♪ live from new york where business never sleeps, this is "squawk box." three days. >> still crying. >> good morning. welcome to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. you can see this morning once again we see a move close to 50 points for the dow. this time in the upward direction. this comes after the dow was down by about 250 points yesterday. we have seen three days in a row where the dow moved 200 plus points. in one case almost 400 points. a bit of volatility creeping back into the market. this morning s&p futures are up by 5 points. the nasdaq up by 15. overnight in asia, the nikkei closed down by 7.5%. hang seng was down slightly.

down by just over 0.1%. in europe, in the early trading, the dax is up by about 0.4%. ftse has bigger gains, up by 0.6%. green arrows across the board. look at crude oil prices which yesterday late were a little bit higher after numbers came in indicating there was less of a draw down than expected in the united states. right now wti hanging in around $45. >> it is a lighter day for your economic agenda. at 8:30 a.m. we get a report out, the august import price report. despite the rather boring name, it's actually a pretty important measure of inflation. import prices are expected to have fallen last month. but the big corp praorate s is wells fargo. john stumpf appeared on "mad money" last night and told jim

cramer he will to the resign though he does hold himself accountable for abusive account opening practices at the firm. >> it may mean some people say that you have to resign. >> jim, i think the best thing i can do right now is lead this company. today we made actually an announcement about product sales goals. you know, we never intended for product sales or any dynamic or any part of a management system to be misinterpreted. >> wells fargo was fined $185 million by the federal government and two other regulators. it is over allegations that staff there opened more than 2 million bank accounts and credit card accounts for customers without their consent. all in all it was an efsht fort meet internal aggressive sales goals. jim also asked if he heard from warren buffett. he said he talked to a lot of

institutional and share holders but would not relay information about one specific conversation with any shareholder. >> i called warren buffett, he didn't want to talk. i tried. buffett has not been public on the issue. >> he did say in '09, in an interview with fortune about wells fargo, the one thing he liked about them is that they were able to cross-sell to customers. i'm sure 99% of that is on the up and up, but 5,300 employees may have crossed that ethical line. that's a lot of employees. >> that's not a few bad apples. and they say it's over a period of five years, a significant number of employees, it points to a lack of internal controls, management oversight and issues about what they were pushing.

>> i don't think enough -- the federal government delivering alpha yesterday. jack lew saying this is why we need dodd-frank, look what the federal government has done. this was an "l.a. times" thing. kudos to the reporter there who for the better part of a year a couple years ago did good old-fashioned reporting. he reported this, the l.a. city government jumped on it and then the federal government piggybacked on that. >> there are questions about whether if this exists at wells fargo, does it exist at other banks cross selling? also, even within the context of wells fargo, if the compliance procedures are not there for that, are there other issues within the bank? >> that's what this gets into. the stock fell 3.3% yesterday because of that. >> stumpf has had a reputation of being good with risk management. >> drill yabrilliant.

>> and this raises all sorts of questions. >> i argued on "power lunch" 1:00 p.m. eastern. >> i love that so organic. >> totally canned. if there's 5,000 employees, you have to ask yourself why. if you look at the time period, and some viewers brought this out in twitter, if you look at the time period, the economy was in shambles. people were scared. you wonder how much of that played into it, i need to keep my job. people i know are getting laid off off. >> it's so bizarre this happened over five years. >> they're using it as a defense, it was only 1% at any point, but it happened over five years, you still didn't look into it? >> i did have some people on twitter, because we talked about this extensively, i won't report names or banks, i can't verify what they said, but a few people came out and said this happened to me at x, y, z bank also.

one wonders. >> the scale of this was incredibly small on an individualized basis. people paying $14, $17, getting charged for accounts they never signed up for, which may be why it took longer to figure out because there was not some massive number from each one. but this is broad and across the board grand fraud. >> so then the question to me becomes, everyone says we want to hold people accountable. we live in a frenzied world, this is one thing that people love to take people down when bad things happen. what does accountable mean? was does it mean towards john stumpf? >> no movement towards that. >> doesn't seem like it. >> last night in the interview with cramer, stumpf did said this is something that the board is looking at. he wouldn't comment more on that. >> by the way n an odd way,

given how -- it's almost an immaterial in -- this fraud, as we talked about yesterday s so lame in that it was not a profitability fraud. the reason the stock is down is for different reasons, it's not the amount of money lost or what they think -- it's reputational. >> do you think it fell based on the lew comments partly about how this is an example? we'll talk about this momentarily, but how this is an example of why we need a consumer financial protection bureau? >> but the federal government is happy to jump on the back of this. this was the "l.a. times." in 2013, scott record who was reporting there, he uncovered it. the l.a. city attorney sued. so the federal government can't say, oh, we uncovered this big fraud. the "l.a. times" did. then the l.a. city did.

>> the l.a. city attorney, mark fuhr. >> warn buffett's famous phrase, if you lose money for the firm, i will be understanding. if you ruin the reputation, i will be ruthless. >> he's a shareholder. >> but this is much more about reputation than money. we'll see. >> he also has been in the ratings agency business. he has some experience with troubled brands before. everyone is going to if you have a wide portfolio. it will be interesting to see how he reacts. >> by the way, welcome. good morning. >> thank you. >> i will try to properly introduce you. i think of you as the master of ceremonies for a big day yesterday. giants of investing and policy had big warnings yesterday at the alpha conference in new york city. kate kelly, queen of the

ceremony. >> i sort of cover it for us oddly. i did a panel. let's talk about it. we have some great sound from yesterday. let's listen to some key highlights. >> it's bad behavior. they were correct to take action against. how that flows through in terms of next consequences will depend on the facts. there's talk in washington about rolling back dodd-frank, about rolling back the law, changing the law that created the agency that uncover and took action against this this ought to be a moment where people stop an remember how dangerous the system is when you don't have the proper protections in place. >> i think the scarier things are really about politics. about scary erosion of the pragmatic center in politics. diminished capacity to make sensible economic choices,

things governments have to do, and the erosion in the policy tools available to help offset the effects of the next recession. the market environment will be always exciting. the question is whether you're adding value or not. i think most importantly, whether you're going to add value in a bad time. in other words, everybody's long. everybody's almost leveraged long. that's an exposure. so, i think that it depends how well you play the game. >> andrew, i believe that was dalio's answer to your question about his inflows. just to remind our audience. they got $22.5 billion in new funs between last year and this year. they started a new strategy that's a blend of the two flagships. one of which is way up, more

than 13%, the other down 9% on the year. he basically said are you value added? are you doing the best you can relative to the other guys? i thought he was humble about it. he went on to say, this is interesting for somebody who has been a champion of the risk parody model, that's trying to take some foresight and apply it to your portfolio. but he said i just try to stay six months ahead of the game or six days ahead of the game. >> you think of him as a long-term guy. i had conversations over the years where we will talk five years, ten years out. here he is talking about six days and six months out. >> what does that tell us about the environment? >> exactly. he also said i think europe is two steps ahead of the u.s. in terms of trying to apply monetary policy in extreme and creative ways.

and maxing that out is the rest of that thought, to the point where it's ineffective and they have corporates issuing bonds with negative yields. >> i'm thrilled that brian is here, but i would love to have a debate with joe. joe has been a big pusher on raising interest rates, and here are two individuals saying any interest rate hike will set -- this economy is so perilous, they couldn't accept there was any -- conceptually that you could raise the rate. >> i don't know what joe's exact position is. i believe the fed -- i think the fed will raise rates next wednesday. i think they should raise rates. >> 26% of the market. >> i don't want to speak for joe. but i tried to make the argument to ray and tim geithner, also pushing washington to actually

reform itself. part of the issue is whether you believe that the fed has allowed congress to do nothing effectively. and that by leaving rates as low as they are -- >> i'm not sure i want congress to act either. >> they didn't buy that argument either. it's the down side risk, how much focus there was on that. >> leaving rates so low for so long, leading to all these bubbles that inherently popped up in other places as a result. >> on that point, paul singer, who was one of the favorite guests from yesterday, he almost needed no interviewing, he spouted off on his extremely negative view of zero interest rate policy. but one of my panelists, who has

had a great year a debt investor, he focuses on para trading, relative value. one thing he's done is short troubled energy stocks, like a chesapeake, and go long the credit, which he thinks is overly cheap even if the stock is overly expensive. he thinks we're headed to a very negative place. >> so maddening, we have this world where everything because of negative yields has caused everyone to say that other things that are not negative look good by comparison. i went to a dinner that goldman ran, every person to a t agreed that this will end terribly. i'm in that camp. but everyone also agreed it ain't happening in the next six months. >> so here's another guy, this was another theme from yesterday. i brought up dalio and his humility. here's a guy with $23 billion of new funds in a totally -- mixed performance environment, he's

humble. there was a feeling across the board that it's super hard to deliver alpha. then you have a guy who says we're headed to a negative place. we're in a low-growth environment. there was consensus on that. that will persist. low an negative interest rates, it's debatable how much they helped. whether they could have done more or less at the fed. the bond rally is going to end at some point. we don't know when. it will be ugly. a lot of pessimism there, even though boaz is doing well and other debt investors made money in this environment. >> two points on rates. the u.s. consumer doesn't care about the fed, they care what they'll pay on their mortgage and credit rates. the ten-year year rallied 16%. the ten-year yield f we're worried about consumer facing interest rates. the consumer will pay 16% more than he would have a couple weeks ago. >> but it's still cheaper than a couple weeks ago. >> that's the jamie dimon

thought. the big fear, the big risk, the big unknown about a rate hike is not about whether a consumer will pay more, it's does the multi hundred trillion dollar derivative market have the wherewithal to understand a rate hike or rate hike cycle. that broader domino effect. we had a guy on the show on "power lunch," he used the term qu quadrillion. i'm not sure i heard that term used. if the government is trying to limit the derivative exposure, they're not doing a good job. >> you're talking about an enormous market by notional value. >> it's all priced at the same assets. >> other people argue you need to raise rates because it will spur business investment. that's a controversial statement but they say there's a lack of business investment, that's the

biggest problem of the economy. the consumer has been keeping up their end, businesses haven't. if rates rise, businesses will say we have to invest before rates go much higher. >> the other elephant in the room is pension funds. finally the fed is waking up to the idea of -- >> punishing savers. >> you have insurance companies stop writing annuities becauseg return. if you're the fed of illinois, you may be going to the fed saying help us out. >> i thought one gentleman yesterday put it so well, he said as a pension fund manager, the benchmark we've had 23 place for a number of years now, 7 and change percent, is not realistic. they doing what they can to negotiate fees lower. >> but most of their investing is passive investing.

>> in house. >> but he's trying to cut costs. exactly. which is telling. lots of interesting material. >> we'll talk more about it. much more from the alpha conference throughout the morning. the nation of venezuela appears to have cried uncle ahead of that company's oil company announcing yesterday they will do a debt swap to avoid having to make hefty bond payments later this year and next year. michelle caruso-cabrera getting up early to talk about this and why it matters. >> and with one of the best panels at delivers alpha yesterday. >> thank you. i love praise. the head of the venezuela oil company, he went on television yesterday and announced they are going to do a debt swap. a debt swap, if you don't know what it is, i cannot pay you the money i owe you today, so somewhere down the road i will give you even more money for not

being able to pay you today. that's a debt swap, as opposed to debt restructuring which is we can't pay you, we will never be able to pay you everything, so let's negotiate how much less we can pay you. here's the debt calendar. what is due when. venezuela has 1.7 billion due in october of this year. 3 billion in november of this year and other stuff coming up in 2017. 3.6 billion in april, a billion in may and and another 3 billion in november. del pino said it would reduce the cash flow out the door by half, and be capitalized by citco. >> when you say corporatalized,

you mean citgo is up for grabs? >> yeah. they're not putting house on the line. >> it's not bad for the creditors. >> but what if your a citgo creditor. >> then it's bad. there had been a number of bankers going down there. they had to do something. did you see how small the payments are that are due for a country that produces that much oil, yet they're running out of foreign exchange reserves. the socialists running the country makes it a message. they don't have foreign exchange to pay for medicine and food. >> supply trucks coming in are getting raided. >> it's awful. something was expected to be done. critics will say you need to do a whole restructuring. you need to change the way you run the economy. the one other detail is these bonds would be due -- they would be due in 2020. so it doesn't give them that much breathing room.

just a couple of years. so we wait for those details today. another sign of just how tough things are. >> is that even legal? can you usurp the citgo creditors? that's a question. it depends on the clauses and various bonds. let's see how much debt there is outstanding on that in the first place. >> great to see you. coming up, after our summer sleeper of a stock market, volatility is back. stocks giving back monday's big gains, just one week ahead of the fed's september meeting which is next wednesday. your morning strategy session is coming up next. at boll and branch,

welcome back. we are in roller coaster mode with major indexes seesawing for a third day in a row. here's what blackstone's ceo steve schwarzman said yesterday at the taalpha conference. >> people have been talking about this on television for so many years, that the fed may do something out of the boredom of it all. >> we're daring them. >> right. you're daring them repeatedly, eventually they'll give up and do something. 25 basis points will move markets only because you all have become a proxy for the markets. you wanted to move something. or else there's no news. and -- but it won't make a difference to the u.s. economy.

joining us now to break down this volatility is david bianco the head of u.s. equity strategy at deutsche bank, and ben emmond from intelectus markets. this is the question we keep going around and around. ben, you think the fed will raise rates? brian is in the camp that says, yeah, he thinks it will happen. are you? >> i think the market is right. the market is pricing 22% probability. i think markets have been right all along. it looks much more like a december opportunity. >> do you think that's because they feel like they have the time? there's no rush in doing it now? >> that's right. i think what was said on monday was really well laid out. that we want to take some time with this. we need more time for data. this is the pattern.

if you have evidence of one hike this year, that means you get one hike each year, and you need an entire year of data to justify that hike. probably in the summer. >> the market looks at that, that may be what the market is expecting that we don't see something in september based on fed futures. but a december rate hike would not surprise anybody at this point. >> we don't expect a hike in september. i think the fed keeps us guessing all the way to december. i think they hike in december. it's not the fed so much that's causing this volatility. >> what is? >> well, interest rates. >> it does seem like every time a fed official speaks, it swings the market one direction or another. >> two things. we had this climb in long-term yields which was from european and japanese central banks saying they won't be as aggressive as previously thought. and investors thought long-term

yields would never go up hurting utilities, tellcos and twe'll b guess nothing next year what the volatility will be. >> what is the new leadership group if it's not utilities? >> i think the best place in this market is secular growth sectors, like healthcare, big cap tech. when things get a little bit better priced, i would look for stuff in the consumer space. but what i think is the difficult thing for investors now to navigate is bond substitutes are vulnerable, and cyclicals are also vulnerable. we're not seeing the acceleration in investment spending or export activity or industrial activity to justify where industrial companies are trading or the pace of recovery in oil companies to justify where energy stocks are trading.

many of the bond substitutes have a down side for the short-te short-term. >> ben, let's look at the broader economy, you can look at the ism, or longer term trends. lead story in the "wall street journal" is how families income rose at the fastest pace since 1967. how is the economy faring at this point and how should we read it? >> if you look at real incomes rising, in a low inflation environment, that's benefiting household spending and income. yes, we have a decent labor market, but low inflation which is more beneficial. that is likely sustained. you have commodity sector that is under pressure. so you have a low inflation rating -- reading from now on. we'll continue to benefit real incomes. i think this is very similar as what happened in japan in the

'90s when real income started to rise the same way. >> that didn't end so well. >> it didn't end so well. low inflation expectations, low inflation benefits real income and gdp per capita. >> middle class incomes had the fastest increase ever last year. there is some good news. where does that money flow? how does the middle class having more money benefit the stock market and certain companies or sectors? >> i think they're not that aggressively going into the stock market. it seems that the savings rate of over 5%, that that's where part of the money is. >> they're nervous. >> exactly. people are holding back. consumer spending running at 4% is decent, but that's not old normal this is new normal spending. 5% savings rate is where the money is. >> ben, david, thank you both. >> thank you. coming up, your money, your vote. a closer look at the impact of immigration on the economy.

later, robby mook will join us to talk about clinton's economic plan and her return to the campaign trail after that bout with few pneumonia. right now, as we head to a break, look at yesterday's s&p 500 winners and losers. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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that was a song i requested last time i filled in on this show. go mets. >> good morning. >> thank you. a north carolina band. it's a great song. great album. >> we're on tv. >> all right. >> welcome back to "squawk box." >> i knew that. >> here's how your money looks. equity futures after a couple days of more than 1% moves not showing a big move. fair value indicating an emplied open of a 47-point gain at the beginning. the s&p 500 and nasdaq looking well. nothing wrong with starting the day with good music. wells fargo could use some good music. they are facing a firestorm of criticism about sales practices. they were fined over 185 million over saallegations that the ban

opened 2 million credit card accounts without autratihorizat. john stumpf was on "mad money" last night with jim. if there are claw back positions, why wouldn't somebody like carrie tolstad, why wouldn't you want to reclaim some of her stock even if she worked there for many years? someone -- we can't just go after the low guys. that's not how we work. >> of course not. to the extent that's a consideration, we have a process. >> has james quigley from deloitte, the head of the audit committee, has he looked at this? has frederiqanybody looked at t?

>> to the extent that's a consideration, we have a process. let's talk immigration reform. it has become a heat ed topic on the campaign trail. donald trump and hillary clinton say they favor secure borders but are at some significant odds over how they would tackle deportation and the path to citizenship. here to talk about what immigration means for the economy, you look at both candidates, is it clear that one is better or the other for the latino community, if you will? >> speaking as an american business person first, i think both are very weak in terms of economic policy and vstrategy? >> on the immigration issue? >> on both. there is not a growth orientation.

when we talk about gdp growth at 1%, 0.7%, or whatever the most recent quarters have looked like, the question is where can we get growth and how do we fuel growth? i don't see that as a conversation other than the traditional i'll cut taxes or raise taxes on the rich, and spend -- >> is there conversation about infrastructure spending? >> is on infrastructure spending, but there are pockets of growth in the united states of america today that are huge and growing faster. it's represented in some of the conversation you had this morning about wage increases. average incomes increasing. what's happening now, i call it the new american mainstream economy. there is a new mainstream any forming under the digital umbrella that we have underway and just the pure demographics of our country that are driven by the latinos not country.

>> a lot of reports suggest that the growth we've seen in family income comes from job creation. that we have seen a lot of jobs created over the last year or so, and that's ending up with higher incomes. minimum wages have been raised in a lot of states, too. >> you're spot on with this notion of job creation. if you look at the study that was done about a year ago, released a year ago at the hoover institute out of stanford, we saw the most entrepreneurial people in this country today in the last half decade were latinos. in the last half decade, they increased their base of businesses by 48%. to your point about job creation, correlating to that was another 30% increase in jobs created. so the base is big.

getting bigger. it's growing at double digits. >> what is it that you want both candidates or either candidate to be saying that they're not? >> first of all, a deportation policy is silly. economically speaking it's purely silly and not well thought out. >> so that's trump. >> that's trump. the second is in the case of hillary, how does she think about growing and stimulating this portion of the economy? the demographics are what they are. we're not going back in time. every year there's a million young people turning 18 that are latinos, that are native born. native born. the growth story is about native born people. about a generational change in average education, average incomes, and all the positive. >> why do you think people have better growth plans? because they don't know how or in large parts of the american community right now what sells is anger and punishment? >> i think that's the rhetoric

that's happened over the last few elections. people think that people are taking away jobs, people are doing other negative things to exist i existing people who have been here longer. many my case, my family has been here 300, 400 years. >> on the democratic side, there's anger about the financial crisis, the regulation. regulation. we need more regulation. when you look at my homestate, california, southern california, huge latino community. you talk to people out there, they won't say it's impossible to start a company, but it's a lot harder than it should be. >> i think that's the story in many states. i do live in california. i hear that story all the time as well. and this issue of regulation and minimizing regulation smartly is important for growth. obviously tax policies are

important for growth. but also the notion of capital allocation, how you create access to capital. not by government programs. >> that is a message that probably -- pieces of what you want to hear each candidate say. each candidate has said negative things from your perspective, too how do you sort it out and decide which candidate is the best? >> clearly the trump policies, when you add them up -- >> including gary johnson and the fourth candidate. >> gary johnson is another topic for another time. when you look at the trump policies they net negative when you deport a bunch of people, you affect local businesses, affect local employment, you affect tax generation. there are studies done that would say it would move us to a negative net 2% gdp growth. that's massive.

why would you want to do that? if you're talking about growing a country, making it better, at the same time go to california, go to several states, texas and others, people are looking for workers now. we have a work force problem. >> it's been a huge issue for home building. >> and many enduindustries. go to the silicon valley and look at the help wanted signs, it's a different job title but still help wanted. >> we have to leave the conversation there. come back. appreciate it. >> thank you. when we return, apple's ceo tim cook addressing one of the biggest concerns about the new wireless air pods. details after this. and a quick check of what's happening in the european markets. green arrows across the board. the ftse up by 0.7%.

if we don't solve our debt problem 19 trillion and growing money for programs like education will shrink. in just 8 years, interest on the debt will be our third largest federal program. bad news for small businesses. the good news? there's still time for a solution. ask the candidates for a plan to secure our future.

welcome back to "squawk box." time for the executive edge. the big question around the new apple air pods, if they will

fall out. everybody has been asking this question repeatedly. tim cook commenting saying they won't fall out. cook claims to have put the air pods to the test running on treadmills, walking and dancing. the wireless ear buds are expected to be available in late october with a price tag of $159. i have now tried these things. they do not fall out. one thing people -- >> i like this video. >> when you have wires on your headphones, they pull down. without the wires, there is no -- there's not the same kind of pull, and they stay in your ears. they are very, very cool. i have to admit i've been enticed. i will buy them. >> you put some in your ears? >> i did. >> and you gave them back? >> i don't want to tell the person that i did that because i was dear use what it was like. >> you know my phobia about sharing isps with people. >> because we talked about it --

>> ear mites. >> updating your ios, for everybody updating over the air, i said wait a day. wait a day, don't know if you saw, people were updated and now they're saying they bricked their phone, meaning the phone doesn't work. you have to update it through itunes and connect through the computer. >> duh, don't be the first. >> it will be work eventually. this is not an apple specific issue, i will not be the first ado adopter. >> sometimes apple will badger you to update. do you want to sign up for apple music? stop asking, i'll do it. >> the new ios is amazing. >> is it? >> the new messenger, they have the emoticons. >> whose ear buds -- >> let's go to break.

we'll have the ear mite discussion on the commercial break. coming up, new data on the face of small business growth. "squawk box" all ear mite free will be right back. coming up at the top of the hour, billionaire investor and entrepreneur j.p. pritzker will be our guest host. "squawk box" will be right back. this car is traveling over 200 miles per hour. to win, every millisecond matters. 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.

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new data shows that political uncertainty may now be holding main street back. kate rogers now here with more. >> that's right. new data from the national federation of independent business finds political uncertainty amongst small business owners hit an all-time high of 38% and was the number two most common reason that main street businesses say they're not expanding right now. for context at this time last year, the read on political uncertainty was at just 20%. you might wonder why uncertainty is on the rise when we're so close to the election. for some small business owners it's due to a lack of detail on their broader plans for companies.

but bill dunklburg said it's because they're getting top in the polls. was concerns over the economy. now, overall the index saw a slight dip in sentiment. 0.2% to 94.4% this is below the historical average of 98%. other top concerns for main street in the latest reading remain the same. coming in first place, taxes followed by government regulations and red tape, and finally the quality of labor. we do have two months left here and i did ask dunklburg whether things like hillary clinton's health will show up in the readings. but he said that's doubtful. he said the debates will matter more. >> let's continue this dialogue. we're also going to bring into the conversation, steven shi shinebalm. welcome. >> thank you. >> first off before you give us the results of the survey, tell us what it is. what are you measuring? what are you trying to figure

out? >> trying to figure out my business customers' borrowing money. >> because that should indicate the idea that they're going to grow? >> right. >> what have you found out? >> we found that our customers are going to borrow -- plan on bo borrowing more by inventory, increased marketing, hire more people surprisingly and really encouraging for the economy. >> is there any indication that the borrowing could be because they have debt problems? how confident are you it's a growth related borrowing strategy? >> bhoes of our customers take two or three advances or loans from us and we're monitoring what they do and we know their use of proceeds. and it's not just to make cash flow or for general working capital. but it is to buy specific goods or marketing campaigns. >> if we do see an interest rate hike last week. in my own reporting i hear from the businesses i speak to that they're disconnected very much

from wall street and the fed. they care more about what their own sales projections are. are you seeing that as well? >> that's consistent. we've been around from 2005. to 2010 when interest rates were flying all over the place it didn't really impact our customers too much. >> what about political uncertainty? we said it hit an all-time high. are you concerned about that? your business depends on them borrowing. >> we would rather see less regulation opposed to more. but our customers don't seem to be that concerned either way. they just need the capital to continue to grow their business. they want to buy more inventory. >> historically though in terms of the political cycle, people always say there is more uncertainty around an election. what do you see when you graph it out? >> we don't see that much uncertainty from our customers' perspective. our average deal is only a year long. we're looking at shorter term

and the political climate doesn't really impact them all that much. minimum wage, things like that really drives them. but not so much the political landscape. >> do you think there's something to be said about at lending? a lot are taking on rates. near 50%, does that give you pause or concern that companies can't access -- >> that seems crazy. >> you have to be in a real crunch if you want a loan with a rate that high. >> we operate a platform. we have 45 different funding partners on our platform. we try to offer our customers whatever they can get, we give them as much flexibility as they have. most people aren't necessarily looking at the costs of it just by itself. they're also looking at what their margins are and what they can do for the capital. if someone can buy something in volume, it's fantastic use of money for them. >> thank you. coming up, our guest host is a billionaire investor j.b. pritzker is here. he's going to join us next right here on the "squawk" set.

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volatility returns. major investors appearing at yesterday's delivering alpha conference warning the markets may be at a turning point. >> expect for returns are lower. so don't start levering up your portfolio and taking as much risk as you used to thinking you can get the same returns. you just can't in this environment. >> with the rates that currently exist in global bond markets, the term safe haven applied to g7 bonds is just wrong. >> how you should play this market and what you need to watch. straight ahead. business and politics. top hillary clinton donor j.b. pritzker will joins.

plus will hillary by b back on the campaign trail? and uber ready to jump into the driverless car race. a closer look at the ride companies hailing technology and what it might mean for uber drivers as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin along with becky quick. brian sullivan is in for joe this morning. today we've got j.b. pritzker. we're going to talk tech, politics, and much more with him throughout the program. in the meantime, let's look at the futures. dow would open up higher about 38 points. the s&p 500 looking to open about four points higher. and the nasdaq looking to open about 14 points higher. here's what's making headlines at this 7:00 a.m.

hour. monsanto will report this morning in fact we've been waiting on it all morning that it is being acquired by bayer ag. this is after months of negotiations, turndowns of prices, and bayer's new offer. the new price said to be about $66 billion in cash or $130 a share which would be a 30% premium where the stock is right now. oil prices are staging a modest rebound today. not much. this after a smaller than expected build. weekly inventory number. the energy department will release its own weekly number survey at 10:30 a.m. eastern time this morning. toyota recalling about 7600 prius models. the recall is for a potentially defective component in the air bag assembly. not a small issue. so 2016 prius owners, take a note. call your toyota dealership. also, wells fargo facing a fire storm of criticism about its sales practices.

ceo john stumpf appearing on "mad money" last night. stumpf telling jim cramer he will not resign even though he does hold himself accountable for the alleged abuse account opening practices that occurred at the if i remember. >> it may mean some people say that you have to resign. >> well, jim, i think the best thing i could do right now is lead this company and lead this company forward. in fact, today we made actually an announcement about product sales goals. you know, we never intended for product sales or any dynamic or any part of a performance management system to be misinterpreted. >> the bank was fined $185 million by the consumer financial protection bureau and two other regulators for allegations that its staff opened more than 2 million bank accounts and credit cards for customers without their consent. the thought that this was done to meet internal sales goals that were particularly strict. cramer also asked stumpf about whether he's heard from wells'

biggest shareholder warren buffett. the wells fargo boss says he has talked to a lot of constituents but he won't talk about any one conversation with a particular shareholder. and the most important players in the markets at the delivering alpha conference yesterday. kate kelly joins us now with some of the highlights from the big day. >> it was really a tremendous day. michelle caruso and i were just talking about it. there was a sense of pessimism, also rare humility about the lack of alpha and the difficulty in this environment. certainly concern about zero interest rate policy. one thing i want to get to is your panel or your discussion with steve schwarzman from blackstone. i thought he was interesting. in a setting where bridgewater said i'm just trying to stay literally six days ahead of the curve or six months at best, he talked a bit about the long-term.

let's listen to one of those highlights. >> the key is picking a business with durability. it's not that different than, you know, why did warren buffett put so much money into coca-cola. >> sure. >> because it's going to be here. and, you know, it's a good thing to own for the long-term. there are certain businesses like that. in a technology driven world, it becomes more difficult to find those undisrupted potential companies. >> so becky, this is really, like, deep value, fundamental investing, if you will, right? >> that was in response to a question i asked him about a new fund that they've opened that locks up investors' money for 20 years. which they have almost $5 billion that investors have given them -- >> 20 years? who would do that? >> that was my question. he said, look, there are pension

funds and others that are looking at long-term goals. yield has been so lousy out there they are willinged to to do that. for 20 years you don't know who's managing that. >> you pointed that out and he didn't really have an answer to that. >> this is not something they're throwing out in marketing. they have $5 billion of investors who said yes we will sign up for those terms. >> they're not the only ones. we've been doing this for 70 years. and so, you know, long-term investing if you're really thinking about deep value and building, growing companies over the long hall. and the taxes. >> so the patience helps the investment, right? >> yes. >> and the patience helps the investment, right? and on the other side you don't have to worry about the churn of people being disappointed with a quarter or a year. >> although the criticism has come from this is that will private equity investors who are offering long-term and shorter term funds, will they save their

better ideas for the shorter term ones where they have to put up results on a regular basis. >> grabbing fees for 20 years is -- >> would you lock up your money for 20 years? >> we do every day. >> but what about -- >> would you give it to blackstone though? you'll eat your own cooking. >> isn't there a value to the optionality of having the ability to get your money out? >> yeah. remember, as long as you maintain enough liquidity -- so we're not locking up, it's our own capital. >> but if you were in charge of a public pension fund, how would you think about that issue? >> i think it would be tough. i'm from illinois. >> you know about the pension problem. >> but that becomes the issue. >> that is the issue. and the big money despite all of your big money is the public pension funds. >> it's true although there are obviously states out there that are like countries out there that are investing.

and i think anybody that can look at a longer term ought to. and by the way, this is not a moment in my view when you want to go in deep in a lot of companies. because obviously multiples are very, very high and there's expectation. >> schwarzman said the same thing. he thinks the prices are a little high. and you said you have the dry powder when prices come back down. >> and if you have a 20-year life, you can choose the moment you get out. you don't want to be forced four, five years from now. >> but this is the marc lasry argument that was also made at lunchtime. >> i was going to bring that up. you've seen a privatization of it. they've taken if not most of their hedge fund vehicles and turned them into private equity deals with three or five year long lockups. >> he said he only lost about 25% of his money. he said 75% of investors that

were in stayed in with the lockup. >> and when people could pull the trigger, i guess, they did. but yes. that's been a huge problem for hedge funds. bill ackman said in the most recent comments he made were that it was only the sixth worst period for redemptions the first half of this year where they really got hit by valeant set backs. but they have an eight quarter redemption policy, right? so even when they get the redemptions, not to minimize them, they're a deal. but it takes two years for people to get the money out. that at least gives him some runway. i think we're seeing this trend play out. >> j.b., how negative are you on the markets? only because yesterday you -- i mean, the -- every hour there'd be a new panel and a new lament about the downside risk being so much greater than the upside risk and therefore you need to stay on sides. or avoid being offsides.

>> remember, there's a lot to like, actually, out in the market. so with all the nervousness and all the smart guys were gathering cash, there is a lot to like out in the market. and we are the best -- i mean, in the world. for all the capital that exists in the world. this is the place where people still -- >> there's an argument -- someone was making it to me during the lunch hour yesterday. you know, trade against the consensus. right? that whole room had one particular view. >> sure. yeah. so maybe actually you should buy g7 bonds regarding them as a safe haven. you should short the s&p 500 and go along the 10-year. you should sell valeant. done that. the market's done that. >> and stay out of energy. >> embrace the tesla/solar city merger. >> right. >> by the way, the -- >> that was the insight from the lunch was go against the consensus? >> no, that was just a guy -- >> i was going to say.

holman's just a guy that was walking by. because that's the most obvious -- >> by the way on tesla, the comment about going short tesla was fascinating. >> i missed that. on the 2:00 "power lunch" hour. >> i was working. >> somebody asked him -- i think michelle asked him about tesla and he doesn't want to answer. he says he owns a tesla and tries to avoid the question. then says what do you think of the stock, he sort of mumbles, you know, i'd be short the stock. i try to actually -- you can't. basically he was trying to say -- >> and he obviously loves the car. >> he might even own two teslas. >> that's the thing about tesla. you've got to separate the car from the stock. they are very, very, very different things. >> and chanos made that point. >> the model 3, i have been in it. it is -- i mean, i'm telling you this is going to be the hottest seller ever. if it drives like the s and it

nevertheless is $40,000, $45,000 with all the features. >> but there's no way, j.b., that it can be. >> tesla shares are not just tesla at this point. with solar city and everything else with it. >> can i add something before leaving delivering alpha. in terms of what was muttered or not. donald trump. politics was the elephant in the room. everybody brought it up in passesing and talking about the scary political climate. a couple people were pretty direct. actually on my panel tony resler from apollo and aires management. running a hundred billion dollars, he said trump is a huge uncertainty in the markets. it's going to be problematic in the markets if he's elected. but nobody wanted to really go there. nobody gave a detailed kind of point of view. >> let me just share a sort of backstage conversation i had. not with someone who was on my panel. but there was other people talking about it.

they were saying let's avoit trump. the reason was if i say something negative about trump and it was a negative view and not a positive view, he's going to, quote, hurt me on twitter. right? >> they're afraid of him. >> right. >> they don't want to be tweet shamed by donald trump. i have heard this about hedge fund managers. that's why they're not giving money to hillary even though they're going to vote. >> the chances were less, we'd have ceos come on and say it's a circus. now it's a realistic choice and because he has been as aggressive as he has on twitter and elsewhere about people criticizing him, people are not willing to. >> it's less about retribution on twitter than it is if he actually got elected. because the man is clearly -- i mean, give him power, give him a finger on any button and he's going to push it if he gets a little oi anywayed. >> j.b., let's be fair. >> you're an advocate for hillary clinton. >> i am but i'm rational.

>> let's be clear on both sides of that coin. if i was a media consultant, maybe some day i will be, who knows. i would go into any company and say for the next 60 days, don't open fraudulent checking accounts, don't raise drug prices, don't mention any candidate by name. because hillary as well will go after biotech, trump will go after hedge funds. keep your freaking head down and don't say a word to anybody. would that be sound advice? >> "street signit's safe. but it's a political environment. i mean, every -- all these senate races, the presidential race -- it's crazy. >> anything is fodder that feeds into that. >> is it political environment or is it so -- there's so much money involved, there's to much money to everybody involved for either candidate to win that the thousands or millions of people that are subsidiary to these candidates, right, and not just media bloggers, whatever it is,

business people. everyone's now got so much to gain that it's -- i mean, out come the nails. right? >> i'm going to push back. i've talked to the megadonors in this campaign. there's very, very little financial support for donald trump among the hedge fund community with the exception of bob mercer. >> i have to apologize. i think this whole thing is like a false balance. everybody's trying to pretend both sides nobody wants to touch. i don't think that's true. i'm not sure anybody loves either candidate, but i think there is a particular view on trump among the business community that they should stay low and keep their heads low in a different way than they do about hillary clinton. i'm sorry. it's just different. it's just a different story. >> i think it's true of people who support hillary clinton, too, that they're afraid to be too vocal because of retribution. >> i got a call from somebody yesterday and we talked and they said they thought the increased market volatility may be due to

hillary's health problems because it's giving donald trump a greater chance of victory and is spooking the market. i don't know if that was bunk, just an opinion. but this person also basically said i'm never going to same that on television. >> they ought to invest a lot in the markets because she's getting well. >> just to be provocative for a minute. if you want to participate in democracy you have to vote. vote for someone even if the sort of electoral math is such it won't make a huge difference. you got to vote. i would argue maybe with some of these big money potential donors, get involved. i mean, if you don't want to bad mouth trump, fair enough. >> you got to look at the unlikables on both sides. and the concerns that has about getting out the vote. i mean, there are questions about how many people will actually come out and vote in this election. it's been brought up because the unfavorables on both sides are high. >> if you're that bothered by a donald trump presidency, give to hillary clinton, give to gary johnson. i mean, be more active. let's face it, these people do

have an influential role in the process. >> or don't give money because politicians already have way too much. the vice presidential candidate tim kaine has his own jet. has his own 737. who's paying for that? >> that's a valid point too. you do want people to get out and vote. >> right. >> there is a lot -- >> go vote. i'm just saying don't write any more checks. >> if you don't like the republican contender, do something else. do you agree with me? >> i would think so. but by the way -- look. >> i don't like the money in politics. >> i totally hear you. >> neither do i. >> great conversation. we will continue this. you're sticking around and we got a lot more. on deck we've got a good conversation, we'll continue ta. plus money making ideas for you, america. sara mallick joining us with her platinum portfolio picks. why she is tapping the rocky mountains for profits. that's next.

and later on, hillary clinton's campaign manager will join us as "squawk box" will be right back. it's me, arty! come see what i collected from the creative galaxy in my idea box. would you help me make art? ♪ each one of our journeys ♪ keeps us young hey, i have an idea! ♪ we'll never get older... arty: go be amazing! amazing!

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all right. first it was the belgians buying anheuser-busch. now the germans are buying another st. louis company. the deal is out. bayer ag is buying monsanto for approximately $65 billion. there was erroneous reporting. 130 bucks was expected to be the price by some reports. it's $128. a little less. $128 a share in cash. if anything goes wrong, they've got to pay monsanto $2 billion. maybe months after courting monsanto, them rejecting the bids. agreeing to a deal of $128 a share. that's approximately 28% premium. i mean, monsanto is a company that needed to do something because this was a $106 stock in december of 2007. it's $106 stock in september of 2016. so the stock minus the financial

crisis dip and recovery, becausically the same price as ten years ago. st. louis one of the biggest companies in st. louis being bought by leverkusen based bayer ag. >> there are a lot of other pieces in terms of what's pro l propelling this forward. when we return, uber's self-driving car. we were going to talk about that. but maybe also about the platinum portfolio picks from sara. we'll talk about that a. then uber's self-driving car about to hit the road. why they're jumping into the driverless car business. we'll look at the technology and what it could mean for uber drivers. "squawk" returns in a moment. isn't major medical enough? no! who's gonna' help cover the holes in their plans? aflac! like rising co-pays and deductibles... aflac! or help pay the mortgage? or child care? aflaaac! and everyday expenses?

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an impending rise in market volatility is what's driving today's platinum portfolio picks. joining us now sara mallick. sara's platinum portfolio up 20%. 20% that's it? that's fantastic. you're beating about 90% of the hedge funds by the way. what i love about you is coming in and bringing us names we don't know. everyone's like google, amazon.

you have albormoro. who are they? >> they're hot right now. the lithium battery business. >> thank you, tesla. >> yeah. they're one of the few in the market. >> alb is the ticker there. is there anything that concerns you about them? i know they've been kind of a quiet favorite. you obviously feel they're fairly valued. >> yeah. they've been less recognized by investors. off the beaten path. we just think this market should remain strong from here. >> everybody's going to netflix and amazon here. more household we know of is coors. that was our reference to the rocky mountains. tap is the ticker. also what makes molson coors good? >> we think it's miller time. they're buying the rest of miller coors going hopefully by the end of this year and that should provide synergies greater

than expected. they can grow the miller brand in new countries. all that should be a positive for them. >> okay. you've also got mgm resorts. with all the concern about the consumer, there's never been more casinos in america which i guess could also be viewed as a negative because every state pretty much twept for now two has a casino. why is mgm a good bet? >> we see vegas is recovering and cutting costs which should be good for them. they're opening a new casino. that should open by later this year. that should be a positive for the stock. >> and raytheon. >> raytheon, great defensive company. relatively new ceo in place with more credibility. they have one of the strongest pipelines we've seen in years. >> albemarle, molson coors, mgm, raytheon. thank you. >> thanks for having me. when we come back, sidelined with pneumonia. when will hillary clinton be back on the campaign trail?

we'll ask her campaign manager robby mook right a the break. 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. bacteria can hide in food and make you ill. wow! announcer: but you can keep bacteria from ruining your day with 4 simple steps: clean. i'm ready for the rinse cycle!

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welcome back, everyone. among the stories front and center this morning, ford as unveiled a new growth plan which it says will help it improve -- investing in new opportunities. the automaker says overall results will climb as a result but then bounce back in 2008. mortgage applications rose last week according to new figures from the mortgage bankers association. that increase was largely driven by new purchase applications. the average 30 year mortgage rate was down to 3.67%. just out a few minutes ago, bayer buying monsanto for $128 a share in cash. that's a total of $66 billion. bayer expects the deal to be completed by the end of 2017. after a stumble following a 9/11 ceremony on sunday, hillary clinton's health is under

scrutiny. joining us now is hillary for america campaign manager robby mook. thanks for being with us today. >> my pleasure. >> there have been these questions swirling about candidate clinton's health, about what we saw in the videos that happened there. we've seen barack obama back out on the campaign trail, bill clinton, several others including joe biden. but what can you tell us about mrs. clinton's health and when we could expect to see her again on the trail? >> she's doing great. she was diagnosed with pneumonia. after she became overheated on sunday, the decision was made to take some downtime and mend up. she is a hard worker as you know. she often has a grueling schedule so she would prefer to be out on the trail and that is the plan. she'll be out tomorrow in greensboro, north carolina. and at the congressional hispanic caucus institute giving

a speech there. so we'll be back at it tomorrow. >> robby, there was an admission yesterday i think from joe biden that maybe it was a mistake to not tell people on friday when she was originally apparently diagnosed with pneumonia. why didn't you tell people at that point? >> well, and many of us experienced this. she went to her doctor, they said she had pneumonia. she decided to power through it and keep working. a lot of people do decide to do that. obviously when she became overheated on sunday, it was clear she needed to take some downtime. she originally didn't want this to disrupt anything. didn't want it to disrupt the campaign. you know, i'm really glad she's got then time off and we're excited to have her back out tomorrow. >> did you think it was a mistake for her to hug that little girl? no rb really. >> my understanding -- i'm not a medical expert -- that she was not contagious. and so -- >> what kind of pneumonia was

it? viral or bacterial? >> you know, i'm not a doctor so i can't tell you. her doctor is going to be -- is working on compiling information that we will be releasing very shortly. >> i think the confusion was amongst some people not doctors or whatever was she fainted, obviously did not feel well. and then 90 minutes or two hours later comes out and says she's feeling great and smiling for the cameras. but if you have pneumonia, what do they do in that 90 minutes to two hours that resuscitated her so quickly? >> well, she was dehydrated. and so she drank a lot of water, a lot of gatorade at her daughter's apartment. was feeling better pretty quickly. but again, we recognized, she recognized she needed to take some downtime. she's been running a pretty grueling campaign for well over a year now. she'll be back out tomorrow. >> what is the campaign strategy at this point?

we've seen a lot of twist and turns just in the political race in general this year. a lot of ups and downs. looked like hillary clinton was building a lot of momentum as we came out of the democratic national convention. now because of several issues it seems like trump has a little more momentum. what do you do at this point? >> well, we have had a lot of momentum since the convention and we expect that to continue. i actually take issue with donald trump. i don't think there's momentum there. >> well, the polls have tightened up. she had a huge lead in many polls nationally coming out of the dnc. if you look at polls -- if you look at the real clear politics average between them, it looks like a tighter race than a month ago. >> well, the poll -- first of all, i take public polls with a grain of salt. we expect this to be a tight race. you don't run a big campaign because you think it's going to be a blowout. i expect that. for folks looking at the news this morning, "news week" has come out with an eye opening

piece about donald trump's enormous business connections around the world. that the article says would make him a tremendous threat to our national security. we've heard already about his deep connections to russia, deep financial connections. how his companies are indebted to the bank of china, to russian oligarchs. we saw the praise he heaped on vladimir putin at that national security forum. and then look we're talking about health records. donald trump hasn't released a serious health record. that letter that that doctor wrote everyone regards as a joke. he has not released his taxes. the media really held mitt romney accountable for not releasing his taxes in the last presidential race. i know that you all have been trying to hold trump to that same standard. we need to see those taxes. we need to see -- >> does this -- i'm sorry. go ahead. finish your thought. >> no, i was going to say that we need to see these debts that he has. we need to see where his earnings are coming from.

we need to know how much he's paying in taxes. we have none of this information. and every presidential candidate for decades has released this information. both the taxes and the health information. and we've seen nothing. so i think donald trump is facing a lot of criticism right now for that. >> these are all valid questions, but based on what you just said, i wonder if you see this playing out as a battle between which candidate has bigger problems and not necessarily a campaign that focuses on issues. that's what we've been hearing from business leaders is there's not enough talk about the substantial issues on either side. >> i could not agree more. but let's be fair. we're talking about problems. donald trump has not released a serious health assessment. hillary clinton has. hillary clinton has released 40 years of taxes. donald trump hasn't. hillary clinton has put out reams of detailed policies. she would love to talk about those all day long. donald trump, he just released a

so-called paid family leave proposal yesterday. very few details. it's totally unclear how it would work. he sort of shoves it into the unemployment system which would be a disaster. so we're happy to have that discussion. >> robby, i wanted to ask you a policy question really around the kind of people that hillary clinton wants to surround herself with. a piece in politico yesterday saying that the left develops clinton admin blacklist. which is to say that progressive operatives say they're targeting two clinton appointments tom nyes as chief of staff. would experts -- people who have worked in the finance industry be on a blacklist if hillary clinton were to win? >> i -- you know, i don't know what to say. sometimes these -- i don't know what sources people have. we are 100% focused on trying to

elect hillary clinton on earning votes on getting our supporters out to vote. this is -- >> i think the question is the business community would like to know if, in fact, business people are not going to be part of her inner circle. >> i think hillary is going to have people in her administration from across the spectrum of this country. men, women, business, labor. i mean, i actually -- one of the reasons i think she'll be a fantastic president is it's important to her always to have everyone at the table. so i wouldn't even pay attention to that sort of stuff right now. it's not what we're focused on. we're focused on holding donald trump accountable for releasing his taxes, releasing those health records and turning our supporters out to vote. it's just totally premature. and that stuff is just rumors. i don't know where it's coming from. >> in my observation and maybe you can back this up robby is that much of the business community is either silent because they're supporting her or actively supporting her.

i hear that all the time despite the fact that donald trump, you know, claims to be a successful businessman who has lots of respect. but the reality is that -- isn't it true that there's sort of a coming wave of criticism i think or maybe investigation around around trump university, for example. the hidden gift to pam beiandi that came from his campaign. makes her way more attractive to the business community. >> absolutely. look, it is the pay to play. it is the lack of policy details. it is scary that donald trump's foundation made an illegal contribution to a political campaign as you mentioned the attorney general of florida was investigating trump university which was a total sham operation. it was just ripping people off. he makes the donation and then the investigation went away. and we need this to be

investigated. officials are already calling for the justice department to look at it. but, you know, the other point that i would make on this is we talk about the business community, how people look at the race. the markets -- hey, you would all know better than me. the markets hang on the -- >> we've got to go. but pneumonia takes weeks to recover from. time saying one to three weeks. how much are you going to pull back on her campaign appearances? if it's pneumonia from friday, it's going to last for awhile. what's her schedule going to look like? >> she's working with her doctor on that. i'm not a medical professional. we're going to take it easy. make sure she's out there because that's what she wants but also making sure she gets the rest she needs. that's with her and her doctor. >> before you go, these e-mails that came out, the colin powell e-mails, jeff leads e-mails suggesting that hillary clinton hates obama.

>> well, what i found most interesting in those e-mails was that colin powell called this benghazi investigation is witch hunt. i think that speaks for itself. >> robby, i want to thank you for joining us today. >> thank you so much. >> great conversation. meantime, we're going to talk about the race to establish autonomous driving. ride sharing services taking a very big step forward as uber announcing it is launching a pilot program. phil lebeau joins us now with more on that story. phil? >> a new day is dawning not only for uber but also the city of pittsburgh. this is where we were on monday. take a look at this. these are self-driving uber cars. we had a chance to drive them on monday and the service is live this morning. that means there are a handful of these cars that are driving around pittsburgh that will be giving rides to people when they call up that they need an uber ride. safety drivers, we should point out, will be in the front seat and there will be an uber engineer in the passenger side

of the front seat to monitor what's going on as well as to take over in case there is an emergency of some sort. here's the head of the suber self-driving program talking about what he's expecting the reaction to be as people hail a self-driving uber. >> i think the public is going to be delighted. i expect it's going to be kind of an interesting experience. you are used to a specific experience and now you have the future coming to you a little bit early. we have safety drivers in there to help kind of be an ambassador for the technology. >> now, i had a chance to get in the front seat and to test out the technology myself. this is made up of ford and volvo models. 20 cameras, lasers. and for now if you were one of those people who say i want a self-driving uber, the ride will be free. but will the people of pittsburgh be comfortable in a

self-driving car? >> i'd give it a shot. you know what i mean? it'd be interesting. >> i don't think the technology is there yet. too many chances for an accident. >> i would definitely feel comfortable riding in a self-driving car. i trust it over human drivers. >> the reason this is important is uber is in a race with other companies and with automakers and tech firms to really plant a flag. to be the first one to say they're eventually hopefully will be rolled out around the country and the world. that's ways down the road but you want to be the first one in the space. >> thank you for that. it is a fascinating story. the beginning. this is the beginning. i think this should -- this story is going to sort of mark it. the beginning of true self-driving cars. >> uber's on pace to lose over

$2 billion this year in losses. venture capitalists no matter how worried, may start to pull back. how much do these cost? >> they're not going to lose money for long. >> self-driving cars, it's going to be tesla cars frankly. because what other car maker is making it a driverless car. >> six people working in america in 50 years. coming up, ray dalio disagrees with jamie dimon. we'll give you that and more when "squawk box" returns. meantime futures indicating a higher open. dow implied up at 57 points. we are glad you are up with us and we'll be back after this. from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment,

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everyone thought i was crazy to open a hotel here. everyone said it's so hard to be a musician, but i can't imagine doing anything else. now that the train makes it easier to get here, the neighborhood is really changing. i'm always hopping on the train, running all over portland. i have to go wherever the work is.

trains with innovative siemens technology help keep cities moving, so neighborhoods and businesses can prosper. i can book 3 or 4 gigs on a good weekend. i'm booked solid for weeks. it takes ingenuity to make it in the big city. welcome back to "squawk box." in my panel at yesterday's delivering alpha conference, ray dalio said he disagrees with jamie dimon's view that it's time for the fed to raise interest rates. >> when jamie dimon says to raise interest rates, you think that's wrong? >> that's right. i think that's wrong. at this stage the risks are so asymmetric. like, there's no doubt that you

can slow the economy. world economy, the u.s. economy. tightening will work. okay? and when you look at the inflation pressures. you know, it's a global thing. and you look at the demographics. all of those things means that the risks are so much more on the downside. >> and former treasury secretary tim geithner said while it's become very difficult to implement new stimulus policies, the fed isn't out of ammo. >> the idea that you should raise rates to replenish the arsenal and slow the economy, that's a weird argument to make. i think that it's not -- it's true to say that central banks in developed markets are much closer to the frontier of what's possible than i think any of us have ever seen. but it's not true that the major governments are completely out of ammunition. >> it was pretty interesting to hear both of them take that

position. >> you know, muhammad el-erian said watching the impact of low interest rates or zero interest rate from central banks around the world. >> i'm curious one of the other things tim geithner talked about was what he thought was the erosion of the pragmatic center. and someone again at lunch said to me maybe we don't all appreciate that -- maybe we, this whole group, is what they think of as the pragmatic center and the pragmatic center may not be working for the rest of the country. >> that'd be a pretty small group. >> e y. >> the reality is i think there is a pragmatic center. it's an awful lot of people out there not voting because they see the parties as representing two polar opposites. i think unfortunately and it's my view that hillary clinton is much more moderate than donald trump is, that there -- people

have painted her as if she's -- >> there are millions in the pragmatic center. they exist. they're not heard from and in part because our industry, the media. loud opinionated voices get the attention. which is why i'm on tv. >> the campaign has forced hillary clinton to take positions i don't think she would have otherwise. >> there's no doubt during primaries, we all know that candidates on both sides tend to head toward the polls. and then in the general election, they try to run toward the center. but the reality is you look at the broad swath -- and there's no broad swath on donald trump's policy views. but if you look at the broad swath of hillary clinton's views, they are fundamentally center left. >> okay. thank you. all right. coming up, we'll get final thoughts from our guest j.b. pritzker. and here are the futures. you've got to watch oil, get the import prices coming out later this morning. you're watching "squawk box" and we are back after this.

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. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce.

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welcome back to "squawk box." so let's turn back to our guest host j.b. pritzker. we've got a minute and a half. we've had vicious debates -- our own debates, if you will, during the break around politics. >> they were polite. >> they were polite. they were polite. firm but polite. in the minute we have left, when you think about the business

community and this election and the debates that are about to come up, what is it you think the business community wants to hear? >> well, first of all -- >> recognizing that you are a hillary clinton supporter. >> stability, period. i mean, that is -- it doesn't matter which candidate is exuding it. that's what the business community wants. stability. if you think things are going to radically change, one of these folks gets elected, it's going to change your business radically in a negative way likely. so what you want is the candidate who's going to, you know, to some degree think about not only economic growth broadly but also maintaining a stable -- obviously change. people want to propose change during the campaign. there's a lot that needs changing in america. it needs to be a little more gradual, it needs to be rational. i think when you look at these two candidates, it's easy to say -- >> you're suggesting the status quo is a good thing. >> but rather that incremental

change in a positive direction is better than radical change. because markets will go crazy. businesses will go out of business. >> you're talking about a known versus known. >> my gosh. by the way you've got 40 years to look at in hillary clinton's record of stability. and you've got no time -- there's nothing about donald trump that looks stable. >> as a hotel guy, trump opening up a huge new hotel in d.c. did it permanently damage his business? i mean, you're right there in chicago near the trump international hotel and reports that business is down. >> yeah, they did a story actually on a chicago station where they interviewed people who bought condos in the trump tower. >> it's half hotel, half condos. including the most expensive in chicago or one of them. >> plenty of people i know will not stay now in that hotel because of the name on the front and the stigma that goes with it. >> plenty of time to get involved in politics and polarizing. >> his particular case -- listen.

who in their right -- look at who's winning college educated voters. right? that's hillary clinton by a big swath. who are the people who are likely to buy an expensive condo? college educated voters. >> j.b., always great to have you. when we return, we'll have more on the market volatility. abigail higgins had... ...a tree that bore the most rare and magical fruit. which provided for their every financial need. and then, in one blinding blink of an eye, their tree had given its last. but with their raymond james financial advisor, they had prepared for even the unthinkable. and they danced. see what a raymond james advisor can do for you.

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breaking news. bayer buying monsanto in a deal worth $66 billion. reaction from the street straight ahead. mr. market's wild ride. future rest bounding again this morning. blackrock's ross costrich has a warning. pay attention to the source of the volatility. he'll tell you what that is. e-mails hacks. colin powell calls donald trump is a national disgrace. and the former secretary of state says the hackers have a lot more. the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box."

>> welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with andrew ross sorkin and brian sullivan. joe will be back tomorrow. we've been watching the futures right now and it looks like things are headed in a positive direction. this comes after three days of volatility. the dow futures this morning up 54 points after giving up about 250 points yesterday. s&p futures right now indicated up by better than 6 points and nasdaq by 19. yesterday at the end of the day, things traded higher after some supply numbers that came in that showed the draw down was a little more than anticipated. >> let's get you caught up with big stories this morning. bayer buying monsanto for $128 per share in cash or $66 billion.

transaction was expected. and now that's it's announced, expected to close by the end of next year. bayer up about 2.5%. and monsanto which had been up before this. the ceo going to be on "squawk on the street" later on. and we've been talking about this now for several days. john stumpf now saying he will not resign though he does hold himself accountable for the alleged abuse of accounting practices at the bank. he joins jim cramer on "mad money" last night. >> it may mean that some people say that you have to resign. >> the best thick i could do right now is lead this company forward. today we made actually an announcement about product sales goals. you know, we never intended for product sales or any dynamic or any part of a management system to be misinterpreted. >> shares of the bank, down

about 3.3% yesterday. they're down marginally this morning. meantime, ford has unveiled a new growth plan. it vofls investing in new opportunities. the automaker says overall results will decline in 2017 as a result but then bounce back, they say, in 2008. in political news this morning, newly disclosed e-mails hacked from colin powell's private account show that the former secretary of state and four-star general were blasting donald trump in a message with a former staffer powell calls trump, quote, a national disgrace. in one e-mail from june he writes, quote, trump is in the process of destroying himself. another he talked about the birther investigation suggesting the president was born in a foreign country as a racist moment. confirmed the exchanges to nbc news and the hackers apparently have many, many more.

>> it's just sort of fascinating that he'd write these. not only confirming it, but just yep and that's just the beginning. i got a lot more on that topic. meantime, stocks to watch today. macy's was upgraded from a buy to neutral. retailer has an attractive free cash flow and dividend yield and is making moves in a difficult retail environment. separately coach also in that retail environment. the analysts there questioning whether a sustainable turnaround is occurring at the handbag maker. >> fed speculation continues to dominate the market conversation. here's blackstone ceo steven schwarzman at delivering alpha yesterday. >> people have been talking about this on television for so many years that the fed might actually do something. just out of the boredom of it all. >> we're daring them. >> right.

25 basis points will move markets only because you all have become a proxy for the markets. you want to it move something or else there's no news. and -- but it won't make a difference to the u.s. economy. >> joining us now is head of asset allocation for blackrock's allocation fund. and the head for solutions team at voya investment management. welcome to both of you. let's pick up where schwarzman left off. he does not think a hike would effect the economy at all. >> i think it may effect the stock market. i think that's the difference. i don't think a quarter point hike is going to derail the economy. but what you do see happening is investors are reacting very differently now that monetary accommodation is starting to be withdrawn. one of the way it's manifesting itself, stocks and bonds are

moving together. >> is that a short-term blip though? is that something where people say my gosh things are moving. we need to get ahead of this. but then they realize rates may be lower for longer? >> i think there is some truth to that far couple of reasons. first is the long-term the fed has acknowledged the rate is likely to be a lot lower than it used to be. which means this is a shorter, shallower cycle than in the past. the other which is ironic is we're all panicking about the fed at a time when the most recent economic data has been soft. so that suggests they may not be as aggressive as some of the recent market action suggests. >> barbara, do you agree with that analysis? >> well, what we're looking at also is a couple of things. so the data's been a little bit softer. it's also important to look at where the long-term projections of the economy can grow as well. >> but the projections have been wrong for a long time. >> and they've been coming down. and that's what the market has been reacting to. also what we think is important to watch is the health of the economy in terms of what the

transmission of monetary policy is. the fed does not act in a vacuum anymore. it acts in a global sense as well. >> mean whag? if we raise interest rates it's going to spike the dollar which could hurt our exports which could hurt manufacturing? >> it's also a matter of if the fed is raising interest rates and tightening policy, how's that going to affect the rest of the world? are they healthy enough to increase monetary policy. >> doesn't it help them from the currency perspective? you guys look cheaper all of a sudden because we are now raising rates and that's going to raise the dollar. >> the u.s. cannot go it alone. or the rest of the world cannot go it alone. the u.s. is a big part of the global economy. when think about it, they think about raising interest rates but do so with the effects of what's happening in the rest of the world. are there issues that are also being worked through -- >> somebody's got to raise rates first. if we are in the best position as we constantly say, if we have

the best economy out of a lousy global neighborhood, somebody's got to go first. >> and the fed already has. they've already said -- but the thing you want to -- they've gone once. but what you're going to watch for at the meeting is not only what the fed does, but also what their communicate is going to be around it. they may not go and say they're going to go in december. >> so we're talking about the fed a lot. we have another meeting coming up which is the bank of japan. if you think about how the yield curve has been trading so far on 2016, i would say it's been influenced as much by the foreign central banks as by the fed. and one of the reasons the 10-year has been as low as it's been, most of the year we've seen good which uchunks of the markets -- >> i don't want to get too much in the reeds, but it may not have seemed like it was falling. but yesterday was rare for the stock market. because you saw the yield on the 10-year rise more than 3% on the same day where the dow fell or

the s&p falls more than 1%. you don't see that much. did yesterday say something bigger to you about the market? >> i think this is exactly the point. we've had the environment the last five years where bonds have been a reliable hedge. and even when bonds are part of the epicenter they were in 2011, the yields rose and fell. yesterday was different. part of the reason for that is this stock bond correlation. it sounds geeky, but it matters when you're building a portfolio. >> 10-year yield is up 17% this quarter. i mean, it's actually -- which i know 17% is not a lot. but for the bond market, that's a super tanker turning a corner. and i just wonder what it says about yields and stocks longer term if that trend continues. >> i think this has a lot of people worried because stocks are not that cheap. you can debate if they're

expensive. they're in the top quartile. the risk premium, the equity risk premium is large because bond yields are so low. that starts to change as bond yields back up. that's one of the reasons people have been nervous about this. the absolute level of bond yields still at a low level. >> and the issue is though they were very over extended too. right after brexit, bond yields had collapsed. made through the lows in 2009 and 2011. >> let's jump through what this means for investors. we've seen a lot of volatility. what do you tell people now? >> one is if the correlation is going to be more elevated, probably your best hedge in the short-term is actually cash. >> so you think there's something coming that will be worth plowing that cash into? >> i think that you can get better opportunities. u.s. stocks are not that cheap now. if you're looking at risk off the table where you would have

done that by buying more bonds, today might be more cash. >> we think this pullback is actually something you should continue to invest through. we think the big correction already happened. it was from may through february of -- so may of last year through february of this year. almost at 15% unlikely to be getting another one. this is going to be a wobble more so than a big pullback. >> russ, what would be considered a pullback that you would take advantage of. at least 5%, 10%? what's the number that you would say this looks cheap tore me? >> it depends where you look in the world. for the stocks to get reasonably priced particularly some of the dividend stocks and defensive stocks that have run up and got to stretch valuations, you're talking about at least a 5% pullback. maybe 10% be fore you turn. >> thanks. barbara will be with us for the rest of the show. coming up, steny hoyer will

join us on why he says republicans are holding zika hostage. stay tuned. you're watching "squawk box" on cnbc, first in business worldwide. what's going on here? i'm val, the orange money retirement squirrel from voya. we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at voya.com.

- i was diagnosed with parin early 2013.lly it took awhile to sink in. we had to think a little more seriously about saving money for the future and for the kids. - the income of airbnb really helped to mitigate the stress. - but we have that flexibility of knowing that if you know things get worse, we have this to help keep us afloat. - so that's very, very important for us.

welcome back, everybody. this is "squawk box." in our headlines this morning, listen to this. if you haven't heard it already, germany's bayer is baking -- is buying monsanto for $128 a share in cash. that values out at $66 billion. the deal is expected to close by the end of next year. but with monsanto repeatedly rebuffing those, it seems this one is going to accept. monsanto up to $106.77. bayer shares up 3% to $96.12. in this case the buyer is higher than the acquisition target. the ceos of both bayer and monsanto will join "squawk on the street" coming up later this morning. and if you drop food, just throw it away. the five second rule is bogus apparently. that's the conclusion by a new study by rutgers university.

biologists researchers dropped water melon cubes, strawberry gummies, plain bread, and buttered bread. the longer it stayed on the surface, the more bacteria trafred. transfer had much more to do with the type of surface than the length of time. carpet transferred less than steel or tile. and wet food of course had more -- >> carpet had less bacteria? >> yeah because it's not a constant -- >> all the stuff they put down, it's not like a chip. you know, if a tortilla chip falls, that's one thing. if a piece of bread with butter hits the ground, that's what -- >> they found that, you know, we call it the five second rule. you can call it the three second rule. it tax less than a second. so at your peril. >> but it's -- >> i guess it's good for your immune system. it builds up some unless you

have it fall on flu germs in which case bad idea. we're going to talk a little politics for a moment. which was a big topic hard to draw out of some people yesterday at the delivering alpha conference. but here are some of the highlights. >> it takes a desire on the part of congress to do something hard. hard things don't happen unless there's a real desire to do it. >> we are just concerned about activist, government intervention in markets. and in the economy. this administration and the next administration which yer one is elected and even in other parts of the world are advocating. it's more intervention, more regulation. >> we don't want extremism. we don't want rush. we want to be able to understand that things are complicated. >> i believe it would have been vastly different for the growth rate of the american economy and the problem of underemployment and unemployment had mitt romney been elected president. >> talk about congress's agenda.

house democrat steny hoyer is here this morning. >> good to be with you. >> i want to just ask you one question about what tim geithner said yesterday at this conference about what he called the erosion of the pragmatic center. and i believe that that is not just a reference to the republican side but also to the democratic side. what do you make of that? >> well, i think he's right, number one. number two, while it perhaps applies to both sides, let me tell you, we don't have a group like the freedom caucus of 45 people who say my way or no way. i've got to get votes. on votes where pragmatism needs to preveal, there's not a member of my caucus i can't go to. those who say i don't like this. but i don't have anybody like the freedom cause kus that says i will do it my way or no way. that's the problem boehner had.

that's why he left. that's the problem paul ryan has had. that's why they haven't passed their appropriations bills or a budget. so i agree with him. that's the problem. but i don't think it's as much on our side. is that a problem from time to time? it is. but not as a consistent problem that confronts either our caucus or our party. >> let's talk about the compromise that may need to happen to get some of these things through in the next couple of months. couple things on the list. we can talk big bore, maybe there's a small. i don't know. let's talk zika. you said $1.2 billion for zika was not enough to be effective. you pushed for $1.9 bt. but at this point what are the chances anything is going to happen? >> i don't think i ever said that $1.1 billion was not a good start. president asked for $1.9 billion. that's what nih and cdc who are responsible for addressing the

zika crisis say is necessary. but $1.1 billion is a good start. 67 members of the senate pased the bill which gave $1.1 billion to the administration at least to start and make a significant headway on fighting the zika crisis. that's being held hostage, however, to republican base issues. we should have passed the senate bill. we haven't passed the senate bill. we're now five months wi, six ms after the president asked. and the republicans have not acted. i would hope they would put the bill on the floor that the senate passed over -- >> is this a clean bill at this point? a clean bill? nothing extraneous? >> the senate bill is a clean bill, yes. and we ought to pass it. and we can pass it. it has the votes on the house floor. i guarantee you if paul ryan and mccarthy would put the senate bill on the floor, every democrat would vote for it and

i'm sure a significant number of republicans who are responsible would understand we need to act. and have the votes. >> congressman, i think we put a republican on, he or she would probably say the same about you guys. because it seems like every time we talk about anything, it's pointing a finger at the other party. i mean, it -- >> hold it. hold it. time out. >> you slam the republicans. in your first sentence. >> john boehner did, too, when he resigned. >> i agree with that, sir. but don't you think it's that type of rhetoric that inflames things further? >> no. i said geithner was right. we needed more pragmatism. i said on my side of the aisle i think we have pragmatism. on their side of the aisle they have a group of 45 to 50 people, the freedom caucus, who their own caucus will tell you are not pragmatic. and boehner resigned not because he was going to be kicked out by his party. i think he had probably 200

votes to keep him as the speaker, but he was just tired of dealing with people who said no, no, no, we won't do it any way but our way. >> agreed. and i don't know everything the freedom caucus stands for. thank god i only wade into politics once in awhile. but those people, i assume, believe that what they feel is right. you may not agree and many republicans may not agree and many of our viewers may not agree. but i'm assuming they feel what they believe is right. how do we start working together even with different opinions because for the history of this country, sir, we've had people with wildly different opinions and somehow things still got done. >> your premise is incorrect. >> that we've never had different views in this country? which one? >> of course not. but that we haven't worked together. when nancy pelosi was majority leader and speaker, we did a number of things with george bush in a pragmatic, compromising way.

george bush would tell you that. so don't make the analogy between democrats and -- >> you actually made my point for me. we agreed, actually. which is throughout the history of this country for 200-some years we have been able to get things done despite wildly different opinions. what's changed in the last four, five, or six years where it just seems so angry that nothing's getting done. >> there's no doubt that people are angry. you saw that in the primary election. i tell people around this country if you will vote for people who are prepared to come together and work together, then you will have a congress. democracy works and if the people demand that, it will happen. the problem is frankly when mitch mcconnell said when asked eight years ago, seven and a half years ago what's your principle objective and he said to make sure that obama is not president for a second term. well, he failed in that objective. but if that's your objective, not creating jobs, not getting

the economy moving, not fiscal responsibility, not making sure that we're strong across the world, not making sure that a zika piece of legislation passes and hold it hostage to your own issues, when the senate 68-30, republicans and democrats came together and passed a piece of legislation overwhelmingly more than two-thirds vote, put that on the floor. the reason they don't put it on the floor is because their hard liners don't want it on the floor. >> i want you to wade into this presidential debate, if you will. we had rob mook on earlier, this is clinton's campaign manager. we talked about this issue around the pneumonia. and he said that hillary didn't want to, quote, disrupt the campaign by disclosing it on friday. should she have done so? >> yes, i think she should have. and i frankly think she ought to release a full medical report to make sure that the people understand that she is fully able to carry out the duties of president of the united states. this is a woman who's been going

hard for over a year. you saw her on debate on the commander in chief, wasn't really a debate, but two presentations. she looked strong. obviously in full control of her thinking, gave answers to complex questions showing her full breadth of knowledge. no doubt in my mind she is fully able to be president of the united states. she's got pneumonia. you've got pneumonia, you get weak and she probably shouldn't have been there, but it was 9/11 and she felt a responsibility to be there. she probably made a jemt of error. but i think that we ought to have a full medical report from incredible medical sources that know her health status. and i think they're going to give her a clean bill of health. she ought to release that. >> okay. we will look for that. the other question i had for you, do you believe nancy pelosi is out or on her way out, rather, and if so what does that mean for you? you're number two. would you take her slot? >> no. i think if nancy left, i would certainly ask my colleagues to

support me for that, but i don't think that's going to happen. i think nancy pelosi continues to demonstrate she's a very strong leader. i think our party if she stays as i expect her to do whether we take the majority back or whether we're in the minority -- i expect us to be in the majority but either way i expect her to be our leader. >> all right. steny hoyer. love having you. thanks for being here. coming up, more on today's top stories including the reason why shares of cracker barrel are under pressure. here's a hint. it has to do with biscuits and gravy, less to do with barrels. we're back right after this. okr bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital,

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welcome back to "squawk box," everybody. let's get you caught up on what's making headlines this morning. bayer has announced that its long anticipated deal to buy monsanto is now something that monsanto is accepting. the transaction is accepting $66 billion in cash. that comes out to $128 a share. the ceos of both companies will join "squawk on the street" to talk about that later this morning. also we're watching shares of cracker barrel this morning. not enough biscuits and gravy on the bottom line which missed by a penny a share. revenue, however, did beat the street's expectations but the

current quarter outlook also falls short of expectations. the stock down by just over 2.3%. and you've heard of self-driving cars. now get ready for the self-driving cart. more specifically a shopping cart. walmart was recently granted a patent for a device like this that could theoretically be summoned through a smartphone application so if you thought the aisles were dangerous before, just wait. >> i can't follow up on that. we are just seconds away from import prices. rick santelli standing by at the cme. the numbers please. >> we are down 0.2% from a month over month perspective. we're looking for a minus number down 0.1% but it's close. and one month up 0.1% stands unrevised. in terms of year over year, spot on with expectations. we were expecting down 2.2%, that's what we received. sequentially it follows a minus

3.7% also left unchanged. now, whether these are mostly due to energy, of course, we know that seems to be the case. then like energy after we had that $26 low, everybody was wondering if we'd revisit it or if we go back to $70. when it comes to interest rates, we're hearing things like generational low. that may be true, but before we jump to that conclusion, probably the best bet is to pick the top of the new range we've established now that we've finally jumped above the 160s which would make it by my guess best support. sully and the gang, back to you. >> thank you. steve leisman joins us now along with guest host barbara reinhart. >> been looking at the data. i think the reason it's important is does it or does it not fall into what was given

monday app hen her framework boils down, it was a 14 page paper and boils down to a couple words. if the economy is running so. up -- >> what about does this fit into the argument? >> i want to get to that in a second. can you wait a second? just want to get through this. it's not just oil. petroleum prices down but non-petroleum prices unchanged. year over year, all down 2.2%. we he did kleins in food, feed, and drink. capital goods price is unchanged. consumer goods down a tenth. bottom line is you do not see the inflation coming and now i want to talk about that. >> lead story in "the journal." >> and we had it all day

yesterday. >> this is about how family incomes have risen pretty substantially. >> and we have been tracking this interestingly in two ways. first of all, i have argued that the story that's been out there which has been by a single candidate about incomes being flat from '02 to 2014 is like saying we had a war, yada yada and it was over. there's a bunch of stuff that happened in that period. rising incomes, falling incomes, then a gradual comeback. and the '14 number ignored what we thought were better numbers that were sure were happening. i want to show you our all america poll. i came armed for this not knowing you wanted it. about anger in america. look at this carefully, folks. go from the bottom. anger about the political system, see all the red there? people are pissed about that. can i say that on cable? >> you just did. >> then anger at the overall economic financial system in the u.s. more than 50%. now look at the top line.

how about your personal financial situation? 39% say happy -- i'm sorry. 18% say happy. 39% say satisfied. to me, becky, this is how -- one of the ways we've picked this up. we've picked it up in the decent consumer spending numbers we've had and picked it up with some of the satisfaction when we ask people about your personal financial situation. i think people better income numbers show up there. >> they are saving money rather than spending it because they're spooked at what happened. >> but we had some outstanding consumer spending numbers. yes, better savings -- there's a higher savings level -- >> i think they're saving up for something, though, becky. >> for a big ticket item? >> i think they're safing up for homes or cars. even if you buy a car, there's a huge up front payment. >> i think these consumer income stories is something you want to focus on. for such a long period of time, it had been that capital was at the expense of labor.

right? and labor's getting a little bit of pricing power. and it's not because the unemployment is down towards levels that are going to be unsustainable. but it actually shows that there is some pricing power that you're getting even being in the labor market. that's relatively good news. it's not fast enough that it's going to cause big wage spirals like in the 1970s, but it will help the mood of americans which i think is a big issue and something that it's been debated in the political system. but also does transfer through things like consumer comfort to spending and also just looking at your outlook. that's great news. >> of course barbara's with us for the rest of the hour. >> nobody asked me what the fed's going to do. >> you got lucky this time. when we come back, facing a looming government shutdown. it could happen by the end of the month. congressman scott garrett will join us. 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. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce.

we got some breaking news for you. allergan buying vite pharmaceuticals at $21 per share or $639 million in cash. you may think this is a small deal but the stock is now up

157%. that's the premium. the premium is higher than that. the deal is going to be strengthening the allergan treatments for cirrhosis and others. psoriasis, thank you. >> one is your liver. one is your skin. >> i was going to say. i need all the help i can get. >> it's fine. it's early. all the presidential campaigns are grabbing all the headlines, republicans are fighting with paul ryan to avoid, yes, get this. a government shutdown. is this every year? that could happen by the end of the month. joining us now is republican congressman scott garrett. >> good morning. >> you and i and becky and andrew have been talking a long time. it seems like every year around this time for the last seven or eight years we've had this same conversation about a shutdown. we've actually had shutdowns.

are we going to have another one this year? >> no, i don't think we will. and i think you had steny hoyer on a little bit before me, right? he was talking about hard-liners in congress. i think that has been what the problem is. that's why we continue to have this discussion. as you know, i'm pretty pragmatic and realistic about it. look, a few weeks ago you had harry reid come on. it's either his way or the highway. if you wanted it one way with the short-term until december. and unless he got it his way, i don't know what would happen. so that's been the problem in the past that the senate and especially harry reid has been taking one approach to it. but we're not going to allow that to come to a shutdown this year. we're working together in the republican conference. we just had a discussion on it this week. i had questions for paul. he had answers for the conference. we're moving ahead. >> because the conversation or at least my conversation with the congressman hoyer was a

little contentious in i gave him a little grief for the first sentence of his first answer bashing republicans. i'll do the same with you. how do we avoid any time we talk about anything everybody pointing the finger at the other side. how much of that is fronting, if you will, for the media and hope that there's actually more substantive dialogue going on when the camera's not on. is that true? >> sure there is constant dialogue going on. that goes on continuously. what also goes on continuously is that we're an institution of rules. this is run by the jefferson manual. if i had it here, i'd show you. it's about two and a half inches. it's been in place since the time of jefferson. it tells how things are supposed to work. the how's starts the process, we pass appropriation bills, it goes to the senate. they're supposed to deal with it. then it goes to the white house.

the problem is as you well know is that we do our part. we pass the appropriation bills, it goes over to the senate, and there i always say the senate is where all good bills go to die. whether it's financial services bills or budget bills. so the process has broken down in that regard. that's why we have these discussions every september, i guess. >> totally random question, scott, that you may just avoid with a ten foot pole which is we had some comments from fed governor saying the fed should not raise rates next week. that's fine. her name has also come up as a possible appointee in treasury or something else under a clinton presidency. should that happen. how political is the fed? and brainer has donated to the campaign. i don't want to just pick on her. i just want to get your view as to this a-political fed. seems to beless apolitical than

it should be. >> i agree with you. >> do you think it will influence interest rate decision? >> absolutely. the fed is supposed to be this totally autonomous independent entity that is not affected by the political process. republicans or democrats. but you know that's not the case. when barney frank was sitting in the chair at financial services a couple years ago and the fed was there, he was saying you know the fed you're not doing this on consumer protection and what have you. and lo and behold a short time after that the fed miraculously responds to his request. and we see this in other areas as well. the fed is political. the fed meets constantly with the administration with the white house, with the treasury. and we get the fed chair here two or four times a year when we ask for the fed to come to and be more responsive and come more often. they refused. when we ask for documents from the fed or have a dialogue with the fed. basically they refuse. it is not the independent body

that you or i or most americans thought it was or wish that it was in the future. >> congressman, to be fair, a lot of those requests for documentation come with a certain political air about them too. the fed may not be as open as some people like, but there have been attacks not coming from congress specifically although some have been there but a lot from outside. it's a contentious environment to begin with. that basically is accusing the fed of being political and then asking for documentation to back it up. >> and i think also -- hang on one second. congressman, what do you say to that? >> sorry? >> what's your response to that? >> well, let's just look at -- let's step back and look at the facts. the facts are that as i just laid out is how often does the fed confer with the administration? basically almost on a weekly basis. which is according to law we're the one who is are supposed to have oversight. you can count on it on one hand

how many times the fed comes there. just on basic facts we're looking for. >> what basic facts have they not supplied there, you've been most frustrated by? >> well, we actually -- our committee had to serve a subpoena on the fed because as you know there were allegations in the past with regard to what's the terminology? insider dealings or trading with people over at the fed right? you're familiar with the story. we said let's get to the bottom of it. we're charged with your oversight. tell us what is going on. would the fed answer our committees when we just sent them a will ert? no. would the fed answer the committee when we serve them a subpoena? no. and you know if a subpoena was served on you or me or anybody else -- >> how can they evade a subpoena? >> that's a great question. but that's what's emblematic of this administration time and time and time again. we serve subpoenas on the administration days, weeks, months go by. no response.

so this is not the first time for this administration to dodge subpoenas, to dodge requests. i don't think this is public school at all. i think both sides want to get o the bottom of these issues because it's supposed to be an independent agency that's not political. >> all right. scott garrett, it was a pleasure to have you on "squawk box." thank you very much. when we come back, an inside look into the other clinton. bill clinton. national memo editor will join us with his new book "man of the world." "squawk box" will be right back. 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,

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welcome back to "squawk box." president bill clinton stepping up his duties on the campaign trail as hillary clinton recovers from pneumonia. joining us now the editor and chief and author of "man of the world." we appreciate you joining us this morning. help us try to understand a couple of things. we've been talking about hillary clinton's health this morning. we're talking now about bill clinton getting on the trail. and we've been talking about these colin powell e-mails. >> oh, yes. >> and you have said that it was colin powell, i believe, who told her to run her e-mail servers this way. he now says that's not the case. he said he tried to tell her not to. >> there's an e-mail from him that showed he did. i mean, so, i don't know how he denies that. look, this story started when somebody at "the new york times"

read my book an early copy of my book and saw that there was an account of a dinner party that madeline albright held for secretary clinton in june of 2009 after she'd become secretary of state. 2009 after she became secretary of state. the guests at the dinner were former secretaries of state including general powell. and they were all asked to give a piece of advice to the new secretary. >> right. >> and i learned that general powell told her then, mentioned at this dinner in front of the others, that he had used his personal e-mail and that it had been transformative for the department. it was a great thing. and, you know, he's told that to other people. he then when the times story came out he said he didn't remember this happening, didn't deny it but said he didn't remember. i have an e-mail that i wrote about this in "news week" from his principle assistant telling me when the dinner was in june and saying -- telling me what he said about e-mail at the dinner. he didn't remember all the conversations there, but he remembered that.

so that was two months before he said he didn't remember. i can't explain that. you know, i was surprised that he said he didn't remember. but this did happen. he did use his personal e-mail. there's no question about that. he doesn't have any of the e-mails that he sent as secretary of state. they weren't recorded anywhere. they're all gone, unlike secretary clinton. and, you know, we now have seen an e-mail from him telling her how to use private e-mail. now, i don't think anybody would say this is the same as what he did, necessarily. she had her private server and all of that. i don't think it excuses what she did. >> right. >> that he did it. but it creates a different context for the story, which is there was a precedent for it. >> let me ask you the larger question for hillary clinton which remains a trust dare i say deficit, i think that's a fair way to put it, a trust deficit with the country. and when there are situations like this health issue on friday where she gets pneumonia and then we see this video, it creates an even greater trust

deficit because people to the extent there was already speculation about her health, now there's even more speculation about it. >> well, she needs to dispel that obviously. >> this is a repeated problem. this trust issue. >> right. well, you know, i think there's a problem that goes back for 20 years or more of people looking for bad stories about her. investigating her. you know, we had the whole white water investigation. it cost $70 million to determine that there was no wrongdoing. $70 million. i mean, that's unimaginable now. the independent counsel act was abolished because of that abuse. but the cloud lingers. if you ask people about, oh, white water, that was bad, they did something wrong. they didn't. i wrote another book about that years ago. so there's that. there's a distrust that stems from stories that were not right. and then there's distrust that stems from, you know, clumsy things like what happened on sunday. >> real quick because we got to go, what does she need to do or what does he need to do, and can anything be done to help the

trust deficit issue? >> well, i think right she needs to release full medical records. i would say donald trump ought to do the same thing. they both need to do that. i think that would start. >> we appreciate you being here. the book "man of the world: the further endeavors of bill clinton." i'm sure we'll see more of his endeavors over the next couple months. when we come back, jim cramer will join us live from the nyse coming off of a big interview with the ceo of wells fargo and "mad money" last night. that's next stick around.

all right. jim cramer joining us now from the nyse. i know it's a big setup for today, but let's talk about wells fargo if we can. stumpf said a lot, you asked a lot of tough questions, great interview as always. what was your biggest takeaway from the wells fargo ceo last night? >> my biggest take away is there were a number of times john said up to the board, to some degree i felt some of these matters are now out of john stumpf's hands. i felt he was much more say the buck stops here than in some of the other interviews. maybe some of the other interviews were not interpreted correctly, but when i hear it's up to the board, then i know that between now and when there's a senate hearing on the 20th, i expect action to be taken. and i don't expect the board to

be able to be silent. the board has to speak. there's some distinguished members of the board. i expect to at least hear something from them in some form in the next few days. >> all right, jim, it's a pleasure. we look forward to seeing more of this on "squawk on the street" coming up in just a few minutes. take a short break and we are back right after this. 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,

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we want to thank barbara for a great show. >> thank you very much. >> thank you for being here. thank you, sir. "power lunch" a little bit later today. >> 1:00 p.m. eastern. >> hope you join us tomorrow. "squawk on the street" begins now. ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. so far looks like the mildest premarket we've had in several sessions, futures slightly in the green here. plenty to work with this morning including monsanto on mad last night, ford, uber and more. eu giving state of the union, 10-year around 1.7. oil inventories in 90 minutes. start with a big deal this morning, bayer acquiring monsanto in a