now approaching super bowl levels. the ceo of stubhub will tell us how much it will cost to get in. it's monday, october 24th, already, 2016. "squawk box" begins right now. >> live from new york where business never sleeps, this is "squawk box." good morning, welcome to "squawk box" on cnbc. i'm andrew ross sorkin along with joe kernan. the nasdaq is up about 29 points and the s&p is looking to open 10 points higher. so many deals as people tap dance to work this morning. in asia, here's what is going on. green arrows across the board as well. and then we'll show you what is going on in europe.

there you have it again, green arrows pretty much everywhere. >> the whole world is happy. >> except for short sellers. and we're watching crude prices this morning. yesterday iraq's oil minister said the country should be exempt from joining opec's production cut embroiled in a war with islamic militants. opec is planning to reduce production targets at the november meeting. wti is lower by 5 cents but still at $50.80. and scottrade is being acquired for $4 billion from ameritrade. >> some competitor of scottrade

said, why deal with us? we have a helicopter. no one really understood what was the -- >> because it's successful. >> it trades more quickly to where they need to go by helicopter. >> it happens over the internet. >> so it's confidence? >> a little bit of confidence. >> interest rates are zero. i'm confident, i'll borrow money, too. >> a little confidence. people think the economy is a little better than we think. >> i don't think that's it. >> we'll talk to the ceos at 7:00. >> for the media mega merger monday. >> i would argue that all the deals -- >> i don't know if i want to hear your argument today. i'm sorry. i didn't prepare for this today because i was told it was not going to happen. how many of them? all of them? >> m&a is very hard to cover. >> at that time of 6:00 in the morning when i was skeptical of this transaction to happen -- >> someone told you that. or do you want to take the credit for being wrong?

i would hang it on a source. >> no, i'm taking credit. >> you don't want to hang it on a source? >> no, i don't. i want to talk about at&t buying time warner for $107.50 per share. about $85.4 billion, half in cash, half in stock. it is the biggest deal in the world this year. if approved, the tie-up would give at&t control of hbo, cnn, tbs, tnt, warner bros and other media assets. at&t bought directv last year for $48.5 billion. this new deal widely expected to receive intense scrutiny by anti-trust regulators. here to weigh in on that, ed lee, managing editor of recode joining us from washington, d.c. this morning. and every article on the front page of every newspaper this morning, at&t facing a political banra

banrage. what do you peg the chances at? >> i give it 60% chance of passing. i think there's good arguments for why it should pass, which is it doesn't hurt competition or take away consumer choice. at the same time, by that same argument, the deal itself doesn't make sense to me from a business economic perspective, which is a distributor owning content. that does not help either side or boost the value. >> has it done anything for comcast, nbc? >> comcast runs the cable business well. and nbc runs the content business well. but one doesn't necessarily boost the area. that's what i think. >> a slow growth company like at&t, what do you do when everybody already has -- >> so you want to change your service, fine. but by owning time warner, it's not going to help you because hbo, cnn, turner networks, all that stuff has to be as widely distributed as possible, meaning you can't cut out other distributors. >> wouldn't you say, for example, if you get an at&t wireless phone, you get hbo go

at a cheap rate. >> you can't do that. >> you have to offer the same rate to other distributors then. >> you want to weigh in here? >> i'm more skeptical about the odds that this is easily approved. i think that they have to get fcc approval, and that is a very loose standard that can be very politicized and very difficult to get the deal through. they are trying to avoid the fcc. if they go through the department of justice, it is anti-trust. this deal legally could pass muster, but i think the doj under a new administration could face some political pressure. i mean, i think it is really telling they are announcing the deal 17 days before the most populist presidential election in history. i think that puts this front and center on the politicians radar screens in the middle of this presidential debate. >> but the whole thing, cooler heads prevail after this insane election. both sides are saying things they don't believe about the tpp, free trade, nobody believes

any of this, barton. once we get somebody in there that knows how the world works, they are going to look at this, read the journal's op-ed piece. this takes care of the problems the fcc was worried about it. it opens up the future to the broadless, wireless ban. i'm worried you are going to need autonomous driving. >> it is clear if they would have waited until after the election, they would face less scrutiny. >> i don't think they had time. it was not in line with the presidential campaign. we'll talk to randall and jeff about this in the 7:00 hour. but we also thought that was the issue. >> they wanted it after the election. but i agree, if the fcc gets ahold of it, it's harder with politics involved. 40% chance it doesn't pass. if that's the case, look for

other networks to jump in and say, maybe we should buy it. >> i talked to randall yesterday on the telephone and jeff, they will be here today, but the most interesting thing to come out of the conversation, which i hope we talk about today a lot, is the idea of 5g. and the next generation development for at&t and the idea that ultimately they'll be able to offer a national footprint into your home, no cables, this is where we are completely wireless. and to the extent that you believe we live in a monopoly in most markets for cable, that this creates all sorts of new competition. but also creates new pressures on cable companies. >> to up their game, change their pricing. >> potentially having to -- but the question is, do they end up having to go off and buy -- does comcast have to buy t-mobile next, for example? and do regulators let any of this happen given they didn't want a cable provider to have a

national footprint before? >> all great questions. the 5g thing is exactly the right attack. my question is, you don't need to buy time warmer to do that, did you? that's a technology upgrade. >> randall makes the argument, agree or disagree with it, that it creates incentive to build out the network because you know have internet faster than otherwise. but customers could say, we demand it, so it doesn't matter. >> verizon says, i'm going to sell hbo and cnn and turner network, you can't deny me the same access to the content. i'll pay you a good rate. >> what did directv do? did that give at&t the foothold into being the biggest paid tv outlet? so it gives them scale, but does directv make sense on a 5g wireless universe? >> well, if you can get all your internet, whether your video stuff or just the stuff you're doing through a wireless connection, it's just as fast

and reliable as a wire. >> that was a pretty expensive acquisition. does it add to the whole product offering for at&t to have directv there, too? >> i think it's a head scratcher which they buy time warner. you already talk about the competition with the cable companies nationally, at&t was taking it mobile. so i think this really begs the question whether they get the fundamental benefits. time warner has had a bat history of pipes and content. >> sure, they can't change the pricing on hbo, tnt or cnn, but they have a great creative engine in time warner. if unleashing them to make new channels like directv now and other things exclusive fundamentally to this service that won't be grandfathered a

legacy of products, it would have to be given to everybody five to ten years from now. could you create the next amazon prime under the banner of the at&t? >> if the regulators like that. you just raised a key point, grandfather, what will they do? the political environment is difficult to come out with meaningful content just on this network and not available to verizon and comcast. so it makes the whole foundation of the deal -- >> verizon has go 90 and nobody is telling verizon to -- >> this is a difficult merger. i understand where they are going. if the regulators pass the exclusive content on the networks, sure, it could be great for them. but i'm not sure that is going to happen. >> reporter: what about the fcc, the doj versus the fcc, it would

be easier through the doj, i find it hard that the fcc won't want something to do with this. i think they will say, shoot, they outsmarted us. darn it, we have spent all this time on broadband and net neutrality. look at these guys coming over us. they're going to want a piece of that, aren't they? they want to be able to deck at a time. >> the problem is time warner doesn't have meaningful fcc licenses. they have legacy tv station in atlanta and georgia. but they will not allow the fcc to get it reviewed. >> this is like time warmer cable 2009, why does this make sense now? i understand from a shareholder perspective, 107 shares is better than what it is trading

now. of course it is a good deal for him. >> it is another thing to distribute -- >> is it different factors? from a content licensing perspective, it doesn't change your calculus at time warner. >> we'll ask the questions or answer the questions here. ultimately it had to get bigger. and that is a more successful way to create value than they could have done just sumply on their own. i think. i think that is what he'll tell y you. >> time warner cable wouldn't be anywhere close to the scale of which this is. but that's randall's deal, not his. not everybody is just worried about whether they will be the guy running it.

i think given 64 to 65 -- >> i think he's been planning for years now. >> he beat the nation and we should have traded the nation. before we go, do you think there's going to be more consolidation -- meaning if you have more wireless players, are they all going to want to try to get to a wireless struck cur? >> they absolutely have to. is there enough spectrum? how many competitors will you ultimately have -- if at&t is right, this is the way the world is going, which it's only -- >> netflix sends dvds in the

mail. comcast could be part of what is happening here. and it has scale, too, in business. you know, the demise of running cable into your home -- >> there's a good argument to be made that cable, you will always need cable to create the wireless. that's a separate issue. barton, thank you. ed, thank you. >> appreciate it. and a programming note that we told you is coming -- it's exciting. the at&t chief randall see stephenson and jeff bewkes the time warmer ceo is here and will join us at 7:00 a.m. >> alphabetic by last name, right?

>> interesting. other news because people are happy and interest rates are at zero. rockwell collins is buying be aerospace at $62 a share in cash and stock or $6.4 billion. that's roughly 23% premium to be aerospace's closing price on friday. you know, at&t is getting a lot of debt at this point. >> yep. >> a good time for interest rates to stay at zero and will for a while. you don't want to go below triple yield plus, right? >> where are you going with this? >> that's something to think about, too. >> you have to worry about whether or not interest rates -- >> oh, you need the cash flow. >> there are a number of balance reports out about the issue with the debt and therefore the security of the stock itself. >> and i like the cash flow,

obviously. >> if people are willing to pay high yielding as of late, your interest rates may not go up that much, even if you are -- merger monday, genworth is being bought by chinese oceanwide for $2.7 billion. it's only a 4% premium. chinese outbound m&a hit a record $181 billion this year. the company is looking to acquire overseas assets as their domestic account sells those. when we return, we'll show you the busiest morning for earnings season. we'll talk strategy after the break. back in a moment with more "squawk."

coming up, barry sternlicht is. >> i think he's a product of this president obama. i thought we would go into a recession and we didn't. i'm actually surprised. and investing in real estate. >> we have 84,000 apartments today. growth is up 6%. where do you see growth like that? >> that's coming up at 7:00 a.m. right here on "squawk box." what powers the digital world? communication.

like centurylink's broadband network that gives 35,000 fans a cutting edge game experience. or the network that keeps a leading hotel chain's guests connected at work, and at play. or the it platform that powers millions of ecards every day for one of the largest greeting card companies. businesses count on communication, and communication counts on centurylink.

welcome back to "squawk box." tomorrow look for case-shiller and consumer confidence, thursday durable goods and pending hopend ing home sales. and it is the heaviest week of earnings. among the big names to watch, 3m, caterpillar, dupont, general motors, apple, boeing, coca-cola, comcast, tesla, ford, ups, alpha bebet, amazon, chevr.

we may not have to use the e-word. >> election? >> the other e-word. >> there's economy, earnings. >> we only have 14 days. >> then one of them becomes president. >> i've taken the new view. i have. it's a bit of a relief for maybe private sector and business people. just a bit of a relief. it is a bit of a relief. >> what is? >> that the eight years is coming to a close. >> what are you talking about? >> i don't care -- what do you mean? i can see how that doesn't register with you at all. the last eight years and the anti-private sector, the constant confrontation between private sector and government. >> and you have two candidates

who are going to go after the private sector, both of them. >> there are personality things that bother -- >> to your point about the left, even -- >> this is my problem with the current occupanoccupant. it's been a long eight years. and at least it's about over. >> some are complaining about elizabeth warren and now she gets more power in this administration. >> i don't understand why you are so excited. >> because hillary clinton deep down is smart -- >> oh, my goodness, save the tape! save the tape! >> she's smart. and she understands, i think, the private sector. she may have had people from the private sector as part -- i also think for her legacy, she wants to make sure it's the best economy if she becomes president. she wants to make sure it's the best -- the reason all your friends are giving money -- >> this is -- >> listen to me. >> throwing in the towel.

>> i can't deal with this. >> bravo. >> politicians, in general, none of them are going to win the award for, you know, honesty. i mean, they all are doing things -- >> this doesn't mean you're going to vote for her. >> that's why there's a curtain on dressing rooms and in voting booths. nothing has happened. this is going to come to an end. it can't happen soon enough for some people. for more on the markets, joining us now is geena martin adams from wells fargo securities. and steven whiting, the global chief strategist at citigroup private bank. good morning. >> good morning. >> let's go back to talking about things that are easier to handle. >> the other two e's.

>> well, it will be above last year. fourth quarter will be above last year. and next year, and the way we look it will be above 6% for next year. >> this is the streak end for down quarter. >> it is just barely above. if you take the report so far and odden everybody yet to report to meet expectations, you'll get 1% growth on the year over year basis. >> but we don't meet, we beat. so you're going to get closer to 2% growth yearover year. interestingly, that was the expectation three months ago. 2% growth year over year. that is probably what we're going to get. now we're beating the expectations. so we're about where we are expecting to be in july. so it's not a huge gain, but we totally agree also we'll see earnings growth next year. relative to the last year. >> over the last year, we had a

6% drag from last year. we would have been six percentage points higher except for one sector. and now we are above water and the rest of the economy is not growing great, but compare that to where interest rates are and it is an income premium to where we are rate market. so like it better than bonds. >> you have thought about friday what the gdp is going to be initially and what it will be at the end. >> the story and the initial take on this -- it will be about 2, but heavier on inventory and weaker on final demand quarter to quarter. we'll see if the revisions to the underlying data change that story. but this time around it's a little stronger on the headline, a little weaker on the demand side for that quarter. >> and that allows december -- they really want to do it and should want to do it, but are they still getting a lot of push-back from people who think inflation is still not where it necessarily needs to be. and why would you raise rates

with a 2% or below gdp? >> my take on this out of the fed is that they are a little closer to agreement than i think it shows. the hawks don't want to do a lot and the doves want to wait a little longer. if you put this all together, next year's expectation for two quarter point rate hikes is finally in the rem of reason for everyone. so i think this particular meeting where they didn't even cite the weakness in the august data, you know, just the absence of discussion of that, i think, is meaningful. and we can't quite tell if it is november or december. markets are off course counting on december giving the precedent of having an election. i wouldn't entirely rule out that they could have a november 2nd tightening step. >> what do you think of the m&a activity this morning? historically people say it's a great time for the markets, they are doing deals, but also historically you see a big, big deal and it marks the peak of

something. >> well, we have had a lot of big, big deals the last few years. and the market has been struggling to make new highs. i think companies are finding it difficult to find those investment opportunities beyond m&a with the perilously slow 2% growth rate across the world. the only growth they can find is through acquisition. and that is playing out in stock price performance as well. i don't know that it necessarily, especially a small segment of telecom, does it mark the top? not necessarily. m&a took a down trend and now we are back on the up swing. so it's been back and forth. i don't think m&a suggests it's a huge top. this is a consequence of extremely slow rates and slow growth. >> cheaper to buy and build. >> absolutely. >> in the past people have suggested it means the market could go higher because there's more buying to be done. >> usually m&a and stocks move higher together. quite frankly, one of the powerful drivers of stock is the takeout of stocks.

and this is just another form of that as there's just fewer shares around to buy. >> charles biederman said that. i'm not kidding here, i had a dream. i actually -- >> what happened in this dream? >> i had the dream. and it was not, like, a nightmare where i was terrified and it involved secretary clinton. and you know -- we talked about freud this week, people are not sure what dreams do, but they do sort of help you deal with -- if you work things out, the anxieties and stuff, and it was a marginally positive -- i'm not saying the election is necessarily over yet, either. but -- >> wow. >> i told my kids about it and everything. >> did this dream happen over the weekend? >> friday night. >> earlier in the night or later --

>> why does it mat her? >> because your dreams are most vivid closer to the morning. >> you don't remember the ones you had, like, at the beginning, you only remember the ones -- i didn't wake up screaming in a cold sweat, this is what had been happening. and it's been happening for eight years, actually. >> progress. progress. we're going to give you an update on joe's dreams in a little bit. in the meantime, u.s. gasoline prices dropping for the first time in 11 weeks. i don't know if you had dreams about that, but industry analysts said a gallon of regular now averages $2.25, that's down 4 cents over the past two weeks. this weekend at the box office, tyler perry's "boo!" opened at $26 million. that tops tom cruise's movie.

>> it was a madea. >> i was hoping if i just read through it nobody would notice. that's what you and andrew do. madea's success -- >> you go to opera every night? >> not while filling in for becky. madea's success has disappointing releases like "deep water horizon" and "blair witch." and td ameritrade is buying scottrade for $4 billion. i was -- glad i didn't stay up for this, i looked for it this morning and i thought, why can't

they do it the way they do in college, start at the 25 and -- there's no ties in college anymore, but the arizona card analysis and the seattle seahawks were tied at the end of regulation. both teams had a chance to win. you see the field goal there. short field goals in overtime. the cardinals' kicker hit the goalpost why the seahawker kicker hit it left. the game end in a 6-6 tie. the first time in seahawks franchise history. but i guess it's okay to have ties sort of because it's the end of the season, there are very specific ways to figure out who gets into the playoffs. and they can deal with the tie. but, you know, people leaving the stadium are like, why did i do this? coming up, the cubs advancing to the first world series since 1945. ticket prices -- >> no ties in baseball. no crying in baseball. no ties in baseball. >> i know. you just play until somebody wins. >> no ties or crying in baseball. >> ticket prices are reaching super bowl levels for each night

of the fall classic. we'll talk to the ceo of stubhub about this landmark week in sports coming up next. and as we head to break, a look at s&p 500's winners and losers. ♪ ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?

you recommend synthetic and can yover cedar?to me why "super food"? is that a real thing? it's a great school, but is it the right the one for her? is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. ok. sure. but are you asking enough about how your wealth is managed? wealth management, at charles schwab.

this is the rx...elevated. rx hybrid and rx f sport. get up to $5,000 customer cash on select 2016 models. see your lexus dealer.

welcome back to "squawk box." the chicago cubs clench the

first world series berth saturday night. and one step away to win a championship since 1908. the cubs will play the indians in their own nearly 70-year championship drought. it turns out the world series is one part of a huge week in sports getting underway. joining us is scott cutler, the president of e-bay's stubhub unit that calls it this year's busiest week in sports. good morning to you. >> good morning. >> so before we get into it, how much -- what can i get a ticket for? can i get a ticket on stubhub to the game? >> you can get a ticket to any of these games on stubhub. >> what is it going to cost me? >> well, the get-in price in chicago is about $2,000. and in cleveland, it's about $700 as the lowest price to pay to get into one of the games. >> wow, that is awesome! what about right above the

dugout, first row, right there on the third base side, what is that? >> in wrigley, what is interesting is that this is the busiest week in sports and everybody wants to see the curse broken in chicago. and tickets are ranging between $2,000 to over $20,000 to be able to see this. but this really goes to -- it's so important to be there to experience the event live. and people are paying almost anything to be able to get there. >> are people buying -- because i go on stubhub and i don't know if i'm like most of your customers or sort of an outliar, i try to buy the last possible second hoping i can get a sort of last-minute deal. how do people really use it? >> well, stubhub is a marketplace that really combines and intersects between supply and demand. and for a lot of these major events, it really is -- it really is the lowest price the seller is willing to sell a

ticket for is the price that you'll pay to get in. so it really depends based on the demand for a particular event. and as you look at major league sports, in most instances, the tickets go down closer to the event. but in certain instances where there's limited surprise, sometimes the price goes up all the way to the event time, which is what we saw with the super bowl years ago. >> manuel miranda, the creator of "hamilton" said about stubhub, the larger issue of what he thought of scalping tickets, the idea that the customer can't even get in these days to get it right off of ticketmaster at all because there's all of these engines buying the stuff before humans can even do it. and what that does to the experience. what do you think of that? >> well, we are actually opposed to bots that have the opportunity to get tickets in an

automated fashion before the public. we recognize for a lot of the events people want to attend, the demand is going to be much higher than supply. and stubhub is focused on having the opportunity to go to any event at any time. >> but do you have the technology to be able to stop that? do you have the technology to stop it or no? >> well, at stubhub we're always open at any time. so we always have supply into the marketplace, where once you're sold out you're done. and the box will hit those sites, but at stubhub, we always have tickets able below and above face value. >> thank you, scott. appreciate it. >> thank you, scott. >> there are tradeoffs. more people get to see things with stubhub.

in a pure economic meeting, supply and demand, that is the only way. that's the only way it works into the world. >> i completely agree. the computer is -- >> but before you would hire 20 kids to go stand in line. they are going to do that in some way. >> the little thing to show you value, maybe i bought something on amazon, but i've never done this. it's a great value in the thickest -- it's fun to find the best value. you don't need to sit in the front row, but you have to find the best value and don't have to pay that much stuff. coming up, the biggest political donors you have never heard of. we'll take a closer look at the money raised in the presidential election. and then at the top of the hour, the ceos behind this weekend's big media merger.

at&t randall stevenson and jeff bewkes are coming up at 7:00 a.m. that builds big things and provides benefits to this woman, with new cabinets. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured.

welcome back. recapping the big deal, at&t is buying time warmer for $107.50 a share, about 85.4 billion dollars, half in cash, half in stock. if approved, the tie-up would give the telecom giant at&t control over some of the most well-known brands on the planet, hbo, cnn, tbs, tnt. warmer bros and other film media assets. and at&t bought directv last year for $48.5 billion. the new deal is wide he expected to receive intense scrutiny. and anti-trust regulators will talk about this. as a programming note, the respective chiefs of the two companies involved, randall stephenson from at&t and jeff

bewkes of time warner will be here at 7:00 a.m. this is probably the most contentious race for president in history, but look at the top five givers to each candidate. according to centers for respective politics, tom steyer and sheldon adelson are the top two. and donald sussman is number three with more than $34 million to the democratic cause. a big hunk of that is specifically to priorities usa, the clinton super pac. ironically, part of his idea is to get money out of politics, ideally through the overturn of the supreme court decision citizens united. bob mercer is the co-ceo of

renaissance technologies and has given over $23 million this cycle initially to ted cruz. more recently it went to donald trump. he's regarded as somewhat reclusive but has with his daughter rebecca had a huge hand in the latter stages of the trump campaign. and the sixth biggest donor not pictured on the wall because so photos exist is fred icanner. a gay rights and clinton supporter, his camp doesn't have a website and his phone number is hard to find. and the number five donor is paul singer, the conservative hedge fund manager who occasionally joins us on stage is not on air. >> are these people normally giving? it is just that -- i don't know if i say normal elections, there are bigger names giving a lot more money, except this time around so few big names want to openly support donald trump. >> interesting. so two things, i would say in a

lot of cases, donald sussman is an example and george soris, these are folks who typically do give, they may be more or less profile depending on what it is, but they are giving more quantity this cycle. it is just an unusual election. some say it is part of citizens united and others say it's the rejection of donald trump. that said, bob mercer has given more. some less. it's a variety of things. but i was surprised how many were on the mega donor list. as a hedge fund who's who. and fred icanner, we never talk about him. >> he's the perfect progressive. >> yeah? why is that? >> to end the big money, he's giving $34 billion. >> he's going to spend the big

money. >> but his cause is the right cause. because he knows what the right cause is. ah, glad somebody knows. perfect. love it. 34 million to overturn the big money. right. futures indicate a higher open on wall street as we head into the busiest week for corporate earnings. mark grant is joining us next to talk political markets and political uncertainty. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision.

because no one knows & like at&t. now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job.

what's that supposed to mean? fedex. helping small business simplify e-commerce.

welcome back to "squawk box." the u.s. 10-year posting dropping. the yield is 7.2%. and a managing director of hilltop holdings joins us now, and why do you think we will see the 10-year fall more? >> i think interest rates are pretty much flat here, michelle, but i think now the japanese central bank and european central bank says the market is backed up, and the resistance line is 169 and that's on the

10-year, and i think that will take us back in the 1.40, or if we will stay in the range between 170 and 180 and i think it's a question at this point. >> you don't think interest rates it's the treasury? >> we are going lower in interest rates. >> can i ask you -- if it were anytime of year, we would be talking about it more but with the election cycle, we are not talking about everything. >> i am watching the currency markets very closely right now, and we broke down through 1.9 against the euro, and this is going to put tremendous pressure on the dollar. by the way, on our corporate earnings, and i think this is going to be a big influence in

the next decision by the fed whether to raise interest rates or not, and i think you are 100% correct that we would be paying a lot more attention to this except for the elections right now. >> skp >> if you look back to january, you see the move and everybody freaked out, right? the u.s. markets went crazy, and then obviously the chinese figured it out and it's flat and they let it strengthen for a while and now quietly here we are at this 6-year low. why aren't the u.s. markets so freaked out like they were earlier in the year? >> your point was well taken that we are not paying to anything in america except the elections, and as you know i speak with some of the biggest institutions in the united

states, and i will tell you with certainty those people are paying close attention to the dollar, and not only against the euro, and it's going to have a significant impact on the earnings going forward and another thing people are paying attention to is the bun, and the two-year is 60-some odd basis points negative and that's going to drag interest rates lower. >> mark, you know, it was months ago when you said trump might win and a lot of stuff has happened, obviously, and abc has hillary clinton up 12 points, and i love -- they do the polls in an interesting way -- media, far be it from them to make it seem like it's better than it is or a slam dunk so nobody shows

up, and you have a 14-point difference, and we all saw brexit and what happened with columbia, and you are an outlier, and you are contrairing a lot of time, and what are you feeling right now. should we still vote or inaugurate hillary in january? >> no, joe, i think absolutely every american should vote and i hope they do, whatever their choice is. >> do you still think trump is in the race? >> i think trump is absolutely in the race. here is where i come down on it, joe, these polls, they have likely voters, and you can drive a trump. i think the election is open and it's going to get down to the last 72 hours when somebody announces something. >> really. that's interesting. thank you. >> always interesting. day. is it because so many go after it the same way?

chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential 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. ♪

so wi got a job!ews? i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition!

a megamerger monday. the deal that everybody from wall street to washington is abuzz about. at&t buying time warner, and the ceos will join us to talk regulatory hurdles and the future of media and what the deal means for consumers and investors, straight ahead. and then what the deal means for your money. and media critic, author and writer for "the new yorker" will be here with the reaction to the big interview of the morning. and the real estate trends and the fight for the white house and why he's making an

energy play in oklahoma, as the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc. and sharing thoughts on the politics, and barry sternlich, we will hear about him in a minute. and at&t buying time warrior, and the two ceos will be joining us here on the set momentarily, and we will ask him about the consumers and much more, and time warner shares we should note in the premarket, up marginally, and the takeout

price, over $107, and will the deal get completed? a number of analyst coming out and calling it a 50/50 chance. you are seeing at&t shares down marginally down this morning as well. after we do all that, we will talk to two ceo deal makers this morning, and get reaction from ken auletta, and mario gabelli, and he has stakes in both. and check out the futures. this is on the back of some confidence, and dow jones looking like it could open up about nine points. >> three blind mice is like writing about the model t with tesla, right? >> yeah. >> and he had to obviously, time

is moving question quickly in terms of technology, and three blind mice was not that long ago, was it? >> all 5g, lte and it's part of the future. >> the world, you don't even recognize it at this point, do you? >> i find it fascinating. the idea that five years from now, it's not going to be about cable but about whether you can get all the stuff wirelessly into your home and at&t becomes a national footprint. >> but would you watch "game of thrones" on an iphone? >> some people do. you might be getting it completely and utterly wirelessly, and not even from a satellite in the future, and

that's what randal stevenson will talk about. >> when he arrives any second now. >> i feel bad -- i feel bad if i was one of the other companies merging today, and it's like let's get through this quickly, and -- >> this is a big one. >> who cares? and a small deal -- no, it's important. $62 a share, and $6.4 billion, and a premium to beat aerospace's closing price on friday, and we have a couple -- are these the ceos or the models that came in here? >> oh, he is buttering them up, or is it presence or the way

they look. >> they dressed me like him. >> we should note, of course, reaching the deal with time warner to acquire the company for $85 billion. randal stevenson and jeff, we want to thank both of you for being here. >> can we go back to talking about "game of thrones"? >> isn't that what all of this is about? >> exactly. >> let me ask you, because you just pulled "the wall street journal" up, and at&t faces political barrage, and i want to hear why this deal makes sense and what you are going to do about this, and we have seen lots of politicians coming out over the weekend saying they are against the deal, donald trump is saying that, or others saying

they are concerned? >> i think what we will do about this is do our typical process, and we will file our comments and application for the regulatory approvals in the u.s. and eu and elsewhere, and this is one where the nature of the deal is unique, and it's a vertical integration, a big merger, and as you think about the areas that have been contentious over the last few years, and they have been horizontal mergers, and people are being concerned about a competitor being taken out of the marketplace, and we compete nowhere and we are not talking about changing how the content is made available to other people or customers or distributors and it's a pure vertical integration, and while regulators have concerns with vertical integrations those are always remedied by conditions

imposed on the merger and that's how we envision this one to play out. >> tell us, you apparently had lunch together, about two months ago. >> we did. >> and the merger came up. tell us what you talked about at the lunch and what this merger looks like in the -- >> you want to tell them about the lunch? >> we meet regularly, and we talk about all the increasing mobile consumption of video and as we got into it and we were talking about what the media companies are doing and what the distribution companies need to do, we realize if we had ourselves to go, that we could create more innovations from consumers, so they could have more choices of package, and they could end up with more competition and more prices, and there's going to be basically more affective advertising, so it won't be as disruptive. you have more efficiency there,

and that means more of the cost of all the great programming made on tv to be born by advertising, and it could be advertising that is useful to you rather than something you are not interested in, and those are the advantages, and for years we have been trying to get all the networks on tv, and not just ours but everybody's to be on demand. >> why is there going to be more competition from a consumer's point of view? my choices are going to be what and what? >> if you look at right now, last year more than half of the advertising went to two companies, google and facebook, and we need to increase competition for advertising across television, internet companies, and that's an important thing. when you do that, what you end up with is more of the burden being born by advertising companies and less of it being born by consumers. >> as a consumer, my choices are --

>> you would have more packages, and if you want to have a mobile package, and randal is more eloquent about this than i many a, but if you want it mobile or in your house across all your screens, and this will enable it to do it faster, and it won't just be our channels. >> it would be channels -- the launch of at&t, we are doing it this quarter. >> jeff and i talked about this in our first meeting, and it's where we see this going and we are launching a product as soon as we closed directv, and it's a purely over the top video product, directv now is what we are calling it and will be launched next month and it's a mobile centric product in the marketplace, 100 premium channels and we are bringing it in in november, and you should assume the price point will be radically lower, and it's coming

to the market, and purely mobility driven and over the top and it's a whole new capability. >> and you can see it on your tv? >> absolutely. if you have an 80-inch screen in your apartment, you can put it on that 80-inch screen in your a ptment. >> you said this when we talked about it yesterday, you will not be able given the restrictions from regulators and what you described as the business logic to keep hbo from verizon or comcast from the other players? >> we want want to do that. >> and as a result you will not necessarily be able to use that for, like, free caps, meaning zero data caps or do anything that will benefit it to at&t, and the question that ed raised is what is the benefit then? >> i want to go back to something you said and i read about it in all of the newspapers this morning about the restricting the access to

the time warner content. it's nonsensical. we are buying time warner for 1$100 billion including their debt, and the idea that we are going to come along and start to constrict the distribution of the content makes no economic sense, and so it would be a crazy idea and that's going to be the by-product of this, and that doesn't make sense. i would set that aside. so what does change? why put the two companies together? it gets back to what jeff said, speed. this thing -- the world of distribution and content is converging and we need to move fast and if we want to do something truly unique and begin to curate content differently and format content differently, and this is all about mobility, and think directv now, the new product we are bringing to market, and what can you do really fast and uniquely for our

customers? can you begin to integrate, and i want to clip it and send it via social media to my friends, and can we give a unique experience to our customers. this is what we are after, speed of execution in changing of the game. >> i have seen analyst say that pipes companies aren't necessarily ready to become media moguls and know how to run something like an nbc, and so brian roberts had steve burke waiting -- thank god for that, because you need an operator in there. you are not -- i don't think of you as an elitist -- >> i take great offense to that. >> no, are you going to have the infrastructure -- i guess he is going to stay for a while or how is that going to work? i am not selling you work.

>> yes, you just did, you sold me very short. >> do you have any idea with dealing with talent -- >> this is a serious question. people on television are crazy, and they are nutty, nutty people, and forget hollywood. >> you are making your point right here. >> you know what you are talking about. >> you are all going to be fine. >> we have, what, a year, to go through the review of this and then after it closes, we think all of our executives and creative people and journalists, of course, are going to stay because our company is going to be stronger and we are going to have more opportunity, and i am also going to stay for a period of at least a year or two to see how we need to make this work. but we have a tremendous bench of talent, and as always, because i was not going to stay forever, unlike some of my fellow moguls, you know, when we

get our next group ready we will move to the next generation, but that's not in the next year. >> i want to address what he said, and when we were putting the deal together we spent a lot of time together and one of the primary issues we discussed, what you are articulating. you had fun with it, but i know nothing about running a movie studio, and making sure the talent is retained and we organize the business so the business is operated and run largely like it is today, and that's a huge piece of this. so i feel comfortable with jeff's plan of keeping the talent in place. >> we will see aol time warner, and at&t time warner, and there's a parallel with acron s acronyms, and you were so

against aol and time warner -- >> i was not against it and we were open minded to it as we were all until we saw the problems, and it was no fault really -- >> that's it, jeff. >> this is a better deal. >> it was misdescribed at the time. what you saw at aol and yahoo and msn, who were all in the same business, and they were the portal businesses, and they ae sraul -- evolved in a way not like search, and broadband distribution came in and changed the game, and this is not the same thing at all. our biggest customer, and most capable districter is at&t, and directv, and not just for time warner but for fox and disney,

and what we will do is take your new product, and it's not just our networks that are in there, and we should note all our networks are in there because they are good, and it's the disney and fox networks and we think any of the innovations will increase adoption, and the consumers will decide, and when we vote, the media and distribution companies follow what they want. >> i was on the phone with the analyst said, and he said if jeffreyly believed invert kul intesraeugs he would never have sold time warner. >> no, that's not true. it's different. you did not have wireless and the advertising business and moving to customized data-driven ads which in those days cable couldn't do, and they were 12%

of the country, and at&t covers the entire country, and everybody watching this show could get an at&t service. >> when it was blocked comcast from buying warner cable, and how do you think regulators will look at this? and the idea that you will be beaming all of this stuff into everybody's home and you may not need cable, and in some ways, it's all sorts of competition and in other ways it creates a huge power play? >> comcast time warner, while there was never a formal complaint filed by the government it appeared the government's biggest concern was what you just said, putting the two big broadband companies together and having a big and powerful -- i think the word

dominant was used, bran broadband provider. it's not changing the media or marketplace, and there's nothing change where we are vertically integrating our two companies, and i don't think it's reseplables comcast and time warner. >> donald trump, on the stump over the weekend saying too much concentration of power in one group of people? >> we are not confused. we recognize it's going to get a full review at a number of places and a number of areas, and our experience is the data and the law and the regulations will tadictate whether the deal gets approved or not. >> if you were going to do this, would you have done directv? >> absolutely. >> the new product won't be

satellite based. >> this is a natural move on the heels of the directv deal. you now have not only a nationwide video distribution platform, the largest in the united states, throughout latin america, jeff has tremendous content that does quite well. >> you are fearless after the breakup, and then -- >> yeah, a regulatory mast kist. >> you saw the diagram of the baby bells and what it went through. did you talk to ed about this, and is he just sticking his chest out? you made him look like a -- out whitakered whitaker. how psyched is he that his old baby bell -- >> this is a natural evolution

of our business model. it makes perfect sense. >> you don't circle with failure. >> it was mega, $50 billion. >> and then the way you did it, after they turned down one you knew they were not going to turn down another, and that was smart, and now this. >> we will talk about, debt, too. >> you are going to owe some money, my friend. >> the debt piece of this, and people have talked about how there will be a lot of debt and cash flow, and this is a $60 billion cash flow business, okay? so we have said our debt will move up to 2 1/2 times, and we have done directv and moved up in that range. >> will you stay investment grade? >> 2.5 times is the investment grade metrics. >> the data is what the data is,

and the business can have the debt service has not tkeudly, and we think in a reasonable period of time we can get our debt back to what i consider more normal levels. >> i can help you out there, too. >> thank you. >> because talent does help. >> will the interest rates stay lower for how long? are you dependent on interest rates staying low? >> we are not dependant. the objective will be we have a $40 million facility in place to finance the thing and the objective will be to put term debt on this and take advantage of a low interest rate environment, and as you deleverage you are not concerned about interest rates and so forth. >> if bob from disney called you or netflix was to call you, what would you tell them the implications of the deal are going to be on them as a customer, meaning they're a

client of yours as well? >> as a customer? of mine? >> both. you buy content from them, and so what is the implication going to be for them? disney came out with a statement saying regulators should look at this and will have to look at it closely. what do you tell bob? >> a lot of people will interject into the course of their own interest. >> that's where i am going with this. >> what i would tell bob, it doesn't change anything about our relationship, and the world should expect we are going to be pushing to reiterate and innovate much faster, and here's the implication of that. as we integrate the content, and as we begin to drive demand, that does one thing, it's going to drive us to have more of an tight to invest in what we call fifth generation mobile technology. we are now deploying or will be

deploying in the next year this technology, this is one gig abit speeds in technology. this means nationwide we could have a viable competitor to your parent company, comcast. and so that's a big deal, and if you are a disney or a fox, that's a great thing for you. >> you don't think you would be suppressed to do that by consumers whether you own this business or not? >> pressed to do it by consumers? >> yeah, and mainly there's going to be a customer appetite for this product irrespective of whether you have the content under your own roof or -- >> we are developing plans to develop 5g now, and you know our business and watch us, and once you get confidence and get conviction, i am convinced it will drive us to go faster. >> don't you think regulators would look at the two players that you just mentioned? i think about comcast and what

comcast is able to do now, and it's a great -- i have great media in my house, like 11 boxes. >> i think they are a poster child. >> yeah, that's what i mean. if you put another scaled competitor in there, it makes both better, both work harder to bring consumers what they will want and if you don't let it do it -- >> just consumers, and if i am a advertiser, i love this, and if i am a distributor, i love it, and a customer, i love it. >> if you are using 1934 laws -- >> that's your job, to educate people. >> what happened with apple? why aren't we sitting here today, and why are we not sitting here today talking about apple and time warner? >> i think they are in a different business. they are busy with phones and devices on a global basis and i am not sure they are focussed on media production. >> when i read they kicked the tires, what does that mean from

your viewpoint? did you have a conversation with tim cook? >> we do a lot of business with apple and cnn and hbo and warner brothers and we talk to them all the time about a lot of things. not about merging the companies. >> is that overstated when they say apple kicked the tires? they did not kick the tires on time warner? >> i think it's overstated. if you park your car on the street somebody might come by and kick the tires and you wouldn't even know it. >> the timing of this transaction, lots of questions happening, what, two and a half or three weeks ahead of the presidential election, and in a perfect world i was told the idea was to do it afterwards and is there a reason this happened faster or am i wrong about that? >> we never talked about that. a deal like this of this magnitude, and the potential for leaks, they are really bad for a deal like this, and once agree

on what the deal should look like, you move, and that's what we did as soon as we got the construct in place and agreed on the price, we said, let's get this done. >> if a company offered 20% more, it would be about the money -- i don't know, pick one, you think the strengths of going with at&t would outweigh more money -- >> i would take 20% more if it were offered to me. >> the rules are, if you really have somebody offering share holders what is clearly, that's the question, a superior financial deal, and they are always apples and oranges, very hard to evaluate that and you have to evaluate it and all of that. the reason we did this, not just fast, but we did it without really any reversals in our

talks, the more we looked at it, the more the capabilities of the businesses, the distribution business and the evolution of the mobile business, our strength, both of us in latin america, the more it came together and the more we just saw. there are very few other companies that could give the media industry or time warner as the leading media company the kind of evolutionary abilities this will give. the other thing is, and let's go back to regulation and consumers, and this is good for competition, and therefore it's going to be good for consumers, because that's what competition does. >> jeff, the break up is $1.7 billion if another bidder were to top and $5 billion if regulators block the transaction, and typically in the board meetings when you finalize the deal the lawyers give you a probability that the deal goes through. what did your team tell you? >> very high, because it should go through as randal said.

and the issue is not breakup fees, that's not what we are interested in. the issue is we have an agreement together that we are going to pursue this, and you know, we have a pretty high standard of agreement about getting this through for consumer benefits, so we will stick with it, and it's not about looking at that versus some breakup fee? >> this is a matter of trust where you do these things, and we both want it to get done, and breakup fees are not that relevant in a deal like this. >> are there any other bidders out there, anybody else you would talk to? >> we made a deal, and we are not going out and talking to other people. >> nobody has approached you? >> no. >> let me ask separately, when you -- >> the "new york post" saying the breakup fee of only $500 million makes it appear that

jeff thinks others are interested? >> that's not related to other bids. that's the other fee. and that's not the importance of it. we have got -- we have a unique transaction. if you start thinking about -- so if you have regulatory issues, we are committed, both of us, to get that done. that's that side of it, that's the $500 million if the thing becomes impossible. >> if the government sues to block it, and we walk away and pay time warner $500 million. >> we talked about what happens to other cable companies, whether comcast has to go buy a t-mobile or sprint, and you look out five years from now and talk about 5g and what it means to have a service like time warner inside at&t, and how do you think regulators will treat all of this for everybody? >> i can't really estimate what other players are going to do, nor should i hear, and i always

said to the extent our strategy succeeds, so it's a function of how well we do together in pulling the strategy off. >> at&t is down, and you would understand as an acquirer, and warner is off the top -- why do you think that is? that's not how you would expect it to react, would it? do you think that's skepticism? >> you have aur bough traus spreads. i don't think there's any ah-has in that. >> this is what took 14 months. >> what do you expect to have to

have them agree, and what do you think they will ask you to do and what are you willing to do? >> i don't prejudge it. if you think about the example you gave, comcast, nbcu, and a lot of people think of that of the conditions, and that was six years ago and the government was trying to protect against two things, net neutrality, and protect the ott players, and that is done, and i don't like it and the ott, i think netflix is going to make it, pull through and make it, and i don't think the need to protect the ott players is like it was. >> and so will amazon? >> amazon might make it, too, yeah. >> and let's say you try to switch that friday show from "squawk box" to a cnn show or

something, and i mean, would you be willing to say no, i will keep that cnbc "squawk box" show on -- >> well -- >> for the regulators, they will say you can't do cnn out there on a friday, and you won't care -- >> that's why we are here. >> we are here for a reason. >> you won't care if cnn -- >> let me ask about the content. there had been a view that cbs would make a great partner with time warner because of cnn and everything else and i think that clearly is off the table. >> yeah, we didn't need that. >> you see them coming together. the folks you spurpbd, mr. murdoch, and put yourself in their shoes and they see this and they do what? >> you know, in fact, they don't

actually have to do anything, so -- >> nor did we. that's why we did not consolidate with one of the other media companies. and all of the distribution innovations we are going to make, they are available for their networks and so there's no particular reason why they should do anything, and they should look at what they do to improve their businesses and whether it serves customers better, and that's it. >> the innovations we will do will be available to everybody. our expectation, if we execute on this, these are things other content players will want to participate in, and it's not something we will just do for time warner, if we create unique ways to deliver cnn to our customers, we would like to do that with cnbc as well, and there's no reason to be exclusive on that. >> we can sign off on this set.

>> this guy, you know -- >> we have one billionth of a vote. >> thank you for joining us on this morning, and we wish you luck with the transaction. >> appreciate it. when we come back, we will talk more about at&t's deal to buy time warner, an arthur will join us, and that's straight ahead when "squawk" returns in just a moment. ps like alpha modus to predict markets five times more accurately. i am helping tv networks use social data to predict what people want to watch. and i worked with marchesa to turn fan feeds into a dress that thinks. hello, my name is watson. working together, we can outthink anything.

upgrade your phone system and learn how you could save hello, my name is watson. at vonage.com/business this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars.

among the stories front and center, a merger monday in full affect, and at&t buying time warner, and it could give at&t control of hbo, cnn, tbs, tnt and the storied warner brothers

film studio and other media outlets, and we will have more on this in just a bit and we will be talking about this all day long, and i hate to harken back -- when was that, andrew? '99. it's the same company, and time warner, and here we are again. >> and oddly enough it's an acronym that begins with an "a." >> you think of at&t was ma bell, and then to was them go through all of these things, and then michael armstrong, and all this stuff, it's surreal, right. >> doing a content deal. >> do you wish you were not some boring real estate guy? >> i sat out the first 37

minutes. you raised an interesting point, the interest rates, and they can't fix the debt for over a year and can't take that risk of fixing $40 billion in paper and terming it out as randal mentioned. >> when i asked him about how dependant he is on low interest rates? >> yeah, right. and they paid something like 14 times trailing for the company, and that's also interesting, if you looked at who could buy them, look at a company like amazon, what do they trade for? talk about a crazy deal. they have plenty of cash. if you want content, content can be districted in lots of ways. if you don't keep the content away from other people then why do you need to do this? is the speed a $100 billion

reason. >> there's many small players out there with small numbers and they are concerned what is going to happen is they will pay more for the marquee content even though the top line will look the same, but are they going to end up subsidizing that -- >> yeah, and there has to be something, maybe not the current shows. >> maybe it's the premium pricing that is inindividualable. >> premium product, and has to be. and at&t is slowing, and they are looking for growth, and they had released earnings on saturday, right? >> yes. >> and so the subscriber growth, and mobile is down. >> the challenge is the comp on this deal effectively, is the people look at the comcast nbc deal, and that was purchased at a low point if terms of the value of nbc, and they were doing it nine times, and it's a

totally different story, so irrespective if you think there's other things, looking -- >> you pointed out they could turn around nbc. >> you had a motivated seller. not sure why they are holding it for that long, and then the big rush to sell on the low. >> your parent doesn't look like it used to look like, and it is a totally different company, right? >> i thought he downplayed the risk of the fcc getting involved? >> i think everybody will want to be involved, just the shear size of the transaction. >> he is making a political case, they should not be involved, it's a vertical -- you heard him over and over again, and he said it, only horizontal. >> but you are a reasonable person, and i would want somebody to go up against -- comcast is a powerful entity, and i think it would be good for everybody -- i want a hurdle into the future while i still

can. >> you have to be impressed with both ceos, they had a strategy and they met and they see it and you have to give them credit for it. >> everybody likes good competition. >> aol, and the 800-pound gorilla, was the disparity of the companies, and these are two cash flowing companies. >> was it the content and the distribution together will be powerful. >> the deal may be fine if they wanted to pay $3, and -- >> this one being a megadeal announced today, this in the "new york times," it says here, such mega deals are often postponed during times of political or economic uncertainty, given brexit and everything going on, and what feels like a tumultuous moment in the economy, smooth sale

somethi -- sailing is ahead. >> there's a couple issues with being this late. you see megadeals at the end of the cycle and that bothers me and you see the big deals being done, and if companies can't grow, they often look to acquisitions. it says something about where we might be in the cycle, which scares me. these are not economically -- >> brexit, that's your kau mull khau wus? >> brexit, interest rates, china. >> the tumultuousness. are you refute kwraeuting that world. last time i saw you, you thought the whole world was coming to an end. >> no, no, that might have been for media.

mario tkpwau belly owns 4 million shares of time warner and 2.9 shares of at&t, and is it just the back drop of the scary world we are living in to give these two pause, mario? >> if you look at time warner as a stand alone, over the next four years, they are going to generate 2 billion, and how does the company handle that? from my point of view as a share holder of time warner, i think this is an interesting exit strategy and i have no problem with it, and from my point of view of the telephone, they will deliver over time and you can't assume astatic, and by the way, most of our telephone was bought and we own it because of directv, and we are a cheerleader for both companies,

obviously. >> do you think this is the best -- time warner, it's a jewel, obviously, with the assets and the brand names they have, and do you think this is the best fit of all of the acquiring companies, and we made the point, i don't know, some new tech company should buy it to -- they are all trying to get content and maybe they should have done it? >> they have a topping fee of half a billion, joe, and it's 77 cents a share, and 1.7, i mean, and that's $2 and change. it's open to the free market process, and if somebody wanted to come in and top it, we would be further cheerleaders. >> and the stock is at $88, and jeff and randal suggested it was normal course. i could make the argument this morning that that's not necessarily normal course for a transaction.

>> the notion of being hurt because of certain deals, there's a legacy, and that's why in quotes it's called "risks aur bough traupblg." there will be antitrust issues being looked at. >> no. >> the argument is vertical integration? >> the stock is trading like a 50/50 probability of it going through. that's what they tell us, right? >> i have an eps in 2020 of $7, and that assumes they use the cash flow to buy back stock, taking it from 7.70, which they will do if there is no deal. where will time warner sale if there is no deal? it's what makes the world interesting. >> the regulators have been so active, so much more active in these mergers. >> i hope so. that's their job.

>> they have really stepped up, and a lot of deals have been shot down late in the game. >> we are trading back now close to where the box deal, and offer of $85 a chair was offered. do you believe inve in that vertical intesraeugs. >> yeah, these things, as you know, discovery demonstrates discovery around the world, and we are looking at the market for at&t, and the content -- >> would you be happier if they owned more spectrum so they could build out their network faster? is there any argument they need the content itself, or could they go off and create content? i was talking to a creator,

netflix and amazon prime came out of nowhere, and if you have a big enough wallet and look what can be done without having to buy a studio? >> yeah, good luck. go back to the 1954, is that far enough back? there was six major studios or seven major studios and there's a graveyard full of companies that have a couple hits and then where is the cash flow and where is the library and content and creativity? no, i think there's more barriers entry into a studio, and paramount has $300 million library, and they have to fresh start all over again, although "jack reacher" did okay. >> if this deal does get completed, what happens next? >> well, the companies like sony looking at their entertainment business, and they split the

company and have their robots and artificial intelligence, and they decide finally to split the company, and then you look at what dr. malone is going to do, and he's obviously a deal maker, and you will see, and all the investment bankers will call and say how do we get into this, and what do we do next? a lot more will happen, you know, whether they continue to look at liberty global or skype is bought by news corp. -- not news corp. but fox, you have a lot more going on. >> i'm on a highway, so i have to go. >> talking and driving. when we come back, we will continue the conversation on the big transaction. the futures looking like the dow

is opening up 75 points higher.

more on the top story, the acquisition of time warner by at&t, and earlier both joined us to talk about the deal. >> it's a big merger, but it's a vertical integration, and if you think about the areas that have been contentious over the last few years, in our industry and jeff's industry, they have been

horizontal, where there was a competitor being taken out of the marketplace and this has none of that. >> we think this will enable us to do those things faster. >> and one of the great wise men on this industry. does this transaction make sense to you? >> yeah, i mean, one of the concerns that content companies have is we don't have a pipe, and one of the concerns that pipe companies have like at&t is we are a dumb pipe and this makes the dumb pipe a smart pipe. >> if you can't keep the content exclusive to your pipe, what is the advantage? >> they would argue, among the strategic advantages are, what at&t has, they have enormous

amounts of data, and if you could use that to target people more effectively, you have built a new -- >> they could generate more advertising revenue by owning the content rather than if they are just sending the content down the pipe because they could tell them you are going to get a white male between the ages of blah, blah, blah, and we know women of a certain age do blah, blah, blah, because of our data? >> why not do that on a licensed basis? >> you could, but everybody wants to own the data if you can, because if you license it you don't own it and somebody could take it away from you. >> we were talking about where the stock is, and how dooh yooh dull that.

>> there's another issue. i think one of the things we are not looking at here is the cultural issue. if you go back to 2000, when the time warner aol deal went into effect, and steve case and the other at&t people were in the room, and the head of hbo, and he whispers and says look at these guys from aol, and they call us old media, and i made more than aol made and they call me old media, and the tensions between the content company and the technology company at aol, and that was one of the reasons the merger did not work, and you have to raise and talk about the cultural issue. >> jeff did not want to do the deal with 21st century fox

because he thought there was a cultural fit problem, and he thinks there's a cultural fit in it's possible that randal seems to suggest i will hire great people to do it, and it seems like he will keep his distance. >> he seemed acutely aware in the danger in the response to your question and you could be acutely aware and not act on it, and so the question is do the at&t people who have little experience with content, and at some point the crazy people you were talking about here, they say we want more money, and the guys in the green eye shades say we don't want to spend more money on content. there are potential clashes there. >> we have to rap. >> i imagine we will be talking about this for a long time. day one, and likely a year, exactly. >> coming up, more reaction to the media merger, and james stewart joins us in the next

hour, and stay around for the next hour, excellent, and "squawk box" will be right back.

mega-media merger. >> the world of distribution and content is converging and we need to move fast. >> the company is stronger, and we will have more opportunity. >> now the next big hurdle. will regulators approve the deal? analyst and politicians are all weighing in. >> the final hour of "squawk box" begins right now. ♪ >> announcer: live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box" here on cnbc. the futures have been strong all day long. and a lot of good feelings

generated by mergers today, and atat buying time warner for $85 billion, and cash and stock in time time warner is down, and they were up earlier, and so a lot of action in the shares today. at&t shares, to be expected, perhaps, down just under 2%, and randall stevenson and jeff beau cuss joining us earlier today on "squawk box," and look what they had to say. >> it's a big merger but it's a vertical integration and if you think about the areas that have been contentious in our industry and jeff's industry, the government was concerned about a competitor being taken out of the marketplace and this has none of that. >> and we were trying to get all of the networks on tv, not just

ours, to be available on demand and this will allow us to make that faster. >> veteran is okay, jim, there are 30-year-old veterans, and so don't take that the wrong way. >> the makeup lady said i was, quote, looking good. >> first, before we get to jim, animal spirit alive and well beyond the at&t and time warner deal, and rockwell collins buying be aerospace about $6.4 billion, and programming note, don't miss the cnbc exclusive interview on "squawk on the street" at 10:00 a.m. today. and ocean wide buying genworth,

and the deal represents a 4.2% premium for genworth share holders. and td amayor trade will buy scott trade. the estimates are the cash and stock deal will save $450 million per year in expenses. how about for merger monday. now, back to the deal of the decade, at&t buying time warner, and randall stevenson, andjoine us, and this is what we talked about. >> they don't actually have to do anything, so -- >> nor did we. >> that's why we did not consolidate with other media

companies. >> the innovations we do will be available to everybody. our expectation, if we execute on this these are things other content companies will want to join us on. >> does vertical integration make sense? >> well, let me look at it from two standpoints. i assume people know what vertical integration is, and i am a total antitrust nerd, but from a regulatory and classic antitrust analysis, this is a no-brainer. there's no concentration in either one and they don't compete in any way, and vertical integration, the big issue here is the consumer angle and another big issue is the management angle. the problem with vertical integration historically is it

often does not work out for the company doing the integration. it's tough for a management like at&t to suddenly step into a business it never has been in and doesn't know anything about and manage it. there's a lot of practical issues. >> there will not be over arching concerns like what donald trump raised yesterday? >> there is going to be a lot of issues here, and i would have said this has a 98% chance of going through, until i watched what happened with comcast and time warner cable, and that was arguably so-called in the cable business, and that got shot down, and basically it was doctrine that had not been used since the 18th century, and they came up and said, well, you know, there's too much power in one hand, so i think we might see the creation of a whole new antitrust doctrine here, but i

still say that's not likely. i would put the odds not at the 50/50 people are saying, more like 70/30 that it will get approved. >> and the actual integration, do you think they effectively run side by side? >> i talked to the ceos, and randal is saying the right things saying i am not going to stick my fingers into this, and i will let pwaoubgious run this. the reality is it's tougher, and i heard somebody say earlier, what happens when they talk about money, who is getting paid and the stars want this, and that's going to be tough sometimes for somebody who spent their entire life in the telephone business or the telecom business to get them used to it.

>> what happens to a company like disney? what do they do? they look at something like this and think what? >> we talked about what pressure will be on the other companies. i think the jury is still out where the giant integrated things like this will make sense. the real model we have is comcast and nbc that seems to have done well but they really bought nbc at the bottom, and disney has been doing well withstand alone content, and, you know, again, one of the things i was pushing them on is i think you brought this up, too, why nown it and not just license it, and they said we can do easier when we own it, and disney in theory standing alone should not be at a disadvantage. >> does everybody need to run and do a deal now or wait a year to see if this happens or not

based on the washington issue? >> the prudent thing to do would be to wait, but they are not always prudent. and yeah, i mean, the danger the good stuff gets snapped up, and warner was the jewel of the crown and that is gone now. >> i was sitting here thinking about verizon, and we are thinking on the content side what do they have to do, and verizon is like, aot and yahoo and these guys get time werner -- >> abo, and "game of thrones"? >> if i am verizon, i am feeling -- >> i would feel like i needed -- >> can we back up one second. people are going to get tv from

their wireless phone company? that's what this means, right? >> people are not going to care. they are going to get it through the broadband and on their mobile phones. are we really going to be watching everything on the mobile screen? apparently. >> he is saying from your satellite or the next gen of lg -- >> you will get your tv from your wireless company. >> yeah, you can bypass verizon or whatever it is. >> the consumer doesn't care where it comes from, just that they get it? >> it's a strange thing to wrap my head around. >> cable people say it's impossible, the physical wire will always carry more data than you can do wirelessly, and that ultimately when you get to vr and all of the new kinds of

technologies, even higher def tv, the wire is going to keep ramping up and amping up the amount you need and the wire will never be as good as, and i'm just telling you what the other side is. >> they claim it's procompetitive because it puts them in competition with google and facebook and the silicon valley technology companies, on an advertising level, and that's an interesting idea. >> interesting argument. >> that they can nail that data with the content and the target that will impact these big jugger knots. i think you would have to say that's probably healthy. >> great seeing you. >> thank you. coming up, we will tell you why one analyst is making a big call on verizon -- i don't know.

we have yahoo? i don't know. i would be like, wow, i am feeling bad about myself. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) whether it's connecting one of or bringing wifi to 65,000 fans. campuses. businesses count on communication, and communication counts on centurylink.

welcome back to "squawk box." the futures opening up this morning. >> let's get back to our guest host, the capital ceo. and andrew wants to talk about trump? >> i am curious. >> i will give you my time, grant you my time request barry, which is valuable. >> what do you think happens to the trump brand hotels and they are changing the name for the new hotels and what about the old hotels? >> it would be silly. it will depend what happens with the election. the price point with existing hotels are high. >> do you think he's damaged his brand? do you think his brand -- the

company said this was always the plan and to reflect the next generation and has nothing to do with this? >> i would find that -- this is a company that made its entire brand -- i think trump -- >> hilton worldwide warnings acquires 25% from blackstone? it makes hna makes an investment in hilton? >> that's the chinese. and it's at 24.50 here. >> they came in at 26? >> 26.25 per share. >> they found a buyer for a big block of their stock, which is an excellent execution for both companies, and hna have been looking to do something and they were a buyer for our company we had in france, and i think -- we

had a big hotel company. and there is tremendous number of interest for chinese. >> what is hna? tell us more about it? >> it's a chinese travel company based in beijing, i believe. >> is this different than the japanese, if you will, coming to the united states? >> there's fewer japanese than chinese. >> yeah. >> i think for many of these chinese life companies, and this is the currency hedge in case they continue to have to lower the currencies against the dollar because of the slowing growth at home, so they have been devaluing the currency slowly. >> did you mean, when we look back at all the japanese bought, they were bad, and they bought

at the peak -- >> they have free money, don't forget. their foot in tokyo was less than six miles of land in the u.s., and they are using funny money to come and buy different things. you can argue this, but i think it's different. the bubble in china, they have been trying to slow that down and every time they do the economy slows down and they lose their conviction and let it heat up again. i think there's a tremendous -- you see nothing of it. china life is the largest hotel company is china, and we were working with them for seven months to complete the transaction with them, and you see, what is interesting, is them being so visible. to me that's interesting, they want people to know they are coming and are here. i think that's interesting,

because before they were afraid of the political backlash and they would come behind somebody and you wouldn't see them and today they are willing to put their name on the door. they have to be thoughtful with a lot of due diligence. >> what did you think of the markets? >> it was bullish. >> you thought new york was overheated. how is everything going with greenwich and your own sale? >> i am not trying to sell a house. >> you were out -- i was out to lunch. actually, connecticut has the highest debt per cap in the country, and as tax rates rise in connecticut, the differential to new york city becomes so close, and some of the people are staying in new york. >> greenwich is the worst real estate market? >> i should have said the high

end. the strength in the market was 1 to $3 million homes, and you are seeing that in new york, too, and the market in san francisco is buckling and people can't afford the rent for the new apartments in new york, and we have 90,000 apartments over the country, and it's a $16 billion portfolio, and we see 16% growth. the housing market is really great. you have 50-year lows of home ownership lows in the united states. >> is the economy terrible or great? >> what? >> is the economy terrible or great? >> i am never a bull, and you never know me to be a bull, and taking out iran and the middle east and russia and the crisis of the world which are real and material,'s think whoever is elected -- the good news, i was telling joe, i was at an event

when a former vice president who said the good news about this election is somebody is going to lose. after that happens -- >> barack obama's not going to be president anymore. that's a happy day for you, if not for you? >> no, i would -- >> you are still stained with that initial vote? >> i didn't vote for obama. >> you didn't? >> no, i did not. sorry to make the news. >> that was quickly denied. >> you guys in the media said i did. look, i do think donald's campaign is a function of making america great again is a reaction to what obama did. >> he can shirt his own legacy by creating trump. >> i think hillary is more moderate than she appears. but he is too popular at the moment, and opposed to what is going on, he looks like the cleanest person in the room, and hillary, i heard her give her a

speech and she was in favor of going to syria, and they were shot down as was gates and everybody else and that's why she left but doesn't say that, and i am surprised she didn't want to do that. how did we get into politics? the housing market. >> look at that pivot. >> it's great, right, and the homes, there's a 40 year low of home inventory. and we have a colony star wood homes which is the second largest renter, and 75% occupan occupancy, and business could not be better. the sunbelt cities, seattle, killing it. more cranes in seattle downtown than any city in the country, and more than san francisco and new york combined, seattle. >> what is that, a red light? >> every time i hear about

cranes, it's a bad side. red light, red light. >> the hottest markets are easing back, and they are overheated, and even the capital want -- or the chinese want to buy in new york. those are the hot markets. atlanta is strong, and florida is pretty strong. >> you brought up politics, and you said the vice president said somebody has to lose? >> an ex-vice president. >> barry is going to be here for the rest of the hour. >> you just did the most annoying sound in the world. >> meep -- i thought you were having a seizure or something. >> i am taking that very personally. we are kicking off the busiest week of earning season, and "squawk box" will be right back. meep, meep --

let's catch up on some of the morning's earnings reportings. kimberly-clark, fell at $1.52 a share. also vf corporation came in ahead of estimates, came in at

$1.19 a share, and it fell short because of the jeans business, and t-mobile, quarterly profit of 27 cents a share, and came up a bit short but the wireless carrier raised its full year forecast. don't miss, t-mobile's ceo coming up at 10:00 a.m. eastern time. and then the ceos of time warner and at&t, and why one analyst telling investors to get out of at&t and instead go to verizon. "squawk box" will be right back. for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities

that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. what's critical thinking like? a basketball costs $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

- i was diagnosed with parin early 2013.lly

it took awhile to sink in. we had to think a little more seriously about saving money for the future and for the kids. - the income of airbnb really helped to mitigate the stress. - but we have that flexibility of knowing that if you know things get worse, we have this to help keep us afloat. - so that's very, very important for us. ♪ ♪ welcome back to "squawk box." today's big story, at&t buying time warner for $84 billion, and both ceos joining us earlier

this morning. >> we realize if we had ourselves together, that we could create more innovations for consumers and they could have more choices for packages and more competition for lower prices. >> this is a pure vertical integration, and while regulators will have concerns with vertical integrations, those are remedies by conditions, and that's how we expect it to play out. >> and eamon javers joins us. >> first off, you hear maybe these companies made that mistake announcing it 15 days before the national election and the reason is we have seen politicians already over the weekend with statements opposed to it and that boxes the

political statement in, and bernie sanders said the administration should kill the merger, because it would mean higher prices and fewer choices for the american people, and donald trump coming out on the political spectrum against the deal, a deal we would not approve in my administration because it's too much concentration of power in the hands between too few. this means it's up to the next administration, and a lot of people betting it would be a clinton administration that would handle this through the process in to 2017. if you look at both companies, and they have a lot of lobbying firepower on their side, starting with at&t, so far $8.5 million, and 28 outside lobbying firms working for at&t, and that does give them muscle here in washington and time warner, a similar picture, but smaller

overall in total expenditures, and just $320,000 spent on four outside lobbying firms, and that does give them muscle for the process, and the deal is will hillary clinton boxed in and forced to say something about the deal, possibly opposing it, and that could set the political tone for this, and regulators say they make these decisions on the merits, but they do swim in a political ocean here in washington, and if all the major factions are opposed to the deal, that could make it difficult despite all the armies of lobbyist, guys. >> thank you for that. i don't know what is going to happen. look at the price, though. look at the price. that's all you need to know. drexel hamilton downgrading at&t this morning, in the wake of the news the company is buying time warner.

joining us -- i was kidding around, and i thought verizon when the music stops and they want to sit down, and they ended up sitting down with aol and yahoo and that seems like not a great consolation prize for somebody getting time warner? >> we upgraded verizon today, and they are going into media in a more measured fashion and they are targeting mobile and jen sea. >> that's a better strategy? >> we think it's a better strategy than at&t, and they face a lot, and -- >> i thought at&t said it would be creative in the -- >> in the first year after, and so in 2019 they are saying creative. and $1 billion, we don't know if

they will get that once the regulators weigh in. >> how do you have the sepber geez. now the challenge with that is, they are not going to be able to do anything exclusive. ironically they have an exclusive for the nfl sunday ticket, but won't be able to do exclusives with hbo after the regulators get done. >> what about they can use it as a content creative engine to create new channels and they create directv now premium, and they have all the creative people that built hbo and the guys from warner brothers to do that, and would that be protected that they couldn't keep that to be exclusive? >> i don't think they will be able to do it exclusive, and they said directv will launch the over the top offer with about 100 channels next month

and i don't think they will be allowed to exclusively put time warner content -- >> no, what i am suggesting is -- >> new product. >> is there a way for them to build and create new products exclusive to their product? >> i think the regulators will block that, because that's the concern they will use the content -- >> do you buy the speed, the integration, it's the speed of this and they can work closer together and bring things to market -- >> no, i think they did a great deal with the nfl, and i don't think you need to buy the cow to get the milk. >> at&t's growth has been slowing. wireless, negative growth this year, and media is growing nicely, and it's about free cash flow. the media business kicks off a lot of free cash flow, and the

telecom business, very attentive, and then remember, discenter geez. >> you are assuming at&t will do the transaction, or are you assuming either way if it doesn't go through you still downgrade it? >> either way you would want to be in verizon stock, and i don't think they will get it approved by the end of 2017, and any new administration will have other prioriti priorities, and i would put about a 60% probability that at&t does get it. >> does verizon go off and try to do some large media transaction himself because of this? >> no, i don't think so. it's well thought out, and it's less risky, but he's going after a different demographic, and

mobile only and jen -- >> what he was saying, i get my cable -- that's not what i mean, i get my video content from my wireless company in a 5g world instead of a cable company? even if they did not buy time warner, is that world coming? >> that world is coming and it depends on where you are viewing it, and in my generation, i like to watch it on a tv in my living room and my nephews like to watch it on a small device. >> creating a different type of landscape with the telephone companies and the cable companies? >> they will use 5g in certain markets to pipe it in, and the consumer will agnostic -- >> we get that, and the possibility of it is -- >> we live in new york city, and you get time warner cable owned

by charter and that's it. it's mostly a monopoly, and if all of a sudden you told me at&t and t-mobile and sprint will offer cable service wirelessly, that changes the entire dynamic. >> i think 5g will be more in the suburban markets than urban market. >> no way, dude! >> the takeout food comes right up -- >> everything, we do not go into retail. >> do you go to art museums? >> all the time. all the time. last week. lincoln center, last night. when we return, today's top stories, deals, deals, and more deals. tomorrow on "squawk," and in

between that we have eli lilly, and the ceos of procter & gamble and home depot, all that starting tomorrow at 6:00 a.m. and "squawk" returns in a moment. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

♪jake reese, "day to feel alive"♪ prge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes.

understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. welcome back to "squawk box." it has been a big day for mergers. among the deals, ameritrade

involved in a merger. tim hockey will join us to discuss the deal, and a little overshadowed by the other deal. just a little bit. and the regulators, have they begun the review of microsoft's deal to buy lynn kau done. they are concerned whether the deal will reduce competition. another version of the apple watch is about to hit stores, it will go on sale on friday, and the watch designed for runners and has a multitude of related apps was revealed at last month's product event. and what did we not get to cover this morning that want to talk about? you don't want to talk about the election? >> no, let's talk about the media business. i was saying i think the economy might surprise us and we will

get a fourth quarter gdp number friday, right? consumer spending and business spending was down big, which you would have thought come into the election cycle with all the chaos and all the unknowns and maybe post election, i think you might see companies make a more aggressive stance on spending capital and building plants and hiring and waging are going up and that's the last piece of the puzzle is wage increases and shortages in labor, and you saw the 5% growth in the household income number, the highest in 50 years. wages are accelerating, and businesses will start investing and barring -- the world never has been more messed up, so that's the big caveat, something could go down in yemen, iran, and i was with an egyptian billionaire -- >> as you would be. >> i was at a conference -- no, i was just hanging out with him,

found one on the street. from their perspective, the world has never been more screwed up, and the turmoil in the middle east, and donald's comment are so funny, and -- >> you keep bringing up politics. >> it's funny to defend putin, and he is dropping bombs on our allies, and 17 departments have said the russians are interfering in our democratic process, and he is doing that on land and sea, and flying by finland and inviting people to visit with him, and -- >> i saw trump's foreign policy, it's simple. we want to get rid of isis and what was the best way to do that and it was very focused to i don't actually understand what

john kerry's foreign policy is. >> it's obama's policy. >> i am not sure what they think their priority is in the middle east? what is it? >> i am not sure at this point anybody knows. you don't know who is going to replace -- >> is donald trump misguided on a lot of things, absolutely? but there's a clear vision on what mishmash we have got. >> you have senator kerry running around -- >> begging banks to do business with iran. >> yeah, the ayatollah is sitting there saying death to america, and we are saying give them more money so we can bomb us. the dumbest thing we have ever done. i agree with donald. and at some point, this can lead to a major conflict in the middle east, which it almost has to, the iranians are in lebanon, and they are in yemen, and obviously gaza, and so there's a bright side, a thing called the

tkpwraoup of four, and there's a rumor that saudi, egypt, jordan, they are getting together and trying to work to actually bring peace to the palestinians, and then with israel, turning their attention to a nuclearized iran. >> yeah. >> and the economy is bubbling along, and we are in a big expansion, 50 months of the expansion, the longest expansion on record, and i am seeing the real estate markets have never been better in the united states, no over building, and i am not sure what the government is complaining about bank lending to real estate, and they are not doing anything they were doing before, and businesses are not borrowing, so there's

lending to real estate, but they are lending at 65% at cost and the markets are balanced, and you have a 1% vacancy rate in industrial orange county, and hotels slowed down with the economy, and the growth for hotels slowed, but overall, our one hotel in manhattan is running 90% occupancy, and we are bullish on -- the markets are overbuilt in certain places, like new york city hotels are generally overbuilt. >> what about the financial industry in new york? we talked about hedge funds over time, and that whole market, the bank market -- >> i think they are soft. take jpmorgan, and they are t--

if he does, you know -- >> he has a lot of back office in columbus, ohio. >> they all save a billion dollars. and the hedge fund, you don't hear about hedge funds except for one, and the market is $150. >> given the performance of hedge funds are you giving them more or less money these days? >> less. >> why? >> i think it's hard to trade against atfs, and 70% of all the money going into the market is in different funds. >> is that what you are doing? >> i still pick stocks. the economy is large enough to see what is going on, and we have apartments and hotels and 30 malls and we can see a lot. the economy is okay. it's not great, but great means there's no inflation. i hope, please, god, she raises

rates in december so we can move on and the curve flattens a little bit. >> it never ends. it's a pipe dream. >> i can't wait -- what is really lacking in politics is common sense. i wish we had a little common sense in the election. >> more from barry throughout the show. >> when we return, jim cramer will join us live from the new york stock exchange, and we will get his take on this morning's top stories including the me megadeal. verizon limits me and i gotta get home. you're gonna choose navigation over me? maps get up here. umm... that way. girl! you better get on t-mobile! why pay more for data limits? introducing t-mobile one, unlimited data for everyone. get four lines just $35 a month.

we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

this has none of that. there are no competitors being taken out of the marketplace. we compete nowhere. we're not talking about changing how the content is made available to other people or other customers or other distributors. this is a pure vertical integration. >> if you want a package of more channels, fewer channels, you want it mobile in your house across all your screens, this will enable us to do that faster. and we think if consumers like it won't just be our channels. >> dealmakers of the morning, randall stevenson and jeff bukis joining us on "squawk box" earlier. we just had an analyst on that upgraded verizon and downgraded at&t. just if i were a ceo of either at&t or verizon, i'd much rather

just, you know, think i'm going to manage these time warner assets than like yahoo and aol. i mean, you know, maybe -- do you think it is better? do you think verizon's better positioned? >> well, i think if i were a shareholder of att i'm in it for the yield. i don't know, i think the balance sheet is not being addressed enough in all the coverage. it's very compromised by this acquisition. very expensive acquisition. those two gentlemen are right, very little overlap. as jim stewart said that's not been what the regulators have been looking at. they're looking at concentration of power. concentration of power it is very much of an older antitrust doctrine, but we're in a populist time and they say, hey, listen, there's no overlap. but i look at the deals this justice department has killed, most active justice department maybe in history, and i don't think it's going to be any different under hillary clinton if she wins. obviously we already know from donald trump that he doesn't want this. but lawyers are little out of touch with the populism at the

moment. just the way lawyers out of touch with what the justice department did at the banks. i think the lawyers are the wrong people to advice her. >> so you're betting against it? at least putting it 50/50. >> jim said 50/50 initially and then 70/30. i'm probably 60 they do it, 40 they don't. but as they get to 60 i don't think you're going to want to do the deal itself because they're going to make you give up so much. not because it's rational. everybody's so rational. that is great. that has nothing to do with the way politics is right now. it's not rational that right now that the walgreens deal being held up with rite aid. none of this is rational. office depot not being able to merge with staples. >> do you like the strategic rationale and value of the deal? >> i think they see google coming. i think they see facebook coming. i think they see we're not that relevant, we need to build an ecosystem. i think they see john ledger and i think they see sprint, those are all taking subscriptions

away from them. so they have to do something. literally they have to do something. that's the way i kind of feel about this deal. what a great thing. put together a company, better deal than fox, going to get a lot of money for shareholders, if randall stevenson were totally motivated by shareholders, he wouldn't be doing this deal. like marc benioff paying too much for twitter. that's why they own the thing, they don't own it because of growth. that's a different shareholder base. it's going to turn over in the interim. he doesn't understand that. that's okay. he's a big guy. >> do you think every media ceo is having a board meeting trying to figure out what to do about this, or do you wait a year? do you think we'll see a raft of more transactions or not? >> i think they're all wanting to know what google does. every time i get together with executives they're always afraid youtube is going to be monetized and take them apart. and that hasn't happened yet. i think people are fearing google, fearing amazon, fearing facebook, but they're very east coast guys who don't understand the mentality of what google

might be up to. and they're like, listen, we're old white guys, we got to do something. it's a shame. it's really interesting thing to see these guys in action totally being at odds with the younger people out west, but very much also out of touch with the shareholder base. but they're rich guys, think it's going to work, their lawyers say it's going to work. they are really all out of touch. i only say that because i'm older than all of them. great american. >> tell us what you really think next time. >> yeah, why not? i'm tired and i'm old. >> thanks, jim. coming up -- i'm not going to say that, anyway, i feel like -- >> you were going to say writing check to -- >> yeah. >> he's going to be on. >> say his name. say it loud and proud. >> legere, "squawk box" at 10:50 a.m. eastern. new bikes aren't selling guys...

what are we gonna do? how about we pump more into promotions? ♪ nah. what else? what if we hire more sales reps? ♪ nah. what else? what if we digitize the whole supply chain? so people can customize their bike before they buy it. that worked better than expected. i'll dial it back. yeah, dial it back. just a little. live business, powered by sap. when you run live, you run simple.

that's why a cutting edgeworld. university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.

guest host this morning barry sternlicht, we really have only time to say who the hell you are. starwood capital chairman and ceo. it's been good having you.

thank you. >> i'll come in another day when there's not an $85 billion merger on the table. >> your first 40 minutes did get cut off because of that. >> that's okay. it's a serious deal. as i said earlier, these megamergers to me do signal you're getting to the end of a cycle. >> really? >> margins are -- >> barry sternlicht, thank you. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. so much news, an hour's not going to be enough. at&t, time warner, tsunami of earnings heading our way over the next five sessions. europe showing decent advantages, china up a percent overnight. watch the ten-year, at least four fed speakers are on the agenda today alone. our road map begins with that