saying here's next hike. god knows when they will be. it's tuesday, september 6, 2016 and "squawk box" beginning right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew sorkin. welcome back andrew. >> good to see you. >> we were a week natural ago. >> briefly for a day. >> one day. >> now it's september and it's back to school and back to seriousness for us. we hope you're ready to get back to work too. let's take a look at the u.s. equity futures at this hour. see at least right now things looking slightly higher. nasdaq up by close to 2. still a lot of questions swirling about that weak r than

expected job report from the fed. we're going to talk a lot about that this morning. in the meantime, take a look at what happened overnight in asia. the nikkei was up a quarter of a percentage point. markets higher in china too with the shanghai up .60%. hang sang putting in a similar gain. if you take a look at what's happening in the early trading in europe, things are mixed at this point. dax is up a third of a percent. cac is up just under .20%. ftse is down .20% and check out crude oil price this is morning, up 1% settling in just under $45 for wti. among stop stories. $65 billion transaction bayer hiking offer for monsanto to $127.50 a share. up from $125 offer. monsanto acknowledging the latest offer. calling the discussions con

struckive. have been in talk since may. bayer believes acquiring the seed maker would position the firm to help farmers produce for a larger population. we'll have a lot more on the potential deal in just a couple minutes with an analyst. other news, volkswagen truck division preparing to take 20% stake in navistar. vw will supply engines. announcement expected as soon as today. volkswagen will play $16 per navistar share. little over $220 million. potential deal coming as the financial burden of the developing new engines to meet emissions standards has forced many car makers to pursue partnerships. >> that is piddling. that's the price. the amount of money. the only interesting is maybe they'll bring their diesel technology to navistar. zero emission. >> do you read about coal

rollers over the weekend. >> who? >> coal rollers. people in the midwest who take the emission standards off their cars and now pump effectively coal into -- out into the streets just for fun? >> this was front page story. it was fascinating piece about. >> just because they can. >> just because they can and they do it to motorbikers. truck drivers will do it. almost press a button and exhaust all over you. new jersey is trying to create a law against it. colorado, tried to pass a law against it. couldn't. anyway. too much news for this morning. apparently. now this week's economic agenda. we have the august ism services 10:00 a.m. eastern time. wednesday we get the fed's book report. thursz jobless claims and consumer credit.

wholesale trade coming up on friday. president obama making final official visit to asia. saw all this weird stuff on the tarmac. >> yes. >> and then some drama out of the group of 27. president obama cancelled first meeting with the president of the philippines. this after president duterte insults the president. two reporters calling him. saying here's a son of a b. then i saw other translation. it's translated. i saw son of a w. >> neither one is very nice. >> yes. >> basically making comments about his mother and saying, look, if he asks me about in -- comments about him. >> read a quote if every time a mother calls me a son of a b. >> she's talking about herself. >> it was weird. obama apparently far be it from

him to go into other place's politics like brexit or anything. in this case he was talking about there's not due process. >> 2,000 people have been killed since he decided to crack down on the war on drugs which is serious, but there's been no due process. >> due process, i don't know, does it happen everywhere? doesn't necessarily happen. >> no, but it's also common place for a u.s. president to bring up concerns about human rights. >> all depends on whether we want anything from that country or what our -- there's a lot of facto factors. we look the way on a lot of human rights stuff with people we think are on our side. >> the rhetoric and craziness beforehand, you want the united states to stand firm. both sides. >> we're not in the business of spreading or values anymore around the world. we tried that. that didn't work out so well

either. he's expressed his regret for crude remarks saying his words weren't meant as a personal attack. >> okay. >> it's the first leader the president offended. he previously cursed pope francis. now to the campaign trail, presidential nominee donald trump who has previously accused the federal reserve of keeping interest rates low to help president obama is speaking again on monetary policy. this was at an event in ohio yesterday. trumpl said the u.s. central bank has created a falls economy and that interest rates should change, i guess he means go up. he said the fed is keeping rates down so everything else doesn't go down and that's the only thing strong is the artificial stock market. >> i didn't understand that last pa part. i can understand the fed propping things up, but the artificial market still strong. >> he is says what we say every day.

>> the fed has orchestrated a strong stock market. >> they're not going to raise rates. >> friday's 150. >> what if they raise rates before friday. >> you said that. i said that, but if it had been 220 or 250. >> you're saying they would. >> wait until you see the next jobs report. they're just saving it all up. >> you come back and it's like riding a bicycle. isn't it? you say we haven't -- or like a comfortable pair of shoes. >> with training weals on, yeah. >> are you saying you're the comfortable one? >> together. what about did you get put in a corner? no one put baby in a corner? >> no. was there any dirty dancing going on. >> no. we were in the hotel.

>> this is a little bit of a different -- >> was the guy -- was the proprietor named max. >> no. i have a son named max. >> you do. >> we went to bed early every evening. >> on your same schedule. >> the employees do the dirty dancing. all you people go to sleep. >> that's true. that might have happened for all i know. >> you don't know. i'm sure it happened. >> not a whole lot to do up there. >> that is true. >> what was the best activity. >> par sailing. >> you didn't do that. >> i did. >> like a parachute on a boat. >> you're high. >> yes. >> i couldn't blooefz how high we were. >> the kids were not scared. they thought it was the coolest thing. thought they were like birds up there. i was looking downgoing -- i thought the harness. i was worried about the harness. >> were you ready to grab both of them.

>> yes. >> you still kind of come. >> that part i wasn't worried about. i wasn't ward worried about the parachute going. i felt like you could flip out of the harness. >> i did it in pv. you get -- you start getting close to some of the hotels. if you hit one of those, then the air comes out of the -- but it's like -- when you're doing it, you're like oh they know what they're doing. >> that's because you had three drinks. >> week and a half ago with the kids, i watched from the boat. i wasn't going up. >> we're all very happy to be here today. >> exactly. in the meantime, check on the markets after the long holiday weekend. joining us now is bryan. chief investment strategist. also peter hooper, deutsche bank chief economist and probably heard us talking about whether the fed will raise rates after that somewhat disappointing jobs

number on friday. still a gain of 150,000, but where do you think this leaves things in terms of will they or whether or not they come september 20. >> certainly the jobs market is looking good. the price action not so strong though. i think the fed has the certainly has room to be patient. i think that seems to be the fairly strong expectations mo sg economists and market probability rights now. >> what do you mean, the market is not expecting to it gives the fed more reason not to raise. >> by price action, i mean the inflation pressures just aren't there. little softer than expected. consumer price numbers have been softening in the recent months. i think they're there as far as the labor market goes on the employment side. i think they would like to see a little more wage inflation. i think they would like to see more evidence on the consumer

price inflation side as well, but certainly by december and the guessing is they're going to set up december with the discussion at the meeting this month. >> you say the thesis for a bull market is still strong when you're looking at u.s. stocks. is that because you don't think the fed the likely to rise or because of fundamentals. >> you know, excuse me, good morning. we think that stocks run by fundamentals in the economy. fundamentals in the stock market in the u.s. and the economy are improving period. our problem with the fed is that we think there's so many eggs in one basket e. >> so that's where i think the risk is. also, in august was a pretty good month. in terms of stocks and joe mentioned on the john sonset, september is usually not a great month. if you take a look at vix or volume in new york or comments

receiving from complaints so complacent. everyone is so convinced the fed is not going to raise rates in september. the fed is going to be lower for longer. we start to worry a little bit doing this for a while. near term were a bit more concerned. longer term steadfast. >> did you change your target. >> no. >> you're at 2100 and 2180. you're bearish. >> near term were concerned. let me ask you a question, between now and september 31, is there the likelihood we could see 80 points down on the s&p. >> or 80 points up. >> or 80 points up. >> who knows. you're staking out a negative position from here and talking bullish, but you're target is 2100 so let's just call it what it is. >> i wouldn't say that's bearish. it's not 80 points below where it is right now. >> i think a normal pullback. >> someone told me we had year

2100. if i act on what you're telling me, i would not be adding. >> joe, depends upon if you are two weeks into the market or three to five years. >> i'm not interested. i wanted to know if you changed it. >> no, i didn't. >> when you come in and finally do, let us know. >> what would you have though see. see a pullback below 21 hundred or. >> i think you have to separate between perception and reality. the reality is stocks have run a little bit too far on the assumption the fed is never going to raise rates period. also on the assumption people have come back to the u.s. because test the best house in a bad neighborhood once again. we think the market on a near term perspective have gone up too far too fast. returns on a average basis for the next three to five years for the stock market. we think we're going to get a timely entry point. >> you don't think the fed will raise rates or good chance they could in september.

>> from a personal standpoint, i think there's a very good chance. from my job and looking at my position the number is that we're not going the raise rates in september, but there's still a good chance. >> you mentioned other markets as a comparison too. do you think things improve in europe and asia and lure investors back that direction. >> i think between now and year end, still structural reform that has to be proved in europe and emerging markets. not just monetary policy. that's the key measure. canada, we think, could be very well positioned between now and year end just because on the strength of the banking sector. assets coming back to canada so far this year. so from a regional perspective, we think canada is going to do quite well. >> thanks for coming in. peter, it's good to see you too. >> thank you. >> bayer sweetening bid for h

monsanto. that's $127.50 a share. joining us on squawk news line, jonas, this hinges on a negotiated transaction, what are the chances of that? >> we still think the odds of deal happening are relatively slim. we have done some work before talking to investors and the sense of where the companies are, i don't think monsanto is all that keen in entering into this kind of engagement. i think they probably need 130, 135 to sort of feel forced to accept. don't think bayer is going to go that high. the racing of 2% from the previous bid suggests they're a

little bit hesitant. finished with the due diligence. didn't see anything in the data set that really convinced them this was a slam dunk. we'll see where they end up this round. >> explain this to me, though, monsanto alluded in this statement somehow there's buyers or other people they're talking to. who is that? >> it's a good question. i mean, bsf is the only real other possibility for a chemical company. could be some possibilities of other chinese players wanting to get into this market. none of those seem all that realistic. most likely this is monsanto's way of saying there's still evaluating the do it alone approach. this summer they had announced a fairly decedent licensing deal, which that was for one particular crop protection, but

that was the deal we expected monsanto to do more of ever since that failed to buy sin general ta. trying to find dozens of those with other companies to build a portfolio. >> final question, regulators. is there any chance this deal would go through. we're down to -- if this would go through, there would only be three players in the market. >> if it goes through, then you're left with about five major players. khem china doesn't change the landscape that much. it would reduce that down to four and would be three major players and bsf at sort of the runt of the litter. regulators pushing that.

legally, i don't think there deal even this deal is that problematic. there's not a tremendous amount of overlap, one player is focused on crop protection. one is focused on seeds. politically the obstacles are quite a bit higher. they've seen them push against the european yoonon. clearly under pressure to limit the impact and the deals we're seeing. this one in particular the biggest deal of the space. very visible name. bayer has already i think shot themselves in the foot a little bit. promises the union no jobs will be lost in germany. meaning only one place jobs. taking all that together with u.s. politicians starting to put more scrutiny on this and chuck grassley is holding a senate hearing later on this month about the consolidation of the

spice. i don't think the odds of this passing are high. >> okay. jonas, thank you. >> my pleasure. >> you said is there another buyer around. is there another buyer. >> did that occur to you. >> it occurred to me as it was leaving my vocal cords. >> it works. >> another buyer for another bayer. >> i think the intention was deep, deep. when we come back, we're going to go deep on yapple expected to unveil the next generation iphone tomorrow. possibly a phone with no headphone jack. we're back in a minute. welcom

box". both those companies make commitment used to metal based 3d printing. german health care group free

zenhousefresenius buying spain't private hospital chain for $6.4 billion. that marks the first expansion outside of market. air bus signing deals with vietnamese companies for jets. these deals were signed during francois hollande's visit to vietnam. stock up 1%. >> aram cco is in lead to buy ln del refinery. >>. let's talk yulk apple this morning. tim cook expected to unveil next generation. eliminating headphone jack. joined now by ed leigh, managing de

director and cnbc contributor. good to see you. wall street journal, how apple can make next iphone count and not even talking about the iphone that's coming out not this one, the next one. >> next year. >> they're saying this one reported to be mild change from current design. as such expectations are mild as well. >> they've lowered expectations. apple as traditionally done on year off year. this year was supposed to be the big change year. last year. >> so we're going to have three years of the same. >> i think they're gearing up for next year's ten year anniversary. and eight is a good luck number in china. if you want to make a big splash in china. they're gearing up for next year. >> i've been holding out for the last year. then i thought i didn't want to

get the s. >> wait until next year. >> if this is working well, it's a well made piece of hardware. keep using it. >> but that's bad use. >> bad news for apple. >> they want you to upgrade. this is -- they're switching it up. taking another breath, i guess, to make the next big one in terms of the big changes and if you're. >> i'm a fan boy. i love this stuff. >> joe, we're going to get -- >> you're being very polite by saying they're taking a breath. i don't understand. they're taking a breath as opposed to making a better phone. >> it's going to be a better phone. if you are a generation or two behind that, it would be a very nice upgrade to have. >> how much better is the camera. >> camera has become such an important thing. >> honestly, that's the only reason. >> here's my take on that. your phone, your images are

always in digital form. you're rarely printing them out. i can't see the output difference. if the camera is better, when i'm looking at my phone or computer screen, i'm not going to know the difference. >> i want this thing to rock my world. i usually sit at my desk watching the live stream. >> you're one of those guys. >> you're telling me i'm going to sit there and be disappointed. >> you're going to be mildly disappointed. >> what about the head phone thing. >> head phone jack is going away. >> how much money am i going to have spend buying new head foenl phones. >> will be either bluetooth enabled or fit into the power jack. >> what happens if i need to power up while i'm listening. >> you can wire leslie hook into your iphone. they're trying to change the vocabulary or of you use your

device. the way they see it, this takes up too much space. makes it harder to make it water resistant. all the holes in the thing. they want the get rid of it. that's a huge cultural change. >> you're afraid of change. you suound like me. >> he doesn't care about the headphone jack. doesn't care in the first place about the device. >> i have -- what is this? i was thinking the world changed ten years ago. literally have an encyclopedia. tv. >> it's insane. >> only ten years. >> will it be waterproof? >> i don't think it will be water tight. it may be water resistant. >> there will be an upgrade to the watch. slightly faster. slightly thinner. not a massive change. that's the thing. you're point, not just from a fan boyle me speculative. >> i'm going to hit all the heart breaks with teases.

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welcome back to "squawk box" this morning right here on cnbc first in business world wide. take a look at u.s. equity futures at this hour on tuesday morning after a long weekend. dow looks slightly higher. s&p 500 off 1 point and nasdaq up round up to 1 point. this morning's top story, $65 billion transaction in the works. bayer hiking offer for monsanto to $127.50 a share. up from $125. latest offer calling the discussions constructive. have been in talk since may. did elude to talking to something else though. >> reading it like monsanto supposedly understands this would be a good deal for them, but bayer shareholders don't want to go. >> monsanto wanted to

consolidate. they tried to do the con sen ta deal. >> british air ways passengers facing delays overnight after an it glitch affected checkin systems. according to a statement from the airline, the system issues have affected a number of their airports. earlier reports of delays coming from phoenix, seattle, atlanta and san frain francisco. manually process all the passengers. checking in customers at heathrow and taking longer than usual. british awirways apologizing to customers. unrelated, but also causing delays, police say nine protesters from the british arms, the british arm of black lives matter. forced their way on to the

runway of london city airport and locked themselves together. the airport is near the financial district near canary war of and handles mostly short hall frights to business dess in europe. >> raises questions, i didn't know that there was a perception that there were other law enforcement, the perception in great britain. it's the same. uniquely american. >> no, i think it's not just in the uk, parts of europe as well. >> black lives matter. >> yes. >> well, speaking of security, right now is time for executive edge. we're talking about a slightly different type of security here. companies are going further than ever to protect themselves against cyber intrusions. in the meantime, this election season has seen e-mails hacked. that could be the tip of the e icebe iceberg. joining us now, gary steel.

gary, thanks for coming in today. >> let me get this straight, you're not strovd with the dnc. not working for them or anything. when you take away that combined with what seems like an increasing number of attacks reported in the news on a weekly basis, where do we stand? how safe should people feel. >> the reality is cyber criminals continue to go after organizations whether they be focused like the dnc or companies to either embarrass or steal sensitive information. it's gotten worse. >> not just my perception. it has gotten worse. >> companies are vulnerable. organizations need to increase their security posture. >> what do you do in particular at proof point. >> we protect individuals from attacks. individuals within companies so either on e-mail on social or or mobile: where they're most vulnerable today. we see cyber criminals moving

their warfare towards individual not so much the infrastructure these days. >> why is that? you would think the whole idea you go where the money is and the money is where the big players are not necessarily the little guys. are these state actors are criminal who is have picked up and gotten better. >> it's all of that. the thing that is vulnerable is because people will click on links, open files. all of those things can be malicious and enable the hacker to steal information or get access to the corporate network. the bigger opportunity is how do you get inside the network. >> did id you see the story in the "new york times" about the israeli firm called nso who apparently sells a hack for half a million dollars to governments or they say just to governments effectively saying we will allow you to get -- they claim they can get directly into your phone. >> is that who the department of

justice used with apple. might be. we don't know. >> the reality is everyone is looking for great capability, great people, and there's obviously great. >> they're professionalized services like this. >> they have to be really scareful about it. offensive hacking is illegal. can't hack back. can't go after organizations that are attacking them. >> but the idea that this company is effectively selling some kind of ability to hack my specific phone, i don't know how they do it, and they say it's untraceable and they're selling it to dpogovernments. >> doesn't surprise me. those kinds of capabilities do exist out there. >> they do. >> they do, yes. >> 600 grand to get into your phone. anything in there to be interesting. >> pictures of my kids. >> that doesn't seem like a business to take off to me.

>> what about all of our e-mails to each other. >> the one thing that does happen all the time is people down load apps. those apps often steal everything on your phone. >> through the apple store, android store, people don't pay attention to what they're clicking through on the privacy agreements. oftentimes say we're doing to take it off your phone. just because it looks like a legislate app, doesn't mean you're safe. >> when you say no to the privacy concerns, you can't have the app. >> that's right. >> you've got like online banking and pay for stuff. >> totally. >> you don't do that. >> no. >> my question is, what does your service do effectively to protect me individually? what are you doing differently that would keep me from. >> we do three things. block all those e-mails coming in that have malicious link or take you to a spot where you're going to be infected with some

form of mall ware. >> on social. >> that means probably locking people off from what they're doing on a regular basis. the only way to be safe is not get into these. >> we look at apps on your phone, determine if they're malicious and delete them. >> are you catching the stuff. >> before it gets to you. >> before twitter is catching it or google is catching it on gmail. >> we're gaching it before it getting delivered to you. we ordinary, reasonable, and prudent au-- we stop someone fr having the opportunity to click. >> gary, it's interesting. your stock has been up 40%. is this because so many more attacks that everybody is going to go up or something you're doing specifically. >> comes down to three things. one is the threat is tilted in our favor. individuals within companies are getting attacked. we help with that. two is we were part of the movement to the cloud so

enterprises move their workloads to the cloud, you need cloud security, that's what we do. third thing we live in a competitive world hasn't been a lot of invasion and we've continued to innovate rapidly. that's why the stock has been up. increasing cash flow with earnings. >> thank you for joining us. >> thank you. >> what is this on your phone. >> this is a picture of his phone of his breakfast. that's happening right now. >> are you jealous. >> we bought a waffle maker. >> yesterday. >> first day of school. >> i haven't. >> how valuable sl that. >> that looks like the first waffle. >> show the audience. yes, this is. >> this is what is awaiting at home when joe gets done. >> somebody else got this. waffle and bacon. there you go. >> now that we're all hungry. >> and bacon. >> all the kids, good. >> who cooks bacon. >> first day of school. that's why this is happening. i got this unsolicited.

i think they're doing it because they know what that would elicit from me. jealousy, envy, torture. >> well played. got a waffle maker? >> i don't know who makes it. >> you make a lot of stuff, kwaes disagreeias. >> when we come back, the nfl season gets underway this week. the multibillion dollar sports industry kicks in again. draft king, getting best bets and getting legal okay to operate in new york state. right now a quick check of european markets. things are mixed there. best performer is the dax. "squawk box" will be right back.

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it is tuesday so i guess we can start to call this takeover tuesday. $4 billion deal just crossing the wires. danaher buying cepheid. will be merged into diagnostics business and add to earnings in the first year after the deal is

complete. you see danaher up. >> and add to that, $28 billion transaction just crossing the wire. em bridge and speck terror. canadians buying texas. nchl season about to connect off. fantasy sports leagues getting a victory. new york lawmakers making the games legal in the state. companies are still battling laws and other states say the sights are a form of illegal gambling. joining us now, jason rob is. ceo of draft kings. i would imagine it's your view that eventually you'll get this squared away everywhere. >> i think that's what you're seeing. it's been mostly just positive news recently with legislation happening in about eight states this year. that brings the total up to ten. that's what we've been seeing over the last six or seven months. >> a real business too. how much money have you raised

for this? >> over $600 million. >> that's unbelievable. then the numbers are -- everything is doubling. some things are more than doubling. >> this year, we've had a great first half. we're looking forward to nfl. >> what are the number sgls first half up almost double on the year. 98%. little bit over doubling on customer side. preseason nfl, just like the real nfl, is a good indicator, but sometimes the real season is a little different. preseason up 70% year overyear. which is great. >> what sports were driving it? >> a lot of nba. a lot of baseball. golf has been a great sport for us. really everything us on. >> i know how well final four works when i have some skin in the game. it's not skin. it's just. >> pride. >> just doing it with other people. >> it is. it's like the most obscure game. i'm watching at the end. i can't even leave the room.

i would like to have that feeling sometimes. ky get that for every nfl game so i have guys in there that i want to do well. is that how it works? >> so basically for the base game. not if i canning from one game. always picking from multiple games and picking players, not teams. more concerned with how the players do. obviously a relationship with players on teams that throw a lot might get a lot of running stats. you're really studying the statistics, looking how they play and which players are going to do well. >> i put my credit card. how much v thoump do i start with. you can play for free if you want. >> i can win millions play r for free. >> we have a $100,000 game that is free. you have to put in $3 if you want the get the million. >> you have to. >> like the lottery. >> how do i play?

-- you're so smart at guessing all these game sgls how do i do golf? what do i have to do? >> golf is a great sport. very popular. once a week. less demanding than the sports every day. very similar, you're picking a roster of golfers. they're going to get stats like birdies and also look at things like greens and regulation and stuff like that and those translate into fantasy points. >> how is your business different than fan dual. >> very similar in many ways. we have a much more robust product offering. more sports you can play. our feature set is more rich. >> in terms of growth long-term, is it just in the u.s.? can you get into europe in a big way? a lot of players in europe elsewhere. >> we just launched about six, seven months ago in the uk. really exciting to see at the beginning of epl season. english premier league started

about a month ago as well. it's been great. it's funny because people think that uk fans are so much more ravd, but it's so similar to the u.s. fans. sports fans everywhere i go around the world, it's so similar. just the love of the game and the passion that they have for hoping their team. >> how much more competition is there in some of those other markets. >> the uk has 10 million fantasy football. percentage of the population is quite similar to the 50 million plus in the u.s. so at least in the traditional season long foremost, manager leagues as they call them have done well over there. we're hoping our version of fantasy football does well over there as well. >> advertising is a little different than in the past. seems toned down to me. >> i think last year was a big year and we learned a lot. we learned a lot in terms of what worked and also what's too much in terms of brand exposure.

>> you mean brings regulators. >> a lot of negatives that came. really just a symptom of major exposu exposure. we learned the right amount of . it's still going to be something that this time of year people are going to see on the air. >> not the guy with the backwards hat saying whoo i won. >> no. i think the message is a bit different. which allows you to play with your league of friends. you can play with almost a little clan of people you play with. it's similar to all the social media. i think that's going to be huge. i think that's the next phase and we want to emphasize that in our advertising. last year was the year we burst onto the scene. i think the message could have been better and this year we're learning from that. >> jason, thank you. >> thank you. >> maybe i'll just call my bookie and say no more of this -- where i owe like $20,000.

you know, that's the bad way to do it. this seems okay. this is good. i mean, those people, they don't mess around. anyway, thank you. by way of disclosure, comcast is an investor in another daily sports app fan duel. what are you doing here? i'm confused. >> i think you brought in the wrong person. >> yeah. >> thanks for being here. when we come back, a scary weekend at the box office and it was good news for sony. we've got details on that when we return. this car is traveling over 200 miles per hour to win, every llisecond matters. both othe track and thousands of miles away. with the help of at&t, red bl racing can share critical information about every inch of the car from virtually anywhere.

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welcome back to "squawk box," everybody. the horror movie "don't breathe" topped the box office for the second week in a row. in the r-rated thriller, thieves break into a blind man's house hoping to steal his fortune but they find themselves fighting for their lives to come out. second is "suicide squad." the dc comic action flick made $10 million this week. coming up, our guest host for the next hour, ken rogoff, he will talk jobs and the fed

and make the case for weaning society off of cash transactions. >> weaning? >> weaning. weaners. they say the wor does not revolve around you but today, maybe it can. i am helping 1-800-flowers nd the perfect gift out of trillionof combinations. and workinth the new yo genome center to find treatments as personal as dna. and i amelping sesame street make education unique to every child. hello, my name is watson. working together, we can outthink anything. hello, my name is watson. where we explore.ans. protectingiodiversity. everhere we work. defeating malaria.ity. improving energyfficiency. developing more clean burng natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing eney poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas

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new this morning, a potential $65 billion deal in the works. bayer gets acquisition. donald trump gets in on the rate debate. what the candidate thinks the fed should do. plus we'll get reaction from our guest host ken rogoff. and a trip to the happiest place on earth just got a little bit cheaper. we'll tell you which retailer is teaming up with disney. the second hour of "squawk box" begins right now.

♪ live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen. our guest this morning is harvard's ken rogoff. he's got a new book out. we'll talk about it and talk to him in a bit. meantime, quick look at futures. four-day shortened trading week, dow would open higher about 15 points higher. s&p 500 about a point and a half. and a nasdaq up over a point as well. quick check on oil prices at the moment. we have been keying almost $45. $44.98. >> and we do have two big takeover groups this morning. is buying houston based spectra

energy. spectra shareholders will get under one share of the combined company for each share they hold right now. the deal creates the largest energy infrastructure company in north america. you can see spectra energy shares with up by 5.8%. also cepheid being acquired by danaher. danaher says it will combine cepheid. shares up 51%. a big premium priced into it. reflected right now in the shares. one economic report on today's calendar. we have the institute for supply and management which will be out with its august nonmanufacturing index. that index is expected to drop to 55 for august. we have some breaking news from our own phil lebeau right now. phil? >> reporter: hey, joe.

we are at navistar headquarters in illinois where navistar and volkswagen announcing a deal that's been speculated for some time. volkswagen is taking a 16.6% stake in navistar investing $256 million in the company as part of this deal. volkswagen will be supplying engines to navistar and will get two seats on the navistar board of directors. what's in this for both companies? let's start with navistar which has been struggling for a number of years. although troy clark has made a lot of progress in turning around this company. this company has really been struggling since 2010 when they had the emissions issue. and the north american truck issue. now ranks as number four here in north america. earlier this year it settled the s.e.c. investigation into the development of those in 2010. but it's still struggling to get

a foothold here. that's why it needs somebody like volkswagen. in order of supplying new engines for the north american truck market. and for volkswagen, the advantage here is it really doesn't have much of a footprint in north america. freightliner here, volvo has mack trucks here. now volkswagen is part of this deal with navistar, gets a foothold in north america again taking a 16.6% stake. coming up we will have an interview with troy clark the ceo of navistar. he will be here. this a big deal in this north american truck market which is under a lot of pressure right now. orders this year for those class-a trucks, down more than 25%. a lot of these trucking companies made these orders over the last couple years and that's putting a lot of pressure on this industry right now. >> just didn't realize navistar

was a $1.1 billion company. when did that happen? i guess it's happened over a period of years. right? >> yeah. over the last five years. absolutely. >> it's almost a microcap. navistar international, the old -- i think that was even a dow component at one time. maybe. maybe not. but it's a billion -- almost 20 million. that's the state of the truck industry right now or just navistar anyway. >> that's why this has been rumored for some time. it's not such a surprise in the industry. we're going to see more of this. . ast the indication that we will see more of this especially with what we're seeing. so many firms that previously ordered trucks are now pulling back saying we're good for the time being. >> do they have a lot of debt? is the enterprise value much higher? like we think of other manufacturing companies. i can't imagine the whole enterprise -- >> i don't know the most up to

date debt level. they had about $5 billion in debt coming into this year as part of this turnaround. >> who's their leading competitor? no one here, i guess, right? >> well, you've got freightliner. obviously daimler has freightliner. mack. all of those guy who is are in this market fighting right now. >> all right, thank you, phil. >> talk to you next hour. >> thanks, phil. meantime, our guest host is ken rogoff. we're going to talk about phasing out cash as a currency. going to be weighing in on a potential cashle less society. meaning less cash. the new book called "the curse of cash." he argues the time has come for a less cash society. what do you mean by all this? >> i think if you look at the cash outstanding in the world, there's tons of it. it's mostly in large denomination notes.

$100 bills. there's more than 4,000 for every man, woman, and child in the u.s. and we print more constantly. but 80% of it is in hundreds. in a lot of countries it's 90% in the big bills. >> this is a physical story you're talking about here. >> it's very simple, practical point that cash is a very good way to hoard, hide, for crime and tax evasion. the evidence i think is overwhelming that's a lot of the use. i'm trying to sort of find a sweet spot where ordinary people can use it to buy normal sized retail transactions. but it gets used less for tax -- >> your argument, though, for cash -- electronic cash has been a lot of that can get moved around too. the whole secrecy that goes into bitcoin was that people can use this for reasons without being tracked by the government. >> so you have to play whack a mole with all these things. there are always going to be these other things. as long as you can't go spend them at the store, take them to

the bank -- >> but you can. with bitcoin, that's the difference. people use it for their rent. >> it's a very low scale now. and you can't go into the drugstore and use it. they'll prevent it in the future. you know, they're allowing innovation. >> but you don't want us to go to a cashless society. what do you mean by the sweet spot? >> there are a lot of issues when you think about actually getting rid of cash. they range from privacy, what happens if you have another hurricane sandy, to some philosophical issues like can the fed control the price level. and so i think leaving some around indefinitely makes sense. >> how much cash do you have on your right now? >> less than i'd like. >> do you think people should carry around cash? i carry around no cash. meaning i may be a bad target. >> why? >> i think i might have $20 maybe. >> you have a wallet? >> no. actually these days i don't.

because i don't need it. what do i need the money for. here's a $20 bill. this is all i've got. >> you're a mess. no belt, no wallet. >> i have a metro card. american express card. don't want to put the number up. >> careful. >> that's kind of a wallet. >> an id. what else? library card. that kind of stuff. >> library card? >> i have a lot of ones. >> but my point is that you can get away with not having cash anymore. for the most part. >> yeah. and it is all the surveys show even in places like germany and austria where they love cash, they just use a tiny fraction that they're carrying around. a lot is tax evasion. the scale is stunning. there are other issues like with monetary policy. >> is that the same -- you talk about europe and germany, is that the same in the u.s.? >> more so. they use twice as much as we

use. >> but these bills for the most part aren't even in the u.s. >> no, no. the fed used to think that. i wrote about this first 20 years ago, actually, and the fed thought that 70% of it was abroad. but it's not. you see that it's the same thing for everybody. everybody has all these big bills. we're not even a big cash printing country compared to japan, for example. >> do you know how much it costs to print cash? >> it's profit making. the government makes a fortune off of printing cash. my point is it's penny wise and pound foolish. even if you got back 10% of the tax evasion the irs thinks you would and not to mention reducing crime by 5%. it'd be a big win. there's things like illegal immigration, by the way, where that's cash driven. if you couldn't pay in cash, it wouldn't drive the illegal immigration. >> ken, what kind of steam is this picking up with people in positions of power? do they buy into this argument? is it an uphill battle?

>> there's a lot more interest than when i wrote 20 years ago. when i wrote 20 years ago about it, bob ruben head of the treasury heard about it so i'm told he got a task force. but he learned about the 500 euro note coming from my paper and he thought maybe we should have a $500 bill. so i think it's much better. people need to raise more money all around the world. there are terrorism issues, immigration, justice departments. and central banks are very interested because they don't know what to do. cash is one of the reasons that they have trouble with negative interest rates. not as effective as it could be. >> i don't carry it. i mean, 50s make me nervous. they do -- >> you can't cash a hundred. >> no. with a 50 -- if i'm leaving some at home -- they're not going to notice it's a 50 and think it's a 20. i'm always worried. if i have six 20s and a 50, i'm

going to use it -- >> i used some hundreds to see how people would react. i went to one guy at a store and he says i'm going to need three forms of identification. >> seriously. if you have hundreds which sometimes at christmas and holidays you do, you can't -- >> but there are 36 for every man woman and child in the united states floating around and they don't know where it is. >> so why don't they -- would you stop printing them completely? the hundreds? >> yeah. i'd eventually phase out the hundreds and fifties. i'm phasing out the twenties eventually. yes, you should get rid of the penny. but it's a separate issue. >> so you got -- >> i got nothing. >> the zombie apocalypse hits and you've got $20. i have gold if i need to bribe someone. >> there are an amazing number

of issues around this for privacy, if there's a storm, you know -- it's so deeply engrained in our culture and so many things you might not think of that to unpack what you'd actually do if you did this is quite a task. >> all right. ken rogoff, we're going to talk a lot more about other things including the fed and the economy and where things stand. >> how you've enabled people for five years not to do so anything because it's not our fault, this sub-2% gdp we have. it's still from hangover from the financial crisis. eight years later. eight years later. >> that gives you to break to -- >> when we return, joe will give you a hard time. and we'll talk. coming up, your money, your vote. just 63 days away from the election. the latest chatter from the campaign trail. and coughing fits. probably not. not on this station. plus you're not the only one heading back to work today. congress is officially back in

session. we'll tell you what's on the agenda. "squawk box" will be right back. we he to be very precise. if we're not ready when the planets are perfectly aligned, that's it. we nd really tight temperure contro. engineering, aerodynamics- a split second too lon could mean scrapping it l and starting over. propulsion, structal analysis- maple bobon caramel. that's what we're working on rig now. from design through production, siemens technology helpmanufacters meet critical deadlines. i think this'll be our biggest flavororet. when you only have one shot, you need a whole lot of ingenuity.

good tuesday morning, everybody. welcome back to "squawk box." we've been watching the futures. check this out. right now you'll see things are a little bit higher. dow futures up by 11. they were up by 22 earlier this morning. s&p futures up by just under a point. and the nasdaq is up by -- just

at one-third of a point. now to the campaign trail. donald trump who has previously accused the federal reserve of keeping interest rates low to help president obama is speaking again on monetary policy. at an event in ohio yesterday, trump said that the u.s. central bank has created what he calls a false economy and says that interest rates should change. he said the fed is keeping rates down so everything else doesn't go strong. and congress -- so we got this going for us. congress is getting back to work after the summer recess. >> seven-week summer recess. >> and they're returning to a full agenda of things not to do ahead of the election. eamon javers joins us. hey. how are they going to decide what to put off first? how do they prioritize whatnot to do things on? >> you said a full agenda i thought maybe a full-ish agenda might be the way to describe this. look at the numbers here.

start with the number of days left in session here for congress which comes back today in washington, d.c. you see the senate and the house, the senate has 43 days in session. the house just 33 days in session. then you have to divide that into pre and post election. you're down to 43 days. there's just one must-do item here. it's the appropriations bills. they've got to avert a government shutdown by october 1st. that's all pre-election. that means they're going to have to do some of these spending bills and possibly pass a continuing resolution to keep the government open. nobody wants a government shutdown ahead of the election. but you never know with washington. also look at what they could do. okay? couple of things that are at least possible. mylan hearings. you could see a number of committee members have expressed interest in the hike. that could be one. zika funding is another one. that's been held up in a side

battle about planned parenthood funding. they're going to try to do that again. president obama's been pushing for it. a number of republicans on the hill are pushing for it. we'll see where that ends up. the merrick garland nomination is an interesting one. certainly not before the election. remember the president's supreme court nominee has been languished for months now. if hillary clinton were to win in november, you could see the lame duck session be very different for merrick garland as republicans decide whether or not to simply move forward on his nomination or wait and see who hillary clinton sends up before them. and then finally tpp. the transpacific trade partnership. that's something that president obama is going to push for. he's in asia now. he's going to push for it this fall. his problem is both presidential candidates to succeed him are against it. so we may not see that one have a lot of legs either, joe. so you talk about things to push off, number one on the list is tpp. >> yeah.

you'd have to -- i guess that'd have to be introduced by mcconnell or something. harry reid said he wouldn't do it. >> right. so, you know, is that going anywhere? no. the votes just aren't there ultimately. and that tells you where we are as a country on trade with this campaign cycle going on right now. voters from the bernie sanders folks to the donald trump folks are very anti-trade and suspicious of all these deals. all these members are running for re-election. they're not going to push this if they don't have to. >> weird signals coming out of germany with that election. that was crazy. and andrew, you see -- i know you don't believe me. you see the ism numbers. they're like better than anybody else. in europe. >> the question is what happens -- >> pound's at a new high. >> i'm not worried about britain. i'm worried about everybody else. >> just counterfactual the country didn't -- yeah. >> joe, here's the question. i mean, is there a global

anti-globalization wave out there? yeah. >> globalization now is anti-globalism. maybe that's the way globalization is working. >> the anti-globalism movement has gloeshlized. >> exactly. >> is that a real thing o for are we looking at a couple of data points and stitching them together? or is that something that we're going to see play out here in november? i mean, that's the donald trump campaign's ace in the hole. if the world is going that way, he's already there. >> yes. well, we'll see. we'll see. it is weird that it's crossing borders. very weird. all right, eamon. thank you. >> we'll see you. when we come back, we'll have much more with our guest host ken rogoff. plus good news if you're heading to see mickey mouse. we'll tell you about costco's discount at disneyland. we're back in a moment. ok team,

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welcome back to "squawk box." media news. roger ailes has now hired a hollywood libel lawyer. the lawyer charles carter recently represented hulk hogan in his successful lawsuit against gawker. he sent an e-mail on behalf of ailes asking the publication to reserve document with possible defamation claim over the fox news chairman. >> want a redo? >> hulk hogan. >> there you go. the happiest place on earth just got a little cheaper maybe making people happier. annual passes for the california adventure are on sale. $330. you can do it at costco. the annual discounted pass is available at costco stores in southern california only for a limited time and only passes must be used before december 1st

of this year. i wonder why they're doing that. >> i don't know. they sell a lot of stuff, i guess. >> i know. but discounting with the december -- are they trying to get people -- you know, to say something about what the people are not going to -- i don't know. >> why would you go to disney world when you can go to -- or disneyland when you can go to the harry potter attraction at universal? i don't think it's mentioned in the same -- >> owned by a great company called comcast. i've heard about them. >> yeah. wasn't even thinking of that. when we come back, done deal. officially completing a merge eer. but the tieup is not without issue. the ceo alex monroeli will join us. dow futures up by 14. s&p futures up by one.

the nasdaq up by 1.5. "squawk box" will be right back. mary buys a little lamb. one of millions of orders on is company's svers. accessib by thousands of suppliers a employeesgloball. but with cer threats on tise, mary's data ulbender tack. and security that senses and migatecyber threats, their critical data is ser thanver. giving them the agility to be open & secure. because no one knows & like at&t.

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♪

welcome back to "squawk box." among the stories front and center, monsanto this morning germany's buyer has raised its bid to $127.50 per share. that's up from $125 per share. monsanto has acknowledged the bid and is in constructive talks about that deal. we'll see whether it happens. liberty media said to be near a deal to buy a stake in formula 1. according to the ft the private equity firm cvc capital. and another airline computer glitch affecting passengers. british airways experiencing problems in the checking progress. it is causing problems at heathrow airport. johnson controls officially completing its merger with tyco.

faced controversy earlier this year. the global headquarters will now be based in ireland and the tax bill will be lower as a result. joining us now to talk about the deal and much else is alex molinaro molinaroli. thanks for being here. >> thanks for having me. >> first off, let's start with the deal. as part of this you're going to be focusing on building controls because the second leg of this deal is you're spinning off the autoparts supplier for johnson controls. what does it mean in terms of when this deal is and what you think the profit numbers will look like? >> well, obviously it's pretty complicated. the last three years we've been going through change at johnson controls. so has tyco. if you look at where johnson controls is today and where we were three years ago, we divested all of our automotive assets. at that point we'll have an automotive business with the company that will be a cure play

automotive. and we'll have a portfolio of products, battery business as long as with our buildings business that's truly a multi-industrial. >> how should we be looking at the success or failure of this deal. you're here for the next 18 months. >> that's right. i'll be ceo and chairman for 18 months. i'll stay on for another year as chairman. but i think in 18 months or 12 months from now, i think what we should expect is that we will be introducing ourselves to our customers. if you're in the commercial buildings market, you understand tyco and controls. together we can do something special. over the next year, what i would expect is we'll have the opportunity but what will be powerful is the combination to be able to do something special. >> part of the synergies is the lower tax bill. i think it's down by $150 million a year because you'll be based in ireland officially as a result of this. that has kicked up controversy in a political year, an election

cycle. hillary clinton herself making some ads where she was standing in front of one of your headquarter buildings. and saying, look, you asked for a bailout, you got a bailout, now you're leaving and paying a lower tax bill. i know that is not entirely true. you advocated for some of the big automakers to get a bailout who were big suppliers. but you want to tell us what you think about it? >> i don't want to get into politics, but i did write an op-ed that tried to straighten things out. no good deed goes unpunished. it's a political year. you can come to expect these things. but if you look at this deal, this is not about taxes. but you would be foolish not to take advantage of the opportunity. this is about being able to provide a better solution. >> did you look at the eu's action last week? and say -- >> with apple. >> yeah. and say they can change anything they want and it's classic that ireland's taken apple's -- they should just do the irexit or

whatever you call it. do you think this can be changed retroactively? >> so i'm not real familiar with the apple deal. but we're not asking for anything special. we don't have a special deal -- we have their rate, but we're not asking for any particular deal. >> i don't know that apple was necessarily either. i mean, the rate -- what it brings up is the lack of certainty in terms of what it's going to mean for a tax rate. if the tax rate was higher than 12%. say it went up to 15%, 20%, how would this change your perspective? >> it won't change anything. this deal is not based off of taxes. it's not why we do it. >> if we changed the tox policy in the united states, change the rate. >> yes. >> what rate would have kept you? meaning you're saying this is not based on taxes. so if the rate came down even to 22%, let's say, which is lower

than at least where clinton is. i don't know where trump is officially going to be when he ends the day. would you say okay, we're going to stay here? i mean, this becomes the larger question about what the tax policy should ultimately be. if 12% is your rate, unless the u.s. gets to 12% or goes to zero which will be where you ultimately want to be, where as a ceo would you stay here? >> well, i don't know that it has to be 12%. but i think we have to have a rational tax policy. one that you can count on. i don't know that 12%, 20%, it's unfortunate that companies luk ours have to make this choice. but 12% is an obvious choice. >> you've made the point that you wouldn't be doing your shareholders justice if you were paying three times the tax rate. your shareholders also weighed in on your pay package.

voted in favor of the package. you say it's been misunderstood. how? >> well, i think first it is pretty complicated. if you look at at least the way it's been portrayed in the media, i think that there are changes that were legacy controls that that is what the shareholders were voting against. we'll have to look at that moving forward. >> how much do you actually make then? because -- how much are you going to make? >> so i have a $20 million restricted stock grant is what i get out of this deal. that's the -- when you cut through all of this. >> so the $100 million, that's not a real number? >> unfortunately, no. >> alex, let's talk about the auto parts supply business. it does make sense to spin this off. but there has been some trouble that the auto business itself has run into recently.

we're still looking at numbers close to $17 million on an annualized basis. i guess i wonder what you think about the timing of what's happening in the auto industry right now and whether these high numbers can continue or whether we're reaching a sort of peak as some people fear. >> people always ask me what inning we're in. it's hard to say. i think interest rates could influence that. we're still seeing pretty strong numbers. but most folks would say we're going to see a sideways move over the next few quarters. it's hard to look much further than that understanding what could happen outside. outside of things that are in our control. but i think that, you know, we're certainly not going to see the kind of growth we've seen over the last few years. >> so if you were james bond, you could make $150 million. but you have not been approached for that either replacing daniel

craig? >> no. >> if asked, would -- i don't know. daniel craig they say is too old. but they want him for these next two -- >> he wants to do it apparently. >> and then start recruiting someone younger. that's 50% more than the rumor you were getting. they have not. so that's off the table. even if asked, you'll -- okay. i'm not going to go either. >> if they asked, i can't say definitely. >> okay. all right. you believe that? $150 million. >> i would do the deal then move to ireland. >> but he's scottish. >> anyway. coming up, we're going to tell you why the markets might be daring the fed to raise rates following last week's jobs report. plus volkswagen and navistar. the ceos will join us right here next hour on cnbc. plus a little more of ken rogoff. back in a moment.

welcome back to "squawk box." the futures right now, they've been slightly higher all morning long indicated up 19 on the dow. up 1.75 points on the s&p.

the latest jobs report from friday giving pause to investors who have been waiting for a rate hike. why the fed are daring to raise rates. mike, everything is in question. >> yes. what i'm saying this is the market is daring the fed to raise rates. that doesn't mean investors hope they raise rates in september. what i'm looking at is the market's condition today versus where we were in december when the fed, in fact, did raise rates. you have stocks that are about 9% higher. credit markets much healthier. junk bond spreads. and also by the way back in september of last year when a lot of people thought the fed should have acted and did not, very subdued. you have the stock market up 4% in the last three months. all these things would go in the category of giving the fed a window. >> also -- it's also the market saying we don't believe you're

going to do this. >> that's exactly the trick here. you could easily argue we are in this condition in the markets because the fed does not actually -- the markets do not actually believe the fed is in the way. i will say this is some combination, some mixture of economic data trend and market condition that will enable them to go back. here's what gives you pause. markets don't expect the fed rate hike. it's not too flat for them to operate but it's definitely flattened up. you have mixed signals about the cycle right now. the industrial economy is backing off. >> ism number was below 50 which signals things are in contraction. >> i think the jobs report was the right size to change nobody's mind. it was soft enough they said it doesn't force the fed's hand. but it was certainly not weak enough it takes it off the table. >> i think you'd have needed to see a lot stronger to see a hike in september. >> 200-plus? >> at least.

250-plus, i would say. >> no one really believes yet that the benefits are outweighed by the negatives. >> yeah. why rush it. it's really -- but i think they will go up in december. >> what if this zero really is causing corporations to do things they wouldn't normally do instead of investing. what if savers are worried about, you know, pension responsibilities what if all of these -- i mean, i know it's a global phenomenon right now, but there are some people that think by staying low, the benefits are now outweighed by the consequences. >> the big downdraft is global inflation adjusted interest rates. they have fallen so much. the fed doesn't know where neutral is right now. gave a speech saying maybe in a few years it'll be set to three. i think they're really rudder less at the of what normal is. >> if that's true, going up a

quarter of a percentage point still remaining very negative in real terms, i guess you have a lot of people saying what's the difference. >> that's true. but then we are in the middle of an election cycle. i think they'll go in december. and i think that'll happen even if it's still big, i do think they'll move in december. >> even if the numbers are worse between now than they have been to this point. >> no. >> are you a believer the election slows the economy. >> not necessarily. >> have you seen the ads on tv? it's a huge boost. >> to certain individuals. there is a view that it historically slenders the economy. >> why is there uncertainty, you're certain who's going to win. >> i am not certain. >> your famous paper that the depth and the type of financial

distress that we had in 2008 is responsible for globally from this ratcheting down of growth expectations, it still is eight years later? >> i think it's a big piece of what's going on. i think people are still nervous that they're worried there's going to be another crisis. lots of evidence from looking at options. >> the only reason i'm scared now is because of all of central bank action in the world. but you think the demand is so slow we're soaking up all -- the fed is doing was necessary but not sufficient to keep us afloat. >> well, the fed isn't the whole show, obviously. we didn't have tax reform, infrastructure, a lot of other things didn't happen. it's interesting there's just this furious debate about whether we should do anything. the left is that no structural reform protectionism is a good thing. and that will slow down growth. >> protectionism on both sides

at this point. i don't know what both are at this point. but you're right. protectionism is a worldwide thing. >> yearly, what effect can we put a dollar amount on over the past eight years. yearly? is it $100 billion? 200, 300 what is it? >> on the financial side there's no question that it's made it harder. >> it's the job engines. >> and the growth in the economy comes from it. it's not just the -- if you look at the real energy, the thing i'm sure you talked about. it is harder and there's a lot of evidence. and europe is worse. >> but could we -- what gives us cover here is that. everybody else is slow too. so people think it's not self-inflicted. but then there are others that

say we were big enough for awhile. that europe is a given that they're stuck in their structural mess. but we used to be big enough to actually drag them along with us. now we're not leading that way and china slows down. >> we are leading the way. we're just not leading it very fast. europe has its problems. but i think there is a lot of the system in europe and probably entering crisis again. there are a lot from the financial crisis. >> that make it a new normal of 2%? >> i actually think eventually it will be better and the whole idea, you know, there'll never be growth again, i remember i'm old enough to have lived through many periods of this where people think the growth will go on forever, slow growth will. it won't. >> in the spring maybe. >> i can't promise in the spring. >> we've got to -- you fertilize in the winter. you do the planting. you know, you do the watering.

do you like to watch? you're thinking about chess again. right? what did you just do? an opening? >> not right now. >> i just saw it by the way. the last few months. >> he still has it. >> it's old fashioned though. >> is it in color? coming up, this morning's biggest movers. plus parting shotss with our guest host ken rogoff. stay tuned. you're watching cnbc, first in business worldwide.

here i am... building a jet engine. we've been hearing so much about how you're a digital company, so you can see our confusion. ge is an industrial company that actually builds world-changing machines. machines that can also communicate digitally. like robots. did you build that robot? that's not a robot, that's my coworker earl. he builds jet engines with his human hands. what about that robot? that is a vending machine, ricky. john, give him a dollar.

hello. let's take a look at some stocks to watch this morning. general electric is buying two small european makers of 3d printing machines for $1.4 billion. they have helped push the stocks of the two u.s.-based 3d printing companies higher. 3d systems and stratasys. and mondelez international a rated overweight by jpmorgan chase. that the company's cost saving plan is running ahead of schedule. and urban outfitters was added to the franchise picks list jeffreys which says it's ahead of the curve on several fashion

trends. including on retro clothing. >> from the 1990s. >> that's not retro? >> that's not retro. >> it's really not. that's current for me. >> i could dig some of that stuff out too. our guest host this morning is ken rogoff who has worn many hats and titles over the years. we were talking how you were the chief economist for the imf in the early 2000s. and you noticed a trend there. we were just talking about growth. a lot of the big think tanks getting it wrong, a lot of governments getting it wrong, a lot of central banks getting it wrong. the imf has done what in terms of looking at the economic forecast? >> just looking at their forecast since 2007, they've had to mark down global growth every time. for the past nine years. they do, they're forecast twice a year. every single time a markdown. maybe 27 times in a row. and now they're saying --

>> what does that mean? >> well, they're sort of synthesizing the whole world view. when i was there i was always told be a little low. you know, so you can try to say you should do structural reform. you should be careful. i guess they try that, but -- >> even when they're underestimating things. >> i think something is going on they haven't paid attention to. >> what do you think that is? >> i think the number one thing was the financial crisis that everyone -- all the big forecasters got it wrong thinking we bounce back wanting a normal recovery. like to see it go with us. productivity growth is lower. and there's all this rising populous. not great for growth even. good for other things. >> we just talked about how you think eventually we'll get back to stronger growth. also this could be decades in the making. not a year or two down the road.

>> it's hard to forecast that far out, but i do think ten years from now we'll forget about stagnation. it'll eventually be forgotten. >> ken, by the way, is with us this morning because he's promoting a new book that's out. it's called the curse of cash. we talked at the top about this. for people just joining this, it catches you offguard because you think about all the evils with electronic cash or other ways to paying and the cyber attacks that are out there. but you say one of the biggest problems is cash. why is that? >> cash facilitates fax evasion, facilitates criminal activity of every kind. drug traffics, human trafficking, extortion, corruption. it's also involved in illegal immigration. there's tons of it. mountains of it. it's not just the u.s. it's the whole world. it's become all in big bills like the u.s. hundred, the euro

500. . >> we're the worst offender? >> no, no, no. japan has more than twice per person. it's a worldwide phenomenon. >> if you're going to be laundering money or paying for something illegally, you're going to need big bills. if you need $20,000, $100,000 you can't do it in ones, fives, and twenties. >> you want to carry around a million dollars, it's in a briefcase. it's in tens, it weighs 220 pounds. they do drug busts and find piles of hundreds around. the central banks which are putting them out there don't know where they are. >> i mean, what are we to do next time that we have a required ransom payment for a state sponsored terrorist to bring back hostages and we need to send something on a plane over there? what should we use next time? >> no, no.

i'm not getting rid of cash. i'm for less cash. >> all right. so we'll still be able -- >> do it in tens. >> just need a bigger plane. >> what is the world reserve amongst money launderers? >> it's still -- >> don't act naive. when you've laundered things -- >> you can find a lot in russia. the russians love our hundred dollar. >> oh, that guy. >> ken, we want to thank you for being here. ken rogoff and again the book is called "the curse of cash." thanks for joining us. >> thank you. >> i love money. >> anyway, thank you, ken. coming up, the deal of the morning. volkswagen's truck division taking a stake in navistar. the ceos will join us first on cnbc. and later, cnbc contributor larry kudlow is out with a new book. he'll join us after the break.

across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at business.ny.gov let's make a deal. a tuesday of takeovers and tieups including bayer sweetening bid for monsanto to $65 billion. and spectra for $28 billion. your money, your vote.

donald trump rips what he calls a false economy and calls for a change in interest rates. plus shots dropping. video going viral as dubai seeks to conquer obscure records 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 kernen along with becky quick and andrew ross sorkin. the futures right now have been up marginally. up about between 18 and 20 points for most of the morning. the s&p called up a point and a half. the nasdaq up about 1.6 or so. we've seen owl prices under $45. been in the range of $40 to $50 which seems tocould be less of

story how it dictates the movement. it gets below $40 or above $50 and you start thinking again. >> let's get you caught up today on other top stories. bayer sweetening its offer for monsanto to $127.50 a share. the shares this morning as you can see monsanto up slightly. it's now looking at $108.25 which tells you a bit about how the market is skeptical about this deal. nowhere near the offer on the table. we had an analyst on earlier who says they think they are still high hurdles for any of this to get accepted. bayer shares up this morning by about 21 cents. also enbridge is buying spectra energy in an all stock deal worth $28 billion. spectra shareholders will get just under one share of the combined company for each share they hold at this point. that creates the largest in north america.

and danaher. that is a 54% premium over the closing price. and cephuid shares are up. and voex kag bonn taking a stake in navistar. phil lebeau joins us with special guests this morning. >> thank you. i'm here in illinois with troy clarke of navistar. and the head of volkswagen truck and bus division. let's start with this deal. we'll explain it and make you can give importance of this. $256 million, volkswagen takes a 60% stake in navistar. we'll talk about the details of why this is to important in a bit. but give me your perspective. this is an alliance, the logical step for the company, we're in an industry where the next will

be tremendous change. this gives the opportunity to collaborate on technology. >> andreas, from your perspecti perspective. going off for the last year and a half or so between you and navistar. how much were those slowed down by volkswagen's internal problems the last year about the emissions scandal around the world? >> we intensified the talks the last six months. we went through a lot of negotiations. but finally we came to a good conclusion. for us the alliance is very important. for us we can resolve power components. >> and this a market under pressure right now. you're looking at class eight orders down 20%. that's just orders. do you think you hit the bottom here? >> you know, i think the market is in that kind of bottom phase right now. and i think that, you know, certainly this time next year we're going to look at one

marking up. in other parts of the market, the median section and vocational section, those are holding up well. the. >> the skeptics will say navistar is finally throwing in the towel. you've been struggling with your own issues when it comes to the new emissions standards for engines. you couldn't do it on your own so you have to go to volkswagen. >> the fact of the matter is we've made a lot of progress turning the company around. you look at it it really makes sense to where we can capture economies to scale going forward in this industry which is becoming more global every day. >> as the loss of market share, did it give you any pause as you were looking at doing this deal? >> the most important thing, if a company has done a good job in decreasing -- increasing efficiency. but to make big move in technology in our business, that's a very high investment.

and for that you need economic of sales. and that's what we tried to establi establish. >> because you haven't had a footprint here. >> yeah. we can help maybe start to achieve the position. and we can deliver all of the components from a global perspective. >> what about trucks getting so much attention right now. we know about the fuel economy standards, how that's changing the trucking industry. autonomous drive trucks, from your perspective how far away are we from having semis that can drive themselves to a dropoff or a commercial location? >> after all i said before, i think the whole industry is changing. the challenge is one side happier. the engines, the power train, we have to be efficient and

compliant. on the other side, it's very important that the whole logistic network is in. and we have to deliver it. autonomous driving is part of it. i don't know. but with this approach we can develop such technologies first hand and bring it to the market when it's necessary. >> troy? >> same thing. there's just a lot of good reasons why i think this technology is going to find a place in the market place. i personally believe it's going to move forward by -- it'll jerk forward and stall a bit, but i think there's a tremendous value in all parts of the chain. >> troy clarke, andreas renschler. >> thank you for bringing us that. when we come bab, donald

trump ripping a false economy. we're going to talk to an informal trump adviser. larry kudlow. he's on in a moment when we come back. it's been over 100 years since the first stock index was created, as a benchmark for average. ♪ yet a lot of people still build portfolios with strategies that just track the benchmarks. ♪ but investing isn't about achieving average. it's about achieving goals. ♪ and invesco believes doing that today requires the art and expertise of high-conviction investing. ♪ translation? why invest in average?

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grown right here in california with absolutely no antibiotics ever. food we're comfortable eating. making. serving. this is the new comfort food. and it starts with foster farms simply raised chicken. california grown with no antibiotics ever. let's get comfortable with our food again. welcome back to "squawk box" this morning. take a look at u.s. equity futures on this shortened week. we've got four days left.

dow would open high about 16 points higher. and the s&p 500 up a little over a point. making headlines this morning, liberty media near a deal to buy a 15% stake in formula 1. that's the company behind the race car series. according to the financial times right now their biggest shareholder is cbc capital. now to politics. a new poll this morning from cnn shows that donald trump is pulling ahead of hillary clinton by two points. 45% to 43%. this is on a nationwide poll. gary johnson takes 7% in that poll. and donald trump weighing in on interest rates in the campaign trail. he said interest rate created a false economy and rates should change. he joined us on "squawk" in may and here's what he said at that time. >> if we start raising rates -- i've always been a low rate person. if inflation comes in and we

don't see signs of that and inflation comes in, that's a different story. then you have to go up and slow things down. but right now i am for low interest rates and i think we keep them low and we have to compete. >> so he's -- larry kudlow joins us now. senior cnbc contributor and formal adviser to the trump campaign. also writer of the book "jfk and the secret revolution." which makes the case that america should embrace the economic policies of those past two presidents. but we'll get to that. hold that up and we'll get to that in a second. >> thank you. >> but just in terms of you heard that sound bite from donald trump's appearance here. and now he's saying that perhaps it's time that at least to start think about raising rates. because it's created a false economy. he's a real estate guy. when he was on last time, real estate guys love -- who doesn't love low interest rates? do you think that his view has

evolved since then now that he's a candidate for president? it's not just about real estate. it's about savers. it's about having ammo next time you get into a slope. there are reasons to consider raising rates. and you can also use it by saying the fed's in the pocket of the democrats for keeping rates low. >> right. >> so has he evolved? >> i have not talked to mr. trump about this in awhile. i'm not sure where he is exactly today. my thought is fed policy is in disarray and all that's got to be changed, cleaned up, rules have to be put in. the main thing for mr. trump and this is the story of our book. what this country needs to get our growth rate back from less than 2% to 4%, 5% where we ought to be, we need tax kutss. we need lower marginal tax

rates. and so my vision for this policy which is in the tradition of jfk and reagan, get your corporate tax rates down for small and large businesses. and then market rates will go up and then fed should follow the rates up in the normal course of things. the dollar will be very strong without manipulation. that's the best way to do it. right now i don't think the fed should force higher interest rates. there is virtually zero inflation. so it's a complicated process. >> the fed can't do that by itself. they've got to wait to see something in washington. >> you've got a fiscal and monetary policy. if you need better economic growth, the lever to push is the fiscal policy. in this case low marginal tax

rates and particularly the business tax cuts. if you worry about inflation which we have none, then you would tighten monetary policy. but i'm worried about the tax hike. >> look at the gridlock in washington. what are the odds anything can get past it? >> the odds are going to be what they're going to be. one of the things in this book that i talk about is that john f. kennedy who was the first supply side. >> that's what i was going to guess. the point of your book and the way i see it is that supply side economics right now has been the narrative is that it doesn't work and that it actually caused the financial crisis. by you -- i mean, it's -- they all say it. presidential candidate, have the shl candidate. you drove us into the ditch with your supply side of stuff. >> terrible. terrible. having taxes is awful. >> it makes no sense. but by bringing jfk in, that

does that here. it's seen as a partisan issue right now. >> what we try to say in is the book is it is not a partisan issue. it need not ever be a partisan issue. okay? >> trickle down, larry. what if it doesn't trickle down? >> incentives work. if you get more after tax on the dollar earned from investment or risk taking, you will continue to work hard. you'll get more rewards. look. the point of this is jfk, the democrat, pushed for supply side tax cuts. high end, middle, corporations, capital gains, and it worked. the democrat. and here's another sub-heading. another hero of the book which i suspected when i started with it, a republican? kennedy's democratic cabinet was the driver of the low tax rates

and the strong dollar policy. the liberal academics from harvard and m.i.t. didn't want to do it. kennedy overruled them. now push the clock towards reagan. reagan was able to work in a bipartisan way. okay? very important point. reagan used democrats in the house. he got 60, 70 votes for all his tax cuts. in 1986 he had almost unanimous opinion in the house. this country needs to understand the need to return to persuasion, discussion, civility, and ultimately bipartisanship. >> for the past 15, 20 years. since bill clinton. b and he was not. >> no, no, clinton was pr etty

good. >> but now corporations are the whipping boys. and it's so incongruent to think that's where jobs come from. and bernie sanders took the party even further out the -- >> and i think that's their problem in this upcoming election. >> can i just ask a question though? >> just one point. they have forgotten the legacy, the tax cutting legacy of john f. kennedy who was their greatest president in the last 50 years. they've written it out of history. that's too bad because kennedy had the story right. >> larry, two questions. one is he's clearly -- well, there's an immigration issue. big business is now on the same side as him. i think you'd want to be. but when it comes to globalization which now hillary clinton is not for tpp either, but still he's probably been even more aggressive publicly about that. i would think that you would be on the other side of that.

>> i'm not entirely happy with it. he's moving away from the detor pags of 11 million people. i do like border security. i think it's very important. i also think we've got to clean out the criminals. whether they're illegal aliens or not. >> this fact that bill clinton 1995 state of the union -- did you see that yet? >> i have not. >> he was right there. >> i saw the headline on -- >> no. it's viral now. it's word for word trump's immigration. >> i thought it was a joke at first. >> i was looking to see whether the lips were moving. >> actually, key point. and by the way, on trade, all right? i'm a free trader. mr. trump has pulled back from some of the worst. but he's more -- >> i know it's a -- >> kennedy -- let me make this point. kennedy was a free trader. reagan was a free trader. >> now nobody is.

>> kennedy believed in a strong dollar actually linked to gold in those days. so did reagan, so did robert ruben. so the similarities here are not coincidences. they move to sound economic growth and economics. i don't for the life of me understand why couldn't we do this again? >> not what the anti-globalism crowds on the right and left want at this point. it's a far cry. you bring up a fair point it's because of the whipping boy situation. but this is not just a left versus right. this is a populist argument coming from both sides. >> can i tell you something? when you are in periods of economic growth and prosperity and job creation and wage creation, people are happier. the problem today as i see it in the start of the book in the intro, people are cranky, unhappy, they're pointing the fingers at this group and that

group. growth solves a lot of problem. >> their not sure their job's going to be there. >> right. and so we need a policy change here. we need to harken back to the jfk/reagan nexus. then people are going to be happier. america, look. we want legal immigration. we all do. i get that. but we have a great tradition in this country. we need to understand that legal immigrants helped build this country and can do it again. but i understand that towns in the upper midwest are pointing the finger at let's say china for example. i get that. but you don't see this in the reagan years and the clinton years. we were running the right mix. we were creating 40 million jobs. okay? and people were happy campers and we didn't have this point. i'm just saying with -- >> government was spending a lot of money under reagan and

clinton. >> on defense. by the way, clinton with the gop was tight fisted. another similarity, kennedy and reagan believed in peace through strength. they were not warriors. they were not neocons. but they wanted america to be first in military strength. >> tax question. i want you to help settle this debate. for many months talking about how hedge funds and real estate people that he wanted to close this loophole. and then based on what appears to be the tax plan, he seems to have lowered the rate for everybody down to 15%. so he first said that everybody was going to -- that this was going to be closed. that he thought they should be paying a lot more. ultimately it looks like everybody pays a lot less. am i misunderstanding what's happened here? >> first of all, everyone paying fewer taxes at lower tax rates

is a good thing. not a bad thing. >> it's just -- >> not completely formed. in this sense there are going to be strict caps and limits to a number of so-called loopholes and deductions for individuals. that's part of his plan from day one. you want to go back again. kennedy with stanley surrey and douglas dylan and reagan believed you lower the tax rates and get rid of the -- and you have growth. our book is not about this election, per se. but i believe mr. trump is very much in that tradition. i think details will be worked out on the deduction caps and the loophole question. >> final question from me about ceos that come out and support either of these candidates. i have a column today i spent a lot of time on trying to

understand the influence the ceos how v now on their employees. employees shockingly follow what the ceo does in ways that i don't think people appreciate or at least i haven't. i'm curious why you think more ceos haven't come out on the side of the world for this. >> i look forward to reading your column as i always do. i'll try to do analysis of my own. what i will say is it's a an oddity in some respects. let's take tim cook of apple. this whole brouhaha with ireland, mr. cook apparently does not like mr. trump. but mr. trump's corporate tax policies of lowering the ralt and repatriation would do wonders to help the apple situation and keep a lot of their orpgs operations in the

usa. i wonder between now and then if mr. trump is able to stay on message with this, perhaps cook and others will come around. >> and rhetoric on corporate taxes. >> it's impossible. >> if he wasn't disingenuous. take what she says at face value, they would not be on the same page. >> i've got -- >> we've got to go. >> kennedy, trump, reagan, reach across the aisle and persuade we can do that. there's an american tradition. >> thank you for being here. and congratulations on the book. when we come back, we'll hear from one of china's best known vehicle makers. fred hu will tell us about that move. we'll be right back after this break.

coming up, grading the hedge funds. kate kelly joins us with winners and losers of cnbc's delivering alpha conference next week.

this is me, using a wrench to build a jet engine. well we thought ge programmed machines to talk. ge is an industrial company that actually builds world-changing machines. machines that can talk to each other digitally. hello? they don't talk to each other like that, ricky. shhhh, you'll anger it.

he looks a little ticked off now.

♪ welcome back to "squawk box." here's what's making headlines this hour. paypal striking a deal with mastercard which will allow mastercard customers to use paypal payment services in stores. paypal already has a similar arrangement in place with visa. paypal payments are in place.

peter piper. general motors had settled the last two of its so-called beth weather legal cases which were set this year. it stemmed from faulty ignition switches that were linked to deaths and injuries. that puts the automakers closer to clearing legal hurdles from the switches. although it has another handful of cases it has to face next year. and the sony thriller "don't breathe" topped the labor day weekend box office. the movie took in $9.6 million in north american ticket sales. i think it's like about -- so it's about a blind guy and they go in to rob him. maybe he turns out the lights? there's an old movie called "wait until dark." with audrey hepburn. >> give advantage to the guy who can't see. because he can hear better. >> i was thinking of the final scene in "the silence of the lambs" with the infrared

goggles. she can't see him but she's -- i don't want to give away the end. >> she hears the click on because he's got a revolver. "suicide quad" was second pushing it over the $300 million mark since its release. also do you remember "straw dogs" each of those guys he gets them a different way. >> didn't see it. >> then there's a remake. >> i'll have to check it out. put it in my netflix queue. >> in color? >> the remake was not as good. >> have you seen it? >> no. check out this "squawk" food news this morning. a dubai bar breaking the world record for the longest domino drop shot. who knew. huddle sports bar and grill breaking the record of more than 6,000 glasses of an energy drink and shots of whiskey was an

effort five months in the making with tests twice a month. it took 12 hours to set up. the previous longest drop was senor frog. got 4,100 shot glasses to fall correctly back in february of 2013. yum selling its stake in its china business to china's pri ma ver ra capital. susan li spoke to the buyers and she has the comments. >> hi. considered one of china's leading deal makers, they just bought a 4 -- that equates to a 4% to 6% stake on how it trades when they spin off the china units in november. they've got a pretty good deal in this offering. and an 8% discount.

i spoke to fred hu this morning. his only interview on this deal. and asked him why he didn't buy a bigger stake. >> this is not to control the company. this is very big company. we position ourselves to trust the partner. engage the shareholder. so, you know, i think it's really about the trust and, you know, influence. i do believe that, you know, given the trust that we would have built relatively minority shareholder. we'll be able to really contribute and add value. >> this yum deal is also being used as a benchmark on mcdonald's future in china. they're trying to find a buyer for their operations and it's proving tough to find a buyer who has the deep pockets and the right fit. if you find the right partner

and also a mobile strategy, internet strategy in ant financial which has one of the biggest food delivery services in china, it may be a bargain. if primavera capital sounds familiar, a bid for hotels earlier this year. that deal didn't work out for them. back to you. >> thank you very that. our annual delivering alpha conference just a week away. we're joined now with a score card of winners and losers. >> there are a bunch of each. a mixed month for hedge funds as the august returns continue to roll in a little more slowly probably because of the labor day weekend people reporting. i'm sure they're reporting to their investors. maybe they haven't looked at them yet. why discrepancy between renaissance and pershing square. perhaps not keeping pace with the s&p. depends who you're looking at, of course, against this backdrop

and continued fees on average. institutional investors have mr. pulled tens of billions from hedge funds this year alone. with the third consecutive quarter of outflows. aig is pulling $4.1 billion out of its hedge fund portfolio. and pension funds like the new york city employees pension pulling $1.5 billion. illinois state board of investments reduced by about a billion dollars starting in february. and others have done the same. jonathan grable says performance and fees are part of it. but optics whether it's putting off pension fund members with a lifestyle or perhaps making political contributions that of course inevitably are not going to gel with some of the individual member who is are ultimately investing in the fund are also part of the picture. so is it to have hedge funds. take a listen. >> we've reduced our exposure in our hedge fund portfolio from

about $1.6 billion to about $600 million. much of that reduction is driven less by performance. more by allocation. we've reduced this exposure because we do not believe they are a discreet asset category. >> these questions will be front and center at delivering alpha. one of our guests runs the florida state pension fund which have gone in the okay direction. we'll hear from him next week as they try to say why they're not delivering alpha or with the rare case they are maybe the secret sauce for doing it. people like paul singer doing tremendously well. we have some of them as well. >> will it be the next eight years will they be unbelievable? hedge funds? >> no. dan lobe predicted a washout in his history. it feels we're in the early stages of that. >> is it cyclical?

what's up with that? >> i think the jig may be up. there was an interesting book that talks about the evolution of this industry over 15 or 20 years. of course it's been 30 or 40 since it started, but there used to be a few thousands hedge funds. now there are many thousands. 10,000 by some estimates. and it's just all the trades are too crowded. the fed absolutely affecting markets. didn't donald trump say that overnight? we have a false market. the fed's keeping the rates low to keep everything else up. a lot of people believe that, actually. whether or not the fees are justified in this environment, i also thought grable makes an interesting point. he says there's no good pen benchmark. and the s&p is okay if you're a long only fund maybe. but if you're doing certain value -- >> i don't know. to me the s&p is a good benchmark. i don't have to pay your two and 20 and get this for nothing. if you can't do anything better than that, how do you justify?

>> are some of these guys considering lowering their fee structure? >> they are -- behind the scenes these hedge funds are lowering fees because they're trying to strike a deal with a guy like grable and make you a managed account. i don't think it's a radical departure, but i think it's less. i think as a general manner if you're going to become a head of a hedge fund, it's still 2 and 20 in general. but we are seeing some slippage around the margins and some individualization of accounts. and i think that's where you're seeing the fees lower. and they're likely not to talk about that. >> kate kelly, thank you. we should tell everybody, remind everybody that we've got a block buster -- you can get more details and tickets are at delivering alpha.com. now to the broader markets.

is a september rate hike on the table? joining us is mark grant. mark, it's kind of a straw man setup. i know you think there's not a chance that they're going to move in september. correct? >> i don't think they're going to move, becky, for two reasons. one, economically they're just not going to increase the cost right before the election. they're not going to drive up borrowing costs for real estate, both individuals and commercial estate. and for corporations in general. and two, of course, they'll never admit it or say it. but we have the elections just around the corner. there would just be major amounts of furor if they did that. and they cause some kind of market correction. >> particularly with the strong jobs report on friday, that probably adds up to it. be you don't think they're going to raise in december either? >> i don't. you know over many years

different than most people i think that september 15, 2008, marks the line in the sandwich was the bankruptcy of lehman brothers. before that the fed influenced the market now with the portfolio over $4 trillion they're controlling the markets. and the united states is the third of the major central bank with the japanese central banks. and the european central bank. currently engaged in quantitative easing. >> larry kudlow was just here in the last ten or 15 minutes and he made some interesting points. where he said really this is not about the central banks and what they can or can't or should or shouldn't be doing. if they raise rates artificially, that's not all great. but what they want to see a not monetary policy that will lower tax rates and kind of force.

that's what we haven't seen. the corporate reinvestment he said if you change the tax structure, you get all of that. and the fed will be following interest rates higher as there's more demand in the market. what do you think about that. >> i know larry and i have great respect for him. i think he was talking about trying to do something politically and i'm not as optimistic as he is that that can get done. what i do see happening whether it's clinton or donald trump is both of them have these tremendous programs of infrastructure and growth they're different kinds of programs but they're going to go to the federal debt. there's going to be great pressure on the fed to keep rates low if not take them lower to offset the rise in debt. >> wow. it's complicated stuff. but mark, i do appreciate reading everything you're

sending out on this. we appreciate your time today. >> thank you very much, becky. okay. when we come back, to mars and back. scientists just returned from a year-long simulation of life on the red planet. >> except for there's air here. >> and they just should have watched the matt damon movie. it's already been done. but this was in hawaii. and one of the missions crew members tell us what it was like to live on mock mars right after the break. jobs disappear?d paying it's what the national debt could do to our economy. if we don't solve our debt problem 19 trillion and growing money for programs like education will shrink. in just 8 years, interest on the debt will be our third largest federal program. bad news for small businesses. the good news? there's still time for a solution. ask the candidates for a plan to secure our future. what's going on here? i'm val, the orange money retirement squirrel from voya.

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welcome back to "squawk" this morning. futures right now looking up. green arrows for everybody this morning. dow looks up 17 points higher. s&p 500 up about a point. the nasdaq up about 2 hnt 5 points. eog resources buying yates. the transaction valued at $2.5 billion in cash and stock. a bit of a merger tuesday for us, guys? takeover tuesday. right now let's talk mars. building a rocket that will carry humans to the red planet is only part of the challenge. getting a crew to work together in isolation is just as important. six people just spent a year testing what it's like to live all alone on a mars-like base. and they just left the simulation and returned to earth. >> three, two, one. >> come on. >> fresh air, finally.

>> of course that's not really mars. in fact, that's the end of the fourth high seas experiment from the university of hawaii. it was meant to simulate what it would be like to spend a year on the red planet. joining us now is dr. shayna gifford. was that the big island, doctor, that you were on? you were walking around all the lava? i don't see why we need to go to mars. we can just hang out there. it's kind of the same, isn't it? except for the oxygen in the air. >> there's a few differences. but yes, joe, it was very marslike. >> was it on the lava -- the hard lava on the big island? >> that's correct. it was on hawaii island on mauna loa which is one of the biggest volcanoes on earth. one of the biggest in the solar system. you've got to go to mars to get a bigger one. >> looking back, was being there weird and going through that? or when you got out, was that crazy?

how you felt? just describe both, i guess. >> well, the answer is yes, joe. being weird -- being there was a little bit weird in its own way at first. just like you move houses and it's a little weird. leave home and go to college is weird. being in space wsh it took a little to get through. you can cross it in 12 steps from one side of the dome to the other. every time you go out, you have to put on the suit, decompress, wait, and then go out. and there's nothing but lava rock for kilometers. but once you're used to that, that becomes normal. and now i'm back here where there is traffic and streets and cars and millions of people. it's seemed a little weird the first few days but i'm getting used to it. >> so you're in l.a.

>> that's right. >> yeah. so the first thing you mentioned was traffic. that might not be -- i mean, i see why it hit you so hard. although google maps makes it a little better. but that would be a true shocker. so did you -- reminds me of not survivor but you want to kill anyone that you were working with at that point? anyone really get on your nerves? can you tell us which person and what they used to do? >> that's the antithesis of my job as a space doctor. i'm there more to prevent people from dying for whatever reason. you know, think back to college. think back to your roommate situation. there was always a thing. sometimes there was that guy who, you know, got on your nerves. but mostly there was that thing that somebody would do, leave out dirty dishes, not help with the laundry. you just have to talk it out. hey, could you pitch in, help me fold all these towels i just did for the whole crew so we can clean the dishes.

but mostly because we did need each other to survive, there was a survival component. we grew our own food. i made yogurt and cheese and bread. we needed everybody to pitch in to make it through. so and cheese and bree bread. >> you different grow potatoes, did you? >> we legitimate tried but did not use matt damonat's method. >> virtual reality is getting better. did that help? >> i think it did. we worked with an affidavstrona named jay bucky and for me the most profound moment was my grandmother passed during the mission, i learned of it through e-mail. all our news is by e-mail. my mother wrote me and said grandma passed, it was expected. i was running the vr system, set it up, tested it, put the goggles on and suddenly, i was

back in boston, which is the city i used to live in, standing in places i used to be and people were looking at the vr rig and i thought, this is so cool, i've gone home. and that was really great, to be able to go home in that moment especially. so it is getting really great, it has a long way to go, but it really can serve an amazing function for people who are home sick or sensory deprived because all we have are white walls and red lava. >> so you'd do it again? >> oh -- >> really, you would? >> the vr or the space, would i do it again? the answer is yes. >> i'll do the vr. i'm staying out though. >> 12 feet, that's like being trapped on a set for a year. >> wow. >> or it's like likeriker's, bu then you have villains. >> just finished a night out.

that's what i was thinking about. >> he came out a little bit different than he came in. >> very much so. >> i hope he's okay. >> shana, thank you very much. >> you're very welcome, thank you. cramer will be joining us live from the new york stock exchange, and we'll get his take on these big deals we've been talking about, be right back. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. ♪ yet a lot of people still build portfolios with strategies that just track the benchmarks. ♪ but investing isn't about achieving average. it's about achieving goals. ♪ and invesco believes doing that today requires the art and expertise of high-conviction investing. ♪ translation? why invest in average?

down to the new york stock exchange, jim cramer joins us. back to school is kind of a metaphor. everybody comes back to school on wall street, too, jim. >> right. >> so we do have an election looming and i don't know, the feds, september, december. so we've got those things. how does it all play out for market players? >> the thing i'm still baffled about is there could be so many deals. embridge doesn't need to buyspect rbuy buy spectro, and eog doesn't need to buy yates. companies say, look, this is our chance, maybe before the election that they feel there's some eminent consolidation and competition everywhere, but these deals matter. just like johnson controls this morning, these are very significant for the market and

even as we talk a lot about the fed hike in september. every time you get negative you get hit by a big deal. >> i wonder -- i hadn't been thinking about what mark grant pointed out and that is both candidates are talking about spending a lot of money on whatever, infra structure -- whatever -- however you want to do it. freights do go up. we're going to go a lot of money at higher rates which would not be good. >> you'll havulcan the most sen projections have gone down consistently. the market's saying look no matter what happens, you should be following those stocks, as well as caterpillar. they've been down for the last couple weeks so i don't know how much to believe. >> mark would know. thank you, jim. see you in a couple minutes. we'll have this morning's biggest movers. you're watching "squawk box," first in business worldwide. those new glasses?

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i cannot blame a soul for being frustrated and i couldn't blame anyone wanting to sell, facing a rate hike, maybe two, and uncertain earnings from companies that rarely mis. . welcome back, everybody, let's get a final check on the markets this morning. we've before watching the futures, and they've been moderately this morning, the dow is up by 20 points, the nasdaq

up by 3 and 1/2. the tenure is yielding 1.5 nine%, oil prices have been higher. >> joseph, thank you. make sure you join us tomorrow. >> yep. >> "squawk on the street" begins right now. ♪ good tuesday morning, welcome to "squawk on the street," i'm carl quintanilla, with david faber, and all back together for almost a month and a half. summer's over, we get back to business, plenty of ama, apple's launch tomorrow, futures are steady. europe's mixed, asia mostly higher, oil coming off the its worst week in two months. summer's over, the jobs report is out and the feds' highly anticipated september meeting 14 days away, even trump is speaking out about rates