"squawk box." good morning and welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with kayla tausche. becky quick is off as the baby arrived, kaylie noelle quayle is the name. that's a beautiful baby. >> just before midnight on friday. >> on friday. if you look at all the kids, they are all sort of -- there's a similarity with the names, what they start with and end, they are all tied together. >> i think it sounds like a great name, personally. >> it does. >> gorgeous baby. we are so happy for them. so happy that both becky and baby are healthy. >> she was here until like

wednesday. >> until the end. >> 8 1/2 pounds, you're ready. that's a good, healthy weight. anyway, we wish becky the best. we'll be talking to becky i'm sure a lot. hopefully we'll see becky, but probably not for a little while. >> a little boy and a girl. >> it's totally rounded out. in the meantime, we have so much to talk about. we'll start with u.s. equity futures and we'll get to the debates in just a second. take a look at this, the dow jones up 77 points after last night's performance. the nasdaq up 21 points and the s&p 500 up ten points higher. the asian markets in hong kong and japan are close d for the holiday. you're looking at the european equities right now. as we flip the board around, we're seeing everything up pretty much across the board. finally, we'll take a quick look

at crude, wti right now this morning. you're looking at 49.60. >> yeah. >> so down about a half percent. it was down on friday. pierced $50 for the first time since june last week. we'll watch the saudi's comments on that. we'll get to the debate in india minute, but first we'll go to the halting in production of the samsung galaxy note 7. the replacements caught fire, not just the original models. smoke from one device forced the evacuation of a southwest airlines flight last week. all 75 people on board had to be evacuated. since then, at&t and t-mobile stopped exchanging the phones were replacements. in a statement they say, quote,

they are adjust iing shipments ensure quality. samsung shares are down 1.5% as the company is in the middle of the activist target. we'll see how this situation plays out. meanwhile, stop lee fisher is arguing u.s. job gains remain solid and growth should pick up in the second half of the year. he made the comments to the so-called group of 30 during the annual imf and world bank meetings that took place over the weekend. fischer says the decision not to raise rates last month was in his words a close call and done mostly to allow further progress on jobs. we do have a busy economic calendar. the bond market closed for columbus day. on wednesday we get the meetings from last month's fed meeting. september look for jobless claims. friday, september sales, ppi and consumer sentiment. earnings season is just about to get underway as well. several big names reporting this week. alcoa starts us off tomorrow.

csx posts numbers on wednesday. and then the three big banks will hit on friday. citigroup, jpmorgan and wells fargo. joe? it was close. we may do it next time. i just want to let you know that. it was very close last time. we're going to do it. we are. we're going to do it. it wasn't close at all last time. >> call me in december. >> are you at 55%? >> we'll see what the minutes look like. >> see, i think it's going to be a good jobs number, as i've said. oh, you weren't here on friday. 150. >> i was here on friday. >> oh, you were here. oh, no, no, you weren't here. >> i was here. >> hitting you remote is not the same as feeling -- >> trust me, through the ifb, i can feel -- >> he was getting the pulse of the economy in columbus on the ground. >> we have an election to talk about and then we'll talk about this.

we'll talk about the election. today's top story, it was bitter from the start, candidates skipping -- i'm glad we got to see the action there, you know, that was a fact thinker right there with the director. the candidates speaking the traditional handshake. john harwood was there for a firstland hand look. he is joining us with more. >> reporter: good morning, joe. that debate followed a rough week for donald trump after the release of the tape from 2005 with billy bush on "access hollywood." over the weekend many republicans moved away from donald trump. donald trump's reaction last night was to, as hillary clinton's was, to appeal to the base of his party. she appealed to the base of her's. and he was trying unite republicans by going very hard after hillary clinton and bill clinton, her husband. so let's take a look at what happened when they talked, for example, about the tape. hillary clinton talked about what it said about donald trump.

and donald trump pivoted to the clintons. >> what we all saw and heard on friday was donald talking about women. what he thinks about women, what he does to women, and he has said that the video doesn't represent who he is. but i think it's clear to anyone who heard it that it represents exactly who he is. >> if you look at bill clinton, far worse, mine are words, and his was action. his was what he's done to women, there's never been anybody in the history of politics in this nation that's been so abusive to women. >> reporter: now, the same thing happened in a different version on economic policy. donald trump accused the familiar republican argument that even though hillary clinton says she's only raising taxes on wealthy people, that really means she's going after the middle class.

and, of course, she reiterated she was going after the people at the top. take a listen. >> we're cutting taxes for the middle class, and i will tell you, we are cutting out big league for the middle class. and i will tell you, hillary clinton is raising your taxes, folks. look at me, she's raising your taxes really high. and what that's going to do is a disaster for the country. >> people like donald who pay zero in taxes, zero for our vets, zero for our military, zero for health and education, that is wrong. and we're going to make sure that nobody, no corporation and no individual, can get away without paying his fair share to support our country. >> reporter: now, what donald trump was doing in the debate was trying to stem further republican defections by uniting them around their negative views of hillary clinton. hillary clinton was appealing to a much more diverse electorate. his supporters are

overwhelmingly white, dominated by non-college educated older voters, especially rural area voters, small town and rural areas. she appeals to a more urban and diverse audience, blacks, hispanics, women, especially single women. the problem for donald trump is that her base is a lot bigger than his base. she's leading the race. our new survey monkey poll has her up by five points over donald trump. and it doesn't really reflect the impact of this weekend. her arguments were also stronger on the merritts, which is what is going to make it difficult for him to expand his base by getting more of those college-educated voters. but he, as one republican pollster told me last night, his best goal last night was to stop the bleeding and maybe he did that. >> more on last night's presidential debate, we'll bring in the former congresswoman from new york and former new york co-chair of carly fiorina's campaign and former u.s.

congressman harold ford. i was watching you and listening, i don't know what you were thinking, so i won't try to glean that, but what were you thinking? you were shaking your head. >> i was listening to john talking about the segment of the electorate to whom donald trump was addressing his rematches. and he was quite careful and rightly so to include every part of the american electorate, particularly members of urban and minority communities who have been absolutely left behind by the kind of policies that hillary clinton continues to aspouse. and when donald trump said last night, i think one of his best points was that when she says these things, it's just words. when she sounds conciliatory, when she sounds as though she's the stateswoman, what's behind those words, in fact, unfortunately are the wrong policies for this country. policies that will continue to set everyone behind. >> and john is assuming it's not

working with people that you -- he may try, but it's ringing hallow. that is john's view. >> i don't know that it would have rung hollow. you listened last nightin the way they addressed the audience in the nation. hillary clinton sounded very rehearsed and practiced, overly so. when she said she was found out through wikileaks, she said, there's what you say in public and what you say in private. wink, wink. she attributes it to abraham lincoln? >> honest abe. >> that is just -- that is a remarkable rehearsed line very ingenuine. >> if trump would have seemed too old if he said i knew abe lincoln, he was a friend of mine. that would have been the lloyd benson, but that would have dated him too much, i think, to say that. but when i spoke to you earlier, you said you thought trump did

pretty well. >> i think he studied or steadied the ship. he said he would indict her, put a special prosecutor if he was elected president, i think in a lot of ways that reminds you of the donald trump you don't want. i thought both of them did what they needed to do again. i don't know that any needle was moved in a significant way. i thought mrs. clinton did a great job of articulating a vision, what she needed to do. and donald trump tried his hardest to move away from the controversy that swirled around his campaign. i think a lot of mainstream republicans look at the debate last night and say, well, he didn't go off the tracks. but in a lot of ways he's capable of doing it again in the next 30 days and pulled many of them back into the fold saying it's okay to stand with him because i'm not as outside the political mainstream as you might think. but we have all seen him over the last year. he's entirely capable of blowing

up again. >> he pulls you back in and then -- >> there are great movies that say, every time i think i'm out they pull me back in. but i think the republican senate candidates who are on the fence are going to have to make a decision this morning. do you unendorse him and run your own campaign to try to hold on to the senate seat? or do you stick with him between now and election day and run the risk of him again alienating, angering and dividing the country in ways that disadvantage you? i certainly don't want to be in that position. i think the democrats find themselves in a much stronger position in the senate races across the country. and i think secretary clinton finds herself in a stronger position as well. >> interestingly, the moment that went the most viral is when he acknowledged that he and mike pence had not come to an agreement about syria policy. >> at least he outright said he disagreed with him. he said we have not talk in a while. >> right. but it comes at a time that there's a divide widening between a candidate and his running mate. and carly fiorina came out over

the weekend endorsing mike pence for president and others are doing the same thing. is that a viable strategy for republicans? >> i think a viable strategy for us is to take heed to the policy premesis that donald trump did articulate last night. and i think one of the strengths, harold points out, rightly so, that donald trump is not inside the mainstream of professional politicians. >> what are you going to do? >> i'm going to vote for the republican ticket. i'm going to vote for donald trump so long as he continues to represent the kind of policies that every american desperately needs. it's not about republican or democrat with me. he has not assaulted women. nor does it include -- >> without a hint of ironny. >> i thought that was the most disgusting -- i can't even -- >> salvaging women is not what

donald trump did but hillary clinton's husband did. to present herself for an advocate for women is offending to me as ament with. i'm voting for the economic policies, tax reform, tax relief and regulatory reform. >> no hint of ironny there. so how about when they go low, the clintons go high. which over the past 30 years, i the we all know that's the way the clinton machine -- there's no hint of irony there either? the clinton machine goes high. >> i have told you that tees people have some bashed in -- the other side of it to me is so -- >> andrew, let's assume, you and i can agree, we both have things that trouble us about each other's candidate, dare we say. >> he did a great job last night of moving off the issue in many ways. >> i have things that trump

brought up about hillary clinton. let's get beyond that and talk about the policies that make sense. anybody thinking about the economy, anybody thinking about people who desperately need work and who need an education. hillary clinton is not representing the best interests of those among us who most need that. >> here's a man who filed bankruptcy multiple times, won't release tax returns to the country, put that aside, we can deal with the economy. but the question i have is, do you trust him with the nuclear codes? do you trust the man who tweets at 3:00 to 4:00 who can be tempted, who can be antagonized, do you trust that kind of person, that temperament in the white house to deal with those issues on the every day basis? >> harold, he needs to have the steady thank you represent. i agree that he needs to, but seriously, he very seriously needs to continue to demonstrate that he can be in control. i have no fears about the nuclear codes. but i do fear a smooth talking

practiced politician who among her many questionable actions has secretary of state also allowed 20% of this nation's uranium supply to fall into the hands of russia. our enemies. why do we not talk about that? hillary clinton as secretary of state, as part of the russian reset, as we all know, allowed dealings with uranium, now 20% of our uranium is in russian ownership. she allowed members of the c consortium outside of moscow have access to outside information. >> they said obviously she knew that what the "c" meant. and it's on the top of all the classified -- he at that point said, you know what? after the interview, we're really not convinced she did

know that. and the level of understanding of just state department classification, after two or three or four years as secretary of state, as the person in charge of classifying things, maybe it wasn't a malicious intent to put the security of the country at risk, but she was clueless. >> seriously. either she's -- >> but she can have the codes? >> the temperament, in all fairness, you talk about fitness in temperament. i think we can all agree around this table this is not a paragon in terms of mr. trump at the kind of temperament to go with the president. this is where i have the greatest concern about a trump presidency. and i think those around this table probably share that. >> but that's part of the appeal to his base, the polished slick sort of -- saying the right things. >> slick being intelligent. slick being fair minded.

>> slick being honest. but hillary clinton is not an honest person. come on, this is a movie that steven spielberg did. >> i beg to differ. when he said he wanted to appoint a special prosecutor, did that make you applaud? or do you say to yourself, this is a problem. >> that's hyperbolic. i would discourage that. >> is the wall hyperbolic? >> the wall is something that millions of americans endorse as a security measure, as did hillary clinton. we have all seen the tape of hillary clinton endorsing the exact same thing. we need to have a structure. we do need to have a structure. >> when he couldn't distance himself from david duke because he said he didn't know enough about the kkk, i don't put that on you, but how did you interpret that?

because we're talking about hillary, mrs. clinton making comments about public and private positions. the kkk -- >> i've seen no indication whatsoever, and i have talked with african-american presidents, there's no indication that donald trump harbors any sentiments of racism. he has hired an advanced and extolled african-american colleagues. one of his spokespeople is african-american. >> why doesn't he condemn them? condemn the supporters constantly at rallies screaming racist things? >> hillary clinton has condemned roughly half the american people as deplorable and irredeemable. that to me is not the kind of attitude -- but she apologized for that. >> she apologized for that and mr. trump has not apologized. i hear you and know it is painful and don't put you in the

group, but these are facts that a lot of americans will find it hard to get around. he had a pretty decent night last night, did as well as he could, but there many questions that remain and we have 29 days to litigate. >> he has been reaching out, and rightly so, and in all sincerity, to communities that historically have not necessarily been associated in recent deck wades with the republican party. and he's doing it for real. because the policies that have been in place that hillary clinton still espouses, donald trump wants educational choice for families in disadvantaged communities. he wants them to have the choice, the option to charter schools, to get a better education. hillary clinton supports none of that. if we don't get tax relief in this country, we are not going to have the kind of small business growth that folks who want to start those kind of businesses need to have. >> clearly, so many of these issues are lightning rounds. next time tell us how you really feel, okay?

>> i'm just trying to be calm about it. i hear you. again, if i had to defend your position, i would be doing the same thing that you're doing this morning. >> gerald ford, thank you so much. residents from florida to north carolina are cleaning up this morning after hurricane matthew ripped through the region. the latest after the break.

the death toll from hurricane matthew in the united states rising to 19. and floodwaters in north carolina are expected to remain at dangerous levels for days. the weather channel's jim cantore has the latest. >> reporter: as matthew pulled away yesterday, the sun came out for many. unfortunately, the water was still coming up. here along the tribuy tetaries, see this river crest at 24 feet. it's going to stay above the old record through at least saturday. unfortunately, this is where i-95 sits. and that means water will be sitting on top of interstate 95. yesterday when we arrived on scene, two hotels here behind me under water being rescued by the

lumberton rescue crews. they got 108 people out of here. no harm, no foul, that's the good news. but the problem is a lot of those people that were in these hotels actually left the coastline. and they have no idea what they're going to be heading back to today. some of them can't get back because their automobiles are sitting under 4 to 6 feet of water. 20 rivers in major flood stage across the state of north carolina. another october, another flood. this one was contributed heavily by matthew. the cleanup continues. i'm meteorologist jim cantore in lumberton, north carolina. >> we will have more on the cost of hurricane matthew cleanup later on this morning. and back to business news, a little elon musk news for you, teasing a new product for tesla. in a tweet yesterday musk said he'll announce the new product

on october 17th. musk says the unveiling with solarcity is dismissing claims that they need to raise equity saying it won't be necessary. coming up, we'll get the latest fed meetings on wednesday and we're kicking off earnings season at tend of this week. the monday morning strategy is coming up. and take a look at s&p's winner and losers from last week. ♪ opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capturopportunities. we enable you to reach global markets

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well comb back to "squawk box." the u.s. equities are up this morning. it wasn't a great week last week. we'll get earnings with the flood starting in earnest this week. mean whig, the deutsche bank saga continues after john ryan failed to secure a deal with the doj over the weekend. ryan attended the world bank's meeting in washington raising hopes he might personally be able to negotiate the $14 billion fine that the doj has demanded. meantime, we'll talk more about the markets ahead of what is going to be a busy week. it's the official kickoff of earnings season. plus the fed will release

minutes from the last meeting on wednesday. plus, we are still digesting what took place with the jobs report on friday. the portfolio manager from deutsche bank is here. you were saying you have a provocative view in what is happening in terms of job growth over the last 12 months? it is misunderstood? >> the argument that janet yellen has made is that you allow the economy to run longer to get more people to join the labor force. in the last 12 months we have seen the labor force grow by close to 3 million. the average gain in the labor force since the economic expansion has begun has been 5,000 per year. so when you see an outset in pickup this way, it suggests when labor markets get this tight, we are literally seeing people come out of the wood work to join the force. i'm suggesting that this is

actually helping people rejoin the workforce and get jobs. whether she should have raised rates last month or the month before that, that is a whole separate issue. because right now the economy is not in the same predicament it was when the unemployment was 10%. yet interest rates are at low levels. >> depending on what side of the political alley you're on, you can take it either way. >> as tim fischer said on friday, it was a goldilocks number, something for everyone. but tim fischer gave a speech last week to reference the secular stagnation. the fact that we have persistently low interest rates. what is that about? a lot of things you see happening in the economy and in politics around the world is a as a result of this persistent sluggish environment that we have in the economies of the world. >> so explain what is happening with stocks then. >> i think that right now the

reason we're not growing very rapidly is productivity is nowhere to be found. at the end of the day, the actual growth that you have is the sum of productivity growth plus labor force growth. productivity growth has been actually in negative territory by half a percent. but guess what, in the third quarter all indications suggest productivity is going to pick up. that's one of the reasons why the thursday quarter numbers will probably be as much as doubled we saw in the second quarter. >> what are earnings going to look at? >> they are possibly going to be negative for the whole year. but next year because the head winds of energy, the head winds of a stronger dollar are not going to be before us, i think earnings could pick up. we're looking at probably in the neighborhood of 5% to 7%. that's grossly below what the consensus is, but the consensus is overly optimistic. the bottom line is that energy is finally getting into the inflection point, which means earnings will pick up. >> donald trump said last time he thought growth was going to slow next year. >> there's a real question of what is going on in the world. >> it depends on who is the

president. >> well, i think whoever is the president, there's got to be fiscal attention paid to what is going on in the economy here. i think that what you have going on, look at what happened in england last week with the british pound. you have real moves in the markets that reflect something that we have never seen before. and i think that we have to take a moment and really ask ourselves what is going on here. focus on earnings, it's a market of stocks. but at the end of the day, is there something bigger going on here in terms of the macroeconomic environment that the fed is aware of that we have not raised interest rates in 2016. >> how does a long term move away from globalization help or hurt the stock market? what happens to a company that becomes less goblilobalized? >> i think you saw this on friday, what happened to the british pound. there's a fear of closing down markets, the lack in access to other markets. you saw that in the british pound and you see that affect the markets frequently. and the candidates have that a

front burner item about whether or not we are going to participate in open trade or not. >> you're shaking your head. >> if you shut down the international markets for the s&p which gathered 50% of their revenues overseas, it will completely collapse the financial markets. we saw this as we moved away from free trade during the compression. and we know that it basically snowballed into a greater depression around the world. shutting down markets and becoming isolationists is not the weighing too. >> okay. i know we're talking economics here, you're an economist, but if you have a portfolio, what do you do about all this? >> if you are a portfolio manager -- >> a portfolio with mostly stocks. i can make a bond argument myself. >> well, let me tell you what you do, you have to be really diversified and you have to realize in a period of uncertainty, the rates of return are not going to be as impressive as a period where we have less uncertainty. we are always going to have uncertainty, but this period, and by the way, i think it is short. wean now and the election,

people are nervous. but once the election comes, things move closer to the center because it doesn't matter whether it is a democrat or republican that gets into the white house necessarily. because generally during the campaign here, a lot of rhetoric, as you get closer to november, candidates will move -- once they get elected, they move back closer to the center because they want to get things passed through congress. so a lot of the rhetoric will go away. >> i would like to give a counterpoint to that. there's a nice scenario for stocks because of low interest rates and don't see them rising so fast. the longer the curve is extremely low, it's been lower since we ended quantitative easing. lower since we began to raise the short-term rates. and i think the lower interest rate could fortell a positive stock market. >> that's not a counter point because our view is optimistic for next year. we are looking at earnings growing between 5% to 7%, if that's not a bad move for stocks. >> do they always move to the center after getting in?

>> they typically have. >> i've been in the business the last 33 years -- >> the last eight years we have seen politicians move to the center. the other side will not allow it. i'm a non-partisan economist. i don't take sides. >> which side didn't allow it? >> any time you have an opposition in congress. >> it is congress again, okay. >> it is not always congress. it doesn't matter -- >> we both watched what happened -- >> democrats or republicans, you have to two-party system and both vie for attention. >> we know president obama moved to the center in the first or second four years. >> we probably disagree. >> okay. have you seen any move to the center? >> the country is extremely partisan and don't have a movement toward the center. that's what the next president has to do. whoever it is. donald trump or hillary clinton, we have to have a leader who is going to be able to work with congress and work together to move this economy forward. >> we are going to leave the

conversation there. this debate won't get settled this morning. in the meantime, thank you both. coming up, a look at what market moves have to say about the election. mark santoli has the breakdown. and a quick check on europe right now where it has been green for much of the morning and still is. we'll be right back. for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪

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i would like to know why you aren't bringing up the e-mails. >> i have brought up the e-mails. >> it is nice to know it's one on three. >> that was last night's presidential debate. it is time now for the executive edge after a long weekend and hectic weekend for presidential politics capped off by a bitter presidential debate last night. joining us now with more on market signals on the vote, mike santoli of cnbc is here. mark, it is hard to delinate

cause and effect here. >> basically it's a status quo vote by the market. it doesn't mean that investors prefer it that much one way or the other, but that's the track. leading into last night's debate, you had a lot of people welling up expectations that maybe there would be some kind of divisive turn, that the market would declare the election for hillary clinton. that's not happening. you are seeing modest moves and the mexican peso is the agreed upon proxy for whether trump has a shot or not. that solidifies that hillary clinton is the odds-on favor. but oddly enough, there was talk that after friday's revelations you might have a democratic swipe. i don't think the market is handing that out either because that would hit certain sectors

like biotech and perhaps like the banks and energy. so all this basically means after last night, the market is kind of going along with the expectations that there's's a general sense that hillary clinton is the likely winner. however, i don't think because of the brexit vote and the shot with the polls wrong there, i don't think the market is rushing to price in a sure thing. >> but also focus groups polled at the end of the debate actually said that they thought that donald trump came out ahead. that they were pleasantly surprised with his performance in the debate. so looking at futures this morning, and looking at the market actually trading up, i mean, it's so hard to decide what is a result from the election. >> i said it's a very broad -- it's day by day. >> where was it? i haven't seen what you supposedly -- you intimated if you look at it overall, that the track -- >> it has tracked real clear politics in a composite poll. last week the market barely

moved. >> the market certainly wasn't soaring as she went to 85 on silver. >> last night after you look at the betting market, you're about 80%. because the prediction markets went up to 80% overnight. the mexican peso is stronger today. so they are implying that -- >> i think we look at the long-term look at the peso. it is much weaker. >> that's why i'm saying there is no declared winner from last night. it's completely hard to do it. i think the way to think about it in market terms is trump beat expectations after guidance and analyst estimates were massively lower. >> when you said if both houses of congress went, there were a couple sectors, like you heard. i would add the private sector. >> first of all -- >> you don't need to pick biotech or energy. >> come on, the house is a long

way from tipping. >> the hope springs eternal, though. >> i think that's why the market just sits back and they don't actually want to rush to price in, except where you have some kind of sense of the probabilities that are turning in one direction. >> so what about people who are trying to play currencies? these are multi-trillion dollar extremely liquid markets that have shown us this year that they can turn on a dime. the people say, i'm going to invest in the peso because i think it is going up because i believe clinton will win the election or the other way around. or if they want to play the chinese yuan against the election as well, that is risky. >> completely treacherous. people involve in the foreign exchange markets are kind of frustrated by the mexican peso and the way it's become this play thing, which is supposedly tracking the polls. it's like a handful of traders agree, this is the next thing. >> how many players are involved? >> i think it is a big enough cross. but i think on the margin, that's the main thing moving.

i think you have the price of oil moving, all this stuff that matters in mexico. right now there's a frustration that it's a bad way to necessarily -- look, if you want to tell me that people are sitting back and holding more cash because they don't know what is going to happen, and it's a very volatile race and anything can happen in one month, i would buy into that. >> you can watch it. we don't know which way to play that either. we don't know whether they want a big jobs number or a small -- we don't know whether they want no hike or -- so all this is so hard. >> i think the time has run out for one of those numbers to change the story for either side. >> mike, a 50 would change it. 150 was not too hot, not too cold. they can still go in december. >> but nobody would have gotten attention for that over the week, right? so it's not something like that people think tipped the scales. >> we have earnings that will take precedent. we are stuck 2% or below gdp. a lot of the macro --

>> japan is stretching for 1, we're hanging at 2. that's the rest of the world. >> the world is easing and we are trying to go. that's all we get, no rate increases, just the rhetoric. >> in the last two years, what has the fed done relative to what it has done before? gotten modernly tighter. >> mike, good to see you. mike santoli. new out this morning, oliver hart won the nobel memorial prize in economic sciences. why do we say it that way? because alfred nobel didn't set up a prize, so it is given by a different group. but a lot of nobel lawyers in economics. and it is such an inprecise

science that one can say up is up and one says up is down and and they both win. the royal swedish academy of sciences says they are vulnerable to the real-life contracts and institutions as well as potential pitfalls in contract design. finally -- >> we'll have a 45-minute segment just on what their work is. >> you're going to host a google hangout. >> that's a good idea. i'm going to host a google hangout. before we head to break, we'll take a quick check on the u.s. equity markets. they are in the green in a big way. the dow opens 70 points higher, the nasdaq up 20 and the s&p 500 up nearly 10 points. and take a look at the price of crude, wti bouncing off the lows of the session after the energy

minister said it's not unthinkable that oil gets up to $60 a barrel this year. we are almost at $50. coming up, a big winner at the box office. we'll talk about that next. our guest host at the top of the hour is a "squawk box" master. mohamed el-erian is here to talk stocks, the fed and the political uncertainty. " 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 thousas of miles away. th the help of at&t,ed bull racing can sha critical information about every inch of the car from virtual anywhere.

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welcome back to "squawk box," an update now on the aftermath of hurricane matthew. it's no longer a hurricane and no longer battering the southeastern u.s., but the devastation continues to be overwhelming. at least 19 people in the united states are dead as a result of the storm and more than 2 million businesses and homes are still without power across the southeastern seaboard. poor logic estimates that the economic cost of hurricane

matthew will be at least in the $4 billion to $6 billion range, which not as bad as earlier estimates, obviously, but still a very large number. >> yeah, back to business news now. jack going hollywood. alibaba is teaming up with steven spielberg to develop films for china. there will be a minority stake in the production company and get a seat on the board, just furthering jack's ambitions in the movie industry. but interesting to see these two bed fellows now. >> pretty cool, right? we'll see what they come up with. in the meantime, we have other movie news. the girl on the train taking the top spot at the weekend box office, adapted from the best selling book, the psychological thriller stars emily blunt as a person involved in a missing person's case. and tim burton's latest movie, miss per grn's home for puculiar

children came in second best, about a school for children with second power. and i saw a great movie, guys with the kids. storks. i tweeted about this. i saw storks which is a great -- >> i would recommend it for kids. my wife cried. i did not cry, but i could have cryed. you're toughening up a little bit. >> i saw the previews to that. >> for kids, it was great. the kids loved it. and i think the tweet i mentioned was that steve, the money man behind mr. trump is, one of the producers in the film. >> yes. who are the voices? >> i don't know. i was more focused on mr. maneuchin in the credits. >> because the stork visited star koi. >> yes, the stork did, over the weekend. dropped that baby off. >> yeah. >> that's how it works? >> yeah, i don't know cabbage

patch is more likely. you go out there. because i've sthene dolls. >> i'm glad we're just keeping this above water. family friendly programming at 6:55 a.m. >> have you seen dumbo? they have actual shots of the stork. >> for people who weren't watching at the beginning of the show. >> becky had the baby, 8 pounds, 5 ounces. >> just before midnight on friday. today's the 10th, the 7th. >> i believe so. >> yes. >> good birthday. >> so our congratulations and well wishes to them. >> do you know what sign that makes her? >> no, i was going to check that. coming up on squawk, more reaction to the debait last night. we'll be right back.

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round two in the books. >> hillary clinton is raising your taxes. if you can look at me, she's raising your taxes. >> we are back on the right track. he would send us back into recession with his tax plans. >> donald trump and hillary clinton taking the stage for the second presidential debate. we're going to bring you the highlights, straight ahead. >> it's a big week for the markets. earning season officially kicks off and lots of feds speak on the agenda. mohammed alari will tell us what he's testing. >> what does elon musk have up his sleeve this time? 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" here. i'm drew curtainen, along are andrew and our guest host for the next two hours this morning, mohammed alarian. we'll hear from him in just a few minutes. the futures have been in positive territories for most of the morning session and now up 71 and a half because we had minus 18 on fair value. so the 53 points, add it together with a negative number positively, right? we used to do this for people because we don't need to. you got it and people got it, right. >> exactly. >> it used to be called the sorcon. >> it did, yeah. >> but now you've got it and the viewers have it. >> at the same time. >> so they can, you know, do it without having to pay the royalty every day. >> and europe, it's green, green, green across the board. not too significant but up the

day. and oil has been hovering between 45 and 50 recently. just over 50 now. see whether that portends anything, whether we go now, if it's a 50 to 60 range, but it has been for 50. and we don't usually look at gold, but i think gold's been interesting in the past two-weeks. gold was up this morning, but well below 1300 and some people say back within 11, handle again, if the fed really gets ingumption. we heard fischer again today, they were close, mohammed, close call in september, pretending that december is definitely going to happen, but we'll talk to you about that in a couple of metropolitan. >> in the meantime, let's bring highlights from last night's debate. hold on for a second. we want to do top corporate stories before we get there because we have a big headline this morning. elon musk saying the auto maker will not have to raise funds this quarter for the plan to

acquisition a solar city. i didn't tell in contrast to last week when it was planning to raise additional funds by the end of the year. musk also tweeted there would be an unexpected tesla product that's going to be unveiled next week. so a lot of people will be watching to find out what that is all about. separately, samsung suspended production of the galaxy note 7 smart phones on reports in fires in replacement devices, the second ones, too. samsung had been in the process to issuing juvenile phones to owners following a massive recall. at&t has now stop issuing those replacements and now allowing users to change their phones to other phones. >> both companies have hired advisors to explore a potential merger by viacom and cbs. >> all right. meanwhile, donald trump, hillary

clinton squaring off for the second presidential debate last night. last night, john harwood joins us now with the highlights. >> hillary clinton came into that debate last night after a weekend in which republicans had been repudiating donald trump in droves over that access hollywood tape that came out with him talking about women in ways that many people found repulsive. hillary clinton's strategy in the debate last night was to use that tape to try to reinforce the doubts of voters, especially women voters, especially college educated voters and soft republicans who are wavering on donald trump and use them to pull them to her side. take a listen. >> if this were just about one video, maybe what he's saying tonight would be understandable. but everyone can draw their own conclusions at this point about whether or not the man in the video or the man on the stage respects women. but he never apologizes for

anything to anyone. >> now, what donald trump did was to try to redirect that fire back at hillary clinton, take advantage of her unfavorable ratings and doubts about her, even with core democrats. take a listen. >> you really owe him an apology. you're the one that sent the pictures around your campaign, sent the pictures around with president obama in a certain garb. that was long before i ever involved. so you actually owe an apology. >> now, that is an approach that appeals to people who are inclined to believe the worst about hillary clinton on any subject, that she's capable of smearing president obama, which is of course is what she's accused him of doing with the bursar story. the problem with it is that while it appeals to people who already hate hillary clinton, it's thought persuasive to people beyond that group. it doesn't expand your base.

why do i say that? well, president obama, milg mic obama r both strongly campaigning for hillary clinton. the same with charges about bern bernie sanders, that she conspieco conpired to rig the campaign for bernie sander. and if i'm president, you'd be in jail, talking about criminal charges. the fbi decided not to charge hillary clinton and in fact fbi director comey while saying she's been careless with her e-mail, he said the case as a matter of criminal prosecution wasn't a close call. so this is why donald trump again, appealing to the base, not expanding the base. >> joining us now is betsy, former lieutenant governor of new york. historically a trump supporter. are you still supporting him? >> absolutely, and i think he clearly won the debate last

night for three reasons. first of all, he addressed the addressed the issue of the body locker room talk and measured it against some of the really big issues against world, christians being beheaded or drowned in steal cages. second, he very effectively prosecuted hillary clinton's two biggest weaknesses, her reputation for dishonest and she represents the status quo. she's been in washington for 30 years and what has she done? but most importantly of all, he disclosed, highlighted her disdain for the public because she's really running not to jump start the economy, not to defeat terrorism, she's running on political to be the speech police and he made it clear last night, she's going to teach men how to talk respectively to women. she's going to make sure that overweight people aren't fat shamed. she's going to make sure that white people show more humility in the presence of african americans. she's going to make illegal

immigrants feel right at home. and people who disagree with her are going to be labeled bigots, racists, homephobes, xenophobic, you name it. and most americans don't like the idea that that's what this election should be about. but take a look at hillary clinton's ads. not one is on an issue, the economy, terrorism. they're all about these politically correct issues. >> can we just talk about the political correctness for one second which is to say you're a woman. i don't know if you have two children. >> i have three daughters and two granddaughters. >> and you have no problem with what this gentlemen said? >> of course i do, but i don't think this is an issue in the election. i don't think this is what a presidential election should be about, not when the economy is sputtering along at 1, 2%, newt when there are terrorist attacks in every part of this currently, not when we're facing such a world devastation in the middle east. with all these big issues, i don't want this campaign to

focus on what he said 11 years ago on a bus with a bunch of guys. >> but hew hewitt when he called for donald trump to withdraw from the race said this is off of research. this is just the beginning. as a republican, do you fear there's more to come? >> i'm not afraid of that. i think it's irrelevant. we know who donald trump is. what you see is what you get. unfortunately, we're only beginning to see more about hillary clinton. she's been around for 30 years, but she, as she admits herself, has the public persona and the private per sona. and then the wiki leaks, she supports open borders and open trade, even though she's telling supporters something very different. she supports drastic cuts to social security, a plan labelled the cat food plan because the elderly would have so little to spend. >> each candidate has given each party so much to take aim at.

the real issue is whether these issues are apples to apples, and how you compare an issue over e-mails and personality. >> let me put that in perspective for you. i've worked in many jobs, lieutenant governor, in the private sector for business and running a not for profit. and when i met any of those positions, i didn't erase my records on the job. honest people don't do that. when she erased 30,000 e-mails and then says it wasn't me, it was somebody who worked for me, that was one of the highlights last night. the fact is she can't defend what she did because all of us go to work every day and i'm sure not anyone at this table has decided they've got to erase the records when they leave a job. >> let me ask you several questions. one of the things he mentioned last night was he hoped to put her in jail if he were to become the president. are you comfortable with that? >> yes. americans feel that hillary

clinton, because of her position, first lady, senator, secretary of state, she's getting a pass for behavior that most americans could never get away with. when you have a subpoena, you show up with the evidence as requested. you don't say, well, i'm sorry, somebody who works for me destroyed it. >>and again and again, we see hillary clinton getting away with things that ordinary people don't get away with, and americans are fed up with the establishment. >> do you feel comfortable with a president who wants to put their political opposition in prison? >> i'm sorry, that question is like when did you stop beating your wife? that isn't the question. it's not putting your political opponent in prison. he never suggested putting bernie sanders or any of the republicans on the primary stage in prison. he's talking about a woman who has clearly violated the trust of the american people and it seems the law. the first 15 minutes of james comey, head of the fbi, statement about hillary clinton,

led everyone to believe he was going to call for a prosecution because everything she had done was contrary to the law. and then he does some sort of verbal pretzel deal and decides that he's going to say he's not bringing charges against her, but the evidence clearly supported that. >> would you be proud for him to be your president? >> yes. because i'm going to be proud when america is growing at 3 and a half% again, when we have a strong military defense, and when we have regained our stature in the world, and that's what donald trump will do. >> okay. betsy, thank you for joining us. >> thank you. coming up, earning season officially kicking off this week. we'll hear from mohammed is expecting from the markets and how the election could add to that volatility. that's next on "squawk box." guess what guys, i switched to sprint. sprint? i'm hearing good things about the network. all the networks are great now. we're talking within a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates.

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mohamed el-eri welcome back to "squawk box" this morning. take a look at futures. they're up in a nice way this morning. dow opens up at 8:00 this morning. dow's up 22 points and the s&p 500, up 22 points. the bond market closed today. on wednesday, we get the minutes from last month's fed meeting. thursday, look for jobless claims and on friday, september retail prices. the producers index and it is officially earning season,

kicking it off tomorrow and csx is out with numbers on wednesday and results on the three big bangs coming up on friday. all reporting in the wells fargo news, of course. it will not just be the numbers, but a lot of people looking here at what john stump has to say. >> let's get to mohamed el-erian, alion's chiefnic advisor. he's also the author of the only game in town. what was your take? 150 was enough to keep things going, but below expectations. does it mean december is definitely happening or still just 50%, 55%? >> with this fed, no one can say what's definitely happening. the 150 is the number we have to get used to at this stage of the cycle. that will be the average of the next 3 to 6 months. >> and that's because of a shortage of workers? so the labor market is so strong that the reason it's not 200 or

250 is because you can't find qualified people and yet we still can't grow above 2%. >> a few things. one, we're taking slack out of the labor market. we created 15 million jobs. secondly, we'll now focus on wages, we'll see the wage pick-up or not. but the critical issue to answer your question is the labor participation rate. would it continue to edge up? we've got a slight up take on friday. or will it stay constant? >> what's mising for us to feel that we're at -- or not feel it, but what's missing from the pool, where we are from 3 to 3.5%? if we're at 5% unemployment, normally, you would think your gop would be more robust. >> so that's a simple answer and complicated. the simple one is we have a huge deficit. >> only you could say that. it's simple and complicated. is this your private and public take on things, like ab lincoln?

>> the private sector is not investing enough, doesn't feel confident enough, accumulating cash or giving it back to financial markets. it's problem is two things, one, is it doesn't have clarity. >> we have major issues in play right now, major cloebl global issues in play, very unusual political uncertainties, especially in europe. and finally, don't forget, these days, if you make a mistake on investment and you're stuck for 5 years, you can get eaton alive. so business people are more careful, and i understand that. so we have a hassive investment deficit on the private side. we understand that. what we don't understand is the productivity of it. my own feeling, we are mismeasuring it, but there's a good debate going on. >> are we mismeasuring gdp or is it really as lackluster as it

seems? >> we've always had issue with gdp measurements. i think it's doubtful this economy can grow longer than it has before and the benefits can grow to more people. we don't have the inclusive growth and capitalalism we're capable of. >> do you think the fed should be waiting until after political events happen? we saw this with brexit, tons of commentators said this is a binary event and now people are saying, why do it before the election? but that shouldn't be how the fed works. >> i would see a hike in september. i think they also missed a window last year. i would normalize. that's where i would be. why? i acknowledge the economic arguments are balanced. i acknowledge that. but i think the risk of financial instability down the road is getting higher and higher and the longer we stay at these artificial ultra low rates, the more we fuel financial instability. so if i was sitting in that

room, i would have argued to hike. but i don't think many people think in terms of the risk of financial stability. they look at the economic outlook. there's starting to be a change. we've had three federal officials come out in the last month, say be careful as this may mean down the road for financial markets. >> do you think we'll hear companies invoke instability, uncertainty, when they start reporting earnings this week? >> especially global. i think what's going on in europe is meaningful. i think people see a lot of uncertainty. we have major elections, a referendum in italy coming up in a couple months. we have elections in germany, france. this is strong anti-establishment movement there as there was here. so yes, you'll hear about uncertainty, particularly in your -- >> if we, let's say, go for the next couple of years and just for argument's sake, we go up on the capital gains rate, keep the corporate tax where it is and leave regulation where it is and

blare more regulations in over that, is it possible for just with everything staying the way it is now, is it possible to get out of our own way at 2%? will we go to 3, 3.5%? can things recover given the current deal? >> i just came from washington dpk where there was the meeting of the annual meeting of the throwback and was what's striking is we're starting to see a tipping point in terms of what people think is desirable in terms of policies. not feasible. the feasible bit has a political element to it. so people are not confident they can be implemented, but we are seeing a growing sense on what's needed. what's needed is a set of structural reforms starting with corporate tax reform, infrastructure spending, better labor market retooling and a better regulatory environment. what's also needed is less dependence on central banks and greater use of fiscal policy and finally, completing an economic architecture that's holding back

growth. so what's interesting to me is that starting to be a consensus that we need to get out of this unbalanced policy mode, but implementation is in political issues and no one's comfortable about that. >> what's funny is that the disclosures out of hillary's speeches to goldman sax were all private sektder cat nip for people that like to -- no, there's too much regulation. >> you should love it. >> i did. this is why people are mad at her, for saying -- you know, it's almost like, wow, there's a glimmer of understanding on how things work in this. >> by the way, one of the things i was looking at. and i apologize, i was listening to you. we were talking about abe lincoln and this quote that everyone said was made up. >> which quote was made up? >> it's actually in the e-mails. >> it's in the spielberg movie. >> but also contemporaneously in the e-mails. when she was talking, she was talking about lincoln. so it wasn't like she just made

this up after the fact, five years later. >> you're like doing the fact checking for us. >> a little fact checking. we said she made it up out of thin air, and i went up to look exactly what the e-mail said, and she said at that moment, she was talking about the spielberg movie and lincoln. so i put it out there. >> mohamed, stick around so we'll get back for you. the winner from last night's debate. twitter will bring you those numbers, right after this.

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there has never been anything like it. and we're going to have a special prosecutor. >> it's just awfully good that someone with the temperament of donald trump is not in charge of the law in our country. >> because you'd be in jail. >> secretary clinton -- >> welcome back to "squawk box." last night's face off between donald trump and hillary clinton, breaking twitter records, making yesterday the most tweeted day of 2016's

election. the social media site reporting there were more than 17 million debate related tweets that had been sent out. shares of twitter, however, down about 8%, in large part because there's an expectation that nobody want to buy it. i find them by the way the most surprising thing is twitter has had its best year ever in terms of number, people on the site using it. and yet they seem to be struggling to monetize. >> because they're paying their employees more, investing more in the product. and revenues and growth has been roughly flat. >> you would think, given all of the action on twitter, if this moment doesn't work, what moment will? coming up -- >> much more from last night's debate and what the candidates had to say about the economy, taxes, when we return.

good morning. welcome to "squawk box." among our stories, shares of

merck on the rise following up beat results for a study of the company's immune boosting drug. patients who took the drug lived longer than those receiving conventional chemotherapy and the stock this morning is up 3%. china based online retailer alibaba struck a juvenile partnership with hollywood director steven spielberg. they will distribute partners in china while alibaba will become a u.s. producer in distribution. and suspending exchanges of samsung note 7 smart phones, that announcement coming earlier this hour. samsung is said to have halted production after reports that phones replaced in the massive recall were experiencing the same overheating problem as the originals. >> and the coalition for clu inclusive capitalalism hosting their third conference today,

bringing together ast owners, ceos, policy owners over 20 countries to restore capitalalism and try to regain some of the public trust. speakers include jamie diamond and larry fink. and christine a, joining us to talk about the coalition. she's also been a longtime supporter of hillary clinton and i want to start the conversation there and get into what inclusive capitalalism mean. but help us understand in terms of what you saw last night in the debate. >> as long as you know i'm speaking in my personal capacity, because capitalalism is nonpartisan, nonidealagical. but it is true in my personal capacity, i am a supporter of hillary clinton. i think she did really great last night. i think she put forward a positive vision for the country. she showed that she is steady and even, that she doesn't go

down every snake hole that is put in front of her by the other side. i think she did really well last night. i think donald trump did well with the 30% of americans who like the hear him talk about what he did last night, but i don't think he moved anyone last night. i think she probably did. >> fair enough. lady, let me ask you this. i want -- it relates to inclusive capitalism. i want to ask you i imagine in your personal capacity. around some of the e-mails that did emerge over the weekend from hillary clinton and some of the things she's said about wall street and also about free trade, which seemed to be different than some of the things she's said publicly. and when it comes to trust, how you think about that. >> thank you for asking that. i don't know the specifics of what was released this weekend because i've been working on this conference that we're host today, but i do know i have been

in the room with many people from wall street when hillary clinton has said to them, you have got to understand that my job as president will be to make this country fair for all americans, that i am devoted to everyone who works hard and plays by the rules. and i am going to pursue policies for those people, even the ones who don't vote for me. i have heard her say that in a room of wall street, mega donors, mega ceos. so i know the truth of her commitment. there is something i want to say about that trust factor. what i will tell you is the people who trust hillary the most are the people who know her the best. the people who trust donald trump don't know him at all. they are closing their eyes to the truth of who that man is and i'm really sorry about that for america, but i am hopeful that hillary will prevail on election

day and this will all be a bad memory. >> laid ey, let's talk if we could about whatclude capitalism in this conference is all about. what are use the phrase inclusive capitalism, what does that mean capitalism has to be a system for everyone. adam smith would have seen inclusive capitalism as a redundancy. but to too many people, it is a complete oxy moron. and we are gathered here with the world's largest asset owners, largest asset managers, because we are trying to find ways we can work together to be part of the solution to creating broadly based prosperity. >> what do you do about the severe distrust out there as represented most recently by the situation at wells fargo? people look at some of these big

asset managers, these big institutions and say we can't trust these people. >> well, and that is a very good example of why asset managers have got to dig deeply into their own investments and who is investing in wells fargo? who is managing that company? and customers, regulators, should be very angry. if we allow unethical behavior, we as investors are going to lose money. it wasn't very nice place to be to be invested in volkswagon, wells fargo, hsbc, rolls rois, when they were involved in illegal activities. so what we're saying is as investors, to create inclusive capitalism, that means we need to engage with boards and managers and make sure that they are living up to ethical standards. lou gursner had a piece in the

wall street journal just last week about this, which i thought was great. he says, we don't -- employees don't do what we expect. they do what we inspect. and it is our job as investors, as owners, even as customers, to inspect how companies are behaving. and by the way, i think customers have a huge role to play in this. if customers stop buying from companies that are unethical or companies that don't treat their employees well or don't take care of their supply chain, suddenly that's going to percolate up to the boardroom and behavior will chain. >> fair enough. we appreciate your time this morning. we wish you luck with the conference today. thank you. >> thank you. appreciate being here. >> thanks. coming up, hillary clinton and donald trump laying out their energy policies and sparring over plans for the cole industry. we'll talk to murray industry ceo robert murray when we

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they had been up about 70 or so. they have edited now, now up 94.

on the dow, up 25. just up 25 on the nasdaq. up nearly 13 on the s&p 500. >> let's get back to mohamed el-erian this morning, the chief advisor at alians. you wrote a piece this morning in the ft where you talked about the market as frogs swimming in a warm pot that is about to come to a boil. why? >> so anybody who's looking at evaluations and trying to reconcile that when with what they see on professional and economic front, it's hard to do. central banks have been very affected in insulating market from what's happening underneath. there's no recognition that central banks are becoming less effective or in the case of the bank of japan, ineffective and almost counter productive. so the protection that markets have received from central banks is lessening and that exposes them to the potential for

quiet -- quite, much higher volatility, and a significant downicide. >> one frustration that i've heard from a lot of investors is the fact that singles stories can move entire sectors. mylan can bring down the entire health care sector. how do you invest around that? >> it's hard. and it speaks to two things. one is that liquidity is not as ample as it used to be. there's been a structural change. one consequence of shrinking the middle, which is the investment banks, is there's a lot less liquidity for what's much bigger now and that's the end users. so when there's a change of you, that sector gets hit hard, both on the way down and on the way up. the second issue is because people are edgy, wondering, what's the tipping point. they know there's an unsteady

momentum. that's why one of the hardest things for long-term investors today is they have to be much more tactical. they have to take advantages of these opportunities that open up when liquidity is not ample enough. >> what to do. >> what you're supposed to do is accumulate some cash here, recognize that you're going to have to be much more opportunistic than you've been in the past. >> so now i have to buy individual stocks? buy -- what am i supposed to do? >> so we have come from a period in which we've seen quite a bit of volatility. look at january and february. and people camen and said this is an overreaction, why? because market technicals were driving. this is an over reaction to china. we'll get those on the way down. and you'll have to learn to fade that if you want to make money. if you don't, just be the story of the last two years, which is you can be flat but volatility or you can not -- it wouldn't have felt that good. >> but this year, if you would have bought almost any asset

class, you would have been up, stocks, bonds, oil, gold. hasn't happened since 2010. >> and what does that tell you? we are in a very artificial market. >> that's a lot of money sloshing around. >> and there's a big floor underneath. >> exactly. so ultimately, the call is can central banks continue to provide that big floor? anybody who ises correlations acting this way, they tend to be efficient. that's why the so-called expert in the financial markets are much more nervous than the average person. they say correlations that make no sense and they worry. in the past, things that make no sense, what is unsustainable, becomes unsustainable. >> how do you have time to worry? people who tend to do it haven't been correct. >> correct. and that is the frustration right now, this is a very artificial market. absolutely right. >> all right. we'll keep talking about this.

we've got a lot of moving parts here, mohamed. stick around. coming up, energy policy in focus. the candidates laying out their plans for the coal industry. we'll talk to robert murray, ceo of murray energy. up next. as we head to break, look at the top tweeted moments from last night's debate. taking the top spot, trump disagreeing with vp mike pence on issues related to syria. we'll be right back. we'll be right back. mary buys a little lamb.

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donald trump and hillary clinton weighing in on the respective energy policies at last night's debate. more specifically, what each candidate would do for the industry. >> you laook at our minors. hillary clinton wants to put all the minors out of business. there is a thing called clean cole. cole will last for 1,000 years. >> i'm the only candidate from the very beginning of the this campaign who had a plan to help us reinvitealize cole country. >> joining us now, robert murray, chairman president and ceo of murray industry and operator of cole mines in the u.s. he's a supporter of donald trump. you want to do a fact speck?

i didn't realize hillary was the only candidate that actually had a plan for the cole companies. did that -- was that the truth there? >> no, it is not. hillary clinton has no plan for the cole industry. she has no plan for reliable low cost electricity in america. she's all about wind mills and solar panels. that's because the clinton foundation and her campaign have gotten millions of dollars from the manufacturers of wind mills and solar panels. there's more electricity in making the wind mill than ever comes out of one. what they get is a 4 kent a kilowatt hour tax credit and warren buffet, one of the billionaires benefiting by this the most, himself said we don't make any money on the wind mills, but we make a lot of money on the tax credit. she's sold out to the manufacturers of wind mills and solar panels. she will continue the policies of barack obama, which have destroyed reliable low cost

electricity. and sir, that woman that's trying to raise children on her own, that single mother, that customer of a product that is manufactured in the global marketplace, that couple on fixed incomes, are seeing their electric rates go up 50%. and so there is no energy policy for hillary clinton. and as far as my cole minors are concerned, she's offering after she destroyed the jobs of my cole miners, along with obama, she now wants to get $30 billion of taxpayer money and give it back. i can tell you, sir, these folks don't want hillary clinton's welfare. they want jobs. she has no policy at all. she's about kickbacks. she's about paying to play. >> so is clean cole clean enough

for the renewable green energy lobby? how clean is it and is that the only cole that we should be using in the future? i guess old cole just, you know, the narrative is there's no place for that in the future energy needs of the country. but is clean cole clean enough? >> yes, it is. critical combustion will make cole fired electricity just as clean as wind mills and solar panels, cleaner than natural gas. the technology is there. it has to be put on. but what's happening is the government is picking winners losers and giving tax credits to the manufacturers of wind mills and solar panels while they end through regulation the operation of our cole mines. the cole industry is produce -- the coal industry is producing

one half of the coal it did at the election of obama. that is 4 kent a kilowatt hours, sir, of electricity. the bind at solar is 26 cents a kilowatt hour and gets 4 krents from the taxpayer. so when she says she's putting coal miners and coal companies out of business, she's not talking about business. she's talking about money. the single mother is standing in the way of her 26 krent an hour wind mills and solar panels. one last point, the lowest 25 million families on economic scale in the united states now spend 22 p krents out of every dollar that they obtain for energy and we need to be thinking about energy and hurting the poorest in the country. people on fixed income, the

manufacturer of a product for the global marketplace. she is a disaster. she has no energy policy and donald trump has an all of the above policy where i will use all forms of energy and yes, there is clean coal technology today that will allow coal to be burned cleanly. >> if we were to just for argument's sake, just get rid of coal completely right now, what would take up the slack? i'm trying to figure out how we'd do it and how much more per kilowatt, the apples to apples comparison to what it would cost to totally replace all coal right now for utilities. dud we do it? >> if you eliminated all coal in this country, people will freeze in the ardark. the lights will go out. the reliability of their power grid will go away. people -- >> well, if we did it gradually so that that didn't happen, what would be the replacement source

for the electricity? what do they want to use? >> that's what i'm saying. there is no replacement. you see, wind and solar only works if the wind's blowing and the sun shines. you need about 30% coal, where we are today, to make sure we have a reliable power grid. there is no alternative to it. but she is vowed to destroy and expand her word on obama's policies. that is is disaster for america. that is a disaster for people on fixed incomes and the poorest people in this country and the lights will go out. people will die on the operating table with her policies. >> two questions. how quickly can you -- you said turn it on in terms of trying to make this truly clean. how long does that take? what type of investment does that take? >> it would take a lot of investment. it would take many, many years, but there has to be a government commitment to it, just as the government is supporting the people's taxes, wind mills and

solar panels, they need to support the clean coal technology. put it on. we need a level playing field. that's what donald trump has said. we'll use it all. we'll use all forms of energy to make electricity. so there needs to be a level playing field, not picking winners and losers, sir. >> oh, that was both of us. okay. >> my other question was a business question. what do you think of tesla? have you ever invested in tesla? i'm curious. >> tesla is a fraud. he's gotten $2 billion from the taxpayer, has not made a penny yet in cash flow. here again, it's subsidies. and hillary clinton said they need government help. she was talking about elon musk, warren buffet, the prilgtskers, the pole skaez, stooir, the wealth i say family, podesta himself. that's who she was talking about

in supporting her friends. it has nothing to do with the environment. and by the way, you could close down every coal fired plant in the united states today and you would not affect the temperature of the earth at all. not at all. >> just the temperature in the lady's house that you might affect that temperature, but not the temperature of the planet. anyway, robert, we appreciate your time this morning. thanks for making the case for us. >> thank you, sir, for having me. >> you're welcome. >> wow. >> wow. that's all i really have to say. >> you know the scariest thing that was out over the weekend, just thinking about people that don't have the where with all necessarily to pay for for health care or energy, 7 out of 10 americans have less than $1,000 in savings. >> yep, i've seen it. >> that is unbelievable. >> they wouldn't be able to pay for an emergency. >> i thought it was 400. >> costs do matter. >> we've got to run.

you're sticking around, right? >> i am. coming up a very busy week ahead for markets in addition to this stuff. plus, more reaction from last night's debate. bill daily joins us and later, cnbc senior contributor larry cuffed low joins us and gives us his take. squawk returns in just a moment with a very big hour. with a very big hour. osts $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica,

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the gloves are off. >> she talks about words that i said 11 years ago. i think it's disgraceful and she should be ashamed of herself. >> he gets derun his campaign anyway he chooses, decide what he wants to talk about. >> hillary clinton and donald trump debate in primetime. they're now just 28 days until the presidential election. >> crude reality, saudi arabia's energy ministry says $60 oil is not unthinkable this year. a live report in istanbul, coming up. and samsung halts production of its note 7. the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box."

>> good morning. welcome to "squawk box" right here on cnbc. i'm andrew, along with joe and kayla. if you did not hear the news, becky had the baby. what was it on friday night, we decided? not we decided. >> before midnight. >> they decided to induce or something. yeah, it was prior to midnight. and it was all, i think, just the way it went, you know. she wasn't -- i think when did she -- >> i think tuesday. >> wednesday she didn't come in. >> kaly noel. >> a bundle of joy right there. >> 8 pounds, 5 ounces. gorgeous. >> and then i heard the significant other. >> matt quell. he left one day and didn't tell anyone. he said, i'm leaving and it happened. and you know what i'm talking about. so that happened. >>and then i think that happened so it was about 12 hours. not quite but you know, right before midnight.

>> and she was a trooper. she worked up until wednesday. she is a super human. >> put us all at risk. you know, if it happens, it's like, who knows. street blocked off or something or traffic or we all feel like the nervous husband. i mean, you need to get where they can handle something like that. >> every time they see something with road rage, they say let them go, they might be on their way to the hospital. >> right. you don't want to have a baby in a car. you just don't. >> best wishes to becky, matt, and the whole family. and she is a super woman. >> and then kyle. >> yes. >> i hope he is taking the news well, big brother kyle. >> i'll bet he is. nothing like, you know that song, the little girls because they grow up -- probably you can't say that anymore. but anyway, it was well intentioned in the old days. >> and our good friend mohamed

el-erian is here for the rest of the hour. the first hour, we've got a lot to talk to him about. in the meantime, take a quick check on fufrcheck on the futurt now, they are in the green. european ecties at this hour, also in the green, which is maybe what we're working off of here. there you see it, pretty much across the board. >> making headlines, merck shares, rising after the results for a study of an immune boosting drug for lung cancer. patients who took the drug lived longer than those who received conventional chemotherapy. verizon, at&t and others are suspending exchanges of samsung note 7 smart phones. samsung was said to halt production after reports that the phones were replaced as a recall were experiencing the same overheating problem as the

originals, which begs the question, what did you change and obviously that was not the fix. it still happened. so we're back to the drawing board there. and twitter shares are dropping sharply. the decline follows a bloomberg report from the weekend that would suggest that potential suitors are unlikely to make a bid for the social network. i don't know whether the hype from the business media about how much in demand this was going to be. for a minute, i even said, is this gold? >> you know, all of a sudden, google and disney -- >> well, big players. they all wanted to buy. now -- >> did they change their mind and not want to buy it or did the business crash totally over play what was going on? >> maybe they saw how much the stock ran up on news of a potential deal. but when it was around 26 a day -- >> the marking it up really did

want to buy it, but the shareholders came back and raelkted so negatively and the back lash has been so negative. google, i don't know where they stood. and disney, some people would say was doing it as a courtesy because jack was on the board and they respected that. >> regardless, we'll see where twitter opens today, certainly not look good for that company. other stocks, bank initiating on netflix. market expectations through 2020 appear to be too high on the business. although it does say the risk-reward balance is unatactive on netflix, unlikely to be target buyer, down 1.5% this morning. united technologies downgraded to neutral from buy the analysts there, too high given a number of underlying issues that will criticism earnings at that company. and vicomand cbs are taking

another step towards recombining the wall street journal reports both companies to explore a potential merger. vicalm and cbs were part of the same company until they parted ways in 2006. you can take a look at those stocks, down this morning. joe, we'll see if what's old is juvenile again there. >> don't get me started: i love investment bankers, i do. anyone can see those companies deserve to be together. synerg ies are so clear. you put them together, it's all viscosity, rationalization of go back. how long ago was that, andrew, ten years? what are these two companies doing together? there's nothing here. we've got to separate. >> how much are you charging to separate? >> oh, we can do that for -- >> how much are you charging to -- >> i'm going to get you the actual banking fees on that separation bump i think we're talkth at least $100 million. >> i love that.

who would put these two together, you know, ten years ago? these two got to be together. they say that things have changed, right? blah, blah, blah. >> they would say the media world has changed and power, yes. >> maybe they placed the wrong premium on the different ceos. hindsight's alwaysf 20/20. >> but he might be able to fix it. >> maybe he could. maybe he should have been in charge the entire time. we've been through a few guys, preston. >> felipe came in. >> oh, we talked -- >> that's going to be your 45 minute segment. >> yeah, on the juvenile nobel -- it was on contract. yeah, the memorial cross, not a real cross. >> in the meantism, let's get back to our top story of the morning, the presidential debate, donald trump talking about his plan to combat isis

but not the quite the same plan we heard from donald trump's running mate mike pence earlier in the week. >> you disagree with your running me running mate? >> right now, syria is fighting isis. we have meet that want to fight both at the same time. syria is russian and it's iran, who she made strong, and kerry and obama, made into a very powerful nation and a very rich nation very, very quickly, very, very quickly. i believe we have to get isis. >> and joining us right now to discuss that and more banks, he's martner at a law firm and political analyst. also served as national council to the 2008 and 2012 mit romney campaign. what did you make of that exchange. >> well, you now know who's at the top of the ticket. so it's not totally unusual for r running mates to have different views.

it got asked in a particularly stark fashion last night. donald trump said what he believed and she's the guy at the top of the ticket. >> and don't you think the voter looked at that and told the truth, very honest. there was something very uthentic about that moment. >> yeah, there was something uthentic about it. i suspect the running malts will have a chat today, just to go over the play book a plilt bit and each will be asked about it. and so they'll come up with a common answer that both respects their differences but also talks about how they will do a better job than hillary clinton. >> does it matter, though, that so many republicans have thrown support by pence instead of behind trump? i mean, there hasn't been party unity throughout the course of this entire election? does it matter anymore now. >> well, i suspect it does in the long run when you talk about how you get your turnout to a majority on election day. but what's also true is that donald trump and mike pence have been running a campaign that

doesn't realize much on the party hirarchy and usual republicans and the folks they're making their real appeal to are low propensity republicans, who may be republicans, may be democrats, may be independents, but their whole argument in this campaign has been a change argument and that's designed to cut across party lines. >> so ben you've been in campaigns. tell us a little bit about what goes on behind closed doors. houf do you see this going? what's going to come out of it? >> well, what the campaigns now have to do is concentrate in the next 30 days on getting those voters who may be trump-pence supporters but don't usually vote out to the polls. so i think a lot of the conversations are, number one, how we can post up against the clinton campaign. but number 2, they need to be talking about the mechanics. in other words, how you have a ground game operation which has

been very underfunded, very underdeveloped. you mentioned party unity before. all of that worked on turning out the republican vote has been left up to the republican national committee. usually, it's a campaign's responsibilities but not this year and so that's a huge burden on the rnc. and again, a lot of the conversations will be about what resources do you have? where are you going to put them? what's the messaging we're using to get voters out in the last 30 days? >> ben, when you think about what's happening, even in the past 24 hours, are you surprise under what i'm surprised by is going into the weekend, given the tapes, it almost seemed that disqualifying event, so many republicans came out against him, but we had business people and jack welch who had come in this program to talk enthusiastically about donald trump saying we needed a juvenile nominee. and to a large degree, i don't know who you thought won the good bait last night, but we're no longer talking about that

anymore. it's actually moved onto the issues again. >> yeah, it really has. and it's been -- this has been a campaign where you sort of do a head snap about every 48 to 72 hours. and that will continue. i'm sure that with the clinton campaign will be doing today is to try and get the conversation back on the tape, back on donald trump and the case hillary clinton tried to prosecute, not all together effectively last night. and the trump campaign will be trying to hammer the chains. of course, there's another debate on october 19th, and that will be when these sort of colliding messages in fact do collide right, live and in person. >> okay. we appreciate your time and perspective this morning. thank you. >> thanks. good to be with you. >> thanks. >> coming up, saudi arabia's energy minister says $60 oil, not unthinkable this year. we'll have a live report

currently taking place in istanbul, up next. you're watching "squawk box" on cnbc. cnbc.

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welcome back to "squawk box" this morning. an update now on the after math of hurricane matthew. no longer a hurricane and no longer battering the southeastern u.s., but the devastation is overwhelming. at least 19 people in the u.s. dead as a result of that storm. more than 2 billion businesses and homes still without power. core logistics estimates the dmk cost of the hurricane will be at least in the $4 billion to $6 billion range. >> well, prices take a quick look this morning with the buff 50 as steve joins us live from the world energy congress in istanbul. and pretty solidly at 50 at this point. i don't know that we're headed back to 40. 60 would not be a surprise at some point this year. >> yeah. exactly. and i'm hearing a lot of that from ministers and some of the big ceos, as well. they think there's a much firmer environment for the price out

there, as well. we've been listening today to actually one of the biggest men in the world and falir who is basically the most powerful man, a saudi oil minister, and he's been talking about how he really thinks there could well be an opec deal. they've talked about it in algiers, haven't put meat on the bones yet. let's hear what he had to say about the possibility for a deal and what he does and doesn't want it to do to world markets. >> i think opec needs to make sure we don't crimp too tightly and create is shock to the market. like i said, we want to be very responsible. the prices have dropped too low, that has impacted investment, many companies and countries are hurting. that needs to be relieved. at the same time, we don't want to get -- give the market the opposite signal and shock markets into prices that could

be harmful. >> that's the whole point. not shocking markets. because last time, we saw opec cutting aggressively. of course, they were doing it to defend the price. we made it go from $147 down to $41 and everyone was very worried from the oil community about how low it could go. and their action meant the price went up again for three years between 2011 and 2014, we saw some stability, as well. they believe in saudi that they can get some form of deal in vienna for the open meeting and possibly bringing nonopec, as well. and on the issue, the key player is russia. and the russians are here in some style. there's a meeting going on literally 100 yards to my left with serious players, including the president of turkey and russia and of course everyone will remember the shooting down of a russian jet, possibly over turkish air space, last november, created a real

superpower tension between turkey and between russia, as well. now, the reprofession has been on since june. now these two are talking. whether you can get the russians on board for an opec deal remains to be seen. but big stories here in istanbul. back to you. >> we'll see what the result of that meeting is and we'll look to you for that. now for a look at what's working in the markets, joining us now, ceo hurdle calahan and company manages over $23 billion in assets. and john, you heard steve mention the late november opec meeting. of course, wti and brent, both up to date. but are we an oil-driven market for the next few weeks? >> what we're really looking at is reacting to prices. if the oil prices moves and moves prices, we're looking for dislocation. where's the opportunity? i was struck by mohamed's comments earlier about being more tactical in the marketplace today. the dominant factor we're still

living with is the low return market, low return environment we're in, created by swrurk. we're really serious investors, really looking for where can we find the returns that meet our clients- needs? we're chief vestment officers managing about $24 billion for 400 clients in 46 states and really looking for where do you find those opportunities today? and so if oil, we actually liked oil last year, and we still own it. not oil, but the actual energy companies. and that's done very well. and so we'll continue to hold those positions. but we're always looking for twlaez opportunity? >> so john, what do you tell your clients if they come in and say, i hear that debater? the market's going to give me, it's going to be lower. but i also they're alpha, what you can create for me on top of the smarkts being challenged by all these distortions in the market. >> right. so i think first of all as you know, mohamed, in a short-term, the price movements are almost

random. we're really looking for the prices reliably converging on the cash flows. so first of all from a beta standpoint, we know nothing's cheap. bonds are almost priced to ineffectiveness. and u.s. equity market is not cheap. we're trading it 21 times our notion of earning. so that's high. so where do we want to look? first of all, we like stocks over bonds. and secondly, we like international over the united states. so we'll tilt to that. because if the united states is priced to give us a 4 and a half% real over the next 10 years, merging markets are priced to give us a 9 and wooechk europe is priced to give us 6.5, 7. so we're looking on the margin to own stocks as much as i can, to own more international than u.s. and to earn enough cash to be tactical. we still like private equity and selective hedge funds. so in a lot of ways, it's a small ball, how do you grind out these returns, find them, position your beta right, keep plenty of cash and look for

inefficiencies in the marketplace? >> what sort of down protection do you have? 9% real sounds great in theory, but you don't know that it will happen until you get it. >> we're really more interested in the opportunity for loss than volatility. what kind of risk are we focused on? two kinds of riskz. achieving our clients goals, which is to achieve 5% real returns at least over time and not losing money. so we want to manage down side risks while we're seeking the returns that meet their needs. so when we look at a 9% real earnings yield in emerging markets, first of all, those markets can be bifurcated. we don't want to own alibaba. we want to own the more stable, quality yield companies. >> can i ask you an unpopular question? there's so much focus these days on the bita issue, which is basically everyone's trying to avoid losing money. and they don't want to see -- they're -- they don't want alpha, but they don't really want alpha. and it's sort of hard to get alpha if you're really playing

for beta all the time. >> well, you want to do both. so alpha is valuable. >> yes, but you know what i mean. this has become a problem, by the way, for pension funds and everybody. because nobody is willing to actually deal with any kind of real risk. >> well, that's true. in other words, the pension funds, that's a whole different story. they're in a game that's often times different from the rest of us as investors. but i would say alpha is valuable, scarce, and fleeting. if you can find it, you want it. but you also have to position most of your money correctly relative to beta. so where are the beta opportunities today? and then this tactical notion, so as a chief investment officer, you're really allocating capital, you want to allocate among beta opportunities, active managers and in and out of the market based on tactical moves. and that's how you try to achieve those returns you need. >> you've got a whole asset clasyou can't even touch. >> bonds, absolutely. >> how do you spread your risk

and say things, got paw be a lot of stocks and a lot of cash? you know, i don't -- >> cash, if i have 80% stocks instead of 60 -- >> it would be nice to have a normal 60, 55 stocks, 35 bonds, 15, you know -- >> but that's not the hand that's been dealt to us. that's not the market. right. we have to react to the market we have. >> i'm glad i'm on tv, anyway, you know, and not you. >> john, thank you. >> my pleasure. coming up, the winners of the nobel prize announced this morning. we'll tell you who they are, right after the break. right after the break.

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coming up, a former white house chief of staff bill daley. we'll get his reaction to last night's debate showdown when we return.

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and spend more money in the neighborhood. my guests are able to extend their stay and spend more money on activities and restaurants. - the extra income that i get from airbnb has been a huge impact in my life. welcome back to "squawk box." here's what's making headlines this morning. fed vice chairman tim fischer says it was a close call. the deciding factors a labor market recovering more closely than expected, as well as inflations still short of the fed's 2% target. gasoline prices up 4% according to the latest lumburg survey. that puts the average price at $2.29 per gallon.

gas prices are up $0.13 over the past two-weeks. and mylan will pay $465 million in settle charges involving the epipen. they had been accused of misclassifying epipen as a generic product which would allow it to pay a smaller rebate the medicare programs. the company did not admit or deny wrong doing, but you can see how the market's interpreting having that checked off the list for the company. the stock is up about 13%. twitter shares, though, are sliding to their lowest level since august 3rd. this comes on increasing speculation that no suitors will ultimately step forward to buy the company. shares are risen as high as 2432 last week on talk that a number of companies were potentially interested in a purchase of twitter over the last month, stock is down 4%. joe? >> okay. it is that time of year. nobel prize announcements, oliver hart and ben hole strm, a

professor won at harvard, holstrom at mit. anyway, they've won the nobel memorial prize in economic sciences for their contributions to contract theory. the royal swedish academy of science says their theories are valuable to the understanding of real life values and constitutions as well as potential falls in contract design, which if you've ever not had a contract that covered everything, you'd know exactly what we're talking about. join us on the squawk newsline is professor holstrom. is it strown up there or mit in general? >> are you talking to me? >> yes, sir. >> i didn't hear what you asked. >> are you at the sloan school or at just regular mit as far as a professor? >> i'm at mainly at mit

economics but i'm also at the sloan school. >> excellent. we're happy this is not a nobel prize in chemistry or physics, but we're still worried we're maybe not as ready to understand what you'll tell us as we might be. but in laypen's terms, can you tell us about your work? >> well, economics is all about the incentive. so this is about the incentive contract. it's about trying to motivate people to do things that are beneficial for the parties and the contract. so it's about designing contracts but in the narrow i think a maximum of the theory. but as we have started to understand things better and that's part of my look, my orders, among others, it's to understand that it's very much

bigger question than these incentives. it's not about how much -- how one designs jobs, stops those organizations. and so it's about the whole system that influences our behavior. >> professor, real quick, just on the incentives, though, and it's something i think we're all fascinated by. there seems to be a big -- has been a big push over the past decade or two. we want our professors to have stock, and then there's been almost a backlack in the last couple years, we've seen certain executives, perhaps two things we wouldn't want them to do and we've suggested they almost had too much skin in the game, their incentives weren't aligned properly. how do you think about that? >> i think that mistakes have been made in the design of the incentives. that's clear. and so i will say that the biggest mistake was that they could cash out so quickly.

if you are interpret no, you can't cash out quickly, you have your own skin in the game, and the biggest design flaw in the compensation in my view that they'd enforce these executives to hold onto their incentives for longer. but that is changing right now. >> professor, congratulations on your prize. you and professor oliver hart have given important insights on the importance of incomplete contract and how you have to support bottom up incentives with top designs. so when you look out there, is there a sector, is there an issue in particular that you think that your insights have not been applied to enough? >> well, i'm more of -- i'm trying to understand the book and so that's the first page. you know, it's like many things. you'll be diagnosed with

understanding why people are behaving the way they are before you try to change the behavior. and so that's been where my emphasis has been. but as i just said, one of the things we've blown is about the fact that incentives of the executives and be able to cash out. some of it has to do with, especially oliver hart's work, has to do with just understanding what contracts are and understanding that what the contract is in. so it has been -- these are deep theoretical insights that are not so easily, perhaps, explained to laymen. but let me say just a% above and economics is that some of the most obvious sounding questions

to laymen, such as why do we have money or why is that so important. you know, these are the deep questions that actually lead to progress and understanding these issues and i think oliver and i have contributed to that. >> great. professor, once again, congratulations. congratulations to professor hart, as well, and thanks for joining us today to explain things. >> thank you. >> you're welcome. >> bye bye. >> now to politics. we're talking beyond to presidential race, though, this morning. jabbers joins us with a look at house legends and the overall balance of power. good morning to you. >> yeah, good morning. those gross comments released by donald trump are released from donald trump over a decade ago are causing ripple effects all the way through the senate and house campaigns, all across the country here. take a look at kelly ayat in new hampshire. she's running for senate, an incumbent. she's in a very tough election. earlier, she had backed donald

trump and said she would support him. now, over the weekend in the wake of the release of this tape, she has changed her mind. here's what she had to say about it. >> i cannot vote for donald trump based on what he has said and done and the actions he talked about in those tapes and i want my daughter to know that. that is more important to me than winning any election. >> now, take a look at the margin of control in the united states senate and you see the democrats need a pick-up of at least four seats overall to gain control, five if donald trump wins. ultimately, those seats may be out there for democrats. the betting has been that it would be tough for democrats to pick up the senate but not impossible. in the house, however, it's a different picture for democrats, a much bigger challenge. they need 30 seats netd pick up and because of the jurisdictions of all the different house seats, the jury manering that has gone on over the years, that

is a tough climb for democrats. nonetheless, there are some republicans who do feel that it is at least theoretically possible now with the crumbling of the trump campaign that we could be seeing a moment where democrats have actually a legitimate shot at the house of representatives this year. that would be a big change in political fortunes from just earlier this year. we've got paul ryan on the halt seat now. over the weekend, he disinvited donald trump to his event in wisconsin. he has not unendorsed donald trump, though, and all eyes will turn to him today as house republicans hold a conference call at 11:00 a.m. to discuss strategy going forward, what they're going to do about their donald trump problem and of course the rnc itself having a conference call at 5:00 p.m., as well. so a lot of moving parts today, guys. >> all right, thank you. last night, donald trump attacked hillary clinton over her middle class tax plan.

>> okay. >> gremlins. i think that was not the middle class tax plan. that was the clinton floor or whatever they're called. anyway, joining us now, former secretary bill daley. funny things happen on live television. he also started as chief of staff to president obama. secretary daily, welcome. it's good to see you, i think. >> i see you. >> thirty-four. >> there he is. >> all right. excellent. >> i thought i was going on to be announced as nobel prize winner. >> did you -- yeah, that's -- maybe nobel peace prize for you. >> maybe. >> for keeping peace when you were there, you probably were in the running when you were chief of staff, right? >> no, it was a great time. >> okay. and let me see how i can just ask my -- what's a good generic question? help us understand what happened

last night. >> well, if you remember the old gong show, i think it's probably the aanalogy would be closest to that show. >> it's coming back. >> well, it came back last night, i think. my guess is after an unprecedented weekend, my sense is he probably stabilized the slide, whether he's able to hold that, many of your previous guests have said or reporters have said, they thought he played to his base. that's a big piece of the republican party. so it's not as though republicans can totally walk away with that. not only did you see the politicians panic over the weekend, post that video, put you also saw a lot of people who were strong supporters of trump, like jack welsh, walk away. which to me, i mean, as you know, joe, jack is not exactly a fan of hillary clinton. never has been. didn't advocate to vote for her, obviously. but the fact that he walked away as a preeminent former business

person who was there out front, he had been with other candidates, i think ted cruz originally, that to me says a lot more than a lot of politicians who may be in the middle of a race and they're panicked because they're trying to win and they see the middle voter slipping away from them. but when you see people like jack welsh and maybe other people walking away from this candidacy, that's a serious walk. very serious. >> so in your own career, you've walked a fine line. you know you've been a bankster and you've been in the -- you know, and i'm saying that, you know how i'm saying it, tongue and cheek. and you've also been, you know, in the obama administration. so you've had to walk that line. you're a private sector guy that appreciates the private sector. now we're seeing this sort of i think it's humorous take on hillary clinton's private and public comments on wall street or on the private sector. and the bernie sanders types in

the left, they're mad. because they say, look, she's saying things that are like pro private sector. and then more reasonable people are saying center left or center right, maybe this is the real hillary clinton that's closer to the way bill clinton governed from the center. but it's just funny because it's a test for those far on the left in your party, they look at it as a negative that she's actually, you know, amenable to working with wall street. and then you see what i'm saying, right? where are you on this? >> well, look, there's no doubt that the far left and the far right have been driving this sort of bus of inaction and congress and in our political system. >> wait a minute. that's your opinion. i would not agree with that, obviously, at all. >> sure you wouldn't. >> well, those two mid term elections, their route was for a reason, bill. >> but joe, you have to also. >> go ahead. >> but you have to also admit that in both of those mid term

elections, you had very small turnout. presidential elections bring out the nation and they focus on election and that's when the mood of the country and where the country really feels is shown, not in midterm that are very small. >> when you start your first term by hijacking 17% of the economy through hook or crook into obamacare and then you have people not working with you later, some people might say that's just carm aeroor payback, though to. >> i think it's been pretty obvious for the last eight years that the republican party debate within that party, which is now coming to a head, and you saw it with boehner, canter being thrown out, the far right pushing, even saw it going back to newt gingrich. >> basically -- >> even when this election is said and done and whomever wins, there's going to be half the country that i've never seen anything like this, that think that one half thinks one candidate is, you know, just

horrific, the other half thinks the other candidate's horrific. >> i know. it's unprecedented and bad for democracy. >> it's going to be unbelievable. >> you've got to help to change that, joe, by being a little more reaching out to the other side. >> i do what i can, but i can do so much, bill. thank you. appreciate it. >> i know. thank you. coming up on "squawk box," we've heard from a hillary clinton supporter. up next, we'll talk to cnbc contributer and trump advisor, larry could low. that's up next. that's up next.

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when we come back, trump supporter larry kudlow makes his candidate's case. first, take a look at futures. dow will open up triple digits. we'll be right back.

welcome back to "squawk box" this morning.

joining us right now is cnbc senior contributor larry kudlow. larry, i want you to just take us through the emotional roller coaster you've been on over the past 48 or 72 hours. because i know you are a trump supporter, but it sounded like there were moments where you were having flashes of questioning that. >> there were moments. there were moments. i cannot deny that. the vile tape, as i call it, is inexcusable. but even worse it connects to some of the dots we've heard from him this past year, or this past campaign season. i don't like that one bit. i don't know, i've been in a lot of locker rooms, so have you guys. i don't talk that way. never have. never will. i was almost in the camp, i didn't declare and i'm not going to declare this morning lord knows, but for me i won't vote for mrs. clinton. i expect to vote for mr. trump, but i thought for a moment there i'd just have to write in mike

pence. that that was the way out for me. just to give me a wrap. >> yeah. >> she was creaming him about this whole, you know, she was really nailing him about what he said. deservedly so. and she connected those dots to what's happened in the campaign regarding women and other groups. okay. he took a big risk. and i'm going to give him credit for this. took a big risk and brought up the bill clinton infidelities and so forth. and i think basically the way he said it was pretty decent, if you will. he sort of threaded the needle, if that's the right manafor. i think this is still the most painful thing the clintons have ever gone through. i'm not an expert on the clintons, but that's what i think. and then he had a very good comeback because he got into some issues and i thought he did rather well on the issues. >> no question. >> he can always do better, but he's coming along. got the economics thing out decently.

i still want him to sell it better. he got the energy thing out, the health care thing out, that was pretty good. and he had her on the ropes. and her business with, you know, private this but public that is really a killer. so at the end of the day, andrew, i'm going to give him a small victory on points. i think what really happened last night his campaign -- like a stock looking for a bottom, i think the campaign found the bottom. he will have some tomorrows, but he's still got a very difficult uphill climb. >> this campaign though has been able to have a lot of these issues traditionally short lived. they were impressed with his performance last night. they were comparing him to the september debate performance saying he was polished, he didn't stoop to extremely low levels. he had some humor about him. >> he did have some humor. that's really important by the way. the way he handled the lincoln thing was very good.

very clever. i think it embarrassed her. i think that he was much better than the first debate. period. on every account. particularly on the issues where he was so shaky in the first debate. i'm not a poll driven guy right now. i think that stuff comes not for another couple weeks. but, but, but, he has to deal with couple things. his own party. he did get mike pence back on the ticket, there was a period on friday where he was off the ticket. regarding mitch mcconnell we will see. he lost a lot of republican support. he's not goipg to get that back. people like kelly ayotte and john mccain, how important are they to the national campaign? i don't know. he bottomed. he lives for another day. the whole thing could have fallen apart. >> do you fear what hugh hewitt

fears, that more research could be coming? >> i do. he was a smart guy, he's a friend of mine. you hear that everywhere. look, let me make my case. i'm not political guy, but on the economy he pretty much got it out, at least the case that we've helped him with, okay. she's raising taxes, that's a recession scenario. he's cutting taxes, particularly business taxes, that's a prosperity scenario. that's america competitive, that's a wage scenario. he's just, to me, has to hammer that home more. not once but several times during the debate, the stakes are very high. i myself am very concerned about our business tax on competitiveness and so forth and so on. he needs to do a little selling. you know, selling. ronald reagan could sell a case. i mean how -- he's going to cut tax rates for businesses, small businesses, individuals, so what does that do?

a, it puts more money in your pocket. what reagan used to say take home pay, just more money in your pocket. b, you'll have more after tax that gives you incentives. incentives to invest, maybe start a new family business, incentives to bring the money overseas back home. we haven't had any investment in this country basically in 15 years. we haven't had any wage hikes basically in 15 years. supply side economics is growth economics. and it also just helps the family. more money in your pocket. that's more demand side. incentives later, that's supply side. i just wish he'd make that case. >> right. >> he has a prosperity plan. she has a recession plan. that's the way i see the election. i'd like him to really start framing it that way. he's got one more debate. we will see. >> larry kudlow, thank you, sir. >> i won't give him a pass on the stuff. >> a final prediction from mohamed el earn. and ralph de la vega joins

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guest this morning mohamed el-erian, what's your prediction? you have a prediction? did we warn you about this? >> so, joe, what's the big message from today's show? you said it, we've never seen so

much political division, we've never seen negative interest ralts, never seen central banks so involved in the market, we've never seen so many things. this is what i call unusual uncertainty. we're going to get to a tipping point and i think that's the main takeaway. it's also happening in europe, not just here. run things at slow growth things start to break. >> all right. >> kayla, thank you. >> i'll be here tomorrow. >> make sure you join us tomorrow. "squawk on the street" begins right now. it's just awfully good that someone with the temperament of donald trump is not in charge of the law in our country. >> because you'd be in jail. >> secretary clinton -- >> a scene from last night's debate.