a good thing. and find out why there's no joking around when it comes to ebola, especially on a crowded plane. friday, october 10th, 2014. ""squawk box"" begins everybody. welcome to squawk box on cnbc. things have been volatile. they can change on a dime. futures are indicated lower. dow down 60 points below fair value even after the massive declines yesterday, the dow down 334 points. the s&p 500 down by 40 points. you can see the futures are indicated weaker as well. the dow is coming off the worst percent an point drop in eight months.

the biggest point drop in over a year. the broader index closing at the lowest level in two months. and if you're feeling a little nauseous after this week's trading, you have good reason. the dow is exhibiting the most volatile period in five months. the blue chip index closing up or down at least 100 points. and 12 out of the last 18 sessions, yeah, it's about two-thirds of the time. the vicx is spiking. the gauge is up 39 pest over the last month. we know it's down 4.5% for the s&p 500. the dow at this point is now just 83 points above where it started the year. so talking about potentially wiping out the gains for the year. >> we wiped them out one other time and then put in good ones. but when you think we deal in gains per year that some people say we should do 7% or 8%. when you can 2% in a day, it can be december 27th and flat and be

up 7% for the year. i'm ratcheting down all of my just, you know, i normally remember the media. but we went up to 17,000 on the dow over the last few years. and i don't think we've psychologically calibrated 1% and 2% moves at 17,000. we really need to. and what might be more amazing -- >> you're going to see big point swings. >> right. let's figure out what is a two digit move now in the dow. what is a 99 point move at 17,000? but on what is our percentage basis? how likely is it for the dow on any day to trade in as narrow a range as being either up 99 or down 99? >> the only thing surprising about it is we have been in such a low volatility environment for so long. >> that's more surprised. >> we're used to when things don't move that all of a sudden when we're coming back, it's little bit whoa back on the roller coaster. >> it's a stranger environment

where you have a bunch of days where it doesn't move 100 points. >> maybe we're finally coming out of that. >> and all the banks that make their money, investment banks and trading firms make their money trading, they say it's inpomible with these small moves. so i think the most notable thing is oil. >> actually that, drove the stock market yesterday. >> let's faytake a look at wher oil prices are this morning. >> $84.67. so down another $1.10 today. wow. >> wlhenever that happens with opec, now we do want our guys in this country that have done such a great job making us much more energy, it drives up. >> then they cap the wells.

there is a limit to how much they'll be producing. when things get too low, they cap the wells. they can't make money on it. >> i'm willing to let it go a little further before i feel it starts getting bad. we'll talk about rates. the 10-year yield, intraday low of 2.2979. should i stop there? i think we should take it out 15 places. there it is, 2.98. and that's the lowest level since june of 2013. >> guess who is on today? >> jim graham. >> mark graham. >> that's confusing. >> yeah. remember, he said it earlier, he thought 2% before 3% and i would be stunned by it. he sends me an e-mail every day. >> i had a dinner with hugh grant. >> you did? moncanto hugh grant or the actor? >> from breaking emma thompson's

heart and yeah -- 8 1/2 weeks or whatever it was. as for currencies, the dollar is on track to close tpost the fir weekly na weekly fall. over 107 yen. dollar index jumped 10% in the last three months. the green back never treated more than 1% since a friday. and finally, the route in the oil markets continuing today. 84 -- below $8$85 now. u.s. crude this is the lowest level since 2012. we rousted dominick chew. he lets other people touch his hair which is -- he is fairly new around here. >> a little tired. >> he just lets them -- just lets them do what they will with it. >> i do, too. >> you just sit back and let them -- see, they have no idea.

they don't know how to work it. >> don't touch the hair. >> they don't know how to work the system. >> the hair system? >> yeah, the system. >> the hair system. >> the weave wrchlt it's attached. where it's not attached. >> there's a system to what i do. >> that is true. >> so when dominic comes out with a little squawk poll. >> the hair. the hair. >> while we were sleeping asia took it's queue from wall street. the major markets there all closing in the red. you could see it was down by over a%. it was down by 1.9% and european stocks dropping to multimonth lows today. we're joined now from london. it's good to see you. >> hey becky graechlt to see you. europe continues to be a big concern for investors following the sell off in the u.s. as well as asia. european markets continue to move lower. we're at the lows of the day. the market is unconvinced that the president will be able to

revive the region's economy. the italian market is down 306 points. france down about 66. let's break down the issues facing each market. germany of course that's been a big focal point for investors. recent data of the country called into question it's growth story. industrial production as expected. it's largest plunge in exports since 2009. that's because of tin stability in russia and ukraine. germany's markets down 5.6% just this week. let's switch to italy. what are they facing? unemployment is the big issue. unemployment at 12% for italy. youth employment 44%. she has been putting together this jobs act. we still need to see if that can come to fruition. france facing similar challenges when it comes to unemployment but it's big challenge has been it's budget.

so guys, sell off across the board and you can see on the week all of these markets trading lower, joe. >> thank you. look at that. all of these charts; they look like an ex-slope. an ex-slope. a triple ex. >> yeah, thank you dominic. >> you're very welcome. >> we talk about you and here you are. >> here i am. >> which i think is -- >> hair. >> they don't overdo it. it's perfect. it has a natural -- they did a good job. >> they try to make it look as good as yours. >> it's not going to happen. >> very expensive. >> the energy sector got hit hard this week and that's a big implication for everything. for the broader markets. you know, everything we talk about, we always can say sort of a half empty, half full wheel of what's going on. the reason oil goes down might be bad but who is it not good

for? besides the suppliers. >> the reason why people care more about the oil and energy complex is is it one of the largest sectors in the s&p 500 so when it does move it has a more disproportionate impact? >> in the world. >> if you're an oil producer. >> cry me a river. >> right. >> but i like the cheaper gas. it may mean i spend more at the holidays. >> it's a tax break for everybody. >> yeah. >> you can see dislocations in stock market like this. remember when oil prices are going up and stock market actually went along with that for awhile because the energy stocks were leading the way. >> what you're going to see here is we're going into a nice area where you have energy prices going down and that tax break if you want to call it that is happening when the retailers want it the most. >> do you think that was a smooth sit down for alec there? do you think that worked well? >> alec was pretty smooth to begin with. >> did they tell you to do that?

>> they were sneaking around the cameras. >> he was right in the middle of the camera in front of dominic. i know it's friday but anyway. >> let's go through the oil side of things because we are in a market for crude oil. if you take a look at brent or wti those charts are not good. when it comes to wti like you're seeing there. >> it's a bad chart. >> it was 104. >> and it was 107 in june. in the middle of june, wti west texas intermediate was around 106.90 or 107 in the middle of june. >> bear market. if you look at where the impact has been on the markets yesterday specifically energy was the worst performing sector. take a look at the down side performers. energy down 3.7%. materials the second worst. materials were 3.5%. utilities, consumer staples were

the relative outperformers. hopefully people have more things to spend on things like food and beverages. take a look at the stocks that moved the most in here. exploration and production companies. you talk about the countries being the ones that don't want those things. they extract oil out of the ground and are leveraged to those prices as well. even the majors like chevron and exxon not hit as bad but still down 3% in trading yesterday. that's a big deal. now if you broaden out the scope a little bit more to see what's happening with oil exploration it's interesting overall the way that this is going to flow through the rest of the markets because if we do see energy prices continue to fall, yes we'll have an interesting impact on whether retail and consumer names will fair better on the back of it but for right now the energy stocks are taking it disproportion natalie harder than everybody else. >> will you do me a favor -- someone the other day said price

per gallon got to $1.60 during the financial crisis. >> it was yesterday or today. >> were you watching? >> i always watch the show. >> i want to know, what was the low in crude during the financial crisis? i want to know. >> i would say there's a 60. >> i thought it got even lower. >> $30? >> it might have been around 30. >> because it's not set in stone that it cost $100 barrel and i wanted to get to the point where it doesn't indicate the end of the world. >> tom said he did nothing. he thought those days were over though. >> i know but the calamity that we saw and nobody wants that calamity right there but it could get more interesting. >> when does it get to the point where we're saying this is saying the world is slowing down. >> i don't think it gets to that point. at some point there's going to be an issue with supply in the market. when i first moved out to the

east coast that was out in 99 out to here. i remember paying 99 cents a gallon. >> when i was a kid a remember 50 cents i think. >> does it ever get to there? there's structural elements within the oil industry. >> i want to know when i say wow '84 says scary things about the global economy. >> i see like $42. >> 42 but that's pretty amazing. right at the end of 2008. 2009. >> alec might have thoughts. it's been a wild ride. we have to temper our expectations for what wild is. i have a calculator to figure out what's 99 points on 17,000. the dow moved over 200 points in the last three sessions i. hasn't happened since august of 2011. do you think it's going to continue number one alec young, mark sals here from montgomery scott is the chief investment

strategist. dhuz scare you? was it a long time coming? and then what do you think oil does? >> i think given the run we've had it's not that scary. i think it has been a long time coming. we've had a great run for many years. >> you're talking about going down. >> yeah. >> i'm talking about the volatility is now -- why should the market only move 30 or 40 points when it's at 17,000? that's weird. >> it's funny that we had so little volatility and now we're getting unusually large amounts so people are noticing that contrast. i think the one thing that's interesting here with the crude oil sell off, a lot of people arguing well a drop in crude is like a tax cut for the global economy. why not discretionary and why aren't things benefitting. the problem with that is people are more shocked by what the drop in crude is saying about the growth output. that's why a discretionary name that would benefit wouldn't happen because people are more

focused about what this means as the global economy and maybe they have international operations. people are looking at the glass is half empty. given that energy is driving this whole sell off that's an area that's totally washed out. i'm very confident that i would buy this and the whole energy patch. widely oversold they could do well. the stock have been crushed. it's just a trade but i think it's pretty wildly oversold. >> mark if it's under 100 point move in the dow it's about. .5%. it's not even a 1% move. is the market volatile right now or is it not volatile right now? >> well, it's volatile in the context of the swings that are wild. they required dramamine to keep up with. that's not something we experienced since 2011 and 2012 where we had that one stretch

where the market was up or down by 400 points. it begged the question of machines running the market or human beings. $17,000 is $7,000. >> we need to start using%. >> when you say 400 points we all remember that it was 500 points but 400 points is now a little over 2%. that's my whole point. i think we need to recalibrate what we call volatility and what we think is -- we could get a lot more volatile before it would indicate like cracks in the -- you know what about oil? is that a good thing or bad thing mark? >> well, i mean, i think for all the mentioned reasons before relative to the tax cut that applies to the consumer. obviously increasing the sanctions on russian economy because it's so important to their export activity are all good things. it's crushing the energy patch and like the other guests we're finding it increasingly attractive because of the costs

of that. the cost of production is $88 barrel here in the u.s. it's going to find the floor at some point. i think maybe the response will be interesting because they defended $100 barrel so well so we'll see if we see any production cuts coming out of the middle east as a consequence. but at the end of the day i think a lot of it has to do with the dollar. there's a .9 anticore ration between the price of oil and the dollar and the move up 8% in the last three months in the dollar has a lot to do with what we're seeing. it's also indicative in global growth. i'm not sure i'm ready to declare the tipping point that this is indicative in a massive decay of global economic activity. >> when did the saudi's change their mind? they were more concerned about keeping market share and cutting prices than cut progress duction to boost the price ace little bit. $84, that has to throw things into chaos for them. >> you wonder, alec, we have

been counting on growth three or four times in the last years that we were filing. this is mostly a euro and it's global and everybody talks about us being better. best house in the neighborhood and things are good here. but it seems like sooner or later don't we catch a cold -- or whatever it is. >> they sneeze, don't we eventually catch a cold. >> aren't we going down to being happy 2%? the global growth isn't cooperating. >> that's the fear. how big of an impact does europe vonn earnings. numbers here will be better so people are expecting a positive tone for earnings. people are wondering -- it's not so much q-3 but guidance. is guidance going to be soft because of everything that we're seeing? you have to be more selective. not surprising to see people rotating in more defensive areas. but given the fact that earnings expectations are pretty modest

and we still see the u.s. economy leading the global economy it's tough to see this turning into a major decline. >> thank you. a lot going on in the world t. republicans are running on we're not safe. isis and ebola. all the people coming across the border. but there's a lot going on between ebola and isis. what's obama decided to do. >> you know what, i never did close gizmo. how can we -- let's have a couple of staff meetings on this and put this other stuff on the back burner. let's figure out how we're going to close gitmo? get involved. get back in the game. what are you going to do with gitmo? really. is there a little disconnect between where our priorities are. >> a little disconnect between our market discussions too. >> really? we're going to spend the week

doing that. anyway -- >> we have a lot of things going on all the time. >> i just can't believe this. that's the priority here. you need to suck up to your base some more? maybe bring in other people that aren't in your base. do something else. >> they're busy. they probably have other things they're talking about too. >> when we come back this morning the king of the online retail is planning a brick and mortar store. also find out why it's not so wise to joke about ebola on an airplane. >> 86% of travel agents say business travel bookings are better than or on par with this time last year according to travel leaders group but what% hasn't taken time off to travel for pleasure? find out next. (vo) you are a business pro. maestro of project management. baron of the build-out.

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51% of americans say they haven't taken a single vacation day in 2014. that's according to a survey. welcome back everybody. amazon is reportedly getting ready to open a physical store in new york city. the wall street journal says that store will be across from the empire state building at 7

west 34th street. it's also macy's flag ship store. it's expected to double as a mini warehouse to support same day deliveries pick up and returns in manhattan. amazon has only said they won't be doing something like this. >> a feel good story. brick and mortar isn't dead. look at the apple stores. >> you can go in on a tuesday at 11:00 in the morning and there will be crowds in those stores. >> i don't want to be where people are on facebook and twitter and ordering things. >> the real thing is this is going to be a warehouse for d f delivering stuff. it didn't make sense to me at first. i get it if it's a warehouse. >> but brick and mortar, cable tv, all of these things. we write everything off. newspapers, magazines, things don't work that way. >> we matter still. >> we do and so does brick and

mortar. build that store. i love it. >> still have things investing in our newspaper too. washington post. he's old school too. >> it's already improving. >> they're adding 100 people at the washington post. everybody else is laying off people. >> a great piece on cnbc the other day. they're even getting sharper and better. it is. did you see it? >> that's right. >> they nailed it. >> things are going well. >> we should tell you about tense moments for passengers of a u.s. airways flight this week. a flight left philadelphia for the dominican republic. one of the passengers claimed he was infected with the ebola virus. an unidentified man said i have ebola. you are all screwed. once on the ground they escorted the passenger off the plane. no word on whether the man has been or will be charged. >> see that. >> bad joke. >> bad joke and here are these guys. we're okay but all of you people -- by them going on the

plane like that -- >> they're all video taping it too. look at all the phone cameras. >> everybody else was a goner. that looks like some kind of a weird movie or skit or something. that's amazing. there's a couple of people smiling there in a couple of the rows. i don't know. >> was the guy flthrowing up wh he said this? i need more details. >> you need more details. coming up more on the root of what's happening behind all of this. we are calling it mayhem and then the elan musk show. tesla rolling out a ton of bells and whistles. is this fast or something? we'll see who will bring the stock to the next level. mountain king"♪ of the [beeping on the computer] peter come take a look at this. [beeping sounds are more rapid]

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good morning and welcome back to squawk box here. i'm along with becky quick and ross is on assignment today. our top story is the sell off that we're seeing around the globe in a lot of different markets including equities and oil and bond yields. not a sell off in bonds. if you're just waking up this morning the -- okay the bloodshed -- bloodshed -- that's what it says here t bloodshed is continuing. i don't give you blood on the street. it's 20% in 1987. this is a little bit of like a

canker sore. >> it's like 12% this morning. >> u.s. futures are pointing to a lower open on wall street. asia closing lower across the board. it's 445 points but look at the actual percentage moves. we go cuts at 4.5%. >> the difference is we haven't seen swings like this. you've seen triple digit moves for the dow and that wouldn't be a big deal. it's not even a percent. it's about half a percent. >> we need to recalibrate. >> ask her. she's been around a lot. >> i find this volatility refreshing. it's like the old days.

like normal times. >> like normal times. >> right. because 99 points on the dow now is.6%. >> when it's very little mother comes home one day and she says dow fell 12 points. >> right. >> and it was a big deal. >> the sell off in 1981 or '82 was 27 points. the market crash was 27 points. so we have to recalibrate. >> we do. >> we really do. it takes getting used to for people that have gotten the last five years or so. >> we don't need to be or as a member of the media is that our job. >> we don't need to be fear mongering but people are take notice. we need to walk them through it. you saw this last night. it was the lead on all the newscast. maybe not the lead but people will be waking up this morning and talking more about it. >> okay. >> also european growth concerns has been one of the biggest drivers behind the sell off this week. michelle joins us on the set. we have been talking about this

a lot. >> i think two things were crystallized this week. and in particular in the last 24 hours. first of all the anemic recovery if you want to call it that in europe skying or completely dead at this point. that's because of all the german data we have seen this week that's been very very bad and the second thing is that the europeans are deeply divided on what they're going to do about it when it comes to monetary policies, physical policies or reform policies. u.s. is off roughly 2% this week when you look at the european markets they're off more than double that. france down nearly 5. france down 4 and italy more than four. you look at the one month chart of the german market. you'll see it down more than 9%. that's up in the top. shows you the deal. if you look to the right you'll see the one month performance is lower than 9%. events of the last 24 hours there's been tons.

let's start with monetary policy. he makes a speech in washington yesterday. remember the imf meetings are underway so every central banker and their mother are in town to discuss the situation around the world and in his speech once again he -- the most dovish we ever heard him sound about trying to get rid of the fears of inflation in europe. >> we are accountable to the european people which means lifting inflation from its level and we will do exactly that. >> but we know that the german central bank doesn't agree with what they have done already so never mind doing more. fiscal policy he said i love this. countries with fiscal space should spend more. >> what does that mean? >> if you're not running a big

deficit, i.e. germany should spend a little bit more so that way their fiscal policy isn't running against the tide here but he did not say countries like italy and france that should like to spend more should be allowed to. >> people think 50% of gdp -- >> agreed. agreed. what he reiterated is even if you don't have fiscal space he literally says -- i'm going to change it a little bit but he's like stop spending it on junk, right? and cut taxes that are distorti distortionary. you don't have to spend more. you have to spend better. >> but he's leaving france. >> that's toward places like italy and france for sure. >> do you think it's harder to do what he did and break the back of inflation? or is it harder to instill inflation like japan. >> i think japan. >> harder to get going. >> absolutely. absolutely. >> which ever. it's really -- it's deep seeded and there's a lot of things that go into whether you have an inflationary environment or not.

>> you get criticism from people it's good when prices go down. it's good when oil prices go down et cetera but if the psychology is why would i buy a car today -- >> when i can wait until next month. >> when it's going to be cheaper. >> deflation is bad. >> deflation is bad. >> deflation is the depression of the united states. >> but you can look at oil prices. you don't want a deflationary economy but it can help bring everybody down to disinflation. we don't need oil prices much higher than they should be right? >> plus you can't really wait to fill your tank until next month. you're going to fill it up when it's empty no matter what. >> when prices get to $5 we start to see slight behavioral changes. like i'm only going to go to the store once a week instead of twice a week. >> i wonder if it starts to fall below $3 a gallon. maybe i can go out to eat again this week. >> it frees up so much space within the budget. >> stay with us. our next guest is southwest

security managing director mark grant and mark before i say you're right and let you say i told you so on yields let's pick up the point that michelle was just making. you think that mario's inability to do more is what has been driving the big market moves this week, right? >> i think that's a lot of it michelle. europe is deeply divided and the division really is france, italy, spain, portugal on one side and germany on the other side. the new program, this asset backed buying program will help the european banks that it's going to have very little effect on what he says he's trying to accomplish in my opinion. >> so result you see this playing out how? effecting the currency markets more and that state your naming things up everywhere else?

>> unless they start quantitative easing i say europe in a sinkhole and they're going to go across the board in a mild to medium recession and that will effect the united states and our bond and equity markets as well we will talk bonds in just a moment but the equity markets catch americans attention. big decline days. where do you think we wind up with the equity markets eventually? you're somebody that's been thinking the bond yields will come down and as a result the he inquirily markets will rise. we have seen it rise to plus 400

on occasions. you have that it's in rise for the moment. we also have the highest amount of margin interest ever right now for the markets. any time we're going to have a dip we're going to start getting margin call which is is going to exacerbate it but instead of concentrating on the dips and rises i want to look at the volatility. we've seen the huge swings 270 down. 270 up and 340 down. that's telling you that the equity market is getting wobbly in here. >> do you see any hope? there's two things that happened in the last two days that maybe are, you know, saeas of hope fo europe. they passed some kind of labor reform. there's a whole drama that still has to unfold but it felt like at least part of the italian government felt like they had to get something done and he's managed to do something and angela merkel held a news

conference yesterday saying maybe there was room for government spending when it came to the energy sector for example or the digital sector which would suggest she's a little more open to fiscal spending. >> as far as i'm concerned that's stuff at the margin. it's good that italy can't find it's problems. germany is locked in a battle with the rest of europe about quantitative easing and how things are going to be spent. it helped the banks because it takes assets out of the banks and hands them cash. but the problem is for the trillion dollars i would bet 100 billion to 200 billion is going to be mispriced and eventually cause problems for the ecb because of political motivation. i think any of those issues we discuss is good to be honest for

you. >> in october well-known that there's times in the past where october has made goodl lows whee we had violent downward moves and it starts out sometimes with little preshocks and my question is is there any reason to think that there are dislocations somewhere or people on the wrong side of some trade or on the wrong side of some market where if it starts moving to a certain point it could get out of hand and feed on itself? i don't see it. i don't know whether -- are we set up for some type of crash per say? because it's october? it doesn't seem like we have extended in enough credit markets where we have that to worry about. what do you think? >> joe i think you're 100% right. i'm not looking for any kind of crash at all and as a matter of fact i think as interest rates

go down and we're going through 2% as it goes down that will help support the equity margins. my biggest fear is the amount of margin depth we've got in the markets and if we do see some downward pressure or significant pressure. it's been exacerbated by the money loaned against the equity market. >> that's a place you see. historically where are we? on a scale of 1 to 10 how overextended in margin debt are we? >> on a scale of 1 to 10 we're the biggest margin debt we have ever had. so it would be a 10. >> but put it in dollar terms. >> i don't think it's going to be -- i think the fed is going to keep interest rates very low. the relative value play interest rates low. the lower interest rates go the more everything is supported and i'm in agreement with you that i

don't think we need to have any big worry. >> okay. >> thank you very much. it's always great talking to you. >> you too becky. >> michelle we'll see you later this morning. when we come back we'll be taking a trip to the gas station where prices are falling and consumers are making the most of it. then we go behind the elan musk hype machine. major vehicle upgrades for one of its most popular models. but will it impress investors? we'll get to that right after this. s, say, a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move, wherever you are. and start working on your next big idea. ♪

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check out what's happening with crude oil prices. they're falling again this morning. that's been good news for consumers. let's find out how good with morgan brennan filling up this

morning. >> a gallon of regular will cost you $3.19 a gallon today. that's pretty good. aaa says the national average price for a gallon of gas right now $3.24. that's a new low for 2014 and it is the cheapest we've seen for this time of the year since 2010. now earlier this week his became the first state with gas under $3 a gallon and as you can see here there's a number of cities in the u.s. seeing the same trend and it's only going lower. aaa forecast prices will drop another 20 cents by thanksgiving. why are we seeing that? brent crude is the international benchmark that gasoline prices are tied to. that's down more than 20% since it hit a high in june on fears of isis in iraq and less pain at the pump could translate into more spending by consumers on other goods and services. one woman here actually told us she plans to purchase more perfume now but gas buddy says

even so driving demands actually down right now versus this time last year. he says what investors should keep an eye on is heating oil prices. they're falling on the back of crude as well and in places like this the northeast where a majority of homes are heated this way he says that could translate into thousands of dollars in savings for consumers this winter and that more so even than gasoline prices could boost consumer spending on other items. becky, back to you. >> hey, morgan, did you clear it with the guy inside to do this report? you're at my luke oil station? did you see justice in there? that's my friend in there. justice. did you talk to him? >> i personally did not speak to him. >> go in there. >> i will go say hello right now and tell him you say hello. >> go say hi to justice. we beat his team in soccer and i had a shot of him actually that i put on. but we go back ten years probably. >> every morning. >> yeah, every morning.

he's in there. >> i will tell him. >> okay. thank you. it's next to our old headquaters. cnbc headquaters. >> i know exactly where it is. >> building's never been the same since we left remember. >> yes, the good old days. >> tumble weeds. >> there's still a morgan stanley or merrill lynch. >> merrill lynch. tesla rolling out a major product upgrade. the new d is the s with more bells and whistles and this is what someone was talking about. it can go 0 to 60 in 3.2 seconds. dual motor. a new batch of ray dars, gps and a camera with image recognition. is tesla moving closer and should investors believe and buy into the hype? joining us now is collin rush. this reminds me of almost a steve jobs like apple introduction. some of those things sound cool

and who better than elan musk to even make his car even more exciting. >> yeah, this is -- i think it's a nice announcement. it's been largely expected that tesla would introduce an all wheel drive vehicle as we look competitive positioning, this is just essential, i think, for them to continue to compete in the high end. what's nice here is the acceleration is insane. this is a very, very fast car. an affordable rate for a car that goes that fast. when it comes down to the economics here, the additional features, drive an additional 30 points of margin as this gets mixed in for the next year or so. >> so you'd be driving your "d" and be like driving your tesla "s" around and you're driving in the snow. you wouldn't leave it at home, right? >> of course not. this a fun car to drive. i grew up in minnesota. driving in the snow is a riot if

you know how to do it. to have a car like this has had great traction and can really get around in that kind of slop is phenomenal. it's a very comfortable car. you know, they've added in extra safety features. as we look at the evolution of the transportation market, they're setting themselves up for the evolution of this product in the market three to five years down the road. >> people point out they still need a lot of help because it's expensive to make these. so you get the state subsidies or whatever it is. when tesla decides to do something new, i was shocked they had the assembly line capability to build these. if they change models or try to introduce new things, do they have the -- where do they get the money to do that? i mean, do they sell stock or do they have to continue to be subsidized by tax breaks and the like? >> i think you're kind of missing the point here. this is a technology that's on a very accelerated cost trajectory

here. as they scale the production and move into the model "x" and the gen three, they've been able to buy equipment very efficiently. they've got a huge facility they bought for $60 million. pennies on the dollar when they bought it. and as they scale up here, the efficiencies are phenomenal. the big item here is the energy storage piece. and the cost trajectory there is again going to a place where they can continue to take cost -- >> so do they not need -- they don't need to introduce like an suv or a different model? they just -- could they do that? >> they've already announced that. that's what the model "x" is. that's the equivalent of an suv. that will be out late next year. >> amazing. all right. colin, thank you for joining us today. like a tesla spokesperson. anyway, thanks. up next, pop star katy perry

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katy perry may have landed the gig of a lifetime. according to several reports this morning, perry will be the half-time performer for super bowl xlix. that game will air on nbc live in glendale, arizona. and up next, jim grant has a

few words for how the fed is handling monetary policy. "squawk" will be back in just a moment.

the bulls giveth and the bears taketh away. another triple digit selloff. the dow down over 300 points. global markets selling off. is it time to hit the panic button? your money, your vote. rob portman on the big challenges facing washington from isis to ebola. plus how he sees the field shaping up for 2016. look out for falling prices. the slide at the pump putting more money back into the hands of consumers. will it all go to holiday shopping? second hour of "squawk box" begins right now.

good morning again. welcome back to "squawk box" on cnbc. i'm becky quick. also here is joe kernen. . andrew is on assignment today. we're going to dive right into the markets. first, though, take a look at what's been called the ebola robot. germ zapping device that's used to disinfect the room in dallas where the ebola patient was treated. we'll talk to the ceo behind the robot about how it works. if you thought you were going to see a bounceback in the market, not yet. right now the dow futures down below about 50 points. s&p futures off by about six points. in the last six weeks, the dow has closed up or down at least a hundred points 2/3 of the time. we're seeg more volatility. but people saw swings like this

back in 2011. and it is probably just a return to normal trading after years of all that volatility being tamped down by the fed's actions. among the recent and most often cited reasons for the -- we go back to seema mody who joins us with the latest from london. >> hi. renewed growth concerns here in europe. you can see a sea of red behind me here on the europe heat map. even if you look at the european markets, we're trading at the lowest level in one year. remember mario draghi, can he revive the european economy here without full blown quantitative easing? the german market down at a one-year low down about 2%. that's a focal point to investors. calling on germany to spend

more. but we know germany. they like to balance their budget. >> thanks. let's talk interest rates and the fed. the fed got -- is it culpable for any of the wild swings we're seeing here and some of what people are saying are stocks and bubble assets? mr. jim grant, you think so. he's the founder and editor of grant's observer. and our guest host this morning. i asked you when you sat down and you immediately played along with me. if you changed the name, don't you need interest rates to exist to observe them? there aren't any interest rates. >> i've got a big business model problem publication. there are none. >> there are no interest rates. >> also nobody's getting younger. i can't see them on the page anymore. >> and you said it used to be interesting when we had them. but at this point, they just seem quaint, don't they? >> i do miss them. i dare say so of our readers

that viewers do as well. >> they seem useful where you would charge for the time of money. you get a return based on holdings. >> think of all the work they did. they set rates on investment. they were useful in values common stock. and whatever did happen to them? oh, yes. the fed entered -- >> thank god they got rid of those things. we've got the internet and all this stuff. weren't they sort of archaic? so that's your point we're making. >> adam smith said the credit was the wheels on the vehicle of the functioning and prospering economy. and we have turned credit and obsession with the fed into the v-8 engine of that vehicle. now it's we can't turn on the news without seeing a picture of mario draghi or janet yellen or one of their comrades holding forth on how the world should

work. it seems to me we have been issued government interest rates as if, you know, sea rations or something. so interest rates now are not discovered as one discovers prices in a frequent. but they are administered and opposed. in a sense of -- essentially we have kind of a price control. we don't call it price control, but i think the financial markets would come into clearer focus if we talk about quantitative easing. relative price control. >> did we know the price control typically there's no free lunches. >> they don't work. they haven't worked for centuries. >> we're going to come back to a lot of this. we pose a question whether the fed is to blame for the volatility we're seeing this week. i would ask the question differently. was the fed sort of being in the

market so much, could you describe the lack of volatility for the last year to what they're doing. >> there have been plenty of instances where interest rates were very low. but this recent episode the past five or six years, the first one in which is government bull market was superimposed on small interest rates. so to the extent that interest rates are the measure of equity value, those values are inflated because interest rates are suppressed. people didn't ask so much on the upside. part of it is going up because what they do in washington there's going to be some growth and some innovation in america. a lot of it, in fact. at the margin what was happening was the fed was wanting us all to get out of savings accounts and into junk bonds and equities. and it was very pleasant when the getting in was going on. now comes the time perhaps for

getting out. it's much more problematic. >> let's bring a couple other voices into this conversation. joining us now is brian belski. he is chief investment strategist and also jim yurio. he's a cnbc contributor. let's pick up where jim just left off. talking about how it was good on the way going up, but jim yurio, what happens now? are we at the point where we're getting out? do you expect this volatility to continue? >> i'm not convinced at all that we have arrived to the brick wall and everybody's going to get out now. i'm still in the camp this could be somewhat of a healthy correction. to the point of what the fed is doing, it's an absolute misuse of what's their primary tool. used to take the edge a you have a recession. when you go five or six years with no interest rates and it's still not kicking the economy, it's obviously something other

than interest rates. so all it's doing is papering over the problems that we're having. and, you know, jim hit it on the head. >> brian, how about you? if you were to try and figure out where stocks should be valued if the fed were entirely out of the market and started raises rates, what would you come up with? >> well, to be clear, we never applaud when investors lose money, but we've been on record by saying this was needed and healthy. the issue is that you've got to remember interest rates have been going down for 30 years. especially the last 15 years. the last five or six years has been one of these blow-off type of events where the fed overstepped clearly, we believe. however we need to see behavior change in wall street around the world to understand that rising interest rates and a rising dollar actually are good for america and good for the economy. and that's going to take some time. that's where the volatility comes in. if you think about investing in general, where else are you going to be in terms of escaping

overall fundamental volatility when you have disintegrating fundamentals. america remains the home of stability. and we just have to kind of get through this classic fall meltdown and reset stock prices. we think we're higher at year end. >> brian, i have a question quick. if we start to really deteriorate in the stock market, are we believing that there will be a time that the fed -- and i'm not saying they restart qe, but do they talk about restarting qe to put back in the janet yellen put we've seen before? i think if we start to get into the low 1800s we might hear that rhetoric. they don't like when asset prices depreciate like this. >> that's an excellent point, jim. at some point we have to move away from that. i think the real issue investing from a longer term perspective is we have given the fed way too much credit. there's too many complacency.

that's a near term concern, i think. all that additional qe does here in america is elongate this process of weaning us off of qe and moving towards the fundamental instrument of investing which is the stock market goes up and interest rates eventually will have to go up. >> jim grant, let me ask you quickly. if you get to that point as brian said, there's not any other place to put your money right now. if the fed is as complacent and we're not looking at rates rising next year, then what does that mean for stocks? >> i'm not sure that america is the one and only place. i think you have to look stock by stock. and market by market. proverbially you can have good news on stocks but you can't have both take a case in russia. can the news be worse? there are stocks in russia that are trading at three times earnings. dominating companies yielding

three and four percent. trading at 80% of book value. so is that -- is america intrinsically better than that? when you're looking at really, really compelling valuations. >> risks in russia are pretty huge. >> confiscation is a limiting case of risk. but the premise of the question is arguable. with expected interest rates is if you can believe it a high flier in the world. >> jim, brian, thanks for joining us today. we're going to have much more on the markets throughout the show. first, though, capitol hill will come to "squawk box." ohio senator rob portman in the studio this morning. going to hit everything from the midterms to dealing with isis

and ebola. i hope he's ready. and guantanamo which is right on the top of our list now for priorities. "squawk box" will be back in a moment. on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates. so i can reach ally bank 24/7, but there are24/7branches? it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do...

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welcome back to "squawk box," everyone. if you are just waking up this morning, check out what's been happening with the futures. even after the big climbs we saw

yesterday, not much of a snapback today. s&p futures down by just over 5.5 points. among the corporate stories that we're following today, dave & busters. the ipo pricing at the low end last night. the arcade and restaurant chain are expected to start trading today under the symbol play. last time we talked about dave & busters, we talked about it being public. it went private for awhile. >> now they're back out. the kids like it. all kinds of games for the kids. big things that they can do. >> there are now, shifting gears, less than four weeks to the midterm elections. washington has its hands full dealing with a wide range of issues from the war on isis to fears about ebola. and senator rob portman is here with us. he's a member of the armed services, the homeland, the security finance and budget committee. he's also the finance chair of

the national republican senatorial committee. you need to leave. you okay for a couple of minutes here? >> i've got five minutes for you. >> let's start with "the new york times." god love 'em. >> your favorite. >> yeah, my favorite. i just love them. they really only put opinion in the opinion pages. it's none of these front page things really. just so you know that. but in this case, sometimes they find some truth and they're not even trying. they're kind of criticizing the gop by saying that they're looking for a theme. and that is that americans aren't safe. whether it's ebola, whether it's isis, whether it's our porous borders down south. >> keep going, joe. >> well, no. but in saying that the republicans are sort of trying to cash in on this perception to win the election, they do highlight the notion that things -- we do feel less safe right now. don't we? i do.

becky and i were just talking about what's this other thing? >> the enterovirus 68. that worries me more than ebola. >> do you remember a period -- i'm ready to go back to the western hills and hide in my basement like growing up in cincinnati. >> even in cincinnati there's uncertainty and anxiety. it's not just what's going on globally which is truly scary with isis and ebola. it's what we're not going to make us safer. there are things the president should do. but it's also here at home. the market volatility is one of indication of that. but it's deeper than that. the polling shows the same thing which is people feel real anxiety about the future. >> you're a republican and you're going to agree with -- these are going to sound like leading questions. >> go ahead. >> but in june, a poll of americans and how they felt about guantanamo. 29% wanted it closed and the people brought back here.

66% didn't want it to happen. since june we've had isis. i figure we're going to have -- i mean, we're not going to have boots on the ground. we may have more detainees. so in june that was the way americans felt. this is his priority right now? the white house is working on a way to override congress to bring these people back here because of why? why right now is this something he's deciding to do? >> bad timing. >> you know, he's not a stupid man. there must be some -- >> look, he made an -- >> some executive order he can do. >> he made a commitment in his campaign. he has said he's going to use the phone and the pen even more. >> does he not care about his colleagues in november? he's not running again. >> he's certainly not helping. particularly in the states that are up. there are seven states where democrats currently run a state that were won by romney. so i think those sorts of things

help the republicans. i think we have a good shot. >> they had done a lot of polling in the individual states. take it for what it's worth. we talk about "the new york times." 52-48, what's clear? >> you go online this morning, they do the aggregate. >> where are they? >> 52-48. assuming reports lose one and -- >> who do the republicans lose? >> they assume we lose kansas. >> but he's up all of a sudden. >> which i don't think is going to happen. >> would that help? would anything change? >> a lot. yeah. a lot. >> why? >> look, i think if you're happy with the status quo and this uncertainty and anxiety we've talked about, keep the current situation gridlocked. if you want to see positive change, you know, elect a republican majority. because i think it changes the dynamic in washington. the town is broken. >> does it? i mean, will you get things passed? or just more gridlock? >> let me give you three

examples quickly. you all talking about energy today. keystone xl pipeline is just sitting there waiting to be done. a story about how the canadians are planning to ship oil all the way from the western part of the country to the east coast to send it to europe. you've got over there in the european union saying why in america when europeans want it? well, we want it. that creates probably the largest infrastructure project in america next year. that will pass in the first 50 days. i don't think the president vetoes it. because it will be close to an override in the house and senate. that's an example. second would be let's move forward on trade. expand exports. you talk about the markets today. how about something that actually helps the underlying economy in america which would be to get us back into the business of exporting. we haven't been able to do any of these trade expansion agreements for the last several years because for the first time since fdr, we have a president who does not have the ability to

negotiate trade agreements. so this will happen. it will happen if the first 50 days. . regulatory relief, tax reform we talked about here before. those can happen in the first hundred days. a budget in the first hundred days. more certainty, becky, and the ability to begin to get the country back on track. >> we haven't done this election yet, but people are already talking about 2016. you've heard of this guy warren buffett. so he's amassed a $60 billion fortune on guessing which way things work. he said he'd put money on hillary clinton. >> let's just move on. no, look. i think it's very likely she'll have a spirited primary. i think her party is more populous, more liberal now. >> move her left and -- >> i think so. yeah. >> given some of the history of the clintons, they might be willing to move with the winds -- >> a little bit. plus she did not have an

impressive record as secretary of state. name one thing that was good -- what? so this is not a record that you want run on. and look, i think republicans are also going to have a spirited primary and we're going to end up with someone who says i hope there's an alternative here. a way to get the economy back on track. the number one issue is still jobs and the economy. second now in most polling is this issue of what's going on around the world. >> do you have a dream ticket? portman? >> you did launch that here. >> you never answered though. jeb bush, chris christie, mitt romney, cruz, paul? >> there are plenty of great people running. >> paul ryan? rob portman? >> the thing republicans have to do and "new york times" loves to criticize us for not having an agenda. we do have an agenda. we have an aggressive agenda. i actually brought my jobs from

america plan today. seven-point plan to get america back on track. 1-800-whatever. but if we do get the majority in the senate, it helps with 2016. it enables us to take a lot of the legislation passed in the house, also pass it in the senate. some of it the president will sign. some of which he won't sign, probably. but at least it lets the american people know we've got better ideas. i think that helps us in 2016. not to be the party of no but the party of ideas and reform and jobs. >> all right, senator. thank you. where are you headed now? >> i'm going back to our beloved cincinnati. >> all right. there's nothing to do in d.c. you might as well go home. >> not in session. the country is safe for awhile. >> how would we know whether you were in session or not? >> let's break through the dysfunction and get something done. that's a majority promises. i think it can happen. >> thanks, senator.

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welcome back to "squawk box," everybody. among the stories front and center this morning, this year's nobel peace price going to a pakistan girl who was shot in the head by the taliban when she was 15 years old for promoting education with girls. she'll be sharing the prize with an indian children's right activist. also japan is bracing for another typhoon. expected to be the most powerful storm of the year. u.s. base there is have been put on high alert. packing gusting winds above 120 miles per hour. and microsoft ceo is now apologizing for his gender pay gap comments speaking at a

conference. he was asked what advice he would be giving women who are not comfortable asking for a raise. he answered in part, it's not really about asking for the raise but knowing and having faith that the system will actually give you the right raises as you go along. and that i think might be one of the additional superpowers that quite frankly women who don't ask for a raise have. because that's good karma. it'll come back because somebody is going to know that is the kind of person that i want to trust. well, just a few hours later, he posted an apology online saying he answered the question wrong and admits he is adding support programs at microsoft to close the pay gap. just shut up. >> right. >> just be quiet and let it go because that's gotten you to the right place at this point. in yesterday's market selloff, energy was the worst performing sector falling more than 3% on the day. and gas prices have fallen over

24% over the last six months. let's see what we can expect on the gas prices that fall. we need someone who knows about retail. look at this. >> perfect. >> we need someone who knows about retail. hi no idea, courtney. can we get you this morning? would you agree to come on with us? >> here i am. i'm here. ask you you shall receive. >> thank you. they say it will help consumers. >> i think it will. not everyone can adjust that quickly. may not even realize how much prices have fallen to divert the savings. but lower gas prices are only one of that spending equation. it is like an extra gift for retailers. according to aaa 16% of u.s. stations are selling gas for less than $3 a gallon. that's four time as many as this time a year ago. the average in missouri is $2.97. and the price could fall as low

as $3.10 per gallon as the national average. that would be the lowest national average in nearly four years. told analysts this week he expects lower gas prices to help retail sales this holiday season. on a conference call, costco said generally it's good news. the customer saves and the retailer makes more at its pumps. a note to investors, susan anderson says lower gas prices could disproportionately benefit value oriented consumers. while prices at the pump continue to slide, aaa says 61% of the days this year have had lower gas prices than the year before. and the national average has been lower for 87 straight days. so like we talked about earlier, it does often take some consumers time to adjust. prices have been lower for awhile, but it takes us awhile to divert that spending into retail sales. so not necessarily reaping the benefits yet, but the hopes are

high that they will just in time for the holidays. >> okay. thanks, courtney. joining us now, joe petrovski. he is the ceo of gulf oil. how are you? still? you can't do both can you? >> no. ex-ceo. >> that's a fine point that we didn't feel necessary to really say. yeah. so tell me, at this point i've heard it's on the way down people don't spend more money on consumer products when they get a tax break. on the way up, they cut out spending on discretionary goods when gas prices go up. is that really the case? elastic one way, and inelastic the other? >> i heard tom say that and i think he was a great analyst but -- >> you were watching the other day, joe? you faithful viewer, you. >> i which all the time. and tom's a personal friend.

especially when he's on. best head of hair in the business besides yours. >> thank you. i'm glad you put that in there. yeah. >> but any case, the -- we noticed the average ticket of consumers who come to a gas station goes up as the price goes down. and i think the psychology of the consumer proves standing in front of that pump watching it click as your money is disappearing is just not a wonderful experience. so i think it's extremely bullish. what we're having -- the story in energy today with abundant supplies, tremendous efficiencies. so we're using less both for heating and for traveling. as you get older you drive less. and the cars are more efficient. it's a wonderful story. i personally think crude will get down to $65 a barrel. >> it may take awhile. but you've always thought oil was sort of artificially high.

there was a lot of fun money in there for awhile, wasn't there, joe? >> yeah, and that -- >> go ahead. >> no, no. there is much less speculation involved than there ever was. and if you can look at what happens when something happens overseas, the market doesn't react quite as dramatically. we had no hurricanes this year. we've had no refinery problems. and, in fact, some of the crude coming out of the ground in the u.s. is so light that, in fact, a good friend of mine who knows refining a lot better than i do says i could refine it with a teapot and a stove. we almost got refinery passes. lots of good stories in energy. we're using 700 million gallons of diesel a year in the fracking fields. that's going to be replaced eventually by natural gas.

we're still flaring equivalent to 2 million barrels a day which makes no sense. because we don't have the takeaway capacity in the fields. and there are companies like apache and others i won't mention who are doing a job to put power plants into the fields to use it's called gas by wire because we haven't built the pipelines to take away. as well as the chp business which is using natural gas for combining heat and power projects throughout the country. so there's a lot of great stories in energy. you just have to pick the right company. and i think this is phenomenally bullish for equitieequities. >> right. let me ask you one last thing, joe. is the weakness in oil because of the global slowdown that we didn't really understand how significant that was going to be? or is it shale, is it that we're better at developing things here? maybe it was sort of manipulated

higher than it should have been. what is it? is it a bad thing or good thing overall? >> oh, it's a good thing. >> but is it showing a slowdown, a global slowdown that's going to derail our move to 3% gdp growth here? >> no, no. i don't believe so. you're actually seeing more exports of energy. china is still importing a lot of products. it's where the surplus material is going to go. it's where the saudis are shipping. there might be -- there might have been some slowdown, obviously, in europe and china. but not dramatic. >> okay. >> and in the u.s., you're actually starting to see it pick up. industrial production. i know suppliers who are now manufacturing adding about 10,000 jobs to manufacture building materials and plastics. so if you're looking at the market, i think any energy intensive industry is a buy.

aluminum, flooring, whatever. >> okay. all right, joe petrowski, thank you. you can't do both. okay, good. >> $2.50 a gallon by the end of the year. >> $2.50? we'll take that. all right. thank you. see you later, joe. >> thank you. still to come this morning, tesla revealing some hopups for the model "s" including safety features and a version that elon musk says is like your own personal roller coaster. oh, boy. dedales in a bit. but up next, a ebola killing row baa bot. this is being used in 250 hospitals to stop the spread of the disease. we'll speak to the creator after this. by the way, check out the futures this morning. after yesterday's selloff you're still continuing to see some red arrows although they've moderated a bit from where we were earlier.

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ebola is not something to make light of. tense moments for passengers on a u.s. airways flight this week. the flight left philadelphia for the d.r., the dominican republic. one of the passengers claimed he was infected with the ebola virus. during the flight, an unidentified 54-year-old man is reported to have said in his words, i have ebola. you're all screwed. once on the ground, hazmat clad workers escorted the passenger off the plane. i assume he didn't have it. i guess. >> no. that's what we're being led to believe that this was just a bad joke. >> if you make any jokes on planes, just get rid of all the whole joke motif. >> there's a lot of things you can't talk about. you'd be in big, big trouble. check out this new thing we have sitting here on the set with us. you can call it the ebola robot. it's right here. check out the ebola robot behind us. you are looking at the

disinfection device being used at the dallas hospital to clean the room where the ebola patient was treated. more than 200 hospitals are using this germ zapping robot for zapping various diseases. joins us is the chief executive of the company that makes that device. thank you for being here. how long has this thing been around? >> it's been around in hospitals for about two years. the hospitals use it typically while ebola is the topic today, they use it to fight hospital inquired infections, things like mrsa -- >> staph infections? >> exactly, staph. they can eliminate upwards of 50% and 76% reductions in mrsa. they've never had reductions like that. >> how does it work? you just roll it into a room? >> you roll it into a room.

it has a pulse lamp. it's 25,000 times brighter than sunlight. this is new technology. so the old technology was to use mercury light bulbs. it would take about two hours and 15 minutes to do it with that. you can accomplish that same thing in five minutes with this robot. you can eliminate something like ebola in 90 seconds. >> i see one flashing in the newsroom. is that safe for humans? >> that's a demo robot. good question. the real robot has sensors on it. it has a heat signature. it can sense motion. it would instantly cut off if someone walks in the room. we have no word of exposure. >> but it could damage you? >> it could cause retinal eye damage over an extended period. >> it seems like a great idea and necessary when you start thinking about mrsa and does it work on the flu? and the enterovirus.

>> sure. it would work against it. the hospitals use it all the time for norovirus. when you think about the problem, 2 million americans get the infections. 100,000 die. if we were to have every hospital use this whenever they could, you're talking about 70,000 lives saved a year. 1.4 million infections. and that could be as much as $28 billion going back into the health care. it's the traditional ounce of prevention, pound of cure. >> i want one of these things for my kids' schools. but i'm guessing it's more expensive than for a school. >> we'll go and disinfect schools where they have staph going around and infecting athletes. >> what patent protection might exist so that competitors can match or exceed what you have now? >> so there's patents on the core technology that we have. and then we have -- we also have 12 other patents that really

define how the robot is used. ways to enhance it. you know, there's different mixtures of gas you can use. there's ways of pulsing the robot really to optimize its use. and we've done that specifically to fight infections. that's a way to optimize it and make it work. >> i mean, a person could just use a powerful uv light, but people don't want to go into where these things are. >> so these are all operated by housekeepers. the housekeeper rolls it into a room. they run it on the left side of the bed. they exit the room. it goes up and down over a five-minute period. then they'll come in and flip a remote control, a hand set and we train them. if it can be seen, it can be cleaned. so if a drawer was closed, open it up. run it on the right side of the bed. now you can think holistically about that environment where you're disinfecting everything

in the room. and which as a human being and these housekeepers, they are working so hard but to turn a room in 30 minutes, they can't get to every surface. >> uv light, does it break up -- what does it do exactly? >> great. so the technical term, it does photodymerization. then it does splitting which a splitting the backbone of the dna. it does photohydration. it puts a wat s s s s a water >> no way to put it back together. >> no way. >> do different pathogens require longer uv exposure? are any immune to it? >> there are not. so across the disinfecting spectrum whereas the old

technology was wherever a pathogen is vulnerable. >> i have no idea what you're saying. but fascinating. and so it's big enough to -- anything that you're talking about, "street signs" going to be able to deactivate it. >> we ask can it get hiv? yes, it can. >> there's nothing it can't get. >> that's correct. >> have you gotten increased calls since enterovirus and ebola have broken out? >> many are trying to deploy these. new york presbyterian, i mean rb really advanced. ucla, stanford. they have them. >> how long does it take to manufacture one? >> from the time somebody orders it, we can have it delivered in between three days and a week. >> does it work on proteins? >> it does. we're not sure it will do preons

against it because we haven't been able to test against it. >> that's a question of whether -- >> that's mad cow disease. >> is that alive? i argue that a piece of virus sitting here basically without a host is very questionable whether you call that living. >> i would call it alive. live being active. >> okay. >> morris, let me ask you. this is a privately held company. you had sales last year i think of $16 million. is that right? >> correct. >> so what's the plan? do you expect someone is going to come in and buy you? do you want to stay independent? >> the last company we started, we took that public and that's been public for a long time. we think that there's a lot of -- we can solve this problem for the long run. we have other ideas, other products that we're bringing out soon. and we're really excited. the mission, the founders they want to solve the problem. they want to stop the infections

and deaths caused by them. i love their mission. that's what we think we can do. >> can you get these to west africa? >> we're working with the department of defense. we wanted it as part of a holistic solution. we don't want to just send robots over there and hope they're going to use them. it needs to be part of a specific protocol. imagine spraying down a worker that's been exposed to ebola with bleach. then the robot. now they're disinfected. without the risk that dr. brantly and others were using to stop the virus over there. >> you don't need to be a genius to talk about tanning booths and this here. skin cancer, uv light, right? >> right. >> got it. i figured it out. connected those. it destroys every pathogen because it breaks down the dna. and yet people still go into the

tanning machines like that tan lady. did you see her? crazy. anyway, morris, thank you. >> appreciate it. coming up at the top of the hour, will it be a friday fright fest on wall street? led to the worst point loss for the year for the dow. we'll talk markets and what to watch today as volatility picks back up. plus elon musk unveiling new safety features to its model "s." but a version that will rival the sprint to 60. jane welles has details in just a bit. up next on "squawk box," don't start your day without knowing the names that will make you money. joe has your list of stocks to watch. right after the break.

there are some stocks to keep an eye on this morning. it is official. symantec to split up. they aren't alone. it's been a big year for spinoffs and splitoffs. more than 60 expected to finish by december. microchip technology lowering its second quarter sales forecast. and that's really taken a bite out of that stock. down 10%. its results indicate another

industry correction could be in the offing. and juniper networks. the equipment maker cites slack demand from service providers. and then finally civeo is under pressure from einhorn's capital which has disclosed a 10% stake and is pushing for the ouster of the chief executive officer. what i'm trying to figure out the chart. that's very weird. i don't know. not sure what to think of that. >> down then up. >> i don't know. anyway, coming up, in a world where more and more shopping is being done online, amazon is shopping for a store front in new york city. and markets falling sharply just one day after the biggest rally of the year wiping out all of wednesday's gains.

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welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick. andrew is on assignment today. we're 90 minutes away from the opening bell. it's going to be interesting given yesterday's action in the market. i felt really happy on wednesday because it came back from tuesday. then gave back more on thursday than you made back on wednesday. less than 2% moves -- >> wu we're now also only talking about the entire year for the dow. at this point we wiped out a lot of progress we made. >> and we showed a chart where the peaks and troughs in the last week having 450 this way, 450 that way. over a period of days. european markets this morning, let's see if they've improved at all because our futures got a little bit -- germany i think is

really ground zero for a lot of what's been happening in terms of whether that very important cog in the eurozone whether things have been slowing down there. and if you think this week has been volatile, take a look back at august 2001. that's when the u.s. credit rating was cut from aaa to aa by standard & poor's which had had little effect on anything. but it did cause big moves in the equity markets. that was friday, august 5th, 2011. you can see what happened in the five subsequent days. those are much bigger percentage and point moves than we've seen. we should point out that the day before the downgrade, the dow had fallen 512 points. i didn't remember all those, did you? >> no. when i saw them, i remember we did specials for a lot of those nights during the week. and they were some pretty scary times, but i think we shook out of that pretty quickly.

it's because of the fed being so involved in the market tamping down volatility afterwards. >> i think us deciding to do specials helped also. >> that too. >> we can call tops and bottoms consistently here depending on the programming. go ahead. it's self-deprecating. i'm not putting anyone down or anything? or management? i'm not. >> you would never do that. >> in august of '01 when bought by one of the big brokerages. at the top of the market european banks bought for about $20 billion in cash combined right at the top. >> we completed this $170 million building, the nasdaq 5000 building the day we went over 5,000. >> now you are insulting people. >> we better get to donald. >> we are. we're wondering if we're going

to see a true construction here. dom chu has more on that. >> all that volatility we saw again back in 2011 around the debt downgrade also european yields were swirling around at that point as well. take a look at the last -- this is the month to date. over the past seven or eight trading days here, we've had a massive swing. we've shown it before, but just to count up all the ups and down moves. down 436, up 344. this is like a market pedometer for us. it counts our steps. we've taking 1,930 steps. points total over the past few days here. this has been a more volatile month. not in terms of percentage. but it's one we're not used to seeing. that's important here. if you go back and look at what's happening with the overall picture for the past five years, you remember that 2011 span with all that market volatility. the dow is only around 11,000 points back then. to your point, guys, the moves

back then, much bigger in both point terms and percentage terms than just what we've seen in the last days here. that's important to remember. the other thing to keep in mind is when people talk about the transportation stocks, we've seen that steadily kind of move down as well. you can see here just down about 5.5% over the course of the last month. and the small cap stocks, the russell 2,000 stocks, these are the ones that have everybody worried as well. they are much more levered at least to the u.s. economy. also more volatile. you can see here the peaks and valleys over the six months. it's down 5.5%, but still just in the last month of so is when it's really been bad. the reason why it's important for a lot of investors right now, a lot of money managers will point out with the recent peaks we've seen in the market, we have not had this kind of volatility. when you do see this kind of volatility, the concern, guys, is that volatility changes a sentiment in the market overall. so as this battle is developing between the bulls and the bears,

this is what has people worried? could this be the real top for a construction coming down the line. back over to you. >> didn't you just do energy the last time you were on, dom? >> we did. >> how did you -- i mean, you just pivoted and did this great report just now? did you notice that? >> just pivot. >> the last hour -- >> every hour all through the day. >> on this network? >> yeah. >> interesting. okay. stop. >> all right. thank you, dom. all ten sectors for the s&p were down yesterday. the biggest losses coming from energy, industrials. including united technologies. emerson electric, viacom, lowes. among the winners you did have 20 s&p stocks reaching a two-week high. including coca-cola, pepsico, home depot, cvs and altria.

>> research in -- in addition to looking at whether there's buyback activity or not and to the supply and demand of stocks i don't know how you decided on this. one of your predictions now is this exit by the fed which we're all waiting for is not going to go necessarily as early or as smoothly as planned. at this point they're going to feel the need to either stay in or re-enter? >> well, they're ending this month. and one of the things -- the most dangerous thing on wall street is what you don't know you don't know. so it has some of the quantitative easing. some of the buying of bonds -- some of that leaking into the stock market. and the absence of that is exacerbating the volatility could be there's no real way of knowing that unless you're tracking the actual order flows. there's no way i know of tracking that. that could be what's exacerbating the downside. however, it looks to me as if we

turn bearish short-term on lekdty before alibaba happened. because of all the money leaving, 24 billion had to leave. and since then we've had one negative thing after another, and what's also amazing to me is that individual investors keep buying off shore etfs and mutual funds. and we're seeing a lot of individuals short eps. so on a contrary indicator that says we haven't had capitulation yet. on the other hand, the intermediate and longer term, so longs it continues there's more money chasing fewer shares. at some point the market will turn up absent any new shock to the system. sfl you saw the icahn. a lot of your thesis is just

based on retiring amounts of stock. and icahn thinks at a hundred dollars if apple's worth 200, you cause a short squeeze. >> well, if a company's growing cash and uses some to reduce the share count, i sea the enterprise value should not go down. so if there's less shares, you shouldn't go down. >> we were talking off camera before of the strength of the dollar. do you think that adds? >> you have to think about the competition to the dollar. that's against the euro and the yen. currencies whose sponsors actually want them to depreciate against other currencies. >> right. >> in the past three months, the dollar is up 8.5%. the reagan was up 65 -- i forgot whatever it was.

but during this fabulous levitation brought on by high u.s. interest rates. so what people are exercised about are not so much the strength of the dollar but the higher consequences of exchange rate for people who have borrowed dollars and now have to stretch to repay them. so called developing asia according to morgan stanley has boosted its indebtedness from $300 billion to $2.5 trillion over the past few years. so a lot of debt must be serviced. to the extense they're stronger against those currencies is a bigger job of work to find the money to service the interest and the principal. >> what about the dollars that we owe ourselves? it's not in the nation's best interest to have a stronger dollar. i mean, interest rates go up, you're in big trouble. with the debt we owe ourselves. >> yes. the budget has been balanced in good part thanks to the fed's unique exertions to hold down

interest rates? the consequences of price control are never happy. not once in 40 centuries according to historians. >> let's bring in another voice on the markets. joining us is bob shiller from yale university. and for those of us who haven't yet won a nobel prize, is there something other than the money do you have something that you got and where is it? is it on your mantle? what's the story with that? what'd you do with it, bob? >> i got a diploma. beautiful. they had an artist paint a unique painting on one side. it's framed in our living room now. and i have a gold medal. which is in my safe. >> a gold medal. not as good, i would say, as franz but that's pretty good. so let the see if i can surmise

something you've been saying, bob. it's important because if you look at your -- the way you calculate a price to earnings multiple, you do it in a way that maybe backs out some of the hocus-pocus that goes on. and you've come from about 26 where we were. you were okay with that because bond prices were so high as well. so maybe that wasn't so expensive given where interest rates are. so now you're starting to sense maybe that we are a little bit extended here? >> you just don't know when the change will come it might go up for years, but i'm interested in -- you know, the stock market has shown very sharp turning points in 2000 and 2007. and if you go back in time, 1929. these interests mean a lot.

nobody has a good way to predict them. >> at this point, would the bond market need to sell off for the 26 to come -- for the 26 multiple to come home? because there's no indication right now that the bond market's getting ready to go down any time soon. we're starting to think -- you know, we used to hear 3% was just -- you could just bank on it. now i'd say maybe you got 30% of people think we might go to 1% on the 10-year. >> the markets aren't exactly in coincidence. so i think we could see a drop in the stock market without anything dramatic happening to the bond market. what i'm worried about, all this talk about sector stagnation, this imf report that came out on tuesday which seemed to be reinforcing that, that's kind of a sign of weakness right now.

but i don't think it's reached epidemic proportions. >> well, you know, what has helped has been central banks around the world. so people would say the imf report just means more central bank easing and that will be good for equities. does that ever come home to roost where you can't really run a world economy that way based on cheap money? >> well, it does seem as if they were putting the cart in front of the horse. shouldn't equities induce consumption and good feelings? this whole notion of the wealth effect, i think, is an assertion. did some research. saying it never worked. it never has been the case that you can by levitating asset

values. prosperity ought to be the cause of rising asset values. not the other way around. so the extent that the fed and other central banks have driven up values beyond the reason to that extent we are vulnerable. >> and progress happens when something new occurs that didn't happen before. governments, united states in particular, is making it much more difficult for something new to occur. all the head winds and head of something new makes it -- you can't just print money, give money away, have higher stock prices. one of the reasons i think the fed will come back in is that the wealth effect while i agree with jim it doesn't create sustainable growth, it probably does add a percent or so short-term. without that there'd be no growth here in the united states. so the market stays flt here

wi with -- >> professor shiller, are you in agreement with that? you like animal spirits from time to time. maybe the wealth effect can work sometimes. >> i've done a study on the wealth effect. and statistically it works both for the stock market and even more for the housing market. but i think it is true that it's hard to analyze what the causal effect is and whether a fed, huge quantitative easing is going to change that relationship. >> all right. can you bring your medal next time? i haven't seen one really. >> sure. >> i mean, do you ever wear it out? you don't just wear it out in public, right? >> they gave me a lapel pin. >> you didn't mention that. i want one of those. >> i took it off though. maybe i'll wear it next time. >> thank you.

thanks, charles and thank you professor. when we come back this morning, your own personal roller coaster. that's what elon musk is calling the updated model "s." details after the break. and later, the head of global fixed income at goldman sachs asset management, "squawk box" will be right back. tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow. i have $40,ney do you have in your pocket right now? $21. could something that small make an impact on something as big as your retirement? i don't think so. well if you start putting that towards your retirement every week

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welcome back, everybody. tesla making some unveils and updating its model "s" last night at an event in california. jane wells was there and she joins us now. >> it was a party, becky. you know, a week ago elon musk competed, about time to unveil the "d" and something else. well, the "d" is for dual motors to create all wheel drive for the model "s." and something else may get interesting. in true tony stark form, e long musk, quote, released the titans. showing the dual motors were displayed. tesla's been a little behind in that. this tesla will appeal to drivers in colder climates needing that capability. musk says they've been able to improve everything about the car. top speed, better range, and 0 to 60 in 3.2 seconds. >> this car is nuts.

it's like taking over a carrier deck. it's bananas. it's like having your own personal roller coaster. >> that was something guests were allowed to find out for themselves as they took test drives. musk said the car will have three settings. normal, sport, and insane. he said it really will say insane. >> i nearly wet myself. that was insane. that was absolutely insane. i had to take my sunglasses off because i went up into the -- it was amazing. >> see, it's l.a. you do wear your sunglasses at night and you almost wet yourself. the set of automated systems will allow the car to see not only other cars but read split signs, see soft objects meaning humans or pets. smart parking. musk said eventually it will open the garage door and park itself. or if synced with your calendar, it will, quote, meet you.

he emphasized this is automation. not autonomous driving. quote, the level of safety and redundancy is not quite there. i have to ask. if the car's on insane setting, do you really want it to read the speed limit sign? if it sees a 30 mile-per-hour speed limit sign, it's going to slow down to 30 miles per hour. if you're paying $120,000 for a car, you really want to go the speed limit? i'm just saying. >> i've got two questions for you. first of all, did you do the insane setting? and second of all, did you wet yourself? >> jane, that could just be age. >> you mean last night? okay. yeah. i generally live by the insane setting. no. the media didn't get into the car. as for your other question, we'll talk offline. >> there's times when i'm not quite fast. >> and you wet yourself.

>> almost. not typically. that can happen any time. >> especially when we get to a certain age. >> that's what i mean. now, did you have a choice of sound bites? did you pick that guy because he said that? >> of course. it was the first guy coming out of the car. of course. i picked the bites. no other reporter will use them. >> i know and love you so well. thank you. coming up, oh my god -- >> did you wet yourself? >> it just happened. no, i didn't . tim's ready to walk off the set. >> it is way tougher to jump on a trampoline as you get older. >> okay. probably true. >> i know. >> all right. and then with the rise in online shopping -- thanks for sharing. >> you're welcome. at least i didn't wet myself here. >> and why would jeff bezos open

an amazon store front?

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former fed chair ben bernanke is expected to be back on the stand today in the aig trial. hank greenburg is accusing the government of cheating aig shareholders out of $40 billion. in three hours of testimony yesterday, bernanke gave one and two-word answers and appeared

visibly annoyed at times. he defended the rescue of the insurer and was very critical of aig. we've heard that anecdotally that that was at the time the thing that got him most upset. >> yeah. i would have liked to have seen that in the courtroom playing out. >> yesterday. >> yeah. >> a lot of guys saying i don't know, i don't recall, things like that. trials are fun. >> they're interesting. >> not trials, but -- i guess trials. but where you're on the record. think if we had -- well, we kind of are. people never forget what we say. >> they don't hear what we say in commercial breaks. >> some people do. that's why i have a cough switch. but you don't. when we come back this morning, after dominating the online e-commerce world jeff bezos is betting on a store front in new york city. is it the right move? before break, one more look at equity futures.

and yes, complaints that i have not been reading the nasdaq futures. nasdaq down by 30 points. we'll be right back. (vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours. e financial noise financial noise financial noise

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then that new entity will be a publicly traded company. let's get to rick santelli. he's got info for us. >> the prices are coming out close to expectations on month over month. we were looking for down .75%. so we all know why. just look at the energy market. if you look year over year, it's down .9. that's about half a percent less than the price drop we were expecting. let's look over the revisions. last month over month now stands at down .6 versus down .9. export prices, they were down .2 versus down half of 1% last anytime. so i get it.

downward price pressure. central banks are going to be matching up. in the grand scheme of things, i think that the energy story may be interesting to some because they would have followed all the hot spots going on close to major energy areas. maybe it would have turned a different direction. it seems to be more about demand. i'm jealous. off couple of wild, terrific, awesome guests. of course biedermann, mr. grant. the best day and then the worst day for the dow all kind of within the same several-day period. if that doesn't have turning point on it, everybody's a bit shell shocked. >> whenever we head back up, finally it's going and you say no way this is the move up. and so what -- do we go under

two? is that in the cards, rick? >> you know, i wouldn't rule out the possibility. and i think that a protracted slowing effect on some of the markets. but no. that wouldn't be my first choice. i would say 30% probability that we're going to have the potential to trade under maybe 180, 185 which would be my kind of wild extreme. but i do think there's a very, very good chance we could snug up to 2%. everyo and we don't need to pay 250 where we bernanke says he's surprised we don't have 3.5%. >> one other thing i think people who have followed your thinking for a long time, you've always sort of questioned whether there's going to be a move into a next -- like an upshift in the economy based on the fed being successful and

trying to orchestrate that. i don't know whether you always thought there was going to be inflation from what the fed did. but you more thought they were being ineffective and shouldn't be trying to do this. the reason i'm saying you're right, it hasn't worked. with yields going todown to 2%, it's clear they're trying to engender growth. you might make it appear better but unless you build it from the ground up, it's ephemeral. i'm not clear that they're out of the woods based on what the fed has done. that's what you've been telling us. >> exactly. the best way to do this is to try to boil it down to something more similar to the past. let's pretend we didn't have all this debt and toxic non-performing loans and all the stimulus and all the balance sheet issues and all the ownership of treasuries and equities by central banks. then look at the way the

market's been lately. we would totally be questioning the longevity of the performance of some of these markets. then when you add in everything we just zeroed out, you definitely have to be on alert. i continue to say you can't make test tube growth or test tube inflation. >> okay. all right. going to speak to somebody else here. >> we are. in fact, let's bring in john beinner from goldman sachs asset management. he runs right now both goldman's bond fund and strategic income fund. he oversees more than $600 billion in asset. >> you must have trouble sleeping at night. >> do you? what do you make of these markets? >> especially lately with the 10-year. i might have to take the other side of some of this discussion. i think in one sense we agree that all of the qe and all of

the monetary policy that's been uber-easy around the world, particularly here. it's questionable as to what that means to the real economy. but when you actually look at the real economy, it has been healing. and particularly in the u.s. clearly there's concerns outside the u.s. you think about the u.s., which frankly we're the largest in the world is still relatively closed economy. so the impact from what's going outside the u.s. obviously is real. but not huge. >> did you think we were going back to 2.3? should we listen to anything you're saying based on what you've told us in the past? where did you think rates would be by now on the 10-year? >> the answer to your question is yes, you should listen. >> okay. >> and answer to whether you should listen, the answer is yes. but you're right. we've been surprised where we've gotten to. i think it's a combination of international investors who took some time off buying when the fed was in there buying. and i think there's been some of

the fast money that also had a similar view the rates were going to go up. now they're covering those positions. our investors can take a longer horizon. hour view is we are going to see higher rates. that i think the bet is we'll see a 3% 10-year note. the reason is not based on policy per se but on the real economy. the fact is that the u.s. economy has healed. we have gone through a slow, painful recovery phase. but we have accelerated. if you look at the data, it's very consistent. that we've moved from a 2% economy that looks like a 3% economy. that means you don't need zero interest rates. >> the fed is concerned about what's happening around the globe. we've had a couple of those voting members on the fomc say, look, you may not need this by 2015. you may not need higher rates. why do you think that you are sure to see higher rates by next

year? >> first it's interesting. people talk about the minutes and they had talked about what's going on outside the u.s. as a risk. at the same meeting, they increased their expectations. if you look at your projections including what looks like the chairperson. so in the same way, yes, they look at that as a risk. but their baseline forecast is the economy is on solid footing. and in fact, they pushed forward the lift off of interest rates. so it's a risk. but at the end of the day, we don't derail the economy. >> what do you make of the so-called emerging market bond market? kazakhstan just sold 10-year notes at a yield of 4%. ecuador which defaulted because it chose to a few years back is now back as of last spring and bopds are trading at premium to par. there is, of course, a raging yield hunger which takes the

form of ever-lower yields and ever-higher prices. how are you navigating through this? >> you're right. i think one of the hinges that very aggressive monetary policy has done is it's reduced risk premium. it's reduced it in fixed income market. zero is the risk-free rate or negative in some parts of the world. so i think there are places that are overdone, but there are those that aren't. you know, emerging markets -- >> name one that's fairly valued. >> we look at brazil. we think brazil is more than fairly valued. they've gotten hit because their concern of the election and brazil will continue to be weak. but we think brazil is an economy that doesn't have a big stock of debt although it's growing. and the real yield there is significantly higher than everywhere. some of the countries you mentioned -- >> more than a hundred billion dollars in debt. none of it is trading over 6.5%.

the best thing that happens to you as the bondholders is you get your money back with interest. how do you think about this common stock versus the stock of a company that has shown slimmer and slimmer interest coverage. as a bondholder you get kind can of what damon runyon calls the medium hello. right? why would anyone buy bonds in these companies that are so leveraged and poorly priced? >> what i was referring to was more of the sovereign debt. you're right. sovereigns have especially in emerging markets they have had histories of default. you have to look country by country, company by company. as a debt investor which we are, we recognize unless you're buying something at deeply discounted prices, your good outcome is you're paid your income. we certainly recognize that. there's that asymmetric payoff. we have to do our work to fig your out do they have both the ability and willingness to pay you back. and that's obviously what we're putting in our portfolios in

some of the names if you're over levered, if you have practices that don't make sense, if you have bad policies then those are places we avoid. >> brazil, that's all they need is four more years of that guy. i tell ya. >> woman? >> that's what i meant. yeah. >> john, thank you for coming in today. >> thanks for having me. up next, is new york city ready for an amazon store front? we'll talk about it after this. meantime check out the futures. right now some red arrows, but things have improved from where we started this morning. dow futures down by more than 50 points earlier. right now down by only 20 points. s&p futures down by 2 points. and nasdaq down by 22. "squawk box" will be right back. (vo) you are a business pro.

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making headlines, it turns out that hackers do not discriminate against industries. dairy queen says its payment systems were breached at nearly 400 of its stores around the country. hackers may have gained access to credit and debit card numbers and expiration dates. i got a new thing, a united airlines -- because i like sky miles. whatever it's called. and i got a new one because of home depot. >> oh, right. because you shop there. >> they sent a new one because of home depot. >> yeah. a lot of that. i shopped at target during the

breach. >> and another thing, i got this doesn't card from a bank that's open 24 hours. i used it in scotland. they cut me off. >> because you didn't tell them you were traveling internationally. it happens to me all the time. >> excuse me, big brother. >> yes. otherwise they think it's somebody else using your card. you've got to tell them ahead of time. >> i'm getting declined and people are going -- >> he's got no money. bad credit all the way around. don't lend to him. >> everybody in the whole place put -- nobody actually. >> anyway, amazon is opening its first brick and mortar store in new york city. joining us on the phone is jan kniffen. amazon is not confirming this at this point, but they're not denying it. you think it's a good move? >> i think it's a good move. they've been looking at this for a couple of years. i've been saying for five years they're going to need a brick and mortar presence.

they need a showroom presence to get the full attention of the consumer. and they're just now getting their toe in the water and i love the fact it's going into the old orbach's retail store. >> they're supposed to be the everything store. i don't know how you begin to showcase what they're selling. i get it if they're using it as a warehouse for same-day deliveries. makes less sense to me if you're truly trying to show off what we have. >> service merchandise tried this 40 years ago. they were ahead of your time. you put an assortment on the floor for people to look at. you teep the real product in the warehouse. then you sell it to them. but i don't think that's really the amazon vision. they want to be able to show the cool stuff in the store. they want it to feel like an apple store, i'm sure. and they want you to come in and be interested. they also want you to be able to bring your stuff back there, pick up same-day orders there,

and do the regular everyday work of distributing the product. but i think they're going to want to make this -- if they don't make this a showroom, they're making a big mistake. because they want to build a further brand image. they need it to be cool, accessible, interesting to the public. and they're going to need 50 of these, not just one. >> you don't expect them to do this all over the place, do you? >> i expect every major market if it works. if they don't do 50, i'd be surprised. i would be surprised if they did 800. but i wouldn't be surprised if they wound up with a hundred at some point in time. that's probably what they're going to need if it's really going to be effective and interesting. and everybody's going to use it like they would any other store, et cetera. i think they will have more of these if this is successful. i think that's where we're going. we're going to see these online-only people have places where you can go see the

product, feel the product, interact with help, find out how to use something, pick up, drop off. and yeah, amazon's got to do that too. they need to be an omni channel retailer not just an online retailer. >> thank you for calling in. >> thank you. >> we should note cnbc called amazon and the spokesman said we have made no announcements about a location in manhattan. when we return, jim cramer on this crazy volatility. does he see a constructirrectio? we'll ask him. see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. take and... exhale.in...

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box." futures look like they are flat lining. that is an improvement from this morning. s&p futures are slightly positive. dow futures slightly positive and the nasdaq just down. >> let's get down to the new york stock exchange. jim cramer. we need cramer. we had jim graham. i've got to get what you're thinking, jim. 300 is not what it used to be. when it's under 100 point move it's 0.6%.

>> i think it's right. there are parts of the market over by hedge funds. industrials and oils, they must have borrowed up the wazoo to own those. they don't own the pepsi and clorox or cvs. you've got big hot-shot money betting rates would go higher. that was wrong. they were betting industrials would come back. they didn't understand isis would not take oil off the market and they would double the amount of oil. they were wrong on every single bill call. that's why they are down 7%. that's what you're looking at. >> are we going to make a low in october again? >> i think that a lot of the points could still be right. i'm looking at 16,400 on the dow. we are having a correction.

it's happening. it's not affecting bristol-meyers of the world. the market, there are bear markets within this market. there's areas of concern that are just incredible, where the yields aren't holding. they're not stopping the declines. it's amazing to see the hedge funds do as poorly as they're doing. >> we just had a goldman sachs guy. he had about ten different reasons why the move in the ten-year wasn't real. there were excuses why it happened. so you were thinking we would be 3%, 3.5%? do you listen to people who didn't know we were coming down two, three? >> a lot of what was supposed to happen, we were thinking europe wouldn't be so weak, but the yields are just ridiculously low. there was a big consensus that the fed had to take fed funds rate 3%, 4%. i don't know exactly what it

would prove. there was a consensus brewing rates had to be dramatically higher. rates, i don't know. i think the question is do we go under 2%? that is a legitimate question. >> we forgot to tell rates what to do. see new a few minutes. >> have a great weekend. >> when we return, where in the world is kim jong-un?

kim jong-un missing a key political celebrity. speculation grows his absence from public view. i can honestly say there is nothing that could shock or surprise me when we figure out what is going on with him. >> yes. what is significant is what did not happen in north korea today. it's the 69th anniversary of the north korean workers party. historically, he, his father or grandfather would show up to events. he did not show. he hasn't been seen in public since september 3rd. there's all kinds of speculation. has been there a coup? some people suspect he's dead.

who knows? reuters with an exclusive anonymous source says kim jong-un suffered a tendon injury because he gained a lot of weight since he took over and he was out doing military drills with the military. he suffered a foot injury, which you can see there from this documentary that aired last month and has since gotten worse. he is now going to be out of commission at least a month. according to the documentary, he keeps lighting the path for the people like the flicker of a flame despite suffering discomfort. >> kim jung un. thank you. >> my pleasure. >> here is something we wanted

to talk about just quickly. you feel that the fed, it's a form of price fixing when you hold rates down here. down the road, that would mean something comes home to roost. will that happen? will there be negative consequences and will it be inflation? >> here is the way one can thing about the progression or retrogression. feds fund rate got down 3%. fed funds rate got down to 1%. >> the governments would not go

through the central banks. they would write checks to the vendors, voters, whomever they felt like journalling money. i think radical monetary policy does not work, but radical moonity policy begets more radical monetary policy. i'm not sure if this is the like likelyiest outcome. is it brought about by the success or failure of these attempts which generate the culminating failure of massive helicopter money. this helicopter money idea found its way to the most respectable outlets. this is one possibility. when you look at the succession of monetary interventions, each one has been heavier handed, more dramatic, more intrusive. where does it end? >> one long pushing on a string,

exercise pushing on a string in slow motion. we've almost gotten to a point where people hear inflation hawks, they write guys like that off. some day it will. we've got to run. >> thank you for joining us today. >> have a great weekend. we'll see you monday. right now it's time for "squawk on the street." ♪ what goes up must come down ♪ spinning wheel ♪ gotta go round >> isn't that the truth? good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber on the new york stock exchange. futures made an effort at recovery. we were negative for much of the morning. slightly positive on the dow. europe still watching up to our action yesterday. the dax in germany down, up 3.5%. well into correction territory now. crude oil, fair to say in freefall. closing in on $83.61 after