the markets, we should say, by the way, are looking really quite down. we'll show the future right now if we can. and it looks like the dow down and the s & p 500 down about six points. make sure to join us tomorrow. ♪ good tuesday morning, welcome to squawk on the street. it is a challenging set up this morning, futures down decisively. europe's in the middle of a broad sell off, made worse by this crisis by volkswagen. some health concerns. and not a lot of data for bonds to react to, although lock heart speaks again tonight and the pope arrives on u.s. soil today.

commodity prices downs a well as concern over fall out from china continues. >> 11 million cars may be effected and the stock, it's down another 20% this morning, volkswagen. and bank of america votes on the roll of its chief executive. and that share holder meeting begins within the hour. jim. what explains this turn round, because japan's closed, asia's been moderate overnight. >> i think most of the market's in a bear market. this kind of behavior should have happened yesterday. and somehow the market rallied. it's almost like it got the wake up a call that it shouldn't have rallied yesterday. i got to tell you the justice

department and a justice department motivated to go after individuals. and last night, the ceo for u.s. in brooklyn, this is the test of the justice department. >> listen, i agree, we're going to talk volkswagen. this is one of the largest company of the world. and the largest market cap and that quasi-dwas during another that may have been illegal. and it's not just china, although we continue to monitor the potential slow down there. >> otherwise, i think the dollar stronger but i got to tell you, talking to a lot of executives familiar with foreign situation. volkswagen is gm, ford and fiat. it's their company and to go after this company and go after them criminally, which is not being ruled out, justice

department means criminally, well, i got to tell you, should you be in that stuff? >> and a lot more fall out on this cheating scandal which is being called diesel gate. they're now setting aside 7.3 billion dollars and the issue is related to 11 million vehicles world wide. here's what they had to say yesterday at an event launching the new pasat. >> our company was dishonest with the epa and with all of you and in my german words, we've totally screwed up. >>ia mention the d.o.j., there's an emergency board meeting tomorrow. and already german companies saying winter corn is out. people are talking do they survive? does this put germany in

recessi recession. >> bp is a great an log. they thought they could contain it and they couldn't. goo gm got away without any indictments, volkswagen -- >> the epa has a lot more power to pursue litigation here. >> as we know from bp -- >> much more than the regulators and the justice department is a different set here as far as what they're going to do. it's still just terrible when you read what they were doing. we still don't know how this was set in motion, who was behind it and what decision was made to say let's put in software that fools the emission s and by th

way, there are plenty of hedge funds here that own volkswagen and they've been getting hammered over the next couple of days and the atari's own part of the kufcompany and then porsched they're the ones that will have to make the decisions here. go back to 2008, that scandal -- >> the short squeeze. >> what porsche was doing, the litigation on that continues. but it's interesting when you just think of a culture and you think of that and they're still being pursued, although they've avoided an end game in avoiding that they've manipulated the stock price. >> this is a real bad set of facts. >> morgan stanley throwing numbers around. they see potential penalties of

about 38,000 a car and that's not counting the cost of repairing the cars and not looking at other countries. you got italy and south korea saying they're looking at this. >> and people have to understand it's a political situation too. everybody is trying to sell more cars to everybody else. and they make cars in mexico, they sell them here, they sell them to korea, korea wants to dump them here and who doesn't want volkswagen stopped? there's a reason people don't admit what this gentleman did last night. >> how often do you hear a corporate leader say, yeah. >> the regulators are planning on making a clean breast of things, so they can say, you said it yourself, we're going

after you with everything you had. this wasn't a situation, where i'm really sorry. remember, they were sorry? >> this even -- i mean, we can't get into it. and criminal fraud, that was caused by a lot of different things that they failed to do. but in this case, how hard is it to prove when they're admitting it. >> they weren't exactly knocking the cover off the ball. china's down 10, a lot of that money was betting on a restructuring. >> let's say we didn't have europe but we do, what happened this morning? i think the numbers in autozone were fantastic and olive garden and margin expansion, every single one of these, i would have said let's look at the

smuker's on this secondary and nobody cares because we're in a market gripped by the guys in pajamas who are taking the volkswagen and presuming the worst here. i would be -- >> i love the guys in pajamas. >> they have feet pajamas today. >> like when i was five or my kids had. >> they have the diapers. >> it's getting a little chill ea out, you might want your pajamas. >> it's pajama game. it's what they're planning. we're literally in one of these moments where it doesn't matter. i'm how are the companies doing? there was no stinker today. not a single company, of all the companies reported, they were five for five, you kill for this. this was like the jets.

j-e-t-s. >> i'm not sure what you're referring to but there is a team that plays here by that name. >> and this volkswagen thing is -- if you own volkswagen today what you're saying is this is like the banking group. >> you need check so many different boxes. and all the consumers who are going to sue them, the class actions that are going to roll in. i'm an environmentalist and the idea that i've been spug all of this and then what does the eu gets on this? >> let's say you're their lawyer, what do you argue now? we screwed up. >> maybe you grow leer the five guys who doo did it, here they are. >> that's good. throw them over board.

come on, man, it's 40% decline. are you going to embrace them? we like this guy, he had a great idea to fool regulators. >> if i had better sources, this would be a great book. how did that hap? let's do this. >> i found the software we can fool all the emissions. >> it's diabolical but clever. they thought this one out, there's no question. >> if i were at the justice department right now, which i got rejected from, i would be saying right now, clear conspiracy, hub and spoke, everybody. i want this case. i think i could take this case. you, you, you can take this case. there isn't anyone in the

country that can't take this case. make it a pro bono case. >> i want him. >> all right. this is just a dream come true for a prosecutor. >> when we come back, the very out spoken, richard fisher, you'll want to hear what he has to say about hiking rates p. and we haven't got to a lot of futures and we want to bring you up to speed on the medical issues.

♪ there's some selling going on around the world. and the futures here look problematic. s & p looks to open at about 20 points. vote expected to be close. we're going to have a live report in charlotte later this hour. of course, he did get a vote of confidence from one mr. buffett who owns a good amount of shares too, which i guess he'll vote on keeping them together. he's very favorable towards

moynihan, do you? >> if you think the board is incompetent on this thing, sell it. i think -- most of these banks are -- he's a survivor money and i'm not going to nail him and tell him he has to split it. and the former ceo of wells fargo said this shouldn't necessarily be voted on by the public. >> i don't know what the stats would tell us about companies that were separated as opposed together. i can think of citi group where the is a separate ceo and chairman. i'm sure there are those who tried. >> in the end, the stock -- and they're been buying it just because it's way behind the rest of the market. i don't care. >> been a lot of management

changes in the circles outside of the ceo's office and we remember the high profile calculation errors when dealing with the fed. have they demonstrated to you that he deserves to have this additional roll? >> i think -- well, no, wells fargo did not commit these errors. he's righted the ship and i think this is rear guard action. look, i'm pro corporate governments. hey, i don't think board should be responsive. but this is an odd fight for me. because you're basically saying everybody should have it because he actually did clean up a lot of stuff. >> he did clean up a lot. and you can't have a chairman with a good amount of power to a certain extent and there could be mixed messages.

microsoft also has this. and we forget about these things and it is a significant differential in terms of companies with it united under one person but i can't say for certainty which is the better way to go and i'm not sure sh e shareholder's do either. >> and they'll be in an executive session, when the chairman leaves, that ican have much more of an impact. if you think he's not the right guy, sell the stock. >> sticking with the banking issue where blankfein has been diagnosed with lymphoma and it is treatable. he will have chemotherapy and he will be able to work

substanshally as normal. his word is my expectation is i will be cured. >> i mean, this is a curable form. first of all, wish iyou best of luck. bin known him for decades and this is a terrible thing and have to hope for the best. you're talking this morning about the futures, saying, oh, my and then comes over and shoot man, wow. we're frail. >> and have moved up -- you want to talk about medicine and advances, there's a perfect example. 30 years ago was very different. >> and i think the company known gary for a long time. the stock is down. you sell it stock because the market's bad, not because lloyd's sick. but i know that this is a mark

w w where there's a million reasons to sell. this is just a terrible market. terrible market. >> when we come back, we'll get cramer's mad dash and a day hat looks like it is one of those days. more squawk on the street straight ahead. at&t and directv are now one. which means you can watch movies while you're on the move. sitcoms, while you sit on those. and even fargo, in fargo!

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we're set up as you can see, for a far lower open, at least from where we closed after yesterday's rally. but we'll see where we close after the open because that's what we care about and it's also

mad dash. >> my nephew said last night rsh people want me to be more savery. so, here's savory things. i'm not a cheerleader for this market. i hate this market, it's awful. >> hate is a very strong word. >> i dislike it. there are sectors that i do like and one of my favorite sectors is the food group. and ken pal is reinventing general mills and yes, i should clairify, no, i don't hate, just feeling miserable about a lot of thing things. >> you're far from constructive? >> being a cheerleader would imply i want you in. >> but to your point, it's names like this you feel can work in

the environment -- >> autozone, still has a growth story. and 4.5, they have been buying back stock. and the important thing to know is now they have 31 million shares. this is the most aggressive buy back. >> eddie lambert's still a big owner there, right? >> i'm not sure. but this is is another place to go because they will be buying back stock. they bought back only 631,000 but that's a lot. and if you're sat is this weekend. >> you don't want to be satter ien or morose. you don't want to be any of those. >> you don't want to be a boulian but i do think autozone and general mills are places to go.

they're the antidote to volkswagen. which we have to talk about. so, when europe closes, you could see a rebound here. >> and we're going to talk more about volkswagen. we have a lot of other ones, as you heard from jim, a number of other ones to hit. we'll have all of them here on squawk on the street and the opening bell after this.

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you're watching cnbc squawk on the street. we'll get the opening bell in a few minutes here and volkswagen is really the story of the day. we'vae already talked about the issues facing the automaker and today, b of 8 tries to make a stab at what suppliers may be effected. >> well, look at -- i think it's really the very big reason why europe is down.

i'm interested to see when europe closes, if we don't try to mount for a rally. volkswagen is one of these things where i remember when bp had its first day and it was an accident. remember when they had their first day down and people said 7 to 750 and then 40 and 30. >> there's a tenure by the way. at one point, it was the highest value company in the world when they were -- when porsche was doing all sorts of stuff. porsche said they owned more than they did and they engineered this incredible short squeeze for all these hedge funds because it was at 90 times earnings and they all paid a terrible price and that litigation continues. they couldn't get it over here but it continues over there. i mention it because sometimes these things come back around. sometimes there's a culture

somehow. >> this is -- people are talking culture. and that's unbelievable because the actual car, people love. i've never met anyone -- they're volkswagen. my daughter has a volkswagen, 12 years old, fabulous car. >> when we did our bmw, the war between them and audi, they would not say audi's name out loud. and there are people reveling shottenfroid a little bit. >> and obviously, a -- look, this is a great company in terms of making cars. that's become irrelevant. what are people talking to me about? they're talking about possible risk volkswagen and possible risk petro and these are the things that you worry about with the fed hike. you're not worried as much about the actual stocks.

you're worried about these situations and that's what hedge funds keep focusing on. >> olympics can't come fast enough. there's the opening bell and the s & p at the bottom of your screen. and food and supply stores celebrating its one year listing anniversary. and the general assembly gets ready to convene this week. china's president, the pope, going to be extremely busy. >> we haven't talked about the president but geez, kind of over shadowed. he'd meeting out west and there's a good interview in the wall street journal -- he's got a party line, so to speak. >> responding in written form, it was not a back and forth. >> that's a very good point but

i think he's very cog underaniz the slow down. if you don't think there's a slow down, go read the pseudo interview. >> and it's not lost on anyone that his first stop is seattle as opposed to washington d.c. >> where apparently paulsen is going to host a summit and the guest list appears to be tim cook, maw, i think he might have had a date with bill gates which reports say is not going to happen. the whole thing is awkward and strange. >> and howard shoelts has made a concerted effort to address the parents, the families. my late family work for the

chinese company and i think starbucks has had unfetered access. >> and did want to mention a name we talked about yesterday, wetterferred. did you see where they said forget it. we wanted to sell stock and debt but not where the market wants us to, so we're going to take our offering and go home. call it a day. and they were down about 9% on word that it was going to be doing this offering is now up 10%. >> do over. like, hey, we lost that gain, wait a second. i want it off the board. forget it. that's how you get your stock up, but first you have to take your stock down. what an ugly day? >> biotech getting tossed around a lot today. reports today that hillary

clinton's going it unveil her flan prescription drugs, caps on what people with chronic pain will play and changing the rules on how companies negotiate, no longer able to write off advertising as an expense. was yesterday deserved? >> yes, i remember when bill clint said these things -- >> but he never managed to get anything through. >> and saunders said yesterday on "mad money" it's going to have publicity and you can't change a lot, other than when you get pure gouging. >> that young man who came on with megand melissa. >> again today. he was everywhere. >> he's not a particularly strong spokesman, he comes off -- i mean, they could make a movie character out of this guy.

>> he wouldn't be the hero. >> no. but he's unbowed. moving ahead with that 5,000% increase. to the larger point of whether you can regulate these prices, the companies will always say you have to pay us for innovation and it's been interesting to me that europe, which does have a much more restricted policy, they don't seem to be pay interesting the innovation of our companies. maybe our next president can figure out that one. >> and i know when they have the drug companies come on, they're all saying -- they price these drugs so they're underneath what the maintenance would cost to try to keep the people healthy and that's the umbrella. united health might say, it's going to cost us x and this is 3 3/4s x. >> and what is the cost of the

health care system if you have a lot of people who eventually suffer from that disease? >> they're easy to beat up. very easy to be a target. >> and there's plenty people who think it was over done yesterday, jim. >> there was tweet, the spokes person for the drug industry yesterday was not a real spokesperson. i think most of the drug companies were appalled about the kaumcomments this young mane and trying to distance themselves. >> he could have a role as evil villain. >> among the least effected today is du pont and siting the 30% decline of the shares. >> i was talking earl i'll about what i don't like about the market q what is most

interesting is holy cow that's down 30%. and a really fine company, comens engine, deutsche bank takes it from a buy to a hold and i said, holy cow, cummins now fields 3.4%. and this is the kind of give up reasons you're seeing now. they're now running away. the coal stories out of china are very, very down beat about coal, that's cater pillar, joy. and they make big equipment that helps the oil and coal industry. kind of a tough market. >> we talked a lot about cars this morning but not about apple and cars which, of course, gotten a lot of attention over the last 24 hours, reports that the is working hard on an electric car, would like to see it actually in some fashion,

something be out there by as soon as 2019, which seems almost impossible. >> among the sale side saying they have a lot of good electrical engineers and not mu mechanical engineers. if you're going it vertical, this is hard to do. >> we were all focussed on the 2020 tesla numbers. i think apple is the story, the expectations have gotten very low. continue to want to own apple. but it's still buying back stock. >> and they wouldn't manufacture it themselves, right? bp has a lot of idle capacity, maybe they can help out. >> that sound clip, it's like, well, listen man, we're

guilty -- i don't even know what to say. their lawyers must have said, okay, that guy is first to go. >> because he told the truth? >> the truth is an abstraction in court, my friend. obviously, you like forthcoming people but so does the car company. and. about 4.5, 4.6. and caremark and that's not caremark, by the way. this is not -- i did not think this was that bad a quarter but a lot of people expected anything auto should be doing much better and this stock is down a lot. i like the company very much but i'm not stepping in front of a freight train because i have

carnival corporation. i urge people to think about companies where they pay dividends. and i'm cognizant that people don't want to get in fruont of speeding freighter. third quarter, really terrific and a lot of good things that arnold donald has in the pipeline and i like everything. this man turned around a disaster. i mean -- >> the cost of concordia. >> this man turned the company around and people have great faith in carnival. and caribbean was one of the 10 stocks at an all time high and carnival did good. i didn't think they could, i thought that was one where that would be in the penalty fwraukb

a long time and it wasn't. their numbers are terrific. >> been a tough morning. you get up at 5:00 a.m., futures down and you say, what happened overnight? did i missomething? >> and answer is nothing really happened. and europe started to the weak side and slowly started drifting down towards the morning p. china was up but there was a report out of the asia development bank that basically cut the gdp forecast for china. they had 6.8% and they had it at 7.2%. the chinese government has had 7%. so, there's one little problem.

and a report entitled che cheerfully, race from the bottom. and they cut a number of minors, ang low, for example, it's been trading in europe for about 7%. and commodities have been weak across the board. glencore this is a new low for them and the stock has been cut practically in half. that's down 12% trading in london. and then we had small companies talk about poor condition. and talking about lower stainless steel delivery, they trade in finland, that's down 18%. a lot of small headlines. collectively material names as a result of all this, you have

free port and all trading to the down side. so, you see that effect and the real problem is in the commodity space at this point. the french finance manager called for a investigation into the entire sector p. and you can see what has happened to daimler fra trading in europe. and you made a very good point about weatherford. and there wads a big stink yesterday. they canceled that debt offering. they're a company with a -- talking about a 1 billion dollar capital raise p. a.

h hallberten, all trading to the down side. and so, take a look at the u.s. market. we're off of the lows for the day and there's no surprise given what i just showed you. so, it's a general, what we used to call risk off environment. finally, just let me close with the impact of the dollar. again, we have been talking about this for the last quarter but general mills was out and generally they beat out earnings in a small revenue miss. if you remove the effect of the strong dollar and report it in constant dollars, sales were up. that's not a typo. that's a 16% swing based entirely on the strength of the dollar. that's the impact of the strong

dollar. right now, the dow is off its lows down 180 points. well, one stock that has been moving up until today of late is dish. people may have noticed over the last couple of trading days the stock has done quite well. today is not the case. having to do with the questions of course as always about what this company is going to do with that massive amount of spectre it ownst? it was late last week where they say fcc we need more to pay interest it all. remember, they're not getting the discount they originally were. they said waet we have new and complex business issues that

have come up, just give us a week to work through those. nobody is telling me what they were referring to when they brought up those new and complex business issues. and others are saying there's a big satellite conference that he always atends and he didn't go. as i said, day when the wall street journal put its talks on the front page and it didn't go anywhere and isn't going anywhere. as for verizon, kwi sat down wi the ceo last week and asked is there anything going on with dish? >> he has a fair amount of spectrum. >> he hasn't figured out what to do with it. he doesn't have the economic fire power to do it on his own.

>> we've kicked around a couple of options here about how we could provide him with wireless service and we'll see if any of that ever goes anywhere. but right now, there's no plan to fufpurchase a satellite comp. >> if there's a plan to spin off and announce an agreement with another company to help the spectrum build the network for it, it would seemingly not involve verizon. he never made it completely clear but here is what he had to say. >> we're going to be a wireless company. we're going to take our spectrum and get in the wireless business and we'll be in the business that spectrum is going to be used and we hope to compete.

>> when are you going to figure it out? are you going to sell it? are you go to buy t-mobile? or are you going to build it yourself? >> throws all optiose are all o. this is not a company where you can buy it and sell it and make a big product. weir rar company that you buy and stick in the drawer and look at it in five years and see how you did. >> when you look at over 20 years, looks pretty good. >> i listen to him and go, i wish people had that attitude. i think he's a superior business person. >> and of course, if i get anything we know is real, we'll let you know. for now, let's go to the group in chicago. rick. >> reporter: well, many traders

on the floor scratching their heads as to what is going on but is it that much of a mystery? you have a premier national corporations, vw under the microscope. and china, a number of issues as you well known kboe and the feds doesn't have enough confident in the u.s. economy to raise the point by just one point. and we're close to two cents higher than we were on the settlement thursday after the fed didn't raise the rate. and jack lou out today, of course, with chinese premier being here and he's talking about how great the economy is.

we took out that number. and the euro currency, you can see the weakweakness. we could see yes a glide path reversing yesterday. and you open it up to september first, maybe visiting the lower portion of that. as far as the yield curb, flatness is fed and no flatness is less fed. right around 150, certainly pretty darn steep as you see. today will be the five year tomorrow, the seven year. back to you. still to come this morning, it's been almost two weeks since apple unveiled its iphone 6 s.

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it's time for cramer and stop trading. >> i want to emphasize that when you see europe close, you might see a little bit of a lift. and another stock to look at is starbucks starbucks. howardtia -- howard shoelts and i don't like the market but there are individual stocks that there good. >> and plan to mobile order. >> and this is one of those things where it's what younger people want particularly. >> what's on "mad tonight?"

>> we have john stumpf, his personal story and i think it's good to have a les gloomy story and he has a les gloomy story. if you want to take a long-term perspective, it's hard to do better. >> see you tonight, 6:00 p.m. eastern time. when we come back, former fed fisher i'm watson. and today hundreds of companies are putting me to work. i'm teaching watson to help your vet speak dog. you're a dog, right? i'm teaching watson to help you make healthy choices. i'm teaching watson to help design a vacation around your personality. don't judge. i'm teaching watson to answer endless questions. how big is infinity?

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♪ good tuesday morning, welcome back to squawk on the street. and markets having a tough time, as is europe, dow is down 193 points and the pope and the chinese president both arrive on u.s. soil. former dallas head

president, richard fisher talks when we could actually see an interest rate hike. >> and the company, in his words, totally screwed up. find out what else he had to say. >> and the bank of america share holder meeting right now. and we're in the negative, down 196 points on the dow for a second day in a row. and it would appear focussed on concern about emerging markets. and mr. fisher, welcome back to the program. >> simon, i love being here and i love your accent. >> since having this news conference in which he put china front and center, we're do

three 1/2-4%. >> a correction was in order. ironically, you said everything is in the red, i don't think its are related and i was surprised by the press conference she gave afterwards. i've been disappointed in what all the other fed commentators have said so far. it looks like there's that ina decision on the committee. i don't think i've seen this much confusion in my 10 years of service and my retirement in march. i hope they find a way to correct the image that's been created that they're lacking in direction and give a better sense of where things moilight . i think it was destructive instead of constructive. >> and they're all out now

saying they will hike rated. the fear is that what she said could prove prufetic. and the financial times on the front page is having an interview with john burrbank, these rr saying, i think we're on the pres ps of a liquidation and this feels like the quarter of 1997 felt. this thing could further unravel with huge consequences, couldn't it? >> the real economy in united states is everybody from john williams and the chairman itself is saying it's performing extremely well. so, they have to doiciecide whae limits of their responsible are.

india has just begun and others are in trouble. i think the purported problems with china, just as we used to exaggerate the upside are exaggerated on the down side. we can't be responsible as a central bank for solving the world's problems. however, it is the central, central bank of the world. and i think it's a matter of communication and trying to clee top and saying, you know, these are the issues that we're primarily concerned with and these are our responsibilities. this is where we're likely to go. >> i thought she was quite clear and why she was sounding a note of caution. they haven't raised interest rate said since back in 2006. why wouldn't it pay to be a

little cautious on this first move, which by the way, people say this isn't a big deal. why are you disagreeing with some of the top economists in the world and not just janet yellen but larry summers and others who say it pays to wait a little bit here and by the way, they're not even making both sides of their mandate? >> they're close to both sides of their mandate. on the employment front, things are moving in the right direction. and this is what stan fisher referred to in jackson hole. the dual mandate is being fulfilled. i understand what is at play. i will say this, if you want to motivate, janet yellen, get larry summers to say something, or get the imf to interfere. they don't pay attention to what

they're saying. they do their level best to make a decision and you're right, lift off is a big deal. there will still be plenty of accommodation in the market but it does show a direction and a move and it is an important decision. i trap they've fallen into now -- well, they're at year end and they need to resolve this uncertainty. >> let me just -- mr. fisher, let me pick up precisely that point, that there are only two more meetings this year. he said it was a tough squeeze to raise it in october and now just before holidays, you're going to have lick widuty

concerns and next year, the business cycle in this country may be substantial. does that hold water in your view in. >> well, of course, had i been there, i would have artic ylula that it was a time to take advantage of. i think what they need to bear in mind and the equity markets and what they have infused with zero interest rate sasrates, i careful in december because you need to get them time to window dress their statements for year end and you could create volatility. therefore, ib can hear them say we want to be very careful because we don't want trip wires. so i can see having failed to

move in semnptember. i wouldn'ted advocate that personally. but there will always be an excuse and a little less compelling than it was before but the real economy is in very good shape in the united states. >> if they can't go in october and december for the reasons you say, they can go in the new year and that's probably fine. >> they'll lose an enormous amount of credibility because tear rr cha they're chanting the mont ruof this year. i think they need to be very clear and i think they confused a lot of people and i was disappointed but i still have faith in my former colleagues. >> thank you for sparing the time. the former ceo of the reserve bank of dallas.

and dollar racing higher and kma commodities under pressure. is it the cumommodity pressure d higher dollar that is leading to uncertainty? >> no, you started out asian markets were relatively quiet with the exception of india. and then you came to london and you had the article about the emerging markets and the assumption was that commodity would come under pressure and then a broker firm had a title something like race to the bottom. so you had a big deflationary wave go across europe and you had continue selling invokwith

volkswagen and amidst concern that this could turn into -- and there were some aspect that made it look like marginal liquidation and that's why we came down and my morning comments, i wrote that market looked like it might be weak enough that we might test that s & p support and sure enough, the low so far is 19.39. >> and brazilian royal has just reachd and the federal reserve has not even moverd to raise interest rate sas. >> janet yellen might take a victory lap and say look what happened even though we didn't

hike rate sais. so, no one has more admiration and respect for richard fisher than i do but part of the problem is we hear not so much one and done but we need a lift off first in case things change. i've been here pounding the desk saying they're not going to hike this year and what you hear from the rest of them is a repetition of the mantra that stanley fisher sent them out to say, go out and say wore e're going to this year and keep that alive. i don't think it's alive. >> the note was that they were somehow unhappy with the message that was taken from the presser. you feel that way today? >> yes, i feel that way today. i think they're trying to get to

back to the we're on target routine. they claim they're data dependent and some of the early data is not working for a rate hike. the housing numbers yesterday were not too particularly good. >> it could be yet that yellen and fisher are pulling them down a path where they know they won't raise rated this year and they fear the foul out is greater than a lot of them estimate and if they do liquidate and meltdown it will effect this economy. >> i thing you're right. i would phrase it a slightly different way. i think the reason they come back and keep pushing that we're going to raise this year is that if they admitted that, markets would say, my god, it is dreadful, isn't it? do i think they're lying to the public? i just think they're trying to put the best face on it.

>> and you don't want to see that, not the typical factors. what puts a floor on this market if we're in this down trend because of the fed and the dollar, which are continuing the recent trend which has been ugly for stocks? >> what has kept us from cascading into a death spiral is crude is off of its low. crude has become a proxy for global growth. my god, they're right, emerging markets are going to fall apart. otherwise, oil is perking up a little bit, so things must be better around the world. >> as the nasdaq joins the dow in the s & p negative for

september. >> bank of america shareholder meeting just getting underway. and good morning, kayla. >> good morning carl. just about 50 odd shareholders from bank of america are present inside the bank's headquarters right now. ceo brian moynihanopening the meeting and we're just getting word right now that the vote has come in and that it has rejected the proposal. we'll wait to see exactly what the numbers are but certainly an interesting development on annishan issue that is very familiar and they voted in 2009 to be the ones to decide whether the ceo

and chairman rolls would be the same. it's been this year-long cou controversy that resulted in the vote today. we've heard very vocal shareholders. they voiced their position that the board needs more oversight, not less. we'll see what this vote means for the bank of america and whether or not we see new blood infused. they have to resubmit their stress test boy ty the end of t month. back to you. >> all right. interesting. sort of a comment, guys, on the influence of these large pension funds as well. >> it's the black rocks and the

van guards that are the sleep g giants that people are looking to to bring up the votes. >> okay. we'll be coming back to you, there's no doubt. and when we come back, biotech stocks taking a hit as hillary clinton unveiled a plan to combat what she calls price gouging. "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

♪ goldman sacks chairman says he's been diing a aing agnosed lymphoma. he said it's highly curable. he says his treatment plan will include chemotherapy and during treatment, he will be able to work as usual with reducing planned travel. we've had a number of health scares and we're hoping this goes as well -- >> my brother had hodgkins lymphoma and he came tlooihroug okay. >> more than 700,000 cases and

the curability rate has gone up over the years. obviously, we wish him well. >> and biotech falling once again this morning, this as they digest hillary clinton's plan to get rid of so called price gouging. >> biotech investigators have been nervous about what hillary clinton is going to propose. some of the main tenants of the plan she laid out is allowing medicare to negotiate drug pricing. that's left to the private insurers in the united states and she says she's going to incent vise research in marketing, trying to get them to spend money on research and development instead of thesed as --ads. and she says she would expedite

generics, both on small molecules for pills and also for bilogic drugs from the current 12 years to seven years. they fought hard for those 12 years and would be very unhappy if it got shortened to 7. and she would limit the out of pocket costs that consumers have to pay in terms of prescription drugs p. and that could putenshally hit insurance companies. and it was a private company getting the heat after raising the price of a drug by 5,000% after acquiring a drug and not doing anything to it. and folks were worried that valiant could be a target. we haven't seen anything specific in the plan to address that. they're interested to know how

long this is going to continue, the high drug prices, probably quite a while. >> we'll keep an eye on it the sector. let's go back to charlotte right now, with breaking news on the b of a vote. >> we want to bring you the final numbers with the polls now closed on the shareholder vote. and the vote is that 63% of votes cast in his favor in today's meeting and of course, that's rejecting calls from other shareholders to split the roles as they had previously voted in 2009 to do so. and it is not necessarily a resounding vote of confidence that this should happen. often times when you see board of directors approved in 60%/70% majorities, they still face pressure from share holders and

there's still changes that need to be made. they have said that even if the vote passes as it has, with a 63% vote, there still may need to be changes to the governorance committee. but 63% of votes are cast in favor of a change made to the bank's bilaws, last year allowing brian moynihan to be both ceo and chairman. >> we'll have to keep an eye on that. and straight ahead, jeffrey sonnen felled was against a split.

♪ breaking news this hour, bank of america share holders have rejected the plan to split the ceo and chairman. and jeff,sonnenfeld, welcome back to the program. this vote has only come through with 63% support. you must bedisappointed by that? >> no, and boy the way, vosiferous if the board thinks it makes sense. and at united airlines, they're going through a transition where

they removed a combined ceo and chairman. and then it makes sense or at ford motor company where you have a large family steak. many times it makes sense and sometimes it doesn't. their process wasn't ideal, shareshoulders should have been vised but i'm glad they ratified it. the number isn't in the 80s but not too far from off two and three years ago and jaime got around 68% to keep it rolls combined -- >> i guess really it depends, making sense to whom? i come from the jack wells school of thought that the company is owned by the shareholders and up to them and not for the board to do internal work. >> i didn't -- you didn't say

that last week there was no shareholder vote for united airlines, a board makes these decisions. and nonetheless, it's an even better process when the board ratifies t which they did. and there is zero research that the separation of rolls is in any way preventive of bad governance. you name your problem, enron, world com, they had separate chairmans. and if we go to the uk, every scandal, had it, you name it, b.p., all it did was create confusion as to who's speaking to the media and analysts. it's much better if the company is bet ter with the unity of

rolls. and 19 of the 23 of fortune's most admired firms have a separation of rolls. >> i listening -- the former chairman and ceo of wells fargo and he supported him keeping both roles and he was saying the outside influence of proxy firms were becoming a problem, which lobbied against keeping the dual role or keeping brian moynihan in dual roles. >> they should not deligate that authority. and larry fink realized this was a problem when black rock did this. and their vote was going to be voted against jaime diamond and he interceded and said, we should take responsibility and not vote blindly. too often, these proxy votes are

a political stand they want to take for themselves to show that these are wide to deligate their authority to. just because it'so easy to measure doesn't mean it matters. you confuse the measurement with the actual phenomenon. it's like, board member age, there's no correspondence with board member age. you luke at the criteria that iss uses, it's irrelevant. >> jeffrey, it's david. is there a way to measure whether companies that have the titles united as opposed to separate, do better. is there any data you would look at? >> there are conditions, if you have a large private equity

steak, there's an argument that the chairman should be separate. who are majority and minority orders? or when we had the new york stock exchange going through a change and they had a transfer of power there for a period of time where it made sense, through a transition. or united airlines during a time of crisis. it's a good idea until a new man or woman proven themselves. >> if you look at when he took ceo, stock hasn't gone anywhere. maybe we could show that chart. let me just come back to the central point you make -- >> what they did was, it was unup 109% and this has been a

rough year -- >> i'm just putting it out there. because we draw charts -- >> and have to deal with 700 -- >> yes, it's been a long hall. >> they have liquidity, capital, so it's come a long way. >> to come back to the search rsearch -- central political point you make and if you say that they old boys want more power and there's a large number of private jets flying around that arguably they might think shouldn't be there and ordinary people saving for their retirement, may want some greater control, more checks and balances of what is going on behind closed doors. >> it's a creative list but i think it's none of those, simon,

if you forgive me. it's the reason they want these comboined is it brings a unity f command. sir adrian kadberry issued in uk and they create a cadburry commission to figure out what is going on and they decide to separate the roles. and he said it's advisory and a presiding director, all good boards have done something like that. and they also say literally quote the chairman, not the ceo is the architect of corporate strategy. there's a not a board or ceo that would accept that. and you want a unity of command,

who's the architect of corporate strategy and in a time of crisis who speaks to company. >> well, in the case of bank of america, there will be no confusion. coming up on the program, volkswagen shares plummeting again today as the company's emission scandal grows. and they're saying they totally screwed up. something of an understatement.

good morning everyone, here is your cnbc news update. pope francis arrives in the u.s. today. he ended his trip in cuba with a mass at the shrine in santiago. and the first lady and president will meet him when he arrives. the company says blankfein has a highly treatable form of lymphoma and he plans to work substanshally as normal. and peanut executive has been sentenced to 28 years in prison for his role in a deadly salmonella outbreak. they knowingly shipped the

tainted peanuts to customers. researchers say they have uncovered a new species of plant eating dinosaur. they found it in rock deposited some 69,000,000 years ago. >> and duck bill dinosaur. mean while, we're keeping our eye on volkswagen. and the department of skbrujust reportedly starting a criminal probe, this as the ceo announces they quote screwed up. and we expect to hear from the ceo of volkswagen within the next half hour. and unclear exactly what he will say but he is certainly front and center as this scandal continues to grow.

there's a journal newspaper out with a report that says his contract, which is coming up on thursday, and will not be picked up. we expect to hear from dr. winterkorn within the next half hour. and 11 million engines world wide impacted in some fashion. unclear what's wrong with the software but that was the announcement from volkswagen. they say they will take a 2.27 billion dollar charge to start fixing these engines. and we had a chance to hear from the head of volkswagen of america and he did not sugar coat it. >> our company was dishonest.

with the epa and the california resources board and with all of you and in my german words, we have totally screwed up. >> how much has to pay remains to be seen. again, we'll hear from the ceo of overall volkswagen out of germany. >> if they misled regulators around the world and they thing they're going to get off with a charge of 8 or 9 billion dollars -- >> simon, that charge is strictly to deal with the software of these engines, any recalls that will take place, etc. i don't think that has anything to do with potential fines, etc. >> and they've lost in excessive of 30 billion dollars in market cap. so, let's see what winterkorn

says at the top of the hour. and the dow now down 264. >> 264 points and this is now the worst level of the session today. the s & p down and the nasdaq leading the decline here. and they're all done 1 1/2 and 2% for now. we again to your point, volkswagen is the only global giants. gl gl glencore getting hit all kinds of ways. and their shares hit a record low for the swis-based company and the slump in commoditcommod prices puts pressure on.

and other mining giants feeling the pressure today. and vale sa in brazil. the global commodities crisis continues. back over to you. >> yes, pressure across the commodities space. and all 30 dow stocks are down, including apple. and coming up, walt mossberg says the new iphone is the best in the market. t management, we believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management.

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good morning, rick. >> good morning sarah and good morning to my guest. thanks for taking the time, andy. >> always a pleasure. >> listen, i want to pay particularly close attention this morning to oil and commodities in general. there's two issues driving commodities in my opinion, one of course, is demand and the other is what's going on with the hang over of the past. can you weigh in on which of those variables may be having a bigger imput? >> i think it's acbsolutely the hang over the past' they're adding more uncertainty by adding china into the mix, it just confuses. are they going to go between now and december or are they going within the next two or three

years. so, you have all this bouncing around. and it's had a total malinvestments every and reengineering to a large extent. >> no, and i love the notion of over funded. it's my theme today and i think we could make a good argument that the over funding of the past, whether it's china with things like copper and i have no problem with regard to energy or technology but the issue is the hang over created isn't going away anytime soon, so in my opinion, if you're janet or mario or abe and you look at current conditions and stay the course, what is the mark tooet expect expect? they're divining this on their own. >> the markets don't go what it expect. you might even see a little bit

more out of japan but nobody knows what's going to happen in china. and the fed is too confused to come up with a kosher argument. and i don't see this going away unless she puts away the pan dorau box in her speech on thursday. >> and behind closed doors, the comment was made that they were high fiving that janet yellen didn't do anything and the rationale is a lot different than many comments being made on thursday. there's too much debt out there. mckenzie, 58 trillion more than in 2007. how can you raise rates with that dynamic? your final thoughts. >> whattier ie' you're suggest

that the fed is trying to monetize and they need to help the uncertainty they've >> which leads us back to the markets and the concerns about where we are. down now 278 points on the dow. extending the losses as markets sell off as indeed it was last friday. more after this break. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much?

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it's looking like a sea of red. we're down 268 points on the dow. only five members of the s&p 500 are positive. it is material that is are leading the sector. sell-off all sectors in negative territory. mosaic, alcoa, down 5%, 6% a piece. it is, of course, about emerging markets. it is about commodities, and it is about oil.

>> all right. one stock we're watching carefully is coca-cola. it's down along with the broader dow. dislowsing it spent nearly $120 million in research funding over the last five years. today publishing a list of more than 900 universities, sports teams, foundations that the company has given money to. among the top recipients an lsu study of childhood obesity, emory's global diabetes center, and $6 million to the university of south carolina. that was at the center of the "new york times" piece back in august alleging coke was secretly funding bias studies promoting exercise, not diet as a fix for obesity. i spoke with sandy douglas yesterday, the head of coke north america bshgs this whole issue. he didn't dispute the fact that industry funded research could support an industry agenda. "that very well may be true, he says, and we want to change how we participate." beyond this new disclosure, we talked about the obesity threat to coke's business and the plan to get sales back on track as concerns swirl about general

health and wellness. coke has answered all this. smaller cokes. smaller packages. mini-cans and mini-bottles. coke in moderation, they're calling it. it's something they're trying to convince investors of as well in a business that has thrived on selling more volumes. sandy douglas tells me the challenge we have with investors right now is to keep reinforcing the metric that matters most is sales. volume, no longer appropriate in a world where consumers want smaller packages. the take-away in all of this, coke was obviously rattled by the recent allegations of secretly funding biassed research. now it's trying to win back trust from the consumer. the bigger picture here is that coke is trying to reinvent itself as many of the food and beverage companies are right now for a world in which health and wellness matters like they never have are. going after obesity with the research fund and trying to show that it's more than just a pr move and a publicity stunt that they want to be open and honest about where they're giving money. >> it's fascinating to see coke

flail around because consumers are better educated. what a big bohemath and how it now has to reshape itself and what it does. >> the second that you hear about obesity concerns, rates rising in this country and the more knowledge that we have of this, it all comes back to our diet and our exercise, and they don't dispute that. when i talked to sandy douglas -- >> diet. >> diet including caloric drinks. that's where they are moving their portfolios into bottled water and sports drinks and smaller cokes. >> let's second it over to john ford and find out what's coming up on alley. >> we're going to continue to watch these markets. the dow down more than 260 points. the nasdaq carrying the worst of all the major indexes. of course, that's tech-heavy. also we have a review of the iphone 6s, and microsoft got something new. office 2016. we'll take a look at that with one of microsoft's top executives coming up on "squawk

alley."

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♪ good tuesday. welcome to "squawk alley." john ford and i here. it's been tough sledding all day long on the markets. dow down 266. really selling off since the open. bob pasani is watching all the movers. >> four to one almost five to one declining on advancing stocks. the futures are down. 1.5%. something