"squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. >> good morning, everybody welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures this morning markets closed higher yesterday. most of those indices, record closes for the dow, s&p 500, russell 2000, all closed around session highs. you can see green arrows this morning. dow futures up by 30 points. the nasdaq up by 12.5 points overnight, the nikkei was flat once again that ended down 15 points, but flat just like the day before. the hang seng was flat

shanghai composite was down by three quarters of a percentage point. in europe, some early trading there, at this hour the bulls have their way the dax is up by 0.6%. the cac is up almost by 1% the ftse up by 0.4%. if you look at crude oil prices, crude was up yesterday settled above $46, this morning at 45.87 >> big developing story. london's fire commissioner says there's been a flub of fatalities in a fire that broke out overnight in a high rise apartment. fire fighters still working to put out that blaze which quickly engulfed the 27-story building in london. london's mayor says question also have to be answered over the safety of those towers some residents in the building say they had been advised to stay inside in the event of a fire in another part of the building >> so no smoke alarms or

sprinkler systems set up the fire took place on the fourth floor and spread rapidly. >> someone wanted to close it down years ago this building >> yeah. i immediately -- it's a fire >> at this point >> with everything happening in london -- >> that's what i thought of, but at this point, just a fire >> horrific and scary. >> another big -- a firish story, if you enjoy my segue, corporate news >> you'll be walking on egg shells >> i won't be walking on egg shells uber board member david bonderman resigning from the board after what he made what was described as an inappropriate comment. at the meeting bonderman cut off arianna huffington trying to jokingly say that more women on the board means "it's much likely they'll be more talking."

that was the comment bonderman since apologized but his comments immediately came under yes, squestion as thr discussing the findings produced by eric holder into the company's corporate culture. holder offered 50 ideas to improve workplace culture, including reducing alcohol use we talked about that mem move that went out before the party they were having, some of which talked about alcohol separately, uber announced travis kalanick will take what is being described as a temporary leave of absence no exact date for when he will be returning we'll talk more about all of this in just a bit with an expert clearly, you said i'm on egg shells i don't feel like i'm on egg

shells >> let's hear your comments then >> i think right now in the valley there's a remarkable sensitivity around all of these issues >> okay. >> rightly, by the way >> there you go. >> clearly an issue at uber. i think in the moment of what was taking place yesterday, the particular choice of words was particularly tough now, were those -- did all of this mean he should resign from the board? that seemed to me to be an aggressive step to take. but given all the signals they're trying to send to all these people, maybe -- >> the timing. >> what i don't know is aryiann huffington, i gather just from what i've read -- >> she laughed she chuckled you think she was offended >> i have to assume, given all that wastaking place, that there was some ill will about it at that time >> prior >> no. in the moment.

>> yesterday, i was talking about you get -- if you have a huffington post sensibility about everything you do, you obviously would never say that that's for sure. >> his sense of timing was not the best >> the huffington post, there are -- in society there are probably people that are here on terms of how politically he correct they are, and people here, and some people in the middle that was obviously on the continuum, that was don't path of being politically incorrect >> on a normal day -- >> i'm glad you're able to say that this is the egg shells i'm talking about. >> no, no. on a normal day, you could say that and somebody might be offended that you said that some people might laugh, some people might not. i'm not sure it would rise to this occasion. but on a day when the meeting is talking about sexual harassment,

the culture of the company, it's an acute issue >> i will be agis. he's 74, not in tune with the current you -- i'm 60 and i don't think things through -- >> i don't think that's agist. the guy comes from a different time >> and you're also not quite address qui a quick. you'll see >> i did this on the air, on "power lunch" when the recommendations were coming on uber had a problem, y needed to take steps they made them change the name of the war room to the peace room one of the most ridiculous things i heard i thought it was a joke when i heard it everybody has a war room >> right i'm sensitive.

i have a wife who happen to be here today >> blake's here? >> blake is here my experience is they both talk the right amount of time they never talk too much, never too little >> we agree. >> we agree. >> you just walked those egg shells well, my friend >> thank you in just saying that in a lighthearted way means i'm not taking it seriously. >> but it's a context story. in this particular instance. >> it's a context story. on today's economic agenda may retail sales and cpi released at 8:30 a.m. eastern. followed by april business inventories at 10:00 a.m the fed's statement is due at 2:00 p.m janet yellen will hold a news conference 30 minutes later. there she is right there you can get full coverage of the decision on "power lunch."

in washington news, attorney general jeff sessions denying campaign collusion with russia and said he would maintain a safe distance from the probe into the election interference kayla tausche joins us now with more >> more than 2 1/2 hours of questioning attorney general jeff sessions declined to discuss his communications with the president, but he was emphatic that he had nothing to do with the russian interference in the election. >> the suggestion that i participated in any collusion, that i was aware of any collusion that would hurt this country that i served with honor for 35 years or to undermine the integrity of our democratic process is an appalling and detestable lie >> sarah huckabee sanders says from what the president saw he thought sessions did a good job. in response to a question about

whether the president as some of his allies have suggested, would seek to fire the special counsel bob mueller, she said while the president has the right to do so, he has no intention to do so there could be a new legal challenge for the white house. nearly 200 democratic lawmakers filing suit alleging violation of the emollients clause today the press is seeking access to meetings on healthcare after reports that the president told senators yesterday that their bill needs to be more generous than the bill he apparently called mean john thune said the president is fine with us taking a different direction with what the house did. the president's 71st birthday will be on work force week yesterday a white house contingent visited wisconsin where the president and that group toured a technical college

and he then made remarks at a fund-raiser for scott walker interesting note, back stage at the event, the pool reported that the president said we were negotiating with a major, major manufacturer of phones, computers and television, and they would give scott walker a happy surprise sometime soon we're waiting to hear what company that is, joe >> i like that the president sometimes usesed a jek tuses adjectives a couple of times was that a direct quote? >> that was a direct quote it would be help ful ifhe said company headquartered in san diego, with x amount of dollars. >> and it is his birthday today? >> 71st birthday >> is it also flag day did you know that?

>> i didn't know that. that could well be the case. is this trivia hour? >> he has his flag tie on for you. >> coincidence i don't think so thanks to kayla tausche. senator thune will join us at 8:40 a.m. eastern. we'll talk about whether the senate is really thinking about doing anything ever. but they did have a meeting about obamacare. >> now they have direction, make it less mean >> less mean less mean. that's nice. nobody wants to be mean. >> definitely not. on top of all of that, we have the fed wrapping up its two-day meeting today. the markets are waiting to see how it will reduce the balance sheet. joining us is steven richutto from mizuho securities, and carcarl carls charles cham beampbell. steven, is there any chance they

don't raise rates? >> no, they're going to raise rates. the markets will look to see if there's new direction in terms of the balance sheet i don't think they'll get much in terms of the statement. that may come out in the minutes. >> we're trying to figure out why the market doesn't seem more concerned that the fed is moving up its timetable for shrinking the balance sheet. will that have additional impact other than just raising rates? >> the federal reserve when they were doing their quantitative easing, they felt 5$500 billion of reserve would reduce the rates by 90 basis points on the other side of the equation, you look at where the ten-year note yield and where it s 2.20 nobody would be upset if it

raised up to 2.50. >> charles what do you think anything es happenilse happenin the surface? will we wake up and say this is ang iss an issue >> we have the ten-year at 2.20. we have stocks at all-time highs. >> which one is right? >> what is each market looking at and each investor looking at? the bond market a janet yellen fade are moving glacially slow everyone cut rates going into recision with the exception of australia. they then had to reverse after raising rates, then cut again because they went back into a double dip or slowdown the only three that different, the bank of england, federal receive and trcentral bank of hg

kong the yellen fed is cognizant of that inflation expectations have come way in if you look at the gauge of inflation, it's at lowest level in a year and a half if you look at the ism, down 8 points month over month. so fed inflation expectations are low now. stock market is saying corporate earnings have been much better than expected. they continued to do well. pmi reports look fairly decent, healthy. so the economic back drop is constructive >> so you're saying both markets could be right at the same time. it's not that the bond market is signaling -- >> you are long equities at this point? >> i'm long equities >> steven? >> i always have equities in my portfolio. i'm a bit overweight bonds i've been grabbing yield, i think that's a good alternative to taking risk in equities equity markets look okay but they are expensive

they are expensive even relative to forward earnings. i'm more cautious in that environment. i yanked the poiunderstand the s no reason to limit the equity exposure, but where do you limit the dollar that you're putting in >> that's the question investors have been asking for months and months you missed 15% in the equity markets. i know it's impossible to ring a bell at the top. >> that's correct. >> is there an argument to be made that because rates are so low and not expected to rise soon that equities -- >> you would be clipping coupons for eight years to get to what the market has been doing for six years. >> but i could lose that very well, and the valuations are -- >> that's always the if. >> it's always the if, but it's an important if. >> it's nice getting 5% rather

than 2%. >> i'm not losing as much as you consider, and i'm getting price appreciation look at where corporates are, high yield performances have been, they're comparable and there are a lot less risk factors in there >> i would think on preferred stock there's more risk if rates go up? >> i'm not expecting a major back up in rates >> but if they d it's like an eternal bond i don't know your yield, if rates were to double, your preferred stock is going down. >> i don't think rates will anywhere near double >> not if the market corrects, but if the rates go up >> look at the political risk in washington we have a president not the leader of his party. we haven't done anything on tax reform >> oh, okay. >> there's a lot of risk that is still imbedded in there that

needs to be taken out. he would have taken out 2018, and i think 2018 is coming up soon >> so you think the market is up because of the president's agenda how much of the premium in the markets now are because of things that are expected to happen in washington, charles? >> the market is not discounting and expecting tax reform they're not expecting the healthcare reform. >> who is the leader of the party now if it's not trump? >> there is not a leader >> there's no leader of the party. >> a lot of people think they are. >> who is the leader of the democratic party >> they're as confused as the republican party >> gentlemen, thank you. those are both sides of the market, appreciate it. >> your horoscope coming into play here. coming up, uber board member david bonderman is out after he

made what's being described as an inappropriate comment at a staff meeting. we'll talk to a crisis management expert next when "squawk" returns usaa gives me the peace of mind and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children. we're the williams family, and we're usaa members for life.

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box. uber's culture problems continue even as kalanick agreed to take a leave of absence now david bonderman is resigning after he made an inappropriate comment at a staff meeting, the same day the company released that report on a culture of sexual harassment and gender bias joining us for more is eric desmal good morning to you. >> good morning. >> we've been talking about it all morning, late yesterday. did he have to -- now we're on to dave bonderman. given the sentence that he said around women talking more and sort of the jokey way we understand he said it. did very to resign >> probably. look, it is an aggravating catalyst and whenever you have somebody say something that causes people to be on cable tv talking about it, rather than the company going about the business of

fixing its problems, it's a distraction. i found in situations like this companies simply don't want to be in the position where they're trying to explain what a person said so the easiest way from "a" to "b" is to step down and get it out of the news. >> how acute in terms of what you think he said at the meeting, meaning had he not resigned last evening, would we be talking about this for a week or more? >> you would be talking about it for the next couple of days, looking at it in the context of hold every's report. if this had happened during a retreat that had no timing intersection with the release of this report, we would be having a different conversation it would be one of those dumb things that people who are not in tune with the culture say the fact it happened on the same

day as the holder report is the reason why we're talking about it if you look at the holder report, historically -- i had a ceo say to me once, the person who takes the company from 0 to 10 million, from 10 to 100, from 100 to a billion people are all different people and the holder report is about them saying -- >> there's a raging debate on twitter and silicon valley related to the bonderman comment and the decision to resign in large part because some people say has political correctness gone too far when you're a business how do you weigh the public issue in this particular instance, he's a board member, with whatever value you think he brings to the company, versus whatever damage you think that comment made?

that's the findme mefundamentaln that somebody needs to ask in this case it was asked and answered and he resigned >> look, my personal view has political correctness gone too far? yes. but i'm not paid in these situations to be an arbitrator of the culture i'm paid to help make problems go away. if the reality is a company in a controversy simply does not have the spine in 2017 to fight a battle on these grounds. companies are simply not able to withstand twitter battles in 2017 the question is do you want to go to war over defending bonderman's comment, or do you wanted to go to war to take a company into the next generation i think the answer is straightforward. the latter >> if -- let's say he was a key man at the company i thought he's a -- he's on the

board. how often do they meet he's a billionaire 74 board members are sort of there as -- it's like a part-time thing. after this happened i was like, you know, i'm out of here is what i would do. i'm just gone. i can help the company, i don't need it. do you think a key -- whether it's an operating guy or someone in an important position, do you think they would have left that quickly? >> probably not. >> a board nmember is different. >> one thing i've always been uncomfortable with, in recent years when you have a crisis, people get on cable tv and scratch their chins and they say do you think the ceo has to resign as if the ceo of united, a accompany with 100,000 employees, has to resign because two idiots do something stupid on a plane it's ridiculous.

now we have this climate where getting rid of the ceo on a knee jerk basis is considered a good crisis management strategy we would be having a different conversation if we were talking about a key executive rather than board member. we can't be overly analytical. the reality is when you're working for a company under withering siege, and you suddenly find that 100% of what you're doing is responding to comments people make, it is simply too traumatic inside the company. >> eric, i want to understand, are we talking in a bubble -- is this a conversation happening in the business community in silicon valley, do you think this is reaching customers this is the tech columnist in the "new york times" today one way to fix uber, think twice before using it.

here we have a situation where all of a sudden this conversation has been happening to a large degree in the business community does it translate into the operational business or are we still in our own eco chamber >> i think largely it's our own e echochamber. on one hand pundits are opining about it and then it becomes a problem. rhyme n i'm not convinced that the issues at uber cause an immediate consumer revolt. but the bigger question is if they're going to move from being a rambunctious start up into being a company that does business in washington, navigates regulation, things like that, i think there has to be a cultural change i see all the time just because you have activists and twitter -- people tweeting, it does not mean there's a business

consequence. >> glad you said twitter you kept saying cable people talking about it i think all of this is the stupid trending thing on -- you go there and you see -- anything can be there we talk ed about this before people in this business used to have a choice, is that a story is that not a story? if you think cofveve is trivial and stupid, you are forced to cover it because it's trending on this stupid social media site twitter. you can't make a judgment about whether that's really news or worth covering but definition, if it's getting that play on twitter, it's a story. >> there's also a bias to covering things as if they are crafts one thing you see is -- i get calls all the time when a company has a controversy. somebody will say gravely to me, do youthink this company can

survive? yes. they almost all survive. the thing they don't survive is the short-term twitter war you can do poorly in a short-term twitter war but do well in the long-term a year after toyota's crisis, sales were up 73%. >> i remember the tylenol crisis people were taking it, keeling over that seemed like a crisis that needed to be managed. >> that happened in 1982, in a different time, under different roles. that shouldn't be the gold standa standard >> i'm not saying it should. united was a big deal. i don't know >> i have a question, can travis come back? >> probably, but it will take a while. >> appreciate your time and your perspective. >> you bet coming up, shares of h&r block jumping in early trading after the company's earnings and

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♪ good morning welcome back to "squawk box. a quick look at u.s. equity futures at this hour dow looks like it would open up

close to 30 points higher. nasdaq about 14 points s&p 500 up about 2.5 points. >> shares of h&r block jumping sharply after a fourth quarter report that beat on both the top and bottom line. the company also announcing a 9% dividend hike. this comes ahead of the retirement this summer of h&r block's president and ceo bill cobb is this really a swan song interview? >> it sort of is with us, everything comes down to the february to april time frame. had a good finish, great year, earnings are way up. increased the dividends. good time to pass the baton. >> h&r block is one of the companies we talk about where you look at four quarters of earnings estimates, it's like there it is there's the quarter you need to do well. i think textbook publisher, usually it's a september quarter. >> right >> certain companies do all their business in one quarter.

>> the s&p 500, we're the most highly concentrate the revenue company. >> are you >> yeah. we do almost 80% of other revenue in the fourth quarter ending april 30th. >> what happens the other three quarters is it like the maytag repairman? everybody is sitting around? >> no, it's like a sports team we actually start around march planning for the next season it's one of those businesses where there's a lot of regulatory reform, tax reform. you have to stay on top of this. get the systems ready for the following year so then you gear up like the season starts in january >> over the years you had a series of challenges really i would almost call them existential challenges you had to face, intuit or -- if there was tax reform, you can do it on a card that seems like it would on i

have y obviate the need for h&r block >> everybody needs help. the guardrail is i'm afraid of the irs, i want to pay the least amount or get my maximum refund. >> we found out during the obama administration, there's a good r reason to be afraid of the irs >> the irs is the revenue collection agency for the united states 90% of revenues go through there. it is something that needs to be addressed, the technology and the system there's are embarrassing they're antiquated even with all the talk of tax reform, something has to be done with that platform to enable that to sustain. >> bill, just looking at the stock. it went from $37 back in the beginning of november down to $20 at the end of april. is that because of the thought that tax reform was going to happen and it would significantly happen since that time it has come back up to $27, as it looks less and

less likely that there will be a massive overhaul of the tax reform >> there was a lot of talk about trump, we were a foil for trump as an example -- >> he literally used your name >> yeah. and we had a bad season. when you have a bad season, 80% of your revenue in one year, it's punishing we regrouped i felt confident we could do some things. i was here a couple months ago talking about ibm watson that's been a great advance for us we did do a big expense reduction which we needed to do to enable us to be so aggressive we do free 1040 ez forms in the offices. so a number of these items put together enabled us to get our margins. we're doing ebita margins of 30%. if you were to look at the externalalties, the biggest tlt

tax threat is tax reform or intuit >> i think it's intuit they're a fierce competitor. their number one in the digital space. we're number one in the office space. i think tax reform is real my sense in talking to members of congress and members of the administration, we said there is real tax reform that has to be done all this comprehensive talk is not the right way to go. if you go back to the reagan years, it took five years to enact comprehensive tax reform what needs to be done, it needs to be taken a step at a time >> you sit with your board, they must ask you, because you have to make investments, to handicap whether there will be tax reform in the next calendar year, you have to make decisions about all this when you have to sit there and make a bet, if you will, you have to make a bet probably more than people in the stock market

have to make a bet what's your current bet? >> our current bet we have to proceed as if something will happen but people will still need help. take the healthcare debate we're still talking about refundable credits to fund health savings accounts. people will be confused by that. they'll turn to people like us for help >> i appreciate that point i'm wondering if we're having this conversation a year from now, whether there will be a new tax code you have to deal with and whether you make a bet on that >> we make a bet, because you have 43 states that tax and all the municipalities we're used to tax changes. we act as if there will be change and we'll proceed along with that. >> and if you can answer this question as a citizen plus with your business hat on, do we want the irs to have more or less funding for enforcement?

there's an argue mtd to ment to, for every dollar spent, you can collect $2 to $3, and billions are going uncollected. for your business it may be better if there's more enforcement then you have more business to do with the irs. >> i think it's not enforcement, it's technology. i think you can have better, you know, enforcement, if you will, if the technology is enhanced. that's the big thing i talk about. >> that's where you would spend the mo the money. >> that's where i would spend the money. i would spend it on technology for the irs. i think that's a good investment >> okay. >> you've been audited yet >> i've never been audited by saying that aloud i'm sure i have -- >> i have a quick funny story. i was audited. when i finished the audit, i was wrong, three days later i was named ceo of h&r block

can you imagine what that irs person thought >> i was audited. >> >> how did it go? >> i made $40,000. but i moved from l.a. back here. they looked at the moving expense, and they were questioning whether you were allowed it lately they ask questions about agent fees >> unfortunately i -- >> they put a note in my file. >> i overpay so meaningfully on the estimates. i overpay throughout the year a lot. so i think i'm usually -- >> you just send voluntary contributions in to -- with a love letter usually. >> yeah. >> attach a love letter to it. i write the check. >> put your money where your mouth is, you would send in voluntary, but you don't >> that's good company to be in. >> how hackable are the new smart devices? we'll have a hacker.

and tim armstrong is the ceo of oath, the new company encompassing brands from aol and yahoo! and later the senate is taking on health qucare refm.or senator john thune is working on that and he will join us at 8:40 whoooo.

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the chairman of china's anbang stepping down, the news coming amid a report he's been taken away for an investigation. eunice yoon joins us from beijing. she has more on this story >> reporter: thank you very much the big question in the financial markets here today was where is the chairman of anbang. we woke up this morning to anbang issuing a statement saying the chairman was no longer able to perform his duties for personal reasons. the company said that the senior management team would take over his responsibilities, and that the day-to-day running of the company would be normal. but what wasn't normal is that last night local media was reporting that the chairman was hauled off by authorities last friday and he has not been heard from since those stories have been

completely scrubbed from the internet here. and it's been raising a lot of questions as to the fate of the company and whether or not anbang will have to be forced to sell some of its assets in order to meet obligations as well as the demands of its policyholders. anbang has been an aggressive investor overseas. most famous for buying the waldorf astoria for $2 billion it bid for starwood hotels, and it has been connected with kushner because it's interesting in a property in manhattan the company and the chairman specifically is probably most famous for something over here, which is that he is married to the granddaughter of the chinese leader ping. because he is so politically connected it sent a shiver of fear throughout the entire insurance industry when people heard this news. one insider had told me that the

government is making strides and efforts to try to clean up the industry and what they're seeing is that anbang in particular has been heavily involved in technically offering insurance, but that the insurance looks like alternate investments that yield high returns to investors but not protection because of that we don't know whether or not anbang's chairma has anything to do with this, but the government is frowning on this practice >> okay. eunice yoon, thank you. coming up, smart speakers. door locks, other devices all making homes more connected than ever hackers are taking notice. we'll talk to one white hat hacker whose firm gained entry into the networks through light -- >> he will tell you how to protect your home. >> oh, white hat i heard of red hat

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welcome back, everybody. forget home is where the heart is as more people buy into app controlled light bulbs, and popular speakers like the amazon echo home could be where the hack is. joining us right now is david kennedy. he's the founder and ceo of trusted us security, a cybersecurity consulting firm, and david, are we overplaying this when we start worrying about what's going to happen with the hacks or are we underestimating just how dangerous this entire setup is >> we're introducing technology into every day of our lives. everything from, you know, monitors we watch our heartrates all the way to, you know, smart toilets that, you know, control temperature when we sit down and use the bathroom so you look at these pieces of technology, they're essentially black boxes that we're putting inside of our homes, inside of our environments, and they're absolutely vulnerable to attack and there are things that you can do, including eavesdropping on conversations, hacking the toilet to shoot water which was done at a security conference a few years back there's so many different things you can do with these devices

and a lot of times they don't have a lot of security around them and they're pretty trivial to hack. >> what have you found, things you can do aside from shooting toilet water at people >> there's quite a few things. like the smart tvs are agood example where you can take control of the camera itself and eavesdrop on conversations we've done that specifically, as well as -- that was actually used by the cia when they were using smart tvs to eavesdrop on individuals. there's a number of things you can do around the philips hue system which there is a flaw where they use the same encryption key across the board. you can hack into the smart light bulbs and get access to the network and eavesdrop on individuals. there's a number of different things that you can do, as well as, you know, what other things have happened. there was one where someone had hacked in to a camera and you can actually listen to the conversation they're having in the room and actually hear them talking, dad walked into a room and heard an unknown voice talking to his child in the middle of the night, from

hacking into his camera. all the things are definitely possible and it's not slowing down any time soon. >> you know, that's one of the reasons i didn't use one of these new baby monitors. i was about to and dan schulman at paypal convinced me that may not be the best idea but are the manufacturers of all these devices getting smarter about this as they realize the weaknesses that are out there? >> i think they're trying to the problem is, is that manufacturing is a very, you know, specific type of process that they follow and introducing technology that's connected over the internet is a brand-new concept for a lot of these folks and so they're really struggling with, you know, the actual security that you put around that, and it's not with the times. hackers are figuring that out and it's definitely an avenue of attack the manufacturers aren't building a lot of security even the amazon echo still use clear text not using https for some of their software updates even companies like amazon have security flaws when it comes to how they're integrating this technology into our lives.

it's going to be awhile before we see a big focus on security and take a lot of different types of hacks around the home for them to actually take it seriously and start to address it philips hughs awhile to address the specific vulnerabilities identified in its light system they released a patch. but we're at the point where we have to patch light bulbs in our houses to protect ourselves. >> that's crazy. what would you be telling people to do? avoid these devices altogether or are there things you can do to make yourself safer if you're already using them >> if you have smart devices and you're looking at purchases some there's a few things can you do to try to help yourself. one is that, you know, these vendors release patches on a regular basis. so as a monthly routine, you know, go to these devices and see if there's a new update you can download >> for my light bulbs, that's crazy. >> i understand. that's unfortunately where we're at today for your toilets you can hack into the bluetooth these are things that can the technology we have to continuously look at what's going on out there >> david, does it matter if it's the consumer version, or the pro

version? meaning i know people have like lutron light systems, there's a fancy version, the one you can buy at best buy. >> yep >> is there a distinction or not really >> not really at all you look at like lutron, same technology they would implement on the lower side. doesn't mean there's more security involved. a lot of cases the pro versions are more of the premiere services, and the more luxury ones and have less security in a lot of cases than the mass monetized ones >> would you ever have a wi-fi enabled lock on your door? >> i would not absolutely not no way >> good to know. >> david, thank you very much. >> thanks so much, appreciate it coming up, verizon's deal to buy yahoo is now done. it's in the this books aol ceo tim armstrong is now the oath ceo he's going to talk brands, layoffs, cybersecurity a sndo much more. tim armstrong in the next hour

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good morning a board member is resigning over a controversy comment about women on the same day that the company released its report on sexual harassment. details straight ahead it's decision day for the fed. what would an interest rate hike mean for your portfolio? we will find out when we speak to morgan creek capital management ceo plus making the oath tim armstrong on growth plans for the verizon subsidiary and the fate of marissa mayer now that the deal with yahoo has closed the second hour of "squawk box" begins right now ♪ live from the beating heart of business, new york city, this is "squawk box." good morning, welcome back to "squawk box" right here on cnbc we're live at the nasdaq marketsite in times square i'm andrew ross sorkin, along with becky quick and joe kernen

the futures at this hour they are looking up quite nicely the dow looks like it would open up about 45 points higher. s&p 500 up close to 4 points and the nasdaq up close to 16 points the federal reserve expected to raise interest rates quarter of a point at the conclusion of its two-day meeting later today. the decision will come at 2:00 p.m. eastern time with fed chair janet yellen holding a news conference a half hour later steve liesman will have more on the fed in just a moment also investors will get a look at two key economic reports ahead of the fed decision. retail sales, also the consumer price index both coming out for the month of may at 8:30 eastern time and expected to be unchanged for the month according to consensus forecasts. also oil prices under a bit of pressure this morning take a quick look. the international energy agency says the current global oil glut will remain at least through the end of the year. the i.a. saying that despite opec's production cut u.s. production levels have increased, and there's already a high level of oil in storage

wti crude right now down about 1% at 45.94. a developing story this morning. london's fire commissioner says that there have been a number of fatalities in a fire that broke out overnight at a high rise apartment building firefighters are still working to put out the blaze, which quickly engulfed the 24 story building in west london. at least 50 people have been taken to area hospitals. london's mayor says that questions will have to be answered over the safety of the towers some residents of the building say that they had been advised to stay inside in the event of a fire in another part of the building other reports say there were no fire alarms in these buildings, no sprinklers, and that the fire spread incredibly quickly. uber board members, board member and one of the founding partners of tpg capital, name is david bonderman, showed some video of him earlier is resigning from uber's board after he made an inappropriate

comment at yesterday's meeting on sexual harassment at the meeting bonderman cut off fellow board member ariane na huffington who i think was recommending a woman for the board saying it would be better when there's more women on the board, more women get hired by the company so he jokingly said one thing i know that it would mean is that there would likely be more talking. bonderman has since apologized and resigned from the board. his comments came as the company was discussing, right in the middle of discussing a major investigation led by former attorney general eric holder into the corporate culture holder's recommendations, highlighting nearly 50 ideas for uber to improve workplace culture, including reducing alcohol use at work. no at work events. probably both. would be good. at work or at work events. and preventing intimate relationships between employees, and their bosses separately, uber announcing its ceo travis kalanick is taking a

trar leave of absence. it is fed decision day steve liesman joins us right now with a preview, and steve the markets have almost basically figured this is a done deal. >> this is amazing despite the weak gdp and lower inflation, the market really never wavered from the conviction of this hike coming today and the fed barely attempt to say anything. fed chair janet yellen i think has some explaining to do at the press conference and also in this statement let me put out a couple yellen dilemmas one the employment rate is at a 16 year low but inflation's been declining. the fed has been hiking, long rates have been falling and stocks are soaring here's the chart of the unemployment do we have the unemployment rate chart? what it would show is -- look at that they're great in the back. unemployment rate heighting a 16-year low, 4.3% but three months in a row now the fed has made no progress on the core pce, or the inflation indicator.

that's what makes, by the way, this 8:30 data pretty important. the retail sales and inflation data but economists say quote we think the main message will continue to be that the improving labor market is likely to justify gradual, but ongoing removal of stimulus. that means another hike is likely this year though not quite as automatic after today and plans to reduce the balance sheet should be revealed later this year. not so much as tightening as normalizing rates. doesn't really want to slow the economy, but would be happy to see gdp even increase. keeping a wary eye, of course, on the declining unemployment rate what the fed really wants here is to get back or claw back what it can in the terms of normalizing rates while the getting is good, guys. >> a quarter point >> steve, you need a haircut, steve. >> really? >> you know how you get -- you know on the sides. >> yeah, it's a little -- yeah, you know thanks, joe. >> either that, or you know i'm

still -- >> i know what you think i know what you think. >> you would be the most bad ass fed watcher in -- you'd be like the coolest thing. because -- >> kojak >> well when gary cohn does it i'll follow gary >> should we talk more about that, steve? >> well, you know, andrew, we seem to -- some people internally think that's news i think between you and me, and especially you, we've known he's headed -- should we say what we're talking about? >> read the e-mail this morning, there's an article in "the wall street journal" talking about how gary cohn is leading the search, if you will, for the janet yellen replacement we talked repeatedly, steve and i have -- >> i think we knew that. >> on the air both about that and the prospect that oftentimes the person who is leading the search -- >> andrew. >> takes the job >> you joked about this -- >> you were just going to do anything you can to try and make that happen? >> i'm not willing it to happen. i'm just suggesting that -- >> geithner never became -- remember when geithner was going to be fed chief.

he never became it either. >> would you give him credit if gary cohn does become fed chief? >> not if he forces the issue by keep talking about it that much. you predict it and you're -- >> andrew. andrew andrew, how long have we known that cohn was looking for the guy who was in charge of looking for the fed people and looking for the fed? i think it's been months now, right? >> maybe like a decade >> you think he could pick himself? i don't think so >> i think he then says well we don't have great options, maybe we want -- i don't know. maybe he wants -- i don't know anymore. >> very powerful -- >> suggesting it's a possibility. steve suggested it as a possibility. "the wall street journal" is suggesting today it's a possibility. >> all right, all right. >> we respect them but they're a little late to lunch on this one. >> oh, god if it doesn't happen they're not late to lunch. >> that's true >> if it does happen andrew's been the first >> steve stick around. >> i will. >> let's talk more about -- let's talk more about -- >> do that >> talk more now about the fed chance of a rate hike at today's meeting and how it may impact the markets.

joining us now evercore isi vice chairman and morgan creek capital management ceo and chief investment officer i thought that was bourbon is -- you make bourbon too at morgan creek >> a little further north in kentucky >> is that a different -- are you in kentucky? >> no, we're in north carolina >> i'm pretty sure you guys make -- don't be shy >> all right >> we will see -- >> make movies there's morgan creek productions. >> oh, there is? that's right that's -- that would be cool all right. so, is there anything that could be surprising today in your view >> i guess if they didn't raise rates it would be a surprise >> what if they raise it and then in the comments is there anything -- >> i don't think they're going to go very further -- very much further out. in terms of promises look, i think they've been trying to get from out behind the curve for a long time. and we were together about a year ago and one of the things i said, i think becky almost fell off the chair was i thought she should

raise it to 3% in september. and she should because you have to reload the gun. they've just been behind the curve. the whole reason to keep interest rates low was to recapitalize the banking business there were people that borrow fed funds are the banks. the banks are doing well they've got excess capital so we could get higher short rates. what's really interesting is what the long end is doing the long end is actually rates are falling. and so the curve is starting to get more flat, and could even invert >> that's the other central banks, right >> yeah, exactly >> but i just don't see why going to 3 would help that problem. it seems like they were right to be slow, and it's been -- >> too much liquidity in the markets. >> and el vaithed by long rates staying so low that they didn't need to go higher is that not true >> steve, is that wrong or not that's your viewpoint, isn't it, steve? then we'll get to chris? is steve gone? >> no, i'm still here, joe i think that's right i think what the fed needs to do here, what mark is saying is that is soak up some of that

liquidity. that's one reason why you have these long end -- the long end coming down. when i talk to a lot of real estate guys they tell me that, you know, they're being asked by banks to take more money now and -- >> but steve behind the curve or not? i've -- >> i don't think so. i don't think so i think that when you have inflation that's low, you're still doing 2% of the economy. i really think this metric, and i really want to hear chris on this, they're not tightening, they're normalizing and there's a difference in that >> chris, there's no asset bubble in oil, that's for sure >> yeah, you know, look, i think that as steve said, the fed is trying to nudge its way back to what they think of as a neutral pasture on rates something closer to a 2% funds rate, which once you subtract inflation, when they get back to target would basically be zero interest rates adjusted for inflation. they think that's appropriate with the unemployment rate now, already below what they think is long run sustainable rates. when you look at financial

markets, i don't think they're trying to kill the stock market. i do think that they see very easy financing conditions in the market and that gives them latitude to keep nudging the funds rate up >> hmm >> so, looking for something exciting today, no one is going to give me anything. are you -- >> a couple of things just to think about. i think it's likely to be fairly straight down the line but look for a couple things the first-on-is if they update formally their plans for the balance sheet roll-off the more formal that is today, the clearer that it is that at least they have the option to go on that in september, rather than in december secondly, just keep an eye on those outyear interest rates docs particularly 2019. i think you could see one or two people starting to just take those dots a little bit lower. when it happens it may be a 3re cusser that down the line of the next edition we could see more significant retreat on that 2019

horizon. that's pretty confident in their plans very near term a lot less conviction as to where we go, you know, beyond end of '18 particularly through '19. >> you always -- one of your favorite things is terminal pricing and you used to think it goes there immediately you have a feel for what it is this time around and we get there and then it might go back down from there? what is it it's so low. >> this is so different from every other cycle, joe, in that now we've never been in a situation where the fed itself is forecasting its own terminal rate and the fed has put that up at 3% we poll on that in our cnbc fed survey, know -- not the all-america, in the fed survey, we poll on that and we're running at 2.8 is the average among our participants in that so, everybody has this idea, and you're right to point out the failure of my theory here is that they're not pricing terminal rate in now there are other aspects that are keeping down on that my question is sort of a drama

today to me is when does the fed get concerned about this conundrum the way greenspan was. remember they were hiking rates, the long end didn't respond and then everybody comes back and blames the fed for not hiking rates enough, and then really fomenting the housing bubble, because rates weren't high enough i wonder if there's some people on the fed who are saying you know what? on the one hand we need to push a little further, a little harder on the brakes in order to make sure we don't have that same problem again and then you have another group of people that were sort of the old dove crowd that say you know what i've got three months of declining inflation, i'm not getting towards my goal, maybe i need to stop so there's this sort of developing schism on the fed that's not a problem yet >> all right, so mark. >> yep >> you're like out there >> okay. on what? >> equities are totally overvalued there's going to be a recession. trump's like hoover, instead of hooverville we see trumptown so, i want you to go on record

for this, so next time you're on if it doesn't happen we can laugh at you, i think. so tell me -- >> sure. >> so how overvalued is it, and there's going to be a recession this year or next year you said this year >> you know, beginning of the year we said it could happen this year. i think it's probably more likely in the first quarter of -- >> did you have an s&p target at the beginning of the year? >> we thought the s&p would be flat to down this year >> from where? where was that -- >> from where it began so, wow, your clients still hanging in there >> well, years not over. a lot can happen in the fall the market's 85% overvalued to fair value you look at fair value on any number of calculations, we're around 85 mrs above that that doesn't mean we have to go right back to fair value you can stay overvalued for a long time. >> let's say -- >> you think the market is going to tank by 85% >> no, no, no. you go back to fair value -- >> that would be a call. >> so i understand what he's

saying -- >> it happened over time >> flat to down for the year so you're talking about a 10% -- no what is it, or at least a 5% or 8% correction, and then maybe below that is what you think is going to happen before the end of the year. >> i think it's a long process you look at 2,000 -- >> you're giving yourself more time -- >> no, no. our original commentary was that we were valued like we are in 2000 we're not quite as extreme but we're pretty close we're the second highest overvaluation in history and so if you remember 2000 you had this last push in the summer into the fall where we get into real levels of high valuation. you look at some of the stocks out there with, you know, quad digit p/e ratios, the average p/e in small cap stocks is in the '80s if you include the companies with negative earnings so if you look at all of that, we're high level valuation housing wasn't that bad. it was down about 9% 01 was down about 12%. '02 was down 22%

you go down a lot -- >> let's say that okay, jonathan yesterday not on our show, later in the day, he -- >> power lunch >> oh, that's right. but we had been talking -- we've been talking with him about whether he's going to raise his target because he -- and he raised his target to 2600 >> i think he's looking for an additional 6 points. >> i think he said 2600 on the s&p. so your stake and i don't know what you where you were before beginning of the year i don't know if you were -- were you bearish for 2016, as well? >> no -- >> it's hedged -- >> okay if it goes to 2600 -- >> we're up about 8% this year >> but if it goes to 2600 do you say at 2600 -- when would you capitulate what would cause you to say you know what? that was a bad call, it's not going below 2250 i'm going to buy this market? what would cause you to do that? >> what i wrote, you mention the welcome to hooverville i wrote my letter that we're actually tracking a very similar experience to what happened in 1928-29. and what i said is that we could

get a bubble blow off top to 2800 so i actually think between now and september-ish we could see 2800 >> -- 2200 you shouldn't have said flat to down -- >> he's up 8% for the year -- >> you want to go long, short to bad companies, short to overvalued companies the thing is when you're trying to protect your wealth, which is the most important thing, right? getting across the finish line, not first, but you're protecting wealth, you want to be -- it's okay to be three hours early but you can't be a minute late so you've got to get hedged in advance of the problem so if we have this blowoff top in the summer, very similar to what happened back in '29 or back in 2000 you've got to get hedged before it turns down. >> well we'll see. that may or may not happen at this point and then you're just going to wish it stayed long or got longer at 2000 i mean it's possible you could be totally wrong >> of course of course! >> all right so far -- looking that way but we'll see whether -- >> we're up as much as the

market >> so why -- >> so you're -- if i had been your client, if i had been listening to what you said at the beginning of the year we're going to be flat to down for the year i would not have been investing in stocks. >> but it's only in june >> i understand that -- well i know i heard i haven't seen -- >> in fact we're very overweight emerging markets emerging markets -- >> up 16 -- all right. but -- fine. so you've been bearish but you're making money anyway -- >> we're not bearish joe you're missing the point we believe the market is overvalued you shouldn't buy overvalued -- >> not saying you're bearish -- >> okay so you're -- you're telling clients you're going to be flat to down for the year you're bearish now if we go to 2600 like these other guys you're going to be wrong. that's what a 4% move from here? >> from 2200 to -- >> 2400. >> i would have rather been telling people it's going up

but you know it's your -- >> okay. >> that's fine good >> okay. come on back we will -- >> check this out to see if it happens. >> coming up, oath ceo tim armstrong plus the fed's decision on interest rates due out later today what it means for your money and bill daley is going to join us to talk trumponomics and later when it's hot out ne'll talk about the brew busiss stay tuned you're watching "squawk. you have access to in-depth analysis, level 2 data, and a team of experienced traders ready to help you if you need it. ♪ ♪ it's like having the power of a trading floor, wherever you are. it's your trade. ♪ ♪ e*trade. ♪ ♪ start trading today at etrade.com

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one that keeps you connected to what matters most. welcome back to "squawk box. verizing completing itzhak business igs of yahoo integrating aol, over 50 media and tech brands including tumbler and yahoo sports and finance. yahoo ceo marissa mayer will not remain with the combined company taking a $23 million severance package which i'm sure we're going to talk about. in the meantime we want to welcome tim armstrong. the former aol ceo now today officially as of yesterday officially the ceo. >> good to see you guys. >> we're going to see you on the day within moments of the official closing but it's good to see you today tell us what has happened. so what is actually happening in the past 24 hours? >> sure, so yesterday i was in california, monday in boston, yesterday in california, the

last couple days in california and we're basically putting the companies together so the deal closed you have the formation of yahoo plus all the aol brand, housed inside of verizon. you have a billion consumers one of the largest mobile companies in the world and we basically, trying to get the clarity to our job impacts happening this week so we're basically focused on that this week next week we're in france for major advertising and then after that this summer a major product sprint, and so the company's been a year of the deal coming to the and i think everyone's excited. >> what's gained and what's going in terms of both the jobs, piece of this but also in terms of how you're thinking about these various brands >> sure, there's three areas of jobs impact we're changing one is yahoo going from public to nonpublic so there's public lease forces second is tweaks just in terms of us around where i say redundant groups and resources, in general putting more money

towards product and technology, next towards the back office functions. and third is where there's product consolidation. so if you look at areas like, you know, mail, or the home pages, those things where we have very similar teams, there may be impacts combining those products over time the brands will stay, but the back ends of those products will continue -- >> what do you want this to be if we had this conversation two years from now -- >> we really -- >> measure it? >> sure. we have our 2020 goals we just talked about, getting to 2 billion consumers. our belief is that if you look at the mary meeker deck that came out it's not hard to see the pathway which is where things are going which is mobile media and mobile services. we want to be the company that leads the forefront of putting brands on phones and that's a very simple propositi proposition. very powerful for, you know, the consumers. 3 billion additional consumers that are coming online and our entire focus is focused on being hands-on phones and putting brand marketing in people's hands. >> putting brands on phones.

you do that without branding ire of the justice department like slapping them on every verizon phone that comes out without any competition that comes in? you've got to use the corporate partnership without getting into a dangerous situation. >> one of the things we did announce internally yesterday was we are starting to load a product called app flash which will carry yahoo brands and aol brands on verize rn phones consumers have a choice. you can potentially load whatever service you want on your phone we will basically have consumer choice at the center of what we're doing and i don't think you'll have any issues where we're getting over a line that's going to become a justice issue. i think verizon understands those issues very well and we're very respectful of them. we want consumers to have a great experience we need to earn our way onto phones verizon's not going to put things on phones that don't make sense. we're going to focus on that >> one just employee question because i know i'm seeing it on twitter, a number of your new employees who are watching you this morning, just to put a fine point in terms of layoff situation because they're all

kind of trying to understand it and i know it's hard to explain it on tv >> true. >> they've heard all sorts of different numbers in terms of how many different total people are going to lose your jobs. what's the total >> it's roughly 15% of the company. it's mainly focused on us putting more resources towards the front end, towards the consumer -- >> what's the total number of employees? >> there's roughly be about 14,000 >> okay. >> so you're looking at about 2100 impact overall. and again those are mainly happening this week. we're trying to get everything done we can this week and we're spending a lot of time, our executive team is spending their -- i said this is people week next week we'll get the strategy and business this week let's get everyone settled and make sure that we help people find jobs across the economy >> question about sort of bigger strategy beyond, and i know you have a lot to do in terms of integrating this piece of the business, but we talked about it before, your boss and partner lowell who runs verizon has said he is open to all sorts of mergers and potentially buying

even more content, much more expensive content, frankly, whether it be cbs, or viacom, or he's open for business to do anything where would you play in any of those type of conversations? what do you want to see? >> let me just readjust that statement is lowell i think had said he was open, like any ceo would be, to doing anything. i think what he recently has said is we're organically focused on pushing the ball forward in terms of the integrations that we're doing at oath verizon has also acquired other businesses i'm sure verizon is going to be open to doing anything that made sense for the business overall but you know, our focus right now is getting really big digital scale, and we're working on a number of partnerships with big media companies. >> but when you look out at just the landscape of how this is all going to play out. how much of the model of what at&t and time warner are doing, or even what you are doing, was there going to be specific brands that to some degree may be tied to specific distributors how important do you think long-term that is going to be? >> well i think there's, you know, our objectives as a

business are clear and related directly to business models. one is we want to build brand people up. that's number one, we want those brands to be distributed everywhere -- we would love to have them on at&t, but to have them on t-mobile, comcast, any of those places. second is to build platforms that companies love. we want to have our services, whether it's media or advertising show up on everyone else's phones, and distribution sources also so, half of what we're doing as a business is actually building things for other companies as well. and the last is building a company that talent loves. and those three things are not specific to verizon. it's very helpful for verizon, but it's specific to where the world is going, where the industry is going. and those objectives are kind of what's driving -- >> -- value proposition of the amount of data and information you get, from -- by being connected to a phone company >> sure. >> and how that's going to ultimately help on the advertising end. >> sure. >> just how important that that is and how you're collecting that data.

>> number one is, the amount of touch points we have without verizon involved is about over 200 billion pieces of touch point a day. so there's a lot of data we use to optimize our services every day -- >> your -- you're seeing what i'm looking for, what i'm searching for, what i want >> yes, what you're looking for, maybe doing e-mail, looking at content. we have a lot of data today that we can optimize our business and personalize things on. the second piece is with verizon now we have that information if you've opted into it you can understand how better things on mobile so if you think about our core strategy underneath the entire strategy what it is, is delivering personalized information on an individual basis so if you look at linear programming, it goes through you know family level or even to a broader level our information is all personalized so everyone can have a -- >> and how is that comparable in terms of -- or advantaged relative to what the kind of information that google is able

to collect with people who have android device, or facebook is able to collect if the app happens -- >> it depends by partner and how they're set up like the way they think about it is verizon's relationship is a total subscriber -- >> right >> everything you do on your phone in terms of the app usage, location data, those type of things are privacy protected and pii protected but there's a lot of valuable data so you look at mobile data and desktop data together mobile data is better than desktop data terminnistically your phone is with you all the time from our services we've been able to put a brand portfolio together that goes from tech to news to finance to sports and if we can deliver that and you combine that with our bring oath together from a structural standpoint, she's done an amazing job, we're going personalize all of those services for you on your phone, on your ott device, on your desktop, and you know, verizon

is a very powerful company in this space oath is a very powerful company. over a billion users on the internet it's this is a scale it's going to take us time to put it together but this is a powerful, powerful potential for the future >> and i got to ask, you knew i would, corporate governance folks look at the severance package that marissa mayer got and they throw up their hands. what's the rationale for it? what's the explanation so people understand >> sure, first of all, one thing i say is i think marisa, we went a lot of time in the last year and they've done an excellent job building a culture and product and engineering team overall and i think the results for yahoo have been very good for shareholders i think -- i won't comment on marissa's package, specifically, but i will say a lot of those type of comp packages are done based on the situation the ceo is going into, and i, you know, marissa had an incredible returns on the stock over time so you know, her returns are

probably tied directly to, you know, what her results were. and she also has a contract that she left the company so i, you know, there's a marketplace for that type of contract, and, you know -- >> in other words that contract was something that was before your time? >> yes >> yeah. there's no -- journalism entity here god bless her -- >> no, no, i'm happy for her really happy it's good for her. >> yeah. >> and by the way there have been -- >> a lot of interesting articles written about it, and the most interesting piece of it, actually, not to go off a tangent was just how the stock has actually succeeded now in large part because of alibaba, but that was how the metrics were -- >> but until we start, you know, figuring out like legislative ways to prevent things like this i say anybody that can get a contract with their people, their agents or whatever and

they get a great contract and something like that happens, i go what a great contract i'd like to go -- i would like to have ended up going to yahoo -- i wish it would have been me. >> i will also say one other thing is if you go to almost any major corporation, everyone is trying to figure out how to get into digital and i think what's happening in sal cilicon valleyn terms of the stock prices, this is a very valuable space and industry >> is it bono -- >> bono. >> when you go back home in ireland you see the guy up on the big house on the hill you want to get that guy you come over to the u.s., i want to be that guy. right? i want to be that gal. be marissa >> i want to be tim. >> all right >> we all want to be tim >> we all want to be tim >> congratulations >> how was your pay cut? >> [ everyone talking at once ] >> when we come back this morning the future is here

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those are just a few of the items on his agenda. joining us right now is former white house chief of staff bill daley and secretary thank you for being here today great to see you >> thanks to you, becky. >> depending on who you ask, you have an agenda that is completely bogged down with no hope of seeing light of day. others who will say, yeah, maybe things are coming together and we could see some things that happen before the summer recess. let me guess which side you take >> well, i'd say it's more likely not anything major is going to happen before the end of the summer. i think you have such a short period you know, they take long breaks around the fourth of july, and then of course august, and you've got some -- forget the circus that's going on right now down there the actual reality of trying to get a health care bill, or tax reform or something serious, these are as the president even said, these are complicated things and so far, not only are they diverted by the comey and sessions and all of the russia probe but just the sort of chaos

that seems to be going on. ringling brothers closed up a couple weeks ago i think it was because they couldn't compete with the circus in washington. >> you're a former commerce secretary but you're also a former white house chief of staff, and let's put your chief of staff hat on for a minute if you were in charge of trying to wrangle things here, what kind of calls would you be making what would you be doing if it were up to you >> well, of course, the first thing you try to do is take the cell phone away from the president, which doesn't seem realistic. because i think that sets a tone every day that is then forces the white house staff to react to so that's -- >> by cell phone you mean the twitter account? >> yeah, the twitter account so it's not going to happen. so, look it, there's no doubt the chief of staff is under enormous pressure to get something done and that's why the senate is moving, at least from what i read, moving forward secretly in some sort of health care bill that they think will be a compromise just to get it done whether that can ever be matched

with what happened in the house, which the president praised a month or so ago, and now supposedly believes it was too mean >> right >> to people of america. remains to be seen but i think they just got to get something on the board you can't announce an infrastructure week and then have nothing really happen you can't announce tax reform, and just sit there and so i think there's got to be a sort of let's stop this madness, as best one can, because a lot of it is out of his control, obviously, priebus', but two things i'd do first of all, shut up everybody in the white house from talking so much and leaking so much. may be impossible. but if that's the case, then get rid of people. make real changes inside because obviously most of the damage being done to the white house in my opinion right now seems to be coming out of the administration not by the democrats >> bill, isn't it possible that with whatever commotion is going on we could -- is i mean is there an argument to be made

that whatever is happening at the white house is noise and that the thing we need to really focus on is what's happening behind the scenes inside the senate when it comes to tax and health care and that perhaps they can get their act together, without the white house, they can pass something interesting, make it happen with the house, and then bring it to the president at the end >> andrew, to be honest with you, i think that's unrealistic. the senate and the house don't deal outside of the town of washington which is driven so much by the white house. the idea that we'll just let the circus take place down 1600 pennsylvania avenue, and we'll be the adults that do the work, it doesn't work that way first of all, you've got a president whose popularity is tough and the senators and house members look at that, they're only 18 months away from re-election. they're scared to death, i assume, in the republican caucus about what's going to happen, and that relates back to the white house. so you can't work in a vacuum. because the president will lean in at the end. and if you have a bill that the

president has a hard time wrapping his arms around, i don't know if he's just going to wrap around anything like he did the house bill, first bill, then the second bill, that's not leadership you've got to get some leadership coming here >> but if he is -- you just made the point that i think i was trying to make which he is prepared to wrap his arms around something that looks like a win. he's in the business of trying to win, or at least appear to be winning. so if -- >> yes >> if he can effectivelyal how them to get their october together, put something together, he will wrap his arms around something that he can stand in the rose garden -- >> at some point if you believe the polls, that the house passed health care bill is not popular at all, to wrap yourself around a bill that comes out of the senate that's as unpopular or more unpopular, just kills them all going to '18 and these members of the senate, more importantly the house who are up in two years, most of them, all of them, obviously, are going to be more sensitive to when this

comes back to them and the president isn't up for another 3 1/2 years. so he has the luxury of sitting around, and embracing anything, and the senators and house members don't have that. >> secretary daley, always good to see you >> becky, thanks very much bye-bye. >> all right coming up, the tsa requiring travelers to declare their carry on bags but taking out ipads and e readers. one company is looking tchgeo an that phil lebeau has that story after the break. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

welcome back to "squawk box. do you dread the idea of a laptop ban on an upcoming flight 3-d screening technology may be the answer to your prayers but will the government buy it that's the question phil lebeau joins us where are you this morning in massachusetts, that's right >> peabody peabody. just outside of boston these are the ann alogic imagine if you could give a c.a.t. scan to your carry-on bags this is their new carry-on bag screening device that they are currently testing with the tsa and with security officials in europe look at the image that comes through as that bag comes out. they're able to maneuver this so

that the tsa screener can see there's a knife, there's a gun, and see this red spot here guys? up here, that is an explosive sim lant that was put in to where the battery would have been in the laptop in this bag now compare that with the current image that you see when you go through baggage screening. it's two dimensional not always easy. you don't see the knife, and it's not always easy to see what might be an explosive sim lant that's one of the key advantages the ability to perhaps better detect explosives. >> so the machine does everything it examines the back using the algorithms, and displays an explosive in a bright red so that it's clearly, you know, for the operator, they can have a clear understanding that something is dang vus in the bag. >> and as you take a look at shares of analogic with this technology that is being tested you would not have to take liquids, lotions,

everything out of your bag theoretically, all of the bags and people going through carry-on bag screening should move through the system faster because of this technology >> so phil real quick before you go, how quickly is this going to be available, and what does it look like in terms of orders at the moment >> well, they're pretty optimistic that they're going to get the approval from the tsa, as well as european security officials in the next couple of months and then it's a matter -- these are a quarter million apiece then it's a matter of procurement with the tsa budget, the european security budget, all of the different airports around the world potentially over the next three years we will see hundreds of these machines rolling in to airports, not only here in the u.s., but in europe and around the world. >> thank you very much, phil >> thank you when we come back, as th craft beer craze gross brewers are looking for innovative ways to stand out we will speak to the ceo of harpoon brewery about th

alnglascape. that's next right here on "squawk box. these days families want to be connected 24/7.

that's why at comcast, we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. nothing like on ice cold beer to get you through the summer heat. helping us cool down this morning with his own brand of craft dear, danny kenary founder and ceo of harpoon brewery in boston good morning how are you? >> good morning. >> to cool down but is it self-defeating am i dehydrating myself when i'm trying to hydrate myself

don't answer i don't even want to know. that is true though. but there's something about it in the summer, right >> it's 95% water. it's all good. right. whenever the temperature is. >> it's always good. >> i like it really cold you're not supposed to, though >> you know, 38 degrees is kind of ideal but i think it depends somewhat on the style and your taste. we're beer not wine so we try not to have too many rules >> i wish it was colder than 32. but i'm told that's not possible >> well, we actually filter it around 30 or 31 degrees. so we do get it colder than 32 >> oh, he does >> we do down at the brewery. >> because there's some alcohol in it so it freezes at a lower temperature. >> it's actually important to filter it below 32 >> so the craft beer that you have times when it beats everybody else and times where it lags. where are we in this cycle >> we're moving from a phase where we're beating everybody else to a phase where we're not and imports are doing better

than craft right now and other style, some of the super premium beers are doing better than craft right now. >> why >> that's generalized. some are doing really well, others are struggling. >> what explains the cycle >> we've been around now for 30 years so it's kind of typical to have those ups and bounce downs. we saw it before in the nineties where consumers had brand fatigue and they're overwhelmed by the choice and they go back to what they know as opposed to trying the new >> how much of it is the millennials? >> a lot of it they are dominating the category right now. and so, they've proven to be really loyal craft drinkers. but also very experimental they're open to trying whatever is new, whatever is local -- >> and no loyalty? >> well, not as much as at times we might like. and that's -- in a consumer product category is not all that surprising >> how important is branding, versus, and marketing, versus the actual product or i guess you have to tell me the product that's most important. >> well i'll tell you, you've

got to have great beer right in the bottle or can but branding is more and more and more important. back in the early days when there were 50 of us in the country, you could get away with your story about hey, we're new, we're local, we're different than the mainstream brewers. now, 5300 craft brewers in the country, branding is incredibly important. >> how do you differentiate yourself in terms of the product and the taste. what would you mess around with? hops or -- >> great question. you know, it's four classic ingredients, right so you don't have a ton to play with but within those categories the malt and especially the hops you do have a lot of different varieties. you can mix and match. and also we have a proprietary yeast, most breweries do, that interact with those ingredients. >> does the quality of the hops, or malt, can you get better malt better hops? >> absolutely. >> you can >> fresher, befter, yes. without a doubt. and our ufo beers huckleberry the summer seasonal. so you can add other ingredients to beers as well, beyond the hops >> all right because people try to say

vodka -- like top shelf vodka, it's tasteless beer i can -- >> that's neutral -- >> -- consume food when it's on the set? what's going on here >> i don't think that it's -- >> this is consumption -- >> doughnut flavor >> that's an excellent question. do we pass that down >> pass it over. niinthn we come back, we'll be fishg is up, and -

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d-day for the fed. investors await a rate hike and potential market moving comments from janet yellen. >> inside president trump's health care meeting. the commander in chief reportedly supports a different direction for reform we're going to talk to a senator who was in the room coming up. plus, more drama at uber this time, a well-known board member stepping down after a controversial comment. investor weighs in on the shake-up as the final hour of "squawk box" begins right now.h. controversial comment. investor weighs in on the shake-up as the final hour of "squawk box" begins right now. >>le >> live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square i'm joe kernen along with becky quick and andrew ross sorkin let's take a look at the

futures. indicated higher up 49 points, up 3.5 on the s&p, the nasdaq up 15 at this point. but, some other things happening here >> we do have some breaking news, folks. we're getting reports that multiple shootings have been reported near congressiona baseball game practice field in alexandria, virginia apparently there was a gathering of congressional republicans here a suspect is believed to be in custody and we are still getting updates on this. we will keep you up to speed as those updates continue to come in among today's top stories, it is fed day. the federal reserve expected to raise interest rates a quarter of a point we're going to get the decision at 2:00 p.m. eastern time. we've got full coverage of chair janet yellen's news conference on power lunch at 2:30 eastern time also, boeing announcing a restructuring of its defense base and security unit the jetmaker will divide those operations into smaller units and cut about 50 executive positions as part of that move functions were responsible for nearly a third of boeing's total

2016 revenue mortgage rates falling for the second straight week diana olick joins us now with more on that news. diana? >> who would have thought that rates would drop back down to where they were right around the presidential election. but that is the case right now and that had mortgage applications up another 2.8% last week. all on the bang of refinances. refis jumped 9% for the week, seasonally adjusted. that according to the mortgage bankers association. apparently there are still some people left who haven't refied already, possibly those who've finally come up from underwater on their home loans. refinance applications have jumped 13% in the last two weeks. and the average loan size hit the highest in almost a year that's because jumbo borrowers can see bigger savings off every rate move and the summer can serial refinancers looking at the numbers because the average contract interest rate on the conforming 30 year fixed fell to 4.13%. jumbo rates are even lower

home buyers, though, not as thrilled mortgage applications to buy a home fell 3% for the week. they're almost 8% higher than a year ago, but buyers are fighting high prices, and still a tight supply of homes for sale affordability is really hurting and even low rates aren't helping enough back to you guys >> thank you, diana. appreciate that. so, are politics irrelevant for the markets? right now to talk about his recent op-ed titled why there is no trump slump on wall street. he's the chief global strategist at morgan stanley and the best selling author of the rise and fall of nations. thanks for being here. explain your thoughts on the market >> well i think there's so much conversation about politics and we wantto believe that's what' going to impact markets. we saw that for one day in may but my basic thesis is that in developed countries such as the united states, the impact of politics on markets is really

minimal. compared to what happens in emerging markets exactly what happened in brazil. in brazil, around the same time we had this impeachment of the president and the market fell by 15% in a day and it's still struggling to recover. so that's the basic thing, that in countries such as the united states, institutions are so strong, we're almost in a post-democratic society where the role of politics or the role of one leader to impact the state of the nation is very limited. >> i understand your thesis. but if you're looking strictly at the stock market indices, and you see where the markets came on the day that donald trump was elected, the day after trump's election to now, you're talking about up 15% plus for some of the major indices. >> exactly but i think that has much more to do with coincidence the global economic data -- >> i understand the global economic data is part of all this higher corporate earnings is part of all this why did it happen the day after the election >> right pap because i think

that -- >> that seems like more than a coincidence. >> but i think that's part of why it took place. look at the market in the internal of the market you see that all the globally oriented companies have done much better this year than the domestic oriented companies. and i think that if you look at the falling stock market, the falling stock markets have done much better than the u.s. stock market has done this year. so i think that the -- yes, is it a coincidence but also because the markets are sort of waiting to believe the moment the election was out of the way. but i also look at the the terms of the market, they've changed a week or two after the election there was a lot of buzz about what trump would do. do the expectations have been weeded out of the market yes, if we do get some positive prize out of d.c., in terms of something along those lines that could have upside surprise my bet is politics is irrelevant for this market and the more you focus on that the more you're likely to be distracted by the wrong factors. >> which is why any of these hearings in washington or anything else just seems like noise to the markets

>> absolutely. so you know, there's a lot to be worried about in this market you know like trading at the highest valuation outside of the tech bubble of the late 1990s. we haven't had such calm in the market for such an extended period of time in recent history. i mean the vix hasn't closed down below 10 so frequently in at least two decades so this is a lot to worry about. >> i just need to break in right now. we do have some breaking news to tell you about we're getting reports that multiple shootings have been reported near congressional baseball game practice field in alexandria, virginia congressman stephen scalise was among those shot a suspect is believed to be in custody. white house press secretary sean spicer has said both president and vice president have been briefed on this news and we will bring you more as we get it. but a shooting at a congressional baseball game. >> i think it was a congressional baseball practice. >> taking place this morning >> taking place this morning where they were all out at practice when all of this happened. obviously very concerning story and we will continue to bring you updates as we get more on

this >> okay. we're going to go to break and after that we'll return, and going to talk to a senator we'll be right back. whoooo. you're searching for something. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if there was a single site where

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breaking news, folks we are getting reports that there have been multiple shots fired near congressional baseball game practice field in alexandria, virginia apparently, according to reports, there were a group of republicans that were there practicing at the time a suspect is believed to be in custody. among those reported being shot, though, house majority whip steve scalise. we are still getting a lot of different reports that are coming in. but according to at least one of the congressmen who was there, he was saying that there were 50 to 100 shots that were fired there were others injured along the way. again this is very early in all of this. we are still trying to get reports on some of these situations but, sean spicer saying that the president has been briefed on that situation and we will bring you updates as we get them. >> okay. uber board member david bonderman resigning from the board after he made what he's described as an inappropriate comment at yesterday's meeting on sexual harassment at that meeting bonderman cut

off fellow board member ariana huffington, jokingly or trying to joke, saying more women on the board means it's much more likely there will be more talking. bonderman has since apologized and as a result of all this has stepped down this came after the announcement that uber chief travis kalanick handing over the wheels while he takes an indefinite leave of absence. does this mean innovation will take a back seat joining us right now an early investor in uber so, let's just go through all of it we can talk for awhile >> we could. >> are you satisfied, unsatisfied, with what took place yesterday vis-a-vis travis taking a step down, and this report >> yes so our view is, look, we would like travis to be at the company. i don't know if it's in the ceo role or what the board is obviously way more familiar but he is' product vision year however i think probably a recent part of the reason he's taken the time off, let's remember the guy did just lose

his mother and almost lost his father the family has got to be a complete and utter mess. so -- >> so what kind of person -- you'd like to see someone else come in as the ceo >> no, look, without knowing all the facts and details i think the company historically has built a business by running into markets and getting in there, and just going in. now if you look at what they're doing with austin, they're getting in these camps and they got back into italy, they're working much more political, you know, kind of, you know, in a political way. >> right >> and so i think you're going to see more of that. what i think they need to bring on more people like the professor who joined from apple. you're going to see more and more of it >> this david bonderman situation. >> yep >> what's your take? >> david is a personal friend. he's actually a mentor to me he has built an enormous -- he's built an enormously successful -- >> -- regarded investment firm >> with lots of women.

he is sincerely apologetic about this that is not his character. but it is a zero tolerance environment -- >> my question is, zero tolerance is this as political correctness gone too far >> we'll see that's obviously one concern that we would have for the board, is just make sure you're not -- you know, you can like -- >> is the company better off or worse off for david bonderman not being there as a result of this >> i think they had to make that decision and i'm sure they'll replace david with another partner who is very, very good, as well. >> and the other piece of this is, how much do you think the conversation we're having here among the business community, and perhaps in the press, translates to whoever is using the app out on the streets there's an article today in "the new york times" saying if you want to hold the company accountable for all of this. >> yep >> go use lyft or juneau or something else you think that's real? zero >> this is actually speaks to the power of the business model, and the service. i think the vast majority of americans, actually people in the world, want a service that gets them from point "a" to point "b" very quickly, and

cheaply as possible, and if you look at the credit card data, you look at think reported their, you know, they disclosed a bunch of their numbers, the business is continuing to grow -- >> let's talk about just the operational aspect of this business and the valuation. >> yep >> so right now a private $70 billion valuation. >> correct >> one day they will have to take their numbers public. >> of course >> and we will see what happens there. >> yeah. >> does a $70 billion valuation make sense given that the company from what i understand continues to lose money? is the model as defensible as people thought when you got in originally >> i think absolutely it is. i think that -- i think that we probably thought the company was going to be profitable sooner than it is but if you actually start to dig in to it and realize where they're spending a lot of capital, and look at the economics we believe they work very well. we're fully invested in early 2015 and we would buy more stuff now. >> okay. i would love to have a longer conversation with you about this and we will have you back. >> absolutely. >> thank you >> folks right now, some breaking news. let's get to an nbc special

report with more on this >> -- crawling into the outfield he was bleeding profusely according to congressman brooks who was also on the scene there. the eyewitness, mr. brooks also telling us that the shooter appeared to have been hit by gunshots there are still a number of things we do not know. among the outstanding questions, is the suspect in custody? was the suspect perhaps even shot on the scene there? did he act alone this is an area, now that appears to be appears to be somewhat sufficiently under control to a certain extent. >> okay and i think we have somebody who might be able to shed some light. i think i have on the phone charles halleren you were just on your way to work out and you passed this scene, do i have that right? what happened? >> i came upon the scene when all the police cars were arriving i came in a side door because the front door was blocked

we came in to the gym and people were visibly shaken, one woman i worked out with generally next to me named amber had been leaving the "y" and someone took the first shot at one -- hit the glass, went through the glass, and went through another interior piece of glass and into the pool area. >> you were entering the "y. how close is the "y" to the baseball field can you give us a sense of how close this was >> 75 yards. it's adjacent. >> and what have you heard from other witnesses, and the young lady you just mentioned about what happened here this morning? >> she said she thought some of the shots might have even come from law enforcement but wasn't sure because they were shooting at the shooter and took the shooter down and there were three bodies out on gurneys that they were attending to and then a chopper came and pulled at least one of them out of there we can't see who anyone is so we can't confirm anything about whether it was members of

congress, shooters, staff or whatnot. >> but it was her sense that the shooter had been shot by police? >> yes, she said he was down, yes. >> charles, the scene right now, where you are, can you tell whether this is a situation that appears to be ongoing or can you tell whether this is a situation that seems to be under control right now? >> my first thought was that it's under control, and it probably is. but there's mayhem out there looking with all the police vehicles and fire vehicles they're probably just being prudent making sure that there's not another shooter. but people are inside the "y." some are already working out, trying to go about their day they won't let anyone leave the "y" until it's all clear >> charles thank you for calling in and telling us your story we appreciate it and send you our best we want to go back to tom costello as i understand you've been speaking to another witness. what have you learned? >> i'm speaking with a witness right now. can i ask you name >> katie >> what happened what did you see

>> i was getting out of the car with my dogs to go to the dog park and i heard really, really loud popping sounds. and i knew a baseball team was practicing at the baseball field, and everybody started screaming, hit the ground, hit the ground and a bunch of the players ran behind the big trees but i was in the middle of the field so i just laid flat in the field, and the sounds were getting louder, but they were coming -- he was walking across the field towards all of us. >> the gunman was? >> the gunman. and i was screaming to someone help me, i have my dogs and i can't get behind anything but they couldn't, because nobody could do anything. and then security -- special agent pulled out a handgun and tried to shoot back, and shot her and she fell on the ground >> the shooting suspect was a woman? >> no, no, no, no, no. >> the agent was a -- >> the suspect i'm not sure but i think the agent was a woman. i'm not sure about either. but she fell on the ground, wee

were also -- i crawled [ indiscernible to the car and i laid as close as i could under the car and then the police and whoever came and get it under control. >> did you notice members anybody who was shot in other words beyond the officer did you notice anybody else shot? >> there were a couple of people injured that they took out on stretchers the person who was the security guard they took out and other than that i'm not sure who was who -- i didn't even know it was anybody famous until the investigators just told me >> and the gunman, you say the gunman was also shot you believe? >> i don't know. they said thatthey captured him. >> tom -- >> let me just tell -- let me just tell the anchors in new york that you are very -- you're shaking. it's hard for you to control right now because you've seen something very traumatic and i would imagine you're just

grateful that you got out alive? >> it was -- you never think something like that's going to happen to you, and it was terrifying, and also it was even scarier that i had my dog children with me so i'm very glad that all of us are okay >> savannah, i'm going to kick it back to you very traumatic experience. she's shaking and difficult just trying to hold it together right now. >> you've been watching an nbc news special report. we're now going to take over this local story that will have national implications about a shooting having happened in alexandria and a congressman among the victims after this incident that started a little after 7:00 this morning. we'll fill you in on the details that we have at this point we know that alexandra police have shut down an area of east monroe avenue just off route 1 jeff davis highway in alexandra after a shooting at simpson field in that area we know that the house majority

whip, a congressman from louisiana, has been injured, has been shot in this incident we can tell you a little bit more what we know about him. >> here's some more information about congressman -- the congressman from louisiana steve scalise. at this point as we take a live look, though, this is outside of simpson field. you can see emergency response there on the scene a louisiana house majority whip chairman or congressman scalise is also the house majority whip, and he was among those shot. we also have concerns that two capitol police officers were also shot. they were wounded. >> this was likely a practice. we understand this was a practice that was happening at simpson field. a baseball game scheduled for tomorrow the congressional baseball game that we all hear about annually happening is scheduled for tomorrow this practice was happening on the field. it would have been members of congress as well as possibly some of their staffs with them

at this practice we don't know which side of the aisle, if you will, they may have been on but nonetheless we know that this representative, two capitol police officers, who were a part of the security detail, were also shot here. you heard from the nbc news reporting that someone said they saw a rifle. another congressman said he saw a rifle there on the field, and then saw congressman scalise crawling across the field and bleeding profusely you may have also seen some of the video in the last few minutes of a kept. i believe that was a u.s. park police kept landing on the field there, very likely being used as a medical transport for someone who was hit in this incident >> more information about steve scalise. he is the father of two children -- >> report on the shooting in virginia again we are following this very closely. but for those of you who are just waking up a gunman opened fire on a baseball practice where there were many congressional aides, and congressmen who were there who had been doing this. it had happened near a

congressional baseball game practice field in alexandria, virginia congressman steve scalise was among those who are shot he is said to be in stable condition but obviously this is still a story that's developing. let's get john harwood to join us at this point he's on the phone. and john, obviously, these are early reports, but very concerning reports >> yes and i've just been listening to a phone report from congressman mel brooks of alabama, who was participating in the practice, who described in detail how this shooter with a long gun came out and started targeting people, including steve scalise, congressional aides, and two security -- members of the security detail. and it was a chaotic situation security detail answered fire with handguns. and eventually took the shooter down but, it was a horrific scene that he described.

and one that appears to be over. in terms of active shooting. but the kind of tragedy that we experience every couple of years. everyone remembers the shooting of gabby giffords in her district in arizona. and as horrible as you can imagine, this from what we've heard, again, with a gathering of congressional republicans who were there for this practice for the baseball game, and from what we've heard again, early reports, but 50 to 100 shots fired. type of thing where you would expect there to be security that we have heard that some of the security people could have also been hit in the situation. >> right this has been an annual baseball game democrats play republicans. it's one of the few feel-good events on the congressional

calendar every year. they raise money for charity and each side has a number of former college athletes and people who play so they were preparing for that game, which i believe is scheduled for tomorrow and so whoever decided to target this knew that there would be a large gathering of members of congress, perhaps republican members of congress, if that was part of the point at this baseball field >> right john, typically what kind of security does a congressman have i'm just trying to think about, given that there, i imagine, were several dozen congressmen and aides, how many other security personnel would have been with them >> most congressmen don't have any security at all. but members of the leadership have it. and so i imagine the reason that

there was capital security there is one, it was gathering a large number and second because members of the congressional leadership were there the house speaker, the senate majority leader, other members of the leadership who have a higher profile do have some security, but the average member of congress doesn't have any >> all right, john, thank you very much. john harwood joining us on the phone with an update on the situation, what's been happening. right now we'd like to bring in judd gregg, former senator from vermont. he's been talking to us some about this, as well. we're going to be talking to him in just a moment judd gregg obviously, former governor and former senator from vermont long time there. >> new hampshire >> from new hampshire, yes and senator, thank you for joining us today obviously you're not there, you can't tell us what's been happening on the scene, but tell us a little bit just about this baseball game itself what it is what they were practicing for,

what happened. >> well, the baseball game goes back generations it's been going on since i think the middle of the '70s it's kind of all in fun event where members of congress can get together and share some friendship and some camaraderie and get away from the partisanship republicans play the democrats but mostly house members, there are a number of senators some senators are too old to play in the game but there are a few senators who play in the game it's always been sort of a very enjoyable event, and families attend, and there is a lot of practicing for it. i did play when i was younger, and we spent a lot of time practicing or at least the coach we had made us practice a lot so i suspect they were going to a practice this morning. >> judd, in a practice like that or even the game itself, would have that been secured separately apart from those leaders and others that actually have their own security that would have gone with them?

>> when i participated the only people who had security were the leaders. so your leadership goes down to the whip i understand that steve scalise may have been injured. he would have probably had security there i'm not sure now we know with the situation being the way that it was that maybe the sergeant of arms was security for everybody >> you know, judd, in a situation like this, you start to wonder how many people know about this obviously, probably pretty well known within the house and the senate but outside of that, it's probably not publicized what's happening, where these events are taking place, if it's just a practice right? >> absolutely correct, becky the actual -- a lot of notoriety around it, they have a program, and local papers, roll call promote it very aggressively and a lot of people show up for it i'm not sure why they do

but the practices, i can't imagine that anybody follows where the practices are unless they're actually part of the part of the congressional family >> i mean, it's too early to be jumping to many conclusions, but the idea that you have republicans it seems like being targeted here, i guess speaks a little bit to how volatile our political scene has gotten these days >> gosh, i would hope that that wasn't the case. and i think it's really premature to make that assumption i don't know, and i wouldn't want anything to speculate on that situation >> senator gregg we want to thank you very much for joining us today obviously this is all happening around this congressional baseball game. that the senator was just telling us about this is a longtime event that has taken place over years, a feel-good event where both sides really get together and look

forward to a little bit of sportsmanship. eamon javers is in washington, and joins us right now with more eamon, what can you tell us. >> yeah, hi, beck. not at the scene so can't tell you much more than what you've been reporting your heart breaks when you hear something like this. it is so shocking, yet it is unexpected in today's washington and we unfortunately we see incidents similar to this time and time again my mind goes back to the navy yard shooting of a couple of years ago. we've had incidents on the capitol complex over recent years where we've had mentally disturbed people engage in confrontations with the capitol police the capitol police have actually fired shots at people who are coming in to the capitol complex. this, though, is different in a sense that you get the feel that this is somebody who knew where this practice was being held and that this was specifically

targeted and left sort of random situation. but, far too early to begin to speculate on who did this and why. but there's generally a couple of possibilities somebody who is mentally disturbed. somebody who has a domestic political agenda and somebody who has an international political agenda and we'll have to wait and see and it was -- it was awhile before in the pulse nightclub shooting last year which i covered in orlando, it was awhile before we publicly knew who the shooter was and what the motive was there but in this case, you know, the police knew fairly early on what they were dealing with it may be the case here that they sense what they're dealing with or not. it's very fast moving. >> eamon, i keep bringing the conversation back to security and security personnel who would have been with the leaders i'm curious, how has security, and protecting congress members and senate changed over the last decade, or has it? >> well, you know, it has changed. i mean there's elaborate

security on capitol hill the capitol police are a big police force they travel with the members of congress they have a protective division which handles sort of the leadership, and in the case of mr. scalise, that sounds like that's who was on the scene today, at least a couple of arm ed and uniformed capitol police officers nearby wherever he is that goes with leadership. but for rank and file members of congress, they have protection when they're on the capitol complex but when they're out in the world, doing their jobs, it's not nearly as much. particularly at a thing like this which is off campus, recreational, in a totally different setting. they would have a very small package of security with them. sounds like that's what happened today. security has been beefed up on the hill since 9/11. even since 1995 when the gunman fired his way into the capitol

complex and ended up tragically killing two capitol police officers they beefed up security at all the entrances to the capitol complex itself but still, congress is an open democratic institution they want people to be able to come in, they want to interact with the public. and that's the tradeoff. >> in a free society you've got a person that's, you know, that's willing to suffer the consequences of his actions. it's tough to stop every single thing that's going to happen eamon. unfortunately. but this may change things you could have security for the 500 members of congress, i guess, if it gets to that point, could you not? 535? >> well, it becomes very elaborate, very cumbersome, very expensive. it gets in the way o their jobs just to be out meeting and greeting and talking to people and gathering a sense of what their constituents want back home and in washington these are people that have to be

mobile they have to go to meetings all over the place you couldn't do sort of presidential level security for every single member of congress. it would be prohibitively complicated and expensive i think. and i don't think they would want it. they don't want to be a security -- there have been propose ams over the years to build a giant fence around the capitol, same they have around the white house and members of congress have said no every time even after 9/11, to that because they want the public to come, and see democracy in action and that's an admirable thing especially given that the members who are voting on those proposals know what the risks are they've taken. >> just to bring everyone up to speed again there was a situation with an active shooter who shot, it's been reported 50 to 100 rounds at a group of republicans who were gathered, congressional republicans who were gathered at a practice field to prepare for an across the aisle baseball game for charity that was scheduled to take place tomorrow. in this situation u.s. house

majority whip stephen scalise was shot there are reports that there were capitol hill police officers who were also shot. msnbc is now reporting that the majority whip scalise and two capitol hill police officers who were shot appear to be in stable condition. obviously a developing story >> president trump is aware, aware of the congressional shooting and is monitoring developments let's bring in former fbi agent jeff lanza do you think this will cause anything to be changed, jeff, at this point or i just always hate to say it's possible to do this and there's nothing you can do to prevent it that's not usually a good answer >> no. you never want to fall back to that position. i think immediately there will be some changes in terms of how they address things and what's the immediate threat going forward. but in the long run, as your

other guest just said congress doesn't want the bubble. they don't want the security all around them and keeps them from the public, and would be unbelievably expensive to change things in that regard. we have to determine who was behind this as quickly as possible determine who was behind and what the motivation was. and then get a better understanding of that before they decide what changes should be made. >> yeah. would it be -- i mean, it's impossible to -- could it come to the point where everyone needs to have at least someone in the area, when -- it just seems like it would be impossible to do that. so i don't know what the answer is >> well there isn't an easy answer to security in an open society that we live in. i don't really think in the long run we're going to see any changes. and you know, where do you draw the line you protect 535 members of

congress, then what about judges what about all the other people involved in our government at high levels you know, there's no place to draw the line. and so, i don't think we're going to see any major changes and based on one incident like this happening >> all right former fbi agent, we appreciate your time this morning >> you're welcome. >> want to bring governor -- former governor howard dean into the conversation good morning to you. this news, of course, terribly disturbing your thoughts, and we've been talking all morning about the security around our leadership these days perhaps even that was around you. are we doing enough? >> well, this is a really tough one. first of all, not that it matters a lot here but we really don't know much about the nature of what went on. is this a crazy person that just targeted attempt at killing people because of their political views? we just don't have any idea just

yet. at least i don't secondly, it is the governors for the most part have fairly significant security nothing like obviously like the president or something -- or probably not even as much as the majority leader and the speaker, but we do have security details and we are taking care but the members of the legislature don't and neither does a member of our national legislature, unless there are death threats which there have been for some people but i agree with the previous guest, i don't see how this is going to change greatly. it's almost impossible to protect everybody who serves and we're going to have to figure out better ways to do what we do but it's not going to make a huge difference to a determined person with god knows what they used for aweapon but it sounds like there were a heck of a lot of shots first of all we need to know more second of all i agree with the fbi guy, i don't see how we can

fundamentally change this. >> when you were governor how many people did you have >> well, i just usually had one with me at all times although sometimes when we knew there were going to be problems we might have two or even we could muster a force, after unionsville which was the first of its kind in the country and very upsetting to people that was a long summer and i had to have security precautions that were really quite substantial. but generally speaking, when the threat level is low you have one person with you. and the threat level, i would guess, was very low for these guys who were playing baseball >> right right. all right governor thank you. we actually have pennsylvania congressman ryan costello on with us now. he would have been at the practice, but he missed his ride he joins us now on the phone it was an early practice this is i guess before, you know, before the business of the day.

try and get some practice in before this game is that the way it works >> yeah. from 6:30 to 7:30 is when the practices are and most members usually have to leave there around 6:00 to get there at around 6:00 a.m. so -- practice for an hour, and then takes about 15 minutes to get there and about a half hour to get home. >> so congressman we don't know anything about, you know, the motivation or the shooter or anything, but how many -- when was the practice scheduled who knows when you're going to be there it doesn't seem like it would be widely known, would it or would it? >> it wouldn't be widely known but obviously you know, we're out in the open, and there's other people walking their dogs in the rest of the park surrounding the baseball field as you get closer to the game, you know, media people come out and do reporting, so if you really wanted to find out where it was, it would be easy enough

to do. >> and the -- the security people that this shooter encountered, they would have been with -- with congressman scalise? or are there other just ancillary security people at the practice ground? >> no. it was only because of him so members such as myself will -- i don't have a car down here so i'd hop in with brad winstrap and rodney davis they leave at 6:00 i wasn't there until 6:01 so i missed the ride. the membership sort of carpooled there. but steve scalise, because he had security detail, i think has two black suburbans, and three or four security people with him at all times and they're there in the morning so you know when steve shows up, because the detail has to go right up next to the baseball feel >> there wouldn't be an additional security detail knowing that there was going to be a group of congressmen practicing >> no.

that's correct your point is, as a result of steve scalise being there, was there security there yes. if steve scalise was not there, would there be security there? the answer is no there would be no security there. >> i guess at this point, no other congressmen were shot -- he was the ranking member that was there. i just i don't know, it could all be coincidental, obviously, but -- >> well, let me share this with you. so, there's -- would have been anywhere between 15 and 30 members there. and the other thing to note is there's probably about 10 to 15 congressional staffers that go there, that are, you know, younger, very athletic they pitch and sort of keep practice moving along. the managers on the republican side are both members of congress so all in, you have anywhere between 40 and 50 people there

for practice doing various things and i'm sort of beside myself right now just -- >> we can hear that. >> it's very weird >> it's got to be, yeah. you know, any type of conjecture in a situation like this is, you know, there's no reason. but ranking member, 50 people there, the ranking member of the congressional -- >> according to reports from a another congressman who was there who's been talking about it, he said that congressman scalise was playing second base when this happened >> yeah, so he plays second base i play shortstop >> my understanding is, it sounds ridiculous to ask which position because that would be pertinent. >> in the middle of an open field -- >> or i guess -- >> where you approach from and everything else, right >> this isn't about me but i would have been right in the line of fire, that's why i'm so shaken up because steve plays second, i play short we have a new third baseman this year because the previous one

lost an election and in the outfield was doing the outfield, it was during infield, outfield practice so there was only three or four of us in the middle of the infield at any one time, and i want to say one other thing. if people say why the heck are those folks in congress playing baseball in the morning, this year we expected to raise $650,000 for public charities in the washington, d.c. area, and it's bipartisan, it's a fell-good tongue in cheek type event but it's fun just because you see members of congress playing baseball but it's for a good cause, and this is the last day of practice. the game is scheduled to be tomorrow and then that's it for the year. >> congressman -- >> next year we'll do it again >> congressman, you've been a representative in your district in pennsylvania since 2015 have you played at this game for all of those years >> oh, yeah. so, yeah this will be the third game and scalise used to play shortstop. and then i started playing

shortstop and he plays -- this is, yeah, this is a fun game and every year, interestingly, if you read every year there's a couple new freshmen come in, and you know, some people don't play as much as they get older and don't play any more. they lose an election and retire and a new crop of freshmen come in and play different positions on the field >> have you spoken with any of the other congressmen who were there or the two who you missed the ride with? >> no. no so i missed my ride then i just got ready for work and went back to my office and was reading in my office for an hour and 15 minutes or so and looking up at the television in the background, and i see that somebody's been shot at this congressional baseball practice and i thought it was like -- that's weird and then i see -- then i see the field and i'm like did and then i see some video of members on their phones -- the guy who i saw on the phone, jack bergman on television, just from a distance, i was like oh, he drove me home from practice

yesterday. what i'm seeing on television is where i should be right now. >> congressman obviously we're glad that you're safe. thank you for taking the time to call us this morning obviously the story we're following very closely congressman costello, we appreciate your time today again, folks if you are just waking up, if you are just joining us this is a situation where there was a shooter who was shooting at congressional republicans on a baseball practice field, they were practicing for a game across the aisle tomorrow that was scheduled to take place tomorrow with democrats, this was the last practice. it was taking place this morning from 6:30 to 7:30 in alexandria, virginia congressman steve scalise, majority whip for the republicans, was shot. it's been reported, we've been hearing reports that he's in stable condition he was shot in the hip there were other people who were shot there, as well. tinge to get updates and reports on that. but, right now let's bring in

michigan congressman jack bergman. he was at the practice he is still at the field now and congressman, a horrible situation. first of all we hope you're okay and can you tell us a little bit about what took place. looks like we've lost the congressman. we will be back to him in just a moment we've been again getting updates about what happened here at this practice field, the baseball practice field where congressional members, republicans, were practicing this morning in an across -- >> we still don't know how many aides were shot, were they scalise's aides? >> we don't know there have been reports that there were two capitol hill police officers who were also shot and who are in stable condition but yes, some reports from congressmen who were there say that there were 50 to 100 shots that were fired at a group that was standing in the open field like this. as we just heard from the last congressman who missed his ride

this morning, who would have been there but missed his ride said generally there are 40 to 50 people there between the age, the congressional -- >> there was a handgun do we know that at this point? >> i don't know. >> so that would have had -- the guy would have had to have a couple of magazines, obviously i don't know how many rounds so that means taking out the last magazine putting it -- if it's 50 to 100 that's reloading >> these are reports coming from congressmen who were there, and it could be confusing to try and figure out how many shots are actually taking place. between 50 and 100 that would suggest -- >> reloading >> or that there were multiple guns involved. >> right and we know that majority whip scalise had, do we know if there's one, two, probably -- >> maybe just one -- >> one security guy -- >> the majority -- >> scalise is the last rung of who actually gets the security, but he's the highest ranking

member there, and maybe it's lucky that he was there, too >> to have someone who was there to stop things from going further. again michigan congressman jack bergman is on the phone with us. he was at the practice this morning and he's still at that field. congressman, again, we hope you're okay. we are still trying to get reports of this, but can you tell us what happened. >> well, good morning. yes, i'm fine. basically we were doing our normal practice. batting practice, and first shot came from somewhere behind the third base dugout, and second shot came shortly thereafter, and by that time we knew it was something real so people started scrambling and lasted for about probably somewhere between four and six minutes. t scalise's security team engaged very quickly, they're the true heroes here. and we were very fortunate it could have been a whole lot worse. >> congressman did you -- did

you see the shooter? was it a long gun? were you able to tell? did you see the shooter? >> i saw the shooter after he was down i went over and took a look at him. probably about 20 feet away. but there was -- there was -- you could tell from there was -- you could tell from the sound it was a long gun. >> it was a long gun, okay. >> and also it appears -- i saw a handgun near the shooter just laying there. it appeared as though that it was the -- it was back, so it must have been empty so i don't know if he had both the long gun and the handgun. >> 50 to 100 rounds, that's not just the shooter that includes the security as well that's what i'm being told. >> yeah, that was all around fired from both sides. >> from both sides, okay. >> congressman, you said it yourself that this was congressman scalise's security team who were the heroes here.

did you ever feel as a congressman that you needed security >> yeah. yeah hang on just a second. they're trying to gather us here to get on the bus to get back to the capitol. >> understood. a lot of chaos. >> can you describe the shooter in any detail at all, congressman? >> well, what i was saw about 20 feet, a white male early 50s. medium to stocky build i could not confirm whether or not he was wearing body armor, but he was down. there were several of the -- you know, the security squad around him. but that's about all i saw. >> and sir, have you felt before this situation that you needed security in the past >> not at baseball practice. >> yeah. it has to be a -- stunning and shocking thing. >> because the whip --

representative scalise, because of his leadership position comes with security. and so that's why those people -- the security people were here today. >> how many people would have known about this practice? >> well, it's public knowledge, it's in the paper every day. politico, the hill so it's -- this is not a secret practice we have been doing this practice thing here for two months. >> but congressman, who else was hit? do you know? aides or security individuals, do you know? >> well, i know that one female security guard was hit looked like in the lower leg and one young legislative affairs guy from one of the companies. we have a lot of youngsters who come out and are support for us while we're out here and he was hit as well. >> president trump just tweeting moments ago, representative steve scalise of louisiana, a

true friend and patriot, was badly injured but will fully recover. our thoughts and prayers are with him then there's another, a statement, the vice president and i are aware of the shooting incident in virginia and are monitoring developments closely. we are deeply saddened that's actually from the white house, not -- it's not a tweet we had both. >> congressman bergman, you said that during the -- they're in the process of trying to get everybody on buses to get them i guess back to the capitol. is that the plan >> yeah, we normally -- we come over here early in the morning, i drove my truck over and brought three other members with me normally we drive back, but unfortunately my truck and some of the other vehicles are part of the crime scene here. so they'll be here until -- you know, the police are done with the investigation. >> congressman, we appreciate you taking the opportunity to

speak with us. we really do thank you. >> i would just ask one thing, keep these folks in your prayers today and god with us today. >> and you too we're glad you're fine and i'm sure that you're shook up let's review, scalise is in stable condition after a shooting at a baseball field in virginia in alexandria. where members of congress were practicing for a charity baseball game that is i think tomorrow and they were practicing from 6:30 to 7:30 this morning it happens every year. republicans versus democrats mostly congressmen but i guess there's a couple of senators that show. >> a lot of the aides that are there too who are younger. some of them have real athletic backgrounds. >> exactly they pitch and several aides were also hit and police say the

shooter is in custody and no longer a threat. so i guess you're going to be able to talk to this individual. and try to glean what the motivation is. scalise's presence at the field though, and this is important, apparently prevented the situation from becoming even worse. he's the majority whip and he gets security. so security was present at the practice only because he was in attendance and anyone beneath him as the leadership goes would not have had security. so let's get to eamon javers and we're hearing about some heroism from the people that prevented this from being much worse, eamon. >> yeah, you're right, joe sounds like a quick response from the police that were on the scene there. god was with them this morning you hear the number of shots that's being reported. all this is preliminary, so this

reporting will change over time as we get more accurate information. but it's case that between 50 and 100 shots rang out on that open baseball field with members of congress out scattered around playing their position you just think that this could have been much, much worse actually given the situation it sounds like the shooter was shooting from a concealed position and you sort of speculate that maybe this was a situation where the shooter was firing from a great distance and didn't have the sort of accuracy or was in some way just not a trained -- not somebody who is trained to handle the weapons because it sounds like this could have been much, much worse if this security hadn't been there, and responded as quickly as they could and given how the members of congress were right out in the open there. sort of one of the worst situations that you would have to defend if you're trying to defend against something like that. >> we heard they heard a shot and then they heard a couple

more then that when's they realized something was happening. >> this is from the congressman -- >> the congressman that we were talking to it wasn't like someone came running up in the middle of the field and everybody knew what was happening immediately. they heard the shots first and then - >> it was taking place from -- >> he might have been not right near the field, eamon. that might be even scarier, like a sniper >> yeah. if you have somebody in a concealed position like that, it will take the capitol police a few moments to triangulate and figure out where the shots are coming from before they can respond. they have to identify the threat and then they have to figure out if that person is in a crowd of other civilians. you know, oftentimes there are capitol hill aides, lobbyists, people who are out for a jog who come by and watch the practices. >> let me cut you have we're hearing from the police chief of alexandria, virginia. >> an active shooter, shots fired at 0709, nine minutes after 7:00 this morning.

here at the park on monroe simpson park there was a practice team event with the baseball team of folks that were representing some folks on the hill. we were there within three minutes. we do know that officers from the office of capitol -- capitol police as well as three officers that we had on scene arrived two of the officers engaged and gunfire returned fire. beyond that we won't make any other statements until such time as we know what's taken place here on this thing it's an active scene we have a lot of witnesses that we're having to interview. we are collaborating with the capitol police, with the alexandria sheriff's department. and the medical -- with the fire department here in alexandria. we are working with the federal bureau of investigation, collecting evidence. we will try to keep you posted as we get more information right now we'll try to schedule

a press conference probably about an hour and a half from now and give you an update right now, that's all we have. ly add one other thing -- i will add one other thing. five people were transported medically from the scene we will not give out their names or locations at this point or know of the condition of their injuries i won't take any questions at this point largely because you have everything that i'm going to release at this -- at this juncture, what i will do now i would like to ask the chief from the capitol police to come up and make a brief statement >> good morning. >> can you speak a little louder, please. >> this morning we received a call via our communications of shots fired at this location officers who are on scene responded and engaged a suspect in gun fire. very shortly thereafter, the alexandria city police and other

units responded to assist and at that point, we were able to calm the situation until victims were transported to the hospital. we won't get into any details in terms of the investigation this is very early on. we will -- i want to thank the alexandria police, the sheriff's office and the alexandria fire department for their rapid response to the request for assistance in the 911 calls. i appreciate their rapid response and certainly it saved lives. >> one shooter >> at this point, we're going to gather the investigators together and look at what we have and put this incident together again, it's very early on, there are a lot of witnesses to be interviewed. once we have more information we will certainly pass on whatever information we can to make sur