>> 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 rosss sorkin. among today's big test we have the labor picture. the october adp report is due at 8:15 eastern time. the economy probably added about 180,000 private sector jobs last month. let's check on the markets this morning and again after two big days of gains you're going to see some green arrows once again. dow futures up by 30 points this morning. the s&p futures up by 1 and the nasdaq up by over 10. >> let's get you caught up on the other big stories we're watching this morning. it's on the front pages of the

papers. volkswagen understated the fuel consumption of 800,000 cars sold in europe. the latest revolution represents more than a $2 billion economic risk. meantime, porsche's north american unit is discontinuing some of the -- how do you pronounce this? i always never know. >> cayan diesels until further notice citing allegations of emission cheating as well. shares trading sharply lower right now. more from our european colleague wilfred frost who is going to be here on the set. >> is he here today? >> here. >> yesterday i saw him overseas. >> he's right here. i just saw him in the hallway. >> very tall. >> very tall. in other news, honda is dropping air bags by takata after they were fined and ordered to stop using a potentially dangerous chemical. 8 deaths have been linked to the air bags.

glencore getting a boost today in european trading this morning. the company announcing it's on there. they plan to make deeper copper output cuts to help raise prices. >> other stocks, the shares are getting crushed right now. down about 25% revenues fell short and hit by sluggish sales in north america and lower revenue from its international business. it's current quarter revenue forecast also -- well, you could say it was the $4 stock. it's worth -- it's getting down close to $2 billion. meantime the company says it's co-founder is stepping down as ceo but he'll return as the role of chairman and chief operating officer. rich williams is going to take the ceo role. how we happen to have a picture of him is beyond me but we are

multial len multi-talented here. nobody in the world knows if that's him or not but we're saying it is. >> his parents know. >> his parents know. maybe. >> he might have forgot. tesla higher now despite a bigger than expected quarterly loss. the auto maker promising to speed up production of its electric cars and orders are picking up for both the new model x suv and the model s sedan. let us know when you got the minivan ready for becky. that's what we're waiting for. >> i like my minivan just the way it is. >> they won't do that. that would be a death nail. i think the stock would be -- >> even as a minivan driver i understand that tesla is never going to make one. >> they would lose everything. >> guys are the ones buying these things. >> right. >> you have a husband. >> he made me put my name on it. >> really?

>> yeah. the lease is only in my name. >> and in the game space, zynga. >> you are a weirdo. >> i am. trading on the top and bottom lines the mobile game maker also announcing a new ceo and plans to delay the launch of two games until next year. i don't know about this stuff. yesterday we heard about -- have you played candy crush? >> i have not. but i saw the deal. it's a big deal. >> i saw the game and it looked -- >> it's a fun game. it's a game you would like because you like brick breaker. >> but i don't understand that game. it just looked like you were shuffling around little things. >> you have to match things up. >> it's not action. you weren't driving around a racetrack or shooting anything. >> if you're a brick breaker fan you'd be into that. >> i got off brick breaker. >> you had to wean yourself. dangerous. let's get another check on the markets this morning. you are talking about green arrows this morning and after

yesterday's gains you saw stocks closing at the highest levels for the dow in late july. also for the s&p 500 and composite. it closed at a record high and passed it's record it set back in march of 2000. take a look at what's been happening this morning in europe and you'll see at this point it looks like there is -- some green arrows when it comes to france. the cac is up by almost 1%. the ftse is up by 1.1%. the dax is flat lining at this point. take a look at last night in asia. hang seng is up by 2.1% in the shanghai composite was up by 4.3%. crude oil prices actually rallied yesterday. you saw the energy sector leading the way when it came to leading the stock market after crude oil was up by 4% to a three week high of $47.90. up another 6 cents this morning to 4796. and the ten year yielded

yesterday it's highest level since september 21st. it was sitting at 2.22%. this morning you can see it's just under that. a 2.209%. in the foreign exchange market you'll see that the dollar is up across the board. euro at 109.27. gold prices this morning look like they are up slightly. $3.50. to $1,117.60 an ounce. >> the new york times conference covered by cnbc which we did all day yesterday -- >> that was a marathon. >> thank you. it was. that's where i was. that's where i was. >> what was it? >> excuse me? >> what was it? you were interviewing people. >> i was interviewing people -- did you not watch your network yesterday? . no, you missed it. >> i thought you were looking at schools again or something -- >> no, no. >> i saw it. i saw it. >> lots and lots of headlines.

>> the conference brought together some of the top investors and playing for the long-term. all taking on that topic. >> if you start trying to manage the short-term stock price you're chasing your tail. so the key in management is you have to have your stable long-term successful picture and motivate people both employees, suppliers, investors toward that picture. >> we're in a bubble. >> we're in what i would call short-term behavior if that makes any sense -- >> so as an investor -- >> by the way at all four levels i talked about, government, business, the fed, money managers, it's rampant in our whole society. >> the s&p 100 companies are paying out 108% of earnings

through dividends and stock repurchases. that's just not -- that can't last. >> you look at the companies we bought over the years, i was surprised myself about the long-term that we do. many activists are not sure of the term. the real money i made over the years is holding companies for 7, 8, 9 years and keeping them. >> it's interesting because carl was sort of the clean-up batter at the end of the day and went through all of his ownership. we think of activists as short-term owners. he was going through stocks he still owns 31 years later. >> like what. >> names by the way that are not -- none are the big names but where he actually made huge amounts of money. so it was interesting to hear given that we put a lot of attention on the activists forcing the short-term and there's a biased toward that. >> but i would say some of these guys are interested in the short-term because they talk to the media because they're trying to get a little bit of attention

to what they're doing and sway the stocks that way. >> and the other piece, hastings talked about his shareholders, this is like amazon shareholders. are you short-term or long-term? and he was arguing that they're very long-term but he has to deal with them in the short-term because his employees constantly look at the stock. so it's a very complicated little dance. >> no sound bites from al gore. al gore? i understand he wants to put exxon in a lock box along with social security, no? >> he did argue that exxon should be investigated. >> there was a lot yesterday. >> was there any talk about how much co2 you and all the rest of your friends were expelling into the atmosphere yesterday. >> we did not get into that. >> i saw -- >> you were checking. >> 70 degrees this morning. supposed to get to 70 today. clearly on the deal book

conference. >> all right. how do our three hours usually do? >> we have plenty of that. >> let's talk about the markets again. the dow continuing it's steady advance toward the 18,000 mark despite speculation of a possible rate hike in december. the fed will be hard pressed to move at that meeting. simon smiles is chief investment officer and simon, thank you for being here. >> thank you for having me. >> we watched the markets come back from these lows that we set in august and september and now you're talking about potentially looking at newer highs. does that make you uncomfortable? does that make you feel like things are doing very well at this point? >> the market overreacted to a concern over china. a concern over a wider emerging market crisis that spilled over to general resentment. it matches how quickly the markets fell in august and september and so in a world where you have very

accommodative central bank policy you have economic growth and you do have earnings growth. we remain optimistic on risk assets. >> that's justify case kags for why we saw the rebound but do you feel comfortable with stocks at this level? or do you have to dig harder? >> with respect to u.s. equities we have a more neutral bias but when one moves across the pond to the euro zone there's still attractive opportunities and when i talk to clients, they are looking for opportunities there and it's a combination of economic growth. in europe we're seeing the economy continuing to grow after a number of years of no growth or, indeed, contraction. the most recent pmi is favorable when compared with the u.s. or china. earnings growth is coming okay. 7%. we're about 60% of the way through season. 15% last quarter. perspectively we're expecting 8 to 12% earnings growth and then finally quantitative easing. that could be comments from draghi yesterday. >> is that almost playing the

central banks off each other though if it looks like rates are going to rise? that will also benefit europe as an alternative location. >> but obviously also from a weaker euro. we have a three month target of 105 on the u.s. not a significant move from the 109 today but still should be additional support to corporate earnings in europe. >> what are some of the themes you like? i know that cancer therapudics is one that's mentioned. >> europe and european assets in general is the topic but when i talk to our larger clients they often look at longer term themes and perhaps it comes from being entrepreneurs that built their own businesses and made their own money or inherited businesses their family built through generations. they're willing to take a 5, 10, 15 year view so they tend to be focused more on long-term trends like demographics, population growth, aing, et cetera.

and at the moment oncology and cancer theer pudices is something that seems to be take a lot of focus from our clients. >> is that something where they look at a scatter shot and they're looking at a lot of different companies? particularly if you're not sure how this is going to play out or is this the type of thing where you say bet on this stock. >> it's not just stocks. people are a little concerned about valuations within the bio tech space more broadly. you talked about our market overvalued. i don't have a strong view but at least with respect to bio tech but at least the headline ratios seem pretty frothy. where our clients are looking is early stage. they're looking to invest with manager who is are looking at earlier stage, taking academic research through first stage proof of concept. so more venture capital. >> i think ge bought kiter and then they became -- and eventually it became ubs so my

money that used to be with ge is now with ubs. some of it. what do i need to be ultrahigh network? what do i need for you? i want a guy that talks like you managing my money. because just like actors that speak with an activities cent like that, aren't they like he's fantastic. he talks like that. emma thompson, fantastic. it's the accent. wilfred frost is here and talks like you. did you see him in there. >> if that's all it takes, i'll talk to you. >> i'm serious, how much do i need for you to care about my finances. >> we care about all clients and particularly yourself. >> ultrahigh network. >> with respect to ultrahigh network it starts with 50 million swiss franc. the average balance is typically much higher than that as well. >> 50. >> with ubs. >> and the average balance is higher than that. that was the minimum. >> i better stay with whatever.

thank you, though. can i dream, right? what if we pool? >> still not going to do it. >> feel free to call whenever you want. >> liar. >> thank you. >> thank you very much. you were laughing -- i knew i could play with you because when i was talking earlier you were laughing. >> i would buy a minivan from tesla. it would be awesome. >> now i'm laughing at you. >> coming up, auto news in a different category. the volkswagen scandal taking a turn for the worst. wilfred frost visiting from london. he'll join us with the full story right here on the set. but first as we head to break take a look at this date in history. ♪ the future belongs to the fast. and to help you accelerate, we've created a new company... one totally focused on

what's next for your business. the true partnership where people,technology and ideas push everyone forward. accelerating innovation. accelerating transformation. accelerating next. hewlett packard enterprise.

welcome back to squawk box everyone. do you get frustrated with poor cell service even in your own home? t-mobile says it has the solution. the company voluming out a personal cell phone tower today. it's about 9 inches tall and wide and plugs into an internet router. it's made to provide 3,000 square feet of lte coverage inside. the device is free to customers that pay their wireless bills each month. i kind of want one. >> verizon and at&t do this one. i think there's others that are going to like this.

>> it doesn't work in my house. >> are you on t-mobile then? >> no. but i'd get one for mike. >> if you had a generator and everything else went down like the media hits and isis or whatever, chinese, who knows, everything goes down, if you have a generator and everybody -- >> would you have the capability to stay connected? >> if you had your own cell tower and your own energy. >> it goes to the wire and the wire is going to some place else that doesn't have the energy. >> so it goes to a wire -- tell me again. >> every tower is actually connected to a wire somewhere. >> it's not wireless. >> no, it's not really wireless. >> really? >> no, there's antennas and they're attached to wires. underneath the ground or where ever to a central place and there's big wires that carry the stuff across the country and around the world. that's how this all works. >> i just learned something from

you. actually, to not download the ios stuff for a week. the new operating system. >> by the way, it was a mistake. i still should have waited. >> been only three weeks or a month. >> i know he watches the show. it's not working for me. i'm sorry. the phone portion of it doesn't work. i have struggled actually using the phone part. dialing the phone. getting your contacts. it doesn't work. there's a major bug in it. >> are you sure? >> it's wildly known. >> wilfred is here. we don't do this on cnbc europe. >> i'm loving it. i love it. >> we go back to the script. in global news, coca-cola chairman joined the conference yesterday and talked about growth around the world. the u.s. is looking better for the beverage giant but europe is still a question mark. >> we see a green light here in the united states for our business. and then africa is still probably the most dynamic

environment from a consumer good's perspective. europe the next three years i think is going to be better than the last three years but the horizon after the next three years it's still -- there's no light at the end of the tunnel in europe. >> and let's talk more about the big story out of europe this morning. the vw scandal. a colleague visiting from across the pond. worldwide exchange co-anchor wilfred frost. we might also talk about this meeting between taiwan and china. that must be getting a lot of play over there as well. they don't know what to call each other. they can't call each other president because they're not legitimate either way. >> well, exactly. that's an on going one and of course it comes off the back recently of the meeting between the heads of korea japan and the chinese premiere. not the president. it would cause a little issue if they're all meeting together. but that was a big step. that was the first of those meetings in four years.

>> is that why shanghai is up 4.5%. >> no, we had strong services pmi out earlier this morning which comes off the back of weaker manufacturing pmi earlier in the week. it's part of the transition that's on going. trying to shift from being manufacturing lead to more consumer lead but the services pmi at the moment is really on a tear. but it doesn't the whole picture. >> do you remember history class? remember. it hasn't happened since 1949 or something. >> a long time. taiwan is one of the key areas that china wants to reclaim but it would be very difficult for that to happen. >> we were allies of taiwan. we have to protect them, right but we only recognize beijing as the real government, right? it's bizarre. >> it's a strange one but those kind of set ups are different and obviously the hong kong government is a totally unique set up and it's a long way to go on that and it's a meeting at least. >> now we can talk about it. what's the bigger issue here?

that they didn't say how much fuel is necessary or that it now effects nondiesel engines based on co2 emissions. >> exactly. the deal was 11 million diesel vehicles. this isn't just a small extension of the scandal. this is, as you say, co2 emissions and a totally different engine type. now 800,000 extra vehicles coming in. volume kswag again saying around about 2 billion euros the extra cost of this. we have a quote i think we can have a look at from the new ceo and he is saying we will stop at nothing and nobody for us, the only thing that counts, is the truth. and i think for a lot of viewers of volkswagen that might sound rich but this is the new ceo. him releasing the information from an internal investigation rather than being caught up. but shares up sharply. >> we were talking about the us epa saying this is the 6 cylinder engines too and they're

saying that's not the case. >> the fact that this is on going highlights highly by the market moves. they're saying today 2 billion the actual cost of this. the market move on the market cap is around about 4.5 billion. so clearly investors overreacting and since it all started -- >> vw underestimating. >> exactly right. they provisioned for it with about 9 billion worth. the total market cap fall is 35 billion and it's hard to know how long this will go on for and the one final point i'll make is what the regulator looks like in all of this and it's embarrassing for them as well. bmw, diamler and that relates to the regulation issue. even if vw can sort out all of the issues on recalls and possible litigation the fall out could be globally on the sector and effects all players. >> the previous term is we will stop at nothing or nobody to cheat on these emission

standards because it was nitrogen oxides before and there's a device that allows you to put out fewer of those, to go to co2 don't you need a different device. didn't your engineers come up with two differ things to do this? >> that's possibly the case. what hasn't come out yet for the co2 issue is whether there was intentional hiding of the data or not. >> when they say there's $2 billion of potential economic -- how do they calculate that? >> we don't know. this 2 has been provisioned for yet. that's likely to be in q-4. but what we think so far is this includes the cost of recalls and fixes cars where necessary. >> and fines. >> and fines as well but what it doesn't include, the crucial factor when we talk about the intent for the diesel part of this is potential litigation and you'd have to think there could be a huge amount of that.

35 off the market cap so far. we're left with around about 50 billion today. annual cash flows of 20 billion. so they have some level of protection but, you know, anyone's guess is it going to be 30, 50, more total costs. >> and at this point wondering whether you can believe what they're saying. that's what struck with me yesterday is volkswagen saying no way. if i have to pick a side to believe i'll believe the us epa saying we ran the test and it shuts off a second after the test ends. >> we had a great bounce back in the share price in october. in fact if you look on a 30 day chart volkswagen is still up over 10 to 15% over the last 30 days even with today's decline involved. that shows how quickly the market was willing to get over the issues. >> it's been cut in half -- some people have even extrapolated to say the german stock market can't get going. >> right. >> but even the german economy which is the leading one in

europe, there's a lot of damage from this. >> merkel tried to defend this made in germany tag and says it doesn't tarnish the rest of germany or the rest of the auto industry but i disagree slightly in term of your saying the german index can't get going because the german index was more euphoric in terms of in october. in october the german index was up 12% so it had a very strong rally. >> so we can get back to new highs on the dax without volkswagen? >> well, volkswagen is an issue that resurfaced again today but the late october rally and moving forward what's really driving european indices is the dovish start out of mario draghi that we got late in october and it seems he of all the central bankers around the world when he make ace promise to do something he usually keeps it. we'll get some kind of extension in december. >> she may cite volutair volksw

shares. >> she might. >> this may have risen to the level. >> i know the debate with her and the fed has been when she has mentioned external situation it's been global slow down in the china and the like but for me i would imagine that the bigger concern for her outside of the u.s. is if on the same month the ecb is about to ease, potentially the bank of japan as well and what that means for the u.s. dollar and we've seen the spread go to the highest levels since i think it was march this year again in recent weeks because of course we got very dovish mario draghi and hawkish janet yellen. >> might be in the currencies. >> inflation is down the road and that was the end. >> i didn't realize the bund was below 0.6%. yeah. >> thank you, sir. great to see you. >> a real pleasure being here guys. >> come on back. >> so you have to be scottish to play bond?

do you think? >> scottish? >> isn't he scottish? >> daniel craig's not scottish. >> but it would help, you need a scottish accent? so they put regular brits in. >> he's english. >> no, sean connery. >> so you could do it, couldn't you. >> well that's very kind of you to suggest it. i went ahead of the release. we did a little package where all the bond films have been made and i asked him jokingly at the end whether he thought i had a chance of succeeding daniel craig and he laughed very loud and clear in my face so sadly guys i don't think -- >> daniel craig is like 5'3". those guys are quick with the karate because they can get in there. you're like 6'4". >> 6'5". >> yeah. >> you hunch. you hunch. >> they lowered the chair for me as i came on the set. >> thank you, again. when we return, squawk bearing

all. are you ready for this? innovation in the world of undergarments. we'll speak to the ceo of a company that just created the lightest men's underwear ever created. i'm wearing them right now. but first as we head to a break a look at this the s&p 500 winners and losers. 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?

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>> welcome back this morning. premium men undergarment brand launching the lightest men's undergarment ever developed. they are introducing a collection made from the most advanced fabric in the world. joining us is the ceo tom patterson and i should say the reason we're doing this, you came on the show, i want to say three years ago -- 2.5 years ago and i know we're not supposed to endorse products but the only thing that i ever talk about is the underwear i wear and the men's undershirt which is is how you started. >> he talks about it a lot. >> i talk about it a lot and people out there should i guess maybe know. you just created this new thing and i thought you couldn't top the one before. it's very strange to talk about men's underwear like this. >> top the t-shirt. >> i thought you couldn't top the t-shirt. he had underwear before and then he started this thing and i came in what two weeks ago wearing

the underwear. >> you're talking about bottoms. >> well bottoms and tops. but it's cold in here sometimes soy wear the undershirt. >> it's all underwear. >> so i started wearing it about a week ago and i came in here and said it was the greatest thing that ever happened to the planet. >> same pair? >> not anymore. >> boxers. >> i'm wearing the bottoms and the top and it's unbelievable. i want you to know. >> sorry. >> and i asked him once what is it that's so great about the feeling -- >> you don't even feel like they're on. >> with the t-shirt too? >> with the t-shirt too. >> it's probably evolved more in the last two years than the last 25. when you look at the marketing t hasn't changed much since the billboards in 1992 and i think the performance and technology it's being incorporated into men's underwear and i think they're one of the last things

that guys upgrade in their drawer. they upgrade their suits, their flip phones but they're still wearing outdated under wear. we tried to make it an experience. innovative fits and providing a functionality that allows you to look and feel great. >> here's my question. i complained about this before. this stuff is really expensive. this stuff goes for 30 or $40? how much does this go for in more now. >> it's ranges from 40 to 62 for undershirts. >> how big is the market. >> it's a $4 billion market globally. undershirt category is a smaller part. underwear say much bigger piece of that pie. guys wear underwear every day. not guys wear an undershirt every day. >> mostly i would say. i had a lot of questions. >> he was going to go with the no adjustment issue. >> so we have a commercial

called big adjustment and it highlights the problem that guys have with pinching and readjusting themselves throughout the day and when you look at most underwear videos it's a guy with his shirt off with the oil slicked 8 pack and we wanted to make it premium but also approachable and relatable and we show guys from military from the old couple to the 21st century guy really highlighting that it doesn't matter what you do, what race you are or what age you are, it's an epidemic. >> it's an epidemic. >> it is and it's mostly based in the front but there are even rear adjustments that need to be made. >> so much more information than i wanted. >> you don't have any problem -- well, you don't. i understand. >> but here's the other question, why can't somebody rip this off, i told buffet that owns fruit of the loom i said there's these guys making this underwear it's too expense. you should make it and rip it off. why is nobody able to do this? >> we have a utility patent

registered. >> what is it? it's for the fabric? >> no, it's for the design so we make the claim that our undershirt never comes untucked once you put it on. >> and it goes without saying no tags. i see that. that's the first thing you need to do, right? i had to cutoff a tag. >> it's tag free. it's lighter weight. it keeps you cooler. >> the key issue here, so this thing here, is that going to -- that will allow no -- let me get my hand in there. that will allow -- there will be no adjustment needed because of this little -- like it's a place where it's held. >> it's the fabric, it's the fit, it's the contour. >> so guaranteed no adjustment. >> no wedgey guarentee. the fly is not up and down. it's across. >> it looks like you can carry something in there. >> we call that the quick draw

fly. it's a faster more functional option for a guy that wants to use a fly but we try to incorporate fit, fabric and function. >> it looks like there would never be an accidental. some of the adjustments sometimes is like whoa. >> just like the video. >> so it can't get out of the horizontal. >> i think you should try it and come talk about it tomorrow. >>ly try it. are these mine? >> yes. >> is this a 32 waist. >> no, 34/36. >> that will be fine. 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.

40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.

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welcome back. emotions battled flooring retailer lumber liquidators has

a new chief executive officer. separately the company reported a quarterly loss of 31 cents a share. that was wider than the 18 cent loss that the street had been accepting. it all came as store sales fell 14.6%. an extension is still in effect after allegations about product quality. >> and in financial industry news, goldman sacks president chief operating officer giving us an update on the health of the ceo maintaining a busy schedule while battling schedule. >> lloyd is great: lloyd has the best spirit and the best attitude of anyone you would ever want to see going through a medical issue. and lloyd is approaching it the way he approaches everything in life. it's just another chore. it's just another task. it's just something else i have to deal with and i'll get through it. he's in the office every day. he's engaged. the days he's not in the office he's on the phone all day long and relationship has never been better so things are great.

>> more of the news making conversations from yesterday's deal book conference a bit later this morning. >> just out with quarterly results the medical supply giant with quarterly profit of $1.52 a share. revenue is in line here and set to recap the quarter. the ceo of henry schein and probably even your revenue number while it was effected was still positive and pretty good revenue increase. >> yes. about 8% local currency growth, joe. >> 8% local currency growth and for people that don't know and, you know, i think about it a lot, if hi to think about everything that my dentist has in his office, how many different products are there that are necessary in modern denistry. >> how many per day? 150,000 go out per day or something? >> yeah, we ship hundreds of

thousands of orders a day encompassing tens of thousands of products so. >> i'm interested in the veterinarian side as well but for some reason i'm sort of focused on the dental stuff because i -- you really need a good dentist because your teeth -- you only got one set, right? and you don't want fake ones because it's hard and you got to use -- they slip and you can't eat corn and i'm afraid -- everybody hates going there and there's the movies, rocky or whatever it is. littlep o horrors and steve martin and i wouldn't want to be a dentist. 8 hour ace day and one person's mouth after another but you're in a better position where you're selling them the stuff they need. but what does it entail? fake implants for example? >> dentists are rated among the highest professions if not the highest. >> they're not paid enough to do that 8 hours a day. >> i would agree with that but the exciting part of dentistry is the digitalization that enables you to get a scan and

walk out within an hour having received your new crown or bridge. >> you can't make the crown in an hour, can you? >> chair side. >> that i haven't seen. i've seen the digital x-raies. they don't have to search for cavities anymore. they'll do a quick digital x-ray. >> is that like 3-d printing? >> it's scanning. it is -- >> it's built right there. chairside and it's no pain involved at all and you can be in and out. >> what are the margins like for you? >> good margin for us. it's like any new technology. >> you haven't solved no pain at all at this point. >> the dentists get a bad wrap on pain. >> when the needle goes in. >> don't -- >> that's not a no pain. >> close your eyes and it's fine. >> laughing gas. solves everything. >> you don't want to do laughing gas. >> no but instead of a shot, yeah. >> not for a cavity?

do you? >> i don't know. i've had laughing gas. >> yeah, you can have it but the traditional -- >> nice. >> i can't -- >> the traditional shot is not so bad. >> the other thing that i was thinking about with the industry, you have doctor's offices consolidating. it's much harder to two independently. do they have better pricing power when they come to you? >> well, at the end of the day what's happening is moving toward wellness and prevention. we're moving from taking care of people that are sick to preventing people from being sick. it's about wellness, health care, not sick care so what we're having is more procedures taking place in the physician office and our physician customers are doing better. >> you are acquiring a company in italy. how much is domestic and how much is international? >> about 40% of our business is outside of the united states. >> is that where -- are you still growing in the united states? >> yeah, we're growing domestically and of course the opportunity outside of the united states is enormous because of the growing middle

class that want dental care and are taking care of their pets and want to go to the doctor. >> maybe we take it for granted. most people have some pretty good teeth around. the rest of the world there must be a lot of opportunity. >> huge opportunity. >> teeth all over the place, right? >> china as an example. dentistry is 30 years old. >> really? >> so the opportunity in china is huge. but the whole of the developing world has an opportunity and the developing world, people in the developing world are buying pets. >> buying pets as well. spending money on their pets. >> what medical products are involved with? >> all products. >> medical not dental. >> medical primarily vaccines which you would imagine are administered in the doctors office and diagnostics. >> great. so you have the business with dental and other stuff too. >> excellent. >> thank you. >> and technology is a big driver. >> technology. yes. digital. >> digital and the data big data is very important.

>> do not take your teeth for granted. don't. >> absolutely. >> you have to floss too. >> it's directly connected to good health care. >> i think you're right. >> i need to floss more. >> no more adjusting of the privates and now the dental. >> yesterday there was a sign that said if you want to think about skipping brushing your teeth for a night just remember all the billions of bacteria that are there on your teeth. >> great. >> coming up guys from a rejected vote on legalizing pot in ohio to airbnb, the results that had the nation talking this morning. ♪

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welcome back this morning, election day ending with interesting results at the polls. we have the highlights. >> good morning, andrew. off, off year election meaning no presidential election and no congressional elections, but it doesn't mean that there were not important issues on the ballot yesterday in election day across the country. look at the key issues starting with school funding down in mississippi. there was a ballot measure that would mandate so-called adequate and efficient public schools in the state. that was supported by people who said the state government was underfunding the public schools. that issue was rejected by

votevoter last night complaining it allows a judge too much say over school funding. another big one watched in the country was ohio, marijuana initiative. that ballot measure was backed by a former boy band member of 98 degrees and others and legalizing possession of small amounts of marijuana in the staid, but it would have limit commercial growing to just 10 plots of land controlled by certain investors. a lot of people in ohio thought that was a monopoly my. they rejected that measure. in houston, a measure on transgender rights that would have undone the houston equal rights ordnance, and voters opted to repeal that law, and critics complained it would have allow transgender women to use women's restrooms. also, in san francisco, this is a big lobbying fight involving airbnb over short term rentals, was the fate of airbnb in the city, and the measure would have capped rentals at 7 a days a

year, a fierce fight, but it was rejected. the airbnb side won the day on that one. a lot of issues in the country decided by the voters last night, andrew. >> hey -- >> yeah? >> obamacare and the opposition to it still works, worked in kentucky. >> yeah, absolutely. you saw this kentucky governor's race in which republicans ran ads linking the democrat to barack obama. he's unpopular in kentucky, and that won for the republicans. >> and it's going to have implications on kentucky's adoption of obamacare as well, right? >> yeah. yeah, absolutely. >> that was not a given either. kentucky has, i think, only had one other republican governor recently, right? mostly legislates -- >> i have to go back, but i'm not sure. ran against a senate majority leader in the past in a primary. this was not a guy seen as a natural victor here, and yet the

anti-obama television advertising, you know, really worked in kentucky, and you're going to see what's going to happen next year in 2016 when you have president obama off the ball ballot. you'll see republicans across the country linking whoever the democratic candidate ends up being as a third term of president obama. it's been very effective in certain states in certain districts across the country. >> all right. all right. okay. zblmplgt coming up, this morning's top stories, the news maker, former ceo, take on everything from the digital revolution to the future of news, talking with him straight ahead, and headed to a break, check out the futures, stay tuned, you're watching "squawk box" here on cnbc, first in business worldwide. ♪

♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪

[ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] ♪ my mom makes hospitals you can hold in your hand. ♪ my mom can print amazing things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] ♪ my mom works at ge. ♪

new this morning, volkswagen shares slammed as another crisis unfolds at german auto maker. the company now admitting they understated fuel usage on other european models. media matters, a slew of industry earnings hitting the tape this hour, plus, a major network launches a new ad free streaming offer and other announces investment advice. we have it all covered. come sail away, a shopping spree at the ft. lauderdale international boat show. sure, there are your average super yachts, but how about a personal submarine? let's hit the docks as the second hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york

city, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide, i'm joe along with becky quick and andrew, and the bulls making it three straight days of gains for the major averages after a great object, posting the highest close since late july yesterday, the s&p 50021 points away from the all-time high. the nasdaq 100 topped its previous record, which was set way back in march 2000 of the dot-com double, and this morning, futures are indicated to extend some of yesterday's gains, up another 40 on the dow, up almost 3 on the s&p, and 13 or so on the nasdaq. among today's big tests, though, the labor picture, and, again, if you can tell me whether we want, you know, big job gains or not so big job gains, it's -- where we go back and forth on what the guys want. the october adp report due at 8:15 eastern, and popped forecasters say the economy likely added 180,000 private

sector jobs last month, but leisman sayings now 150,000 keeps us going in terms of lowering the jobless rates. >> there could be revisions to august and september, the pattern over the last several years. we'll see what happens. the other top stories at this hour, volkswagen understated the fuel consumption of 800,000 cars in europe, and this revelation remits $2 billion risk, and the markets selling off by more than that. decline of 9.9%, closer to a 4.5 billion selloff on this. in the meantime, porsche's north american unit is discontinuing sales of the diesel suv, citing notions of the cheating devices, shares down sharply in europe as you can see. glencore cutting sales, and they plan to make deeper copper output cuts to reduce or raise

prices, shares up in the news in europe, a gain of 8%. sabmiller extended deadline for the rival anheuser busch for the takeover offer by another week. the move comes as companies work on shareholder support for the deal. we got stocks on the move this morning to tell you about. groupon sales crushed, hit by sluggish sales in north america, and lower revenue from the international business, current quarter revenue forecast is weak. the company says the cofounder is stepping down as ceo, returning to the role of chairman, and the chief operating officer, rich williams, takes the ceo role. catch him on "squawk alley" later this morning, and shares of tesla trade higher this morning despite the quarterly loss. the automaker promising to speed up production of the car, and orders are picking up for the suv and model s sedan. results are just in from time warner, earnings handedly beating wall street estimates,

estimates at 1.25, consensus for 1.09. revenue also beat the street. results driven by good numbers from warner brothers and from hbo, and just see if that's -- i'm not sure -- is that -- >> giving us 460, street in the middle of 465 for the funnel year. >> the -- real trade? e don't believe that's a trade yet because 7730 is the close. i have a 78 bid and 79.48 ask. you wonder why with the good numbers it's down, and i don't know when that trade was registered. at this point, looks to open higher. >> okay. three months ago, cbs, disney, and fox fell on fears that the current landscape would be turned upside down. today, the stocks recovered, lost a little ground, you came back, and earlier this year, our guest coast said a emergencier between time warner and cbs is a

deal that should be done. prepared to put money where his mouth was? now he says that much more consolidation is need. he's been a storied career, served as ceo until retirement two years ago, and president coo of viacom, former ceo of cbs, and he's on the board of the executive committee of autism speaks. we welcome him this morning. >> good morning. for the record -- >> yes, sir? >> the day after i was on, jeff was on asking him a question about the fact i said something about it. >> we played it back to him. >> said i was talking my own book because i, obviously, had cbs shares still. just for the record, i owned no shares of cbs, no media stock. i don't own sirius stock. >> what does that tell us? >> anything to tell us? >> nothing to do with whether the stocks are good or bad, but i, personally, i'm not invested

in stock market anymore. >> hold on. before we get into the media landscape, then, tell us why. what do you do with your money? you've done well over the money. >> cash. >> cash? >> you know this tina thing? >> there is no alternative? >> there is. keep your cash. you don't really need to invest money if you believe that the markets are not right. >> you don't have cash -- >> i have it in tax free municipa municipals. >> i know i guy like you has munis. >> the idea for me is that i believe that, particularly the area that i know bestings which is probably where i would be doing most of my investing, is in the media space, and i believe that the media space is all growing and being valued on the basis of the fact that interest rates are so low, they are borrowing a lot of money, they are using that money to buy back their stock, and at a time when revenues are growing so

modestly, the multiple that these companies are selling at are, like, all-time high market multiples, and now i don't think there's anything wrong with a high 17, 18 times earnings multiple when you are growing your business. when the region you're trading at that kind of a multiple is because you're able to borrow this money and buy back your stock and shrink your float and earnings per share go up because there's that fewer shares. i don't think that those multiples are the right multiples. >> but the multiples -- >>ed go ahead. >> the multiples because we're at 0 on interest rates. >> yeah. >> you just talked what they do with buying back stock is the not multiple part of the equation, but the earnings part. they are raising earnings per slar, and you're assigning the same multiple to a higher earnings per share, but the reason you're at 18 is because of the tina, which you said, because of the 0. >> because people are buying it, and they are saying that the

market's not overvalued because the market has been selling at that range for a quarter. >> exactly. but they are choosing earnings, not multiples. >> i speak fast. i don't know if you noticed that, but -- >> same multiple applied to a higher earnings per share from retiring the stock. >> different than getting that multiple when you're delivering bond. >> buying the stock back at a higher multiple, making no sense. >> by the way, the thing that's interesting, and i know that's probably not why i'm here, but the thing that's really interesting is that when all of these companies are doing record buybacks, there's not a lot of inside buying. >> yeahings right. >> you know, the exec -- >> the insiders, executives putting their open money in this? >> yeah. >> there is pay for performance in the stock, though. >> there is a question as to whether or not the insiders really believe that it's a great investment to put the cash to buy back their stock or whether or not they are thinking t irin.

they have nothing else to do with the money. >> to stay on the point for a minute, though, you thought this a long time, if you were already there the last time you were on in february or march, early on, well before everyone panicked on media stocks over the summer. >> i sold -- i didn't own a lot of media stocks. i owned a lot of stock, a tremendous amount of stock in the companies that i worked for. >> sure. >> so i had sort of a barbell philosophy that i was going to be fully invested in the stock market, but i thought any company that i was involved in would outperform anybody else, so that would be my stock market, and then i had everything in either tax frees or, you know, treasuries. when i left sirius in january of 2 2013, and i continue to believe in the company, but i sold all my stock. i never had much. >> i remember that day, big down day in the markets. rough day. >> i sold it.

i was -- stocks over $4, and today, and i told -- >> sirius. >> sold at $3. >> unpack this. imagine a reckoning of sorts come, but do you differentiate between the content players, the wireless players, and the pipes in the ground players? are they all in the same bucket to you? how do you think about it? >> in this regard, i think about it all in who's driving top line revenue? if you're a content company and can show strong top line revenue and you're a distribution company, and you can show strong tough top line rev new, you are equally good to me, but, if, in fact, you are, you know, i know a lot of people, i mean, i was looking at time warner, so i don't know how this year compared to last year, i know how it compared to, quote, estimates, you know, so that's sort of how good you play -- >> oh, i can tell you it was down. 109 was the estimate, but 122 was a year ago.

>> wait a minute, you mean stock is looking like it's going to trade up, and them the revenues are down? >> see, that was earnings per share. >> earnings per share, sorry. >> oh, okay, so -- you know, so, i mean, i think -- i'm not really speaking about time warner per se or any specific company. i think the general nature is that -- >> revenue's been up. 6.5 versus 6.it. >> okay, that was respectable revenue growth. >> so, but to the -- >> right? gdp is growing 2%. >> right. >> maybe. you know, you grow. >> to the extent there is a reckoning, what's the tipping point in your mind? what causes this all to domino? >> well, i'm not someone who can speak to the markets, so what you're talking about is, i don't think that there are these media companies that are going to be bankrupt or in trouble, you know -- >> you think there's going to be another big leg down? >> talking about valuation and whether or not when interest

rates go up and companies are not going to be buying back their stock as much and maybe the cost of buying it bag is going to be different, so stocks may not -- >> a lot of people don't distinguish between buybacks and using all the cheap money to do mergers, yet you want mergers in acquisitions. that might be wrong too. that might be misallocation of capital if rates were not zero. >> i agree with you if you make bad acquisitions. i'm not saying anyone sets out to do a bad acquisition, but i believe that good acquisitions, you know, are good. i think stock buybacks are good. >> some are. >> not all. >> ibm is not something to buy soon. 14 straight quarters of down revenue. b buybacks every quarter. >> hard to look at companies and see what price they paid for the sock, and it is higher than where it is now. now, no one's a stock picker,

you know -- >> a question on mergers. >> yes? >> you called for more conso consolidation in the industry broadly, from the content side, the distribution side, or most importantly, begin the tremendogiven washington, do you think it's possible? >> i'm not calling for anything, right? i'm giving you what my -- i was very paranoid as a ceo when things are bad, when things were bad, i was always looking for ways of making them better. when things were good, i knew they were going to get bad, and i was looking for ways of making it better. in my opinion, once you have gone through the basic stuff, you know, you've consolidated, you've looked at excepts, done everything you can do, now what is left for you to do to make it better? i believe one of the things that is left to do to make it better is to do some consolidation, so when i was the ceo of cbs, bob wright was the ceo of nbc.

hated it when i would say this, i wanted cbs to buy nbc. i didn't see why on earth somebody shouldn't be allowed to own two networks. look at all the channels out there. why do you need cbs news and nbc news? there's a tremendous amounts of benefits for shareholders, disruptive for employees, but significant amount of shareholders if the two twa companies, 15 years ago i said, should merge. fast forward to today. look at all the competition out there. who would care if somebody owned two networks? this, th fcc public standard is how many people don't have internet and are getting the signals over the air? i mean, do we think -- >> you made the argument how long ago? it's a different argument today.

>> it was anticipated. all i'm saying when i was making the argument, that's where we saw the future going. >> right. and, therefore, the regulators are out moded? they didn't -- they never look at it that way. >> well, i think we're still deal with the 1934 communications act, so for everyone to even reference that act today is archaic so, you know, someone should decide how many competitors do you feel you want in the radio station business? now, forget that radio stations compete with satellite and internet, but let's assume you want a certain number, is that four? if you had four owners, would that be okay? well, if there's 100 stations in new york city, that would mean one company might be able to own 25. what would be wrong with that? what would be wrong if one company, one company owned ten radio stations in a market where there's 40 radio stations,

hundreds of internet audio choices, satellite choices, you know, all of the video choices. what would be wrong with that? >> it's a longer conversation. we're going to take a break, though, and you're here for the rest of the show to keep the conversation going. >> all right. when we come back this morning, "squawk box" platinum portfolio members making a stock swap. find out where he is finding value. that's after this. "squawk box" will be right back.

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welcome back, "squawk box," another earnings trade, joining us on squawk newsline is the cio, and what are you trading out and putting in? >> caller: removing cbs. it's not a top three stock to continue to hold. it's not top three anymore, selling that because of volatility, and buying mohawk industries, the carpet company. >> what do you see in mohawk that you like? >> benefitting from high home sales, expanding internationally, and, you know, as long as the housing market stays healthy, they'll be fine. housing's plateaued here at a high level. there was an issue in the northeast last month, but hopefully that picks up again,

but that's -- you know, i'm picking things based on really strong sales growth, and mohawk has stronger sales and earnings than cbs at this time. >> third quarter results come out thursday, looking in $2 billion in shares and are you thinking they beat the numbers, or is this a play for the longer haul? >> caller: they have beat in the last four quarters, not big beat, but consistent, and their earnings grow fast, and they have upgraded a couple of the facilities, so i'll be looking at adjusted earnings and see what they need to beat. >> last week, you swapped out allergan, what was the theory there? >> caller: well, stronger sales growth, less volatility. the way our system works, if there's any stock more volatile, we start to punish it. obviously, they might make a play on pfizer, but, ha, timing was not perfect there, but, you

know, i have very strong sales growth in my portfolio. i really want my earnings to grow fast in sales because offering lines are expanding. so far, this quarter, they are not rewarding what i do. they reward deep value. there's been a lot of short covering, but usually when the dust settles, the strong sales earnings lead the way. excited about both the companies ultra and mohawk. >> leading the platinum portfolio dtoo, by the way, how much is because you're willing to trade out stocks quickly and continue to stick with the system? >> well, actually, i hate to say this, but i think ann's ahead of me now. i might be a little jealous. trying to catch her. so i have to give her credit for that. >> all right. >> the -- some of the changes are so that i can catch her. >> thank you for joining us, and talk again soon. >> caller: thank you.

all right. coming up, former walmart executive, bill simon, crash lands a plane and survives to tell about it. that story when "squawk box" coming right back opinion. time now for today's aflac trivia question. what animal is the most common sports mascot of u.s. colleges and universities? the answer when cnbc's "squawk box" continues. lac! aflaaac. 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! we heard you got a job as a developer!!!!! its official, i work for ge!! what? wow... yeah! okay...

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what animal is the most common mascot in u.s. colleges and universities? the answer? the eagle. welcome back to. scary story from fayetteville, arkansas, bill simon crash landed a single engine plane. he an two passengers survived after making a parachute landing. there was oil pressure issues in the flight from bentonville to waco, texas, he tried to make an emergency landing in an air fill, but the engine failed, so he used the parachute. the plane hit a truck traveling on the road, but only minor injuries reported. unbelievable story. >> what a parachute. how many of the planes did you ever hear of this? >> actually, my cousin is a pilot, and they have parachutes

in theirs too. >> more and more? >> maybe. i'd want one. >> obviously. that's amazing. >> i think it's really expensive because it's a one use parachute. that's it. >> yeah. >> yeah. >> wouldn't be flying around. >> it destroys the plane. it's, like, a -- you have to be sure to use the thing. >> right. >> but you probably don't care about destroying the parachute. >> that takes the whole plane. if the -- >> if the parachute's on the plane. it's amazing. >> oh, i didn't get that. >> great idea for a single end gin plane. coming up, more coming up, and janet yellen on the hill today facing the financial services committee. we'll talk to the chairman of that panel, jeb, and president obama calls him jim, a bit later this hour, as we head to break, u.s. equity futures.

welcome back, everybody, this is cnbc, first in business worldwide, and among the stories front and center this morning, we are 45 minutes away from the adp employment report for october, and analysts think the u.s. economy added 180,000 private sector job in the last month. falling to the lowest rate in years, and the irs cites budget cuts in the drop for audits. takata fined $70 million for actions surrounding detective product, and says they were not forthcoming with the test results. >> years ago, mel thought dimon should be the next commander in chief, and two years later, we have 17 candidates now from both parties. i don't remember you depositing the name of jamie dimon.

>> i absolutely did, and i absolutely did schulz from starbucks, i thought he would be great. if jack welsh were a couple years younger, he would be great, so, yeah, i mean, i thought all those individuals, not because they are ceos, but jamie would have difficulty because of the baggage of being from a bank, but if he were the ceo of proctor and gamele or just any other company, he would be a great ceo, and i know about his illness, but i just think he's looking and feeling great. >> sounds like you love outsiders. which is the favorite? donald? ben carson? carly fiorina? >> so far none of the above have i selected to be the one who i'd like to see beat hillary clinton. i think it's really important -- >> you want someone to beat hillary clinton? >> i really do. i think hillary is a very smart

woman, doing great things for the country, worked hard, but i think she would be a fabulous grandmother. >> have you ever voted for a republican, mel? >> i only vote republican. >> howard, if you -- ? i'm not talking about where they come, but individuals who i believe would be great presidents, and if i thought the democrat would be better, i would go that way. it's not, like, i'm, you know, grabbing a republican with all the issues. i tend to be more republican on the financial business issues, and probably more, you know, democrat on the social issues. >> exactly, but there's people who think that maybe we have learned over the years that private sector solutions are more effective than just bigger government and, you know, more central planning, which, you know, you take the 100 smartest people, they are not as smart as market forces.

>> i believe that. you know, taxes are a big issue, and the economy's a big issue, so the -- >> the biggest. >> i've worked my whole life, right? i started working at 16 years old, and i was never a founder, all of the money i made was w2 money, so even all of my stock was always in stock options, which i sold and paid ordinary income. >> you've paid the highest rates on every dollar ever made. >> and i live in new york city, so i'm paying a little bit over 50% taxes today, in addition, the money that i have after the taxes, in my estate, is going to be taxed again at about -- because of new york's 6% and 16% city, at another 50%. >> right. >> okay? so roughly 75% of the money that i've made has been spent on taxes. i'm not complaining about it.

i mean, i'm happy to pay it. the idea of raising taxes to me, for me, i'd with okay with, if, in fact, there was a revision of the tax code so i'm not here sitting here saying i want lower taxes. i'm fine. me, personally, i'm fine. i believe lower taxes are better, but personally, i'm not pitching for that. >> what do you want to see? >> tax free. you're a muni. as a lot of guys who have made it. >> yeah. >> they are in tax frees. warrant buffet. >> in other words, is it fair, that, you know, inequality, and, by the way, as a kid growing up, lived in the queensbridge housing project for 2 is1 years subsidized housing, and my family was on welfare, called home relief then, but i don't think i'm responsible for the income inequality. >> what do you want to see in a

new tax plan? because i think there is very overwhelming desire among voters, among the business leaders to see some sort of a tax reform, but the devil's in the details. what do you want to see? >> i'm open. i want it better. in other words, if you can't get it perfect, it's fine. so i know that -- >> talking on corporate front or -- >> both. i mean, i think it should be overall tax -- >> like 1986? >> if what the exact rate is, i'm indifferent. if it's higher than i'd like it to be, but we get the corporate tax issue cleaned up, and we get a streamline, we get a tax code that people understand, we can simplify it, i'm okay. that's what my concern is on a president is i want to make sure that the president -- i don't care what he or she believes because they don't get it done by themselves anyway. it's a negotiation. it's a give and take with their own party as well as the others. it directionally has to improve.

if you can't win, if you can't go to worst to first, just get better. >> yeah. >> just improve it. >> let me ask you about capital gains for a minute, but in a different context. larry fink in the conference, said it here before, has a policy proposal, a graduated tax effectively so the longer you own the shares, the less taxes you pay. hillary clinton had a similar one. does that make sense to you? >> not to me. >> not to you? >> but i'm okay, if larry fink runs for president, and that is his position, i wouldn't be so -- i wouldn't rule him out as being the president because of his tax view point. >> but disagree because? >> i want to be able to sell the stock when i want to sell the stock, and i don't necessarily want to think that i have to hold it longer than i want to hold that stock because i'm -- it's a different tax rate. >> so it's -- >> approaching the whole issue -- >> i should have the choice. it's my money. >> well, companies and people should want to invest long term

because it makes sense economically in the free market system to do it that way, and the reason they are not right now because of what mel talked about, better to do the financial stuff than something that takes 20 years to payoff. greenspan had an empirical study on government activism and effect on long term investment, remember? >> yeah. >> and whether it's obamacare or regulation or the fed, whatever government activism you're talking about, something is holding back long term investment right now. >> here's a initiative story about why i'm not in stocks. all of the money managers that i know, friends of mine, right, all said to me, mel, you're crazy. you know, let me handle your money, invest with me. i asked them, what should i expect that i should be able to get? you know, what's a reasonable, conservative rate of return? we should be able to get 6, 7% for you. i said, i have a deal for you.

i will give you a bunch of money, bunch of moneyoneyment. i only want 3%, anything more than 3%, keep. you just guarantee me 3%, but let me have the flexibility to take the money out whenever i want to. . here's the money, you do with it what you want, dimon, put it where you want it, giving me 3%. nobody would do the deal. >> nobodiments a guarantee. >> you can't be gauaranteed. >> can't let you out. >> if you can't be, why do i want to with my interest being in the target if i was investing for ten years, 20 years, a long horizon, there's no place better, but today, my whorizon s not that. >> we want reaction to stan, there's a piece of have had, i talked to the hedge fund manager, with this to stay on our nation's debt.

>> the federal debt, everyone that runs around, certainly, republicans, 19 trillion, we hear it every day. if you believe i was going to get my social security payments and everyone else was and medicare payments and the government's not going to back on us, and president valued that stream of payments promised to me, and looked at the revenues that are coming in, the federal debt would not be 19 trillion, but 205 trillion. >> wow. what do you think of that. >> maybe should run for president. >> on your list now too? >> you know, i think that the debt is a huge issue, and not enough is being done about it, and i think that for people to not deal with the retirement age for social security means testing, you know, it's crazy. i mean, i get, i think i get it, you know, my people tell me i get it, a social security check. i mean -- i mean -- >> ken langones says the same

thing. >> he gets it too? then i don't feel bad keeping it. >> you guys end up giving it away. >> i don't want to give it to the government. i'll give it to various charities, you know, but i would be very uncomfortable -- when i was at westinghouse, now cbs, and i eliminated the fine benefit plan, you know, and it was difficult to do because you had a lot of people, but we picked an age, you know, picked an age that said if you're 55 today, we'll switch you to a 401, and those at 55 either did or didn't or go bankrupt, and the government is in the same position. can't keep doing what it's doing. >> mel, you mentioned you have not decided on the three outsider candidates.

>> or insider candidates. >> anyone you like what they have to say and want to hear more from? >> what i would really like is for someone to be an alternative to hillary clinton that has a lot of baggage because i think that there are a lot of people because her dislikes are pretty high, and the people who are not fans of hers are pretty high, that if there were somebody who was just running because they were not hillary clinton as an alternative, they would get a good number of votes, so the republicans to nominate somebody that's going to also have a lot of unfavorables is not as desirable to me as being able to find somebody who is good and doesn't have that unfavorle. >> abc. >> anybody. >> i looked at your -- i see now the autism speaks cuff links, but from a distance, it looks

like the age with an arrow pointing that way. scared the hell out of me. my heart jumped. >> my wife picked out the tie so the pin i normally wear for autism clashed. >> show us the cuff links, looked like the h with the arrow, but it's not. >> it's the puzzle piece. >> andrew, i saw his heart leap. looked like it was hillary clinton thing, but i don't -- >> you thought my heart would leap for it. >> he did kiss me when i walked in. >> because of the h, yeah, i know. >> mel is here the rest of the program with more to talk about. when we come back, though, janet yellen on capitol hill today, and congress bring overseeing the financial system, and representative joining us next. we'll be right back. recommend synthetic over cedar?u "super food?" is that a real thing? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions...

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fed chair janet yellen faces the house financial committee services in a hearing to discuss fed supervision and regulation of the financial system. representative jeb is chairman of financial seasons committee, joining us right now, it's very hard to understand, congressman, mr. chairman, exactly why we don't have the regular person to do this, that was stipulated --

how old is dodd frank now? five years now? they -- everything else they had to get done. we have to do this, we have to do this. one of the most important things seems to be that the regulation or the supervision of the regulation, and obama has not -- president obama has not appointed anyone. what do you think's really going on there? why doesn't he want to? >> well, because i think, ultimately, he doesn't want more transparency and accountability for the american people. again, dodd-frank is five europes old. don't feel bad if you missed the anniversary party. there was not a whole lot to celebra celebrate, but five years ago, the act said the president was to appoint a vice chair of supervision to come to congress twice a year to testify about the vastly expanded supervisory and prudential regulatory role of the fed. well, such a person still does not exist, so my counterpart and i got together to say we have got to have somebody come up here and testify because, again, the fed is now the single

largest most power fful agency dealing with the economy in the entire federal government, and so much of it, we don't know what they are doing. >> we talk about it all the time, the fed has in terms of subjective decision, no rule based decisions on monetary policy. we're not even talking about supervising the regulatory machinery of dodd frank. they got too that, because there's no one -- there's no one else to do it. i mean, they are -- this is an important body. this is an important woman coming in today, important chairwoman of the fed. >> well, absolutely, joe. one, there is a, and we want them to be independent in the exercise of monetary policy, but there's a separate and distinct role on regulatory rule making abilities over, really, the

largest financial institution in huge swaths of the financial sector of our economy, i mean, they essentially now can exercise de facto control in the board rooms of the largest financial institutions in america. one of the fears we have is that they are trying to use their monetary policy independence to cloak their activities in the regulatory sector, and that's just unacceptable. these are two different, two completely different functions, and we are fearful, particularly, for what is known as the stress test in the living wills that these are just absolutely opaque processes that totally defie the rule of law. one of our foundational principles, and one of the foundations of economic growth in america. nobody even knows what the rules are. it's like going out and getting a speeding ticket and never being told before or after what the speeding limit was. and then being told by the

police officer you have to buy another car, and here's the route you have to take in order to avoid the ticket. that's not -- that's not smart. that's not fair. i think, ultimately, it's a drag upon our economy. >> and it almost seems like there could be a conflict of interest between their monetary policy and this other role that it just seems like they should be separated, even by a china wall, and, andrew, you were a dodd-frank expert, you know, too big to fail, everything else, you never wrote a column on that there's this -- there was stipulations, that there should be a vice chairman of this. does it not bother you five years later, no one has been nominated for this? >> not that bothered. you know my view on dodd frank, around the edges, it's environments that changed the game. that's a personal view. >> yeah, you know, but it would be nice if they did this. why aren't they? why would the president not nominate? >> one less person in government bothers you? >> yeah, in this case, if you're

going to expand the fed's ours, it's beyond fed policy. they have total power over how to regulate the financial system. in addition to monetary policy. >> if i could add, it's what the law says. the law is clear that the president's to appoint, and here we are five years later, has not gotten around to appointing this position, again, on a vastly expanded fed. the fed was the big winner under dodd frank as far as the power game, vastly expanded powers into reaching, and quite literally, quite late right lanely, reports of fed representatives in the board rooms of financial institutions. i'm not sure i saw that in the dad frank law, and i doubt it's a wise or good policy to have. >> congressman, we have not talked about the xm bank. the senate passed the highway bill that has approved the xm bank getting funding once again. it's going through the house at this point. what do you think happens? >> well, i think xm is a

four-letter word, but right now, i suspect the house on an earlier vote that in some republics was a show vote indicated a majority, clearly want to see the program, i think there's amendments that will be offered, and hopefully to do something to ensure that it is a less politicized process that hopefully will do something to protect taxpayers because increasingly this is one more taxpayer backstop. i view it as a form of corporate welfare, and that view did not carry the day, but at least i want to make sure that taxpayers are protected, and i continue to fear that we are becoming a backstop bail out bankrupt society. i think xm is a part of that, but, again, as of today, that does not appear -- that argument does notcarried the day. >> all right, congressman. have you seen the new speaker walking around? have you talked to him? we want him to come on. he used to when -- we didn't,

you know, completely cause him to get him the position, but we helped. he doesn't call or write or anything at this point. >> maybe that's why he doesn't call or write. he didn't want the position, but answered the call, and we're all grateful that he did. >> tell him we said hi. >> i'll do so. >> we're here, we're here. >> i'll tell him. >> he knows how to find us. >> we'll did. luxury seekers in fot. lauderdale boat show, hot item? personal submarines if you can believe that. we are joined live from florida next. back in just a moment. (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, a boat show about to be under way with serious vessels in the water with big time price tags, we have more on the story now. >> reporter: well, good morning, you know, usually, the most expensive real estate in the nation is in new york and manhattan there or san francisco, but this week? it's right here in ft. lauderdale for the largest in-water boat show in the world. the value of the vessels here exceed $4 billion. there are 700 boats here, and as former u.s. secretary robert ruben said, a rising hit lifts off boats. that was his saying. that could apply here. the national manufacturers association reports in june sales year over year for boats 40 feet or longer are up 9.ha4% and while it's long been the

case people who own this need a helicopter on the deck, there's a new trend, and that toy is the personal submarine. of course, the like -- like all the wealthy lining up to take a trip into space, there are those who want to take a trip down below in a private submarine. the recreational marine industry is valued at 35.4 billion, so just about anybody who is anybody in the industry will be here today through the weekend trying to make connections, trying to make sale, and if you're wondering how much it costs, say, for a boat, this is $20 million. how much does it cost just to fill it up? i asked the captain. >> cost 80 grand, yeah. try to buy in 8,000 gallon increments because that's what a tanker truck is, and, you know, you pay every time a truck comes out, so you might as well buy 16 if you are buying 13 or 12.

>> is that how you fill up your boat? 8,000 gallons at a time? >> not exactly. >> getting yourself a sub? >> not exactly. i'm putting the sub on the christmas list, though. that's where we'll see it. thank you very much. when we come back, much more for the special guest, mel, and a take on taxes, and breaking news on the jobs front. stick around, adp very soon.

shares of vw slammed as they open a new front on the emissions scandal, and tesla pops after strong quarterly results, and the rest the industry is high on block buster sales, a trip behind the wheel straight ahead. >> taxes, mounting troubles in syria, and the road to the white house. senator rob portman comes to "squawk box" to talk washington and wall street. that first on cnbc interview minutes away. world according to mel, the king of media, and how do we get

america moving, and the push to fi shine a light on adult autism. all of that 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." welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe along with andrew and becky, and we're less than 90 minutes from the opening bell on wall street, and just 15 minutes away from -- this is going to be good, the adp number which gives us a great indication of what to expect on friday for the big jobs report, and that comes right at 8:15. the futures right now are extending gains that we had yesterday, and the previous session, and, actually, in october or all the way back to where we were before that august

selloff, reallying and checking out markets in europe at this hour, responding to maybe what's happening in shanghai and also the better sentiment we're having here with france and the ftse both up over a percentage point. >> okay. let's talk about other stories that investors are talking about this morning. mortgage applications dropped nearly a percent in the latest week after rates rose to the highest level in a month. also, among the other big movers, groupon slammed after revenues missed the mark and there was weak sales guidance and newly ceo rich williams joins squawk all lee later, and time warner beat the street on the top and bottom lines, and revenue growth by good number, and warner brothers, of course, and hbo. >> the nasdaq 100 topping its record close, it was set in march of 2000. dom chu is here with us. what's leading the charge? you were just a little fella in 2000? weren't you? were you --

>> i was junior, more junior than i am right now, joe, but it was actually my first year on wall street. i graduated from college, and i had just taken a job on wall street, the height of the dot-com boom so i remember what they were like. i remember when amazon on a split adjusted basis was about $100 a share back then, and it's $625 today. but anyway, joe, like you said, the nasdaq 100. the large cap stocks of the nasdaq composite, the one yet to reach the intra-day record we have from march of 2000. looking at the nasdaq 100, large cap stocks in the nasdaq composite, it helps the pay gains in u.s. indexes so far. it's a happenful of names driving things, but put in perspective all the way back to near the bubble peaks at the end of '99 and 2000, you can see here, we're just getting back to the levels right now. important to note we are a couple percent away, 48.16 is the level we want to see to break the intro-day record in terms of hows for nasdaq 100.

if you look as what driving the action, again, market caps for the nasdaq 100, the biggest ones, market caps generally between 6 and 660-some billion dollars. ten companies with the megacap status, $100 billion or more, and netflix, more than a double, and drag is keurig green mountain down 68% of the value in 2015. as for the individual stocks moving things around, google parent company, alphabet, one of the share classes, a class, up 40%. 506 billion value market. amazon, 293 billion market value there. big drag's in technology. semiconducto semiconductors, specifically, intel down 5%, worth $162 billion, and qualcomm reporting earnings, down 18% at 96 billion. as we talk about the influencers, a lot of guys, andrew, are driving the gains. we know with market capitalization weighted indexes like the nasdaq, the ones that are the biggest values drive the

most action, andrew. back to you. >> thank you, dom. we have to tell you, volkswagen shares slammed now. the crisis the german auto maker takes a turn for the worst, and we are joined now from chicago with more on that and other news as well. phil, good morning. >> talking about volkswagen in a bit, they are stopping saling of certain diesel models, more on that in a minute, but a slew of the autos in a last couple hours, record auto sales in object, when you look at the pace of sales, we have now had back-to-back months, over 18 million double digit gains for the four largest auto makers in the u.s. the projected sales now for all of 2015, 17.46 million, so if you look at annual auto sales over the last five years, we are trending now towards having the best year ever for auto sales in the united states. previous high? 17.4 million in 2000. again, we're on track to have

17.46 for the year. also this morning, new information tracking auto loans, 968 billion dollars have been taken out in auto loans. that's how many active loans are out there, a new record high, but the biggest growth, it's at the high end, those with super prime credit ratings, loans up 8.3%. i get the question, what about sub prime? yes, up 7.8%, but not growing as fast as the high end, gm, ford shares, compared with auto nation and group one. the growth has been with the dealers opposed to the auto makers over the last couple of years. quickly, volkswagen has announced that it is going to be stopping sales of certain audi models, diesel models in the united states, coming on the heels of porsche north america saying the cayenne is held, no new sales going on with those model, and, finally, tesla reported greater than expected

loss after the bell last night, and revenue coming in a little shy of estimates, and yet the stock moved higher, mainly because they are hitting the low end of their guidance, guys, of delivering at least 50,000 vehicles this year. lots of auto news today. >> phil, thank you. i'm sure we'll see a lot of you today to talk more about all of this, but, again, phil lebeau. guest host is broadcast and immediate ka titan, mel, and, mel, we talked about a lot of the changes happening. i know it's always been your job to see around corp.ers, see what's coming, but opening up "the new york times" cbs weighing a streaming push, verizon and nba form a partnership for mobile content, a production deal with hbo, seems like change is coming faster and faster, and i just wonder what you think -- where you think we're headed. >> well, i think all of the things that are changing are clearly beneficial for the consumer because what's going on is you are giving consumers more choice, more opportunities to get their content any way they want to do it.

i think the cbs app that they are selling for 5 prepondera.99 for cbs. cbs long believes that it should be getting paid more for its content than even espn is getting paid because more people watch cbs than watch espn. cbs is not getting close to the 5.99 from the distribution people today, transmission, satellite, or cable, so if somebody wants to cut the cord and buy the cbs app in order to get the content, cbs gets 5.99, some costs there, but it's 5 preponderate 99, and if they choose not to and stay with cable and satellite, they get the revenues. it's a total win for cbs, and i believe that in any bundle or any package, cbs is going to be part of it because of things like the nfl, you know, i mean, if you take a look at who the

single best winner in the content space is, it's the nfl. >> right. >> i mean, i don't think -- >> and what people are willing to pay up for the rights to broadcast. >> and no sign that it's going to stop, but what's going to happen, and the yahoo! experiment was a terrific example where the nfl already told people that, gee, we have an alternative if you broadcast guys are complaining how much you pay now. you put up with when direct tv got sunday ticket, so there was just the nfc package, afc package, and monday night football. then there was a sunday night, a mon night package, a thursday night package, and then they were the sunday ticket, then the verizon package, all at the same time that the delusion came at

the same time while fox, cross-examinatiocbs, and espn paid more for less exclusivity. when the next rights deal is up, guaranteed there's going to be a interpret deal. >> yahoo! google. >> somebody with deep pockets, right? facebook or yahoo! or, you know, am apple, who knows at that point, anyone's box who is being diluted faces the issue you're going to lose your most important content, so better so have that content and pay up for it than to be competing and not having it. >> do you think that's true of all sports across the board? >> i think it's true of the nfl in a league of its own. >> uh-huh. >> right below that, it gets into, you know, the nba, you know -- >> right. >> and then soccer. b but, yeah, i think live television, you know, live television where the -- if you are going to be in the advertising business, and you're going to be dependent upon commercials, you really need to be in sports. >> that's the broadcast

business. what's your view on espn? the question is about the existential threat of cord cutting to espn. >> in my opinion, it's sort of the same thing. whether or not you're a cable channel with the nfl or you're a broadcaster channel that has the nfl, the american public wants the nfl. >> and they'll pay. >> and they'll pay. >> throw in ncaa final four, and throw in ncaa football, and then you throw in the latest baseball, and them you got the local markets for baseball, and you throw in the masters, u.s. open, ryder's cup, must-see event you run commercials through, and olympics every two years. >> nfl owners are smart guys. bob kraft played an important role with roger gooddell, and they are aware how much money media companies make and aware they are buying the stock back and have all the money.

they are saying, we want our share because the players want more money, and we need more money, so the rights are going to go up, and the first time they'll stop going up is when you hear that there's a 20-year deal. >> mel, we'll continue the conversation in a moment, but when we come back, we have adp, stick around. we've created a new company... one totally focused on what's next for your business. the true partnership where people,technology and ideas push everyone forward. accelerating innovation. accelerating transformation. accelerating next. hewlett packard enterprise.

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.

welcome back, you are still seeing green arrows after two days of gains, nasdaq is up by 16. >> okay. we're going to have breaking news in a moment on the jobs front, adp hitting the tape right now, and steve leisman has the data and a guest, steve? >> thank you very much. andrew, 182,000 adp sector private payrolls, rising by 180,000, that's the guess how they did in the bls coming this friday. that is right in line with the forecast of 182,000. september was revised down by 10,000, still strong 190,000, and if you go back to the prior screen, the nonforeign payroll is 183,000 in line, and looking at the split between goods and service, again, on that prior screen, goods up 24,000, services up 158,000. we're back to that, now go to the next one here. looking at jobs by industry, construction up by 35,000, and

trade, transportation, 35,000. i have to get -- there it is right there. having good sync right here, professional business services up by 13,000. one of the big stories in the r report, though, is job growth by company size, and what you sew there is small business powered ahead by 90,000, medium 63,000, and it was large business that did not do as well. 29,000. joining us now is mark zandy, i think, right, is that correct? >> i'm here, steve. >> everything's working find here this morning. mark, there's been a step down in hiring, but not by much. talk about where we were and where we are right now. >> well, if you go back a year ago, job growth, monthly job growth was consistently over 200,000, probably between 200,000 and 225,000. now job growth is 150,000 to 200,000. that step down is the function of two things. first, the energy sector has gone from adding 10,000 to

15,000 jobs a month to losing 15,000 jobs a month, and, for of reasons, and the other is the trade sense manufacturing sector. going back a year ago, it was adding 5,000 to 10,000 a month, and now it's detracting 5,000 to 10,000 a month. those are job constraints. >> there's a pop in construction, housing business, construction up something like pa,0 35,000, is that residential, mark? >> the construction cycle's kicking into gear, both residential housing and commercial construction, and that's going to continue. there's no reason to suspect that's going to slow, just given that housing activity remains well below what we need in commercial construction picking up. construction's going to be continue to add, and as you pointed out, small business job growth picked up a lot largely because -- or a big reason because small business are tied

into the construction cycle, catering to the construction cycle doing well. >> the autos sold, those 18 million autos, some of that has to be pickup trucks connected to the retail, real estate industry. mark, there's a debate. what do we need in terms of lowering the unemployment rate? what should we be used to? what can we expect from the economy? 200,000, 220,000 now looks in the rearview mirror like it's not going to be the new average. what do we need to lower the unemployment rate? >> well, just to absorb the growth in the working age population, we need somewhere around 100,000 to 125,000 a month. even at the current lower rate of job growth, let's say we're at 175,000, you know, just picking the mid point, that's still well above what we need to have in the population. we're working down the slack in the labor market very, very quickly. if you do just a little math, and assume we stay at 175,000, i think we'll do better than that, six, 12 months from now, but

assume from that, we'll be back to full employment. there's going to be absolutely no slack in the labor market by summer 2016, and, in fact, that's the key statistic, what the federal reserve looks at when trying to decide to raise rates and why december looks like a likely launching point for raising rates. >> mark, we do this every month, and you come on to face the music when you are good and bad, and looks like your error rate is up a bit, and i want people to be aware of that. >> yeah. >> we have a 60,000 average three month error, plus or minus, you see, folks, is varies, difference between adp and private sector, calculated to ensure people know how accurate it is on on going basis. is there a particular reason why you are missing? >> the bls is wrong. they are too low. yeah, they're going to revise it up. two months have been very, very weak, and on friday, we're going to get another number, and i wouldn't be surprised for upward revision. >> this is critical? you see august -- becky talked about this earlier.

you see august and september upward revisions coming? >> i do. steve, there is no meaningful slow down in the job growth. there's been moderation because of the manufacturing sector in manufacturing, but this job market, everything points to a solid strong job market. >> the growth numbers do not, mark. the gdp numbers suggest that job growth should be slowing. >> well, not -- i'm not so sure. q3 was weak, but extract volatility, underlying data, and gdp growth is 2.5-3%, the strongest in the entire economic recovery. i don't even agree with that, but that's the volatility in the gdp data. >> do you see gdp rebounding? >> yeah, absolutely. >> in the fourth quarter, what's your number? >> i do because of the housing cycle kicking in.

tail winds behind the consumer, and the tail wind is trade, but that evade, and we're a 3% economy, where we've been in the last year. that's where we will be in the next year. it'll shine through. most important thing, obviously, for most people is jobs and we're getting them, back to full employment by next summer. >> mark, thank you for joining us, and interesting opinions, becky, back to you. >> all right, steve, thank you so much, and, mark, thanks to you too. when we come back, stocks to watch, and measure to restrict short term rentals in san francisco, shot down, why companies benefit from the decision. by the way, don't forget fed speak today that investors want to hear about at 10:00 eastern time. fed chair janet yellen testifying on the hill, and the new york fed president scheduled for a news briefing on looking beyond the macro economy, and stanley fisher speaks to the national economists club. "squawk box" will be right back.

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earned $1.01, beating estimates by 12 cents, and same store sales fell 8.5%, but more than half of that was due to the strong dollar. real estate website zillow posted a profit of 7 cents a share compared to analysts' forecast for a loss, but cut full year revenue forecast to account for the sale of its market leader unit. oh, stocks down. >> stocks county. senator rob portman reforming the tax code, stopping inversions, and how washington should handle the crisis in syria. the futures this hour, dow likely to open 356 points higher, nasdaq up 8, and we'll back in a moment.

welcome back to "squawk box," stocks to watch, pork belly falling short, upbeat 2016 -- what did i say? >> i don't know, what did you say? >> you know, i don't know. pot belly.

i said pork belly. pork belly? >> yeah. >> so better than expected sales growth. maybe "trading places," anyway -- >> you're young and don't know what it is. that's the thing. you don't know what a pot belly is. >> no, you do not. >> topping estimates, and most of the segment, and earnings and revenue beat the street, quarter was highlighted by 65% increase in u.s. sales of the -- i knew i said something. >> yeah. >> that -- >> i looked at you. >> like i had five heads. >> not that unusual. >> not unusual. major restricting short term rentals in san francisco failed at the polls yesterday, handing a victory to airbnb, spending $8 million in recruiting more than 400 supporters to knock on doors, put up controversial billboar billboards, and had tv ads to get the proposition defeated. the measure sought to limit the number of days a private room, apartment, or home could be

rented in the city. just a few seconds away from the international trade number you've all been waiting for. get ready. get set. check out the futures, up by 56 points for the dow, s&p futures up by 5, and reck santelli is standing by. rick, take it away. >> here we go. on that trade balance, which is a deficit, the deficit is 40.81 billion. that is really close to the 41 billion-ish we looked for in last month's 48 and change moved to 48 and change, a subtle revision, hardly worth mentioning, but when we look at last month's 48 billion, that was the second highest of the year compared to 52 billion, and in march, the highest or largest negative number going all the way back to 2008, 38 billion was the smallest in february, so, you know, i don't suspect that this is going to move the markets much. it always has a hook into the

dollar trade, and the dollar trade always is the hook used by multinationals when they don't quite make their numbers, maybe they pile on a little more than they should. maybe what's most noteworthy is the last time we saw a ten year note hovering above 220 on a closing basis is in the middle of september. it is worth many, telling many we're hovering at 2% for weeks and weeks the next move would be a push to 2.25, i don't know that many would have believed you. there's market logistics going on here that may be counter counterintutive, but those piling in looking for rates is on that chip about three weeks ago. we are listing now the other way, and, of course, a lot of fed speak doesn't make a difference. i don't think so, but we have to listen. joe, how's it going? back to you. >> going well my friend, thank you. i don't know how it's going -- how are the bears this year?

we'll talk football and alcohol at some point, andrew, by maybe not right now, are we? >> i think we're going to talk a little howard stern maybe? >> that's rights. our guest host, mel, the former ceo of sirius xm radio. you said good content rises. one of the things we see is people paying up for sports, but also paying up for talent, somebody like howard stern. you've done deals with him again and again, the deal about to expire and has people wondering what he'll do next. >> including me. i have no idea what he's going to do. he's an extraordinary performer. i think that he would have tremendous number of alternatives available to him -- >> in traditional media. >> well, i think, as a subscriber, paying subscriber for sirius, my hope is he stays there, terrific platform for

him, doing a tremendous job, and i think that sirius does a job of paying whatever it takes to keep him. howard has options. one of the options, theoretically, would be he has a library of 30 years worth of material. >> does he open all that? >> he opens it all. >> he could syndicate it. he doesn't have to work, sell the company or he could do law and order, friends, seinfeld and make money because everyone's in need of content. >> this is not a guy who needs money, though. look how much he made over the years. do you think he loves doing this? is he the type of person to retire? >> i think howard loves money, not said in a pejorative way. he's working. he knows how much money other people make off of that show, and i think he wants his fair share, you know, or unfair

share. howard could also do something arguably a netflix type. it's original content. he does the video, did it with the comcast on demand, and it could be a tv show that could be available worldwide. apple has made a deal with beats, jimmy, someone who i got to know well, a smart guy, i don't know why apple would not be interested. my bet would be that he would stay, but i really don't have an idea. >> i was going to ask about apple, which is to say, apparently, apple tried to go after when bill simmons, had a podcast, left, went to hbo, there was a bid to do that. do you see apple trying to become a major player in owning the content itself? >> strikes me that if, in fact, you are going to be in the audio business, then you should be in it in a big way, so arguably, if, in fact, apple has, i think

they have 6 million paid subscribe subscribers, sirius xm has 30 million. why wouldn't they just buy sirius? it's controlled by liberty so that decision would be made by liberty media, tax efficient because that's important, but the idea is sirius has, you know, today, a bunch of revenues, largest radio revenue company in the world, and if you're comcast, and you want to be in the subscription business or you're at&t and you have directv or you're dish network, and you have, you know, a subscription business, there's a whole lot of synergy and a whole lot of benefits that can accrue by combining with sirius, but, again, that's irrelevant what anybody thinks but for liberty because it's their decision. >> mel is the guest host with more to talk about with him today too. >> but now, representative paul ryan promotional speaker of the house lifts hopes for u.s. tax

reform. joining us now, robert portman, finance committee, a lot of committees, senator, he worked with speaker ryan during his house service, and we have not seen now why a while. >> great to be with you again. >> i often said that you need a president, really, to get this done, and, you know, you need a bully pulpit. you guys can talk about it as much as you want. now, i don't know, paul ryan as speaker, is there a chance you could get the -- at least the beginnings of some type of tax reform before president obama leaves office? >> you know, joe, i think it's possible, not to do the broad tax reform needed that we talked about, but to do one part of it that keeps companies from going overseas. there was an example of it last week, pfizer announced a deal with allergan to go overseas to take headquarters overseas, and when that happens, investment

and jobs go with it. we saw another one this week, again, a pharma company, shire, in this case, buying in the states, doing that three times now in the past year. what we're seeing is more and more u.s. companies leaving our shores because our tax code is so out of date, so antiquated, such a disadvantage for american companies, so if that little piece, the international business piece, and if we could fix it this year or next. >> how, try to fix. i mean, you can -- you know, you can try to cure someone of malaria, i guess, by giving them aspirin for the fever, but does that do anything? how would you fix it? >> the way the administration's trying to fix it will not work. in effect, through a tax notice, it's tougher for people to go overseas and do, you know, what's called inversion, you buy a company, a smaller company, merge with it, but they are not going to stop the movement. you'll see more and more transactions. last year, there was a doubling

of acquisitions. this year, it looks like it's 60-70% increase again. this continues to happen, joe, pretty much every week, losing a u.s. company. you can't do it by regulation. go to the problem, which is our tax code. you know, it's a mess. it makes it a disadvantage to be a u.s. company because a foreign company can have a better after tax profit, therefore, pay a premium for the companies, and that continues to happen. you need to fix the code, and i don't think we can do the broad tax reform with the president because he insists on tax increases there, but said with regard to the one area, the business tax reform, and specifically international tax reform, he's willing to do it on a revenue neutral basis, meaning no tax increase or cut, but reform the tax code to keep the companies from going overseas, taking jobs and investment with them. >> how would you do it? >> it's not that hard. we kind of know what to do because we had over a dozen hearings on this in the ways and

means committee and finance committee where i sit. one, come up with an international system that's competitive. almost like permanent repatriati repatriation. this is what all the competitors have now, where they don't say, if you make money overseas, in order to bring it back, you pay these very high tax rate, and the united states, of course, we have the highest rate of any of the industrialized countries now. go to a territorial-type system. this is something that a lot of people called for over the years. again, joe, hearings on it, discussions about it, and as you know, i issued a report on this with chuck schumer of new york, a democrat, and we know we have to do this to be competitive. second, we have to do something with research and development. countries overseas say, hey, you bring your innovation, your intellectual property here, you get a lower rate. some call that a patent box. we'll lose more and more jobs that way because they tie employment with it. there's a nexus to get lower rate, bring your researchers too. we are seeing that as well, we'll see more of that.

i think that's the basic solution, and bottom line is we also need to reduce our tax rate here because the combination of the noncompetitive international system we've got and higher rate makes it really tough to be an american company. >> you have a mass fainting spell in the country if the house and senate did something that became law. has that been done before? >> well, yeah, i mean, we reformed the tax code -- >> no, i know. >> in the baspast, but back in 6 to see real tax reform, and since reagan leading the effort, and as you said, it takes presidential leadership, every other -- all of the competitors have reduced their rates and changed their business tax system to become more competitive, and it's worked for them, joe, attracting our jobs and invest mement. we have 2.5 trillion dollars tied up overseas right now locked in. think about bringing that money back through repatriation. think of the jobs, plants, and

equipments. >> i know, i know, preaching to the choir to me. plain as the nose on my face. i believe it when the bengals win a playoff game. >> undefeated, on the way. >> wait until thursday. no, when they win a playoff -- you don't want me back or as a fan, i ruin it for them. that's why they are doing well. >> when he's looking good, he's looking good, dalton, aj green stay healthy, we don't only get in the playoffs, we go all the way, joe. >> oh, my god. now i know -- >> now you know i'm an eternal optimist, right? >> all right, senator, good luck, good luck on all these areas. >> hey, joe, if you and becky and andrew did all the questioning at that debate, there would not be complaints. that's all i'm saying. >> i'm not familiar -- i don't know what you're talking about. [ laughter ] no, thank you, rob. >> see you guys. >> when we return, how guest host mel helps adults with autism. that conversation is next when "squawk" returns in a moment.

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a report estimates 1 in 68 children nationally are diagnosed with autism in the early stages of life. in some parts of the country, like new jersey, it's 1 in less than 50, and children routinely have access to a variety of resources when they are young, like tutoring, transportation, and medical health services, but once adulthoods, the services dramatically diminish, so our guest host formed an alliance

with resuutgers university to bridge the gap, not in the least because the cause is near and dear to him and me. we know all the way through high school, public high school, i think, there are accommodations made. >> for the most part until you're 21. >> even in college, if your parents are young, they will be there for you burks t, but rt f worries and society, when the parents are elderly, what do we do? >> there's a tsunami coming with all the children becoming adults, and what services and what arrangements have been made to take care of them, so my daughter and one of her friends, who is a parent of an autistic child, was thinking about three years ago, and she thought about where the best place would be to put a facility to deal with autism, and they came up with a

university campus, and the reason they thought that a university campus would work so well is because it's 365 days, there's plenty of security, there's a lot of jobs, thousands of jobs that are done on campus, and there's transportation that is available from the bus, and there's all of the recreation, just so much available, and they started working with the graduation of psychology, putting up a center, and over a year ago, i had dinner with the president who said he was for real in wanting to do something, thought it important to do something for the community and that rutgers has a big position in the psychology area, and this will be something they will be very interested in. i told him that i was all in also, and we estimated that the private sector is going to have to raise about 35 million

dollars to get this done, but i'm going to be all in so far as making sure it gets done. the appeal of it will be there is a center where rutgers provides 60 jobs to adults with autism, and the jobs will be all over the campus. they will be jobs in the bookstore, jobs in the library, a working farm, and the graduate students who are studying psychology will be assisting those adults in their position. the adults will get paid for the work that they are doing, the graduate students are going to have an opportunity because there's a phase where we're going to put housing in as well, and this housing is going to be state of the art, designed for autistic adults. they'll have their own bedroom, living areas, kitchens, everything will be there, and the exciting part of it is rutgers graduates all these

professors, you know, all of these people who are going to be knowledgeable and work with the autistic adults, and they will be able to go around everywhere and try to help out. >> yeah. >> this -- there is nothing like this program that rutgers is doing anywhere in the united states. these residents' aspects stay until people are at least 60 years old. this is not a temporary thing while in college. this is until you are 60, and we think it's scaleable. we think that universities all through the world or the united states at least should be doing this type of a programserving t helping with the serious problem. it's a very exciting project. you know, i wish, in fact, the numbers were bigger, that we could accommodate more, but it's a great place to start, and i think it'll be a prototype, and i think rutgers, you know,

should be graduating anybody that is anybody on the autism spectrum, no matter how well financially off you are or not, you ought to be grateful for what rutgers is doing because this is something that i hope will transform the way autism gets dealt with in the years ahead for so many people. >> so many universities where that's a perfect fit, and, you know, you could see that at both private and state universities, and there's how many in each state? >> yeah, i mean, i think there's thousands of -- >> there are. >> thousands of universities. >> land and money, you can do it. >> and the jobs vary. we're talking to somebody who has a son who is interested in the theater, you know, on the spectrum, you know, october asperger or, you know, on the other end of the spectrum, but we're talking about having a job working on the theater of rutgers. >> right. >> our feeling is that, you know, we're looking, obviously, to raise the money, i think, that becky has an alumni of rutgers -- >> one of my roommates worked in the psychology department and

worked with autistic children. >> for my appearances here and contribution you make, brian roberts and steve birch should absolutely name one of the buildings after becky quick, you know, for -- >> i don't know about quick. >> i don't know about that. >> it's a great thing. and, you know, i got into this mainly because i had done my 102nd quarterly earnings call. i said enough. and i just have been spending my time on the not for profits, dealing with autism speaks as well as this. this rutgers project is an exciting one. >> 35 million is not a -- you know, we had robert frank on, there's stupid houses being sold out in beverly hills for 35 million. >> we have raised half of the first building already. >> great. thank you. >> thank you. >> thanks, rutgers. when we return, jim cramer from the new york stock exchange. here are the futures now. been up for the entire session. up about 56 points.

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karmazin karmazin. ...york stock exchange. jim cramer joining us now. we had the adp report, varied and sundry earnings, and volkswagen. i worry about the dax. that's a big company over there,

isn't it? this is a -- this is a shih-tzu storm, isn't it? like dogs. >> it's interesting, because i feel it's being -- you know, it's just dripping out that things are bad. there the systemic risk may be off the table. i see the stock is terrible, but i think the company will be okay in the end. i think -- that's because sales are not horrible. sure, gm is taking some share. but the sales for the volkswagen flat. audi good. numbers are not great, but in the end i was surprised to see people are still buying their stuff. >> apple's back to 123, jim. or 122. >> that last quarter was fabulous. people are slow to recognize this is an inexpensive stock. people every day say the iphone 6 is not that good. we know from allibaba from

starbucks, disney tomorrow will be a preinjection. the chinese economy is good. there's a lot to like with apple. people recognizing it. this one has gotten way too low. i think disney way too low, but up 20 points from the bottom. >> all right. >> thank you. >> we'll see you in a couple minutes. thanks. all right. thanks to mel karmazin for being with us. mel, for anybody who was listening to what you said about autism, is there a way that they can get involved with this project. >> there's a website that is rcaas rutgers center adults services, rcaas.rutgers.edu. >> when we return, some stories that have us buzzing this morning.

♪ ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] ♪ my mom makes hospitals you can hold in your hand. ♪ my mom can print amazing things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ]

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again. stories that have you squawking. our conversation with mel karmazin fueling lots of buzz on twitter about the future of content and how you watch that content. we asked you if live programming was still king or is streaming trumped it? paul says he is a full time streamer. he says i will not pay for or subscribe to cable tv. the bills and fees are too high. >> how did he watch us. >> i don't know. paul, i would like to tell you what do with your streaming, i won't. i'm kidding. any way you watch us is fine. another squawk fan thinks live programming will always rule. he tweeted cable is synonymous with better content. my man, exactly. thank you. that guy has it going on. >> you think he knows? >> i think he's -- he knew to answer us, which means the content he's watching, which is king, which is us today. >> reed hastings --

>> i can't believe you're going -- blacking the nyt thing again. >> i was not plugging -- >> what did he say. >> he did say that content is king and -- >> let's bring this up tomorrow. we got to go. can't believe you. join us tomorrow. "squawk on the street" begins now. ♪ >> good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the premarket inching high wer more record closing highs within reach. busy day with yellen on the hill, media earnings, more volkswagen fallout. china surges 4% on a weird day which we will get to. ten-year 2.22. trade gap