good morning, welcome to "squawk box" here on cnbc. i'm michelle caruso cabrera along with andrew ross sorkin and joe kernan. becky quick is off today. despite a big rally we saw on friday, volatility is back and that is making things a lot more interesting. the dow has closed up or down by 100 points in seven of the last ten sessions. dow basically flat. s&p is down a little more than 1%. the nasdaq is down 1.5%. and the small cap heavy russel 2000 dropped 5%. futures at this hour are suggesting a negative open with concern about the situation in hong kong. dow opens lower by 62 points.

the nasdaq lower by 15 and the s&p 500 lower by 7. andrew? thank you, michelle. hope you had a good weekend. we'll tell you about the corporate news as pimco is working to assure clients it has a solid team in place. that's what they are telling everybody to manage their funds following the very public departure that surprised so many of us of founder bill gross that happened right here on the air on "squawk" friday. the bond giant has seen $10 billion in outflow since that news first broke. and the wall street journal now saying some are projecting withdrawals could hit $100 billion or more. the ripple effects from gross' departure being felt far beyond pimco's doors. in newport beach they dropped upon the gross news. also, meantime pimco's new ceo doug hodge says they are moving

away from the founding. in an interview the total return fund run by gross does, in his words, decline pimco. we'll tell you other financial news this morning, goldman sachs tightening its interest rules on investments that bankers can make in individual stocks and bonds effective immediately. bankers are not going to be able to allow in activists with driven hedge funds. this comes as elizabeth warren calls for hearings into issues raised by secretly taped conversations between fed supervisors. did you hear these tapes? >> i didn't hear the tapes. >> the tapes were part of the american life project. i listened to it over the weekend, it's pretty crazy, the tapes. the tapes were secretly recorded by a woman inside the new york fed that is suing -- >> she got fired. >> and i believe this is part of the case that was thrown out. nevertheless, the tapes unto

themselves do raise questions about the fed, everything. >> i was startled at the rippled effects of bill gross. you know, italian and spanish ten-year yields rose on fears of whoever takes over the fund isn't going to like spanish. can you imagine you leave a firm and two massive economies see their sovereign debt yields rise? unbelievable. >> no firm is more associated with the founder. i was still trying to think phl took it, his name, but that was weird. and some say it never regained stature to that level. i'm surprised that a trillion dollars -- bill gross single handedly built that firm to where it was. and does anyone -- advertisers, i love them, pimco, you're great, you're wonderful, but does anyone else there know how to manage bonds as well as bill gross?

do we know? >> i don't think we know, though i do imagine that hodge is right in that there's a lot more people behind this than bill gross. >> they are going to attract the best and brightest, right? >> very few firms are so associated with it. but then you look at some of the recent -- the erratic behavior that maybe that's coming from the other side that is leaking some of the stuff about writing about his cat. and also getting more and more thin skinned and maybe abusive to employees. >> here's the thing that could have been true for years, but as long as you're making money, you can do whatever you want, right? but the last three years he hasn't done so well. >> there is a person that if he wasn't so guarded and protected and just always saying, you know, seen to be phrasing things like, he looks about the corner, he could tell us everything.

and he tells us nothing about this. >> i think there's a contract in place that prevents him from doing that. >> all i can get out of him, you know what i can say is, hey, how are the jets looking? >> here's my question, he could tell us, meaning does he have something to prove? by the way, do people at pimco now have something to prove and therefore -- >> how do you hit a home run in a bond fund with zero interest rates? when you know it's just headed up? i mean, how do you manage that really well? i mean, you still do the global -- >> you try to outperform the other repeaters. >> but you also mentioned the volatility back, it's at 14 and change. but that reminds me of going from the ten-year, you go from 1.8 to 2.5, it's a 50% move but still 2.5. the vix is still $14. >> i wonder if bill gross going

to just manage money rather than managing the firm allows him to focus on that which he's very good at. >> i think this could help or hurt. this is as much of a psychological game -- >> how about the people who are on the board of pimco, this guy definitely has to go, but what does it mean? and now it happens and they are just watching billions leave. >> you knew the market cap of allianz is dropping billions. that's unbelievable. >> it was going to hurt the firm alone. it was a decision they felt they had to make. >> during the commercial breaks on friday, i was calling -- you said it happened on the show and i was thinking, we didn't have anything to do with it, did we? >> no, it happened during the program. the timing of those people -- >> it had nothing to do with what you said about gross or what i said about gross. it was simultaneous. it didn't happen on this show, andrew. >> it was announced during the show. >> it's an illusion. you think about that a lot.

>> it's the grandeur i have. >> you are not really a part of any of these stories. you have to get over that. you are just reporting on them. >> i am an observer. >> we are just reflecting on what's happening right there in the world in the public. >> i want to reflect you because what have you got? >> no, i just -- fair warning to the viewer, i am sick. i have -- i'm sorry. >> hold on. >> i don't know what is going on around this table, but whatever they had, becky and joe had, now i have it. and -- this week is not the best time. he's stepping back, too. >> we have a guest waiting. he's like very patient. he looks like he's in a tennis match. >> he doesn't want to take my hand and he shouldn't. >> japan ea's softbank is offer $32 a share to buy out dreamworks.

that's the studio behind "shrek" and "madagascar." there's dreamworks and dreamworks animation, right? >> dreamworks is not live action, they have cartoons. and this is dwa. >> i never understand, do you only use deodorant on -- >> have mercy on me this morning. >> i know you sweat when you're sick, don't you. it's gross. horrible, clammy, is it up here or everywhere. >> just up here. >> headache, too? >> my throat is on fire. my eyes are hurting. to other news, microsoft's ceo is in a meeting with regulators in beijing. china's government said he promised to cooperate fully with

authorities in their anti-trust investigation. they have seized evidence from multiple microsoft offices in china calling in high-level executives for questioning as well. and there's the european commission because it reportedly is set down to accuse apple of benefiting from elicit state aid in ireland. the fda is saying this is based on preliminary funds to tax deals. they suggest the probe could mean apple is facing billions of euros in bonds. what is it called, the irish sandwich or whatever it is? >> hot coffee in the sun, i don't know. >> some very twisted way of -- >> reducing your tax benefit in a very legal way. >> in a very legal way. >> in a shareholder way. >> i don't know if it is legal but we'll find out. the dow is taking investors for a wild ride heading into the trading week. it was my read. it was my read. sorry. >> read it. no, no, you finish what you

started. >> it's you. >> generosity. >> what were you talking about? one thing to tell you about ireland, they know how to play golf. >> they do. that's where you are headed, right? >> just like scotland. >> rory and graham. painful. painful for the united states. it's like we just learned how to -- it was born in scotland. >> it was. >> and the euros had it first and it looks like they have a lot more experience with the entire playing of the game than the u.s. did you see -- neither one of you saw it? i watched every minute of it, and the entire time you're hoping against hope, but you're watching what's happening and knowing that you're just not an icecube's chance in hell for a win. >> but it was pretty, right? >> it was, but it was like the varsity team playing the j.v. team. it was incredible. and it's been like that eight out of ten times or nine out of

eleven or something. it had nothing to do with tiger but those guys. we congratulate them. ian poulter is a friend of the show. the dow is taking investors for a wild ride. we are at 17,000, so 100 point moves aren't what they used to be. there will be a day when we do 500, 600, 700 points up and down. that will happen. after the fed gets out and all this volatility that had been masked by all this money sloshing around, there will come a time. for the first time since june of last year, stocks are poezing five straight days of triple-digit gains, up or down. what can investors expect as we close the quarter to get ready for the big jobs report coming on friday? >> it is. >> get ready for that. i'll be watching. we want you to do a good job of it. maryann bartel is here with

portfolio solutions, the chief investment officer. >> that's a big title, isn't it? >> sounds good. >> people have problems. and you are the solution. >> yes, i am. >> yet it is not pretentious or anything, is it? do you feel you and merrill are in a position to help people? >> we do not guarantee results but we try to get our clients to their goals. >> that's a good -- i assume that. don't all broker firms? >> we have the chief investment officer that actually created how we get to our clients investment results. >> i'm liking it. >> he wrote the paper beyond -- >> are you just an economist? >> just a boring economist. that's all i got. >> that's it? >> do you have any solutions? >> do you expect to talk? >> we have you here and you here. >> i did bring my crystal ball, so hopefully i can tell you

more. >> the vix is 14, will it get back to 30? >> i can't want say it will never happen. this year i don't think so. >> is the fed and what we're seeing, it's such a big part of the dollar. it's a big part of the equities market. a big part of the bond market. when they finally exit, and we normalize interest rates and everything else, will volatility return? >> we think volatility will definitely return. but if you study history, this is certainly not normal for the kind of environment that we're in, it takes six months before the market responds to a fed tightening. in fact, normally the economy is booming and that is why the fed is tightening. and the market gets very giddy and it takes a while for the market to realize that the punch bowl was taken away. so believe it or not, six months after a fed tightening on average markets go up double digits. >> so when is the first

tightening move? and is it possible that we're wrong and that it gets pushed back because things weaken a little bit? when do you think it -- >> at bank of merrill lynch, our forecast moved up in june. so we are closer to consensus. >> so that gives us all of 2015 before the market reacts to it is what you're saying. >> that's what history has shown, but i think things are different this time. not only are they raising rates at the fed funds, you're the economist, the expert. >> he has no solutions, though. >> they are also going to interest rates on excess reserves and using reverse repos. and i attended an economic summit where 30% of the audience had no idea what a reverse repo was. >> supposedly the repos won't work because it's not going to cause any drain. >> well, the tightening cycle is

very different. i think you can get a lot of market behavior not knowing how to react, just like when ben bernanke used the word tapering we treated it as tightening. i think the market can get confused over the coming months by the fed language. and we can continue to see volatility. >> kevin, is june 1st the -- >> i think that's right. >> you do? you think it's june. >> given the economic backdrop it seems like a reasonable forecast. that's our forecast at ubs as well. if you were to say which way the balance tilts, it's probably an earlier exit. q1 is not out of the question, but right now it seems like the fed is, with the kind of economic data we're getting, it can be patient and wait for inflation closer to the 2% threshhold. >> do you think the economy has moved in to a higher level of activity at this point? >> i do. if you look at the last couple of quarters, three out of the last four quarters, you have grown above 3%.

the third quarter this year gdp seems to be tracking at 3.2%. in the fourth quarter, 3.4 seems reasonable. we have had a break out here in capex. we'll update this later in the week as it seems to be moving in the right direction. job growth seems to be averaging about 200,000 a month. the unemployment rate has fallen to 6% by friday. so i think the economic backdrop does suggest that the economy is moving. >> if it dropped .20 it would be in the fives, wouldn't it? >> it would. >> we just had someone say last week this is a completely sort of distorted 5% to 6% unemployment rate. and that things are still so weak that we never in the next five years, we never see rates go back because we can't afford to let them go back because it will cost too much on the debt we already own here. >> well, the lower interest

rates, the fed's portfolio has been redeeming a lot of cash that they have been sending to the treasury. so, you know, as the normalization of policy takes place, there won't be handing of the money over because they could potentially lose -- >> it's $150 billion per point they said. >> really. >> if it was a four, you're at an obamacare type numbers for a year. >> if you go back to the 1950s, we are very similar type of interest rates. we had zero interest rates in the early '20s, '30s and '40s. we had the ten-year equivalent that took 16 years to normalize back up to 5%. so i'm with you, i think rates will get higher much lower than people anticipate. >> the market, will it continue to go up? i mean, it's at 17,000 now. is it -- >> well, the seasonality is going to get --

>> will it be 50,000? >> we don't have the forecast out that far. we have a solution to where to be invested over time within the marketplace. but i think people should understand that the seasonality going into the fourth quarter is very strong. and very strong even with the midterm election year. and so forecasting next year out, we have -- we don't have an official forecast, but knowing where to invest within the markets. we have talked team usa all year. we have talked about technology, energy, autos and manufacturing. the capex -- >> i like that, team usa. >> we had the olympics and -- >> she's clearly patriotic. >> this a good day for me with andrew. i should bring up -- you're just -- you can't argue. >> i'm so under the weather, just get me -- this tissue is my white flag. just go for it. >> shall we talk corporate taxes? >> how about fairness. >> did you see the piece in "the

new york times"? all this data, the data decided -- >> not today. >> this is my thing. >> a person from my church said the only fair in life is the state fair. >> that's not bad. >> just a catholic guy? >> no. >> did you marry someone and change religion? >> yes, i did. >> wow. what do you think of that? >> the only fair is the state fair. >> i think i did, although i play video games on most sundays. it's horrible to admit that, but non-violent. the educational ones. >> thank you for solutions, by the way, all of those. and him for the economic prognostications. coming up, positive news in the battle against breast cancer. the details on the latest advancement from swiss drugmaker roche is coming up next. and forbes is out with the list of the 400 richest

americans. we know the usual suspects but this time there are 27 new faces on the list. we'll tell you who they are when "squawk box" returns. e financial noise financial noise financial noise financial noise

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in global news thousands of protesters flooding the streets of hong kong's central business district today. this is the worst unrest since china regained control of the former british colony back in 1997. susan lee is joining us from the ground with the very latest. susan, what is the latest? >> hi, michelle. yes, we are seeing more people than the 80,000 estimated on the streets of hong kong over the weekend. and what makes these protests really perk up the international community is the escalation and confrontation from the hong kong government. yesterday firing tear gas into the crowd, pepper spray, at one point holding up signs saying disperse or we will fire. the speculation is they had rubber bullets being fired into the crowd. we don't have confirmation of that, but today it looks to be gav galvanized. this draws comparison to 1989 with a peaceful protest.

a student movement here on the streets of hong kong happening all over again. we have seen capital flights today with repeats in sell-off close to a three-month high. no one knows what's going to happen going into the long weekend of october 1st and october 2nd. we have been hearing from the government it's looking like the stock will stand today because of the number of people on the streets. and the people are questioning whether or not hong kong is still independent from beijing. so we have the chief secretary second in command here in hong kong coming out with a statement saying they advise to take a second look at the fight for universal suffrage, which is the right to select the leader of hong kong. she says the government will take some time to take a second look and there's no guarantee that they will do this any time soon. >> you mentioned the comparison to 1989, do they anticipate something as horrific at

tiananman square and is there chance that the chinese government may do something like that ever again? >> well, in taking a look at the crowd today, even with it galvanizing with more students moving into the streets of hong kong, it doesn't seem like fear has struck just yet. in fact, i feel like the movement has gained momentum with what's happening on social media. you can't get a hong kong feel without talking about the yellow ribbon movement. this is called the umbrella revolution because that's what they are using to separate themselves from the pepper spray. and they are sleeping in the hot sun because it is very hot. it is bolstering in the city of hong kong. i didn't get a sense of fear from those attending the rallies still in the streets of hong kong heading into the evening here. >> all right, thank you, susan li in the middle of the protests. she'll update us throughout the day. and roche says a new breast cancer drug shows unprecedented benefits in extending lives.

meg caruso is here with the latest. >> roche's drug improved the results in targeting genetically defined breast cancers that have spread throughout the body. it is showing overall survival. they improved survival in breast cancer patients to many. the drugs are doing what they are supposed to do and extending survival in breast cancer patients. this is the longest survival in breast cancer and it is a combination of therapy, which is is a big deal right now in the way we are treating cancers and is genetically defined. these are two cancer drugs

targeting the protein. >> this is for people who are the mutation in the protein. >> that's about numbers of 25% who have the mutation. and the two drugs target that protein, so projeta binds in a different way. >> so it's additive, putting the two together. what do we do about the other 3/4? is there a difference in the severity or the mortality rate of this versus the other three quarters of breast caps her? >> when this was approved in 1998 it changed things a lot and projeta was approved two years ago. so these are spelling better outcomes as we are seeing today in the patients, but in the other three quarters we have a lot more work to do. >> but there's a her2 in the other three quarters. we just don't know the mechanism or the mutation somewhere else that maybe something similar

could be designed. it's an exciting time. >> we are seeing a lot of updates out of the meeting, especially in oncology. we have data from america and bristol myers. merck is working on gastric cancer, so a lot of good data out of this meeting. >> thank you. all right, coming up, the leaves are turning colors, football is in full swing and the halloween decorations are going up. that means the arrival of earnings season. should investors expect scary numbers this time around? that's next. and then, besides being september 29, it's also national coffee day. every day is national coffee day to me. let's raise a cup in honor of what keeps america going each day. dunkin's brand ceo is joining us later on the business side of coffee. but first, we'll take a look at last week's dow winners and losers.

>> are you tells us absolutely everything? >> not exactly. we are all select coffee. how do you beat the number one seed?

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now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today. good morning. welcome back to "squawk box." i'm joe kernan along with andrew ross sorkin and michelle caruso-cabrera. becky quick is off. it's harvest time in california. experts warn many of the state's crops will be smaller than usual this year because of the

historic drought. the water shortage has led to shrinking grape, almond, rice, orange and pistachio crops. speaking of, we have a drought here. if you get a chance, check out the wall street journal piece on germany today on the front page. they are so crazy about water conservation over there that their entire water table in germany is too high. so basements are flooded and they take baths together, supposedly, it says in the article. but don't change the water -- there's two different kinds of flushes. there's the save the -- >> the small button and big button. >> right. >> i always use the big button. >> if it's yellow, let it mellow. they have the whole thing going on, but they have gone overboard. which it's amazing -- >> not really. >> it's a problem. there's too much water around.

at this point. it's over there, but it's not -- you won't be able to buy any almonds. >> water is a localized issue. >> all politics are. don't get into an argument about anything, just nod to me because you are not in a position. you are not in a position to give an effective argument. >> today i'm -- i'm under the weather. let me tell you -- it is like mcdonald's. if you plan to use an out of network atm, joe, you're going to be traveling and using the out-of-network atm, a new survey from bankrate.com reports the average fee for using a machine that doesn't belong to your bank has risen 5% to a new high of $4.50 per transaction. this is extortion. they call it overdraft fees that are also increasing to nearly $33 on average. i got some of those that went away. didn't bank of america get rid of these? banks are raising fees with dealing with new regulations after the financial crisis. >> we are similar on this.

don't you -- when you do get money, don't you get a lot more. >> i try. absolutely. will you go out of your way, so i'm like a chase guy, would you go out of your way to find one of your banks? >> i have done that. >> so you don't have to pay the fee? >> in the suburbs you can't. >> i just use the atm here at the office. is it tree? >> i don't think they charge a fee. >> here they don't. >> you're in the city, chase is all over. >> i'm hsbc, so i can get money out all over the world. >> good thinking. >> they have chase around the world. >> it's much easier the way hsbc is set up, it's much easier. >> well, excuse us. >> we are too local. >> we are in the domestic banks that we deal with. you are the international correspondent, i keep forgetting about that. do you get a lot out so that you -- >> yes, i do.

i always take out money four times a month. >> are you bringing traveler's checks? >> no. most places don't take them anymore. you show them to a 25-year-old and they don't know what they are. >> atms work most places, right? >> they do. >> credit cards are much easier. the third quarter coming to a close means earning seasons is around the corner. analysts say the third quarter profit shows how strong corporate america is right now because earnings stunk to start the year. in the second quarter they surged thanks to the pent-up demand. so what should we be expecting? we are joined by the director of research, great to see you. >> thank you for having me on the show. >> do you think will this break the tie between the first quarter and the bad second quart her? >> absolutely. the first quarter was held down by we don't really know what happened, but weather was supposedly one of the reasons.

then there's a rebound, so now this quarter will really give us the lay of the land as for corporate earnings. and there's not much growth expected that's been kind of the trend as well. >> you know what, in fact, i'm going to interrupt you as we show viewers right now a graphic which shows the evolution of third quarter estimates. if you went back to june 27th, analysts thought earnings would be up 6% and slowly but surely today they only think earnings for the quarter will be up more than 1%. why is that? what's happened? >> that's been very persistent trend for more than two years now. we start out with the fairly elevated growth expectations. and then when the earnings season gets going, most corporate management teams will guide lower. and that's what you have been seeing. so right now for q4, the earnings expectations are about

9% to 10%. as this q3 earnings season gets underway and management teams guide for q4, if the trend remains in place, the trend that you have been seeing for more than two years that 9% to 10% growth rate will most likely come down to 3%, 4%, 5% growth rate. and that's how we sign q3 and what we have been seeing for quite some time now. >> bottom line it for us, third quarter is going to be good? good enough? what do you think? >> the key element here is, if we will see any improvement on the guidance front. as i mentioned, more than two-thirds of the companies that guide lower, with stocks as high as they have been, we need to get some reassurance in the earnings front that the outlook for the coming quarters and beyond will be good. so if we see any improvement on the guidance front, i think it

will be fair to call the earnings picture improving or better. if not, then it's the sub par earnings environment. >> good to see you, sharez. >> thank you for having me in the show. steve liesman is in chicago today where he's going to be joined by chicago fed president charles evans right here on "squawk box" at 8:00 eastern. but first, here's here with another special guest. good morning to you, steve. >> good morning, andrew. yeah, we have another president here, the incoming president of maine, john silvia at wells fargo. thank you for joining us. is this finally the big pop we have been waiting for after, you know, the recession, how we kept waiting and it was lackluster growth, 2% growth, 2.5%, and now it looks like it's up a little bit. >> oh, absolutely. it looks like it's a return to more like 3% year growth for the year ahead. and it's broad-based. you are talking residential

consumer and individual investment. so government is turning a corner from negative to it istive. >> some say it's a bad thing. we'll talk about jobs, what is the forecast when it comes to payrolls and unemployment rate over the next year or so? >> the payrolls are probably not surprising around 200,000 or 220,000. but here's the key, the unemployment rate continues to decline below the 6% level. and it gets to about 5.5, 5.7 by the end of 2015. >> so does that mean that relative to where the fed is, do you think -- 5.5 sounds to me like it could be a full employment number? >> oh, absolutely. i agree. >> how is it that we're approaching full employment with the fed still at zero? >> well, there's the other half of the equation. this is a survey for both financial and non-financial economists. and when you look at the balance between the two mandates, inflation and unemployment, the unemployment rate certainly is approaching full employment, but the inflation number throughout 2015 in terms of the pce

deflator is below 2%. we are not as aggressive as the fed is by tend of 2015 in terms of the federal funds rate. >> let me summarize that. you have the unemployment rate hitting the fed's target but don't have the inflation rate hitting the fed target. >> agreed. >> the outlook is below 2% inflation. so here's what is interesting, like our fed survey, they all see the market here for where the fed funds would be and the fed is here. what xaccounts for the difference? >> i think it's the fed's expectations, your survey is simply saying the inflation is probably the primary factor driving any fed aggressive tightening. and in terms of the federal funds rate, and we don't see it. >> john, what are the problems in the economy that the economists want to see, the government or somebody address? >> well, two big issues. one is the housing continuing to be much weaker than expected. housing formation is picking up

with jobs being created, but the housing start numbers remain pretty weak. then second, just consumer disposable income. what is going to kick that into gear? a lot of jobs being created are part-time jobs. not all full-time jobs. and the wages in total compensation are modest. >> thank you for joining us and congratulations on becoming the president-elect for business economics. back to joe in new jersey. good morning, joe. >> good morning, steve. and we'll be watching to see what mr. evans says later. coming up, the new rich on the forbes 400 richest list. plus, the shockwaves going through pimco and the entire global bond market. could any of us do anything to royal the entire world? >> you royal the world every day, joe. >> i know. i don't want to do any more royaling. after the bill gross departure, "squawk box" will return in just a moment.

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welcome back to "squawk box." a thriller winning at the box office. starring denzel washington, debuting with $35 million. and the "mays runner" came in second place. and the universal movie came in third place. >> that sounds great. coming up, we'll talk about the forbes list. you know the forbes richest. buffett, gates, but the list has more than two dozen new faces. we'll tell you who they are when we return. mr. daniels. look at this. what's this? clicks are off the charts. yeah. yoshi, we're back.

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welcome back to "squawk box." forbes magazine out with the 400 richest americans of 2014 with 27 newcomers making the cut including the man behind the rockstar energy drink and the founder of theranos. she is one of 47 women on the list. here to unveil that full list,

senior editor at forbes. thank you for being here. >> thanks for having me. >> so the question i had during the commercial break, joe was saying i have trouble with this list. i have no trouble with this list. but i imagine there are people on the list, some who desperately want to be on the list. and others who desperately don't want to be on the list. >> yes. >> i want you to tell me about those people. >> the people that -- >> how does that work? >> well, we basically resort to threatening at some point. >> you do? >> we do. we tell them they're going to be on some outrageously high number. i'm joking a little bit, but you want these people to cooperate. obviously there's some cases where we miss people and we then later on find their fortunes and are able to pin it down and they come on new to the list. but sometimes there are just crazy deals happening that push

these people into the ranks. >> generally speaking, you're measuring which is measurable, right? if they move things to assets less measurable, it's tough for you. and they do that on purpose? >> of course they do. >> good to bring up. >> we looked at some of the -- >> where's the dubai guy? >> let me take it this way. there are some people that inherited part of it or made a lot out of what they did inherit. but probably more notable and it stands out more, the number of people that did this on their own. >> 2/3 did it on their own. this year we did a self-made score to see who really started with nothing and versus those that kind of maybe had a wealthy father who gave some money.

>> bill gates would still be at the top of that list, right? >> no. he came from an upper middle class family, went to private school. >> there's jobs associated with each one of these people that have done it. >> definitely. thousands and thousands of jobs. >> and tax dollars also that go from the revenue that these people have generated too. >> yes. perhaps some not as much as others. >> i can't find a bad angle to this. but i guarantee you "huffington post" would have a rogue salary of these people. and they'd have one of those arrows where you go from each to the next. in this part of the country right now, it's a zero sum game. for every billion these people have, there are people that are blaming the billionaires because they don't have enough money to buy a car. >> i do think billionaires do

use their money to influence the issues they think are important. >> who are the biggest philanthropists. >> bill gates and warren buffett. >> where does that come from? why is there a medical center -- what? >> i don't disagree with you. >> yes, you do. in large. >> i don't. >> i would imagine -- i feel like i should defend andrew since he's not feeling like it. >> they somehow influence the dialogue. like the andy reid superpac? so on both sides? >> on both sides. >> so it's not just the nasty koch brothers. >> next year for joe, i want you to assign the number of jobs that each person created. because you look at the what zap

guy, he probably created only 30 jobs which is sort of odd. if you had to think about it like that. >> strange ratio. >> although, eventually there would be shareholders and everything else. >> the cutoff is here. $1.55 billion. so i could have $1.5 billion and not on this list. >> definitely. and there were 27 people that were dropoffs that basically -- >> are those the ones calling up saying i've got more dough than you think. >> some people will. one guy is already threatening to sue us because he thinks his number is too low. >> is donald on? >> yes. >> what's his number? >> $4 billion. >> is he always suing to get a higher number? >> actually.

real estate is doing fantastic. >> you know if donald has sued anyone over a comment? did he sue someone? >> someone said he was not a billionaire. and he was mad. >> thanks for being here. appreciate it. still to come, should investors expect the dow's roller coaster ride, triple digit gains, and losses to continue. first on cnbc, tim arm strong responded to that report on friday that yahoo! should be showing some interest according to an activist fund. and later inside the departure came bill gross. me latest details of his abrupt divorce. his abdication as one newspaper called it. stick around. "squawk box" will be right back.

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. dramatic events in hong kong. thousands pour into the streets for a pro-democracy rally. the police move in to contain the crowd with tear gas and batons. will this create tension on wall street? you've got a possible suitor. is aol the latest takeover of yahoo!? and the bond king leaves his throne. bill gross stepping away from pimco after 43 years. billions of dollars flying out the door. the shock waves of this departure as the second hour of "squawk box" begins right now.

good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin. along with joe kernen and michelle caruso-cabrera. today is national coffee day in america. served hot or cold. starts the day off with millions of people. starbucks, mcdonald's have promotions going on. we'll have the ceo of dunkin brands. just opened up new stores. we're going to do that at 7:40 a.m. if becky has the day off -- >> she probably isn't drinking the coffee. >> probably doesn't need it. it is a precious elixir. corporate news. japan's softbank is offering $32

per share for dreamworks. shares soaring on the news as you can see. take a look. trading higher by 25%. but below the suggested price, right? we have an energy deal this morning. encana buying athlon. the eu will publish probes into apple and fiat. reports the european mission is set to accuse apple of benefitting from illicit state aid in ireland. apple faces billions of euros in fines. stocks coming off a wild week. the dow locking triple digit moves in seven of the last nine sessions. morgan brennan joins us now with a breakdown. good morning. >> good morning, joe. volatility. that's the keyword coming into this week. and mkm partners says it's

reading on price wings doubled last week. still not close to the year's highs, but certainly a sign that volatility is coming back. take a look at the volatility index. it surged last week. up about 23% from the week prior and the weekly gains since the end of july. that's down about 4% for the year. a number of factors contributing. and of course the fed. this is as it winds down to bond buying. to likely begin raising rates. the feds created a lot of liquidity in the markets. that has tamped down. that liquidity declines. volatility will return. the dollar index currently trading above a four-year high. 11% over the past five years. all of this affecting parts of the markets most sensitive to rising rates. small caps is one area to keep

an eye on. the russell 2000 is down 4%. it's had much larger losses. emerging markets a selloff as well. gold that is near its low for the year. so this week money managers are expecting more swings as we get a tidal wave of data. this is just a few of the highlights for this week. most notably we have the jobs report on friday. not to mention the fact we are coming into october and we do have the start of another earnings season. and is the last round of the feds bond buying. back to you. >> so good morning, morgan. there was a famous disk jockey that would just say good morgan. it's easier. and you know what i'm saying? it's abbreviated and quicker.

thank you, morgan. let's dig into the markets with peter fisher. senior director of black rocks investment institute. also rich bernstein. he's also a cnbc contributor and owes me big. never had a middle name, so i gave him that. richard, i'm reading your -- i'm sorry. peter, i'm reading you are very cynical in this talk you gave at m.i.t. >> oh, yeah. yes, i was. >> i wonder how rich is going to feel about this. you are taking the notion -- number one, you're calling people like yellen and bernanke elites. no, no. all macroeconomists. >> you're talking about how future generations and civilizations might look back at

what we went through and wonder how had were been so misguided. the notion that if you keep the rate of interest really low on some things, so to finance the purchase of an asset, because you think you're making it cheaper to do that and easier. because the asset rises in price, because of that you're actually not doing that. it's almost the same thing jim grant says. you can make things appear to look better, but you don't really make them better by what we're doing. and there could be negative consequences. have i got that right? >> i think you have. what i'm driving at is monetary policy can only do two things to stimulate an economy. it can try to borrow demand from the future. we're going to have more debt. we're going borrow more from the future and increase indebtedness. we as a society for 10, 20, 30, 40 years think every time we get in trouble, borrow more. and the fed's been part of that too.

and here we are, we've been borrowing again against the future. we haven't delevered anything from the crisis. >> it reminds me of being on the "titanic" and everybody thinking it's going well. isn't some looming ahead of us with this? >> i think so. i was nervous about my outlook being this gloomy. but a chapter was fire next time. >> but there are times when demand is so weak which we saw -- >> absolutely. >> -- where you have to pay it forward or whatever it is. >> sometimes it works. but the question is it always going to work. >> it depends on the problem. in europe what i think i've seen happen is money is super easy. those governments that are supposed to be doing all kinds of things to make their economies work better, they haven't had to. because they've been helped by the european central bank

instead. >> we keep borrowing from the future. i think people think monetary policy somehow has another secret. that's really all there is. >> you want to talk about this or where we stand in terms of the market? >> we can talk about this. joe, look. history is -- in my memory i can only remember one fed chairman who has been viewed positively in hindsight and that's that paul volcker. each other has been looked at negatively. i don't think this is necessarily new. the other thing i would point out is that i agree with peter in terms of some of the secular bag drops. we have to remember as investors that there are cycles. and i think we're in a very powerful cycle right now for u.s. assets. despite what peter's saying. if we ran emerging markets, i think what peter is saying is much more dire than it is for the united states. i think if you're in europe, it

may be more dire. but i think for the united states, i think we're at a very powerful cycle for u.s. assets. >> peter, assuming an iceberg is building, the issue for most investors actually isn't that the iceberg is building. it's when are we going to hit it and what is going to be -- what is it that's going to cause us to hit it? >> i agree with richard. let's be clear. i think there are cycles in only one of two ways. either the fed raises real rates enough to surprise us, to tighten up the economy and we slow down. we borrow less. or we all just keep borrowing and we all borrow too much until it tips over. there are only two ways the cycle ends. doesn't look like the fed is going to tip stuff over. but it looks like we'll keep borrowing until we tip other. >> although there was something disconcerting from one of the fed regional presidents quoted

saying the fed has to be careful not to fall behind the curve. i don't think he noticed the curve has been flattening. that's unnerving and that gets to peter's point that the fed has a history of really in retrospect doing kind of unwise actions. maybe we're going to do that again. i don't think so, but that quote this morning was a little unsettling to a bull like me. >> so last week, rich, those were sharp breaks. we only need a hundred points to scare the heck out of people. at 17,000, that's probably good, right? >> joe, you nailed it right there. it's kind of funny how people are still so scared of replaying 2008 which i just want to remind everybody was six years ago. they're scared of replaying 2008 that any bit of volatility, everybody heads for the exits and nobody wants to be caught being long. i think you nailed it with your comment right there. it just takes a hundred points.

>> one of these days, you know, people want to buy stocks at a 10% discount. that's what the market never seems to do. we go down 4%, people go okay i'm going to get interested when we're down 10%. and then it goes up and nobody gets in. >> just to add to peter's comment about how cycles end, you have poor monetary policy at that point but also overenthusiasm for stocks. right now people are hypersensitive to what the fed is doing. that's not usually end of cycle behavior. >> peter's going to stay. rich, we're going to let you go. be honest with me. have you ever signed richard e. bernstein. >> i have not. >> so you haven't really fully adopted it. >> no. but people have come up to me

and actually asked me if that is my real middle name. >> you know on "seinfeld" seven became popular. and what was the other one he came up with? for names that he thought -- even was for -- and soda. he was going to name a kid soda. >> effin, i want that to be a name. it's a good name for any one middle name. >> high fives. >> was it seven spelled out? >> that's a good question. i don't know whether he did. but you say -- guess who we have on today. richard effin bernstein. >> embrace the effin. >> i'll take it back as easy as i gave to it you. >> i'll keep it. you know -- >> because your parents didn't care enough to give you a middle name. >> there's nobody in my family with a middle name. >> should all be effin bernsteins. and probably your neighbors did

call you that. we'll see you. >> see you, guys. all right. a developing story going on this morning. thousands of protesters on the streets of hong kong's central business district. we are joined now live from hong kong. >> yeah. we made it back into the bureau because there were more than the 80,000 that were estimated to have taken the streets over the weekend. so our networks were overloaded and we couldn't get a live signal. we thought there were way more people out tonight than there were over the weekend. and the reason the international community took notice because we've seen mass protests here is the confrontation and stance the riot police has taken. over the weekend you see on your screens they fired in tear gas. you had baton charges and pepper spray being sprayed and lobbed at the crowds.

at one point the riot police were saying disperse or we will fire. speculation was maybe they were readying rubber bullets. but we don't have confirmation of that. this was to be a peaceful student protest. and i guess people because it was a student protest, that people made the comparison to 1989 tiananmen square where the tanks rolled in. this is the worst escalation we've seen since the handover to the uk. the fifth largest market in the world here. and nobody wants to hold risk going into the long holiday, the october 1st national holiday. they also canceled fireworks as well. we did get a stance from the government. the chief secretary, number two in kwhand here, says they'll look at the suffrage clause once again. but once the chaos dies down.

>> thank you so much. peter, you were head in hong kong? >> all over asia. >> what do you think when you see this? >> it's amazing. it blows my mind. it's hard to fathom. hong kong itself is a pretty stable police. let alone since the chinese peoples republic has taken over. >> market impact? what do you think? >> yeah, i think so it's going to be part of, you know, dollar firming, volatility up. the theme we touched on this morning. i think there's tension in lots of places in the world. and hong kong thought they had a deal with peoples republic about how the chief executor would get wuchb. >> do we have another tiananmen here? >> that would surprise me. i mean, hong kong is different. i think the leadership of the hong kong business community and the society won't want that to

happen, won't want it to reach that point. but it's different than i saw before. >> peter is going to be sticking around. when we come back, will aol continue to fly solo? or will a deal with yahoo! interest the company? that's one of the very questions we have for aol chief tim armstrong as he gets ready for ad week. he'll join us right after the break. your customers, our financing. your aspirations, our analytics. your goals, our technology. introducing synchrony financial, bringing new meaning to the word partnership. banking. loyalty. analytics. synchrony financial. enagage with us. today could be the day. the day we give you hope. relief. a cure. today, we believe every life deserves world-class care. as one of the top four hospitals in the nation,

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welcome back to "squawk box." now let's get down to new york city where julia borston joins us. >> thanks so much. tim armstrong, ceo of aol. thank you for joining us. before we get to e the heart of the ad week news, i have to ask you about yahoo!. are you making a deal with yahoo!? >> it's great to see you. i think the yahoo! situation is the yahoo! situation. we've been really focused on what we're doing at advertising week. we're announcing a deal with google assist today. i wouldn't comment on that speculation. that's two other parties' relationship to work out. >> i have to ask you, this is not the first time speculation has come up about the potential

synergies of a yahoo! and aol merger. do you think it's time to bring the companies together? >> i think the interesting thing right now overall is you have giant dynamics happening. scale matters a lot. we went to number four in terms of traffic this year. bumped up a spot. we had done well in news. we're number one in global news, top three in video. so i think those rumors speculate the evaluate aol has been moving up the scale rank. so we're manifest destiny and focused on our strategy. >> andrew, you want to jump in? >> i know you don't want to speak to it, but to the extent you can, you've had conversations over the years with starboard. they're not new to you. have you had conversations with them about this at all? >> you know, andrew, my focus

has been on the largest single shareholder at aol. our relationship with star bebo had been around the shareholders and employees. so our focus since then has really been about driving aol's strategy. i think the point we're here to talk about today is where the world is going. advertising is a trillion-dollar industry. aol is in the fore front of that. i haven't focused too much on ' yahoo!star board. >> can i ask one question in terms of broader words, you're not involved. softbank looking to buy dreamworks animation. what do you make of that in this idea you think people are trying to get on one platform? that suggests to me maybe there's something else to how you think about aol in the

future. >> i saw last week from softbank, had a chat with him. i saw the news like you saw. content is king. you look at what's happening in the world in terms of the focus. focus we've had around building properties. and then you look at the fact that everybody wants scale. >> now, i want to ask you with this news your announcing this morning. you're expanding to buy traditional ads and tv ads through your program. what's the news? >> the news here is advertising on the internet is growing very quickly. it's now starting to go into tv. so the simple way to think about this is advertising is becoming as easy as e-commerce. in the world where hundreds of millions of dollars gets traded over fax machines.

we're the first company to tie the internet advertising target and leadership and digital has been tremendous. and we're the first partner they're going to be launching with. >> what's that going to mean for aol's bottom line? >> the tv market place in the u.s. is tens and tens of billions of dollars. it's hundreds of millions globally. i believe this transition -- we've gone from zero to hundreds of millions of dollars. video landscape online, i believe we will go to hopefully hundreds if not billions of dollars in the future. i think this is a landmark announcement. while all this other noise is going on in the industry, aol is showing up. what is at the fore front of where the world is going. >> expanding that into television. thanks for joining us.

tim armstrong, thanks so much. joe, over to you. >> thank you for that. quick programming note. steve casey, aol founder, will be here tomorrow at 7:00 a.m. coming up, we'll be right back. financial noise financial noise financial noise i lochecked bag.free with my united mileageplus explorer card. i have saved $75 in checked bag fees. priority boarding is really important to us. you can just get on the plane and relax. i love to travel, no foreign transaction fees means real savings. we can go to any country

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don't move, because coming up we're going to talk about the bond king abdicating his throne. words being tossed around like erratic and eccentric to describe bill gross in his final days at pimco. that's next on "squawk box." know that chasing performance can mean lower returns

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welcome back to "squawk box." among the stories front and center this morning, harley-davidson recalling more than 105,000 motorcycles from the 2014 model year. the company warns clutches may fail causing stopped bikes to creep forward and potentially crash. the faa wants to restore action by mid-october. causing delays at chicago

airports. facebook is advertising new launching today. they will now let companies measure the impact of their ads across devices. for the first time in 43 years, bill gross will get up and go to work for a company other than pimco. we're looking at the ripple effects of his departure. >> gross anatomy is a fun wa i of looking at it. >> you're going to try to -- i don't know why he's working anywhere. >> he doesn't have to. >> 70 years old. billion dollars. >> in newport beach. >> he's in the oc somewhere. i want to say probably newport. >> i bet it has a great view. >> i think so. yeah. we talk about this whole bill gross situation. the reports are executives spent the past few days on the phone with top clients to keep assets

managed by the company. this past friday, they lost about $10 billion in redemptions. that was an interesting part of this story. a sign that gross' brand and influence could lead to more money leaving pimco, those are all things to be concerned about. the coming days and weeks are big for the company. the look of dan ivascy rks in is to assure clients no hitches will take place. now, pimco's total return bond fund is massive even in the world of gigantic bond funds. the next biggest taxable bond is vanguard and it's got less than half their amount. if there are a lot of client

redemptions here, they will have to sell to finance those withdrawals. another thing to watch is a theme developing. that's with regard to unconstrained bond funds. a structure that allows different bond and bondlike assets around the world. when they rise in value, bond values fall. so index funds for bonds may see a trend of declining values. these unconstrained bond funds, they allow to see regardless of rates. and what dan on the team there that runs its global unconstrained bond funds. >> thank you, dom. we're going to bring the reporter that broke the original stories on bill gross and his falling out into the discussion. greg zuckerman at "the wall

street journal." i want to get into the imaginations behind the scenes. but first, we're talking about redemptions. morgan stanley this morning looking at the price of allianz's stock saying the reaction discounts $400 become of outflows from pimco. does that make sense to you? >> it makes sense to anticipate that. i'm not sure they're going to get that high. he's built a firm from scratch. he's the bond king. give credit to where credit's due. there are a lot of local clients. >> take us through the past week. you know all of the players. what really happened? >> well, here's a guy who out-performed for many years and then has stumbled. a lot of his idiosyncrasies, he could be a difficult guy to work for. but it got worse.

he went from hard to work with to borderline nasty. when you're not performing at the same time, that's a lethal combination. >> in the past two weeks, there must have been a trigger point. was there a specific thing he did? what were they? >> a group of people decided they couldn't take it anymore. they went to management and say it's either you guys letting him go or where we're going. they went one by one. in some ways a surprise chose to go with the employees. >> organized, right? it bunt like there happened to be ten people who walked through the office. like a coup. >> yeah. you almost needed to quite frankly. bill gross is a powerful guy internally. and he headed off all kinds of opposition over the years. one on one. the only way to make any head way against him was to sort of

gang up. >> was he really worse or is it simply that when you're making money for everybody, you can do what you want and when you're not, you can't. >> you know, i've asked people internally, hey, wall street's a difficult place to work for. isn't every other place up and down the street hard? he says no, greg, he's harder than anybody else to work for. and that place is full of pressure. that all said, if you stay a few years at pimco, you're set for life. your kids are set for life. and your grandchildren are set for life. you don't want to overdo it with feeling sorry for these guys, but it was a high pressure place to work. >> what happened in the last 72 hours. say, wednesday on. it sounds like bill gross saw the handwriting on the wall. and then he went to janus. that was a surprise for many people at pimco. >> that's very much the case.

they were shocked. they were surprised by the timing. one could have expected to take longer. but to his credit, bill gross didn't want to ride off into the sunset. >> real quick, bill is a verbose guy. we have not heard from him. does that mean there is some kind of nda, a contract that's going to prevent him from speaking? is there money involved? will we hear from him soon? >> no. he left a lot of money on the table. i think you will hear from him when he sets up shop in newport beach. it will be quite the challenge for him. >> would you bet on him? >> he's dependent on resources in pimco over the years. he won't have those kinds of resources. he's a great investor and hasn't been on a winning streak. we'll see how he does with them. >> thank you for joining us and walking through what happened there. coming up, time to make the

doughnuts and the sandwiches and the coffee in the move to california. what a consent. dunkin brands. >> you gave him that idea right? >> i did. he came up with it, but i said no wonder they hired you. california. that's an idea. let's ask ceo nigel travis as he joins us to celebrate a national coffee day. plus, reading the fed tea leaves and checking the pulse of the economy. quarterback will be right back. today could be the day. the day we give you hope. relief. a cure. today, we believe every life deserves world-class care. as one of the top four hospitals in the nation, over 100,000 people from around the world come to cleveland clinic for care each year. and we're ready for you with a second opinion or a same-day appointment

today today today and everyday. call today, for an appointment today.

. welcome back to "squawk box." the futures right now are suggesting we will have a negative open. software being purchased by $24 a share in cash. it's a $27premium. it is national coffee day. and to celebrate today, dunkin'

donuts is ringing the bell at the nasdaq. but one says his shares are down since march. here to tell us what he plans to do to give the results a jolt is nigel travis. the squawk poll is open. we want to know what you drink. log onto cnbc.com/vote. with us now nigel travis. chairman and ceo of dunkin'. i was there saturday and sunday up. you know i go every saturday and sunday. i get the same thing. so i don't need to vote. i the just tell you that i -- what is a latte? i feel silly even saying it. >> we have the best latte out there. >> you do. but it's not $4. >> that's true. great news for you today. a special reward for all your

great customer. you can get a free medium hot dark roast coffee. >> because it's national coffee day. >> because it's national coffee day. >> you have to buy a doughnut? >> you can just go in. andrew, i know you like offers. one per person though. >> is the dark roast new? >> it is brand new. we spent years developing it. we're really excited because it's got this bold, smooth finish. and i'm really excited about this. because a lot of consumers say they wanted something other than their original blend that was successful. so we've got a lot of consumers out there who drink our original blend in the morning. now they've got dark roast as well. we've got even more offers. you can get it 99 cents through october 5th. so a lot of opportunities. >> let's -- do people overlap? are there starbucks people in

the world and dunkin' people in the world? i think they're different people. >> i think there's a lot of overlap. 80% of overlap based on our research. it's not just people go to starbucks and us. they go to all kinds of different places. they go to convenience stores. so the trick is to make sure they come to you more than anywhere else. >> how do you do that? how do you induce people to skip starbucks and come to dunkin'? what do you think starbucks does to keep them coming there? >> i'll answer with what we do. we're world class on speed. people want in and out of the drive-thru in the morning. we do a great job on that. people are attracted to our breakfast sandwiches as well. and the real thing that adds stickiness is our perks program. we allow people to do mobile payments with our app. you get a fast reward. you get a free coffee very

quickly. 250 points. five points for every dollar. >> you won. >> with 10,000 votes. >> we asked people which they prefer. dunkin' over starbucks. >> the speed thing is true. that line -- >> huge. >> we've considered that. i said i was going to stop before i get home, i'll stop at starbucks. you don't have time. because there is the line. >> and now they obviously like our coffee better as well. >> when burger king and tim horton's and all that was happening, cramer came on and said tim horton's is a crappy company. the canadians go crazy when you say that. have they hurt you sfp. >> they've been good competitors in the north of the country. i like to think i'm very competitive. this is a like a sport.

we compete with them, mcdonald's, starbucks every day. i think we've done a great job. we've shut down a lot of tim horton's in providence, maine. they've done a good job in other places. we intend to be competitive. see detroit as a real battleground. if you think about it detroit, where my wife comes from so i know it well, is very close to the canadian border. we've got franchisees there. all mergers are difficult. you have to take out cost by definition. that's distracting. so our franchisees are very focused on what we can do to take advantage for probably the next two years. >> what do you make of the problems or challenges that mcdonald's has had over the past couple quarters? >> so i spent 20 years competing.

they're a great company. clearly the consumer is looking for something different. whether it was value they want, the range of products. all i know is mcdonald's has tried everything against us. they've been giving away free small coffees for the past two weeks. doesn't really register on our numbers. but i think mcdonald's probably needs to find the new way to win. they've said that publicly. they've got capable people there. i think don thompson is a capable leader. he and i have some of the same challenges. and we've talked about it. so -- >> which are what? >> i think the challenges are the differences between how you manage franchisees and corporate challenge. that's been a well documented issue. there's various legislation around a country coming out that is bad for franchising. to me the number one issue we all have to focus not just in this country but locally is jobs

and young people. you're the expert internationally. think about global youth unemployment. >> it's horrendous. >> in our industry is the place to give people the opportunities. >> is there an argument to make, you've embraced doughnuts. you're not trying to pretend to be something else. do you think mcdonald's has strayed too far from its core? >> we have our menu that's focused on what's good for you. a number of consumers take it. most consumers don't. so consumers do bother with that. >> one doughnut. to be totally pc -- >> fewer calories than a bagel or muffin. >> are you in seattle? >> we're in seattle, baskin robbins. >> why aren't you in california? will you go there? and how many minimum wage employees do you have at

dunkin'? >> going through those questions, we are now in california. we've opened spectacularly -- i could not be more happy with california. the first three traditional stores have opened. we've had lines out the door. in fact, the only comparison i can give you right now is we opened two weeks ago in southern india and we had lines as long as california there. so we're very excited about california and india. >> you know there's a strip mall on every corner in california? i could see a dunkin' on -- i could see four of them per interchange. >> you're right. >> i can't believe you weren't there. they needed to hire you to figure this out. it was like the 19th century someone said that. >> we're going have a thousand stores in california one day. you asked about minimum wage. >> yeah. how many do you have right now on minimum wage? >> we don't actually have the detail records because they're run by -- >> would it hurt you if it went

up $2 3or $3? >> no. it has to go up by state. the thing i've opposed is a federal minimum wage. because that doesn't reflect the individual economy is on a state by state basis. we think each state needs an individual minimum wage. most of our franchisees pay well over minimum wage. >> very few people. >> and the number people don't get, for people to come in our industry within 70% get a promotional opportunity. this is a great way for people to start learning to deal with customers, to learn about marketing, to learn about computers even. >> do people still -- do they still dunk their doughnuts?

do you dunk your doughnuts? >> i've done it once. now -- >> it's delicious. >> it's really good. joe dimaggio was a big one. >> that's where the cruller came up. >> sometimes it falls off. >> i'm going too start -- >> you don't dunk your doughnuts. >> i'm going to do it now because you told me to. >> try it. >> i will. >> i'm going to have this doughnut. >> do you dunk your doughnuts? >> no. i like the glazed. >> it's a good doughnut. >> you're going to try dark roast today aren't you? >> i absolutely am. >> he's going to drink 83 coffees. thank you. >> thank you very much. coming up next, new week on wall street set to kick off. look at some of the stocks on the move at this hour. plus just minutes away one-on-one with charlie evans. he made waves last week saying

he's uncomfortable with the calls to raise interest rates sooner rather than later.

let's take a look at some stocks to watch this morning. nike was upgraded to out perform from neutral at credit suisse. i wonder how long they've been neutral and now they're going to o

outperform. the price target was increased to 100 from 80. good move. yahoo! shares were raised to buy from hold. $48 at this point. let's get back to our guest host peter fisher. worked at black brock for a long time. your thoughts on what happened at pimco with bill gross' departure? >> i think about how hard it is to run a big management asset company. >> so magnanimous. >> seven years ago when i joined at black rock, we were jealous of the house view approach. the clients all understood it. >> and every other manager has to follow that whether you agree with it or not. >> and the harder it is ta sustain that. the clients didn't just sign up for one view. they want to know who's running their fund. we had to move in that

direction. i was jealous of pimco back then. i think it made sense to move in the direction of less centralization. we still have leaders. you've got to talk to each other and explain what they're doing to each other. part of pulling people together. you can see what happened at pimco over the last two years with mohammed leaving. more faces coming into the pick chu. people running their own funds. >> dancing with glee over at blacksflok. >> i haven't therein there. >> an educated guess? >> i think our turnover and head count in the last ten years, you don't wish that on anyone. i think he's going to run a great leader. >> thank you so much, peter. >> my pleasure. >> with us for the whole hour. when we return, a first on cnbc. interview with charlie evans. and plus we're going check in with our platinum portfolio

manager. and later, nfl hall of famer warren sapp set to tackle the. another big hour of "squawk box" coming right up. you can only see it right here on cnbc. if energy could come from anything?. or if power could go anywhere? or if light could seek out the dark? what would happen if that happens? anything.

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

studio shopping. kung fu panda style. softbank, owner of sprint, in talks to buy dreamworks as it looks to become a multimedia powerhouse. details ahead. happening right now, hong kong protests escalate after a weekend of violence. the markets are on edge overseas. we get the latest from the region. plus a bet on energy that hasn't paid off. jim o shaughnessy is down on his picks. the final hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc, first in business

worldwide. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabre caruso-cabrera. we have an interview coming up with chicago fed president charles evans. but first michelle has top stories. >> an occupation which started in the early hours of sunday. police have moved in to contain the massive crowd. pimco trying to stem outflows today in the departure of founder bill gross. the bond giant seeing $10 billion in withdrawal since the news first broke. and some say it could hit $100 billion or more. it is being felt far beyond the pimco doors with treasurying being hit. in corporate news, check out shares of dreamworks. looks to be a big winner today.

softbank is offering $32 per share for the company. markets coming off a roller coaster week. a correction could be coming down the trap. >> more volatile till peeking back in the market. it's something we outlined in the last hour. triple digits every day last week including thursday when b we saw that brood selloff. the dow, s&p 500, and the nasdaq. economic growth concerns of fraud. we've got the feds shifting monetary policy here. the impedding -- it's also adding to a stronger dollar. so they have posted gains for 11 straight weeks now. the industrial sector, one of the biggest laggers last week. stronger dollar could also weigh on big multinationals. that's something to watch in the revenues the next earning

season. but credit suisse says the mid-caps could be the most at risk. their scene is more vulnerable and still have that exposure abroad. speak oging of the small caps. high momentum stocks sensitive to risings rates. hit the technical death last monday. since then the slope has declined. that's a sign the long-term trend or the russell is no longer up. it bodes poorly for the small caps specifically, but this could be an early indicator. lastly, high-yield bopds. all of those tumbling this month. they're all down 2.5% to 4% a piece 37.

back to you. >> weird. because there are a couple of down days of a hundred. then down 250. then up almost 200. now what we're looking down 90 today. that's going to be -- could be trim. when you get a 90 this early, usually they push it. morgan, unk ta had. let's go to steve leisman. he joins us from the annual naeb conference with a special guest. hey, steve. >> hey, joe. thanks very much. i'm here at the conference with chicago fed president charles evans. >> welcome to chicago. >> thanks. let's talk about the speech you gave last week. how patient should the fed be? >> the economy has come a long way. the unemployment rate has come down to 6.1%. we're about to get to the end of our asset purchases. now everybody's wondering what considerable period means.

i think there will be quite some time before it's appropriate to raise rates. i think that if you look at the risks, we ought to balance those and sometimes coming out of the zero lower is a difficult proposition for economies. so i'd like to be patient and any removal. make sure the economy is strong and will continue to be strong. >> so the market which is completely underable, they try to put a time frame on this. i know ut to do it based on the da data. is that the appropriate time frame? is that patient enough in your opinion? >> well, i think we're going to have to see. i think it's going to be based on the outlook of the consensus view of the committee. that's always challenging. we all have the outlook it will continue the pace of improvement. june is a possibility. once you say appropriate monetary policy, i want to make

sure we get inflation up 2%. just to make sure we have confidence if we get there. that's a committee decision. >> from your own personal standpoint, you could see going beyond the summer to make sure -- >> i certainly could, that's right. >> use this term overshoot in your speech last week. and i was a little bit confused as to whether or not to use that as policy. and allow it to be there for awhile. to be symmetrical or even with what you had before. >> i think we want to make sure we get to 2%. it's been a long time. we've never gotten to our 2% inflation sustainably since he called it off january 2012. we need to get up to two. that's what our objective is. we've been below it. it's okay to be above it as long as it's modest above that and in a controlled sense.

sometimes in order to get things to the target, you have to make sure you got enough momentum. if you're shooting free throws, you want get to the rim. but if you're short, you don't get there. >> you don't want to be throwing over the back board. >> that wouldn't be controlled. >> let me ask about this issue. the concern out there is that the fed is already fostering bubbles in places like corporate high yield markets. people believe it is just the result of policy that's too loose. how concerned are you about that? what's your response to that? >> we're always worried about financial instability risk. the world economy is dictating low interest rates around the world. in europe interest rates are low. japan, they're low. there's not a chance that the

can engineer higher interest rates around the world. the world economy is doing that. we're providing an combination. get up to the 2% objective. and yes it's going to indicate -- that's going to be -- that's going to propel people to go out and borrow more, to spend more. more consumer durables get the economy going. for stability risks, we have to make sure we're using macroprudential tools to make sure those don't emerge. they're not large. that they're in certain places if they exist. so they don't have to indicate did sh. >> there's a piece in "the wall street journal" today written by a scholar from the american enterprise. it says first of all you guys are no good at identifying bubbles and there's no proof that macroprudential works as a tool to keep bubbles from happening. >> well, i don't know there's a

lot of evidence of that. i think dodd-frank has been a water shed event. i think what we're doing in terms of stress tests for the financial institutions, the fact we're doing capital investment plans and we're questioning whether or not the largest firms are putting enough capital aside and telling them you need to be more careful and not just waving through their plans. the new liquidity requirements. the table is set for them to be more resilient. i just don't see any evidence in favor of what you just mentioned. >> let me come out in this way that i think the critic of the federal reserve might. you said we're doing better. 6.1% unemployment. inflation is not below 1%. it's up in the 1.5% to 2% range. we have a low alarm fire. but the interest rates are at a

five alarm basis. you're at zero with an economy running close to potential. how do you describe extreme policies right now that are at a point where they're like a financial crisis? >> sometimes i think you have to be kidding on this. look at europe. they put the monetary union together and aren't able to hit their target. they're way below. they're worried about the entire integration of that community. look at japan. they've had disinflation for 20 years. china's having its difficulties in ternls of overheating and how they're going to generate growth without bubbles in the housing market. the u.s. economy is the strongest economy in the world. that's what everybody is looking for. also why on everybody else is doing well. we need to make sure we got the

fundamentals right to get strong growth so we can exit the zero bound dilemmas. if we stay in this environment for an extended period of time, we've used up all our best. >> you're part of those feds who mentioned this idea we don't want to go back here. that it would be really detrimental to the federal reserve to have to go back to zero. >> you've seen what happened in japan. you've seen what happened in europe after they had to back track. no, we don't want to do that. >> what are the next things in terms of fed policy and statements? did uz that have to go bf you raise rates? what are the steps in terms of liftoff. >> chairman yellen came out and put forward the normalization principles where we indicated the funds rate is going to be

the tool we'd like to see thee funds rate become our tool once again and use access on reserves. and we've got an overnight repurchase product that will provide on that. the time is going to have to come when we alter our language just because it's obsolete. we expect asset purchases will end at our next meeting. and so we're going to have to have that language evolve. however, i'm not unhappy with the current posturing of that type of forward guidance. because i think it will be some time. my preferences are we maintain something like that. >> thanks for joining us this morning. interesting discussion. back at andrew at headquarters. >> steve, you didn't correct him on -- it's not considerable period, dude. it's considerable time. you just sat there. >> i'm sorry. >> you told me it's not considerable period.

it's considerable time. >> that's your reaction. >> you didn't correct him though. which is it? you said it made a difference. >> i will. charles,ly do that now. i wrote joe an e-mail the other day when he said considerable period on tv, i reminded him it's considerable time. you said the same thing. how's that joe? >> it didn't matter. when we come back, was the government bailout a taxpayer ripoff? we've got the answer when we return? hank greenberg going to court.

charlie, the demand on this network, it is increasing by the 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. [b♪ll rings] time and sales data. split-second stats. ♪ its so close to the options floor, you'll bust your brain-box.

all on thinkorswim, from td ameritrade.

welcome back to "squawk box" thork. let's look at stocks to watch. macy's to add holiday workers for the shopping season. that's about a 4% increase from a year ago. we'll count that in the good news category. baidu increased to $212. and mattel upgraded. citing the loss of the disney

princess license doesn't see a chance of a dividend increase in the near term and believes sales will slow. six years after aig was thrown a lifeline, the former insurance giant claims to say the recovering talkover of the country was unlawful. the now taking place in washington, d.c. that's where we find mary thompson this morning. >> good morning to you. almost from the moment the government put together what became a $182 billion rescue package for aig, hank greenberg saying they were treated unjustly during the government takeover. his lawyers who intend to prove this will come here during a trial in federal claims court in washington, d.c. with testimony from some of the government's key architects of its response during the financial crisis including former federal reserve chairman ben bernanke and hank paulson

and tim geithner who at the time was running the new york federal reserve. greenberg's investment firm was formerly the largest shareholder in aurig. this will be argued by david boise. greenberg resigned in 2005 amid an investigation into they have firms accounting. including accepting -- claims in a sister suit greenberg had filed in district court had been thrown out. now damages between $17 billion and $25 billion. um posing unusually high interest rates on loans.

and refusing to fatherly compensate. sought to dismiss the case. but the presiding judge said the complexity of it merits a hearing of the facts. the trial opens at 9:30 this morning for each side getting opening arguments. >> thank you for that. i don't know the merits of this case, but it's going to be fascinating to see what happens. coming up next, democracy protests growing in hong kong. today after a weekend of unrest. the live impacts on the market when we return. plus ready to make the case for energy stocks. picks are down, but maybe not out. "squawk box" returns in just a moment.

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tens of thousands of democracy protesters on the streets of hong kong's central business district after dramatic scenes of armed police wielding batons and firing tear gas unfolded over the weekend. susan lee joins us with the latest. >> michelle, an update on protests in place. more than 80,000 we saw over the weekend. but still largely peaceful. you saw mostly students out there in the central heart -- >> we're having some issues with the satellite feed from hong

kong. apologies there. when question cowe come bac look at equity futures. we do have red arrows. that could change when we get the numbers. dow off 92 points. s&p off 11.5 points. and nasdaq 25 points. we're back in just a moment. today could be the day. the day we give you hope. relief. a cure.

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all right. we think we fixed the satellite issue. susan lee joins us with the latest on the hong kong demonstration. >> hey, michelle. we were doing the count on the streets and from virtually all of the heads that we saw out there, it was more than the 80,000 out on the streets in hong kong over the weekend. largely peaceful protest so far. we haven't seen any violence, any tear gas or any baton charges of the like. hopefully it will stay that way. we saw the violent clashes take place in the wee hours of yesterday this morning. hopefully we will keep it that way. there are no guarantees of course. we had local television showing these pictures from last night where you did get the tear gas. where you did get bloody faces and also pepper spray.

in fact the protest leaders were telling the protesters to retreat in fear maybe rubber bullets will be fired. we have no confirmation of that. i guess people today in hong kong brought to a stand still. people told don't go into work. which is rare here in the city unless there's a typhoon or some weather system. and this is the fifth largest international market in the world. people taking money after their table to prevent the risk. >> you mentioned the market effect. h how worried do you think investigators are? >> we saw volatility spike. trading off close to three-month lows. and given it's a national holiday on wednesday and also thursday. nobody wants to hold that risk.

so you can't sell out. and people are making this comparison given that was a peaceful student movement. people are thinking is this 1989 again? do we the pla rolling in the tanks. they do have garrisons in hong kong. >> what do they want? protest want to do what? >> they want to select the chief executive, via leader of the city. which was kind of worded in the basic law when hong kong was handed by to chan from the uk. it looks like they're sticking to their guns saying we are going to choose the nominees. then the 1200 legislative koun s -- can see from there. they want to freely elect and select. >> susanusan, thank you so much.

>> you bet. we are seconds away from personal income and spending. the futures right now are suggesting a negative open. let's show you the 10-year yield as well. right now the dow would open lower 90 points. the price of gold at this hour, what do you think? you think the yield is lower because of hong kong? gold is higher? no? >> you want -- if you want to go to hong kong, just make the case, girl. >> i've been e-mailing all morning. >> have you? >> yes, i have. >> because by the time you get there -- >> if we take off this afternoon, want to report tomorrow got to got on the plane this afternoon. i would land some time in the middle of "squawk box." >> right. maybe you're right. they don't -- once they get going, usually -- >> i don't know what gets them to stop at this point.

>> that's what i mean. hopefully it's not the same thing that got them to stop last night. >> and it's an intriguing question telling the chinese government you want democracy. think about that. >> and what we're frequently told is that, you know, people are pretty smart about it over there. and they understand that this is a country not ready, really, necessarily for it. and they need to keep order. rick santelli is standing by. the numbers quick. >> breaking news. august personal income rises .3. pretty much as expected. well, it's not only about income. how did spending look? it was strong up half of 1%. unchanged, close to pgs kps down a tenth from our last book. that's month over month. a little hotter than we expect

ed .1 cooler. you know, this data is as expected with no serious revisions which leads us to the big fundamentalal of today. it's down 101 in dow futures. that doesn't take it on fair value. but that's in large value what it will look like. we haven't settled under 2.5% in three weeks. here renow hover at $2.49. >> do you think the lower yield this morning has anything to do with hong kong? >> you know, a personally don't. but that isn't to say that it hasn't had some effect. lately i think what the markets are so many things. it's hard to ganl the cause and effect. the market is able to be moved in certain directions easier than others. and all this news may have an

effect in one direction or another. but only markets that are willing are able to be pushed. >> rick, before you g, do you have any view on the outflows from pimco and what that means this morning? >> pimco had a unique scenario towards the last year or so. they had a predominant view for a variety of reasons versus cash. bigger than some in their kind of category. and futures are always relatable. there's no doubt. that may take a toll on the market place. but at this point in time, i don't know that it's anything that we can put our finger on directly. and once again, it's a market already a bit nervous about bubbles. having said that, what are yields doing? moving lower. >> thank you for that. we're going to move on and talk about our platinum portfolio. jim o'shaughnessy is here.

he's standing by with his three stock picks. jim joined us on april 2nd. since then canadian ole down 12%. i'm sorry about that. says he could is off marginally. and his third pick has dropped 21%. and yet you're doubling down? >> well, we're quantitative investors. we use a formula to select the stocks. >> has your -- the formula would change but given where the stocks are now do your algorithms say i should be doing something different? >> actually no. we're still buying canadian oil. you're getting canadian oil sands at 8%. if anything it's better as

continual buyers of the stock to see them go cheaper. cheaper than 80%. you look at canadian oil sands less. so what we have to do is we continue to add to these positions as they become more attractive. then we're one year buying whole. >> you say one year. in this algorithm you created, it's looking at what the stock would be 12 months out? >> basically, yes. >> where do you see these stocks? what would you be expecting given they're down as much as they are right now? >> we don't normally make forecasts. we do is rely upon how the overall strategy has done. and it's done quite well. this is a global high dividends portfolio. and over time, particularly when u.s. rates are rising, we found that global high dividend portfolios do significantly

better than domestic portfolios. also the global portfolio is considerably cheaper than the u.s. domestic high dividend stocks. for many, many years you have high dividend stocks. >> is there human intervention that takes place in terms of this algorithm of yours? >> no, there is not. >> so these are the top three picks that are spinning out of control? >> yes. as the most attractive, the best valuations, the best earnings quality, highest dividends. with the brazilian telecom, we're just holding that. so essentially we will act -- >> if you had to replace -- is there one just below on the list? >> basically what we're finding

is that lets us get a concentration of names as they're underpchling and increase the dividend. that's a good thing for the strategy overall. >> thank you for coming in. we will watch these three stocks. some of whom may have bought on your recommendation. so right now they may be suffering a little bit, but we hope things turn around for them. when we return, "squawk box" will tackle the nfl problems both on the field and off the field. and we will be joined by hall of fame defensive tackle warren sapp. he'll join us after the break. i think he's in town for the event tonight. check the futures right now. they are indicated sharply lower. we'll be right back.

welcome back to "squawk box" this morning. take a look at futures. see how things are setting up for the day. red arrows though. little better than it was before, but not much. dow would open up 86 points. nasdaq off 22 points. and the s&p 500 off over 10 points. the eu is going to be publishing decisions tomorrow on tax pros into apple and fiat. the european commission set to accuse the iphone suggesting

they could leave apple facing billions of euros in fine. hall of famer warren sapp in town to attend an event that provides spinal cord research. the league's reputation tarnished in the wake of recent off the field scandals and mounting concerns about concussion. joining us now is warren sapp, the legendary player for the tampa bay bucs. won me super bowl. you got your ring on, warren? >> no, sir. >> not wearing it today? hey, you've watched this and first of all i think i'd just like to get just your overall summary or comments about what we've witnessed for the past couple of months and what you think how it was handled, what it means. >> it's a very unfortunate situation some of those players

got into. the league and commissioner will do a wonderful job going forward. we need to implement the policies and procedures we will follow. everything should be okay because it's a great game we all know and love. it's unfortunate that this off-season has been marred that way. >> we've had discussions here and i've got one way i look at it. i think about due process. and normally you want in this country to be given the presumption of innocence. i understand the commissioner needs to dole out punishment to protect the league, but you don't want to rush to judgment in certain cases and being the judge, jury, and sentencer all in one fail swoop. so it's a fine line to walk to protect the league. yet you have to respect someone's right as a citizen. >> i agree with everything you

just said. >> i don't know how you come under criticism for not immediately acting more quickly. i understand the two-game suspension, the video changed all that. but one of the other things we talk about a lot is whether the nfl or football players are so coddled all through high school and college. you're me big man on campus. you know, there's a perception that maybe you get an easier time of it because you're a star athlete and that that carries into your professional life. you make a lot of money and somehow football players feel they can get away with things that everyone else can't. do you think there's some truth to that? >> i don't know about that. because when i was growing up, if we even looked at the water bottle, we were soft and everything. so i think it's more of an entitled to now. everything is such an information age.

yooer knowing this is the best eighth grader in america. my god. how do we know? it's just the times we have now. there's so much information out there and people looking for likes and nfollowers and things we have. >> what do you make of the argument? i think rosie o'donnell made it, that somehow because the job on the field is to hit and hit hard, that it becomes very difficult off the field for that same emotion not to be there. does that make any sense to you? >> you know, i always say this. this isn't just a problem for the national football league. this is something that happens every day in america on a day in, day out basis. it just becomes a bigger issue when o player is in the news. this is a nationwide problem we have. women are being attacked every day in this country. and it's not just the football players, ray rice or any guy we

want to make it that one guy. this is a problem across america. i mean, this is something we need to really get a focus on and handle on. >> we tried to figure out the percentages whether it's more than the general population in the nfl or less. i'm not convinced it is more. because we don't hear how many domestic violence incidents have happened sips bs ray rice pichl. >> it is what it is. if you dig into it, it's a problem across this country. it should not be this way. >> people love this game, guys love to play it. but you are putting yourself at risk not just for head injury. but you see guys 50 years old where their bodies are just after years of playing in the nfl, they're not as healthy. you got to make sure you don't

have guys head hunting and stuff like that. but do you think it's okay for someone to accept that risk that maybe one out of three guys are going to be affected long-term from concussions? what can we do about that? >> we need to take care of each other. they've gone e done a real good job on the helmet to helmet. we've grown so accustomed to looking for the big hits on the weekend. and also we have to take care of each other. >> you're a goodell fan. you said you think the league will do a good job and put this behind us and we'll focus on the great games yesterday. >> we'll go forward. no doubt about it. the leadership and everybody will make this thing what it should be. no doubt about that. >> it's a great cause that you're back for tonight. you're being honored, right?

>> yeah. 29 years of the miami project where dr. greene founded it in 1985. and since 1985 they've raised over a hundred million dollars for the project. i'm happy to be one of the nominees. i'm here for a wonderful cause with great people. pedro martinez, mary lou retton. i'm just happy to be part of the crew. >> we appreciate you coming on and sharing your thoughts with us this morning, warren. we're all big fans and remember you will. >> thank you. >> you're welcome. coming up, a new week on wal veet t -- wall street. jim cramer will join us next. and tomorrow on "squawk box," cleveland -- excuse me. cleveland cavaliers owner and chairman of quicken loans, dan gilbert. he's going to be here. we're going to talk detroit's

recovery, the king coming back to cleveland and more. we're back in a moment. guys! you're not gonna believe this! watch this. sam always gives you the good news in person, bad news in email. good news -- fedex has flat rate shipping. it's called fedex one rate. and it's affordable. sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. great. more good news -- it's friday! woo! [ male announcer ] ship a pak via fedex express saver® for as low as $7.50.

welcome back to "squawk box." the futures right now, take a look and see what's happening. we'll tell you what's going on. dow would open off about 103

points. nasdaq off 28 points. s&p 500 off about 13 points. as joe hits his golf game. you're getting ready to go. >> i am. i am. but let's get down to -- >> to scotland. >> yeah. let's get to cramer first. i've got a couple things. thing hundred, down a hundred. we saw 90 an hour ago, you get to 90, you see triple digit move at some point because it's not percentage wise it's not that big, but what do you think we're seeing with 100-point swings. we're seeing it more frequently recently. >> yeah, no conviction here, joe. i think people buying friday at the bell disappear on monday. people who were selling thursday at the bell weren't there friday. these moves are not good in the sense what we're having is just -- whatever is the last thing that happens is being exacerbated here. dollar goes higher, sell everything, oil goes lower, sell everything. oil go higher, buy everything.

you'll get nike on friday that will be good, and everything that's good is one-off. there's an absolute -- just a gimme, the gimme trade, fed's going to 4%, gotta sell stocks, doesn't mat whether it's factual. >> jim, on the fourth down play, i think he could have thrown it to the guy in front of him. >> i know, he had him right there, you know? it was really -- that was -- wow, that was a bad ending to that game. shouldn't have been in it. >> now it's fun to watch the eagles since kelly has come on board. >> well, g-men are good, cowboys are good. don't know what happened to new orleans. great parody in the nfc east with exception of the redskins. >> game worth watching, wasn't it? >> a must-win for the niners, not the eagles. sometimes that's what matters. >> i thought it was going to happener. >> exciting. >> last drive. then he got it back and almost did it.

enjoyed watching it. thought about you. just about ready to tweet, wow, and they took it from the 9 yard line down there. i had to watch something positive after watching every swing in the ryder cup and having a feeling of dread. i knew it wasn't going to happen. >> my golfing this weekend watching you. i was at a wedding, there you were. >> i heard somebody yelling. i and was practicing. >> that was us. that was us saying hi. >> i heard someone say that. and i was like, oh god. all right. >> staff member of "mad money," kay, and we said, let's get him up here. it's two different worlds. >> maybe it was, yeah. the wedding, the wedding was nice. i was -- you could see how focused i was. i've got mental problems with the wedges and i'm -- i need -- >> just that? >> i can't -- i can't face the, you know, killing someone on the other side of the green when i

skull it across. >> his wedding almost nice as your wedding. >> thank you. >> one of great events i ever dealt with. >> 16 years ago. we go way back. >> that was fun. >> we're getting old. >> thanks, jim. >> thank you. good to see you. coming up, dreaming up a deal. shares of dreamworks animation rallying. japan's softbank showing interest in shrek and the kung fu panda maker. would a deal like this make sense? that's next on squawk box. razy, 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. starts at 6:30 a.m. - on the (vo) rush hounose.und here

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instagram's ceo and co-founder joining the board of walmart. serving on the technology e-commerce committee. the board now has 15 directors. >> young people adding to the board, too because marissa mayer from yahoo! on the board. dreamworks animation in talks with japanese telecom company softbank. the deal could be worth more than $3.4 billion. joining us on the squawk news line, david bank, managing director. david, i mean, at softbank, does this make sense? what does he want? what does jeffrey katzenberg want? >> i think a deal of this size,

right, dreamworks has valuable franchises in i.p., but i don't think it's a game changer, right? i think -- i think -- i think he's looking to control content more globally -- >> for his telecom business? >> i -- i would imagine, right, as the business evolves, this isn't about next year or the year after or the current echo system. i think this is about as the echo system evolves, right? you need exclusivity on your mechanism. you need traction for your distribution by having exclusive content. and globally. and i think -- i really think it's a forward-thinking transaction. i think over time you'll see more but with a deal like dreamworks a game changer, you know, it's probably not the kind of scale that would you know do it. to me, if he's going to play this game, i imagine it's a go

bigger or gome hogo home sort o >> at session lows at this moment. back to dreamworks situation, what degree is dreamworks vulnerable in light of the tough second quarter last time? does that make them more vulnerable or something that happened in the quarter that make them more likely to do a deal? >> i think -- i think it wasn't so much the second quarter, you know. i think dreamworks is in search of that next franchise with the size and scale of "shrek," right, or "madagascar" making one or two pieces of i.p. a year, you're making huge bets on developing the next hit. and that's, you know, somewhat risky model. i think by -- in a world where other studios are bigger, they have more resources, they have more i.p. in their library, i think a deal like this would take some of the pressure off having to develop a hit in any given quarter. >> david, before you go, very quickly, jeffrey cattensburg,

you think he would stay as the head of the company once its owned, if that happens? >> i think he's so crucial to the creative process, it would be tough to do a deal without him. >> david, appreciate it. thank you for being with us this morning. >> you bet. >> looking, by the way, futures down massively. have you been watching this? >> until session lows, i think we'll bring up the screen to see, last i heard, an opening of about 144 down for the dow jones industrial average. nasdaq open lower by 42 points. s&p open lower by 18 points. >> make up your mind. down, what was it thursday, down 250, almost up -- got almost to 200, then up 160 or something. head fakes like that, you think, wow, looks like we're starting on a correct and, well, scratch that not starting, made it all back. now again. you wonder which way it finally breaks out, you know, moving 100 points. >> you think it's anything but

the fed, the -- >> i mean the volatility over the last week? as the fed pulls away, no? >> they haven't started pulling away yet. might be what you're talking about hong kong. >> great seats up front. sometimes kids up there, watch. >> i'm going. make sure you join us tomorrow. "squawk on the street" is next. ♪ good monday morning. welcome to "squawk on the street." carl quintanilla, david faber. we keek an eye not just on the student protests in hong kong but income in spending not bad. jobs number returns this friday. take a look at futures. road map starts with protests in hong kong weighing on the markets. volatility returning to stocks as we closed out the worst week in nearly two months. futures down te