>> live from new york where business never sleeps, this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. troubling data, bank repo sessions soaring 66% year over year in the third quarter. that's according to research firm realty track. a bank's move to take back the house is the final stage of a foreclosure process. these numbers suggest that the backlog from the financial crisis could be clearing up. new foreclosures are back to normal. new jersey has the country's top foreclosure rate with activity more than twice the national average. let's get to stocks and take a look at the futures. yesterday you saw the market was down by almost 200 points yesterday. ended down by 157 points.

you can see there is a bounce back. a lot of that coming from walmart. 44 points from walmart's deline alone. you can see this morning there's a bit of a bounce back. dow futures are up by 107 points, s&p futures up by 12 and the nasdaq up by 28. >> a couple of big stories we're watching. first data priegs it's ipo at $16 a share last night. here's the bad news, that's below the 18 to $20 expected range. selling 160 million shares to raise $2.6 billion in total. it is the year's largest public offering but albertson was expected to be the year's second biggest ipo but the super market chain decided to delay it's pricing due to market volatility. also it could be that the market is now -- that window is closing. mobile payments company square officially filed for its ipo saying it plans to list on the nyse under the ticker sq. the news comes just a week after

square qceo was named ceo of twitter. it reported a net loss in the first half of this year. united health out with quarterly numbers. it beat estimates by 1 cent with earnings of $1.65 a share. revenue was also above forecast. >> breaking news out of washington this morning. president obama will announce today at the end of 2016 the u.s. will maintain a presence of 5500 troops in afghanistan. the number is much higher than the initial target of 1,000 troops. the administration points to mounting violence and instability in afghanistan. as the reasons for keeping more troops. right now, the u.s. has 9800 troops there. wow. and we're going down from there. things seem great as is. president obama is going to make the announcement later this morning. >> let's get back to walmart. shares of the dow component

plunging as much as 10%. that dragged down the blue chip index by 45 points. walmart getting slammed after they predicted poor profit and flat sales at an analyst meeting in new york. prior to that gathering doug mcmillon joined us on squawk box. >> walmart is the second worst performing dow component of the year. what are you going to tell the analysts on wall street today? >> there's people that will buy into the long-term story and some that aren't. they're going to say how long is how long. >> how long is long? >> normally we provide guidance for just a year and we're going to talk about three years out for today. that will help people getting their minds around it. >> what do you see three years out? that's part of the problem. when people were looking at the estimates for fiscal 2017 they were looking at earnings of more than $7 as recently as -- as recently as the beginning of this year. those number versus come down drastically.

>> we'll share the numbers later today but we'll talk about revenue projections, earnings projections, what we think we're going to need in capital and then they can judge for themselves. >> well, as you can see, check out the chart. the street did not judge kindly. later in the day after the company lost about $20 billion in market capitalization, mcmillon returned and spoke to jim cramer on mad money about the impact investing in a higher minimum wage of $10 an hour we'll have in terms of short-term profitability. >> it's great that we're giving visibility into what the next three years will look like. >> that's a radical departure from what people thought. don't you think you could have put a release out this morning before squawk. >> people have known that $10 was coming for awhile. this news today is just that we quantified it for everybody. >> i will say when he was on our air he quantity pied it by saying we thought it was a billion dollars it would end up costing the company. closer to $1.2 billion.

and additional effects next year but obviously there was a lot of confusion. >> they went into yesterday with a way to approach the whole -- they knew what was going to happen and they came in with a way to approach it. now when he was here he told us about the 15 billion negative forex and copped to the higher wages were going to be a problem but in trying to do it before you saw the numbers and then he got defensive with the analysts saying i thought we had already told you all of this stuff. which he thought he came clean with us but he really -- >> that's what it was. if he had given the numbers and was exmaining at the same time. >> why have an analyst call if you're going to tell everyone on a tv show. >> but why didn't you put out a release. >> but what is it that he didn't tell us? was it the weakness in the consumer? if it's the weakness in the consumer this is not just a

walmart story this is a fed story and economy story. >> which is why all the other retailers -- this is not a walmart getting hit alone. when we asked him about the consumer he said it's going okay. i said is that a 2 or 2.5% gdp. he said yeah. it's going okay but didn't get specific with numbers. >> it's more than having put out a statement yesterday before talking to us. it's about how you would have told people about this over the past two months. >> it's never easy. >> this is not just bad news. >> it's constant updates on its sales. it stopped doing that several years ago and as a result you get much less frequent updates. >> you hope you're preparing slowly to get people used to it but if you don't do it enough -- yesterday you said it shouldn't be mcmillon it should be mcbi i

mcbillon. >> he had a tough time trying to justify the higher costs. there was a moral argument plead guilty made and all of these other things but this is going to put a real damper on this company broadly. they shouldn't have approached it this way in terms of what the wage should be but how it's being articulated. >> is it incumbent upon a company -- they're having the analyst call to let you know. >> courtney reagan is here. >> why tell people, you don't need to release a statement before you have the analyst call about what you're going to say in the analyst call, do you? >> i think what would have been good is if they would have put the release out first and then he comes on and talks about it on tv. it gives the analysts some time to update their models. come full circle with where they're thinking. prepare a little bit better because what i heard and charlie was there was that once the news

came out, the analysts ran out of the room, everyone went on their phones in a panic and nobody could find a private spot to talk because everyone was calling back to their desks and having to update things so many of the analysts were unprepared for that type of information. >> investors were unprepared for that. it came as a surprise to anybody out there. >> the meeting could have been a clarification. that could have been very helpful as opposed to hearing it for the first time and being there without your computers or without the ability to remodel and ask intelligent questions there. >> charlie o'shea is here. how big of a surprise was it for you? >> it really wasn't a surprise for us. we had mentioned something earlier in the year about the potential cost for this in a press release. we pegged it at about a billion for 15. >> he did say yesterday morning it's probably closer to $1.2 billion. >> we knew there was some risk

to the upside for cost, down side for metrics with that number. then hook out to 2016 you have the increase going to $10. it's more than $9. so you could back into it. >> they also have added department managers in a lot of these stores. their starting wage is $15 an hour. >> there just weren't enough specifics. it wasn't tied together and then the impact on what that meant on the bottom and the top line. >> if he had said, you asked him about earnings expectations. >> he said three years of guidance. >> are they too high right now. if he had said at that point, and sort of given body language or whatever that people are not prepared, would it have closed at 63? is it different? does it matter that he didn't do that beforehand? >> i'm not sure. i don't know if it would have made a difference yesterday

morning. >> but maybe like andrew said the last couple of months. >> or in february when they made the wage announcement and they did give us some indication of how much of a hit it would be to earnings and then again in august but they didn't fully model it all out including the $10 increase until yesterday and even he said during the question and answer session we told you it was $9 and $10. maybe we didn't give you enough math to do this but you knew it was going to be a big number. so it felt a little defensive to me. as if walmart felt that they had given the street enough. >> i will say that. from everybody, from jim talking to him -- >> walmart thought that they gave. >> i think they were very surprised by the streets extreme reaction to that. >> i'd have to agree. i'm a fixed income analyst. we take a longer term view here. we think this is a good idea going forward as you try to turn the battleship. but i think there was, you look

at what the stock did and clearly it wasn't a popular decision to make. >> a bernie sanders story because shareholders lost $20 billion because wage earners are going up to 9 and $10. so the income inequality issue if you thought that shareholders had been rewarded to the exclusion of the labor force this is what you're supposed to do. unfortunately a lot of people in the middle own walmart stock and pension plans and you can't ever really look at this as a good thing when market cap losses total $20 billion. you can't say it's worth it for the wages going up, can you? >> well, for shareholders, again, i look at this through a different lenses. through a fixed income longer term lenses and this is what we feel the company needs to do in every other brick and mortar retailer needs to do this stuff. they have to invest in employers and price and also have to invest in e-commerce and they're going to spend a billion dollars in e-commerce a year for the next three years on top of

what's already been spent. you're trying to move multichannel. it's not free. it doesn't happen overnight and to compete with amazon in our view is the brick and mortar retailers are well positioned to compete online, you have to do this thing. if the investors have a longer term view i don't think they react the way they did with walmart yesterday. if they're taking a shorter term view they're going to react the way they did yesterday and that's a balancing sheet. >> i thought the ten year goes under 2. the euro is back at 115. so some of the things that cause the problems are reversing because of that but this morning, fed's not going probably no 2015. so what if it really is a slow down? because we're now seeing that the benefits of it, sooner or later you're not going to have anything to do if the market has another tantrum and the market could get a tantrum if the consumer goes away. >> the consumer is stressed. there's almost a bar bell here where the upper end consumer is

still doing well and the lower end consumer remains pressured. there's still effects from the snap payment reductions at the lowest end. the payroll tax with holding increase hitting everybody in the middle. families of $50,000 in income lost to about $1,000 in spendable disposable income. that's money that never came back. a lot of the positives on the consumer side are being driven by autos. if you're buying a car you're not buying anything else. even if you lease you have to put a big chunk of money down. housing has been choppy. our view of the consumer at moodies is certainly mixed. >> thank you. >> let's talk about another stock on the move this morning and that is netflix. quarterly results falling short of estimates and subscriber numbers below forecast. they're blaming the transition to chip based credit cards for

the miss. old cards on file at netflix no longer work. this resulted in what netflix is calling involuntary turn. shares dropping by as much as 15% after the bell. anthony joins us this morning to get his take. he's of course the senior analyst. what do you make -- is the card thing -- is that a real excuse? and the reason i ask that there's a number of analyst outs there that says it's the craziest thing they ever heard. >> i think it's a real excuse. a real driver. one of a few different drives. one could be seasonality. another could be macro. they're about a third through this transition to chip based, debit based cards. the key point is that gross edition. so new science up on a gross basis was strong. very strong. above their internal estimates. >> specifically internationally. >> well i was just talking about the u.s. but certainly internationally. the guidance was awesome. that's story of the stock.

is the international expansion, the global scale and even though you have a little bit of this question, the involuntary turn we'll talk about today it's a temporary phenomenon. the long-term narrative remains intact. >> what's your target for the stock? >> $125. >> so you still love it. >> joe is laughing. >> your target is supposed to be $9,000 on netflix because every dollar of market cap that old media has is supposed to go into netflix. i looked to see if i could watch fargo the last season but i couldn't but i can see chips and reruns of -- >> why are you so angry? >> i'm not seeing it happen. you said you would get out of everything else to the exclusion of netflix and it's gone down more than old media in this route. >> i said that at 50 bucks, joe. the stock has more than doubled that. >> no, this was much later. this is only a couple of months

ago. >> dealership is shifting to internet television. it's what's going on in traditional media. media the stocks are under pressure because there's a long-term bear case that's typical to disprove. >> netflix is the answer. netflix goes down more than the old media that you were talking about. >> last night? >> no, after espn and disney. after espn and disney. >> stocks rebounded most of the way back there. >> it's at 105. >> 105. >> went all the way to 90 at that point. >> the stocks doubled this year. >> i'm not talking about since the last time we were talking. >> since the espn deal. >> i think that the traditional media companies now are trying to adapt to what the consumer wants to do. internet video. ad free, on demand, across all

platforms. tsa wh that's what netflix is tapping into. >> so here's the question and a agree by the way, this was a minor -- there's a larger question on netflix which is the cost. content costs are going to continue to rise for them. at what point does that become challenging or does it? >> i think that the thing that deflects that concern is their longer term guidance on profitability and margins. so they reiterate their guidance for 40% margins in the u.s. how do they do that? shift their mix to originals which they said they get more bang for their buck. so more viewership per dollar spent as opposed to acquired programming and -- >> one of the things they said is they're not interested. >> they raise prices. they just raise prices so that in some sense allows them to spend more on content while not

taking down -- >> it's not you. it's netflix. i'm unhappy. if i want to see jaws, i don't want to see splash. and whenever i look -- you used to be able to get any dvd you want. >> i think you're focused on movie. i think it's shifting to tv shows. >> original content though. they better not start -- >> the thing you should worry about they did say yesterday on the call is they want to get into the news business. >> really? >> no joke. >> not necessary live news. i don't know if they were referring to more docks or what they were going after. >> they jokingly referred to vice media. what they're doing with real live. >> long form type of stuff. >> so they're experimenting. they want to leave themselves room to experiment. >> but not live sport yet. >> not at all. >> what do you think the news thing is going to be? >> i'm not sure. >> vice is now into -- they're doing daily journalism. >> but we did have very --

>> journalism? >> we did have dillard here this week. >> who is the english guy that nobody really watches? is that journalism? >> no, the guy that does the hbo thing. >> john oliver. >> john oliver on hbo. it's a form of news. it's a comedy show. >> here's the thing i would say about news. if you have a daily show or weekly show you eliminate the idea of going in and then turning. if you have content where it tethers you to the service on a daily, weekly, monthly basis that's what the general strategy is, that reduces -- we talked about involuntary turn, that reduces the voluntary turn. >> thank you. >> what's up. coming up some very long. >> we didn't play that. >> it's about you. >> some very long custom lines.

custom lines at u.s. airports. we'll tell you why, next. but first here's a look back at this date in history. ♪ surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is?

screening from passengers slow down for a time. all is back to normal. it's used to screen passengers that may be on the watch list or have other security issues. customs and border protections say they were able to use alternative methods to process incoming passengers. >> now to politics. we're less than two weeks away from the next gop debate. watch it outside. joining john harwood from washington to take a look at the big issues on the table. dem cats say the economy stinks. that was my point. the candidates agree. if middle class is suffering. so you didn't see that in the debate, john? >> i heard democrats complaining about the economy just as president obama complaining about it looking for growth. but the issue that confounded republicans so far has been

immigration. remember coming out of 2012, barrack obama got 7-10 latino votes. republicans know they have got to do better. when donald trump -- >> when mexico sends it's people. they're not sending the best. they're not sending you. they're not sending you. they're sending people that have lots of problems and they're bringing those problems with us. they're bringing drug, they're bringing crime. they're rapists. what's coming from more than mexico. it's coming from all over south and latin america and it's coming probably from the middle east but we don't know because we have no protection and we have no competence. we don't know what's happening. it's got to stop and got to stop

fast. >> what that's done is put on the offensive candidates that hoped to appeal to latino voters with a more optimistic message and temperate message on the issue of immigration. jeb bush uses his own personal biography. the fact that he's married to a mexican-american he met while study ago broad. take a listen to this clip. >> in 1971, 8 years before then candidate ronald reagan said that we should stop thinking of our neighbors as foreigners, i was ahead of my time in cross border outreach. across a plaza i saw a girl. she spoke only a little english. my spanish was okay but really not that good. as a candidate, i intended to let everyone hear my message including the many that can express their love of country in a different language. >> but jeb bush has been forced by the pressure to back away

from his past support for a path to citizenship for illegal immigrants. so has marco rubio who himself is the son of immigrants from cuba. he pushed forward a bipartisan senate immigration bill a few years ago. he now says that he doesn't support that bill because it's not politically possible but for republicans to have a possibility for winning national elections they need to repair relations among latino voters. >> john, one of the questions bush has constantly come out and said that he wasn't going to win the primary in order to lose the general election. do you get the sense that that's off at this point? everybody is backing away from their stances because of the ground that trump laid out and others? >> no, jeb bush is still pursuing that strategy. his poll numbers have been pretty unimpressive. he has not commanding the stage in previous debates but he's still trying to separate himself from the message that donald

trump is articulating and having more embracive and inclusive tone. question is whether it can work for him. i'm willing to risk losing the primary to win the general. >> john, thank you. >> good-bye. when we come back this morning, why danny meyer wants his restaurants to eliminate tipping. but first a look at yesterday's s&p 500 winners and losers. ♪

♪ welcome back to squawk box everybody. the fbi and the justice department are reportedly looking into the business model of daily fantasy sports operators. the wall street journal is reporting that the government officials are trying to determine whether the businesses violate federal laws. there's been an exception for a lot of years because this was seen as a game of skill. not a game of chance. that's how they have been able to get around it but now that you're talking billions of dollars people are saying wait a second, is this for real? >> it's for real. >> it's pretty grey. that's a stretch. >> it's been operating for years. >> i like how you said billions.

>> billions. >> in other news, danny meyer wants to eliminate tipping. >> you're all for this. you've already done this, basically, haven't you? in a unilateral way? >> 25% across the board. >> including tax. >> yes including tax and wine no less by the way. i don't subtract that out, do you? >> so he's going to be eliminating tipping at 13 of his restaurants. he's going to raise prices in an attempt to raise pay for cooks, dishwashers and other kitchen workers. server compensation will remain about the same. across the board in the front of the house where you dine wage versus gone up 200%. >> because of tips. >> in the kitchen. >> so this way they're going to try to coordinate -- >> everybody gets it across the board. however, prices are going to go

up across the board as well. do you like that? >> it's supposed to be the uber model. >> there's a lot of places, like a lot of clubs or social clubs or no tipping. >> i thought you were going to do a market thing. like a market based economy. >> it will be market based. it will be reflected in the price and then they can be. >> i know but i was thinking the service. >> i like that it gets shared. >> you want to be able to pay somebody for doing something great. >> if it was just a -- you know when you go in and they got 20% is going to be added on because there's 10 people, doesn't it seem sometimes like th the serv isn't quite -- >> do you think the tip does help the service. >> yeah. when i was a waitress i worked for tips. i worked hard for it. >> it's all about motives and incentives. >> but i wonder if there's pressure to leave a tip anyway

if someone does give you good service. >> and if you're a bad guy anyway they have other ways of getting you other than spitting in your food. >> what are you going to do about greecing the guy at the door? are you going to still do that? >> when you're on tv, you don't have to do that. you know that. >> i don't know any of these things. >> any restaurant i can get a table near a waiter. >> coming up we have a lot to talk about. we have a big show. squawk box getting political. mac thornberry is here. he's the chairman of the housed armed services committee. and the chaos in the house leadership as the gop looks for a new speaker and then a big program out on the plaza in just a little bit. ♪ care of my heart.

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welcome back to squawk box. president obama will announce the u.s. will keep more troops than expected in afghanistan at the end of 2016. the u.s. will maintain a presence of 5500 troops there. the senate approving a partisan defense bill despite the threat of a presidential veto. joining us with more on this and a search for a new speaker of the house, marc thornberry. it's great to see you. >> thanks. >> i look at the period that we're in right now and i think it's the experience we have with

iraq so that we're now almost hesitant about boots on the ground anywhere and we know that they're not all uses of ground troops are equal and i think to be really there puts us in an issue where we're compromising what our enemies think we are able to to. >> there's no doubt about that. >> but it's not all the president's fault, it's the american public, maybe it's george bush, fatigued for another 5, 10, 15 year situation where our guys are coming back with no arms and dead and worse. it's hard. it's a difficult situation. >> yeah. i would say two things. one is we have gotten testimony all year that the united states has probably never faced as many complex national security threats all at one time as we face now. secondly i think you're right, there is a lot of concern around

the world that the united states is not going to take aggressive action and any time you rule out options you simplify the calculations of the enemy and the rest of the story is the president has even talked openly about stepping back from our leadership role in the world. so as we step back others step in and that's what you're seeing with putin and syria. you see that with the chinese building islands off the south pacific. you see that with cyber attacks and with iran just a couple of days ago launching a missile that most likely violated the u.n. agreement after the nuclear deal. so you see these folks who have an opportunity to step up and unfortunately as you mentioned a few moments ago, our president has now threatened to veto the bill that pays our troops and provides for our own defense. so that's just further evidence that the u.s. is stepping back. >> but to joe's point, it's not just theth, it's a reflection of american fatigue with this.

if you go and you have to leave troops there for a decade or longer and when you pull them out after a decade everything falls apart it leads to questions about whether we should be there to begin with. >> but we have been in korea and germany for a long time and made a huge difference there. >> they're not getting blown up. >> that's true. but my point is you have to be this for awhile to help these countries get back on their feet, to develop their military so they can help provide for their own security. secondly, we don't have to go do the fighting for them. but we have to be there in enough numbers to help with the train, advise, and assist. we left iraq completely and look what happened. and that was the concern about what we were going to do in afghanistan in as well. so now, apparently, the president decided to leave 5500 but last week in a hearing i asked the general in charge of afghanistan, out of the 9800 we have now, how many of our troops

are in daily contact with the afghans helping advise them outside of the capital and the answer was less than 500. >> wow. >> how do well finally get a resolution of the two opposing world views about what the united states should do? that we can't export democracy is one view. and we can't go tell people how to live. and then the other view is we have to be involved as the leaders of the free world in every single situation. how does that ever -- both sides have arguments that they're absolutely sure of. which side is right. how do we ever rectify which situations we definitely need to get involved with that will be to our benefit and the world's benefit? >> we will always have tensions in the united states based on our heritage, our geographic location but also on the other side based on the way the world is moving. a lot of the key to the issues y'all are bringing up are leadership.

we have to have a leader that makes those judgment calls but also explains -- >> that makes those judgment calls for the american people. >> no, to lead the american people in making them. now, sometimes you got to make a hard call and then explain to the people why you're doing it. but i think most people in the country do not fully appreciate the extent to which our economy and our quality of life is dependent upon our leadership role in the world. and as we retreat in the world, then others fill that void, but it effects us here at home economically as well as security. >> i like that tie. you're from texas. gop guy from texas. nice tie. >> thank you. we actually have ties in texas. >> a lot of purple around today. we all have a lot of spirit. anyway, thank you. >> thanks. >> when we come back this morning, gene spurling is here. we'll talk politics t race for

the white house and his new book right after this. first, check out the squawk green room. look who it is. it's carl. it's the q. >> does he workout? definitely. >> it is a special throw back thursday right here on squawk box. all that's old is new again. carl, david and jim cramer will all be joining us on set for an hour to talk about the news of the day. hi, carl. stay tuned. we have a full morning ahead. ♪ they come into this iworld ugly and messy.

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tesla is unveiling an auto pilot system. it's new model s sedan will be able to steer and park themselves under certain conditions starting today. elon musk says don't get too adventurous, at least not yet. he's cautioning drivers to keep their hands on the wheels. what's so amazing is they can now upgrade these things literally over the air. it's all software based. it needs no new actual technology in the car. >> but you wait, on the initial upgrade, you wait a week, right? >> yes. wait a week. >> absolutely. >> i'm learning. >> how is your iphone doing? >> there have been additional things fixing the things from the original upgrade. just like you said. >> but now it's working properly. >> it is. some of them just you try to get in and they just blank. when that happens with me.

>> thank you tim cook. >> okay. the cnbc republican presidential debate is just two weeks away. the candidates will be laying out detailed plans on how they plan to grow the u. s. economy. joining us is gene spurling and he's the author of the new book what works in girls' education. there it is. but let's start off with the presidential race and see where things stand right now. a little bit of chaos happening right now. questions about whether or not we'll be able to raise the debt ceiling. whether we'll get a budget passed. >> we've gone from the fiscal cliff to the boehner cliff and there's just a lot of pressure to get things done while the speaker is still there. i do believe that john boehner will not leave without at least making sure that the debt limit is extended.

i think that the big questions are could they feel the pressure because of this cliff in trying to get more >> they being congress? >> with the extenders. i think there's a little chance for positive news that the keep of chaos you see on the house republican side could try to inspire some type of deal that could maybe at least comfort people that were going to take out the tail risk for government dysfunction for a year or two, but on the other hand, if you can't get it done saying any bill that goes through defunds planned parenthood or obama care, that's real uncertainty, but paul ryan is clearly the wild card because it's not whether paul ryan comes in or someone comes in, but it's about whether they have the authority to negotiate with the white house. the question really is, is paul ryan, does he hold out?

i know paul, i know he doesn't want to be speaker. he wants to spend time with his kids this period, and he's saying, if you put me in the job, you're giving me authority to negotiate and can't make demands. >> reminds me of the biden cliff, and, you know, everybody loves paul right now. wait until he becomes a possible candidate for speaker, you're going to see not as much support. >> yes. >> you already heard that. >> you're a friend of bill. you have plans if biden decides to enter? maybe he doesn't enter now, but i wouldn't want to be joe biden with the clinton machine if he were to announce. you got good stuff on him? >> well, listen, you know, i'm in the position now -- >> outside adviser. >> i worked for everybody, clearly advising hillary clinton now and i'll continue to support, and i work closely with joe biden for those years, a terrific guy. >> would he get in in?

>> no. >> how worried -- >> then, again, i've been with bill clinton and hillary clinton for 23 years, and biden understands that's where my ultimate loyalty is. >> it would be bad for the party it if he gets in? >> you've seen hillary clinton yesterday, one of the most qualified people who's ever run for president, really, in terms of eight years in the white house, a senator from new york, secretary of state, and, you know, yes, i would like to see people start to rally around here, but i understand we're going to have a competitive primary debate, and it's certainly his choice, and if he gets in, there's a lot of respect. >> this is not a competitive debate right now, but unless he gets in, it's not going to be. how worried were you he would get in? feels like now that she had the performance she had, chances of getting in or at least the decision makes it more challenging now, but up until two days ago, i imagine you were

more anxious? >> you know, from what i knew and thought, i did not believe that the vice president was going to enter the race if hillary clinton was in as she is now. i left in march 2014. he's, obviously, been through quite a lot personally, and it's a personal decision for the end of the day. i respect any decision he makes, and i'll support hillary clinton, but i'm a fan of biden for the rest of my life. >> you're out rs but you know everything. have you heard anything in the last 24 hours? >> this is amazing. you can be on the phone, you can have three or four people on the phone and think for sure these people know, they are so close, and nobody knows. >> maybe he doesn't know. >> talk about the book, "what works in girls' education", why did you write it? >> at the end of the clinton administration, i led the u.s. government to the goal of universal primary education for

children around the world, and i always felt this is one of the most important and least appreciated issues. education for all children, but, particularly, girls education. i think what you see in there, just, you know, to put it simply is that it's not that it's a silver bullet, but there's no single investment anywhere with so many positive returns across such a large area of a crucial things in the world. >> investing in girls, you mean? >> investing in girls. for example, investing in girls' secondary education has strong growth effects for countries. it affects their wages, but besides that, this is been proven to be perhaps thee most or the most effective solutions for infant and child mortality, preventing million child marriages. if there's one thing that's important to do, it's all the more important for the million chirp who are syria refugees, half of them girls, focus on secondary education for girls, i think it is as we say the

highest returning investment in the world. >> well, gene, thank you for coming in, again, the book is called "what works in girls' education," great to see you. >> thank you. >> time for throwback thursday. squawk box 20, the gang is back together to talk the top stories of the day, carl, and david faber, the brain, and i just said it because it's a good anchor name. and jim cramer ready to join us on set when "squawk box" comes right back.

♪ ♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck.

20 years of power, money, and mayhem.

>> welcome to the news "squawk box" here on cnbc. i'm becky quick. >> i'm happy to introduce andrew ross-sorken. 20 years of unprecedented access and bringing wall street to main street. to triumph -- >> 9,000. >> to tragedy. >> very serious. is that the world trade tower? >> yeah. >> boom. >> broke 10,000. >> to bust. >> what we are working on now is an approach to deal with the systemic risk and stresses in our capital markets. >> and everything in between. >> i love it.

♪ >> you're watching squawk -- ah! >> it's time now to go back to the future for this special throwback thursday edition of "squawk box." ♪ live from the beating heart of business, new york city, this is "squawk box." ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. admittedly, we had moonves and zaslov, but, truly today, in the present of greatness. everywhere i look, i can feel it. i feel it moving towards me almost. >> really? >> that's inspiring me. >> that's not great necessarily.

>> i'm joe with becky quick and andrew and carl quintanilla, david faber, and jim cramer, a special throwback thursday on "squawk box," assembling a squawk's past and present to look ahead to the future and true fans here to celebrate our 20th anniversary. [ cheers and applause ] >> nice. >> really. great. >> there you go. >> wow. >> then you got cutouts that they definitely all brought themselves. yeah. they deaf nfinitely had those, them off their walls wherever they live. >> oh, wow. >> brought them in here today. we have no ability to provide that stuff to them. all right. where do you start? the other night when we were -- i was thinking about how -- i like this show and how cool the show is, and i realized it's the sum parts of almost every single

day that we've had with the very early days, right? >> the earliest, yes. first at ten years, actually. >> do you remember that we had collected everything that we had used or that people sent, and we had it in the shelves, and it took, like, a moving van. we used to do very immature things. >> very, very. for years. >> for years. >> yeah. >> the lava lamps. >> it was in response -- >> all that stuff. >> sure. there's bubbles coming and going, but the original bubble was the annoying comparisons, adding up market caps of dow components compared to excite.com or pets.com, and invariably so we've seen this movie before. >> yeah. or even aol, of course, and they were smart enough to do something with the ridiculous valuation by buying time warner. >> you remember all of them. the aol. >> i remember aol.

>> they were vicious. >> terrible. >> that was before twitter. >> yeah. >> and i got tweets today. >> they are still going. >> oh, my god, yeah. there was a little -- >> they wanted to taser anyone who did not think the stock was going to -- >> it was jersey then, so jersey outlawed tasers, so we could stop them. >> who was the cnbc reporter shot by the taser as an experiment? >> brian? >> no, sanchez. >> oh, yeah, he was on msnbc at the time. >> do impressions. >> no impressions for you today. >> other than -- >> i don't know the answer to that. [ laughter ] >> i just -- bought a home for 30 years. [ laughter ] >> we may talk about icahn later, but you can't do icahn unless you can do the f word. >> i can't. >> last time i heard from him, he was screaming at me. >> he was? >> upset with me.

>> i have to say, you guys, never knew when you were going to go. you never knew when the camera was going to go, who it was on, what you'd say. it was a free-for-all. we didn't know what it looked like, but reinvented every day. you said something, talking, and then you just shouted something. no one's done that on tv. that's what -- now, we refine it to make it more exciting, but i remember you just, jim, stop it. >> i remember -- and you were consistently a guest host in those days. >> every wednesday. >> a hedge fund guy. >> it was intimidating. mark hanes did not say hello because it was contact. >> glad it was not just me. >> no, it was not you. he would usually sit out in the car smoking cigarettes first. i used to think there was a police detective outside, you know, and i looked, and it was actually mark. [ laughter ] >> i used to pass him on the

road coming in from jersey, and what was that -- i said it was a white buick, and he goes, it's seafoam. i guess that was the color of seafoam, and the window would be open, and they looked like it was exhaust, but it was not. it was smoke hurdling down the turnpike, but you're right. remember when you said i have a little prick on my finger? d >> yes, i did. you don't let me forget that for years. >> you know what he said last week? >> little weep aner. >> they were good too. >> they were. >> another one, the hershey park, and i med that reference, remember that? >> i said, to get to the hershey part, did you take the hershey highway. >> no, it was the hershey train, and i started to sweat. >> whatever. >> that was back in the day. >> i was worried this would happen. >> but i will say this, in all seriousness, when we realized it

was special when at&t, the actual at&t, the first one broke into three pieces. remember that? we went off prompter. and you and i were in new first year, first six months. >> did you write down everything you would say first? >> i don't remember? >> you read from the prompter? >> no, no. >> in the old days, a story hits the wires, a producer would sign the story to the writer, writes it out, load it in the tell prompter, and then it came out, and you read it. that was different. there was just nothing. it's risky. you just heard some of the things that happen if it spirals. >> that's the beauty of the show. it's a morning zoo, loosy goosy, and you don't know what happens, but when news hit, and we have all sorts of examples, then it's a mature, capable machine like that. you know what i'm talking about. >> right. happened yesterday with walmart. still, with us on our show. >> with earnings on a regular

basis, things that blow up all the time, but as a transition, we've always told people about the headlines, and we'll do that today too. this is our time to get you caught up with what's happening tea. some of today's top business headlines, the markets. check out the u.s. equity futures at this hour because the walmart story is what initially dragged down futures yesterday or -- did that hit? what time? before the market started? >> no, at 10:20, around then. >> responsible for 44 points of the dow's decline, end of the day, down 157 points in total, but now back up 93 points, s&p higher by 9.5, and nasdaq up by 20. unemployment on the docket today. >> we have another headline. we have everyone here to talk about it. netflix under pressure this morning. the streaming service reported earnings and revenue that missed forecasts. shares fell 14% in after hours

trading, but rebounded in a web cast with executives, the company's cfo blamed transition to chip debit cards calling a involuntary turn that took a toll on subscriber users in the u.s. they thought about getting into the news business. that's fascinating. do you buy the chip thing? >> no prepasses, but the rest of the call beyond that was fabulous, and i thought that i'm going to give them that pass on domestic because the international is strong. by the way, the conference call -- >> international's amazing. >> amazing. i mean, this is one of those where it's a product story, and you tend not to believe product stories because you don't get numbers or say, listen, this many viewers, but the whole -- geez, the stuff they make. >> right. >> there's not a single one they didn't do a season two for. >> that sounds like -- we've

seen networks try that, and books are written, finally, remember, desperate networks, one network had "lost," and another, but it was years of 50 pilots a year. that's why it scares me if they can't keep churning it out. sooner or later, they'll get a cold spell. >> in the call, reid says every day ceo says, we need ten more oranges is the new black. i don't know that we can do that. you talk about the cost of this stuff. >> enormous, going up, i don't know where are they now? we have a producer of television programming with us. >> exactly. >> there are 4 billion going to 6. somewhere in there. >> exactly where they are, but all they need is one or two programs a year that hook you. that's all. so that you don't -- >> that's hard to do. >> talk about -- >> and, by the way, if you have kids, they don't even need that. >> someone who contributed to something that's going to be on tv in the not too distant future, you're judged on who watches it. you'll know.

if you have a netflix show, you would not know whether it was a success or not. we don't know. >> no. >> so they could renew everything because we just don't know what's really watched or not. >> but the model is they don't have to care. >> that's what it is? they don't have to care? >> do they care in. >> they are segmenting, right, i need faber to watch, joe to watch, becky to watch. >> i know i have enough. >> as long as i have enough of everybody and not cancelling subscripti subscription, even at small numbers, that's fine. that's the magic and what's different about premium cable or this business than the network business. >> hbo seemed like they had it. >> it's a different business. >> they had a need for hit, and things are written, oh, this is long in the tooth. they got to come up with something else, and they are constantly under the gun to do it. >> 70% of hbo's programming,

stuff people watch is not the original stuff, but it's the movies. you need original stuff just to keep them from cancelling. >> i was surprised by reid hastings giving hulu a shoutout. >> yeah. >> you can watch stuff the day after it airs. >> you never hear a ceo talk so positively about the other guys, but he does that. in terms of recognition, they talked about whether it's a hit in 24 hours, but we never find out. these are the black box -- yesterday, you had bill miller in one of thee most exciting interviews, and you heard what he talked about. the market capitalization of the company is too small given the fact it's internet tv and guys at linear. that was a constant theme. they are linear. we're internet. internet takes over the world. we're the internet channel of the world. that's a compelling thing for the $47 million stock. at one point, people dumped on

that one domestic count, and them people believed and believed and believed. come in this morning, there's more uncertainty about the chip data again. talk about narcos. >> look at netflix, do you say to yourself, hbo or time warner is undervalued? meaning -- >> i thought they were. >> one or the other. >> jeff, a great american, we have to point that out -- >> always. >> felt better about time warner after that even though time warner's programming -- >> you would be happy if they traded at 60 times. >> right. >> time warner is remarkably higher than the margin of netflix. >> i know. >> does that say anything about amson and walmart? one is rewarded for inkrcredibl growth. >> every quarter, there's a massive round trip after hours. >> people have to understand this conference call is not the typical conference call. this is continuity of the

analysts asking the questions of the world, and there's a narrative, up and down, bobs and weaves and tells a great story. i loved it. >> how important is reid to the stock? >> oh, geez, you know, this is -- it's not kevin plankton on under armour -- >> almost. >> it is almost. almost. >> they would be netflixers -- the believers? >> the netflixers. >> yeah. >> like from another -- >> it is. there's more, you know, ill intent for many of them. a quick break, and, you know, you think about news, it's okay to have entertainment value. look at the millennials saying john stuart was the place to get news. think about that. we get a little wow. wow, that one was good looking. we're waiting for goldman sach's quarterly results. when we come back, the list of stocks to watch and maybe a little surprise ahead of the opening bell.

you push a person, you know, and you are not sure when it's -- >> here it is. i knotted it up, i'll knot it again. >> it's that time. >> wait a minute. i think i might have -- oh, yeah. let's just get rid of this sucker right now, okay? watch closely. >> this kills me, mark. if i had known this would be what would have happened, i didn't know -- >> no more tie to make fun of, joe. en end of tie.

at ally bank no branches equals great rates. it's a fact. kind of like ordering wine equals pretending to know wine. pinot noir, which means peanut of the night.

thin skinned about anything? no. >> you have never -- >> so far no signs of intelligent life, but i'm going to find if if i have to tear this universe another black hole, i am going to find it. i've got to, mister! >> darv and her sister, larva. feels strange doing this. i feel like i look strange. >> do you want to irritate people? >> me? absolutely. >> that was a major faux pas. >> i made it through, blake, and you didn't cry. that's good. ♪

>> wow. >> that hair was inkredle. >> i miss that hair. >> incredible. >> could be worse. >> looks good. that was -- >> did you see when shatner was in? i did that same imitation of jim carr carrey, but what happened? >> i was supposed to read. >> i'm just telling you. >> i saw that. >> said fire this person. he did. yeah. >> i used to love him. well, we are back where it all started, sitting across from each other, reunited, you heard the song, and it feels so good. we have stocks to watch today. >> one, walmart. >> penguins, of course, which, i wanted lemmings, remember, falling off a cliff. this was in the period when analysts were completely sold out because they were all about just investment banking. there they are. we like to point out, of course, in praart, they were all backwa

looking, couldn't find lemmings, but we found penguins jumping off an iceberg. three or more downgrades of one stock. >> we do. we have it. there was no wall street firm to obscure. we could get to three. >> used to be four, but then consolidation got it. >> you remember, what was the name of the pen begins? they started making very successful penguin movies after watching this, dancing feet, whatever it was? >> we had a penguin come in once. >> we did. >> "happy feet", and there was a sad movie about what happens because it's cold. >> yes. >> i don't know, they are hud e huddled together, very sad. what was that? "march of the penguins," all inspired by "squawk box" as well. >> i think that's clear. this morning, joe, we have a downgrade on credit swiss, downgradining stephens. thanks so much for all of that

insight there from those ammists who saw something they didn't like yesterday. some -- thing. >> i thought he should be named mcmillion, but andrew was right -- did you see that yesterday, add the "i", and you are mcmillion, and he said one other person suggested that. guess who? >> who? >> donald trump. >> you and trump would think alike. >> he was here, massaging comments. he thought he prepared the street for those numbers. >> yeah. listen, the communication strategy part of this is secondary to the story itself, of course, saying, we're not going do see level earnings from this year until 2020. >> right. >> fiscal year 2020. but it is interesting that he chose to come on with you yesterday and blind sided, really did, everybody. >> here's where estimates are. what is that? he did say 15 billion. >> yeah. but it's more about the wages. >> the wages.

>> and increases result, although it's 1.2 billion, and they paid morgan 100 million. >> is that what we decided? >> i don't know. it was a big number. and then the investment in technology. the stock yesterday. >> your face is close to mine. you could kiss mine on that shot. >> oh, i could kiss -- look at that. are we wrapped already? are we going? remember when we used to say -- used to do transfer mode? >> yes. >> self-propelled platforms. who was that? >> i can't remember. >> come on. >> i can almost -- >> glg industries. >> fuel for gatorade. if you're on the field. time now for today another avenue flak trivia question. when squawk box launched in 1995, it replaced what show?

the answer when cnbc's "squawk box" continues. aaaa-flaaaac. someone's sandbagging. i'd be tired too. he paid my claim in one day when i got hurt. one day? serious hustle. serious duck. in just one day, we process, approve and pay. one day pay, only from aflac. ah!

now the answer to today's trivia question. when squawk box launched in 1995, it replaced which show?

the answer? "the money wheel." >> hey, wait a second. >> what is this? what is this? what is this? >> he had nothing to do with it. i'm here shamelessly. >> that's low, cramer. that is low. i can't believe you planted this guy everywhere. >> we're everywhere. we're like that. thank you very much. >> welcome back, i'm carl quintanilla outside the "squawk" studio on this throwback thursday, here for the 20th an verse try of squawk box, and time for a round of rapid fire. are you ready? >> i was 2 inches taller 20 years ago. you lost 2 inches. >> we just mentioned xilix, reporting on the quarter, first upset in ages, and positive read

through with what they are doing, it's communication chips, a strong quarter. >> hca. >> shocking, preannounced last night. i thought that went away with the affordable care act, but it's down, and reits to ten and shocking, shocking. >> kr. >> all right, now they went down with walmart 1.4%, putting the kibosh on a deal that a lot of managers wanted because albe albertson's has great same store deals. they will be pushed back, but the data coming to the market, and we have to see how badly it does, but albertson's is the casu casualty. >> ge? >> that's tomorrow. there's a great concern about what happened with delta yesterday. is there a wide bodied glut? now, how do we rebutte that today? you need to know about this because ge is heavily aerospace. they got to clear up the idea there's no going forward in order to make ge stand tall

tomorrow. don't forget peltz buys back 40%. >> the great interview yesterday. >> you have an easy job on "squawk on the street," don't you? >> i could do that. >> then you just say interesting. >> interesting. >> and done. >> and then you go, oh, delicious for the "today" show. >> oh, that's really good. >> there's something in his mouth. there's nothing in his mouth. >> when we come back, quarterly results from dow component goldman sachs, expected any minute, breaking down the numbers as soon as they hit the tape. we continue in a moment. .

carl quintanilla -- that's right. >> what's happening? when you're not confident your company's data is secure, the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.

"squawk box's" newest member, carl quintanilla, great to see you. welcome back. >> i feel like when sitcoms introduce a new character. >> you're an old character. >> one killed off and brought back in the afterlife. >> god are you handsome. >> welcome to the new squaux here on cnbc. i'm becky quick with carl quintanilla. >> do you want to be fresh today? >> i wanted to be fresh, absolutely. >> welcome back to "squawk box" on this throwback thursday. we have the whole gang here today. jim, david, carl back with us today, and, guys, we talked about how the show's bare great when there's breaking news and run and go into action. we have more than our fill with the financial crisis, though. a lot of things that were happening constantly, and reran clips, but not much from the financial crisis, but, david, that was a time when you and steve liesman were coming up

with new things and telling us about it. people were watching it. i remember during that time, we read the newspapers here, i threw out the papers every morning because people were happening and changing so quickly. >> yeah, i mean it was rapid fire in a period not just days, but weeks into months on what was going on and required reporting every single second, and it was a great opportunity to, obviously -- >> things happening that couldn't happen. >> i still don't think they could. >> right. >> behr sterns when it closed that day? what was wrong? i thought it was an indication that was 1- 2? >> yeah. originally it was 2. >> i remember, i was a contributor then, coming on the next morning. >> shaking the machine, like, that stupid thing, right? >> unbelievable. >> it was. >> can't happen again, can it?

can it? >> it can't. >> the bank of america quarter, in this quarter that jp morgan did, your wells fargo, the amount of capital they have is absurd, turning back capital. it really is app amazing time for the banks in terms of the regulatory, the environment, and bank of america added more regulatory guys, more lawyers just for internal. now, they were able to get rid of the justice department, but they are about regulation first and making money second. i'm not kidding. >> what's that mean? >> they are all penalized for what dick was saying, a series of bad actors, and you could argue that, wait a second, jp morgan, the whale, everyone was so-called in on it, but i'm just saying that you don't have -- you have a huge capital cushion this time, and i know that it's fashionable, the democrats are still arguing glaing what higth clinton is saying, but i'm

confident in the banks saying it's ramped up to the point where they don't make nearly as much money as they used to because of the capital. >> do you think that has any knockoff effect on the economy as well? >> well, lending was good, 10-15% numbers in lending, very positive. actually, talking to rick santelli yesterday, you feel like the fed should tighten with the language going on. >> wells had strong numbers in terms of up numbers, but it's hard to get a mortgage. when you hear people trying to, jim, and you talked about this a lot. >> oh, yeah. >> it's difficult. one wonders if there was a loose enning of standards, nothing in the 2000-2006 period, but loosening maybe for more activity. >> there's a comment in the jp morgan call they are doing jumbo or keeping them on the balance sheet, but bob said over and over again rs it's really hard, and it's hard unless you're rich and don't need money. >> we have to talk about goldman sachs, numbers just hitting at

this point. they are coming out with earnings of $2.90, a penny below expected. revenue now is 6.8 billion, and that is below as well. street looked for 7.12. >> stock is down. they ended the relationship with business wire so they put it out themselves. it's not on the website yet, but we are getting a few headlines on the wires meaning someone has access. >> that's funny. >> hoping for better numbers. >> what's the most important one there to look at? investment banking? >> ficc. >> 1.46. >> hurt in trading. that can't be that good. >> bank of america not that dependent -- >> i'll tell ya, not to take it away from the merits and earnings themselves, but this question of how they are releasing the earnings, the fact you can't get the earnings from

the website. >> release is now on the website. >> now it's on the site? >> yes. >> some people have it, others don't. raising questions about how all the things happen. >> carl, i'm on the invester relations page. >> tweeted out a link to the details of the conference call and release itself. >> right, just got that. >> ranking first and worldwide, announced completed mergers, accusatio accusations, year to date, investment banking revenues, 4.8 billion, highest performance for the first nine months of the year since 2007. we'll talk outlook of banking in tech as they hold the innovators conference out in california. >> blankfein making obvious comments, lower level of activity and declining asset prices in the third quarter too. >> yeah, well, i mean, fixed income is a difficult -- certainly has been a difficult area for the number of investment banks recently and lack of activity. we talked about what's going on in high yield as well. just in terms of trading.

>> the conference was a seminal moment of the call, twice, look, people on the sidelines, sitting on their hands, and if you're wells fargo, they can sit on their hands if they want. they are a national community bank. there's tension among the bankers. they feel that the ceo of wells fargo gets a free pass because he did not engage or did not have the kind of trading distance, but wells fargo is steadier than goldman. zb right. >> worth noting in the investment banking area, m&a transaction backlog, the pipeline effectively, saying increased compared probably obvious at the end of the second quarter of 2015 and end of 2014. trying to figure out when the end is near. may not be near just yet. >> in terms of? >> m&a activity and what they say from the pipeline p perspecti perspective. >> one wonders whether capital

markets will be any sign or any source of strength for them in the future in terms of equity, and i mentioned fixed income is more difficult. m&a keeps going. >> one thing that's important is i always see goldman the most transparent. the book is $171. the idea that goldman sells at book is just -- well, i'll call it insane because they closed the door, they make money. >> blankfein doesn't offer a lot in the way of color, but to the degree he does, we experienced lower levels of activity and declining asset prices in the quarter, reflecting renewed concerns about global economic growth. >> right. >> yeah, see, wells fargo is worried about, you know, how new york real estate's doing. it's doing great. just different narratives, and wells' stock not hurt near as badly, but the interest margin is a key metric, down a basis point. this is the model versus -- in the new world, goldman sachs is not swinging around the trading desk making a fortune. >> no. looked like walmart's start from yesterday, jim.

>> geez. >> talking about a yearlong chart, walmart's chart looks the same, worried overall. >> the comments about it. >> it's a rolling bear market. i see goldman at $5 and $6 tangible book values. that's like bank of america. >> look at shares of walmart too, joe referenced that. >> what you charted. >> right. yesterday big news, but concerns about what's happened with the global economy, and this stock got hurt really badly, though, down 10% yesterday after the retailer predicted poor profit and flat sales at the analyst meeting in new york. the ceo. doug mcmillon, joined us, and we asked what he planned to tell analysts. >> right now, walmart is the second worst performing dow component of the year. what's missing? what do you tell the analysts? >> that's part of the issue. there's people who buy the long term story and others won't. the question is, how long is long? we'll try to answer the question today. >> how long is long? >> normally we provide guidance just for a year, and we're going

to talk about three years out today, and we have not normally done that. that'll help people get their minds around it. >> what do you see three years out? i think that's been part of the problem when people were looking at the estimates for fiscal 2017, which starts next year, they were looking at earnings of more than $7 as recently as the beginning of this year. those numbers are come down drastically. >> i'll share numbers later today, not now, but we'll talk about revenue projections, earnings projection and what we need in capital and judge for themselves. >> that they did. the stock down by 10%, a harsh selloff, not what the street expected to hear. as a result, walmart's ceo went back to cnbc to talk to jim on "mad money." >> it's great we give visibility into the next three years because this is not a one-year situation. what we're doing is investing dr. >> lower than people thought. don't you think there needs to be a lease this morning before "squawk," something?

>> people knew $10 was coming for a while. this news today is just that we quantified it for everybody. >> jim? >> well, look, i think first of all, it's great he came back, because, of course, there was a need for explanation. second, he pretty much said, look, we either do this or we that slow bleed, death by a thousand cuts. >> meaning higher wages? >> yes. >> get in front of the pr. >> they had to put money in e-commerce, but i will say this, i think that mcmillon thought more people were wise to what had to happen and going back to the 2015 letter where he references why they spend more, you don't get the feel that things would be as dire as they were. he's trying to reverse that. give him credit. talking about revenue growth which people gave up on growth. >> that's true. in fact, they raised the target for revenue growth from 1-2% to 3%. >> i like that. >> yeah. although, where is that coming from? >> well, he's saying because of

the results of investments and the idea that -- >> they have seen that customers coming into the stores in the united states spending more money of the that was -- >> right. >> that was a bright point. >> look, the guy came on, give him credit in the idea he believes and it's possible to spend more and grow revenues. i think what happened is that something that we referenced, which issings wow, this is really a long term. you have to wait a long time. >> you know, when they made the announcement originally earlier in the year, amazon is a moving target. >> right. >> so in that time, having to -- even attempt to catch up with the guys is -- it doesn't just stay static. you have to run faster. >> this is exactly right. one, you need a culture, and college, you get a college, you don't get a college degree by working at walmart, although, there's doug mcmillon paying managers more, and starbucks, in terms of innovation and retail, it's happening quickly, and square deal, we've not talked about that, but it's a situation where walmart is playing

catchup, and he's trying to get ahead of that by spending a huge amount and buying back $20 billion of stock. i said, listen, is that a good use of the capital? he talks about the cash flow being huge. >> do you worry, though, there's other companies that effectively over earned in the past several years that need to catch up, and the fact they pay everybody more, all a good thing, forces other companies to do the same, and, therefore, you kick the bottom line? >> costco the biggest competitor, they pay more than anyone on their website, the best benefits. starbucks, costco, chipotle pay the most of the retailers, and they have the most prof profitability. >> there's concerns about mar gyps overall, right? >> right. >> they peaked in the productivity gains? this is a theme you hear, and has there before enough investment to the point, andrew, and, therefore, does that hit profit margins? >> yeah. he thinks margins come down

across the board. >> a year ago, we talked about income inequality in earnest, the point was made, is it somewhat true that with asset holders having done so well in recent years, i.e. walmart share sh holders, is there a time where some of that should have been accruing to labor rather than shareholders? i still don't think that's necessarily, you know, the answer. >> it's hard to believe. >> it'll happen through market forces to keep good talent, you need to do it. >> because we can't have attrition. we have to pay people more because we need people in the jobs dealing with our customers. >> what shareholders lost in walmart since the beginning of the year, is that really -- is that a -- understand, guys, let's understand costco, jim, the co-founder, said, listen, we pay a fortune, why? because we have the lowest turnover, biggest expense is 30% at training. >> carl, what's wrong? you're getting out the daily news. >> you hear stocks? >> oh, god, i'm out of here.

>> we got more for you. >> let me just do a couple of them, but keep that going because -- >> oh, wow. >> you requested this. >> i have not heard that in a long time. >> is lucky with us? >> he is. he's not aged well listening to this for five years. >> i thought it was an act that you didn't like the animal. >> yes, it's fun. >> all right. check out the dow component. united health earnings and revenue topping forecasts. and then you know the favorite song we played. yoko. oh, god. >> hate it. >> oh, this is drive away people. >> driving away people? this is what we are all -- water, something like that. wait a second. >> oh, did you see john lenon in the background? i love her, i don't want her to be mad at me and i want to get some, but i'm not going to play in this band that much.

he never said i'm out of here. >> get some acclaim, did he? >> yes, get acclaim for this. exactly. we have to break, but before that, we have to let you know what's going on because what happens behind the scenes at squawk, it's a tradition, i'm not good at it, but the word game, jumble, found in newspapers around the country, and joe, carl, and becky used to play every day, and they kept score for years. the rules are simple. unscramble the first four words and then the circled words to solve the puzzle. look at today's jumble, joe, becky, and carl compete in the commercial break, and we'll reveal the winners and answers when we come back. it's in the daily news if you got it at home and it's on page 33. ready, set, go!

happy to welcome and introduce andrew ross sorken. >> he's in the seat. that's what's going to happen. >> carl, i'm in your seat. >> it's your seat now. >> andrew is here. >> oh, hi. >> watch out. >> make him cry.

>> don't tape me when i listen to andrew like this. it's too painful. these are my brown shoes. ♪ i'm too sexy for my shirt >> may be in the market for a car. 500 is the budget for the helicopter, and then -- >> all from a guy who -- >> this is my -- >> wait, wait rs wait. >> there. >> save that. save that. save that. >> you're looking right now -- well, looking at me right now, but you are about to look at the answer to today's spoiler alert. it was a steel was the answer, and the winner, though, was -- >> becky. >> best win ever. >> whose the winningcarl, you'vg long. >> this is may weather and

pacquiao here. >> my shoulder hurts. the rotator cuff. >> throwbacks. >> you do it in your sleep, i think. i wonder when i watch you in action. >> you joked about that. that was a good -- man, he came up with stuff. >> the names. ? yeah. >> he really did. his ability to franchise every part the show. >> right, branding. >> yes. i want you to wear this on your head because i need you to say who you are, a dollar sign represented by man. [ laughter ] >> remember the helmet? >> right. >> oh. that's what i was going to say. do you remember the management we've been through? >> yes, i do. >> all of us. >> 20 years brings a lot of them. >> we have great ones now, but what a roads gallery along the way. >> i should get us to break

before we go much further. >> well, there was a particularly bad day in the market. do do right. >> there was the red cross helmet. put it on, heard from the genius manager at the time who said, don't ever put that on again. you're almost fired for putting that on, and then over the transit in the old days, there was a fax, one says, love the helmet, mark. help calm fears, a great thing to do, and we gave it to the middle manager in charge at that point who once told me, i am cnbc, this guy. anyway, and then it was okay. >> yes, then the helmet was back on. >> the ceo of ge. >> we got to thank everybody for coming on. what a blast. dave, carl, jim. >> happy 20th, everybody. >> we have to wear helmets. >> viewers are sending answers to the jumble now. >> we got it. >> get down to the new york

stock exchange. see them again in an hour, but richard parson is joining us and walter issacson, talking banking and the future of banking. stick around. back in a moment. hello, ken jennings. i haven't seen you since that tv quiz show. hello, watson. you can see now? i can recognize people, analyze images and watch movies. well i wrote a few books, did a speaking tour, i... i've been helping people plan for retirement. and i help doctors identify cancer treatments. is that all? i recently learned japanese... yeah, i was being sarcastic. i haven't learned sarcasm yet. i can help with that.

♪

happy birthday to "squawk box's" 20th birthday. very young. >> "squawk box," happy birthday, many more. >> happy birthday to "squawk box," it's been a great 20 years. >> joe, becky, andrew, "squawk box," happy 20th birthday, you're doing good. >> i'm hannah davis, and i want to wish "squawk box" happy 20th anniversary. >> happy 20th, "squawk box." >> i want to wish a happy 20th anniversary to "squawk box." >> happy birthday, "squawk box," congratulations on 20 great years. >> congratulations to the "squawk box" on their 20th anniversary. >> congratulations to ja"squawk box" on their 20th anniversary. >> keep up the good work, keep it business, not personal. >> i want to be on the 40th anniversary show. book me, will you?

when a moment turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. 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. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. they speak louder. we like that. not just because we're doers. because we're changing.

big things. small things. spur of the moment things. changes you'll notice. wherever you are in the world. sheraton.

earnings rate continues, seconds from citi's results, number, and state of the financial sector from former citi group chairman. >> barry diller wrong about the future of the media? >> i'm saying the evening news, it has an audience, but that audience is declining. it's no longer relevant.

>> walter issacson of the aspen institute is here to react and share views of the next 20 years in technology and television. >> it's a special throwback edition of "squawk box." >> so far no signs of intelligent life, but i'm going to find it if i have to tear this universe another black hole. i going to find it. i got to, mister! great moments over the last 20 years just highway as the final hour of "squawk box" begins right now. ♪ >> live from the most powerful city in the world, new york, this is "squawk box." >> hello. >> welcome back to "squawk box" here on cnbc, first in business worldwide. good to see you. dick parson's here, and other

notable notables we'll get to in a second. futures at this hour after a ragged walmart session yesterday, up 62, more than that earlier, but that is a little bit of a rebound. europe looked okay for most of the morning, but almost not responding to what happened over here since it was so company specific and maybe they decided it was not a necessary mandate or somehow telling us how the u.s. consumer is. maybe it's more walmart specific than consumer overall. citi group is out with the numbers, and the first one i see is 1.317 p. >> street looked for 1.28. >> above expectations. the revenue number the street looked for, 18.5, right? >> 18.5. >> 18.7 looks like. that is above as well. both numbers not bad, and you can see the stocks up almost up

2%, however, wow, 51, and dick parson's expecting 5, isn't it? >> and 10 citizents. >> that's true. >> deposits at 7 billion, assets at almost 1.7 trillion, deposits at 897 billion, and e colluding this, it was 18.5. the revenue is right in line with expectations. purse is 36 million shares. lower expenses helped the company make its quarter, but that's been, you know, that's almost, you don't call that a nonrecuring item because it's been there every quarter with how they couldn't stay at the levels they were after the past couple of years. goldman reported. >> they did. >> you're andrew, right? >> i am. >> okay.

>> opposed to in. >> opposed to walter here. >> oh. >> do you know -- >> no relation. >> no relation. >> different guy. >> totally. >> you came anyway? >> oh, yeah. >> as long as you know. >> he's the one i know. >> talking about stocks to watch this morning, goldman sach's earnings and revenue short of estimates. the shares now, you are looking now down about $2, a little over $2. analysts downgraded shares of walmart after the stock was slammed yesterday. we talked about it, cutting ratings on wmt today. also, netflix fell short of estimates, video streams services, subscriber editions blame their forecast, ongoing transition due to chip based credit card. a lot of people getting new cards in the mail, and that created turns, at least that's what they are saying, the stock traded down worst than output, came back, and analysts say it's a buying opportunity.

blackstone post the a larger than expected quarterly loss. the stock market drop hurting the value, of course, of the portfolio. >> all right. today's special guest, dick parsons, senior adviser at providence equity partners, former chairman of citi and time warner andfuls the senior white house aid under president ford and serves on the board of estee lauder and current president of the aspen institute, former chairman of cnn, editor of "time" magazine, author of "steve jobs," on on the board of united airlines, and, gentlemyegentlemen, thank being here. >> worked with dick parsons for many, many years. >> talking about media right away, but before we do, dick, thoughts on citi? we showed a few headlines. >> not surprising, they have been in a long term recovery,

but they really regained their balance, and, you know, i've always believed when i was there, and they got the premier banking franchise globally, and over time, the market will recognize that. they continue to rebuild and be strong in my opinion. >> gentlemen, talk about media because that is the common tie between you too. we had barry diller here this week. and, walter, dying to hear what you think about this. he said that news in general is dead, like, old line news, unless it's locally focused. what do you think about that? >> that's not true. you want to know what happened every morning, whether it's this show, twitter notification. >> television news. >> oh, evening news. >> oh, evening news. >> well, once you comb it down to the, you know, the evening half hour newscasts, sure, those are less well of an event.

>> 25 million people still watch it. >> also it helps, the agenda, reading the next morning's people it is because of what was on the pbs news hour or network shows. >> you can tell from the advertising, though, that it's old people. i don't think many millennials have incontinence or need pills to keep them in bed at night. i know all the side effects of every pill from watching the nightly news. that's the age you're talking to. >> that is the problem. the problem is not -- it's who is watching. when you see generationally, i saw a recent survey of incoming freshman, asking how many of you formed the habit of reading newspapers every day? 1%. 1%. >> 1%? >> 1%. none responded positively saying, who gets the news from

an edited credited source? they get one line. if you look at the generational shift, as you look at the tide that's coming in, i don't know if it's dead, but it's going to change. it has to change. >> one of the things that make it useful. the major networks in the cable model, they have to, you know, bundle it. if you say at any time i want, in the evening, i could watch a great evening newscast on my tablet or computer, that would make life easier, and it's still just surprisingly hard to do that, like, i want nbc nightly, and i want it in at 8:15. >> right. the network's protecting the bread and butter? >> yeah. protecting the fact that, you know, they are part of the cable. you can't just put all the stuff out for free on the internet. >> is that the right move? because then it becomes the question of how do you get -- >> the real question is whether the cable model break up, and we talked about it. when you have sports, this wonderful revenue model that

comes from cable, it's hard to walk away from that, especially since other business models have not been developed yet, but television is, like it says, television's the new television. it's still strong. >> dick, it's hard to argue that a la carte is not on the way. >> speed, how quickly does it get here? i don't see the cable bundle fully breaking up, but it is little by little. sports will hold it together for a long time, plus, you know, there's the, you know, i have cable, the bundle, and my biggest problem with tv is every time i turn on the tv, i have not turned it on in so long the kale box goes out. i don't know. just goes to funk, but would i move from the bundle to something that requires me to actually think about what i want to watch, a movie? no. >> what's the tipping point then in. >> decade long move in terms of millennials who don't ever --

>> i know everyone likes the sort of storm surge model of disruption. >> right. >> me? it's more like global warming. i mean, the tide is coming. >> when you see -- >> no, no, no. >> when you -- >> don't do that. >> we see the data. >> satellite data. >> talking about the data of people, cable, bundles going down. >> harping back to the fact yesterday, and i asked les moonves, i'm watching it again, and it's not on abc or cbs like it used to be. it's on channels i can't find. i have to keep the bundles right now. it's hard to make money because people pay up for it, but i have to keep the bundle. remember basketball with college? there's -- channels i never heard of. i have got to have. trutv? >> the ceos of the world, they are clever people. they are clever people. they are going to mix and match and combine things that keep you in just that status as long as

they can, right? and when i think back, going to mention a bad word, walter will cringe and throw something. to our merger, time warn eric, 2000, right? harkening the new age, about a quarter of the things that we all anticipated would happen around the corner have happened to point in time. if i were to ask you, what do you think warner brother home pictures, dvds and blu-ray, what percentage of total revenue generates comes from hard copy carriers opposed to digital? >> 75%. >> you're right. >> am i? >> three quarters. >> still? >> still. it doesn't happen like people think. i turn a switch -- >> that's how i get my movies. >> sometimes, boom, there's a demand, uber comes along, the taxi industry is disrupted in a couping years.

there's a pent up demand, and if somehow or another there's an ability to get what you want when you want on any device you want, that's what consumers want. that's what they want, and that demand is there. >> i get it, but if you ask me, if i have to bet 15 years from now, who is going to be out there taking people back and forth to work and so on and so forth, i still bet the yellow cab over uber. >> would you pay for a medallion? >> price of a medallion has gone down what? >> massively. >> yeah. it's still expensive. >> yeah, but medallion is 750, 800,000. it was up over a million, but, you know, not to say i use them, but it's a new model and bigger and new competition for them, and i don't know that it'll, you know, will be as durable as yellow cab. >> you look and think like vice media, that's the future of news? >> i think vice is going to do a nice job with hbo, and then if i can get it when i want, it's cooler, i don't have to figure

out how to watch on appointment on a cable box, yeah, i'll start watching it. >> instead of a nightly news? >> i'm one of the last people in america who still kind of is with kathy, my wife, you know, we, like, let's turn on the evening news while we get ready for dinner. >> lester's great, i understand why you do that now, lester holt, right? >> like him a lot. >> you are an example of the generation. it's declining because you and i, not these folks, are going to move into our next existence, but it's time. >> what do you mean? >> retch peopich people? you don't include me? people with a lot of money? >> i was with you, but the rest weren't. >> you mets or yankees fan, dick? >> both. i'm a new yorker. >> tonight? what are the ratings going to be? >> a new york team, i'm for them. >> l.a., new york. >> they should have taken them out the other night, but i think

the mets will do it. >> they would have won if the right call was made on the slide, right? >> all the calls have been weird recently. >> i'm back on baseball. i don't know why. cubs? >> cubs. >> well, it's fun. >> it is fun. the poor cubs. >> oh, okay. you are a mets fan. getting political with this morning's guest when we get back. they come into this iworld ugly and messy. ideas are frightening because they threaten what is known.

they are the natural born enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.

welcome back, everyone, watching the futures this morning. take a look and you'll see this morning they are still indicated higher, but off the higher levels seen earlier. earlier, triple digit gains for the dow, which, remember, down by 200 points at one time yesterday, ended the day down 157, and today, bounces back by 67 points if we open at these levels. s&p futures higher by 11, and nasdaq up by close to 25. dow component goldman sachs out this morning talking about the earnings. the stock is now down by about $2.50, decline of 1.3%. the numbers of goldman sachs, numbers looking at earlier, in line with a little bit lower

than expectations, at 2.90 versus 2.91 that the street looked for, and same with revenue, almost in line with expectations. another subject with the two guys, and we all like to talk politics, necessarily -- i don't know do you feel like an expert, dick, walter? >> i used to be. >> used to be until this year. >> let's do it anyway, and not a lot going on this -- in this election really. >> we should run dick for president. >> i feel tlihis is like a purp panel here. neither one of you are fanatically one way or another, i don't think. >> we're not fanatics. >> worked for nelson rockefeller. >> that's the problem in politics these days, the number of fanatics increased. >> i walk away saying, rhino, but that's enough for me, because, you know --

>> that's too much. >> it's actually progress, but we can -- which side do you want to start on? your side or his side? >> oh, talking democrats or republicans. >> oh, you know. >> immediately. >> well, obviously, to be the debate, well, hillary clinton, you know, pretty much changed the narrative there. i don't think vice president biden can get in, and i think, you know, started with the nomination. >> started with mccarthy, and you know as a member -- the media's waiting to welcome her back in the follow and stop talking megatitalk ing negative things. couldn't wait. larry o'donald, whatever the name is, the perfection of the clinton campaign was sitting at the bottom of the screen for, like, five minutes. the perfection of the campaign. >> well, she had a really good debate. >> she was -- those guys she debated, they are not going to damage here because they know they are not the nominee. ?

right. >> people on the other side are trying to knock everyone else. it's like "survivor" there. they will be dirty, under cut the guy on top. >> yeah. >> i think you have that in all the words -- the house speaker -- >> bernie sanders, would you be upset bout e-mails? >> no. >> that's what i'm saying. the debate says, okay, she's going to win it. >> the mccarthy thing is the gift that keeps on giving. >> yeah. i think, you know -- >> no, not joe mccar ththy. >> this is an entertainment phase, that's new about the cycle, but then they get serious. >> this was some in the pasting but we didn't have -- >> getting the nomination. >> didn't have the social media. >> getting serious, we had a wild entertainment thing, whether it's the house speaker's race, republican debates, everything. you could end up with the fever

breaking, and getting the nomination, which seems probably most likely, and hillary clinton getting the democratic nomination, and paul reign, you know, getting the house speakership, and the fever breaks, and all this clown shows -- >> still going? >> i think the clown show ends, and the fever will break. >> dick, do you think that? >> no, i don't think it's rubio. >> then who? >> conventional. >> jeb bush? >> probably. probably. a serious candidate, serious credentials, and he's a nice guy. >> neither of you think we'll wind up with a front runner? >> that's true. saying that all those things about jeb are true, it's him or rubio but they both, you know, respectenblable good nominees. >> we don't know though. christie is not -- people laid him to rest. he's not been totally gone, but

who else? >> casic. >> more establishment lane and whoever wins that one, which is jeb bush, marco rubio, maybe christie, one wins that lane, and then you have the -- what i call it the nonestablishment lane. >> the donald. his numbers have not diminished at all up to this point. >> getting a nomination at all in. >> i think that -- i don't know how -- this is what i've seen, that even in the republican camp, his negatives have gone down below 30% with republicans and his positives are up above 50% in some polls. >> even if he doesn't get the nomination, he's the spoiler. >> up conventional candidate. >> how can he do that, though? how can he become more conventional. there's a lot of anger. >> he did capture, you know -- i

mean, how good is that, really? for anyone? i don't see him getting out of that groove, the people who are just angry, had enough, i'm not going to take it anymore. at some point in time, he's got to spread to, you know, people thinking about what's in our best interest as a country, my best interest, and there, that's a tough summit. >> who is watching "saturday night live"? >> if i get the tv to turn on. >> that's going to be -- >> a hoot. >> and it's going to be big. >> it's going to be a hoot. the other thing i have to say, he's probably the one guy out there who is really enjoying all of this. >> yeah. >> you know, all the other people, it's a slog. i wouldn't do it myself, but this dpguy's having a ball. >> networks with debatings that are enjoying it too. >> in terms of the guys in the race, though. it's a hard call. >> it's tough. >> i wonder if he'll look for app exit strategy because i

don't think he can seem to glide past through the presidency. >> he might. i think he does. >> okay. a quick break, continue the conferring, and when we come back, a check of the markets as we head to break, take a look at this throwback thursday moment. ♪ it's just the two of us? you are afraid, yeah. i can bet? 100. yeah. >> okay, all right. >> what do you have? >> four as. >> four aces! >> look what i have. i win.

welcome back, everybody. a quick stock to watch today, phillip morris posted better than expected earnings in revenue. they are impacted by negative currency effects, about everybody else who trades or sells intergnarly told us the same thing, adding overall, the overall business outlook is improving. when we come back this morning, inflation data, cpi data, and jobless claims. the professor will be joining us on this special throwback thursday. no -- oh, i thought we were bringing back the easel. that left us, but steve has not. he's here in a minute. u.s. equities higher, dow up by 87 points.

welcome back, everybody. we are just a few seconds away from the jobless claims numbers and the cpi data, and rick santelli is standing by at cme in chicago, and rick got a flight back yesterday. take it away. >> all right. here we go. jobless claims, 255,000, down, 7,000 from a 1,000 lower revised 26 originally release of 263, continuing claims, 2.158, so we'll call it 2.16 down from 2.08, call it 2.0 1. september inflation, headline, down .2. doesn't sound terrific, and hoping to pay more for things because that means we're better, but, no, it is as expected. you strip out the included energy, and it's up .2, a little hotter than the .10 expected.

maybe year over year core at 1.9 is something to look at, it was 1.8. we expected 1.8, and that was the high water mark of the year, 1.8. how many times? this makes one, two, three, four, five, this is the sixth time or six tames we had 1.8, and now we have 1.9. last time we had that was july of last year. last time 2% was may of last year. maybe those are the long term things to realize or pay attention to. stability, price stability, and 1 prepondera 1.8, a lot close to 2%, growth half of expected you see where i'm going. all is well with stocks. stocks are better. it's interesting, stocks are better, but what's going on with the treasury complex? 2% is elusive on a consistent closing basis for tens, meaning

lower, happening several times since april. is this the time it's going to change? i personally don't think so, but we could call it home base for a while. andrew, back to you. >> thank you, rick. we appreciate it. over to steve with more, crunching the numbers, doing something there. what are you doing? >> gasoline prices down almost 30% year own year. andrew's favorite category, airline fares -- >> yes, i know. >> 6%. you never knew it flying in and out of laguardia. that's fair enough. >> makes me feel better. >> medical, a huge political debate, up 2.5%, lower than the general trend of things. apparel for anybody who is interested in apparel, down again, and used and new cars down 0.2%. look, here's the fed's inflation dilemma. look at what's happening, the core is up 1.9% as rick said, up a tenth compared to previous readings. all items, the headline is

unchange year over year. this -- yellen has specifically said she has confidence that inflation will be back at 2%, and the reason is because of a couple things. you have the strongle dollar, this commodity downdraft. they start to work out of the system. you had shepherdson on, and he points out, getting rid of the comparison to last year, it works its out. and then, on top of that, layer these extraordinary claims numbers, 255,000. the job market looks to be healthy, some sense inside the federal reserve that the last two jobs numbers, prerhaps coul have been an anomaly, leading to the big debate of the day, the notion of what the fed does this year. we had talk on cnbc, and saying, you know, i don't think it's beginning to happen this year. october, i believe, is off the table. i still believe december is a

live meetings, but don't get excited about it because we'll go into the meeting with full knowledge of two jobs reports. if the jobs reports are healthy, if we begin to see a turn around or revision to the two prior jobs numbers, boom, we're back on -- back on check for a rate hike this year. >> i have to close my bias. >> pointing out what -- two things, one, what the fed funds futures has said, which is that they are beginning to discount december, it's .33. that turns around like that. despite the confusion. religiously i believe that more talk is better. walter's a journalist. you're journalists. >> we love it. keeps shows like this alive. >> talk by the fed is better, not me. not me. more talk by the fed is better than less talk. here's the thing. jobs came in weaker. the market adjusted to it. it worked well. >> any way you got the biggest retailer in the world, any way

you say that's just walmart's problem, nobody else's problem? >> what we know for sure is that retail prices are falling. >> right. >> so what's going to happen is that you're going to have this upward adjustment, probably, in some categories, to the retail sales number yesterday. it's somewhat stronger than it appears because of the real number. look at real retail sales, joe, inflation adjusted retail sales, they are not too shabby. >> look at the real walmart stock price. >> i know. joe, e watched walmart -- go ahead. >> take it away. >> no, i just think that -- starting at the end working back to the beginning, there's zero chance the fed moves on rates this year. zero. because the indicators are trailing indicators. what happened in the past? looking at forward indicators like global trade, they are headed in the wrong direction. it's too risky out there for them to sort of back up and jam rates up, i think. i think interestingly, one of

the changes that i've seen in this show, you now report when you brought on companies, you report where they are in the stock buybacks, right? >> yeah. >> you never did that in the past, but it's such a rigorous thing now, like every company that's hemorrhaging cash, buying stock back instead of what? investing in productive use of the capital. >> yeah, but walmart invests in use of the capital, invests in its own business, it's killed. >> yeah. to some extent because of the mark marketplace. can it be that walmart was, you know, 10% off? can it really be that it was worse -- excellent one day and 10% worse the next day or wrong before or wrong after? >> what about the macro? that's the question joe's getting at. walmart telling us something about the consumer that -- we know gas prices are lower. we know more people are employed. we can talk about the quality of the jobs, and there's a useful debate about this, but you did a

study on the institute, and it's finding 80 cents on the the dollar on gas savings. >> doing something they did not do before the bust. they are saving. savings used to be minus 2%. >> and the walmart numbers show -- >> people are not stupid. they learned last time. >> who was murphy? did you know murphy? did he know anything? the guy who invented the law? did you know him? >> i was related to him. [ laughter ] >> if he was right at all, the way this would work was we'd have a new slow down before getting out of the action from the last one, putting us where we never did. we never were able to raise, and here we are dealing with another slow down. that's murphy's law. if you saw that, you get another problem. >> so there's actually a theory, a real theory around this, sorry you brought that up -- >> you've done work on this? >> yeah. rich, a mop tear policy expert over at columbia, a bright guy out there, basically talks about

the reflect nature of monetary policy. they become data dependent, and they say they are going to hike, causing the economy to downdraft, and they will not hike, and then the economy goes up, they say hthey hike, and thn the economy -- it's a never ending loop. the hamster on the exercise wheel. >> if it's going to go wrong, it's going to go wrong, right? >> i'm sorry, what happens if you were to strap, joe, the -- >> who was murphy, though? you don't know? do you know? >> i was related to him. >> you don't know him either? >> i'm trying -- >> what do you talk about at the aspen institute? >> look at what walmart's doing, making sure prices do not go up. . that's what they invest in. they invest in markets, but you don't see wage inflation happening new. so i don't see any real pressures to raise rates. we talk about this all the time, but every piece of data here says why do you have to raise the rates now? you're not getting wage

inflation or price inflation. >> because of what dick said. >> that's why they do the buybacks. >> they borrow money for buybacks. >> what about capital at the table? shouldn't there be some positive effect of paying workers more and then they spend? i mean, they would have a larger -- >> right. >> a higher marginal capacity to consume their wages than the shareholder would to spend his or her -- >> other than the people looking at their 401(k). >> that's true. >> upward shift in the wages and wage bill. sorry, folks, that's capitali i territory. >> and they came back on cramer's show, that was good, and that makes sense. we have not got wage inflation yet. >> we've. celebrating our 20th anniversary of "squawk box," and you're a key member of the team, celebrated with bernanke two weeks ago. we talked about a lot of things, but you've been here how long? 13 years? >> 13 years, yeah.

>> 13 years, everything from the financial crisis to fishing and we've something on the throwback thursday. take a look at this. >> uh-oh. ♪ >> fly fishing in 30 miles per hour winds is what we live for here. ♪ >> he's been praised by presidents, savaged by presidents, bern bernanke. >> secretary lew, thank you for joining us. >> thank for having me. ♪ >> becky's at the easel with the old professor. >> which is this -- caution outlook will vary by region. ♪ >> wow. >> see how young bob looked

there? >> hey, can i just point out -- >> eight years ago from the time life building. >> kind of you to do, it overtakes the fishing. >> didn't get half of your stuff in there. >> it's been a great 13 years and a terrific show. terrific show. >> thank you for being with us. >> who is before you? was it -- >> marcy -- >> and before her? >> kathleen. >> my strongest memory is how nice david was and app drew and becky. >> yeah, yeah. >> karen gibbs? what about joe? [ laughter ] >> remember when we had a real person that had business and had done actual -- >> the crisis is really my biggest memory, 6:00 a.m. every morning after working until -- >> talked about that before. coming in, read the papers, and e threw them away because there was nothing in it that mattered. >> it was a big shift for cnbc and "squawk box" when -- this is

a big media story, and i feel like cnbc leaped ahead of the papers, things happened in realtime, and if you read about what happened in the crisis in the newspapers, you were late. i remember being on set here when the phone would ring, and it was a significant official. >> not only that, the papers were not precise and thoughtful about the crisis. they were chasing a story. you guys were in front of them, and they were not adding anything new. >> i was writing the paper at the time. >> can we end the show now? >> you were just coming on the show because you had stuff you couldn't put in the paper because they opposed that. >> exactly. >> and in is always been a place where people have come with some of the leading ideas and executives come on the show. i mean, you know, ben didn't launch the book tour here for nothing. he knew it was a place where -- >> smart. you're here now, mainly, right? you saw the future. you saw the future. you sold all your stock holdings, didn't you? you're not holing on to that

stock? >> my new york times stock? >> someday maybe you can have wall paper of that. anyway, when we return -- lv wh love when i do that. today's special conversation with dick parsons and walter continues, plus, goldman sachs under pressure this morning.

you wouldn't order szechuan without checking the spice level.

it really opens the passages. waiter. water. so why would you invest without checking brokercheck? check your broker with brokercheck. welcome back, goldman sachs missing the mark on top and bottom lines, and joining us now is marty mosbey. good morning to you, marty. how close, understanding what

happened here, what are you worried about? >> what you have to look at is the variance in revenue and what is the source for that? it's really investing and lending, which goldman sachs gets little credit for. look at what they typically produce from their investments and private equity, somewhere between 1.7 and $1.8 billion, in this quarter, they only produced $700 million. that's a billion dollars worth of variance creating this particular quarter. >> what did you do today? >> what you look for here is pressure, moving back to book value, trading at 7% premium, growing as tangle book value at 7% clip each year, and a year from now, you trade on tangible value. there's a good entry point here, a good yield, and we think that the temporary pressure on revenues will bounce back as we think -- >> to be clear, book value puts this company at what price right

now? >> it does. it's really the floor. as they grow it with the returns that they are able to create, you know, on average, they produce 11% return on tangible common equity. they are able to do that because of what you see in investment banking, although banking was weak this quarter, you look at the pipeline, it's the biggest it's been since 2007. you look over the first three quarters of this year, it's the strongest results had in investment banking since 2007 itself so there's a lot of momentum based on interesting customer demand. >> marty, thank you, appreciate it very very much. >> great to talk to you. >> getting to our guest hosts, future of banking, and dick, walter, i have to ask you this, goldman sachs, where the market place is right now, we had first data under the ipo. we had the other ipos -- >> looking good. >> the other ipo pull. where do you think we are? meaning, there's a lot of m&a, but is it -- you know, are we at

the end here? >> not on the m&a side. >> no? >> no. as things continue to blow, as they will and emerging markets continue to grow, which they will, the business remains strong. >> for how long? >> for the foreseeable future. >> on the targstock market too. >> i am, actually. the conventional banking, it's tough to be in that business in a zero rate environment. >> i have to ask dick a question on conventional banking. is there some disruption that happens now? you know, digital currencies, anything? >> yes, but -- yes, but, that's a long way in coming in my personal opinion because, you know, the trust factor, i mean, human habitats do not change because technology changes. i agree with you. convenience, you know, anywhere, any time, what i want, when i want, all of that, that matters in the entertainment space. when it comes to people's money, not so fast. >> we're going to --

>> i'm just saying it's tough when you can't -- when you can't get a sort of fixed margin, what you end at in terms of what you take in in a 0 rate environment. banking is difficult. >> we'll continue the conversation with dick and walter in a moment. up next, though, no need to head to the nearest tesla dealership for the latest update on your model s. the company is pushing it out over the air to all owners. we'll have the details next. (cole) alright, now that we have merged with cableworld,

we are so excited to hear your big ideas on how we're going to take on directv. so over to you. (newhart) thank you. full disclosure. we forgot to come up with ideas. (cw exec) yeah, we got messed up last night. you're lucky we're even here. (newhart) but, we did bring breakfast. (jmh) bagels? (newhart) nope. (woman) oh my goodness. (newhart) peel and eat shrimp. (cole) not how i would have gone but it's good, it's innovative. and that's what we want here. (vo) get rid of cable and switch to directv. call 1-800-directv.

. . . welcome back, phil lebeau is here. he took a ride in the autopilot in tesla. >> it is called tesla autopilot. new software. we tested it out on the west side highway here in new york and more than a few people who were saying, really, you let this car do the lane changing without holding the steering wheel. that's the whole idea. autopilot allows lane control, access racial, braking, auto lane collision, sight collision avoid dance that will let you know if you are going to run into another vehicle. >> you take your hands off the vehicle and it does it? >> yes. they make it clear this is still

in the beta test phase. the recommendation is that you should not go into this thinking that i don't need to hold the steering wheel. the system prompts you to hold the steering wheel. well, if you think this is as far as it is going to go with an autonomous drive, listen to what elon musk had to say. >> in the long-term, people will not need hands on the wheel and eventually, there won't be wheels, wheels and pedals. >> a steering wheel is what he is talking about? >> this technology is coming along quickly. i felt comfortable and it is very intuitive? >> what do you mean, it prompts you? >> it says on the instrument panel, you need to hold the steering wheel. theoretically, if you wanted to disengage and doze off, you could try to do that. they are trying to keep you engaged while you are behind the

wheel. >> the wheel not wheels. >> he did not mean hover kraft. >> another congratulations on 20 years. be back in a moment. as we go to break. opportunities aren't always obvious. 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. the great beauty of owning a property is that you can create wealth through capital appreciation,

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welcome back, everybody. we have one more opportunity to talk to walter isaacson and dick parsons. what should we be covering that we haven't gotten to? >> the dysfunction in washington. the fact that if they don't elect a speaker of the house, you have a government shutdown. >> andrew, are you saying no? >> no, i'm agreeing with you. >> you could have an easy way out, which is to have somebody respected leak a paul ryan. he is going to have to figure out how to get at it. or you are going to have the 40-person freedom caucus block that. you are going to have a bad problem. you talk about the fed raising interest rates in december. they are going to have to wait to see if there is a speaker of the house that will allow the government to continue. >> we will actually see john boehner do something and get a deal done to get us through the end of the year. make sure the incoming speaker of the house, whoever it is. >> that's through the end of the

year. >> i think that's possible. they are in a mess right now. walter is right. they don't know which way they are going. i think ryan would be -- i think he is going to emerge. i think he is playing a clever game of trying to use his willingness to be a candidate to bring people together. it will be a while before that emerges. >> do you think it is possible he would do it and take some democratic votes to get in? or would that blow up the republican party? >> potentially down the road, not now. >> if i were him, i wouldn't do it. then you are beholden to the 40 people. >> i'm not talking about you specifically. i think it is really endearing that all the democrats like paul ryan so much now that he is not on the national ticket for presidency. i saw on "saturday night live" they had a skit with chaffitz.

you wouldn't want someone with a lot of experience who has done this, like paul ryan. i thought, did i hear that on snl? >> what do you think about paul ryan? >> i like him a lot. he has been on the show a dozen times. i like him a lot but i think he would be great but i think he would be crazy to subject himself. the same way if biden was to run. they would tear the guy apart. >> the biggest economic news by the end of the year is whether or not we are going to close down on december 31st, which is when they are going to close down? >> the fed is going to have to wait and see thichl. this is the big one. >> we are going to be waiting and seeing what's happening but that's not moving this year. i think i agree with you. >> thank you, both, for coming in today. it has been a pleasure having you here. >> throwback thursday. >> we are not doing more

throwback thursday. >> we are not doing more 20 year stuff. we are going to do it again. 1995, good year. >> we are guest hosting on the next 20. >> you guys are going to come for the 8:00 hour? >> no, no. we will be outside there holding little signs of you all. >> "squawk on the street" is coming up next. it is the biggest ipo of the year. first data going public at the big board today. the pricing about he low the expected range. we will be all over the trading action and talk to the ceo. good thursday morning. welcome to "squawk on the street." i'm carl qintanilla with david faber. a lot to work with today. earnings from goldman, citi and