and starbucks for life, the coffee giant very busy boosting pay, changing dress codes to allow tattoos, while offering a mega prize. it's friday, october 17th, 2014. some of our headlines -- get a tattoo -- and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. and what a difference a day makes. futures this morning are point to go a sharply higher open. that is a much different story than we were talking about just 24 hours ago. in fact, this morning, dow futures up by 140 points above fair value. s&p futures up by 17 points, the nasdaq up by 32 points. the dow is on a six-day losing

streak. that would be the longest one of the year. the major averages are now on pace for a fourth straight weekly drop. a lot of wild swings in the market, but it's continue to go raise questions about the federal reserve's next move. comments from st. louis fed president jim bullard, who we talk to regularly on this program, suggesting the central banks should consider its taper. that's been fueling some stock buying. >> i heard a guy say that on this show the other day. his initials are j.k., i think. >> what about liesman? liesman would be balder today. but he -- he's not real slick, but he did not take -- >> he was smart enough not to -- >> he was thinks like six months from now, a year. next day. next day. i wasn't going to say this because we've got headlines to get to, but in the old days, there was this funny cartoon that said the market sold off early in the morning when it was noted that an asteroid would destroy the earth on saturday, but rallied at 10 after the

money supply came in lower than spen expected. so now ebola is the same, but qe might continue! that is sick, andrew, isn't it? >> the market reaction is what's sick. >> i don't think it's -- i'm just sort of making a point. but for some reason, i read about nigeria and sen gegal, an in both places did epidemiological detective work, they circled it, they -- on monday, nigeria -- hi, meg. >> hi. >> you're here. >> you know more about this. nigeria monday is the day if no one gets it, then they're ebola free, right? a country of how many million people and senegal, too. >> nigeria had 20 cases, i believe, and eight deaths. it did spread in nigeria more widely than we've seen in the united states. >> if they can do it, can't we do it? >> that's the hope. >> i'm not seeming superior to them, but hopefully there's a chance for us.

>> and that's great about the work we've done to this point to do that. we've been awfully sloppy with -- >> did you see the president yesterday -- >> we have a whole segment we have to do on this. >> we will. but the president said i'm not philosophically opposed to -- first time i've ever seen him, you know, consider the other side of something and say, you know what? maybe i have to put something that we need to consider. i'm talking about a travel ban. here we go. oops. >> taken all the wind out of the sails of the -- >> i'm sorry. >> of this piece. >> i was the one that said qe was coming. >> i was trying to give smu credit and then you -- >> well, i also know this stuff. >> president obama said he might appoint an ebola czar. >> we're going to talk about that in just a moment. >> the comments come amid criticism which becky mentioned about the government's handling of the deadly ebola virus. is there anything that you would like to add? >> let's talk about the news

that came out overnight and the news that came out last night about all of the places that people who were involved in treating thomas eric duncan or handling his specimens have traveled. we're talking about the second nurse, amber vincent. we learned last night that the cdc is looking at the flight she took out of dallas to cleveland saying that due to more information they've gleaned from their investigation, potentially there's reason to contact all of those patients on that flight. >> she she wasn't feeling well, even though she didn't have the 100.4 threshold. >> she was 99.5 when she traveled. >> so i'm blaming her now again. >> no, i'm not blaming her yet. when you listen to the cdc, they said there were no problems. you were not symptomatic until you had this threshold temperature. it doesn't take into account the fact that different people react differently. >> which passenger would have been in contact with bodily fluids? if they're telling us the truth about the threat of an airborne transition being low or nonexistent, i just don't see how it would have been easily

transmittable. >> right. the communications are confusing right now. and let's talk about the other piece of news that just came out overnight, which is that somebody involved in handling specimen from eric duncan, it was handling samples, then got on a cruise ship that left the united states and is now in isolation on that cruise ship in a cabin. it's important to note that it's been 19 days since that person came into contact with the specimen. and hasn't shown any symptoms. we're almost to that 21-day window when that would be -- >> how did they find out that that person had touched the specimen and then -- that's like being in jail because it's going to be a small, little confined space on the ship. >> yeah. >> how long are they on the ship for? >> right now, according to reports we're seeing, it's parked off the coast of belize. belize won't let the cruise ship. >>. >> this sounds like a core legislature of murphy's law. it almost sounds like a joke.

what do you get when you cross ebola with a cruise ship? seriously? ebola found its way to a cruise ship? >> we've been so lax and now we -- >> but you know what i'm saying. because the way you think of noravirus and you're on a confined space and all the water is being recirculated. and now the possibility of ebola. that almost sounds like a bad joke. >> right. we should note this person -- it's been 19 days since the contact, so it's very, very unlikely this person is going to come down in the next two days with ebola. >> joe mentioned the piece out, i suspect you read that piece on the cover of drudge about nigeria and some of these other places, sierra leone, closing the boarders, and by next week eradicating -- >> you think i read everything on drudge everything day? >> no, no. >> i hope you stau entire huffington post today. >> i breathed it in. >> well, you wrote most of those

pieces. the question that i have for you is have they really eradicated it? because i would imagine they could have somebody come in on tuesday morning. >> that's always the worry. if it's still existing in the world and in those west african concerns, it could travel anywhere. the way they deed an outbreak is over is two periods of the incubation period. so 42 days. so past 21 days and 21 days again since anybody has shown any symptoms. >> it doesn't seem like you know everything that's happening in countries with -- >> and nigeria is now letting planes back in. >> i'm not sure about that. yesterday dr. frieden was asked about nigeria closing the boarders and somebody was sayingny gear ya had closed the boarders and he was saying he didn't think that was -- >> they had closed the boarders initially to get a handle on everything and reopened them with aggressive temperature taking and other types of sort of tracking. i don't know enough about -- >> let's talk quickly just about what happened in washington yesterday.

there was a lot of news. we were at this hearing and there were repeated call force a travel ban or travel restrictions coming in from west africa. dr. frieden getting grilled about why he's not thinking about this. he timely said we'll consider anything to keep americans safe and, of course, president obama saying he's not philosophically opposed to that and now talking about whether it is prudent to appoint an ebola czar. some people are saying, isn't that what the cdc is supposed to do? >> i also have to say, watching a lot of that congressional testimony yesterday, were any of them even listening to the answers? some eem them would make points, not lisp to a single point that any of these guys said back. >> there were some wacky questions, too. >> any sort of congressional hearing, those kinds of questions come out. one last piece, nina pham, the nurse who we saw the video of her earlier. you watch her interacting.

she's been transferred now to the nih in ba they had these da for treatment because there are still 50 people that they're monitoring in dallas. health care workers lent her thomas duncan's room. if any of them show up, they have to handle them. there aren't a lot of beds in all of these containment centers to treat all these patients. >> just the event. >> and care givers. >> it's somebody who is in there because she has is compassion. >> i don't know whether they got on a plane or not. i know who had the early call on this is levecster. when they started out, protocol, most have been -- protocol my -- they had no -- >> that was ridiculous. >> blaming the nurses. >> operator error is what you heard. >> blaming the nurses when you

start when they had no idea how to deal with this situation. that was bad of frieden right there. frieden was covering his own [ expletive ] right there. we had the right thing and these nurses must have done it a little bit. they didn't. >> they didn't have any can equipment. >> and we're hearing communication from the hospital. they've engaged a pr firm. they're sending out videos. and a lot of disagreements now and different kind of messaging coming out from the cdc and from the hospital. >> you would, in texas -- you would treat yourself i guess is what you were saying? nope. do you remember boris said they don't have that i -- in europe. >> and, meg, even watching -- i don't know who was supposed to be in charge. they're invited in. but i don't know who should have been responsible for tracking everybody who went into that

hospital room, making sure that they were kind of under at least some sort of self-imposed quarantine. that's where i feel like we fell down on the job. >> it was patient zero. there had been no previous patients, so there's no reason to think -- for two days, they didn't know he had ebola, did they? >> they're saying that's when he -- >> but even when he came back the first few days he was in the hospital, so you're talking four days from the time he first went into the emergency room. >> and that hospital system apologized for that yesterday in the shaerhearing. it was explicit. in the meantime, the dow closing down for the sixth consecutive session, marking its worst volatility of the year. that is a question kwk kwk had for lloyd blankfein. >> a few weeks ago, people were bemoaning the lack of risk premiums, the inability to

sprayed the good from the bd because there's not a lot of premium attached to things. it's kinds of like the wish from the bottle. we're a little bit beyond what heem are looking for. >> allison dean, a cnbc contrinter, kevin gettes a r a raymond james. is this volatility here safe for a while? >> i think the volatility is here to stay. the markets in fair val territory which means the chance for the u.s. growth rate to accelerate diminished somewhat. i think there will be more winners than losers when the comes to corporate profit. that could create a lot of volatility in the market. >> kevin, would you agree with that? >> yeah, i would.

starting with the fed weighing in on global growth and the drop in oil prices and ebola and a number of things that have brought more questions to the market which is increasing the volatility. so from a bond market perspective, they're watching the stock market. the stock market is trying to figure out, you know, is this the time to buy or are we going to see more volatility take us down? without a doubt, it's going to be here probably until the end of the calendar year or until the fed weighs in further. >> we've been thinking about the fed speak, thinking about what bullard had to say. and maybe we're interpreting this wrong, but wondering if there's going to be a qe4. kevin, do you think that's the case? >> i really don't think so. and i'm not sure it's actually needed. the thing about the qes, is you do them until they stop working. i think qe3 in particular has stopped working for a while now. i'm not sure that there's a whole lot to gaim gain by continuing to keep buying mortgages and treasuries from the fed's perspective.

the u.s. economy is going along pretty well. it's not great. it's choppy and lumpy. but it's not at a point where we're seeing what's going on in europe. from that perspective, i don't think qe4 makes much sense. what makes sense is the fed hold pat for a while based on the inflation numbers alone. do you really want to focus on how will the economy is doing, but the lack of inflation sister better story. >> there's been no evidence to say that you do it until it stops working. it stops working -- when did the fed ever say that, kevin? >> well, i think it's he depend in the marketplace, joe, that -- when -- but they've been doing it for a wheel year. they've been doing it for a whole year after it stops. most people think only e1 had poch effect. and so he's had qe3 the.

i think one of my points was that -- what was the taper tantrum? that was like 700 points. these guys are doing qe15. >> do you remember last sternum, joe, when the fed started hinting it might stop qe? it might not be helping, but it might be providing support to make them a little nervous in the face of other things going on. >> definitely. you know, i'm like everybody else. i'm glad the market is stabilizing a little. nobody likes volatility when the market is headed down 400 points on the open. but i don't -- i feel guilty saying, ghee, the fed is back helping us again. you know? i don't -- i wish we could do it on our own, some day. >> alison, i guess i'll ask you quickly, what do you think happens from here? we're a little calmed down. does that give people a chance to collect themselves and rethink before we get into

massive swings one direction or the other? >> well, you know, the positive side of volatility is it gives you opportunities to buy good companies at good prices. you have to be patient and not -- when the market is pulling back, decide everything is going to continue to go down. if the overall market, in my opinion, is valued around 2000 or a little higher, you're going to see opportunities through some of the better growers and healthy companies being served in the market selldown. >> okay. yes. >> you pick your stocks and be patient, usually have opportunities to buy good companies at good price necessary a volatile environment. >> alison, kevin, thank you both for joining us approximated. when we return, the chinese going wild for the iphone 6. we have that next. plus, a swing and a miss for google. what has investors worried about the tech giant? we have that after the break. and the table set for the fall classic, the giants beating the st. louis cardinals in the league championship series.

they will now face the kansas royals in the world series. game one, tuesday night.

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sdwloo the iphone 6 is officially on sale in china. eunice yoon joins us from beijing. andrew had one, but you got it legally. >> 6 plus, yeah. >> you got the 6 plus. >> in the united states.

legal. >> oh, you guys got it legally? now we can actually get it legally, as well. the lines today at the apple store were very orderly, very calm. people were just really excited to get their iphone 6s. like you said, our launch was about a month later than yours because of olympicsing issues. but that was worked out. so people now don't have to go to the black market and buy the iphone 6 for $3,000 or so. instead, they can get et legally, officially at the apple stoors or at the telecom shops. this is what tim cook had to say earlier today about the launch here in china. we've had a lot of customers wanting to buy. we are launching as soon as we can. the -- it takes time to the through the process. we're happy to be doing it. >> and a lot of people were very happy that they were able to see the iphone 6 is here because

they really like the big screens. that was the comment that we got over and over from a lot of people because they say now you can watch movies even better on these big screens. some of the numbers, we had an unofficial number, preorders going to 20 million. i've been warned over and over again by various analysts that the reason why that number is there and sounds very inflated is because they said a lot of people go online and they register over and over again. so that is probably not going to be a big issue. there is one other thing i wanted to tell you guys. we've been reporting about how the iphone 6 is the death of the -- and in china, they have an answer. there is one phone shop that actually is now offering free tailoring services for anybody who has a pair of pants and wants to have wiser pockets so you can stick your iphone 6 neatly into your pockets. >> eunice, there is what we were just talking about, asking andrew where he puts that thing. i've seen him putting it in his pocket. >> that's not a phone in your

pocket. >> he could wear his skinny jeans, get one big pocket at the back. >> you can't sit with an iphone in your pocket, right? >> right. if i'm wearing a suit coat or a blazer with, that's great. >> that's how they bend. >> i got a pair like two weeks ago, right? >> finally. >> joe has a -- you know, i think it's stretched that he -- he'll be fine. >> no, i like the way they feel. i hate to admit that. i do. they feel better than all cotton. >> you guys are behind the times. women knew this about 0 years ago. >> the death of them was two weeks after i got them, which is like everything for me. where is your iphone 6 plus now? oh, you don't have it in your -- >> no. wherever my coat is. >> all right. okay.

we're going to talk about google. >> eunice got a lot in there. >> she did. well done, eunice. thank you. google shares sliding after the company's chief earnings reporting a miss on both the top and the bottom line. the big issue, slowing growth in the company's core, advertising business. here to break down the results and the road ahead is daniel ernston, daniel, what do you make of this? it's not that they are not -- they're not -- they're not growing as fast as we thought. what does that really portend? >> yeah. there's always so many moving parts with google. so it's a little bit hard to call it. but their core business, actually, was google's sight for that fuel surge, ad mob, a detective correct, that is up 24% year to year. what occurred to them was par neither sites. so if you're not searching google with your iphone plus,

that hurts google. they're over the core bes of 24%. earnings were up 18% yeefr other year. they generated 6 billion in cash flow from prigzs. it's indigital advertising. if it's 17 times earnings compared to a 35 for 140 for a twitter. so it's a good business. but, you know, it's one core trend. i'm not getting too worried about it. >> daniel, what do you make of how much they're spending in terms of hiring. they seem to be on a hiring tear. >> it does worry me. my point there is no that it's growth, but there is a spending. a couple of years ago, when we were upgrading, it was --

>> that's the future, though. is this long-term thinking? >> right. so the difference between understanding the software and the machine learning and the information processing going into that is actually bold. but one of the things that they said on the call eight last night was that a lot of their -- most of their growth in operating costs and r&d are actually focused on that core business that generates revenue. i thought that was kind of a change in the way they presented that. you know, the cloud computing, the data sensors, building infrastructure because we keep hitting our capacity. so i think it was pretty positive. it felt a lot better. google never says anything. the calls now are long, they good many gave you no depails. >> we have to leave tlit. thank you for joining us, dan. >> thank you.

>> i'm going to ask you, you were sticking that in your pocket during this. >> it works. >> but not in the skipny jeans. >> no. >> if it's front pockets, you can dole with it. >> gentlemen. but kenny jeans, they're very shallow pockets. you can barely get your keys in there. >> well, and it doesn't look nice. >> up next, one of the biggest companies on the planet, we're talking about general electric. the numbers and instant analysis coming right after the break.

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back to "squawk box" here on cnbc. i am joe kernen along with becky quick and andrew ross sorkin. we're waiting for results from general electric and, you know, six sigma. normally they hit right at 6:30. >> we've got seven seconds until 6:30. >> you know, how many mistakes are you allowed to make in like a million things? you're allowed to make like one or something. so they don't want being late -- >> oh, they did it. right on the money. >> six sigma earnings. what is this? likes look adjusted 38 cents. okay. adjusted net of 38 cents and that compares to 37 cent estimates. so a penny ahead of estimates. revenue, let's check that. they're expecting 36.793. and it's 36.2. but the company says that some shipments in the power business were shifted out a quarter.

so the company, at the same time, says they're now guiding organic revenue growth, the estimate was 4% to 7%. they're guiding revenue growth higher for the year. >> there are some comments from -- >> volatile, but infrastructure opportunity. the environment is volatile, and that may be the key take away. we heard yesterday from lloyd blankfein that things were going well but that things could change on a time. jeff immelt saying the environment is volatile, but opportunities exist and ge is executing well. >> and you can look right there at that chart, ladies and gentlemen, and see. the high for the year is 28. the low 23.69. so it closed just above its low and this is with a yeel of 3.6%. so some of the sell-off we've

seen in the dow, some of this is reflected. margins up 90 basis points. we're excited about that. industrial earnings up, i think, 9%. the industrial segment profits up 9% and 10% year-to-date. and orders always seem to do pretty well. sometimes i wonder, they keep -- you know, a lot of times they'll have double digit, like 22%. it's hard to translate that sometimes into revenue growth. but they continue to shrink ge capital. let's get some instant analysis. hey, man. nick heyman has gofrd ge for like a hundred years. you knew edison, right? >> i was in his fraternity.

did you go to keggers and stuff? >> we lit up the night. >> how about the metrics? >> it's okay because you had the push on wind in particular without the renewable energy credit of 2.2 cents a kilowatt being extended by congress. the big pent up that you had knit first half of the year clearly as it relates to the u.s. portion of the wind business is starting to go on pause and hope that congress in the session will figure out how to turn that switch back on. so that may be pushed yet into '15. we'll have to see what congress does. but overall, i think that the 38 cents adjusted to exclude any charge for their jp coming divestiture here, their australian finance business, that would be in line with the 38 cents that we had. >> so this company now that -- the events of the appliance

business, did you like that deal? do they still sort of benefit from if things do well there. do you like the current mix that immelt has now put together? and is he finished? >> yeah. it's -- you know, i think he's pretty much done. but i think there's three things to have to be figured out here. enhanced simplicity. so we spend less time, is the quarter great, is the quarter light? the second thing is folks have to understand energy's impact and put it into context better. on a pro forma basis, it would appear to dilute ge industrials margins.

appliances, that's been sold to electrolux. lighting, got to wonder where that's going. it's not a big deal. and then there's energy management. and they've put one of their ace turn arounds on the case at energy management. it broke even, essentially, in the first quarter. it will be back to double digit by the end of next year. if that occurs as we anticipate, you will more than offset any dilutive impact from alstom. with alstom, ge is a complete a to z in the most important base infrastructure market in the world, which is power, electricity. so they have all the distributive power, all the base load, all the renewables, the grid. that's key because the next frontier for infrastructure, industrial infrastructure is undevelop undeveloped countries as opposed

to emerging countries. ge set up really well on the power side as well as oil and gas and transportation. there is a lot of land locked countries in the world. >> you couldn't form a company with all those assets. the alstom deal, i've had people say they love that deal, especially right at the beginning. but by the time it's done, did some of the concessions that the company had to make make it not as attractive at the beginning. is that your view or is it all said and done? >> it's a transformational. one was goodrich over at united technologies and this was the second. and its transformational, joe, because of the fact that it today gives ge, as i mentioned, end to end coverage here with

regard to the most critical cornerstone for base infrastructure. and when you look at the fact that alstom appears to dilute and secondly they gave maybe 10%, 15% of their targeted initial five year synergies away, the assumptions here are very conservative to get that billion 1/2 dollar synergies over the first five years. what they bought is a 9% margin business. today we follow alstom. what it is intended to become is about a 13.5% to 15% margin. same business for ge today are in the upper teens. >> quickly, if this is transformational, when does it pay off in the stock price? >> '16 is when it impacts because it closes in mid '15. '16 is when you see the beginning of the break away performance in a very modest global growth environment of 8%, 9% organic revenue growth and

low to double digit eps growth. so we would think that starts to be showing up probably, what, second half of next year? >> immelt looked really happy in that picture that we had. very similar hair to you, too. >> mine is a lot whiter. >> no, i think you guys have caught up. and it's happened at the same time as we've been following the company. if jeff's first week was september 11th. >> september 11th. that's jeff's first week. it's like, wow, that's great. i'm the ceo of general electric and then the planes hit. nick, thank you. >> thank you, guys. have a great way, a good weekend. it's scary how much he knows about this company. you need a life somewhere. anyways, thank you. see ya. doesn't he know -- >> i understood things i didn't understand. >> did you take notes? mentally, yes. alstom, pay off the first half

of 2015. won't show up until 2016. >> i have a dvr. apparently that's what you have planning to do. what was that? you were watching that -- do you know what's coming out? >> what? >> that stuffed animal, the filthiest movie i've ever seen. "ted." how are they going to outdo that? >> they already kicked a guy off, that guy from "seventh heaven." >> he's perfect for that. that movie is totally inappropriate. that guy. he is a problem. he is a preacher. >> is that a universal picture? >> it's going to be great. coming up next, he is a rebel icon, an innovator, a closer look at the man who is trying to change -- a man who jay leno thinks he is the newest prime time star. the life and times of elon musk when we return. and a programming note, jon fortt sitting down for an exclusive interview with

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2014 is cnbc's 25th anniversary. this career, we looked at the leaders who impacted business over the last quarter century. over the next four weeks, we're going to be hearing from some of those people. here right now is an engineer, investor and within of the world's biggest dreamers, elon mrufk in his own words.

i initially think that changed the world or will that affect the future. and wondrous new technology where you see it and you're like, wow, how does that even happen? how is that possible? rather than reasoning, you boil things down to the most fundamental truths you can imagine and you reason up from there. and this is a good way to figure out if something really makes sense or if it's just what everybody else is doing. >> initially, it was not my intention to be a ceo. there are other things that are important to happen.

we started spacex for tesla, it was less than 50%. in the case of solar, i thought probably the success was greater than 50%, but it wasn't -- it wasn't a magnitude of success. there are things to get done, okay, it's worth trying. >> i really feel that tes that turned a corner. people will view this as a time when an electric car became a viable company. i think that's how this period will be looked at in the future. >> i'm always going to be involved in tesla, i mean, forever. i would certainly stay on in some role beyond the four or five years point. but, we'll have to see whether me being ceo is the right thing in four or five years.

>> i think what we've done thus far is relatively minor. honestly, i'd characterize it as revolutionary. what we hope to achieve and can encourage the rest of the industry to do is to achieve full reusability with rocketry. >> it would ensure life as we know it in the case of a calamity on earth. we need to have things in life that are exciting and inspiring. we're going to have several more cnbc next 25 pieces that will be unveiled in the coming weeks. this is just the beginning. elon musk. who i do think, by the way, is one of the few people who -- everyone voted.

>> who you think will be -- >> in 25 years from now will clearly be -- >> right. and be influencing the future. >> and jou joe is looking like, no, come on. >> he is the man of the hour. >> but he's the guy -- >> three companies, right? >> tesla, spacex -- >> with tesla, we talked bit last week, i need a name for them, the tesla-zarians. >> even if tesla doesn't exist 25 years from now -- >> i can't imagine he's not still doing things. when you bet on people, i would bet on him. >> right. but he loves stock. there's no one left to buy it at this point. >> could be. could be. up next, the euro is taking a breather. major averages bouncing off recent lows, especially in germany where the dax took a big slide this week. the euro problems didn't just disappear. we're going to talk about that, next.

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welcome back, everybody. a rebound for the european markets this morning after falling to 13-month lows. but the problems in the eurozone are not going away. michelle caruso-cabrera joins us with more on this. >> they're higher across the board. they are off highs at the equity markets. when it comes to the bond market in europe, we are seeing still the divergence i told you about yesterday. it's just the opposite moves. people are calmer.

so they are selling germany, but they are buying italy, spain, portugal, greece. so that lock step we had seen before, everybody goes down together because they believe the ecb is going to take action. >> so the divergence is getting smushed a little. >> i'm saying the divergence still exists. just yesterday we saw people buying germany and selling italy and spain. now it's just the reverse today. right? so the risk on/risk off is definitely still in place. in the last 20 minutes, the head of the german bank has started speaking. if you think all the volatility of the last month of the german market has changed the german central bank's mind, absolutely not. he says there is no need for more stimulus in germany. that's directly at draghi who says countries with fiscal space ought to spend more money. he's against the recent outcome

of -- and saying the other countries have to do structural reforms. here in the united states, we're talking about the possibility of qe-4. and in europe they're wondering if qe-1 is going to come. >> we've already folded. >> michelle, stay here. we want to bring in a guest to talk more about this. douglas rediker represented the united states on the executive board of the imf from 2010 to 2012. and doug, the huge questions exist, how big of a problem is this economic turnaround in germany and the rest of europe? what do you think? >> i think you have to decide especially if you go back to what michelle just said if they are embedded with any risk at all. if you believe what draghi said two years ago which is the central bank would do whatever it takes, then there's no credit risk you should assume all

eurozone members should have a tight spread. if you believe that the ecb is not invincible, if there's any risk out there at all that would go into the credit risk category, then you've got to draw that distinction which is a non-credit risk sovereign to almost everybody elsewhere there's some level of credit risk. that's where you seeing that divergence. i don't think the european authorities much less themselves have figured out the answer to that question. >> the bigger question is are they going to stand up with each other? >> so there's always been, since the beginning of time within europe, tension between amongst others the french and the germans. and they usually surprise in the end by coming to some sort of agreement even if they don't trust or like each other or believe in the same things. they usually come up with something that allows everyone

to believe that europe will muddle through. that is the basic thesis of the european union. the question now is whether with that chink in the armor of invii invincib invincibility. whether that is a lack of cohesion at the political level that the ecb can't address. so if you have questionable doubt about the ecb's ability to step in. the bank clearly taking issue with draghi. you've got france, germany, and italy not agreeing. then investors are correct in saying is there really a cohesive center here for europe or are the doubts really real? >> what do you think ultimately? can the ecb embark ofr quantitative easing or are the germans going to do everything they can to stop them? >> the message you see coming

out of the ecb has been one of progressively trying to get everyone to believe that qe is on the cards. we just don't know when. the strategy so far has been to do this abs covered bond process, see if that works. if it doesn't work as well as they'd like it to be, then the assumption is they'll go down the qe route. but the germans are pushing back very, very strongly as you suggested earlier. i personally think in the end they will have to do qe. and even if the germans object, the german economy is not doing so well that they really have solid ground to stand on. but it's clearly going to heighten tension within the investor universe that's worried about this public dispute between germany and the ecb. then the end of the day, is qe in europe really enough? or is it a signaling mechanism? if that's undermined between germany and the others, the question is if it really works.

>> thank you for joining us today. thank you, michelle. coming up, the fed to the rescue. the mere suggestion of the central bank sticking with its bond buying program helped some say to bring the markets back. more on the wild ride next. plus major hospitals like new york's mt. sinai are looking for the best but preparing for the worst. are the first responders ready? "squawk box" will return in just a moment. tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do.

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everything's fine. everything's fine. don't worry, people. welcome back. >> didn't have to listen to us. >> this is "squawk box" on cnbc.

first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. the major averages are on pace for their fourth straight week of losses, but the bulls aren't heading to the weekend without a fight. we've been watching the futures. at least at this hour, there are some green arrows. s&p up by 16 points. the nasdaq up by 36. there's been speculation about more easy money from the fed stoking the markets. that's what turns things around yesterday. so it's the perfect day to have boston fed president eric rosengren joining us. >> leisman should have shaved his head. he didn't take the bet. >> he shouldn't have to save it. he said no. >> but he also said they weren't going to do qe. if he wanted to be honorable, he would -- >> there's nothing to shave. >> get rid of the friar tuck thing and go to mr. clean, mini

me, a bad ass. bald guys, you think they're bad ass. two stocks to watch this morning. both driven by quarterly results. beat the street by a penny. ceo says the environment while still volatile, there are opportunities in infrastructure that exist for ge. and he says that the company is executing well. uh-oh. here's leisman. okay. and he's -- he said he didn't mention whether he -- no, he didn't pay off on the bet. google missing the mark on earnings revenue. reporting a slowdown in paid clicks on ad links next to its search results. andrew, have you ever -- do you click on things on google? >> yes. >> to check things out? >> check them out. >> have you bought things based

on that? >> i bought things. i put my credit card in that slot. >> that's my problem. i can't find that slot on my computer. >> let's tell you about other news. hurricane gonzalo is bearing down on bermuda. it's a powerful category 4 storm -- >> hurricane gonzalo. >> i was going to call it gonzo. many tourists have been evacuated. expected to pass 29 miles close of bermuda tonight. close enough to be a direct hit. >> bermuda. >> you did it right. >> thank you. >> the president said he might just appoint an ebola czar. that comes amongst criticism of the handling of the virus. meg tirrell is back with this. you were just telling us other things we hadn't heard about. >> yeah. at the hearing yesterday, there are a lot of questions about what happened in dallas.

accountability questions, who's in charge. but the primary theme really was calling for restrictions on travel. >> i want to join with chairman upton in urging the president to immediately institute a travel ban until such time that they can firmly and scientifically prove that americans are safe from having more ebola patients coming into the united states. >> now, the cdc and white house messaging on why there was a travel restriction from the west african countriecountries. it would be counterproductive to stopping the virus at its source. now they're focusing on the fact they won't be able to track people. people would come in anyway even with the travel ban. so it's interesting hearing the different kind of messaging on that. this matters when we're hearing about this cruise ship that came out overnight. we're hearing about the flight that amber vinson took to cleveland. a lot of concerns about how ebola spreads. dr. frieden addressed that

yesterday reiterating it's spread by direct contact. >> there will not be a large outbreak here barring a mutation. we're absolutely looking for other mutations or changes. what we have seen is very little change in the virus. we don't think it is spreading by any different way. we are confident this is not airborne a transmission. >> that's been the main question. can this mutate. and if it does is that how we get a wider spread virus. he's trying to make sure people aren't afraid it's spreading easily than we know it does. >> i watched a lot of that testimony yesterday that you were following so closely. the one decent question was from a representative who said, okay. this is what the cdc's original guidelines were in terms of what the proper clothing would be, how protected you could be. you could still see skin around their faces. then here's you when you were dressed when you were exposed to ebola. i don't know where he was. i think he was in an african country. he went to west africa for this.

he was in the full gear with the head thing and everything else. that was the one point. yes, what's the cdc say and what would you do in that situation? >> a lot of questions about the changing messaging. hearing from the hospital, too, that protocols were changing quickly. how it was confusing, they weren't trained, they didn't know what to do at the beginning. >> i think there's going to be czar. you mention a czar, there's going to be is a czar. i want a czar. i want a layer between the president and this guy. that's the big gulp guy, frieden. >> have you heard this debate that if you were to stop flights from africa that depending on the dallas situation, that people would say you got to stop flights out of places like dallas. i don't think it's a fair argument, but i heard that made. >> because we had some cases there? >> no. if you decide that you're not going to have flights from west africa, for example, but then it creates a hysteria about -- >> that's kind of -- >> the problem is the people

will get here anyway. i think the cdc is finally being honest about what the concern is. you won't be able to track them. they'll get here anyway. >> they'll get sneakier. they'll try harder. >> there still needs to be a focus on west africa. it's getting really bad there. it's getting worse there. exactly. and flu season is coming. more people are going to be coming into emergency rooms. but we're at the infectious diseases last week, ebola is still small. three cases in the united states. >> two alive. >> two transmitted here. >> thank you, meg. we're going get to dom for a second. it's been a wild week on wall street. the dow now down for six straight days. that doesn't begin to tell the story because volatility and volume, two words of the week. dominic chu joins us with that. >> here's what we're talking about. we're going through the market pedometer again. you can see here on our nice large wall. these are all the candle charts for all the swings during each

day so far this week. if you go all the way back to monday, we were, you know, again, a big swing here today. but pr the top to the bottom you can see there during the course of the day, we swung by nearly 300 points. so that's a big deal. then you move to tuesday, the 14th and we thought we'll get a big. people will consolidate a bit. but that still led to a 190 point swing between the highs and the lows of the dow here. now here on wednesday was that really, really big gap down. we started off the day and then dropped 370 points off the get go. and then somehow managed to make even worse lowed before closing up a little bit. that was a 460 point range. the wildest day this week. and then yesterday we did see a little bit more of the volatility return. at least we were trying to make a bottom here going to the upside. between the tops and bottoms here, we saw about 276 points. about 1200 points overall.

the range from top to bottom for the week between 750 to 800 points here. the point being, this volatility had not been evident over the past different new highs we've hit over the past couple years. that's why some traders are concerned. even though we're seeing what looks to be a sign of 150 point open for the dow on today's trading session, it doesn't mean it's going to stay that way. that's the big key here. >> dom, it's like october, number one. number two, it's friday. number three, it's like aren't we in the teens of october? like the ides of october. it's like going into october with the market really volatile. this is a key day. we're up this morning. but you can imagine if it's a slow sort of decline throughout the -- and i'm not saying it's going to be. but who knows. but it'd be scary. >> but it's a good point here. here's the reason why some of the bulls are a little bit more bullish, if you will, today. if you look what happened with

the russell 2000 and midcap 400. you're seeing a trend higher. the russell 2000 is on higher caps. they were the hardest hit during this downturn. if they're making a bottom, maybe that's a good sign. >> and some people pointed out this is the tail end of what has been an ongoing correction for a lot of parts of the market that don't make headlines every day. that it's been, like, three months that a lot of stocks have been in a rotating sort of a correction. so maybe the big ones and the media gets involved at the end of it. >> energy was the big one. that's the one we have to watch. >> that's okay though. if it's lower oil prices, you know, they've had so many good years. those fat cats in big oil. let's get right to it.

jurien timer, confusing. why have the "j" if you're not going to use it. and our guest host this morning, of course she's got a bunch of "t"s. she was recently named -- is this true? >> yeah. i'm told it is. >> wow. wow. whoa. named one of the top 25 most powerful women. oh, women in finance. i think -- why -- >> why limit yourself like that. >> just to finance. you are just powerful. >> i'm still young. >> so how you feeling after these last three weeks? >> i'm glad i dye my hair. if i didn't i'd have a lot of gray. >> don't you have a lot of responsibility? it's harder for you than it is for us. we develop home. bad day. >> i love what i do. so that makes it all okay. seriously. i love what i do. i don't enjoy downturns. no one does. but it's fascinating. >> how's friday going to be, today? >> let me get my crystal ball out and tell you?

>> do you feel better today than you did -- >> yeah. wednesday this week felt like a capitulation. one fixed income -- i had to write this down. one told me 36 point basis move in the treasury was a ten sigma event. when you have that kind of pressure across markets, it feels -- i mean, the technical term one used to use in investment banks is a puke. which is a bit crass. but when you get that, it usually helps you find a base. we've had some helpful comments. >> we need to look for capitulations not just in equity markets. it's all connected. right? and maybe rebecca's right. that was the day that a lot of -- maybe we made some bottoms there. what do you think? >> yeah. good morning. wednesday was a really well day as was just mentioned. treasuries gapped down in a big way. almost like a flash crash in the treasury market. but at the low on wednesday, the s&p actually using data was down

9.9%. so that's pretty much a 10% correction, small caps down i think 13 from their highs. as far as remembering if you go back a hundred years, you'll find the odds of having a 10% correction at any given time is about one in three. historically they happen very frequently. it's just the last few years we've gotten spoiled by having no more than a 5% draw down. and as you mentioned, we've had these stealthy corrections all year. this is sort of the fourth one. this hasn't been so stealthy. and now the average symptom in the s&p 500 is down about 15%. we're still getting good numbers in the u.s. the fed really watches that. a lot of this started with these dots coming out of the september fed meeting. being much more hawkish than people thought.

and then the dollar went up, inflation expectations went down. so it'll be important to see the fed sort of dial down that -- all that rhetoric. and it's really happening. we've seen some fed officials in recent days doing exactly that. even wondering if qe should end or not. and if they can sort of message the market back towards, you know, low for longer, then we're going to continue to have moderate growth with very little inflation and there's not a lot not to like about that fundamentally. >> okay. yeah. you make some good points. humans put together these indices. and this will go down on record adds not correction in the s&p. if it holds here. but those are -- we put those names together as humans. there are other indices that did have the correction. it's just all perception. anyway, we got to keep it short. i'm not really sure why, but we do. >> i think 94 is still a good

analog. that was a stealth bear market during a rate cycle. and the s&p went down more than 9% but the average stock was down 20%. then you had a liftoff after that. >> okay. thank you and we'll have more from rebecca throughout the show. up next, how prepared are our hospitals? mt. sinai in new york looking about ebola. we will be joined right after the break. location. location. (shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do, and you gotta do it fast. before the competition does. it's tough out here; you better be on the right cloud.

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welcome back, everybody. we've been looking through some of the earnings numbers. >> we are looking through the morgan stanley numbers that are just hitting revenues at $8.9 billion. we're looking at items at 77 cents a share. you don't trust me? >> go ahead. >> hold on. you don't trust me. >> i'm going to check to make sure you get all this right. >> i'm only focusing on the compensation numbers. >> i said did you see it. he said compensation -- that's the first thing you look at. that's not normal. the bottom line, i think, andrew what did you say it was? 84 cents? >> no. because you have to exclude some stuff, it gets to 77 cents. >> what was the estimate? >> i believe it was 54. >> okay. good. >> we'll continue to watch that.

>> does that do it for you? >> 33.40 today. the mt. sinai health system designated as one of the four that can handle ebola patients. mt. sinai yesterday running emergency preparedness drills. joining us with more is dr. jeremy bole. doctor, thank you for being here today. >> my pleasure. >> we have spoken with the ceo of mt. sinai. we know you have been running drills and had secret shoppers, so to speak, and tested people along the way. what do you do to prepare for something like this? >> this isn't something you can prepare for overnight. i think you've got to -- at the earliest possible time when there's a potential threat work on multiple levels to make sure they feel totally confident.

that they know what to wear, to isolate that patient. they know how to ask for help. and we have the ability to provide ongoing care if we need to test in critical care setting. >> i think we've all been stunned by the lack of protocol at texas presbyterian. it's very concerning to think about the nurses and doctors on the front lines. >> i would agree. at a minimum, we know that the staff there did not feel safe. they didn't feel like they knew exactly what to do. the instructions were changing over time. and given this disease has a 50% mortality rate in the best of circumstances, everybody who had interactions with the patient who are at risk for ebola has no know exactly what to do. when you're putting your gear and on taking it off, somebody's

got to be watching to make sure you're not contaminated. >> how consistent has the recommendations in terms of protocol from the cdc been? in terms of the preparations you're making. how much are you listening to them and how much are you doing your own thing? >> right. so the recommendations have evolved i think as most people recognize. part of our responsibility is to listen to everybody. we're listening to the cdc. we're speaking with other hospitals like emory. we're following and reviewing the doctors without borders guidelines. it's to get the best information as quickly as possible recognizing that the state of the art may evolve and rapidly. >> do you have confidence that other hospitals are going to be ready? i do have confidence you can figure it out. i'm less confident -- i am wrong to be less confident that everyone else can? >> there's going to be variability in readiness and capability. our view is and i think the cdc is in a similar position is that everybody has to be ready to

identify patients. because somebody can walk into any hospital in this country from west africa with symptoms that are consistent with ebola. they have to be ready to stick them in a room and isolate them. at that point, though, in all likelihood we should probably be transferred to a few -- a handful of centers in each state that are ready to manage the patient and protect the staff statement. >> you new yorkers, the only places -- how about cedar sinai out in l.a.? how about the mayo clinic? >> there are places -- >> so in flyover states you might be okay? not just in manhattan? >> hospitals in the state of new york i would worry about. >> doctor, you said 50%. people stress 70%. and they explain that 50% away. i can't remember their rationale. i've seen the cases and it comes out to 50%. but they say it's actually 70%

for some extenuating reason. is it 70% or -- i mean, i'd feel better if it was 50%. is it 50% or 70%? >> i don't feel better at either number. >> both are bad. one out of four of chance is not as good as a one out of two chance. >> i would agree. but i think the issue is that we don't really know. in the optimal setting, so in an intensive care setting. i think it's reasonable that it will be tested in the coming months. >> one really important thing. we're s to get fears in consumer confidence. people worried about flying. but the risks to the economy, to the markets is i think one more of confidence than an actual pandemic, frankly. what would you say to people who are wondering if they should get on a plane in the next few months? >> you're right.

i don't think there's any risk to the public in flying. the odds of transmission are extraordinarily low. because she was very early in the condition. when people are at dangerous to others is when they're incredibly sick. in those cases they're always in a hospital. they're always in isolation. they're having a lot of vomiting and diarrhea. but early on in the disease, again, this is transmitted through bodily fluids. and those are not spread around the airplanes. and again, for the vast majority of flights, there's no concern whatsoever. so i think this is an issue of confidence much more than a true risk to the public. >> dr. boal thank you for coming in today. morgan stanley very quickly just the number we should be matching up in 65 cents versus the 54 cents. if you take out the positive dva and the tax benefit that coming out. >> well then the 77 on the screen is the one we should not

be using. >> right. >> but the stock's up sharply. it's up $1.10 or so. >> we will talk about that when "squawk box" comes back. breath and . . . exhale. . . aflac! and a gentle wavelike motion... ahhh- ahhhhhh. liberate your spine... ahhh-ahhhhhh......aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh! four days? yep. see why speed matters at aflac.com. [sfx] duck snoring sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities.

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welcome back to "squawk box" this morning. here are the stories that are front and center. right now walgreens former cfo, he's suing the operator. he alleges the company's executives defamed him in news reports and blamed him for earnings forecast error. also two more firms are firie i pimco. they are dropping pimco as their manager of their bond portfolios. and the fbi director has a harsh message for the -- to stop encrypting smartphone data. if not, he warns that murder

cases could be slowed and some suspects could walk away free. all because he says authorities can't get to the information that they need. and check out shares of morgan stanley this morning. that company reporting better than expected earnings at 65 cents a share. not 77 cents a share. that's 11 cents ahead of estimates. revenues excluding dva coming in at $8.7 billion. they beat pretty much across everything. >> yeah. that stock is up sharply. >> up $1.77. there's a tax benefit. so 19 cents total on that 84 cents. >> the investment banking number beating. the equity number beating. wealth management, same in line. >> the income disparity definitely being added here, andrew. >> they missed on investment management. that was their only miss. >> the compensation -- as a percentage of it, it was -- did

you do that one? >> i have not done the math on that yet. we have an analyst on to talk about it. not just that. >> what would be okay? 40-what? 40? >> you know me, i want it to be as tiny. >> the boston economic conference is taking place today. janet yellen set to take the stage in just about an hour. we'll be monitoring her speech for any of the news on the economic front. obviously the markets keying on everything the fed is saying at this point. in the meantime, let's get to steve leisman. he's at that conference and standing by with an interview you'll see only here on cnbc. steve, good morning. >> good morning, becky. i'm here with boston fed president eric rosengren. >> welcome to boston. >> let's talk about the weakness out of europe. does that change your view of the pace with which the fed should taper quantitative easing?

>> as you know, financial markets have been quite turbulent. i would remind you just a couple months ago we were talking about how little turbulence there was. it will take us time to process what's the reason for the turbulence. and so i think we're going to have to factor that into our decision. but i think it's a little bit too soon to make a judgment. >> but there's only a couple weeks until according to new statements you guys are set to end the third round of quantitative easing. >> so unless we have to change our forecast, we have made a lot of progress in labor markets. we're at 5.9% on the unemployment rate. we were much higher at the outset of the program. the program was really designed once we made on the program and labor markets more generally that that program would end. if it looks like we're not going to get that kind of progress now going forward, we'd have to reconsider it. i'd be surprise fire department in the next two weeks we get enough data to change our mind on that. >> let's talk about what's been

happening globally. when you see european economic weakness come across, how concerned does it make you for the united states? >> europe has been weak for quite some time. i think there has been some news that's been a little bit weaker. i would say my fundamental outlook for europe hasn't changed that dramatically. i would say financial markets have moved more than the economic data coming out of europe. that being said, they're certainly having significant problems. their inflation rate is too low. unemployment rate in many european countries is too high. we are concerned about europe. we should be concerned about europe. it does affect the u.s. economy. and so hopefully they'll start getting a bit stronger growth than what they've been seeing recently. >> when you say financial data, sounds like you're saying markets have overreacted to the data. >> either that or they underreacted going into this. so it's a little bit hard to tell the low volatility before or the high volatility we're seeing now, i think you average between the two and you probably get a better perspective.

i think people were surprised that the market wasn't reacting a little bit more to the bad news coming out of europe. it has been for some time that we've been getting fairly weak reports coming out of europe. >> talk about the outlook here in the united states. you had suggested that a mid-2015 is where everybody was clustered. does that still seem the case? >> i've said i think it would be appropriate to raise short-term rates once we're within one years of getting to full employment and inflation rate of 2%. we'll have to see whether that's what we actually get. at this point we'll have to see whether the financial market turbulence is something more significant. i would say so far the economic data has not shifted enough to make me think that my overall forecast would be dramatically different. >> two recent developments, certainly in europe but also expected in the united states is lower inflation. when do you think the fed is going to hit that 2% target? and what's your immediate

outlook right now? >> we're at 1.5% right now. certainly with the dollar getting stronger, with oil prices going down, it's likely that the inflation numbers are going to be a good bit weaker over the next six months. given that we're trying to get to 2% we actually don't want inflation to go down from this point. i would say that inflation's a fairly slow-moving process and i think it would take us several years to get completely back to 2%. >> given what's happened with oil, have you changed your inflation outlook? >> i focus on core inflation. and so we think about oil prices. we think about food prices, but this is that reason that has fluctuated a lot over the last several weeks. they could easily go back up. so i think we need to smooth through that process. if we stay at $80 a barrel, a little bit over, then that is going to indicate that we're likely to have a fairly low pce and total pce read over the next several quarters. >> this is a conference here

about inequality of opportunity here. but one of the things that's out there in terms of the criticism of the federal reserve is the fed is responsible for income inequality. that its policies itself have exacerbated it by raising asset prices. and not helped average americans. how do you respond to that? >> i think average americans have been helped by the actions we've taken. one of the things that really impacts a family is unemployment. the unemployment rate has come down quite dramatically. now, there are other things we care about as well. we've had slow wage growth. certainly if we see us hitting our inflation target of 2%, we would expect we'll also see some increases in wages as well. so i think all americans are helped by low unemployment rate. all americans are helped by wages starting to go up faster than what we've been seeing. the focus you mngsed was on inequality of opportunity. and i think that reflects much

larger trends than just monetary policy that tends to be cyclical. >> thanks for joining us today. >> thank you. >> joe, back to you from boston. >> great, steve. thank you. i understand eric doesn't have an ear piece in. so we can't really talk to him. but steve, just before we go, we almost made that bet thoer day and you're pretty smart. do unctiyou think at this point you made the bet about qe that you would have to be considering paying off now or do we actually have to -- what would construe me actually being right about that? >> okay, eric can't hear. so what we're talking about, joe, if i'm not mistaken is joe wanted to bet that i would shave my head if the fed did qe again. so he's ready for me to pay out. so i'm going to take joe's remark as a question to you. is there a chance that the

federal reserve does quantitative easing again? >> i don't expect that we'll need to. if the economy got weak enough that it was required, we should do it. i certainly hope and i don't expect that will be the case, but i can't rule anything out at this time. >> all right, joe. do you hear that? that's the best i can get from the boston fed president. >> do you want to make that bet now? yes or no, steve? and some of our viewers, i said you would be a total bad ass like that. they said fu manchu plus the bald and you'd be on "the tonight show." i mean, think about it. i'm trying to help. >> joe, appearing on "squawk box" is the greatest thing that happens to me. i'm very happy to do that. i have no desire to go elevate my game in that regard. >> good answer. >> i'm just fine. >> good. >> i love being with you on the show, joe. >> you know, that will always help, complimenting the show. thank you, steve. we'll see you again in five minutes. i think rosengren is dovish?

>> according to a chart i looked up, there's a chart that kind of ranks everybody on a hawkish/dovish level. he's seen as one of the more dovish ones. but, you know, that was really interesting. >> that was good. coming up, a trip inside morgan stanley's results. we'll speak to an analyst. a lot of stocks are higher today. then later, heightened anxiety over the spread of the ebola virus and how authorities are handling the situation. we'll have the latest on ebola in america. sounds like a "nightly news" thing here. and a look at how airlines are looking to handle a true outbreak. "squawk box" will be right back. ♪ [ radio chatter ]

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morgan stanley out with third quarter results earlier this hour. beating the estimates on both the top and bottom line. with reaction, david hilder from hamilton banking. we don't always compare everything to goldman sachs, but since we just had goldman earlier this week, how did the two measure up? with morgan sort of -- do we see similar things in terms of the environments they're operating

in? >> we do see similar things. i think morgan stanley had a great quarter. i think goldman had a much bigger rebound. but morgan stanley was strong in investment banking revenues. they were up 33% year over year. and their equity trading revenues were up 40%. fixed income up 19%. >> do you even compare their businesses anymore? goldman and morgan? the reason i ask is the business changes so much. >> that's right. i mean, morgan stanley gets almost half its revenues from the retail securities business. this quarter because of all the strength and institutional, that was a little bit more than half. but they are at the top level, they're certainly different firms with different strategies today. but you can line up the institutional businesses pretty well. >> one thing we've been talking

about since the recovery started is getting banks to lend more, get that going through the economy to help corporations. how are you seeing the numbers coming up so far this quarter in terms of loan growth and quality? is it improving? can we take that as a better macro sign or not? >> yes. i think we saw what i view as strong loan growth at many of the largest banks. certainly one of the biggest areas of strength was commercial and industrial loans which is basically unsecure commercial loans. and we saw small improvements in credit quality across the board. credit quality is still getting better. and yes, we saw, you know, good kind of anywhere from 7% to 12% growth. >> all right. yeah, they do have -- you're not going to -- i'm waiting for you. >> what's that? you want to ask a compensation

question? >> what was the percentage of compensation? what was that number? did you say 4.2 billion? >> on the institutional side it was around 40% of revenues. you have to adjust for dva. but it's certainly nothing outside of what morgan stanley has been paying in recent quarters on a percentage basis. >> okay. >> the other thing i would mention is that on the retail side, we saw at morgan stanley a sequential improvement in the pre-tax margin to 22% from 21%. so again, they're continuing to do better in terms of profitability on the retail side. >> all right. david hilder, thank you. >> happy to do it. >> takes guts to leave drexel in your name as a firm, doesn't it? >> sure. although it's been awhile. you remember drexel? >> i absolutely remember drexel. >> a furniture maker and a university. >> there you go.

when we come back, oil bouncing back slightly. what price would kill u.s. oil? we'll find out after this. by the way, check where oil prices are right now. up about $1.15. "squawk box" will be right back. so i can reach ally bank 24/7, but there are no branches?

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let's take a look at a couple of stocks to watch this morning. we'll start with ge. earnings kbeeting the street by a penny.

the environment is volatile but growth opportunities exist for the company and that's up as you can see. that's a current quote. honeywell earnings up. boosted the low end of its full year forecast. range for profit and for revenue. that stock is up sharply. google missed the mark. earnings and revenue falling short. reported a slowdown in paid clicks. on ad links. that are next to its search results. >> do you know what those are, joe? >> i kind of have seen them. i never clicked on them. i don't want anything. >> we have a guest. let's talk about oil. plunging oil prices changing the calculus for power players like the united states. we've been talking a lot about this all weeg. so how low will prices go and at

what point does the drop do more harm than good? joining us now to answer it jack gerard. how low does it go? >> i guess it depends who you're talking to. there is speculation it will go lower than it is today. the fundamentals are what we need to keep in mind. most of the push to lower the price was driven by the concern over slower growth particularly in europe and in asia. but fundamental lly on a global scale, we're still going to need more oil over time. and so i think what we're seeing is a market adjustment. how low will it go today? some believe that it's kind of reached its bottom. that it's eventually going to climb back out. i think it's too early to tell. >> what do you believe? >> well, we have members that represent the whole continuum of oil and gas production. it all depends which basin you're in. our industry is very cost

conscious. >> is there a seven handle coming? >> well, again, it's hard to tell. it depends who you're talking to and where you're producing. >> hey, there's been a lot of conspiracy theories the last few weeks that the falling oil prices are something meant to pressure russia. maybe even the saudi arabian producers to do it to slow down the u.s. shale revolution and shut in production here. seems to me this is more of a middle eastern thing where the producer are tired of the rest of the opec members cheating and they're trying to pressure them before we get to the next opec meetings. but you're focusing on the u.s. do you think the fact the saudis cut prices to asia, do you think this has anything to do with them looking at the u.s. growing production? >> well, they could be looking at that closely now, but i think the fundamentals have really changed. what i mean by that is, if we look back just five or six short

years ago, no one would have thought that opec would be where it is today. i think they're really in the process of soul searching. the one strength we've had is we increased here at home over the last four or five years. and so it's changed that equation. before when they could kind of work it out internally, that fundamental has shifted now because the u.s. has become a true competitor. and i believe if we'll get our policy right in the u.s., allow for export, we're going to continue to put pressure on opec and other major producers around the world. >> real quick before we let you go. i tried to get you on the downside. you didn't want to go there. what's the upside? if it's going higher? >> it's interesting. some have speculated. the head of the eia said this production today, the price today due to volatility in the middle east and elsewhere may

have been as high as 150. today the price is considerably less because of domestic production. we're in a market adjustment time right now. and ultimately it's going to find where it should be, but the key to this from the u.s. perspective is we've got a unique historic opportunity to be the biggest player in the world. if we seize it, we'll change the course of history from an energy perspective. >> let's hope we do that. thanks for joining us this morning. still to come this morning, feel like you've been carrying the weight of the world on your shoulders? are you running uphill when it comes to putting your money to work? have no fear. we'll tell you how to lose the extra luggage and become a lean investing machine. look at the futures this morning. much better picture for the bulls. dow futures looking up 163 points above fair value.

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welcome back to "squawk box." here on cnbc first in business worldwide. i'm joe kernen along with andrew ross sorkin and becky quick. president obama says it's possible he'll appoint an ebola czar to manage the country's response to the outbreak. he also said that philosophically he doesn't object to a travel ban from west africa. but most experts and that is true, say that it could be counterproductive and maybe not be effective. i don't know. obama could encourage people to hide their home origin. we'll have more on this from the front lines. we would mean the airlines in that case. we'll talk about that in just a bit. >> but first the other big story of the hour. the markets, of course. stock futures pointing to a higher opening. the bulls making one more charge to stem the week's big losses. the dow is on a six-day losing

streak. the major averages are now on pace for a fourth straight weekly drop. about 30 minutes ago, boston fed president eric rosengren spoke to cnbc about the possibility of another amid the current economic turmoil and the environment. >> i don't expect that we'll need to. if the economy got weak enough that it was required, we should do it. ii certainly hope and i don't expect that will be the case. but i can't rule anything out at this time. >> investors take note of rosengren's comments. we'll see what happens. but yesterday that was one of the things cited. there were comments from somebody the day before too. it happened quicker where they at least opened the door to that possibility. what else could drive today's trading session? this gentleman is back again. is this a different report than what you did -- you are very busy. aren't you, dominic chu?

>> you guys have got me very busy. >> how do you know so much? >> i don't know that much. i just try to put some pieces together from you guys here. so how about this. last time last hour we told you about all the volatility of the stocks. this time around, let's tell you about what's happening with the markets and why some stabilization at least for right now might be a positive sign. first of all, the russell 2000. you can see here it's up almost 2%. so if those small caps the ones that got hit the hardest are fighting some base here, maybe that's a sign of some positivity here. also one other sector you'll want to watch is the energy sector. they have had a rough week and a rough few months to be honest since oils hit their highs back in june. you can see here, though, that over the last couple days we've seen a nice trend here for energy stocks. they're the ones that got hit the hardest. energy stocks might be one of those places that go and look. other places investors are checking out are some of the

most widely held stocks in america. if you have a 401(k), an ira, anything like that, you probably own some of these stocks. apple shares are down 4% since the highs in september. so again, better than the overall market. the s&p is down almost 7%. take a look at another one. microsoft shares here. those again are maybe doing a llt bit in line. down about 8% as well since the market highs in september. moving on to another widely held popular stock, it's been a relative outperformer if you want to look at it that way. down about 5% since the market highs in september. and then wells fargo on the financials side has been beaten up a little bit more than the overall market. then johnson & johnson on the consumer and pharmaceuticals side. that's one to watch here. it's down about 9% as well. one of the most popular have underperformed the market. if there are places the investors are going to look, look at the energy seconder.

and look at the large cap blue chip names. they've taken a bigger hit. back to you. >> thank you very much. let's bring in a global chief analysis. russing with let's talk a bit about what we've heard from these fed officials. that's the reason that we're citing the markets i guess calming at this point. things kind of calming down. is it enough for them simply to say things like this, remind us that they're still out there. is that enough to tamp down the volatility we've seen? >> over the long-term, i don't think it is. it's nice, it's a bit of a safety blanket. but i think the fed officials have been clear. unless we see real weakness in the economy, in the labor market, qe-4 is unlikely. now, again, there could be a shock that produces that. but obviously that would not be good for the market either. i think right now it will come down to earnings and stabilization in the global economy to get the market moving

guard again. >> how do you feel about the fed even talking about this stuff? do you think that's a good thing or a bad thing? >> well, i think the fed has been very clear since the beginning that whether it's qe or forward guidance, their actions are data dependent. in some ways what the fed is saying is simply an acknowledgment of the fact there's a lot of uncertainty out there. and whether you're looking at geopolitics or ebola with the sharp acceleration in europe, the reality is things are probably not as rose you as we thought a couple months ago. if things continue to deteriorate, we may have to step in. that's not our base case scenario. >> russ, it's rebecca patterson. with our clients we've been actually looking for opportunities during the selloff to buy equities we thought were overvalued before. we're reaching out to clients now saying if you're sitting on cash, you should start putting some to work. curious. it's a big market. people have different views on this. what are you all telling your clients to do after this

pullback? >> honestly, i think it's very similar. not that this is necessarily the bottom, but i think for long-term investors, the selloff has created some pockets of value. we do think that the fundamentals globally are sound and particularly in the u.s., the economy is doing relatively well. so there are places we'd like to increase positions. u.s. large caps were mentioned a few moments ago. i think that makes a lot of sense. i think some bargains have been created. we do see better valuations than we did a couple months ago. and i think investors should be willing to take advantage of that. by the way, not just in equities. but also places in fixed income. one of the things that's opened up the last few weeks is high yield which is not particularly cheap. it's looking to be a much better value than it was just six or eight weeks ago. >> there was a story in the wall street journal today suggesting the corporate debt markets had been slowing to a crawl because the inventories is fueling this lack of liquidity.

do you see that happening? >> "fast" really interesting. because this something everyone has been concern pd about. so far the selloff in high yield has been fairly orderly. if you look at the flows, you look at the etfs, you have not seen the massive liquidation. but at least thus far, it's been a relatively orderly selloff. we haven't seen that problem that a lot of people have been waiting for. >> even for junk bonds on thursday potentially? >> i'm sorry? >> even for some of the junk bonds on thursday? >> well, there's isolated pockets. but if i look at the overall high yield market, we have not seen the type of liquidations and the violent market reaction people were expecting. if anything, the irony this week was the 10-year treasury on wednesday. you had this incredible swing in yield that has not happened in

years. >> rates below 10% for the 10-year. what happened? and where are we headed from here? >> i think that very quick in the drop we saw earlier in the week, that was technical. that was a function of some large investors having to unwind. we're now back around 2.15. one, slower nominal growth. second, very low yields in europe and japan which are pulling down u.s. yields. as long as the 10-year is, it looks better in comparison. and then finally we have seen a consistent bit from institutions all year. and that has continued. so i think the combination of that has brought yields a lot lower than anyone thought, ourselves included. we do think the yield is going to back up a bit as we get into 2015. but as i wrote about a few days a egg, i believe we're in a low for long environment as it applies to rates. >> thank you for joining us today. >> thank you.

>> drexel hamilton -- >> not related, right? >> not only is not not related, but at its core drexel hamilton seeks to own and operate a place by veterans. i think we should have people come on a lot. because that -- and they do full service. full service institutional broker dealer. so i like it. i like it. so we'll have the guy back on. maybe -- i'd like to get the ceo on who was in the marine corps and the founder. i would definitely like to help this firm out. if at all possible. you too sorkin? >> i'm happy to. you think they picked an unfortunate name. coming up, keeping the front lines safe. the president of the hospital nurses association is next. plus tracing the steps of the second dallas nurse to be infected. could she have flown on not one

but two commercial flights while showing symptoms of the virus? we have details on that story. plus former continental ceo gordon bethune will join us. back in a moment. morrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on.

(laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

welcome back to "squawk box," everybody. we've been watching the futures this morning. and a different picture from yesterday at this time. if you look right now, you'll see those futures are indicated up by about 140 points above fair value for the dow. s&p futures up by 16.5 points. and the nasdaq up about 30 points. also keeping an eye on the 10-year note. it looks like it's yielding 2.169%. holding signs and cheering, staffers at texas presbyterian hospital gave nurse nina pham is hero's sendoff. pham walked the distance from the ambulance to a specially equipped medical jet before the journey to bethesda, maryland. she's going to be treated there for ebola. are hospitals prepared and is the cdc doing enough? joining us now is the president of the american nurses association. represents the interest of

nurses throughout the united states. welcome. thanks for joining us today, pam. >> thank you. >> i don't think we've ever had anything quite like this before. it'd be great to think that we're all just so competent in the united states that we're ready for anything all the time. but -- and i wish we were for people that deal with patients. but we aren't and we weren't. >> you know, we really found that there were some lapses that created the problem that these two nurses have now become infected. but i would have to say that for many years we've had very good infection control and prevention procedures. i think ebola has created some challenges that now we've really learned very quickly. the american nurses association has been in touch with the cdc on a regular basis. there was a conference call yesterday with more than 6,000 nurses dialed in to express our concerns that we really believe

there needs to be greater clarity and a stepping up of the protective equipment that's recommended. as we know, it's important to understand how to put on and take off this equipment. we are assured that there are plenty of supplies nationwide and so we're really encouraging our nurses to work carefully and closely with the organizations to make sure they have adequate training, they have the supplies. and if there's any concerns to raise them quickly and have them resolved. >> one of the things that -- and early on, we chafed a little bit at the cdc director in saying while we had some very obvious protocols, obviously they weren't followed. did that rub you and people in your profession the wrong way? because that obviously was not -- i don't know what he was trying to do at -- well, i guess i know what he was trying to do. but i thought it was disingenuous and not a good way to start things off. >> there's been a very strong movement in health care for more

than a decade to really create a culture of safety. and part of that means that there is no blame. we look for problems and we correct them. so i think there was some disappointment that some of that language sounded like there was blame being placed. but what's most important is to learn very rapidly, correct the problems, make sure we spread the information about what are the best practices. and in this case it's rapid identification with screening tools and the right questions. and vital signs to be taken when someone comes to an emergency department. have they traveled from west africa? have they been in contact with anyone known to have had ebola or exposure? do they have a fever? what other symptoms they have. and then to move into a mode where if someone is identified, they're quickly put into isolation and then we follow them and move them to a higher level of care. and so, you know, i think those are the kinds of things we're really focusing on. knowing that education is very important and particularly the actual protection of workers with the ability to understand

and practice and have a buddy system to know that they're putting on protective equipment appropriately. and then taking it off. because that's where we think there were problems with these two health care workers becoming infected. >> pam, how confident do you feel we know how to handle the waste that is generated by ebola patie patient, that we know what to do with anything that comes down the line. are there other problems in the system that worry you that you think we haven't addressed yet? >> you know, actually, there is a lot of information available from the cdc on these issues. such as dealing with laboratory specimens and waste management. again, i think the fear factor that was raised created a fair amount of chaos early on. so individuals or companies that have not been accustomed to how to deal with waste management said no, we're not going to handle it. some of that also happened within the institution. i think we have clear direction on those activities right now. and so there is incineration going on. there's disinfection going on.

we also have great information from places like emory and nebraska and the sites that have a lot of experience handling these kinds of issues. so again, we have that information available to our hospitals and we're working closely with the american hospital association as well. >> here's a question about the nurse who traveled. look, the cdc has mismanaged in my estimation from the get go. however, sort of common sense at least on my side suggests that if you are exposed to ebola whether you have it or not, the idea of traveling doesn't seem like such a great idea to begin with. do you put any sense of responsibility on that nurse and what direction have you given to or has been given to other health care professionals about what they can and cannot do when they leave the hospital and go home at the end of the day? >> we really have been relying on the cdc for their direction. and again, knowing that there's

a very long incubation period with exposure to this illness. and that there's also a delay from the time that someone would first report symptoms. that's why they have individuals monitoring their temperatures to when they show real signs of the disease and at that point become infectious. i think we're learning all the time. we're being more cautious or over-cautious than we were several weeks ago. what we're seeing is a set of recommendations to say if there's any thought there's been any exposure or risk, that individuals will not travel. i think as we're learning more, we're going to be able to have a much more measured approach to what those requirements and recommendations will be. >> that was dubbed patient zero. that was the first one and obviously mistakes were made. and if that could -- if that has been put to bed now and from here on out, we're going to do things right, that would be one thing. but we haven't been tested again.

are you confident that the entire system in this country is now ready for if there is another case and nurses are protected? >> i think we are much more ready. and i think what we're hearing from organizations or hospitals in particular is that clearly the front end screening which is a public health issue is in place. and so that again is very important. i think where the discussion is moving now is should we expect all organizations or all hospitals to be able to treat any ebola patient who might cross their threshold. or do we need to look at a distributed system where initially they go to a limited number of institution. ultimately we want to know that the control mechanisms are in place so that we're not going to see a major epidemic in the u.s. >> okay. all right. thank you very much. we appreciate it. >> thank you. >> see you later. coming up, bermuda bracing for impact. more on ebola and the airlines with former continental airlines ceo gordon bethune.

and blankfein will have comments. and check out the futures at this hour. it does look like it's going to be a better day at least at the moment. dow up about 132 points higher. "squawk box" will return in just a moment. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours.

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hurricane gonzalo is headed for bermuda with maximum sustained winds of 145 miles an hour. that makes gonzalo a major category 4 hurricane. people in bermuda are getting ready. they're boarding up things and batoning down in the atlantic. gonzalo is the sixth hurricane of the season in the atlantic. also if you are watching us over a cup of coffee this morning, this story is for you. starbucks is giving customers a chance to earn free coffee for life. they are encouraging people to use its new app that lets you pay with a mobile device. ten lucky winners will be named. they are launching its pay ahead program nationwide next year. other news on the company, starbucks is relaxing its dress code. that means the barista will be able to show off a tattoo or

small nose piercing. >> how do you feel about it? >> how do i feel? knock yourself out. are you thinking about a nose piercing? >> i'm thinking about a tattoo. >> where? >> well, a "squawk" tattoo over here. >> i don't know if i'd get that. >> you think that's a bad idea? no? >> i don't know. >> what about -- bad idea. >> they're hard to remove. >> what would you do? >> cnbc peacock. >> no, no. he's holding off on that too. >> it's for when you move on and up. >> long-term contract. sorry. >> what about gonzo? what did you say? >> i like to call it hurricane gon gonzolo. sounds better to me. are you smarter than a fifth grader? i don't know about that part. but at least one aurora, colorado, road worker might not be. road paint that's supposed to

read stop instead says sotp. despite that one issue, the paint seems to be doing its job. most drivers get the idea. they still stop. the word is misspelled on a road leaving a sam's club store parking lot. the store has not responded to media inquiries. >> wow. sotp. >> okay. well, i don't know. >> you know, when you're that close -- the guy doing it wasn't standing back really. i feel bad sort of. >> you feel bad for that person? >> a little. >> i'm surprised you have not made the comment that i'm sure that's a government employee that did that. >> that goes without saying. >> but it might have been a sam's club employee. >> i'm sure the person knew the correct spelling. >> look, i caught myself misspelling stuff this morning. i was texting too quickly.

>> there's no spell check for the stencil. >> we can combine the tattoo and that story together. because there are been -- >> misspelling on tattoos. >> yes. i saw one -- >> it was rihanna or somebody, right? >> had a total misspelling. and then you're totally screwed. that hurts to get rid of. you know what i can't like are the homemade tattoos i've seen? if i were going to get one, i would want a really good one. >> the homemade ones there for a day or two? >> nowhere people do them and the writing is bad. >> if i did a joe and andrew bff for life, would that -- >> that will last. that will stand the test of time. i have confidence in that. >> you could get matching ones. >> or where you put them together it makes a heart that is broken if we're apart. >> can becky be in the middle. >> do you want to be in the middle? >> i'll let this man love thing

stand on its own. >> three's company. >> we had her on. it was a pleasure for me. you got one of those things. >> the cowl sweater things. >> yeah. very functional. >> it's upstairs right now. >> except she put the hood up and looked like the grim reaper up and scared everyone. coming up, a read on the state of the housing market. september housing starts released after the break. back in a moment. always obvious. rtunities aren sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. introducing synchrony financial

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housing starts are out. let's get to rick santelli. rick? >> september starts. 1.07 million yuunits. that's 6% plus higher than our last look which had had a humongous released. no, it was not a downward revision. it went to 957. but in the context of that, of course, that number became down about 12.8%. that put this number up. i take that back. and almost virtually identical number for permits.

that's up i don't know 1.5%, 1.4% or so. of course these are september numbers and they stack up pretty good. keep in mind when it comes to starts, our july number was the highest. these numbers are getting up to best numbers we've seen since '07 and '08. so, joe, how you doing today? if we worked on the robes and special crowns we're going to give to all the fed officials that have to tell people, listen, put down your gps and take your cell phone away from your nose and kind of look around so we can tell you where rates are going to go? >> i like the -- i just like it when i think i know someone and then when they sort of confirm it. that's okay with me, rick. i mean, then you have -- >> like are americans happy outsourcing just about every part of their life to people that they can't get through to the ballot box so they elect their congressmen and we end up

with this group of people that have mostly -- i know richard fisher might be different -- but mostly have never created anything. okay? not jobs, not true economic growth. the real smart people. okay? but why is this -- why is everything around me that has price discovery have to be -- i think we need to make a special song before the fed officials grab the mic. something like that. what do you think? >> well, i just know that -- and i kind of almost understand it because they're very -- you know about good intentions. and they're well intentioned. >> oh, they are well intentioned. but so are all those ceos and heads of investment banks that used to say things and kick the tires. you don't get that anymore. they're afraid to get the phone calls with $5 billion fines attached to the other line. >> i do sort of blame congress a little for the dual mandate.

because as long as one of the mandates -- >> dual mandate? their mandate has more cylinders than a v-12 engine these days. >> but you figure, all right. we don't know whether qe helps, but obviously europe's thinking about it. >> come on. qe helps. >> if inflation stays quiet and we still have an economy that's not up to par, then they figure why not. i think that's what they're thinking. >> what does qe help? i look at help the way kanzians used to look at help. this isn't help. this is subsidy. we haven't even officially ended the last one and they're dangling another one. because listen, america. americans, people, human nature, never give up subsidies without a fight. and we're training all these market people to permanently and forever price in subsidies and that is the problem. >> well, you know, it's -- we're going to be -- there's a lot of

great things about europe, rick. and a lot of people -- >> i hope people do think they're great. because we are becoming europe once again. i think we ought to go to tiffany and get a bunch of crowns made. because that's what it is. americans want to be led by the nose. whether it's siri or the federal reserve. >> you know, we're going to leisman now and he's probably got -- i don't know what -- >> i'm sure he's going to pick up this thread. >> let's bring in steve leisman for more reaction. i know rosengren did not have an ifb. unfortunately you have one. but you're going to ignore this, aren't you? i know you. >> if i understood what you were talking about, i would join in. but i don't really get it. i don't understand the idea of subsidy or whatever you're talking about there. but let me talk about the data for a second. the starts were better than expected. a little bit better revision to august. and a good number for permits which is sort of a leading indicator. i will tell you that the permits are down for single family but

up for multifamily. and a lot o the gyrations we've had had in this. i breathe a sigh of relief with every piece of u.s. data. the way markets are cured is how it will withstand with what's happening in europe. every time a piece of data comes out that shows we're going okay that i think the markets will breathe a sigh of relief. had a problem with retail data this week. on janet yellen, no comment on the economy. she does point out she's concerned about the growing burden of student debt and the decline in business formation. these are longer term concerns. she's not addressing what's happening in turbulence overseas. but as you heard, rosengren did talk about it. but probably not enough time between now and the next meeting for the fed to alter the course it's on. that is to really end quantitative easing. of course things could change between now and then. but at the moment, it looks like they're going to end qe.

i've been maintaining the real tool for the federal e reserve is the federal guidance. it's when they will hike rates and the slope of the incline. and right now those are relatively dovish when it comes to what the guidance is. >> i want them to end it too. i don't think you'll pay off on a bet unless they end it and restart it. i think you try to welch and say that is not a new qe. so i want them to end it. because i don't think -- >> joe, you know, i talked about the bet with some interesting and smart economic people here. what they don't understand is the other side of the bet. your offer if you lose the bet to shave your head if it's a risk presents no risk to you and no reward to me. >> i understand that. >> which is what we talk about all day long to people. is risk/reward. >> i understand that. >> but what's the reward? there is none, joe.

so until you come up, until you put something on the line, there is no bet. >> someone said that on twitter. they said you need to shave your head. i said okay. so then you are conceding my hair is real. they said no. because -- steve, thank you. how about i'll get a tattoo. >> if you get a grateful dead tattoo, i would make a bet. >> that's one i would get. >> i want you to win. i'm after a win/win here. >> i think you should get morning in america. or ronald reagan. >> a picture of the gipper across my back. that's an idea. reagan for rushmore. >> reagan for life. >> she's going to come in and talk about nothing funny. >> i'm not a tattoo myself. >> you are talking it. okay. >> but i think steve said something important about the markets. i'm segueing. did you see how subtle that was?

that the market's breathing a sigh of relief with any data point with no spillover from europe. >> it's a calming influence. >> but i think what was ignored earlier this week is we got mortgage applications up 6% following another increase the week before refis up 10%. the fall in oil prices a use discuss a lot is helping and now those low interest rates are starting to kick in. so that's a good thing. >> it is. >> refere >> carl has tattoo of lucky. >> and cross out the joe. put in the lucky. goldman sachs chairman says the fed has handled this economy correctly. he actually sat down with us yesterday to talk about everything from the market downturn to ebola. probably not tattoos though. carl joins us with more. good morning. >> good morning. good to hear all of you this morning. pretty good quarter from goldman

as you know by now. i see that morgan stanley looks good too. we covered on the call yesterday. wednesday, all the selling on wednesday was, quote, painful for their clients. we talked about whether or not that was going to drive a mass liquidation. lloyd said he wouldn't get hyperbolic about that. but we did ask him to expand on what we saw on wednesday and what that all meant. >> few weeks ago, people were bemoaning the lack of volatility. no so much volatility, but the lack of risk premium. the ability to separate good from the bad. and wishing for it, it's like the genie in the bottle. you wish, wish, wish. now all of a sudden we have an avalanche of volatility. a little bit beyond what people were hoping for. >> lloyd tackled all the things the market's been handed in the past couple of weeks. europe, you guys were just talking about europe.

he said the decision making process on economic policy there is not well constructed. certainly nowhere near where we have in the states. the fed, he called them wise and courageous for standing up to those that have second guessed them for careers. and again on ebola, we said how is your average investor supposed to manage and evaluate this risk. here's what he said. >> i wouldn't try to create another virus of fear that just has its own life to it. you know, when people all of a sudden are afraid to mingle in the public or get onto -- you know, not there. and if all you do is turn on the tv set and that's what anybody's talking about, i could see how your fees can play on you. that's a virus itself. >> we're not done talking to goldman. later this morning the chair of tmt. we'll talk media on a week netflix and google missed. and the head of banking will

talk about valuations, ipos, inversion policy. all of that coming up later this morning. so joe, i think tattoo, nicholson. what do you say? >> you mean jack? i met him. i love him. >> yes, jack. i know. i was there when you met him. i've never seen you more -- >> star struck. totally. i couldn't even put a sentence together. how many movies? think about it. and you get done with them and think of chinatown or something. you know? not even the new ones. you know what? seeing him at the angelica next to each other. so you didn't take the lucky bait. how are the twins? good? >> everyone's good. lucky, you know, he's getting older as are your dogs. >> well, we lost one. we lost reagan, carl. i haven't told anyone. yeah, we only have two. now sorkin's thinking of a dog.

that's why i mentioned lucky. a dog or a hamster. very similar. >> i still have on my phone today. for him that was the highlight. >> carl, what kind of shoes -- are those crocs you had on without the socks? >> these are ralph lauren, you know, sort of loafers. but, man. this went viral yet. >> it did. >> we were talking about ebola and fed policy. all people wanted to know is why i wasn't wearing socks and why lloyd wasn't wearing socks. we're in california. >> he wasn't wearing them, so you didn't wear them either? >> yeah. >> carl, those are grandpa jeans too. those are grandpa obama jeans. don't you have any skinny jeans? >> can you move on to the next segment? i'll see you at 9:00. >> carl, good to see you. thank you. >> all right. >> some thanks for getting up early. >> giving a tough time. >> you got ideas now about dogs?

lucky, you could have. >> i'm still working on the tat. i was thinking make an x-1 for you. >> i'm not going to out you on what rich bernstein said. i can't do it. >> please don't. >> because you denied you're a tattoo person. rich immediately thinks that means you're big on piercings. all right. never mind. that's rich bernstein! and i outed him. >> i'm glad it's friday. >> let me out us. let's take it to break. >> all right. we're taking a break. turbulent times here at the set, but also for airlines. news that a health worker diagnosed with ebola flew on a commercial flight the might before showing symptoms raising a scare that the virus could reduce air travel. gordon bethune will join us to discuss the ebola threat and the health of our nation's airline sector as we head to a break. take a look at the airline index over the past week. it has come back a little bit. we're back in just a moment.

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welcome back to "squawk box," everyone. we've been watching the futures and things are in a much better position for the bulls than they were yesterday at this time. dow future up 150 points. s&p futures up by about 18 points. they've been positive all morning long, but they got a boost from the housing starts. airline stocks bouncing back a bit after along with the broader transport but fear of ebola has the potential to move the stocks back into the red.

joining us now is former continental airlines ceo gordon bethune. >> good morning, andrew. >> what is your sense of the fear of ebola which is really what this is all playing into relating to what the next couple of months are going to look like on airplanes in the united states? >> i suspect, andrew, it depends on how we get our arms around it as a nation and get some controls where people have confidence. obviously there's a lot of risk-adverse people that don't need to travel and won't. and so if you start seeing more and more outbreaks in the united states, you're going to see less an less travel. that's just the way it's going to be. >> do you think that we should have a travel ban to west africa right now? >> well, it doesn't help the person that did come into this country went in via nigeria which hasn't had any ebola in months. so it's hard to get them because they have so many different paths. they can go to london and then

come here. you would just destroy the whole system. so that's not going to be the way you approach it. >> do you have confidence that the tsa and the whole system at the airports, i mean, where those airplanes are coming in right now will be able to -- will be able to take people's temperature, do it properly, and keep the country protected? >> i do. and i believe that they can. they just need to demonstrate that. that's what the public lacks is the confidence in the government. you have confidence in the airplane when you fly. you know you've got professional men and women in government oversight. you need to implement some control there. >> what do you make of the way frontier approached this particular issue in the past 24, 48 hours? they talked about taking the plane out of service, doing a complete scrub of the plane. by the way, i have not heard that from the other airlines that i imagine at some point had passengers that did travel with

ebola on them. >> you know, i don't know what airline that would be. i think frontier's doing the right thing. it's getting confidence back in the airline. obviously, that they're going to take whatever steps necessary to give the passenger a sense of confidence that it's a clean airplane. and i think they're doing all the right things. >> hey, gordon, how do you think the fall in oil is going to provide an offset or how much of an offset is it providing for the air industry? >> it just drops right to the bottom line. you can call it a win fall but i remember the torture going up to $100 crude and coming back down through $80 is going to help the bottom line. all airlines. >> gordon, we're going to leave the conversation there. we appreciate it. >> okay. >> i don't know what to make -- one last question before you go, gordon. what do you think about the airline stocks themselves? now are they undervalued? >> well, i believe so. only because of the potential of the revenue staying stable and

expenses dropping via the oil price. that would give them some upside on the tape. >> okay. gordon, thank you. appreciate it again. up next we've got jim cramer from the flor of the new york stock exchange. plus, monday a cnbc exclusive. john fortt will bring us that interview 6:00 a.m. i love having a free checked bag. with my united mileageplus explorer card. i have saved $75 in checked bag fees. priority boarding is really important to us.

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head down to the new york stock exchange with cramer. i wish we had more time, jim. i'm surprised the jets hung in there. that was a shocker. you're the only guy i talk sports with normally. were you surprised? they could have won that game. >> the jets are going to win a couple of games. geno smith looked good last night. i was impressed with the jets. the score doesn't say that, but i was impressed with the game. >> second. we are now in the business hoping oil prices go up and interest rates go up. that's what has to happen for stock prices to stabilize. it's a weird world. do you think it was the fed comments yesterday about qe?

>> i think it was the turn in oil. we have a lot of companies, you can hear baker hughes call. where you got to $70, $75, you had companies that couldn't pay their debt covenants. you could see the declines in oils and mass limited partnerships. people felt the complex would stop the growth in this country. when oil went up, it was terrific. schlumberger great, honeywell fabulous, general electric amazing, morgan stanley good. google was a fabulous quarter. these analysts, you have to look at the cost per click. that's what matters. the only number i care about. it was sensational. google turning after down 30 last night, google cost per clicks, right metric. lots to like this morning. a deal over in europe. chinese, maybe a huge subsidy this weekend. >> but no new ebola cases either.

>> how many days ago did duncan come down with it that we know he was contagious? he found out, we know the timeline. he was contagious september 24th. today's day 23. it's supposed to take only 21 days. where are the people who came down with it. >> we needed more time. >> the president last night had a press conference. he seemed focused on this. the cdc guys are going to focus on the flu. >> also said i'm not philosophically opposed to him. >> you've been asking that all morning. remember, this is day 23 when duncan came here. 21-day incubation. where are the other ebola cases. >> thanks. up next, we have a secret to share. it involves joe and a tattoo. what can your fidelity greenline do for you? just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own.

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the all new, head turningon cadillac ats coupe. idea. it's irresistible. ♪ welcome back. earlier in the show we were talking about tattoos. joe swears he doesn't have one. >> oh, boy. >> we found someone in the building snapped a picture of joe in the men's room. >> it's a tramp stamp. >> after a workout. i went to see this. if you look just above it, there

is a beautiful image of roger. >> you don't know that's true as far as know. i resemble that remark. sue you for defamation of character. >> you have a very girly back. >> thank you. thank you. >> you're welcome. >> would you prefer if i looked like an ape? >> no rebecca, thank you for joining us today. it's been fun. >> the one thing you said earlier that people should probably hear again, you've been telling clients to put money in as things calmed down. >> we are not sure this is the absolute bottom. the more we see economic data confirming europe is not affecting the u.s. economy in a major way, i think this is an opportunity. people have been waiting for the correction. i think we got it. if we'll have a lot of cash, it's a great time to start

putting some of that back to work over the next couple of weeks. small cap is having a nice run, too. >> thank you for being with us today. >> that does it for us today. have a wonderful weekend. >> show it off live. >> get away from us right now. ah! time for "squawk on the street." go away. from that to this. good morning and welcome to "squawk on the street." i'm david faber with jim cramer. carl quintanilla is at the goldman sachs innovators and builders in santa barbara, california, where he conducted an exclusive interview with goldman's chairman lloyd blankfein. he'll have more on that and that conference. let's give you a look