said. his speech last week was the delivery of information that the public wanted to hear. we're going to send cruise missiles in and blow these guys up and it won't cost you anything. and everybody was watching said that sounds like a good plan. let's go back to our televisions and go back to watching sports. but we don't have the political will to do -- certainly to do that. >> but remember, even last week it was a big departure from where the american people were three months ago. >> right. >> so i can see a day -- i'm not proposing this, but when this

effort doesn't lead to kind of success we're looking for, we may have to commit ground troops. i hope not. >> i think we have to, but i think we're not. >> the kurds have always -- even though we didn't stick with them. the journal says the best bet is with the kurds. we should move our air base into northern iraq in kurdish territory and put the base there and have the kurds be our allies in the region. >> that's fine except the kurds don't have the economic power, the people power like turks do. the turks are strategically located and got tons of money. and the kurds, you know, a very small number of people. i don't think that's a very good idea. we have to be better at influencing our allies than we are. and we're not. >> colonel, i wish there was a more positive outlook here, but thank you very much. >> you're welcome. i wish there were an environment to be more positive. we haven't done a very good job of influencing people anyway.

>> and these guys are working with the beheadings. they're going to do another one probably. >> they'll keep doing them. as long as they can, they'll keep doing them. >> it seems like it solidifies all the people that are with us against them. but it also brings recruits in, probably, too. >> the latter more than the former. because the recruits are actually going to do something. everybody hates the beheadings, but nobody's doing anything about them. >> thanks. up next, steve is back with his fed survey. this time he's slicing and dicing corporate taxes. he'll tell us why 19% is the magic number for so many of the people he has spoken to. when we return. act i. scene 3. open port twenty-two-oh-one-seven

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. welcome back to "squawk box" this morning. a battle for galactic supremacy between elon musk and jeff bezos. teaming up with the start-up blue origin. the group will work to develop a new rocket engine used to launch u.s. military and spy

satellites. bezos and his partners are also said to bauild a taxi. it will put bezos up against musk with spacex. time to talk taxes. steve leisman is back with more of cnbc's exclusive fed survey. steve? >> yeah, joe, this issue of tax inversion is one of the most pressing economic debates going on right now. companies moving overseas to get out of the u.s. tax system here. we asked our respondents in the survey how you would fix the problem. here are the answers. raise the foreign ownership percentage. this is something treasury secretary jack lew is looking at. very little support for that. how about other? 6%. and they gave us some interesting ideas. one was drop the tax on global earnings. in other words, go to a territorial system rather than a global system. and tax amnesty. let people bring back the money

from overseas. 30% said lower the rate now. they came up with 19%. and how about do comprehensive tax reform. 50% says that's the right way to go. on a scale of one to ten we said how big is it to the economy? 2.5%. rate about double this number right here. rob morgan from v2v associates, u.s. corporations that are tax inverting out of the country show that companies are leaving hostile tax environment to go to a friendlier one. lower the tax rate now, america. if our guest host larry bossidy would indulge me.

lar larry, look at the survey. what's your answer? america's waiting. >> there's no way to -- in my mind to fix the tax inversion question short of reforming the tax code and among other things going to a territorial tax system where you don't tax foreign earnings. going to a lower corporate rate. 19% seems to be the consensus now. and closing loopholes. there's a lot of proposals how to fix this, but for example going from 20 to 50% foreign ownership which is one of the proposals, that takes u.s. management out of the picture. >> right. >> then there's other proposals by senator schumer to stop the stripping, if you will. they load up u.s. companies with debt and deduct the interest. there's many ways to get around that too. so i think essentially you've got to reform the obsolete tax code. >> play the role of the treasury

secretary. you're jack lew right now. which is not a far call, larry bossidy. you've got to do something now. would you act right now to stop this movement overseas? >> yes. i don't think i can stop it by any of the measures, but i would if i had to do one thing, i'd change to a territorial tax system and i'd tax some of the repatriated profits but not at 35%. >> i don't think he can do that stuff, though, administratively. >> no, no. i think you got it. but i think you could go to d s congress and say the overhaul of the tax system is going to take a long time. this is something to do now. >> you have some information on -- >> i mean, it's a 19-page publish eed paper by hasselt. and it used to be -- >> explain what the curve analysis is. where you maximize the revenue and minimize tax avoidance.

>> and it was 35% back in the 1985-1989 period. >> but we had less global competition. and now? >> you can see it's shifting and it's around 20%. i'm going to send this to you. then you can explain it to me. i've looked up a lot of articles. >> the way we asked the question was if you support this idea of lowering the rate now, what rate would you. ic? so it's an open ended question. so to come uh this 19% -- >> but to do that alone is not the answer. >> i didn't give you the political question switch are you going to go up to the podium and say to the american people companies need to pay less and you need to pay more? that's the politics of it. >> i would say the companies are going to pay in a different way. we're going to close the loopholes. it will be revenue neutral. >> and it's fairer for small businesses in particular.

>> let's assume you pay 19%, for example, you don't necessarily compete we the rest of the world either because there are some that are lower. but there's some advantages of being in the united states. >> you're saying it just because the public wouldn't allow it. but if there is a race to zero, why not go to zero and if we're at zero, then tax dividends more or tax individuals. >> you can do all of these things. >> you say don't do that -- >> first of all, the congress won't agree with it. i mean, there's no one answer in congress -- >> does it make sense to tax corporations when those are the guys creating the private sector jobs and it's a global economy, you want to be as nimble as they could be. >> that's a good argument. but the tax receipts from corporations are relatively small. >> it's only 10% anyway. >> how do you feel about ceos living in the united states versus elsewhere. if you have a headquarters elsewhere, the ceo, the management, the entire company is based elsewhere they don't

live here. they pretend to be based elsewhere. >> what is monte carlo's rate? >> i don't know. >> i could live there. that'd be okay. >> to your point, if they do that, of course, that's inversioning at the extreme. i mean, they're out of the country. and if they own 50% of the countries, that may well happen. >> look at mylan. they're going to live outside of pittsburgh and pretend her company is based in the netherlands. >> but that's what happens with inversion. i mean, even though there's a 20% ownership, the u.s. management is still in place and they're still headquartered in the u.s. >> if we go to zero, why doesn't another competitive company pa i to have a company come? you know? who knows where the bottom is here. >> i don't know. i just -- i don't -- there's a weird idea in this country and someone told me that the reason -- one of the reasons romney lost was because people said he's going to let corporations off the hook even

more. and that is a visceral feeling people have. they don't see it as the job creators. the government doesn't create the jobs though. >> thank you, steve. when we come back, another casino farewell in atlantic city today. we'll have details after the break. then france is being invaded by netflix. can the online streaming giant become the creme de la creme in europe? we'll talk about the expansion plan in just a bit. will mean making it lighter. one day, factories will work with the cloud. one day... is today. where the reward was that what if tnew car smelledit card and the freedom of the open road?

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welcome back to "squawk box," everyone. the casino crisis continues in atlantic city. trump plaza, the 908-room hotel and casino on the boardwalk officially closes its doors today. more than 900 employees are affected by this latest closure. overall nearly 8,000 casino workers have lost their jobs in atlantic city this summer. and humans apparently aren't the only ones feeling the heat in southern california. this week is black bare caught on camera as it wanders into a back yard and takes a tip. it relaxed in the water for about 15 minutes before climbing out and exploring the patio. if you came home to that, joe -- >> the advantage of the above-ground pool. there you go. that's kind of cute. that was the story before?

>> the atlantic casinos. >> yeah. does anyone maintain these? >> are people going to live in them or -- >> there's good bidding for those buildings. >> but they're dark right now. >> yeah. >> and they won't come back as casinos either. coming up, we have the ppi. producer price index. is increase second. it's crazy, huh? and people are relying on it more than ever. we cover more than 99% of all americans. i know, i can't imagine living without it. it's a place where people can come share knowledge and ideas. it's beautiful. that's deep charlie. my selfie just hit a hundred likes...(gasps) a hundred! at&t is building you a better network.

producer prices are out. steve leisman has the numbers. >> looks like they broke early. final demand unchanges. x food and energy up 0.1%. looking down, a big decline in energy prices down. what else here? >> that's no surprise. >> we knew energy was going to be done. finished goods down 0.3%. let's move up the chain here. intermediate minus 0.3% and going further up, i don't have the crude number here. but residential natural gas down 4.5%. that's producer price. they don't necessarily trend into consumer price. but it's something we follow for

inflation in the pipeline. and it's an interesting concept how the fed is going to process the wholesale numbers and consumer numbers we're going to get later this week in the fed meeting. not really seeing a whole lot of inflation. i think joe was talking yesterday about the idea of importing deflation from europe or disinflation from europe. >> but how did -- >> i don't know, joe. is someone there pressing a button somewhere? >> i don't know. >> if it was going to be laid on the floor, maybe found a way of releasing it on the website early to get it out. i'm guessing. >> maybe knowing they were looking at the trade and know there was an early release. >> it's about as expected, is it not? >> very much as expected. there's not a lot of concern right now inflation up the pipeline. and this is something that tends to flatter earnings. you're better off when your input prices are falling. >> let's get some reaction from

the cme. jim euro is standing by there. i know it's a bit of an unusual release. what's you're reaction to the numbers? >> seems like that guy had the good job of hitting the button at 7:30. i could do that. stocks came in a little weak as it was. rates were creeping lower below this. there was a little bit of a headline about more arms going to ukraine. i don't think it was serious, but the rates are coming in lower too. i don't think tis is a big deal. if the fed is not going to be pushed to moving their language at all tomorrow based on any inflation. we saw capacity utilization was lower than expected yesterday. this is right in line. the whole king dollar story has benefitted us on the inflation front. if they do change their language and i believe they will mildly tomorrow. i think it will be for other reasons. >> what's the market reaction if they do that? >> i think that's already priced in they're going to do it just a little bit. that's one of the reasons the

stock has been trading poorly over the last week. obviously there's different reasons for the nasdaq trading lower. the top is what we're supposed to believe is raising money for the alibaba ipo and that's fine. >> all right. if that describes the weakness over the last week, then the fed has done the right thing than messaging ahead they're going to do this. if they don't, does the market rise as a result? >> yes. >> a more difficult time of trying to talk it down later? >> i absolutely believe that the market will take that as a catalyst to shoot higher if they signal full speed ahead. you guys were crazy for thinking we were going to change the language. i think the market will shoot higher. >> you still run in the circles of ceo out there. you were at the golf. i don't get invited be u you do. what were they saying about inflation and wage costs right now? >> i hear no discussion about the pricing environment being any better than it's been in the

past. in other words, price -- >> the ability to raise prices. >> right. it continues to be difficult. and most material costs or supply costs are relatively flat. but by and large, i don't see for most conversations there's a concern right now. >> how about wage costs? >> wage costs are beginning to move. this last month it went up. they're inching up. they're not exploding in any way. but they're moving from where they were. >> okay. great. steve, thank you. jim, thank you for joining us. >> thank you. we're going to talk about the business of education right now. more than half of the nation's school districts are using tablet technology. expecting schools to purchase 4 million tablets by the end of the year. the next guest has been spearheading a mass move -- i should explain to the viewers -- >> andrew yelled at me because i said i wasn't paying enough attention in the interview. >> now he's sitting there taking

notes. >> i've got a note pad. i do want to take notes. >> it's educational. his company amplify rolled out its new curriculum this year and first consumer education game. that game called 12 a dozen hit the number one spot if had the uk and number two spot in the u.s. on itunes store just this past weekend. here now to talk more about changing the game for educator, bill kline. he's also on the board of news corps. should ask about that as well. but tell us just about -- i see this game and it's a consumer game. you do that game in the school system too? >> we do that. >> you don't use ipad. you have your own devices. >> we use any device. we run the game on. we use them on ipads. >> that's an ipad. but i thought the main device you sell in schools is your own. >> we do, but we also run our curriculum and our games on other devices including the ipad.

we want as many kids as possible to have it. we have 30 games right now that are in the schools that are really a wide range. when we would demo this, teachers and parents said could you bring this to the consumer market. we put one on the ipad. it's taken off. it's been exciting to watch. it was number one in the uk. it was number two in games this weekend in the u.s. and response we're getting from parents, a way to teach your kids algebra that's really fun and really cool. >> how much does that game cost to download, for example? >> it costs $4.99 to download. >> when you look at the opportunity there, the consumer market, relative to the -- it's not a b 2 b market. >> it is. >> the institutional market. is it just magnitudes larger? >> it is. but it's complicated. you've got to do change management. you've got to get teachers involved in what you're doing. in a consumer market, parents

download it. parents are saying i can't wait to play this with my kids this weekend in the comments. but the market we're excited about our curriculum is all about the skills. >> the krim lum goes for about $45 a student. the tablet is $$359. >> so how much is -- i guess the next question then becomes how long do these tablets last for? >> usually three years. that's what you see school district keeping them for. about three years. then a replacement cycle. >> one of the things i notice you're doing among a lot of good things is trying to help schools integrate the common core curriculums. they're controversial. in some states they're being turned down even though there's a national mandate. what's the future? is that going to happen? and what's the progress? >> so two things. first of all, larry, what a privilege it is to be here. when i was chancellor of

schools, the first book i gave my team was your book. i said school reform is littered with good ideas poorly executed. i wanted to make sure they read your book. privilege to be here with you. common core, overwhelmingly the states are sticking with it. they're doing it for two important reasons. we've got to have higher demanding standards for our kids. and second of all, we need a national way to compare how people in new jersey are doing compared to people in iowa and people in indiana. so i think that makes sense. on the other hand, as you know, education is always political. they're getting lots of political pushback. so a lot of states are renaming it, making minor changes. a couple of states have jumped off it, but nothing of any consequence right now. most important thing for me, if you look at the results today, most of our kids going to college are not fully ready for college. and so they have to be remediated. that seems to me to be a dumb strategy. why don't we get them ready for college when they're in the k-12

system? i like to see higher, better standards. >> there are arguments it has to start even before kindergarten. there are pieces saying even 4 years old might be too late. you need to get kids earlier if you want to cut back on the inequality. >> i totally agree with that. i think we're wasting the most formative years. anybody who's watching who's had a kid knows those earliest years, 0, 1, 2, 3 are formative critical vocabulary developing, interest developing time. we have got to find ways for kids who are growing up in challenged environments to get the benefit of that kind of stimulation and learning in the earliest years. the key to this, though, becky is we've got to do it right. for years we've done lots of things in head start and other places that haven't got the bang for the buck. because we've just put the programs in place. not assured quality. but i'm with you. we have got to start much earlier. the thing that killed me when i was running the system, is kids

from poor neighborhoods would come to school with 20% of the vocabulary of kids from a middle class. >> as a parent of 4-year-olds, we try to limit the screen time of our kids. so we actually don't want them playing -- at least i think conceptually i don't want them playing the games on ipads. should we have been giving them these types of games when they're 2? they're addicted to the devices. i don't know the right answer. >> the answer to this is the quality of the game. if the game is truly educational, then you want it. if the game is not, then you want to limit how much time they spend. there's a lot of kids doing a lot of games today. what our theory is, let's get them working on algebra and having fun. when you see this 12 a dozen game that's in the ipad store right now, parents, kids get excited. they say this is what we want to do. but they're learning algebra in the process. we have a game called lexica that teaches kids reading and writing and so forth. it's exciting. we can walk and chew gum.

you're talking about the world in which it's either education or entertainment. ours is both. >> a lot of schools with ipads you have to wonder what are the kids doing. they're playing other games. might as well play a game that you might actually learn something. one question about common core. and i look at both sides and i don't know enough about it to understand the opposing site. who decides on -- like i would like common core for math. things that are objective i would like. but i think about different ways of presenting history and different ways of presenting certain subjects. when does it change? is there a committee? can an administration that's in office decide what's in common core and then you get a completely different take on everything? >> no. it's only done by the states. this is something -- >> so the states. >> they did it in math and they did it in english language arts. >> that's fine. >> which are the two anchors. they haven't touched history. they are now doing it in

science. >> this speaks to your piece on gates. and i love him and he's got a lot of money and everything, but the way he wants to characterize history bringing in all the disciplines. we used to celebrate columbus day. there's places you don't -- i just want the facts. i don't want a lot of the -- you say it gets political. i'm worried that what is in there as common core would get political. >> if the states can adopt it or not adopt it, in the end, that's what matters. >> andrew's piece of gates was amazing, by the way. >> so that's the way we should do it? one rich guy decides that's the way we should? >> as long as we make it available. as long as we make things available -- >> he's a fan of bill gates. >> i'm a fan of bill gates too. >> he was on the other side of gates for a long time. >> i've got some ideas, too, about how i think -- but i don't have $60 billion to force my will on -- >> all bill's going here is making something available.

if we start to jam things and shove things, it's not going to work. the worst thing though is to let states dumb down standards. when it comes to history, what i worry about -- you know how many kids graduate high school today who know so little about history? how many kids graduate college? >> right. >> as if you can walk into the world a big thinker without knowing history. >> i just wish i knew -- i don't know if i wish i knew what bilogically was happening at the time, but i wish i had studied more so i knew history. i don't need all the interpretation. >> what happens to the mississippis and the arkansass, the states in the union where we've had difficulty in getting kids to a level that allows them to compete? are the good going to get better under the common core or are those who need it going to improve? >> both. but you're absolutely right. the kids in mississippi are not competing with other kids in mississippi. they're competing with kids in china and in india.

you know this more than anybody. how long are we going to play this game where we say kids in mississippi don't have to learn too much. if they're going to be competitive, they have got to be ready for the big game. and the thing that drove me nuts was the number of kids who in the k-12 system all over the country were not leaving high school ready for college. it's a losing formula. you can't play this game. >> joel, were you surprised your former boss, mayor of the city, went back to bloomberg. >> i wasn't. i think he's excited about it. >> and he's at news corps. >> do you know whether rupert personally tapped your line? is that what you're asking? >> no. whether he was going to come back to time warner. what do you think? >> i think the record stands where it is. we've walked away from time warner. >> okay. he's leaving it there. thank you for being here. >> that's pretty consistent with that. >> you've got to come back.

we've got more to talk about. coming up next, "orange is the new black" hits france. we're going to talk netflix expansion plans after the break. then another twist in the lesean mccoy tip drama. you are not going to believe it when you see it. take a look at futures. know that proper allocation could help increase returns so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement. know where you stand with pnc total insight. a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today.

welcome back to "squawk box." netflix ramping up in europe.

they're worried about the challenge it poses to home grown hits. in germany cable competitors are slashing prices to fend off the streaming giant. so will they conquer the giant? joining us is the media and technology analyst at btig. is this going to work or not? i don't think in the united states there were a lot of folks trying to kill netflix early on. >> i think a lot of people tried to ignore netflix or basically talk about how they were sort of irrelevant. remember jeff bucus with the alien army trying to take over the world. now they're selling all types of conflict to netflix. i think there's been a rapid change in view in what netflix means, how it effects the ecosystem. it's changed behavior. you're seeing a complete shift towards everybody wanting to

license time to netflix. as well as an increasing fear about time spent and how much time people are spending. remember the average u.s. home is spending 100 minutes a day using netflix. >> and so do you imagine netflix is going to start buying up content in europe? then they might have fans among industry. >> it's an interesting comment. i think one of the things we've been very worried about is how they move from english-speaking countries. they've launched in the uk and done very well. they've done very well in canada which is in some ways you think of as the 51st state. a lot of the content in the u.s. works well in canada. and the same thing with the uk. the question is how well will u.s. content work in france and germany? and the pushback we get is netflix talks about how one of the most popular shows in france is "medium," a u.s. tv show. so how well will u.s. content export? especially television shows. i think netflix is betting it will work very well. that doesn't mean they're not

licensing a significant amount in the european markets. we did a demo yesterday of the french service. there is a significant amount of french content both tv movies even kid shows. they're definitely out there a " they are licensing local content. recognizing to be successful in these european markets, they've got to attack local language content. >> rich, netflix had a wonderful rise in terms of its stock price. even the positive look at this foreign strategy says it's going to take four, five years to be profitable. what's likely to happen to the netflix stock as they go about trying to penetrate europe? >> what's worried us about the stock has been that we felt like it was already discounting significant success overseas, and there was no margin for error. that's why we downgraded it. we've obviously been wrong downgrading it 100 points ago after a huge run in the stock.

the question becomes, how big can this get? they are going to launch more markets theoretically next year. they are teasing entering asia, whether that means japan or south korea. we are looking for any signs of early success in these nonenglish speaking markets. that's where there is obviously huge potential. france in germany aggregate bigger than in the uk market. in each market are they on that pace? are they behind? we are going to be looking for how fast are they accelerating overseas? as they try to get an understanding how big this can get overseas. the stock is trading on the international potential right now. u.s. is assumed to be a success. >> rich greenfield, this means we need a road trip to test this out. in paris. >> culturally, "seinfeld" didn't work in germany.

tastes are different. >> in france they have "homeland." showtime didn't sell that piece of content. it went to netflix. it shows how rights are really fragmented as you go around the globe. >> thank you very much. stick around. cute little guy, huh? this guy could take down your entire company. stay with me. on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm.

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welcome back, everybody. in "monday night football" eagle took on the colts. eagles winning 30-27. speaking of the eagles, a new twist in the lesean mccoy tip drama. the seller says he was given the receipt by tommy up the owner of pyt restaurant where mccoy left the tip. the bidding is up to $99,900, four times the value of the tip. >> i don't believe it. >> i don't believe it either. i saw it this morning. that is amazing.

let's get down to the new york stock exchange. stocks are one thing, the early call and you're right on that, how about yesterday? we talked philly and eagles. i didn't get to watch it all. you get up later. i watched the first series. looked like a different team. so much better than two, three years ago with chip kelly, right? >> darren sproles is on my fantasy team. in camp i saw him line up in every different position. i did not think he would be giving mccoy so much run for the touches. the city is flying high. it will be a very contested game. >> so we had ppi, a couple of others stories this morning. what's on your radar? you see facebook and some of the other tech stocks because of alibaba? >> facebook has got the

identical characteristics of alibaba. stock could open $90, $100. it's got better growth than facebook. it's i not just people selling for $23 worth of ipo stock, it's people selling to be able to buy the rest of the stock in the after market. i think that is going to be flippers versus buyers. the flippers are going to make a lot of money and buyers will make a lot of money because it's not an expensive stock. >> see you in a couple of minutes.

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that does it for us today. join us tomorrow. now it's time for "squawk on the street." good tuesday morning. welcome to "the wall street journal report." i'm carl quintanilla with jim cramer and john faber. the two-day fed meeting