campaign trail canceling events after a diagnosis the campaign tells us of pneumonia. and it says she had a medical episode yesterday. plus, a huge weekend for sports. we'll bring you the highlights including the tom bradiless patriots defeating the cardinals barely in sunday night football. it's monday, september 12, 2016. and "squawk box" begins right now. ♪ >> live from new york where business never sleeps, this is "squawk box." >> good morning, everybody. and welcome to" squawk box" here on cnbc. i'm becky quick along with joe kernan. we're playing the band kansas because we have the musical guest kicking off their 40th anniversary tour. more on that in a bit.

after some huge losses on friday, relatively speaking to what we have seen over the last couple of months, you can see that the futures are once again indicated for a triple-digit down day. dow futures right now down by close to 150 points below fair value. it looks like the s&p 500 would open up down 18 points if we were to open here. and the nasdaq down by 48. the dow was down by 394 points on friday, a decline of 2.1%. that was the worst daily performance since brexit. the s&p broke the 43-session streak without a move of 1% in one direction or the other. finally getting decisiveness down by 2.4%. obviously, a lot of things have changed. people are coming back from vacations. some are coming back with the big issue fed speak. there were concerning comments for the bulls if you listened to boston fed president eric rosengren to sound like he was in favor of a hike.

he was in favor of a hike last time, too, but the fed is meeting next week. we do have more fed speak today including neel kashkari joining us at 8:00 a.m. today. he's looking at the last comments you'll hear before next week's meeting. we'll watch that closely. take a look at what happened overnight in asia. things were trickling through from what we saw here on friday. the nikkei down by 1.7%. the shanghai composite down by 1.9%. and the hang seng was down by . 3.25%. catch-up after what we saw here on friday. the dax is down 2% and so is the cac in france. the ftse is down by 1.6% across the board with pretty significant declines. taking a look at crude oil prices, crude oil is down by about 85 cents. so we are just sitting at $45 a

barrel. $45.03. that's a big pull-back after the gains we saw earlier last week. >> history doesn't repeat itself typically. >> that rhymes. >> but there is something about september. what is the coolest month, it's not september, some other winter month. but for the market, september is cruel. and the reason we know about so many october lows, it's because they are making a low after september. and i don't know -- for me, you know, when rates do go up, there's going to be near term. this is what is likely, i guess, to happen. but i wonder if it really changes, like, if you're at half a point, three quarters of a point -- >> what is the tipping point where it actually matters? >> yeah, i don't think it matters up to -- what is actually happening, and unless stocks are inflated from animal spirits -- >> but what we have heard so long from david tepper, this is

the way the funds are flowing. >> that was a year ago. >> but when it turns, that is their concern on some of these issues. >> but that was a year ago. >> right. it doesn't matter on 50 basis points, yeah. >> that was a mowhole year ago. >> the vix was up last year. people have been begging for volatility. well, there you go. get ready. >> 400 points isn't what it used to be. >> no, although if you look at it relative to the last couple of months, it's something to pay attention to. >> that's true. today is the last day before central bank officials enter a week-long communications blackout. i wish it was like that all the time, really, ahead of next week's -- >> i'm excited to hear what kashkari says today. >> i like the blackout. you never know which one is good cop, bad cop.

one is like, uh-oh -- >> on liesman from friday, the market is complacent. >> uh-oh, now they believe us. send somebody out to make sure we won't. >> are you suggesting they are playing us? >> yeah, we have no idea. speaking late friday, dallas fed president robert kaplan urged that the fed can afford to be patient and deliberate in its actions. and he didn't specify or specifically say that he doesn't think that the feds should hike in september. he would never say that. new this morning the minneapolis president neel kashkari is saying that immigration and tax reform are keys to solving the slow growth. kashkari will join us in an exclusive interview at 8:00 a.m. he's a very animated fellow.

he's excited to be on and we're excited to have him. i was saying earlier that he's a friend of the show and used to be on all the time. that probably isn't the only reason he's been raised to such a high level. >> i think it's the -- yeah. >> coincident with coming on "squawk box." >> i was trying to explain that to you. >> he's done very well and is an old friend of the show. there's a fair amount of economic data on the agenda this week. on wednesday look for august import prices. thursday we get august retail sales. we get the producer price index, which should never be shortened. >> ppi. >> and then the production end of september, it's okay to say cpi and september consumer sentiment. >> we are adults, really. bridgewater, the largest hedge fund manager, attracted $22 billion after taking the unexpected step of opening its active funds to new money for

the first time in seven years. according to reports, the inflows are a rare exception in this industry which have suffered from poor performance recently. most of the money went into a new optimal fund started back in 2015. the remainder went into the firm's main macro hedge fund pure alpha. and speaking of alpha, a programming note for you, don't miss the blockbuster lineup tomorrow at the sixth annual delivering alpha conference. this is the preimminent investor summit produced by cnbc and institutional investors. we'll be there all day starting at 6:00 a.m. headliners include treasury secretary jack lew, paul singer and carl icahn. more details at deliveringalpha.com. and elon musk is announcing big changes to the autopilot on the tesla car. phil lebeau is joining us. the changes are coming over the airwaves in the next week or so? >> it's an over-the-air software update, that's what tesla is

sending out to the vehicles with autopilot technology, all the vehicles built since october of 2014. here's what the software update does and what the new system will do. it's now allowing autopilot to essentially use radar to detect objects on the road. therefore, there should be fewer accidents, it will do a better job at detecting whether there's a vehicle that is suddenly stopped ahead of another vehicle in front of you. that's the whole idea here to see octobers and car that is the previous system could not see. because the previous system was primarily camera based. now with the radar sending out electromagnetic signals, it should be a better job of detecting objects. this software update happens over the next couple of weeks and elon musk says this is a dramatic impact in terms of safety for the autopilot system, but no system will prevent accidents 100%. >> it won't ever be zero fatalities or zero injuries.

you know, the world is a very big place and there's a huge number of people and a number of circumstances. so it's really just about minimizing the be probability of injury, minimizing the probability of death. not sort of the illusion of perfect safety. >> the upgraded autopilot system will not only have more capability. it will be easier to use for drivers and have more warnings for drivers. in fact, the autopilot system will turn off if drivers repeatedly ignore warnings that they have to stay engaged. they have to grab the steering wheel so often. if you don't listen to those warnings more than three times in one hour, the system will shut down and the only way you can restart it is to pull over, turn off the vehicle, start it back up. if you want autopilot to work, by the way, this update has been shared with the national highway traffic safety administration. elon musk says they believe they will be happy with the progress

that has been made with the system. keep in mind, as we take a look at shares of tesla back to tend of june, that's when the fatality in florida was first reported and the shares fell 2%. elon musk was asked if this software could have prevented that accident where a driver drove into a semitractor-trailer turning in front of him. and elon musk says yes, this updated software would have been able to see the truck better and therefore alerted the emergency braking system and could have prevented that accident. guys, back to you. >> phil, thank you so much. in speaking about the stuff and how it has been down 2% because of the accident, is it more because of the accident or more because of all the questions surrounding solar city and the rocket issues? i mean, what do you think the biggest issue overhanging tesla is at this point? >> i would say the biggest issue primarily is you've got a number of issues in terms of the

acquisition of solar city. you have questions in terms of whether or not they can meet the delivery goals they set out for the second half of this year. i'm not sure autopilot hurt the stock initially, but it's come back since then. if you look at the stock primarily over the last couple years, it's traded generally speaking between 180 and 220. there are a times when it has gone below that and above 220, but generally it's stuck in the pretty big band there. but i think it's the production questions that really has everybody focused on what the next six months offers for tesla. >> phil, thank you very much. >> you bet. and in agricultural deals crossing the tape, agrium and potash will combine and get a new name prior to closing of the transaction. it will be the largest crop nutrient company in the world. both companies are based in

canada. and let's get a check on the markets and the big moves we saw both on friday, to see how things are shaping up today. the futures are under pressure once again. this cops after the dow was down by 394 points on friday. the s&p was down by close to 2.5%. this morning the dow is down another 145 points, a triple-digit move, something we have not seen a lot of. the s&p down by 18 points. it looks like the nasdaq will open closer to 50 points lower this morning. and check out what is happening with treasures. both the ten-year and 30-year on friday saw the highest levels in terms of yield that we have seen since brexit, which was back on june 24th. the ten-year note hit a high of 1.678%. the yield is higher since then. 1.689%. if you check out the dollar, you'll see that the dollar which also gained in strength on friday as it made it look like the fed was more likely to potentially raise rates, the

dollar is up against the euro, 1.1223. joining us is peter bookbar from the lindsey group, welcome to have you here this morning. >> good to be here. >> finally, we have a little something to throw around and figure to the and talk about what this means. the markets took some of the commentary they heard from rosengren and assumed september is a live meeting. what do you think, ed? >> i think there's a chance but it is more likely december. probably your viewers are sick of hearing all of us speculate over what the fed is going to do. >> but they are stick of hearing about it but it's the only game in town. peter, what do you think? >> it's true. but really the most noteworthy thing is the rise in long-term interest rates. we talked about rosengren on friday with the ten-year note little changed on friday. it was the rise in long-term interest rates that started a month ago with the rising ggb yields and spilled into europe and is now spilling over into the u.s. >> what is that telling you?

>> it's telling you that central bankers -- yes, we can see they are potentially losing control, but they are reaching their lodgistic logistical limits. they are acknowledging the flattening yield is damaging their banking system. dragge acknowledged there are limits to how far you can push sovereign buying in qe. this is a global bond bubble. we are all in this bed together. and the u.s. yields which are moving higher are following in lock-step with what is happening in japan and europe. that's the northeast noteworthy thing. short a month ago in japan. >> i know we're sick of hearing about the fed, but what do you tell people to do at this point? volatility spiked by 45% last week. people are wondering, is this a big pull-back or more of what we have seen of the tiny dip and then we're back to -- >> we are about $60 billion in multi-asset allocation funds.

we have had a tactical year, gone up and down, we are either overweight or underweight. we pulled back in july to a slightly underweight position. this is a bit of a pull-back, but not necessarily a bear market. staying broadly diversified, keeping a little cash. >> wait a second, there's a big difference between a slight pull-back and the bear market. are you looking at a 5% or 10% decline? >> we are halfway to 5%. a 10% correction is not unusual. we have had one this year, so it is not something to panic about. weapon won't go into a recession, but i think it is overdue that we have a bit of a pull-back. >> peter, you are looking for a real town downturn in the, m markets, is this it? >> if we look at the longer

yield bond yields, in that central bankers have tried to suppress bond rates, start to lose that ability, then yes, the stock market is extremely vulnerable because of the evaluations created. and if long-term interest rates are a tad higher, then the weak earnings and economic picture thrown under the carpet starts to rear its head again. >> that's part of the big question, do you think we have weak earnings and a weak economy, ed? >> i think the earnings will start to grow again, but the second half rebound has lost steam. the third quarter looks flat. so we'll see progress forward, but it won't be terribly robust either. >> would you tell people to buy on these dips? if you're down 5%, is that time to jump in? >> i'm looking at how we manage our portfolios as we are caution, we have a little extra cash and are not buying a resolute today. we are waiting for a little better opportunity. >> is 5% a better opportunity or much bigger?

>> it is a dynamic situation. we look carefully at the earnings and it is possible to see a growth next year. but we are not overly aggressive at this point. >> scare me and tell me -- just tell me -- >> joe likes to be scared on a monday. >> i like to be scared on a monday. the worst case scenario they've gotten into this thing and they have no idea how to exit. and for years we sort of have seen what the pessimists have said, they won't be able to get out very easily. so just the intimation of another quarter point in what is a tightening cycle when we go down 400 points at the drop of a hat. could it play out as we actually get in a tightening cycle that they have more and more trouble doing this and are sort of stuck because they are afraid of every little tremor they see in currencies or equities around the world? >> there's no question. because they have tied asset prices, if they have embedded

asset prices and evaluations into the economy to such an extent that if they've elevated the asset prices because of their cheap money, once they back away, financial conditions will tighten and that affects the entire economy. whereas back in the day at equity prices just reflected the underlying economy. and that is no longer the case. equity prices have driven the economy. >> how artificially inflated do you think the stock market is at this point? >> the stock market has been in fantasy land for years. look over the past year and a half. earnings -- the third quarter is six quarters in a row. it's all about interest rates at the central banks. the long-time interest rates shouldn't be ignored here. >> last word, ed? >> we are up 5% for the year. it's actually been a pretty good year despite the pull-back. >> especially if you factor in the dips from february and june. >> it is likely we have further to go in this pull-back. but i still think we're in a fundamentally bull market. evaluations are elevated but not

extremely elevated. no where near where they were in other bear market cycles. so the computer is a little too optimistic although we'll see normalization of rates overtime, we are in a fundamentally upward trend with the correction. >> ed, peter, thank you both for coming in. so april is the cruelest month. >> that's the first line. >> it's a poet who decides that. >> but why? >> april is a great month. >> the first stanza explains why. >> i disagree. i don't care if he's a poet. that ushers in may getting toward the summer and everything is great. september -- >> you are thinking of beware of the ides of march? >> september is cruel because people go back to school, they have the sick feeling that summer is over. i see it right now. yesterday you could feel it a little bit. it was the wind and the leaves starting to come in -- >> my birthday is in april,

maybe that is the cruelest month. >> because you get a year older. >> that's right. >> winter kept us warm. >> april is not the cruelest. >> you must have gotten us heart broken in april. >> he's wrong. sorry. coming up, hillary clinton canceling campaign events after a pneumonia diagnosis. but before yesterday's -- i have seen it characterized as a lot of things, a simple stumble according to media organizations. she was under fire for calling trump's supporters a basket of deplorables. john harwood will join us next with the latest from the campaign trail. time to squawk and roll. kansas is back on the road kicking off their 40th anniversary tour. first stop, "squawk box" with

details to weigh in on the big business. "squawk box" will be right back. for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪

welcome back to "squawk box." to the campaign trail and hillary clinton's health is in focus. john harwood is joining us now with more. good morning, john. >> good morning, joe. it was a bad weekend for hillary

clinton. it started off with her depending the comment she made at a fund-raiser with barbara streisand friday night where she described half of donald trump's supporters as a basket of deplorables. she was talking about prejudice, racism, that sort of thing. she later came back and said, i shouldn't have said that many people, i shouldn't have used half. but that story was very quickly replaced yesterday by something worse, which was that hillary clinton as you can see in this video, goes to a 9/11 commemoration, she leaves early on a day that wasn't all that hot. and she collapsed as she was waiting to get into her secret service vehicle. she then after about an hour and a half of resting at her daughter chelsea's apartment, came out and had this to say to reporters. >> are you feeling better? >> yes, thank you very much. thanks, everybody. >> now she didn't say anything substantive.

but for hours the campaign did not explain what they finally came out and said with a statement from her personal physician late in the afternoon, which was that hillary clinton had been diagnosed on friday with pneumonia. now pneumonia doesn't have to be a serious situation but it can be, particularly for older people. she's 68 years old. donald trump is 70. and so it raised a couple of questions. one, they did not disclose this on friday when she was diagnosed. and, in fact, they had ridiculed reports that she had problems associated with coughing. she described them as allergies, but then we learned she had developed pneumonia. then they didn't tell us that for hours during the day on sunday after she had this episode. they described it as her having overheated, which may be true, but it clearly wasn't the full story. now, this is a circumstance that is going to increase pressure on her to release more health records than she has. she put out a statement in 2015,

of course, donald trump hasn't produced any meaningful health records. and for him to take advantage of this, he's going to have to do more if he intends to make that a durable issue. now, this is coming on a weekend when there was pretty good poll news for hillary clinton. look at these nbc/wall street journal marist numbers we've gotten. in states that have been traditionally republican, she's running pretty close to donald trump. on the other hand, talking about georgia and arizona. then if you look at nevada and new hampshire, states the democrats have won recently, donald trump is running close to her. then when you step back from the battleground numbers, look at the abc news/"washington post" poll, it suggests she's got a five-point lead. but the serious questions about hillary clinton's health, donald trump could rise for some reason. these are nothing to fool around in a campaign with two months to

go, guys. >> some of these polls, make some are outliars, but it's a roar shock. i will tell you that i don't know why i think i know about places like ohio, i just think i do, okay? and i think that trump wins georgia and arizona. and i think the story was new hampshire and nevada, that was what raised my eyebrows more than the other two. >> that is a fair conclusion. now, there were also cbs polls out yesterday that showed hillary clinton up seven in ohio. >> that's weird, too. >> this is why you average them together. >> yep. and then, john, i was thinking, i was happy that she was okay. but then i thought it was weird -- >> good, that's nice of you. >> i thought it was weird that the little kid came up. because kids can't walk past secret service. so that was choreographed. and then she had pneumonia.

you don't know if it is contagious or non-contagious. >> or viral. >> whoever thought that up, they didn't think that through. >> she had been prescribed with antibiotics, which is suggestive of bacterial pneumonia. but we don't know for sure. >> come on. anyway, nice. and then the other thing i was thinking, john, and we don't have trump's medical records, he's out a lot. he is busting his hump. and it is grueling. and i'm watching how grueling this campaign really is. >> any campaign. >> it is grueling for anybody running for president, no question about it. and we will know. even before this happened that, you know, all the supposed conspiracy theorists, they could sit back and say, say what you will, but maybe they honestly believe there is more to it than what people are saying. she did talk about the concussion for not answering.

so whatever. but you can sit back and probably say, look, if there really is something there, how difficult a campaign is, will bring things out. you won't be able to sit there for hours standing up if you're not well. so we'll know in 60 days. and it's going to be a grueling day or -- >> both in terms of your personality and physically, campaigns reveal a lot about who you are. you're out there all the time. >> it's like being on a golf course. seeing what happens to people out on a golf course is similar. you see into a person's soul and how they handle just horrific adversity. >> sounds like you had a good round this weekend. >> 56 days to be exact. >> 56. okay. j.h., we'll catch you later. >> you bet. >> i thought they took that video down. you still got it. it's hard to get rid of it when they -- >> took it down? >> i read somewhere it was hard to get that one anymore. >> i don't know. i saw it all over twitter. >> i did yesterday, too. from like a bunch of different

angles, which is amazing. thank you, john. when we return, when it comes to presidential politics, ceos have a tough decision to make. get in the game or carry on until the results are in. we'll find out how the business world is preparing for a trump or clinton presidency next when we check in with yale's ceo caucus in washington. what powers the digital world? communication.

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here on cnbc, first in business worldwide. check out the u.s. equities at this hour. after the huge declines relatively speaking we saw on friday when the dow was down by almost 400 points, the markets are indicated lower once again. the dow down by triple digits. a decline of almost 150 points below fair value. the s&p futures are down by close to 19 points below fair value. the dnasdaq down by 50 points. the question is what will the fed do at the next meeting? guess what, we have neel kashkari joining us to talk about his perspective at 8:00 a.m. eastern time, less than two-and-a-half hours from now. no, an hour and a half, sorry. can'ted add. gasoline prices are rising to $2.21 a gallon, up by four cents. and time for the executive edge as leaders gather in washington today for yale's semi-annual caucus to focus on

politics and business. joining us is jeff sannenfeld and a cnbc contributor. he'll be leading the talks. jeff, it's good to see you. >> thank you, joe, good to see you. >> who are you most excited about that you have for this one? >> well, we don't have single star power. the whole galaxy of stars there is incredible. we have a great mix of political leaders, people like jason ferman for the administration, many congressmen and senators, and a great cross-section of ceos, lowell mcadam of verizon, we have houston's ceo, lockheed martin, the critical timing is -- i don't know if you saw the piece in "the washington post" last week that said how big business lost washington is across parties right now we have an unprecedented sense of

vilifying business. the critical issues that are on a business agenda, both parties seem to be attacking, whether or not it's on trade or immigration or infrastructure that you folks talked about earlier on the show, somehow getting the political momentum behind it and the voice of the business community somehow being lost. and it isn't like they don't spend a lot of money on this. just in the '80s is when they start to create their business affairs offices in washington growing by 400% a year. in the last 25 years, i guess they spent $4 billion a year on lobbying. that has grown 700% in the last quarter century. yet i don't know if you saw the survey data i forked over to you, but 70% of the ceos say their voice is lost and others say the trade associations don't do it for them. >> jeff, i wonder if the bigger picture, with the rise of bernie

sanders and the relearning it seems like every generation needs to relearn what i thought had been settled. i thought it was settled like in 1776. i thought adam smith got it right. and then i thought frederick hayak had solid points and thought milton friedman educated all of us. and then i thought it would be sort of obvious to people that jobs, if you say jobs, you probably mean private sector jobs since nobody really aspires to, i don't know how many private sector jobs you need for paying the salary of a government employee, but i know it's more than one probably. so we've lost that entire perspective. again, i understand that maybe big business is different than smaller business, but if you can't figure out that small business and entrepreneurship is key to growth, i know you have to go back to the drawing board.

if you don't have the private sector, what do you got? >> there's a lot of truth. you talk about adding milton friedman and adam smith whom they all had drawn upon, a lot of that wisdom is true. there's nonsense about the fact that the private sector doesn't create jobs. it all comes from public sector. you're right as wrong, but it's wrong to go to the extreme. adam smith didn't quite get it right for the 19th century. certainly the 21st century. the hybrid shows a lot of the sectors have to work together. a lot of the development and exploration of what we call the developing world markets, it happened across sectors. there was a lot of collective action as well as individual entrepreneurship. this is a mythology we create and capture by the ideologies. right now the people who are screaming crony capitalism are just as much on the right from bill kristal to breitbart.

>> crony capitalism is the hideous twin of socialism. >> but trade policy is up for debate. going back in history, 1953 issue of "fortune" magazine. what the focus is on how the republican party is opposed to free trade. >> i get this out of "fortune." it has always been like it is now. >> this is charles percey and others. >> many are spending more and more lobbying feeling like they are getting much less bang for their buck. but it does seem to me like the business community is much more reluctant to weigh in on this election than they have in years' past. things have been very partisan. that's a reflection of the

nation. if you say you're for somebody, you automatically have half the customer base hating you at this point. so it seems to me their voices are lost because they are not using them. >> i think there's a very good point there. i don't know if you say reprimand them, but we have a call to action today. because that is a problem. you see jamie dimon of jpmorgan chase and jeff emmel of ge and there's a critical mass of those speaking out. but others say, look how jamie dimon got for speaking out and challenging key figures. look at hank greenberg whose case at long last comes to trial. it's hard not to see that as indicative by eliot spitzer when he and warren buffett were accused of the same things. one selectively gets prosecuted and the whole thing was nonsense. it was judicial overreach of this crazy thing in washington and new york.

>> we have to run. have you seen the commercial where the couple was actually interviewing mortgage lenders and they got a whole -- that's what we're going to do with my daughter and son. so if you would like to send a yale representative along with all the harvard -- we have 10 or 12 coming. make the case to us, we're willing to consider maybe one of your schools. >> we'll certainly start the bidding war. you know, will rogers complained that a congressman stands up and a congressman says nothing, no one listens and everybody disagrees. our goal is to get people to listen to each other. and your daughter should be coming to these events. >> just think about it. would you be the representative or have someone higher up that we should -- >> i'm not sure i'm high enough up on the food chain to close the deal. >> anyway, thank you. thank you, jeff. jeff sonnenfeld.

and ey global chairman and ceo mark weinberger is joining us at 7:00 a.m. meanwhile, we'll be right back. >> executive edge is sponsored by at&t, discover the power of and with at&t. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.

welcome back, everybody. we'll check out the u.s. equity futures with things shaken up in the markets on friday when the dow was down by almost 400 points. dow futures are down close to another 150 points this morning. the s&p futures are down by 18 points. the nasdaq down by 49 points. and again, this came as volatility erupted. we saw the volatility index, the vix up by 45% last week after being very calm through the last two months of the summer. things are back and people are wondering what the fed will do next week with the big meeting. and this is what you see as there were concerns about what rosengren, the boston fed president had to say, that made the markets think a hike is possible next week, if. >> i really would give them kudos if they did. >> i would be surprised myself.

>> because the impression i have is that they don't have the -- they just don't have that. they don't have -- >> then you try and bait them. >> the same way that they cry wolf. i call out their bluff. really? okay. let's see you do it. businesses are scaling back their expectations for the economy, meanwhile. in a new survey out this morning, the nabe survey, the national business of economics shows the economy to continue to grow for two years but not by as much as first thought. among the reasons, a lower expectation for business investment. the majority of those surveyed said they don't see the u.s. economy peaking until 2018. as if they have any idea. but anyway. when we come back, the band kansas is launching a new album and kicking off their 40th anniversary tour. guitarist richard williams and singer ronnie platte will join

us next right here on the "squawk" set. ♪ now that fedex has helped us simplify our e-commerce, we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome.

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welcome back, everybody. kansas is back on the road. the rock band celebrating their anniversary of the album that sprung them on the national scene. kansas also releasing their new album in more than 15 years, and joining us to talk about the music business and more, two members of kansas, rich williams and ronnie platt, and welcome, it's great to see both of you. >> great to be here. >> great to be here. >> this is cnbc, so we care about the business of kansas and the business of the music industry, and you guys have done over 100 shows this year. >> i have never been this busy. >> how has the business changed since you first got into it? >> actually the touring part is the same, you do the same thing, and you travel and stay at hotels and et cetera, but i

think relying on touring is becoming more important. >> are you asking about groupies? >> no. >> you say -- >> there's no time for that when you do that many shows, joe. >> oh, please. i hear from steve -- what's his name. if that's your story and sticking to it, and that's fine. you told me you would bring me a story this time? >> i think i told you last time, we are a bunch of muts. >> seriously, though, in the business of touring and your shows have gotten bigger and bigger, and what are you doing to find the new generation? >> gotten bigger than i have been in the band in the last two years, i have noticed an increase. >> you voice sounds like the other guy, right?

>> i think the development of my voice, it's from trying to emlate my heroes. >> it's reminiscent. we didn't want a bare atone, it wouldn't make a lot of sense. i had seen ronnie play several years back and i saw a very talented performance so when steve announced his retirement, he was the first guy i thought of. you are going to do in a concert the entire album, this is becoming -- >> in proper sequence. >> that's cool, too. >> yeah. >> i spent ten years devouring steve -- >> i am going to see "royal

scam," and i don't want to talk about another band, but they are amaze gs. >> yes. >> and they are doing -- i think they are doing count down to ecstasy. >> i would like to see night flyer. >> exactly, geniuses. >> what is the significance of playing the entire album in the order it came out, why? >> it just makes sense, and in the good days you would put on a record and listen to it and then turn it over and people were used to that pace of it, and we have never done it before. >> how many shows will you duty whole album? >> throughout the rest of the year. >> so in new york, in the new york area, at least once? >> yes. >> so i guess mr. quick is excited about that. >> we are introducing the new

album that comes out on september 23rd. >> this is the first album you have had come out in 16 years? >> yes. >> how did you get the creativity to create new material, what inspired you? >> i think it just happened when david and myself came on to the band. there's just guys that are willing to work and the chemistry seemed to be flowing and one thing led to another, and we just started thinking, maybe a new album and we did an outside song written by an outside writer in the studio just to see if things would work and things took off from there. >> the album is the phoenix, the bird. is this of what is to become? >> absolutely. "prelude" being the introduction, and "implicit" is an absolute.

that's just more than the album title, i think that's the new us, and we are absolutely -- we are back, and we're a musical force and going to be creative again and we are already scheduled to start on a new album in 2018. >> you have started on new material? playing around with things? >> playing with all of leftoverture. >> you are busy? >> i'll be fine. no problem. >> we rehearse before every store and learning all the other things we need to know once we get started, and our days are very full and then you get home, you don't want to be the guy that shows up not knowing the parts. >> no, thank you for coming in. >> supernatural, you didn't plan that, did you? >> no. >> from the ground up. >> supernatural. >> all the millennials are into

kansas now. >> brought you a shirt. >> beautiful. >> that's great. gentlemen, thank you very much.

♪ ♪ global market selloff. the future is under pressure and stocks in the red. could this week's fed give the markets another jolt? >> and tesla getting an upgrade. we will tell you what it might mean for safety and autonomous driving up ahead. we have the highlights from last night's match-up. the second hour of "squawk box" begins right now. ♪ ♪

>> announcer: live from new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. richard bernstein, he's a cnbc contributor. he needs a bunch of jobs, i guess. are you one of those two or three in this economy, yeah, in this economy, that's what you don't see in the numbers, a lot of people have to work more than one job. >> this is part time work for me. >> yeah. >> we will get a take on the markets in just a minute. let's get a check on the futures, which they are down 138 in europe, and i don't know whether there is any predictive ability for europe because the forces are reacting to what

happened here, really, on friday, and so you know, they are just playing catchup. we will set the tone today and see whether we try to recover from the sharp selloff at the opening. let's check out oil prices, and they are back down to 45. >> in our headlines this morning, a newly announced merger deal will create the largest crop company. they will combine in what they are calling a merger of equals to form a $36 billion company. and each share holder will get more shares, and they will own 52% with agrium share holders getting 48. with the fed meeting

looming, three fed officials will be making public appearances today. leonard will be speaking, and dennis lock hard, they will be speaking this afternoon. and neel kashkari will be joining us here soon. this is all you are going to hear from the feds ending today. in other corporate news, changes announced to tesla auto pilot cars. phil, this will take the auto pilot program for the entire fleet? >> yeah, and it involves better detection and more engagement with the driver, so they realize when they need to take control of the vehicle and basically they should stay engaged better with the system according to tesla. here's what tesla is doing with the upgrade of the auto pilot

system. they are taking the radar technology, and that has been in all of the tesla vehicles since late 2014, and that system will be upgraded to the point that it adds radar vision, so they are sending out electromagnetic waves so they will see objects better on the road and working in tandem with the cameras on the vehicle, and it's an increase in the number of objects as well as how quickly they can see the objects on the road or other vehicles, and more alerts for drivers, and since you cannot tune it out and say i will put it on autopilot, you have to stay engaged more often and this will be installed in a software update over the next two weeks. and over a conference call it was this is a substantial increase in the safely being involved in tesla vehicles. >> the set of improvements, radar inclusive of the others

probably cuts the accident rates more than in half, that's my guess. it's by far the safest car on the road. >> he went on to say vehicles with the new auto pilot system are three times safer than vehicles with no pilot system at all and they are testing the new upgraded software with select customers, about 1,000 of them, and he also believes this system, because it will do better at detecting objects or vehicles that turn in front of the road and not just relying on the cameras, could have prevented the fatality involving a florida driver when he ran into a truck back in may, and when we first heard about it in june, by the way, tesla has shared this information, and this upgrade with nhtsa, knit

saw. they have been challenging given what has happened with spacex and solar city, and of course you have tesla go into the most important six months this company has faced in long time. back to you. >> he thinks this upgrade could have prevented that fatality, but did he say specifically -- i am assuming this is becoming directly because a result of that and they wanted to prevent that, and is that a safe assumption? >> oh, yes, and if there had been no fatality or accidents and let's say the system was working perfectly with the cameras only, and tesla will say they are always looking to upgrade the system but it did not add the urgency with the investigation and the fatality, and that spurred tesla engineers

to ask how they could improve the system doing a better job detecting vehicles and objects on the road and et cetera. >> phil, thank you, and good to see you. >> you bet. volatility was back for one day, and the index shot up 39% on friday, and it's biggest one-day jump since brexit. joining us for the hour is richard bernstein, ceo of richard bernstein advisers. he highway the specific richard bernstein in charge of the company itself. >> that would be right. >> if we just said richard bernstein, there are probably 400,000 people in new york named richard bernstein, and in this case, you can't say what is his middle initial, because there's no middle initial. so your parents, for one reason or another just let you be.

michelle gerard is here -- >> michelle gerard has had as many as ten names. >> i was like, look where we are going with this. >> i saw you going, hmmm. they are not doing it in september, are they? >> now, to me the case is probably as least compelling as it has been, because there has been such a strong case to be raising. some of the data has been weakened and now we are going to step up and say it's time. we have only, you know, a small -- >> for the game that can't shoot straight, that would make sense. >> unfortunately, the economy will weaken the stock market and then they will get blamed for the fact the economy was turned

down and maybe the seeds are being sewn, and i'm not predicting that, but i am a little worried and maybe the one time it would be prudent to wait. >> a still want them to do it. >> just to show -- >> they can, yeah. >> we talk about the fact that rates are so slow and to think a quarter of a point -- >> not in real turns, but the markets looks like it's a long-term policy. >> if the government can spend money, he wants them to do it. >> oh, no. >> this could end the world if we raise rates? >> it's not going to end the world. >> but you don't want them to do it? >> no, but i can understand why they are getting itchy. if you look at inflation expectations, they fell last february and money growth for the first time in the whole cycle is above the long-term average, and you can see why

they are getting itchy, and the problem is the other sources of the growth in the economy are not that strong so if the fed -- >> but their policy is less effective so why keep at it when you know there are risks to continue that policy that may outweigh -- >> what is the rush? where are we going with this? the fed has been a lagging indicator, and they are finding out why they have been a lagging inindicator. >> there are two kinds of people in the world, those think they are not responding to inflation, and other are thinking the fed is responsible -- >> no. >> that's silly. because corporate managers, and they do buy backs, and -- why aren't they making long-term

investments. >> get out of the way. they made the cost of capital ridiculously cheap. you can bring a horse to the fountain but can't make it drink. >> you are not getting the benefits of it, so why stay there if there are negatives? >> to take away a low cost of capital when the economy is not functioning well makes no sense. >> but we are at a point probably, and i would agree that i think it's the case we made that lower rates are causing perhaps more harm than good on both fronts, and -- >> he says you are silly. >> no. there are other things going on. whether or not -- what i worry about is we missed the window, right? >> or the appropriate time to raise. >> for the appropriate time to raise and the feds have gotten themselves in a difficult spot, exactly, so that's the question. and i do agree, it's funny as we

look back, the former guidance that served the fed so well played into this, and they did not feel the urgency to do anything and they were told by the fed rates were not going to go up. >> and the fed is continuing to say that, by the way, and even if we start to raise rates it will be lower for longer. >> it the costs of all the transparency. >> yeah, and it's on the way down. >> yeah, exactly. >> there's a downside to transparency, and everybody believes there's certainty to what is going on and all of a sudden one fed governor comes out and says something different, and everybody pan kwreubgz. >> are you a contributor? >> to? >> cnbc? >> no, i am trying to contribute. i try to contribute. >> michelle is going to stick around -- oh, no, did i read that wrong.

let me read that again. thanks michelle, rich is going to stick around. >> this is going to be an interesting hour. >> michelle, thank you. >> thanks. when we come back, we are less than 60 days away from the election, what, 56 days at this point? ceo's are gathering in washington to talk politics and business, and mark weinberger will be at that business to talk trade impacting the ceos and much, much more. "squawk box" will be right back. today i am helping people everywhere do what they do... better. i work with startups like alpha modus to predict markets five times more accurately. i am helping tv networks use social data to predict what people want to watch.

and i worked with marchesa to turn fan feeds into a dress that thinks. hello, my name is watson. working together, we can outthink anything.

welcome back to "squawk box." the futures right now, take a quick look. down 130, 20 points better than half an hour ago. the nasdaq down 45 on the open. now to the campaign trail. hillary clinton's health in question. the democratic presidential nominee has been diagnosed with pneumonia according to a note from her doctor put out by the clintons yesterday after she appeared unsteady on her feet and there was a lot of video about this, and almost looks like tremors she was dealing with and her shoe fell off under the van, and her crew said she

was overheated and a spokesman said she would remain at her home to rest. clinton was diagnosed with pneumonia on friday which started with a cough related to allergies. we will have more on the race for the white house in a few minutes. industry leaders gathered for the caucus today, and the business impact of political disruption. join us is mark wieinberger. they are feeling like their voices are not heard. that strikes me as interesting because it seems to me the business community is less willing to weigh in, what do you think?

>> well, you are right, becky. obviously business community has a voice and we have to find that voice, and there's a lot of issues decided in this election, and not only by the presidential race but who is controlling congress, and they are going to affect immigration, and a whole host of things and most of the politician talk we are hearing is not about those issues, it's more about barbs back and forth. you mention about monetary policy but fiscal policy will have to step up if we want to continue to grow. >> does it seem executives are less willing to step their foot or put their toe in the election cycle this time around because there's so much rhetoric and heat and anger among the voters? >> amongst the voters, yes, but we are talking to our employees and we have a quarter million employees, and when you look at

the combined amount of people business leaders can reach, and one of the issues today, of course, is politicians are beating up on big business hard and there's not a voice you can see in the election cycle willing to talk publicly, and the business roundtable is current this week, and we are meeting with politicians and representatives of the administration, and current members of congress, trying to talk about the real issues and getting them on the table and making sure the postal action and we're ready to hit the ground running. >> we will leave it here, because we have one of the candidates calling in now, and we thank you for your time. >> yeah, i am told that after this break we are going to take a quick break and -- that's the way i would do it, and sell some advertising, and then when we return, we will have one of the candidates -- he's tall, and he's -- >> don't give it away. >> stick around.

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welcome back to "squawk box," everybody. friday was a huge day where you saw the dow down by almost 400 points, and s&p futures are down by 18 and the nasdaq down by 48 as everybody awaits the fed meeting next week. >> joining us on the phone as promised, presidential candidate, donald trump. >> good morning. >> i think it was -- it was not the only time, it was last week or in the last couple weeks you made the point that in your view your opponent, hillary clinton, didn't have the stamina either mentally or physically to be president, and given yesterday's

event, and i am sure you don't take any satisfaction in what we saw yesterday, but would you say that you were probably correct in your assessment? >> well, i don't take satisfaction, joe, and frankly, you know, i hope she gets well and i hope she gets well soon, but, you know, it was quite sad to be honest with you. i hope she gets well soon. no satisfaction, believe me, whatsoever. >> i think i don't know, because i have not kept track of your entire schedule, but it's a grueling process what you are going through and you are on a plane lot now, and -- >> i am. >> and it's not easy giving hour-long speeches day after day after day, so it's grueling and i think your schedule has been more grueling than the one she is pursuing, and that has been documented? >> it has been and it has been a very tough schedule.

you go from one city, we are going from pennsylvania, ohio, florida and all over over the next, you know, day or so and you go to a lot of different work -- you are not putting up a lot of money to fund my campaign so the fund-raising not a big deal but turned out to be amazing because we have the internet, and it's called new world fund-raising and millions and millions of dollars are come into the campaign in small doses by small donors. we have, i think it's averaging $61 we have taken in, just a tremendous numbers of dollars which no republican has been able to do before. in june i think we took in $27 million, and now we are taking in much more than that and we are raising a great deal of money, including we are being helped by wonderful donors. but it has been -- again, it's money going to the republican party more so than me. i will say, joe, it has been an interesting process, but its

grueling work and there's no question about it. >> that's my point. there's a long way to go and there's the debates, and lot of travel involved. i would think we will have -- i don't know if she is going to release more records or how the clinton campaign decides to deal with this, but it will all come out at some point because it's so grueling that if somebody is not well it will be tough to go through the process. >> well, it is. what was interesting, because they say pneumonia on friday but she was coughing badly a week ago or even before that if you remember, and this was not the first time. it's interesting to see what is going on. i want her to get better and i want her to get out there and i look forward to seeing her in the debate. i will say this, with the scheduling, if you look at my scheduling and compared to anybody else's scheduling, there's not a contest. i have found the whole challenge to be very invigorating.

it's about making america great again, and that's what we are doing. so many things that can happen. for one thing we have to get the business taxes down. you know, i speak to your viewers when i say that, but we are bringing the rate down from 35% to 15%, and businesses won't be leaving our country anymore and businesses are going to be reinvigorated and it will be a great thing to watch, and not since reagan has anybody proposed anything like this. >> just had one of our frequent guests on, and i think he brings up a good point. he asked me to ask you about point he was making that big business and business across the board seems to have trouble finding its voice now with a lot of the country, and we know that the private sector, big business and small business, that's where the jobs come from. why do you think that is? i know you talk about fair trade as well as free trade, and do

you think the rhetoric on both sides of the campaign has caused there or are there any other reasons businesses are held in disregard at this point? >> i listin to mark, and he's right, business has lost its voice and taxes are too high, and this is a little surprising in what i find and going around to all over, big business and small business, i am meeting everybody, and what i find is more disconcerting to business regulations, and if you would have told me business regulations would be more important than a big tax paint and if you would have said regulations are more important than that and i would have said no way. regulation is much more important to the business than even the big tax cut. i am so surprised by it. when you think about it, you can think to understand it. businesses are being put out of business by regulations and every day new regulations come

down, and i am not only talking about small business i am talking about massive businesses telling me, donald, you have to do something, they are putting us out of business. the energy business, they are making it impossible for them to compete it's so onerous, but that's -- it's almost like it has become a business, the bi s business of creation of regulation and the business of regulation is turning out to be a big bureaucracy, and i am going to knock the hell out of it. we need for safety and environme environment, certain rules and regulation and they are a good thing, but about 80% of it, they are totally unnecessary. it makes it hard to compete -- >> it's like never clean out your refrigerator after the expiration date.

it's hundreds of billions of dollars that have been added to business costs over the eight years or so. >> you referred to what mark weinberger was just saying. he doesn't endorse one candidate or the other but he said the business community is concerned because they are not hearing enough about things about trade or immigration or hearing about things they want to hear. how do you reassure some of the global leaders that it's something that you are working on and you will have policies and will reflect what they want to say? >> i would love to speak to mark directly if he would want, but i think i addressed trade -- >> i don't think he liked what you said. >> i amount king of illegal immigration and i will stop it and nobody talks about it more than i do, and we have to stop it, and not only immigration, but the drugs. our youth is being poisened and

you go to places like new hampshire, heroin, it comes from the southern border and you go to ohio, as an example, and i was there two days ago and the biggest complaint they have is what is pouring in. nobody talks about it more than i do, and it's my issue, and hillary clinton wants to have open borders and let whoever wants to come in come in and let the drugs pour in. i am a free trader, first of all, and i think joe knows that and you know that, but i want to make good trade deals. a lot of times i will say we have to renegotiate nafta, which is a disaster for our country. nafta is the worse trade deal every made not in this country, but the history of the world. it has trained our country of businesses. what i want to do is renegotiate

nafta. when people hear that, they say i am against trade but i am not against trade but i want to make good deals. nafta is a one-way street into mexico and other places, nothing comes through here, and it's a one-way street to the poor house. we are losing business on a daily basis, and mexico is the eighth wonder of the world. and i have a friend that tells me new plants, and he tells me the plants he is building in mexico are unbelievable what is happening and i said how are we doing in the united states, and he said not so good, it's terrible. i want to renegotiate trade deals and make them great. we should be happy about that and not upset about that. >> speaking of mexico, your recent visit there, afterwards the finance minister resigned and stepped down in what was seen as a huge hit to the president there.

and he was a guy educated in the united states and if you talk to others, he was paving the way and are you sorry to see him go? >> luis was a great guy and he said i was doing well in the campaign, and we are doing well in the swing states and we are leading in many polls and we are leading in the overall polls and cnn just came out with a number that i am leading by two points overall and we are doing very well and i think we are going to start to do beyond that. we have a tremendous schedule to go, and even today i am going to three different states. you know, luis saw that, and he wanted to arrange a meeting and i think it was a very positive meeting. i think they lost a tremendous talen the with him and i believe he will be back in mexico, i really do, and i believe he will be back at a high level. he's a really good guy and a really good talent.

i think that -- i think he probably got a lot of publicity and it was good for our country the meeting i had and it was very good for the united states and perhaps it was not good for mexico but mexico has to understand it's not a one-way street. we have to get something out of the deals also. we are getting nothing. >> shifting gears to, you know, our bread and butter, and that's business issues and the fed. you made comments a week or two about artificial markets, and maybe as a real estate guy you said i like low interest rates, and i think i don't know whether your position shifted a little because the fed has been low for so long and everybody thinks it's not doing that much and are

their negative affects and did you come to the conclusion that maybe it can't stay at zero forever and what do you think they should do in september? >> it's staying at zero because she's obviously political and doing what obama wants her to do and i know that's not supposed to be the way it is, because that's why it's low, and as soon as they go low the stock market will go way down, and don't forget, i called brexit and did a lot of calling and what they are doing is, i believe it's a false market. money is essentially free. i don't invest in the stock market and i think you saw the stocks i bought, and i bought a lot of stock and i am not a stock market guy, and i bought it because i did not use free money, and the stocks went way up and then i sold them because when i did this, when i decided to do this i figured maybe there's a conflict of interest, who knows, and with them they accuse you with anything so i

figured i would sale, and anybody could have made money. i think they are keeping them down and they will keep them down longer and any any crease at all will be a very, very small increase, joe, because, you know, they want to keep the market up so obama goes out and let the new guy, whoever -- let's call it a new guy, you know, because i like the sound of that much better, but the new person becomes president, let him raise interest rates or her raise interest rates and watch what happens to the stock market what that happens because you have no choice. the people that were hurt the worst are people that saved their money all their lives and thought they would live off their interests and those people are getting creamed. the ones that did it right, they saved their money and cut down on their mortgages and did all the things they did exactly right, and now they are getting practically zero interest on the money they worked so hard for over 40 years. i mean, those people have really

been -- you can almost say discriminated against. the interest rates are kept down by president obama. i have no doubt that that's the reason they are being kept down. >> what makes you think that? >> as a real estate person, i love it. but for the last 14 months i have not been active -- i do run my business and spend a lot of time on my business, i have to be honest with you because i am running a campaign and business, which is not so easy, but i certainly have not done as many deals as i would normally do, but i love low interest rates, but for the country something has to happen. i don't think it's going to happen very much because he wants to go out and he wants to play golf for the rest of his life and he doesn't care what is going to happen after january. >> let's say, donald, that we do some of this and let's say we cut taxes, and we can't find enough waste in the government to pay for everything, and we do infrastructure and we have this

incredible, you know, deficit run-up to where we are paying interests on that. if rates go up, what are we going to do? it's going to be much more expensive for what we have already done? >> it's a problem for the country and we are talking about rates that are practically at zero, if i refinance something i get money for almost nothing. to a certain extent, it's wonderful, i love it and i am getting as much long-term stuff i can and i have little debt, but i will tell you this, joe, at some point if rates ever go up to a more natural level, you know, these are the lowest rates in history, and if rates go up, we have $20 trillion, you know, and we doubled our debt under obama, doubled it. exactly, by the time he leaves it will more than have doubled in eight years, and in eight years we doubled what happened in hundreds of years, think of

it. we doubled the debt over the last eight-year period, and the worst part, we have not got anything with it, we have not rebuilt bridges or highways or airports and our airports are a disaster and roadways and tunnels are dangerous. the whole thing is a mess. we are $20 trillion and our infrastructure is a disaster, and we spent $6 trillion in the middle east, and we could have rebuilt our country twice, and that's because it was run by politicians that don't have a clue and our country is in trouble. it's one thing if we had $20 trillion as crazy as that number s. but our roads are new and bridges are beautiful, and many of them are in danger of falling down and you see the reports and it's a sad thing what is going on. we have a country that needs massive investment and at the same time we are at $20 trillion.

>> mr. trump, can i go back to the fed for just a moment. >> yes. >> what you said about janet yellen about how she is doing what obama wants her to do, that plays into a stream that we have seen from the left as well, and just last week senator elizabeth warren was working with a group called fed up and they are trying to put constraints on the fed and get their arms around it a little more and in a trump administration would you put more constraints on the fed as well? >> what i would want to do is have a policy -- i wouldn't go by what pocahontas wants you to do, because her agenda is obvious, and she's a disaster and one of the least effective senators in the united states senate, and nobody understands that, but she's done nothing. i would want to have a policy where we can start to at least gently reduce debt and get things under control, because right now it's not under

control. what happens if interest rates go up fairly substantially and with all of the money we have and are borrowing, do you know what that does to our balance sheet? >> obviously, it's huge. >> and the rates are crazy low interest rates, and they are not always going to be this way because of market and market competition, and what will happen when interest rates go up? they will go up. i was there with jimmy carter when the rate was 21% -- >> no, i remember my parents had an 18% mortgage rate at one point. >> i think the prime rate went to 21%. you think that can never happen again. it's like the baseball players, they have a good season and then though go out and live like they are going to have a season like that for the rest of their lives and it doesn't work out that way, and that's with a we are doing, we are living like we will have no interest rates, and the numbers are so low, and

she's keeping them artificially low to let obama retire. >> this is a question of fed independence. we have a notion that the federal reserve operates independently from the administration and congress and there are questions on all sides surrounding the fed right now about people who think they are not and finding ways to do that, and i guess the question of fed independence is the biggest i have? >> i used to think the justice department worked independently also and the fbi was independent also but that's not possible because hillary clinton is guilty as hell and everybody knows it and any third-rate lawyer will tell you that and it's obvious, all you have to do is read and watch. i used to think they were independent. i used to hope that the fed was

independent and the fed is not independent. it's not close to being independent. >> i guess you saw the markets reaction to brexit was not what any economist expected, and christine said she talked to all the exists and it was going to be a disaster if britain voted to leave and not only has the stock market done better but the matrix has done better because of the weaker pound and everything else, and do you think that's an indication, maybe globalization is important and then again so is looking out for number one in this case, whether it's britain or the united states, and maybe there's something to that. >> well, they call me mr. brexit over there, and i predicted it and called it and i took such heat you wouldn't believe it,

and i said i would think it was pass and i own a lot of property in the uk, and they asked me two weeks before when it was not fashionable and i said i think it will pass because people want independence and they are tired of taking in people from other places that want to blow them up, and i thought it would pass and obama said if they passes they are going to the back of the line, which i think helped it pass, if you want to know the truth. you know, that the way it is. they wanted independence. i think it was very smart. i think the uk is going to do better because of it, and the whole thing with the -- you know, tying it all up like that, it has been a terrible thing. i needed certain approvals on a job, and i couldn't -- i could get them from the country but i couldn't get them -- nationally it was impossible to get anything approved and it was

horrible, and the uk wanted independence and they got it, you know, i think they will be better off for it. it's a very short period of time but it's turning out to be better so far and they are very happy. if a vote were taken today it would do better, and they are very happy about it skpr, and in big investor over there, i like it better. >> you made comments about the president's recent trip to asia as well, and in terms of it not being as maybe well received as the, you know, head of the -- the leader of the free world should be. any additional comments on that? >> when you say "well received," they would not even give him a chance to get out of the airplane. this is the first time the great air force one with its

incredible history has landed where they would not give him stairs to get out of his airplane. it was terrible. he had to get out of the -- they call it the mechanic stairs, and that's the stairs to fix the plane when somebody has to run up and fix a light bulb, right, and this is our president. by the way, shortly before show showed other heads of state from other countries coming down on these magnificent stairways with red carpet, and he came down on the mechanics stairs, and when he landed in cuba, castro was not there to greet him. when he landed in saweudi arabi nobody greeted him. if it was me, if somebody was not there to greet me, but our nation, because it's our nation, i would have told the captain, close up the doors and let's go to washington, and the same

thing with saudi arabia and the same thing with china. i have never seen anything like it. they were standing there and would not provide them with the stairs and people were fighting on the runway with chinese officials and what a sign of total disrespect. it's like the iranians running their boats around our destroyers and making crude gestures at our sailors, and it's like that, and you say, how does that happen? like when they captured our ten sailors, joe, and they would not have given them back, but the money started pouring in and they had to give them back because they wanted the $150 billion, and the payment started two days after that, so obviously they gave them back only for that reason, and if it were not for that they would still be there. there's a great lack of respect. what i saw in china where they would not provide staeurirs out air force one was, to me,

incredible. >> mr. trump you are known with a great negotiator, and i wonder what you would do about north korea? after this latest nuclear bomb they set off, the latest i read this morning is the north koreans are saying this is laughable, the idea of additional sanctions, and how would you get a better deal when you are potentially dealing with a mad man? >> we are dealing with a man that has got some difficulties, no question about it, but i will say this, china has tremendous power over north korea, tremendous power, and also iran is one of their biggest trading partners. when we made this horrible iran deal, one of the most incompetent deals i have seen, they should have put in you have to help us with north korea because they are one of their biggest trading partners, and the one that really has power that can cut them off completely is china.

china doesn't like to say they have power because they want to tweak the united states, and look what china is doing, they are building in the south china sea a military foretruss, and we have power over china because they suck is drive, and i have the biggest bank there has my tenant and i have great relationships with china, and what i say they know is true, and they just renewed the release and i couldn't believe it, and they obviously like the building. we have tremendous power over china because they take so much -- they suck so much money out of the united states. we should get china to fix that problem, and we should use our economic power because without us china would be in serious trouble. they have -- they take tremendous amounts of dollars out of the united states and without us china would be in

tremendous problems, but we don't have leadership and people to get them to do that and when you ask the chinese, oh, we don't want to get involved. they don't want to get involved. in the meantime this guy is developing the real deal. two years ago they were saying they couldn't lift them off the rocket ships and now it's the real deal and i think he is being helped by iran, and i think they are being helped by iran, but you look at their technology and it's getting better all the time, and something damn well better be done soon, because once he is set, like you said, he may be or may not be a mad man, but he's got evil intentions, no question about it. >> when you refer to china and they are sucking a lot out of us in terms of the economy, but i believe they own the largest percentage of our debt, so they have a big chip with us as well. >> it's all the more power we

have over them, and because of that we have more power over them. you do understand that right, becky? >> because of the idea if we owe the bank $100 -- >> look, we owe china $2 trillion, okay? $2 trillion. hard to believe, but that's what it is. they suck the blood out of us and we owe them money. they are magic upbz. >> you won't default on the debt? >> no, we would not. china has defaulted with us because if you look at what they are doing with intellectual property, $300 billion a year. you look with what they are doing with stealing our intellectual property and

rights, it's crazy what they are doing. it's like no laws that pertain to them. you could make a case in a court what they have done to us is incredible. and then they come over and get steak dinners, we give them state dinners. honestly, it's a very sad thing, how china has out negotiated us, it's sad. china could solve the problem we have with north korea in one day if they wanted to. >> we have a can -- i don't know how much time we have left, but i want to talk about the debates and how you are preparing for those and whether you like the moderators selected? i would like to see what we have been talking about, instead of maybe add momming stuff, it would be great to have the discussion we just had. real quickly on the wall street journal, if you are going to get somewhat objective treatment you

have to look here, but the headline today "are clinton and trump healthy enough to serve?" . at least they address the clinton issue but had to throw you in there, too. >> they always do. >> would you release your full health records if she releases hers? >> you know what i did? you would be proud of me. i saw what was going on with her, and i said i will do something and i took a physical and this week we announce the results of it, they come in. i did pretty much the whole deal, and because i think we should, i think we should do that, and so i will be announcing sometime during the week i will hand out a paper with very large numbers, very detailed -- hopefully good statistics. i feel very confident, otherwise i probably would not be telling you i did this, right? i will be releasing something

this week in great detail as to a physical. i like that. as far as the debates are concerned, and the system is being gamed because everybody said i won the so-called forum that your group put on, but they all said i won and that matt lauer was easy on me, and he wasn't, and i think he was professional and has been treated unfairly, and they all said i won so when i go into the debate i will be treated unfairly by the moderators. this is no different than the great bobby knight, and he endorsed me and i won in a landslide after getting his endorsement and he would do numbers on the referee and towards the end of the game, they would just sort of, you know, maybe subconsciously give him the calls and he was a master at it. well they are doing the same thing now.

they are saying about how matt lauer -- he was not nice to me, and he was tough. i answered them better than she did. the fact is they are gaming the system, and i think maybe we should have no moderator. let hillary and i sit there and just debate. i think the system is being rigged so it's going to be a very unfair debate. i can see it happening right now because everybody was saying he was soft on trump and now the new person is going to try and be really hard on trump just to show the establishment what he can do. i think it's very unfair what they are doing. i think we should have a debate with no moderator, just hillary and i sitting there talking. >> mr. trump, we appreciate all the time you have given us this morning. i know you have other things on your schedule, and we will talk to you again soon hopefully. >> thank you. thank you very much, joe and becky. thank you. >> you are welcome. >> thank you, mr. trump. when we come back,

minneapolis fed president calling out immigration and tax reform as keys to solving slow growth. he will join us at the top of the hour. right now as we head to a break, a quick check on the futures which have been under pressure all morning long, and they have eased up a bit. we were down 150 earlier this morning, and s&p futures down by 13, and the nasdaq down by 35. stick around, "squawk box" will be right back.

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the campaign trail. we have highlights from our conversation straight ahead. up next, neel kashkari will join us live and we have his take on banks and a "squawk box" exclusive. the world according to george mitchell. the former senate majority leader is here in the studio, and the final hour of "squawk box" starts now.

>> welcome back to "squawk box" here on cnbc, first in business worldwide, and andrew is off today. the futures right now, take a quick look now. not even down triple digits at this point, down 97. at the beginning of the morning i would say we were down about 145, 150, after the big selloff on friday and keep it into perspective. we are still not at 400. >> no, and we sit up and take notice because this is the first time the s&p moved one way. >> just to keep it in perspective, because 400 points is not what it used to be. we are seeing some of the similar numbers, and becky said 2.5%, and we are seeing some in europe but it's a little moderated now, and everything in

between 1% and 2%, except for italy and spain, and that's in the response to what happened on friday, and i don't know if i would say it was a long-time coming. >> it was the biggest change direction or drop since brexit. >> and september is turning out to be one of the worst months -- no, it was fine until friday. >> the month is still short. many days left. >> t.s. elliott, that guy was wrong, april is not the cruellest month. historically, the reason you have all the black days that we talk about with market crashes, we are always in october, and it starts in september and gets worse, and -- >> crescendos. >> yeah, and i don't know why, but i get depressed.

>> everybody comes back after not paying attention. >> with school. >> i am struggling with that, too, at our house. >> i still have the uneasy feeling. >> and the dreams about i am missing the exam. >> maybe three decades. maybe. three fed officials will be making public appearances today. and that the atlanta fed president, dennis lockhart and neel kashkari. today is the last day fed officials can speak publicly until after next week's meeting whether they decide not to raise rates. kashkari will join us live in a few minutes. in deal news, a merger of equals, and forming a $36 billion company. in other corporate news, tesla is changing the way its auto pilot works following a fatal

crash in may. there's plans to revise the mode saying the updated system will depend more on radar signals and the company will add safeguards to keep drivers engaged at high speeds, and all of this is happening in a new software update they will send over the air to the entire fleet in the next week or two. and then hillary clinton's health this morning, she cancelled events following the pneumonia diagnosis. >> are you feeling better? >> yes, thank you very much. thank you. >> that was interesting. correct me if i am wrong, but that was not donald trump? am i right about that? i am glad you are here to help me out. we will get that loaded up, maybe, john, while we are talking to you. that was obviously -- john, before we go, i think we have it now cued up so we will look at

it quickly and then be back with you. >> i hope she gets well and i hope she gets well soon, but, you know, it was quite sad, to be honest with you, and i hope she gets well soon. no satisfaction, believe me, whatsoever. >> john, so i know we spoke to you one other time and you went through the -- i don't know who hasn't -- you must be in a cave if you have not seen some of the video from yesterday, but take us back. >> look, that was an interesting interview you just did with donald trump. first of all the remark he made about her health showed a lot of discipline, restraint and political smarts on donald trump's part because this is a story that is very bad for hillary clinton, the video was bad and the way they handled it was bad and donald trump reacted in just the way that a republican political strategist would want him to, and then he went on in the interview, and you had a lot of time with him, to say several things that could

have the affect of taking the spotlight off of hillary clinton where it's hurting her and on to him. he referred again to elizabeth warren, the senator from massachusetts, as pocahontas, and this plays into the basket of deplorable issues and some see that as a racial and ethnic slur on elizabeth warren, and he raised questions about the debates and said he will be treated unfairly by the moderators, and lester holt will be moderating the first one, and then he made comments about the independence of the fed, and he said the justice department and the fed and the fbi all of which i used to think were independent are not independent and i just

had an exchange with the former bush administration treasury official who is a friend of the show, and he said that was an out outrageous attack on the independence of the fed, and he said president obama was keeping his interest rates now, and i think this is not necessarily the smartest way for donald trump to use that interview. >> yeah, i saw tony's sweet and i said, that's tony, and he's a never trumper, and has been. >> if you are donald trump and the republican ticket, you want the focus to be on hillary clinton and the very bad day she had yesterday. >> and i am sure that, you know, that went into the thinking of the trump campaign as well, and i didn't think he got off -- i didn't see any smoking gun that you see with any of the issues. he's already on the record saying the fed -- that criticism

was already levied last week when he made the comments last week, and senator warren, that's about the tenth time he has used that -- >> right, but nothing is a smoking gun, joe. >> as you said, the basket -- i don't know, the basket of deplorables, that whole thing backfired last week because, you know, there are -- >> yeah, but if you are being accused -- >> if you are at 46%, and you said half, then you are talking about -- that's like a mitt romney generalization that didn't work well for him at all last time. >> from trump's point of view, if you are accused of saying racial things, the smart thing to do would not say things people think are racist. >> you are never going to get through 45, 50 minutes without trump being trump, obviously. >> you are right about that. >> whether any of those things

come home, i don't know, i didn't hear anything -- anyway, thanks. >> john, thank you. breaking news, just crossing the wires concerning the fed, and steve is here and has more on that. >> this is one of three that is coming out, and the next one just coming up right here on "squawk box," and just keep your television tuned right here. dennis lockhart out with his speech saying the economic conditions warrant serious discussion of a rate hike at the meeting and the economy is sustaining sufficient momentum in order for the fed to hit its goals of 2% inflation and maximum employment, and he says the economy is chugging along and not stalling out and dismisses the reports that led to that weakness and he said the quote is a little below 2%, and then ends his speech by asking, given that we have the gdp where

it is, and inflation where it is, guys, he says is the current rate still appropriate? if i had to put him in a column, and he's not a voter, but it sounds like he would be in favor of a rate hike. i counted four officials that i think are definitely in favor of a rate hike, maybe two or three that are possible, and then a couple others -- >> voting members? >> i don't know if they have it in the back real quick. i have it here somewhere. i have got fisher, rosen tkpwrepb and mister, for the likely, and yellen, dudley and bullard as possible. >> what about traoul yo? >> i have traoul yo and bullard as unlikely. >> no matter what any of them think, they will go with yellen?

>> and, yeah, and she brings the governor wz her. >> what about fisher, though? any idea of fisher being somebody that will vote for, and how much sway does he have over yellen? >> stan has a good amount of sway, and he is more hawkish than the fed chair, and since 2005 you had a fed governor dissent from the trail. >> sit true tarullo and brainard have a sway over the chair? >> i think there are limits to how much dissent she will want, and we have not all them yet. i don't think, again, eric is a

kind of dissenter. you could get a hawkish -- you one or the other, you could get a hawkish stay, or a dovish hike is the way i would play this. >> i bet, mitch, he lost his but, the bear cubs win over purdue -- >> i did not say that. i will ta >> don't be like them. yes or no? >> yes or no. >> they raise or not? >> can i -- you criticize me for wearing green ties, and i know why -- >> you are so sensitive. you are so sensitive! i came in one day and i said, joe, you have been wearing a series of nice green ties. >> so i stopped. >> he saw it as a criticism.

>> was that a criticism of green ties? >> i thought women thought about what they wear, and i never thought -- >> it's nice, joe, i like that about you. >> you say whatever you feel, too. watch this, i am going to go with what i say. >> we ask donald trump about the fed a couple minutes ago and this was his response. >> the interest rates are kept down by president obama. i have no doubt that that's the reason they are being kept down. i love low interest rates, but for the country something has to happen. i don't think it's going to happen very much because he wants to go out and he wants to play golf for the rest of his life and he doesn't care what is going to happen after january. >> joining us now, neel kashkari, the minneapolis federal reserve bank president. on the one hand, there's an entire planet that seems to be

in easing mode and a global economy that just isn't that strong so you can certainly argue that low rates probably, there's a lot of has to do with that and it makes sense, and then remember greenspan and the first bush when he raised rates and how to this day i think 41 blames him for that, and there's always the idea or notion, and it's almost a wall street where there's a saying, there's not going to be an election hike in an election year, and maybe theres's something to it and maybe not? >> first of all, good to see you. i can tell you, i sit in the deliberations and i am part of the deliberations and politics doesn't come up and we look at the economic data, and we may have different perspectives on policy but everybody around the table is committed to achieving our duel mandate and politics does not play a part and i can

assure you of that. >> and his point, i thought it was kind of smart, you throw in the justice department and the fbi, and -- there's a lot of deplorables out there, probably. the whole basket shaking their head going, really? after recent history. >> where you started is important, we are seeing trends all around the world, slowest recovery among all the advanced economies, and i am asking like many people, why is that? what is the explanation? the ruler is the deeper the recession and the strongest the recovery and yet we had the weakest recovery with the strongest depression. it's like demographics and the slowing growth of the workforce and the aging of our society, and lackluster technological innovation and psychological scarring coming out of the crisis, and these problems cannot be solved with monetary policy and i think we should

admit that and focus on the regular yao l regulatory and fiscal process. >> the notion it would be fine if the worse that monetary policy did was be ineffective, but that would be fine, and i know you read the editorial where many do see negative affects and this weakness and the sluggish economy is self fulfilling because of the fed, and it's not that it's not working but they are causing it, and i guess you don't agree? >> i understand when people look at neglect rates around the world, and it seems negative rates are spooking people and it could lead people to save money because they are freaked out by why are my interest rates negative, and low rates i am not sure are the exact same thing, and i would push back and say is

the solution now, do you think raising interest rates is going to lead to higher inflation? that's a curious economic principle. around the world we are seeing low inflation and in some places bouts of deflation. i read those comments and i read the criticisms and don't understand the economic logic behind them. >> maybe when you look at the size of the balance sheet, their man is not there to take it up and they keep pushing on the string to get something started, tri trying to light a fire under the economy, and all you are left is the balance street you don't know how to get out of, and maybe you should get rid of regulations that hold back banking and corporate tax rates are too high. none of this will be solved by the fed staying at zero. >> i agree with that and i think it's important all elements of

our government get in gear and do what they can do. take immigration. one of the huge sources of economic growth is population growth and workforce growth so more workers and more consumers to buy our goods. our workforce has been slowing and not growing because our population is aging. this is not happening just in america but happening in europe and japan. one of the advantages we have had in america is immigrants wanted to come here and that's a boost to our workforce and our demand here at home, and so immigration reform can be a source of economic growth. same thing with r and d spending, and the government spends $33 billion a year on basic science, and that sustained orr a period of time could lead to an increase in innovation so there's lots to do to get the economy growing again including tax and regulatory form, and as you said it's not monetary policy.

we should admit it. demographics is not the problem we will solve with low interest rates. >> good morning, becky. how are you? >> good, becky. good to see you. >> good to see you, too. this is the last day fed officials can speak before the meeting to raise rates and that's why people are listening to eagerly to what you are saying today, and we got a preview of a speech dennis la lockhart is going to be given today. this is a live meeting essential essentially, and he ends his speech by saying is the current rate appropriate? >> i have my own personal policy

on not commenting on those, and the fed expected inflation to bounce back, and core pc has came up in the last year but has been stuck at 1.6, and there's a headline with food and energy prices, and i want to see more movement in corin corinne coreinflation. i don't think it's productive to speculate, but i think it adds to the noise without adding information in terms of what we are going to be doing. >> we have gotten a few numbers recently that shook some people's confidence and some market players confidence and that was the jobs report that was weaker than expected and add to that the dual reports we got, one that showed manufacturing contracted in the most recent

numbers and the other that showed even the service business, which is by far the largest piece of the economy fell by more than expected and it fell the lowest in the last six years. >> you get a few data points and it's hard to decide if that's a trend or not. i think i heard steve say that dennis lockhart said a little less than 2% for the year and that feels about right to me. i think the jobs report was overall pretty good. certainly was not terrible and was not as strong as we like to see, and more of a muddle along type of economy, and so my view is there isn't appear to be huge urgency to do anything, frankly, and gets let as much data as we and get our inflation back up. around the world inflation is coming up low generally, and

this is a global phenomenon, and why are interest rates over the last 30 years, why have they been falling? not because of central banks but other factors that we need to focus on and that will lead us to nonmonetary solutions to achieve the outcomes we want which are maximum employment and a growing economy for awful us. they are not monetary problems. >> too many mandates, and you keep talking about inflation. i don't want to saddle you guys with that, but i wish you would stick with the employment. i certainly don't want to saddle you with every single slight market tremor we have around the world and any equity market and that's what some people think, too, has been too focused on by the fed and that's not what you should be doing but when you are try -- i think it's all out of whack. >> well, you know, there are a

lot of things going on. i can tell you this. i think my colleagues and i are good at looking through the noise and you are right it's easy to get distracted by every new data point and market skwraoeu ration, and i don't have a bloomberg terminal on my december skpbg don desk, and i spend a lot of my time getting out across my district as my colleagues do to meet with small business owners and banks and families to see what they are seeing in the economy, and i feel good about the process we are undertaking, and we all want to get an economy growing more quickly and get back to a place where interest rates are justified to be higher and we are trying to figure out the right way to get there. >> all right. thank you. i don't know, why does goldman sachs need to be owning live cattle and moving it around and storing it and stuff, and i was

going to ask you about that, but you want to break up the whole banking system, and we need to do that on another interview? >> we will do it next time, joe. thank you. >> thank you, and good to see you. when we return, we are counting down to cnbc's sixth alpha delivering conference. and here's what donald trump said about business and tax reform last hour. >> for one thing, we have to get the business taxes down, and i speak to your viewers when i say that, and we are bringing the rate down from 35% to 15% and businesses won't be leaving our country anymore, and they are going to be reinvigorated, and it will be a great thing to watch and not since reagan has anybody proposed anything like this. what i love most about

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the sixth alpha conference, i can't believe six, and it has

gotten more amazing. >> it got better every year in terms of bookings and content and ideas. >> kate kelly. you are kate kelly? >> yeah, i am, and i have been at all five alphas, and i will be there tomorrow. fp >> weird, we have the sports official mics. >> makes me feel more official. >> anyway, david ganek speaks out, as investors worried about activity, and beganic once worked at sac capital. and the manhattan u.s. attorney has fallen under a cloud.

two key insider convictions he won were turned over on appeal, and left the defendants free and clear. and then charges were eventually dropped against a number of cooperating witnesses including the one-time level global analyst that provided what they initially thought was incriminating evidence against ganek. he argued his due process rights were violated among other things, and the next brief is due in november. and so he manages a family office and he is speaking out for the first time tomorrow, and it's an exclusive and it will be interesting to hear about the process he went through especially the process of swinging of the pendulum, and

the 80 convictions, and still a good record but -- >> it will be interesting to hear his thoughts. >> it's newsworthy this week, right, with the greensburg trial starting among other things, and per your guest earlier, the obama administration coming to a close and it will be interesting to see if things change, and will we continue and see a focus, and anger about things, lots of things to discuss. we have been watching the markets and on friday not only did the stock market drop, but you saw interest rates start to pick up.

yields really starting to grow on the idea that maybe, maybe, just maybe the central bank will raise rates again come september or december. and mike, have interest rates bottomed? >> that's what jeff gunlock said, and if you look at the case for a potential bond market top, one of the ingredients is the bonds did get over loved and people thought lower for longer was almost a rule and it was basically written down it would never be violated and central banks would be your friend and all of these things fed in, but i would argue this recent selloff in bonds and the increase in yields is not about the fed and it started in japan and filtered through the european central bank and it's a rethinking whether the banks are fatigued and on some level it could be a good thing, you have

the longer end of the curve yield going up. i think the fed picture will be cleared up, but it could be a short term challenge for stocks, and a fleeting rise up to 3% for treasuries and stocks went down 5% and stocks were cheaper back then. i will give you the case for why bonds are now a buying opportunity. inflation is muted. you do not have enough safe income in the world arguably for those that want it and need it. the fed, even if it does increase rates, still likely to go slow and they don't want to puncture the low-rate environment they have right now, and i think it's going to be a source of noise and static for the stock market for a while but i think it's too early to say the bond market, bull market going 35 years now, is definitively over. let's have context.

ten-year treasury yields not back up to where they were on june 23rd of this year. >> thank you very much. make sure you check out the article on cnbc pro. and coming up, the stocks to watch and before we head to break, a check on the futures. we will be right back. in inform. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. with this level of engineering... it's a performance machine. with this degree of intelligence... it's a supercomputer.

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coming up, global tensions in presidential politics. former senate leader, up next. and crude oil falling below $45. the declines on friday continue today. stick around. "squawk box" will be right back. d no matter where you go. you want an experience that feels highly personalized. with watson on the ibm cloud, travel companies like wayblazer can apply cognitive analytics to social data to understand what a destination is really like. and who exactly, it will appeal to. today watson is helping businesses create experiences that revolve around you. because that's what the ibm cloud is built for. announcer: are your children in the right car seat for their age and size? is the seat supposed to be forward-facing or rear-facing?

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because she is being political and doing what obama wants her to do, and i know that's what you are supposed to do, but that's why it's low. don't forget, i called brexit and did a lot of calling and what they are doing is, you know -- i believe it's a false market. >> that was donald trump joining us on "squawk box" earlier this morning, talking about the fed and fed chair, janet yellen, and low rates. when we come back, our morning of news makers and breakers continues. george mitchell, he will join us in studio. stick around, "squawk box" will be right back.

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a cease-fire in syria is effective as of sundown today in hopes peace can be found for the war torn country. thank you for being here today. >> thank you for having me. >> so many times we have felt like we had cease fires to have it fall apart. is this time different? >> we can all hope so. it's very complex, obviously. a lot of interactive and sometimes contradictory

conflicts, but the continuation is devastating for everybody and so let's hope and pray it does stick. >> the talks with russia, which we would be looking for, what signal should we be watching to see if it's going to stick this time? >> russia has a long historical interest in syria and has a base there for 50 years and the russian government poured in much effort and money in support for syria and there are tens of thousands of russian men military wise and otherwise married to syrian women and so we should not be surprised their interest and the fact they will go far to support the regime. >> yesterday, september 11th and everybody watching memorial services taking place and on my drive in from manhattan you could still see the light shining up from the towers, and

where are we 15 years later? are we safe esafer? >> in this case, the perception is the reality. we are in fact safer. 78 million people died in a war in a world in which the population was a third of what it is now, and so in terms of the numbers of deaths the world is much safer, and the reality is people are fearful because the conflict that shifted from described in battlefields where people knew where the armies were fighting each other and they were constrained to now terrorism which can happen anywhere at anytime, so people feel unsafe, and most americans are not aware they are more likely to be killed by a lightning strike than a terrorists attack, and that doesn't detract from the fact it's a serious problem worldwide and so people feel unsafe and

you have to deal with that perception. >> i just worry about loose nukes, dirty bombs and biological weapons, and anthrax, smallpox, yeah, sure, i worry about about lightning more, but we know what their intention is, right? >> oh, yes. >> and hopefully it doesn't have to happen for us. kerry said the media has to play down the terrorists angle, and that's like -- that scares me more than the terrorists that that's the secretary of state's idea about how to deal with terrorism? >> if he said that, i don't agree with it. >> he did. >> we do have to deal as effec effectively and within our own constitution in dealing with it, but it is a serious threat. >> would you tell isis we are not going to put boots on the ground as one candidate said, we are never putting boots on the

ground, so if you are worried about that that will never going to happen under my administration? do we need to go in and root it out where it is? >> i don't think a large american ground force would be in our interest. for one thing, joe, isis is a very serious threat. but it follows on al qaeda which follows on other things. it's a reflection of a region in up he have annual and turbulence. i do think that we can and should increase our effort in what i call special forces, we can do a lot more in abetting those who are engaged in the conflicts. >> let's talk about north korea, after setting off the last nuclear test they did last week, the response has been that we will see additional sanctions

going with talks and that we are taking this very seriously and i believe i saw the north korean government saying they find it laughable and we had donald trump join us in the last hour and he said his solution in dealing with this is to put pressure on china to crack down on north korea. what do you think of where we stand right now and how would you deal with north korea at this point? >> that has been u.s. policy for the last two administrations to encourage china to deal with the issue of north korea, but china's interests and ours co-insights in the short term but not long term and china is worried about the north korean regime but doesn't want a collapse of the regime and a unified korea under the current south korean regime, which they would regard as a mortal threat to their interests, so people that say china, china, china,

has to recognize china's interests do not coincide with ours? >> but the sanctions have not worked? >> it's fair to say they have not worked so far, and sanctions forever, and -- >> the reason they are not working is because the chinese are allowing more trade to come through china to take off the economic pressure, and in the meantime, the north korea nuclear program advanced and if i was in south korea or japan right now i would be panicked with what they are doing? >> they are very concerned and one concern, of course, that will trigger a nuclear arms race in the region, and it's just a matter of time until the upcoming japanese politician says china has them, north korea has them and it's about time we have them, and i think that's not in our interests and it's not in the interests of the stability of the region, but would not be surprised if that

happened. >> another thing trump commented on, the mexican foreign minister stepping down, and he was largely seen by the business community, a lot of viewers for this station as being somebody who was paving the way to open investment from america and to mexico and vice versa and what do you think in terms of where we stand with nafta with our largest trading partner? >> i don't think mexico is our largest trading partner, but canada s. but it's a very large one and it's a neighbor and always will be. i think we should encourage investment in and development in mexico as the best way in the long term to relieve the pressure of migrants coming. the fact, however, is that the net migration from mexico is zero, and those going in and

coming back are the same, and it's a transit point from central america who are going through difficult times and coming in through mexico, and so i think mexico is and always will be a peaceful neighbor, one in which we have to encourage good relations that are beneficial to both. >> when you look around the globe, what is your biggest concern at this point? >> i think there are several. first, i think the threat of islamic extreme terrorism is a real one, and it's going to increase. that point has not really much been made. 1 out of 5 people on earth today is muslim, and that's about 1.5 billion, and when the population nears 10 billion it will be 1 in 3, and about 3.5 billion, and that was the total population of the world as recently as 1970, and the conflicts within islam are many and they are

intersecting and overlapping and sometimes contradicting and they will continue for sometime and feeding into that the possibility of the collapse of the nuclear nonprolive nation regime, which led the way, i think, quite successfully. there are dozens of countries who could produce nuclear weapons. >> right. >> who voluntarily refrain from doing so in reliance on american leadership and on the nonproliferation regime. those two, i think, pose the greatest threats to stability worldwide. >> leader mitchell, i want to thank you very much for joining us today. it's really a pleasure seeing you. >> thanks for having me, becky. >> thank you. >> nice to see you, joe. >> good to see you. when we return, a home realty check, mortgage rates ticking higher at the fastest pace now since brexit. details next. futures right now, take a look, we're now down only 79. down almost double that at the beginning of the morning. stay tuned. you're watching cnbc first in business worldwide.

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welcome back everybody. mortgage rates have barely budged since the brexit vote, but now they are finally starting to tick higher. how's this going to impact the housing market, which even though we've seen some strength we're not sure how strong that

would be in the face of higher mortgage rates. diana olick joins us right now with a look at that. good morning, diana. >> reporter: good morning, becky. as you said rates have been sitting near historic lows ever since brexit and have moved only in the tiniest margins. that changed friday when the rate on the 30-year fixed made its biggest move in two months. not a huge move, mind you, but around 0.8 percentage point. it's not so much the size of the move but breaking out higher out of that tight margin where it's been stuck. we're still below 4% on the but it was enough it was enough to tank the home builder stocks on friday, down 4% on the average. and not just the builders but everything that touches the builders, that is your home depots, your lowe's. i spoke with john berns of john berns real estate consulting in california and he said historically higher mortgage rates have hammered builder stocks, hurt new home sales badly and hurt existing home sales a little. they've had little impact on the home price unless there was a

recession too. what i would add to that is that with price gains accelerating again due to this uniquely tight supply situation in the market today, buyers are more sensitive to mortgage rates because they're so squeezed on that monthly payment as it is. so we're going to be watching this week. we could see them move even higher than we saw friday, becky. >> diana, thank you very much. coming up, we'll have the day's biggest movers. and later this morning don't miss barclays ceo jes staley at 10 eastern. first before break, more highlights of what donald trump said this morning. >> businesses are being put out of business by the regulations. every day new regulations come down. and i've had people -- and i'm not only talking about small business. i'm talking about massive businesses telling me, donald, you've got to do something. they're putting us out of business. look at what's happening with the energy business. they're making it impossible for these people to really compete. it's so onerous. make healthcare more personal

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nafta is the worst trade deal ever made in the history, not of this country, in the history of the world. it has just absolutely drained our country of businesses. and what i want to do is renegotiate nafta. so when people hear that they

say, oh, he's against trade. i'm not against trade. i just want to make good deals. nafta's a one-way street into mexico and other places. >> one of the many comments from presidential candidate donald trump we had on for roughly 40 minutes or so. i thought about some of the scuttlebutt that maybe david shus ter talked about the dnc talked about for contingency reasons talked about what if there was a health problem, i was going to ask him if that would be a positive or negative if someone else had to step in like a biden or i don't know who they'd pick. i don't want to be placed in the basket of deplorables. i watched matt lauer. i think matt is one of the best pros we have. and i can see now there is a little bit of a partisan nature to how you view things in the world right now. >> the whole country is divided at this point, and i think everybody sees through things through their own political

lens. >> right. but if you're not in lockstep with what, i don't know your peers are doing, or even if you don't appear to be in lockstep, you in a heap of trouble. folks, thank you for joining us today. make sure you join us tomorrow when we are at the delivering alpha conference. we will see you then. right now it's time for "squawk on the street." ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber, sarah eisen. cramer is off. futures red but well off the lows of the morning, the worst day since brexit as you know, worst week for the dow since the middle of january. europe and asia playing defense overnight and this morning, plenty of fed speak today driving bonds. and oil has touched the 50-day moving average. our road map begins with