"squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. live at the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen and kelly evans. becky quick halt day off look at u.s. equity futures now as we figure out which way the market will set itself up. the dow looks to open higher by 38 points. the nasdaq up about 7 points the s&p 500 up neighbor 1.5 points higher. overnight in asia. we'll show you what has been going on bit of a mixed picture there the nikkei down marginally shanghai down. hang seng looking on the green side if you swing over to look at european equities, looking at green arrows across the board. importantly there the italian

ftse up over 1%. finally quick look at the dollar maybe that's moving some of this euro/dollar, 1.18. >> 1.18. remember earlier this year, it will be below parody, 94 cents it shot completely the other direction. >> yes >> amazing frt don't belie >> don't believe what you read what you're seeing here is true. >> these newspapers so problematic. speaking of stories, the big ones today, a major storm gath eari gatherring strength in the gulf of mexico. harvey was upgraded to a tropical storm overnight crude oil prices, let's see, down a little bit. wti crude just over 48 bucks it's been sitting out the rally in metals.

federal regulators say they don't plan to block amazon's $1 billion deal to buy whole foods. the ftc making that announcement hours after suhareholders approved the merger. uber reported a lost of 6$65 million, 9% smaller than the 708 million loss in quarter one. hpe ceo meg whitman is standing by her statement that she will not be the next uber ceo she said nothing has changed since her series of tweets in late july and where she said she would not be taking on the road. all this after the board was said to be still in talks with her. >> i don't think the board said they wanted ere in talks with h, they wanted to be in talks with

her. >> she has said over and over again i don't want this job. >> get it through your head. >> why do you think they want her so badly >> i think they would like a female ceo they would like a tech oriented executive. i don't know if jeff immelt is in that category and they want someone with managerial experience >> why do you think she doesn't want it. >> all the reasons we're talking about every day. >> a huge company, changed the world. you don't think that's an attractive opportunity >> at the same time they're all trying toing to shiv each other >> there's millions and millions of new losers in america they are the lucky ones. they are the lucky ones. >> it is a curse to win. watertown i know well from going to school up there, living in

newtonville. >> is that where the winner was? >> that's where the winning ticket was sold. >> i didn't get to play and he didn't get to dream. >> someone in mass mass roughacs roughly 7$759 million richer today. state lotto spokesperson said the winning ticket was sold in watertown outside of boston. it's not clear who bought the lucky ticket but they are the single biggest lottery winner. >> is that where the town was based, like a been affleck movie years back >> no. i don't think. >> the town. >> one of the few movies that i've seen. stuck with mefrnlgts tany. >> the town. >> i think watertown, when that horrific marathon bombing happened, i think the guys were around there, too. >> oh. >> i think there was a curfew in wat waterfou watertown. take the turnpike, you go right

in there >> you're happy for this family? >> no. i know, there will be a documentary about this family a decade from now. >> what i did tell you yesterday? you, the first time someone said let's bring in this "new york times" reporter to guest host on "squawk box," it was like eight, nine years ago or something. >> maybe ten a decade >> that was the lottery. that was when you won the lottery. that's when your family won the lottery. >> right >> that's when your life -- you won't win -- people do win more than once. i would just be happy with that. didn't even cost you a dollar or two dollars. >> would you take the lump sum or the annuity >> i guess the lump sum. >> sitting with me, he's taking the annuity. every day he gets the annuity. >> you're making it an

annuity -- >> this is an annuity. in political news, any reporting about the relationship between senate majority leader mitch mcconnell and the president. eamon javers has more on that. a lot of people buzzing about it and what it means for policy making in the future >> that's right. some relationship mending going on yesterday between the two top republicans in american politics, the president of the united states and the senate republican majority leader, mitch mcconnell, both issuing statements saying they can work together after a "new york times" story earlier this week said improvemently he was worried that the president wouldn't be able to salvage his presidency here's the statement from mitch mcconnell yesterday saying we have a lot of work ahead of us we're committed to advancing our shared agenda together anyone who suggests otherwise is clearly not part of the conversation mcconnell saying the two men can

work together on their shared agenda he went on to list a number of items they'll work on together but importantly not denying the reporting of the "new york times" from earlier in the week about that strained relationship and his private comments here's the statement from sarah huckabee sanders she said president trump and senator mitch mcconnell remain united on many shared priorities, including middle class tax relief, strengthening the military and constructing a southern border wall so there's an incentive to do tax reform and some other things to do on the president's agenda, because they promised voters that they would do those things. they want to go into the 2018 midterm elections with something to talk about that is a positive

accomplishment politically they're attached at the hip, personally though it see seem there's is no love loss >> remember the elaine chao part of it? >> yes >> alaen ciin ciao was standin s standing by the president while he made that statement on tuesday, she said i stand by my men. mitch mcconnell was calling into question some things and the president was frustrated that mitch mcconnell wasn't protecting him on the russia

investigation. the president thinks he should shut don't investigation, mcconnell disagrees. >> we will continue to follow all of this i can't imagine what it's like in their house at night. we should mention you don't want to miss this a programming note we have a big interview coming up today on cnbc house speaker paul ryan will be sitting down with ylan mui to talk trump, taxes and trade. >> i think it's mui. >> don't knit pick here. he got it out. please. >> quarterly results are out from sears now and the loss looks better than expected, just $1.16 a share versus the 2.48 estimate by the single analyst who covers sears.

his revenue forecasts, he had . 4.214 billion. comps one do s were down. sears holding shares trading at 8.63 this morning. on today's agenda on wall street a few retail reports before the bell. a few more retailers reporting results before the bell including staples, tiffany and abercrombie & fitch. after the close, we'll hear from broadcom and game stop a pair of economic reports weekly jobless claims out at 8:30 a.m. eastern. at 10:00, july home sales. the fed's annual jackson hole summit gets underway in wyoming today. cnbc is there live with a huge guest lineup we'll hear from kansas city fed president esther george at 7:30

al a.m later in the day, steve liesman will speak to robert kaplan, glenn hubbard, and tomorrow speeches by janet yellen and ecb president mario draghi i mean, we said it's the woodstock for bankers. i think it just speaks -- i question whether it was really like woodstock you see those speakers it is like hendrix >> were you a woodstock guy? >> no. my parents would not have let me go >> i don't know how old you were making your own decisions at that time. >> no, no, no. do you know what was going on there. >> i heard that's why i asked >> you know what they say? if you actually were there, you don't remember >> you wouldn't talk about it. >> they say that about the -- they say that about the '60s too. you don't have the brain cells

left if you were there to remember that i were actually there. >> joining us on set are phil orlando from federated investors and scott nations, president and chief investment officer of nation shares a cnbc contributor. welcome to you both. scott, i was trying to see if your account lined up with andrew's the financial crisis is one of them in here that's not the most vent you put the flash crash in here. >> i talk about five crashes the first one the panic of 1907. five modern stock market crashes since then the last is the flash crash. there's a subjective nature into terming what's a crash the flash crash is what the next crash will look like the dow lost 7% in about 13 minutes -- >> was that because it was high frequency trading, fast? etfs -- why is that a harbinger of the future

>> it was purely ail lgorithalg. the trader responsible for portfolio trading refused to sell more futures. his quote in 1987, if i sell more than i am supposed to, the market will go to zero that was a human intervention that stopped the crash in 1987 there was none of that in 2010 >> phil, do you share the concerns about the structure of the market it brings passive ichb venvestm, etfs, are people sleep walking into an issue. >> our focus are more underlying fundament fundamentals you have low interest rate, good corp plorate earnings, in terms fundamentals, we see the markets in good shape. likely to grind higher overtime.

that does not mean there will be instabilities and structural issues that can cause air pockets, but we're looking at the bigger picture which we think is good in good shape. even if the type of thing you're describing plays out, could you buy that dip would anybody even -- in other words, the flash crash was also a flash rebound. it was an event that people didn't know what to make of. >> i'm a trader. i was looking at my screen i was certain as it was happening that the markets had been hacked. i thought that's what was going on the entire thing unfolded in about 20 minutes the problem is what if it had not bounced back and then you would have disrupted the market entirely. i think you would have killed confidence it was 2010, it was less than two years from the low in march of 2009. i think it would have been easy to kill confidence the fortunate think is crashes

happen rarely. five in the last 100 years >> phil, would you blindly buy any dip in the markets going forward? >> blind is a strongword the short answer is we think we're in the midst of a modder 3% to 5% correction in the august and september period. for a number of reasons. if the fundamentals play out the way we think, we would buy that. who is to say that some black swan event doesn't change that fundamental outlook. so you always have to withhold opinion in terms of evaluating what the cause of the correction is if things play out the way we expect -- >> anything you could hear from janet yellen or mario draghi that would change your mind? >> we're optimistic about getting something constructive out of jackson hole and out of yellen what do you mean constructive. >> we think we'll be disappointed, but we would like janet yellen to talk about the fundamentals of what the fed will do in the second half of the year in terms of what is her

five-year plan for begiing to shrink that balance sheet down to 2.5 trillion to $3 trillion over the next five years what are they looking forward to in terms of the next rate hike we're not likely to get the detail we want on that until the fomc meeting in the middle of september. i think the fed would be well positioned to give us some of that detail tomorrow we may not get that. >> also, there is a sense out there apparently that if janet yellen lays out a five-year plan, whomever the next fed chair may be will be committed to following that. >> we know they have to shrink the balance sheet. they have to $4 trillion is not sustainable what will they do? simply let the maturing securities run off that would make the most sense they will start in september it's time. how much longer -- >> it may be time but we spent

all day yesterday and the day before talking about government shutdown, will they raise the debt ceiling that's a lot of uncertainty to start this massive plan. >> it won't be massive at first. that may call for them to wait to raise rates until december. let's remember the goal of buying all of those securities was to drive rates lower and letting them run off will raise rates it will do so very gradually and slowly and where it needs to on the yield curve >> you both focused on janet yellen, mentioned mario draghi the euro is at 1.18. it's up 20% this year almost is it going to be anything from him to listen for that could be more market moving i think that they are about 30 months of where we are in the whole process. we've taken a little step backwards, rates have come down here that's why the euro is doing so well it's temporary once our rates pick up again,

we'll see that reverse >> gentlemen, thank you both. >> thank you coming up, kids across the country are headed back to the classroom with new school supplies, but one brand you might find in your kids backpack is helping those who can't afford school supplies the co-founder of ub joins us next is this a phone?

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call, visit, or go to xfinitymobile.com. >> school is back. back in session for much of the country. gives me butterflies thinking about it millions more kids will be returning to the classroom the next few weeks, many of those who can't afford school supplies that they need joining me is the ceo of the company ub, which aims to fill the gaps you have been doing this since 2014 2.5 million kids have gotten something from the relationship with you >> yoobi makes bright, colorful stuff. for every item sold, we give another item away to a classroom

in need in the u.s it's that simple >> let's see give met numbers on how it works. >> we partners with an amazing retailer in target to literally sell our supplies. so, today whether you buy from yoobi.com or target, when somebody walks in and buys a product, we partnered with the kids in need foundation which we then -- together with them, we select schools where 70% or more of the kids qualify for the national lunch program schools throughout the country, coast to coast have been able to receive free supplies from us. we're up to 88,000 classrooms that received free school sup y supplies from yoobi. >> socially conscious companies like your own, maybe it's a chicken and egg situation. how did it start did you start with the premise i

want to get this stuff to kids in need? or did you start with the premise i want to create a cool company that makes this stuff and by the way maybe if we're successful we can have this other component. >> we actually started with cause as our call. in this particular case, my mom was a school teacher i grew up in a family with not so much money. my mom would spend, like teachers here, close to $600 out of her own pocket on supplies for her classroom. we didn't have that much disposable income. my mom at the most was earning $36,000 a year we know teachers that live like -- on a salary like that. so i've been fortunate in my career when we started yoobi, cause was the number one focus it was simple aim. we thought we could hit a few hundred thousand kids, with our partnership with target and kids

in need to get to now by september it will be close to 3 million kids served by yoobi >> i'm curious how it plays out in terms of why people end up buying this product over another product. we've had this conversation with the guys at willby parker, but people who buy them buy them less for the social aspects but because they look cool but they attract all sorts of people who want to work there, because they feel there's a social purpose to what they're doing that feels like maybe it's different than what you're doing. >> dave and neil, who are incredibly good friends, i would almost say mentors of ours, what they've done with warby is similar to what we've done the number one reason why people buy is because of, "a," the

design and the quality of the product. but the reason they come back is because of the give. every-year, year after year, we're noticing more and more people are making their first purchase because of the give but design and quality is always number one on the list >> how much is federal funding and that may be heading the other way. one may be going down, one needs to go up what is the percentage now >> to be -- from our perspective, we know the per spent taj is going down. >> for federal >> for federal >> right >> over the years we partnered with the department of education who have been amazing, both with the former administration and now looking to partner closely with this administration to make sure that every kid gets supplies we know there are tens of millions of kids turning up to school right now this week without supplies without a backpack some of them without even a pen when they go home toe do their

ho to do their homework we believe a public private partnership when it comes to school is the most effective way to do it to help parents and kids keep money in their pocket for things that are more important for their wellbeing and families if yoobi can do our bit, we're -- for me, it comes back down to my mom. i wanted to make sure that no teacher has to spend money out of her or her mock ket for supppocket for supplies >> it was chance, chance the rapper i knew chance the gardner. chance and state bags donated $30,000 backpacks. so call chance he may be a good partner 340,000 stuffed backpacks at one of his concerts. >> people like chance, we've been lucky when we first

launched we partnered with usher and pharrell last year everybody knows a school teacher. everybody knows. what's incredible is that organizations such as bank of america and merrill lynch partnered with all the way through to the mom and pop companies buying supplies from us for their teams they are also giving back just through their actions. it's amazing >> thank you >> thank you >> very cool >> appreciate it. coming up, ibm teaming up with food retailers to put blockchain technology to work. if you don't understand what it means, you're not alone. i spent time figuring it out and i'll explain it to everybody even medical services are using the technology back in a moment guitar legend just by playing air guitar. the baby's room won't build itself. and her paw won't heal on its own.

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. welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning u.s. equity futures at this hour are rebounding one day they're up, the next day -- they're up, they sell off. up 38 points today after weakness yesterday because of the shutdown some other things happening yesterday. a couple earnings reports were not great. but seems to be somehow correlated to that the nasdaq indicated up 8. 802 right now. the s&p up a little bit under two points

facebook picking andrew bosworth to lead the consumer hardware efforts. business insider says this comes as facebook prepares a video calling device video calling device for release next spring. bosworth was most recently vice president of facebook's ads and business platforms and considered a close confidante of mark zuckerberg. for 2020, potential president. >> linkedin cofounder reid hoffman talking tech valcations in a cnbc interview. he told john ford he thinks things are getting lofty >> as you get to a network world, we get to larger and larger companies ten years ago it was more oil companies, now it's more tech companies. they benefit from this global scale in a network role. it gets down to a company per company decision now what it does mean is probably most of the valuations are probably too high.

that's the challenge for being a professional venture capitalist investor and trying to discern companys >> you can catch more of that interview later today on "squawk on the street." there are many ways open ledger technology can be used for other industries today ibm spotlighting a developing use for blockchain as it partners with food companies from walmart to dole joining us is brigitte mcdermot mcdermott. i spent time last night -- we talk about blockchain. when we talk about blockchain, we used to talk about bitcoin, which is a currency. explain the technology for people when we say an open ledger, what does that look like. >> blockchain is a trusted system of record that's all it is it's that simple it means that when you want to

share information with people who you know but maybe you don't totally trust, you can -- >> like them >> like us >> not naming names. but you can put it on the blockchain when you put it on the blockchain it can't be changed like doing a crossword puzzle in pen. if you do a crossword puzzle in pencil, your friends are like did you do it? did you cheat? if you do it in pen, they know if you crossed it out. blockchain records it in a way that everybody trusts the information -- >> the way it was described to me was the idea that when you buy a home, there's always these different constituents, component parts. the buyer and seller, but there's the bank, the -- >> you have to do ridiculous things like a title search, all of those documents could be passed along in an open ledger, right? >> let me use the example for food safety. that's what we're talking about today with this announcements with these food companies. when you have food, it's grown -- let's say it's grown in

mexico you have a papaya grown in mexico you ship it, put it through a packager, processor, cold storage, distribution center, retailer all of these people have information about when something was picked, when it arrived. what was done to it. whether or not they have the certificates that show they did their hot water tests, whether they have their global food safety initiative certificate. all of this information is incredibly useful if as in the case of papayas you have salmonella if you live in new york now, you shouldn't be eating papayas. >> i didn't know that. that's good to know. >> so what you want, when something happens -- like on may 17th when the first case of salmonella was reported, we should have been able to quickly say let's look at all the information of everything that's been sold and triangulate on what caused the salmonella but the information is sitting in sill loos

the grower has some, the processor has some everybody has information. you can't look and go we have a couple of illnesses, the commonality is the papayas these papayas came from mexico >> are you sure it can't be hacked people come on and express concerns about blockchain, they say how do you know this thing can be fully protected >> one thing that i think is great about blockchain, when it was first developed 2008, i think it was, it wasn't so much that it was this brilliant new idea like quantum computing. it was this idea of how do we put together technologies that we know really well. so cyber, data management, data distribution so it took all of these technologies and said let's think about them differently so we're not reinventing the world. we're using it differently there's so many people out there who know how to build, secure kind of -- >> how much of this is about permissioning? it almost feels like some kind

of grand sharing -- dare i say, like a facebook for business with sort of permissioning on sharing. >> there are two parts to it >> in terms of all of this information. >> a lot of people when they think about blockchain, they think about cryptocurrencies. it's about anonymous access to information. there is no permissioning. everybody can see every information. still the information is unhackable and secure because of the way that the information is put on the chain and is stored with a hash. when you go to what we talk about, which is enterprise blockchaining this is about how do you let enterprises use it for business where they want -- enterprises don't want anonymous transactions that's when you get into permissioning. you say, okay, if i have a transaction where dole is selling food to walmart, they don't want crowing tore see that

information. >> right if driscoll's is selling fruit to walmart, they don't want crowing tore s kroger to see it. >> but when there's a problem, i want to see the whole chain, that might include all sorts of competitors. >> when there's a problem, what we've done is build the food safety solution. there's blockchain, the underlying technology. the announcement we made is two parts. we built the ibm blockchain platform which helps us and others to build out enterprise solutions in blockchain using the technology where there's not a lot of depth and capability right now. not enough people know how to build good blockchain solutions. we built the platform to make it easier to do that. having done that the first example we're going out with is ibm blockchain food safety saying we ran a pilot of this. we built the technology solution with walmart earlier this year we proved that in this case we did traceability on mangos

pa papayas, mangos. we showed we could trace back instead of 6 days, 18 hours, 26 minutes, which is what it took them to identify the farm where a package came from, we did it in a couple seconds. now we're saying that's great. you can do it linearly, but let's do it across the network >> what other industries will this be applicable to? >> ginni rometty says blockchain will transform transactions the way the internet transformed communications i can't think of a single i industry that the internet hasn't transformed, and the same is with blockchain and what competitor do you wake up to saying we're afraid of what they're doing i'm worried about the people who know the businesses. blockchain is about transformation, about thinking differently about how you -- >> there's not a technology company that is even near what

you're trying to do? >> no one else has the platform, so the underlying technology, the expansive look at solutions and the services to help build it no one >> good answer >> make it easier on the house quicker, cheaper >> if we could have source data put on the blockchain nice and secure, everybody would be happier. >> how quickly do you think you can get it done. >> i don't think it's in time for the purchase you're looking at. >> this is for a friend. >> just asking for a friend. >> could you close in less than a week >> probably not going to happen in less than a week but really fast >> all right thank you very much. coming up, tech analyst picks from mark mahaney. and then comments from esther george from that symposium in jackson hole. and later in the morning, scott gottlieb will be here to talk

about the process of cushing k tobacco addiction.

. welcome back to "squawk box. it is now time for the executive edge venture investor and "squawk box" beguest host chamath palihapitiya will be creating a new tech holding company they hope to raise $5 million i an ipo and go out and acquire merging businesses that have little incentive to go public themselves it's a similar model to berkshire hathaway chamath palihapitiya has long criticized the current venture model. >> what is he to sophia? >> don't know where it comes from i don't know the history of it the next time he's on, i'm sure we'll spend a good time talking about it >> i would like to know what it means. vice president mike pence hinted that the u.s. is

considering further sanctions against the venezuela government of nicolas maduro. the comments came last night >> you may be assured under the leadership of president donald trump that the united states of america will continue to bring the full measure of american economic and diplomatic power to bear until democracy is restored in venezuela >> recent reports suggested the administration may ban the trading of new and perhaps existing debt issued by the maduro government. bitcoin is boomi inin iningn venezuela. electric power in venezuela is heavily subsidized so it's essentially free so people are using the power to mine bitcoin.

all right. all day it's a learning experience for some of us. check this out "sesame street" out with its latest parody video. this time of the megahit "despacito" which is apparently a big hit. i just found that out. >> what is the target audience >> do you know despacito >> i've heard of the song. this version is called e el patito, spanish for duckling. "sesame street" has had a lot of parities over the years, including orange is the new snack. so you don't know despacito either >> i'm aware of the song the one i'm heard, i'm not sure fizz the justin bieber one or s

awesome. i don't know how i landed on it. i listened to it probably a dozen times. >> what is it? so i know it's coming at me. >> it's at the top of pop rising if you go to pop rising in spotify, you will know what's cool and hip the next couple weeks. >> theoh this is a big deal this despacito thing. the second song in history to remain at number one for 15 weeks. >> did they say what the first was? >> probably i can find it in here no >> there we go decemb >> i wonder if it's "i got a feeling. >> maybe let's get over to tiffany. earnings out from luxury goods retailer earnings were 92 cents, 6 cents above the estimate

tiffany saw strength in diamonds, fashion and designer jewelry. social security pit t despite the double beat, shares are down >> someone sweet day when we come back, tech stocks up 22% this year. they've been flat over the past month. mark mahaney will talk about his winners and losers in the sector and give us our what's working series next. some interesting picks back in a moment when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.

that's the power of and.

welcome back to "squawk box. the tech sector enjoying a strong rally in 2017, up more than 22% since january, but are names like facebook and netflix overvalued we also want to talk about snap and amazon and so many others. mark, it's great to see you in person. >> good morning, andrew. >> we talked about it yesterday, wpp coming in with what seemed like a terrible quarter and also predicting where advertising was going. where do you think all this money is going >> i've got a couple of good ideas. i think facebook, google and possibly amazon, so they cited specifically wpp cited

specifically weakness in consumer package goods in north america. wpp is talking about 1% to 2% growth worldwide facebook just gave you its 17th straight quarter of 50% year-over-year growth. google gave you its 30th quarter of at least 20% year-over-year growth the dollars have to be flowing there. the surprise candidate, which hasn't been mentioned in the news coverage yet, there's this thing called amazon which is generating more ad revenue than snap and twitter combined, or darn close to it. >> explain that, though. >> well, we've got a global audience that's probably well north of 300 million people that are all looking to purchase. the people on amazon of shoppers what you want to do there, it's almost as good as google search engine on google people tell you what they're shopping for on amazon they're shopping in categories. >> you're talking about sponsored product. >> yeah. >> when i say i'm looking for -- >> lululemon, men's pants. you know what you'll see at the top?

levi's people are shopping. they're in shopping mode that's the beauty of google. people are interested in what they're interested in buying if you're a consumer package goods company or apparel company, get there and you can get target ready people are looking to purchase. >> so one day people -- you don't think people are thinking about amazon as an advertising company? >> no. it's doing 200 billion in revenue and advertising is $2 to $3 billion it's tiny. look at their earnings call last quarter for amazon they talked about two places where employee growth is really escalating or accelerating one was cloud, the second was advertising. it's the first time they ever mentioned that. >> you are bullish on snap. >> yes. >> i just spent some time with the snap guys. make the case for everybody. >> one of the few. i think we're close to a valuation floor. i think we just tested it as we went through the lock-up expirations and we had two negative prints. numbers had to be slashed two times in a row i think we found the valuation floor. if they can get those daily

average users to start growing again on a year-over-year basis, they're rolling out more functionality. >> the map functionality, have you played with this it's very cool. >> i'm not on it. >> we've had some of the analysts say they need to get the word out about this feature more >> this company likes to hide their technology innovations and let people stumble across them it's kind of a passive-aggressive kind of thing. >> but that's a way to generate some real momentum. >> more engagement by the way, they're showing it they disclosed that their millenials are spending 40 minutes a day. >> yes, they have captured the millenials, but are they going to capture any other cohort? are they going to capture the older cohort which is finding its way onto instagram and some of that functionality? >> so there's tentative evidence from survey work we've done

they're starting to get more traction with 30 and 40-year-olds if you're over 25, swipe right swipe right twice to get to the discover tab and you'll see very interesting content. cnn update, like swipe through that i think most people -- the espn content on there is better than what you find other places. >> i think that's why cnn is doing theirs. >> they saw the great success. >> you search lululemon men's pants on amazon and i get a docker's ad, just like you said. >> it's $2 to $3 billion in advertising dollars. watch amazon, watch that space. >> that's how joe ended up with all the docker's, looking for lulu pants. >> another seinfeld piece. another seinfeld episode that you don't understand. coming up, at president trump's speech tuesday night he talked about his commitment to the coal industry and mentioned a mine opening we'll talk to the ceo of coal, the small company that is opening the mine

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good morning wall street looking west as the annual fed summit in jackson hole, wyoming, gets under way. we'll tell you what to watch for and get a live report straight ahead. the president's energy agenda, how policy could change the coal industry. the ceo of corsa coal joins us to discuss. and the spike setter craze

what it could mean for big breweries and their bottom line as the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of business, new york city, this is "squawk box." good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sore kkin along with joe kern en the dow looks like it would open up higher, about 35 points higher nasdaq up 6 points the s&p 500 looking to open about 1 point higher here's what's making headlines the kansas city fed symposium at jackson hole, wyoming, getting under way today. speeches from janet yellen and mario draghi and steve liesman is covering the symposium. later this hour we'll have a conversation with kansas city

president esther george. in the meantime we're going to get a fresh read on the housing market later this morning. the national association of realtors out with existing home sales for july that's at 10:00 a.m. eastern time analysts expecting an increase of half a percent. tiffany reported a quarterly profit of 92 cents per share revenue was also above forecasts, but comparable store sales declined by greater than expected, 2% maybe not enough people buying the little blue boxes, i don't know. >> some long-standing issues, tiffany shares down 1%. hp ink reporting third quarter profit slightly better than expected. revenue from workstations and desktop pcs rose 12% hp ink share is down 2.5%. general electric is going to sell a division.

reuters says ge would like to sell the business for $2 billion. the share is down 0.1 of 1%. >> that will do it too once they get that restructured part of ge going, that will do it i think that's the answer. that will get it, you know, maybe above 24.5. >> the fact that warren buffett sold his shares? >> 24. >> tom flanery has his work cut out. >> sell this, buy this, restructure this, move this over here, joint venture with this. >> meanwhile nbc universal -- >> 24. stuck at 24. considered a done deal, federal regulators don't plan to block amazon's deal to buy whole foods. they made the announcement just hours after whole foods shareholder vote, after they voted okaying. amazon hopes to wrap up the deal by the end of next year. >> uber reporting a 16% jump in

quarterly bookings it posted a loss of $645 million. that's 9% smaller than the $708 million loss in the first quarter. trip requests more than doubled. positive results come amid the slew of corporate scandals, including a legal battle, but so far all of the scandal and soap opera seems to not be impacting the customer and what's so fascinating about uber has always been that the front-facing piece of uber, meaning who the customer interacts with, it's one of the few companies where it has nothing to do with headquarters. >> it's the drivers. >> and they don't really work for the company because they're all contractors. >> and they're pretty good i love talking to them i took an uber down here meg whitman is sticking to her guns she is standing by the statement that she will not be the next ceo of uber. she said nothing has changed since her series of tweets in late july in which she said she

would not be taking on the role. it came after reports surfaced saying the board still wants to be in talks with whitman about a ceo seat. let's talk markets now joining us is gabriela santos and phil blancatto we promised viewers that we'd really dig into this whole jackson hole thing that's happening. that we are calling woodstock for central bankers. i've got a producer that's given me alternatives. >> are you just calling it that? >> no, he called it that i'm not calling it that. here are some other suggestions and we welcome any suggestions from viewers what about comic-con for central bankers. it's more like that. freaky weirdos dressed up in "star wars" outfits. is that better how about burning man? >> coachella. >> lollapalooza.

>> what about you? >> i want to take "squawk" to burning man. can we host from therenext summer burning man is going on right around now. >> yeah. >> and i don't think we're -- >> what is that scary face that i see whenever they talk about burning man. >> the big man >> what do you think we could get our own rv, like the "squawk" rv. we could hang out. >> a road trip you'll travel around, do a shot when you get there >> nothing better than a buddies road trip. >> yes that's what i'm thinking. >> i see -- who were those two guys did you see what she came up with >> that is one of my favorite movies of all time how can you not think of any other movie with two guys going across the country. >> andrew, read the teleprompter no, i'm kidding.

>> oh, wow wow! wow! >> a lot of love. >> what time is it in the morning? geez louise. >> people, let's talk about -- it was a joke. i'm sorry, i apologize she's new on the show. >> i did it's sort of an inside joke. >> gabriela, jackson hole, what do you think >> on that note -- >> anything significant? >> we could get a little bit of a wild card with yellen, with her speech on financial stability. it could go two ways really the base case, she'll use the speech to talk about financial regulation and the need to preserve a sound financial system but she could use it to talk about the need for the fed to balance their goals of inflation and unemployment with a focus on also maintaining appropriate financial conditions so that would be -- that second option would be a more hawkish

tilt and could see some movement and reaction in the short-term part of the yield curve. >> she's talked about the participation right, right we look at this wonderful unemployment number and you've got a participation rate that's still 8%, 9% below when we were at full employment for her, she wants to raise rates because she has this lack of ability in case something goes wrong but the reality is you have a labor market that still has a lot of people outside of it. it's a challenge for her she's fought to be very careful with what she says for her and with dudley, the two of them being on the same team but they're not exactly saying the same things. for them, i think they'll have a little tug of war here september i would believe is off the table. maybe december but the numbers aren't great enough to get you there. >> so the journal did the piece on global growth and gave the stamp that it happened they cited a recovery from the financial crisis along with global central bankers so i mean as we unwind here eventually and as that slowly moves across the globe, isn't

that something to worry about, that the inflection point has been passed and we're headed on the other side of this >> i'm really glad we're actually giving the global economy the credit it deserves it has been the most broad based and strongest global growth since the middle of 2010 actually for the second quarter. and i think really what central bankers are trying to figure out is how much the economy can stand on its own two feet, how much it doesn't actually need that emergency medicine anymore, right, because we're not at that store anymore. the u.s. is certainly ahead of the pack and that is why we're talking about winding down the balance sheet probably in september, continuing rate hikes. but the ecb is also trying to figure out can the european economy stand on its own two feet, can they get going with tapering here. our view is that the economy can withstand that removal of central bank policy, especially because it's a very gradual removal. >> but it's a double-edged sword. look at the yeuro closing in on

1.18 i would expect morrario draghi o take his time. so i agree, imf came out and said 3.6% global growth next year that's a fabulous number, it's an increase. but be careful because you're going to get into a currency battle of who's going to win this battle of cheaper currencies, stronger exports and easing and bowieing a balance o the two. >> we have to acknowledge that the european economy is not growing anymore. the european economy is growing based on domestic demand it's european consumer spending again, european companies willing to invest back in th business so a stronger euro may take out 10, 20 basis points from growth but it's not going to derail the entire story. >> i think you both think that tax reform is so important to certain people in this country that it's going to happen in some form, isn't it?

gabriella? >> our expectation is that's one of the things that the republican party agrees on is the need for corporate tax reform so our expectation is that congress is probably not going to waste too much time on both the debt ceiling as well as -- >> they'll get to it >> so they will probably get to it it's probably not going to be the reduction to 15% or 20%, but we are likely to get something and that validates the earnings estimates and the direction of the market so far this year but doesn't provide that much more upside that's why we're looking to international. >> i think a lot will have a tough time watching some of the traditional credits go away. if i said to you, joe, you run a little business, you're not going to get any tax breaks anymore on what you spend. the local businessman is going to look at that and say, wait a minute, you're going to take this away and give me a break of 15% to 20% taxes but what happens when i get a new president and they jack it back up. i think the idea of capping some of the deductions but at the same token dropping rate is

exciting for me as a money manager, i think it's a boon for small and mid. >> i don't want you to deduct my new jersey tax. >> they're not going to let you deduct that. they're going to phase out the mortgage interest rate there's a lot of bad stuff in here that's supposedly sold as some big wish list item for the people that elected trump. >> robert chiller said that it won't impact the housing market if you mess with mortgage deductibility. >> he's talking about from a behavioral point of view i don't know >> he was a little bit about -- we're changing radically demographically in this country. the people that bought houses 30 years ago and the ones buying them today, it's a whole different ball game. i think we overlook this demographic angle of housing look at yesterday, the numbers that came out in housing recently are not great to me there's a demographic story we don't tell enough that is so impactful of the housing market, of our economy as a whole. 80% of the country's wealth is with 20% of the population that changes everything about housing, how we grow, the

success of the economy and the tax aspect is even more important now. if you're a senior and you live on those deductions and are already in a low tax bracket i turned 50 the other day. >> 50 is the new 20. i'm going down 30 years now. so thank you. >> thank you so much. >> all right, thanks. in the meantime, everybody knows how much i love a jackpot, i love the lottery i know, i know >> you didn't win again. >> i didn't play and therefore, i wasn't able to dream. >> and if you had bought a ticket, you probably would have been the winner, probably. >> and you know what, now that i didn't play and didn't win, i could think if i had played maybe i would play. >> you saw the comparison. 1 out of 292 million. >> yeah. >> getting killed by a vending machine is like 1 out of 100 million. even you i can't see walking in front of a falling vending machine. >> can i talk about the news there's a family in massachusetts. >> in watertown -- >> you don't know if it's a

family might be a bachelor, a single person it could be anyone it could be a dog. >> it could be a dog it couldn't be a dog the second largest jackpot in powerball history has a winner, but it wasn't any of us. a ticket sold in massachusetts snagged $750 million. >> it wasn't ontessa. >> contessa brewer joins us. >> it wasn't her, it wasn't us. >> reporter: what makes you think it wasn't me >> were you in watertown no. >> reporter: hold up you just -- no i wasn't but just because i showed up at work does not mean i wasn't a big winner i might do this any way. i would just be a big old pain about it you know what's disappointing? coming out and looking at the board and seeing it read $40 million. it just seems like, 40 million, chump change, who cares. i don't need that. i don't want that. anyway, we're here this morning. the excitement just dissipated because everybody knows that person in massachusetts, a

single buyer, now the biggest taker of the single jackpot. so there was a bigger jackpot, $1.6 billion, but this was the first one that hasn't had to be split at $758.7 million. that was the final tally jim cramer, by the way, says you should take that as a lump sum and do with it what you want with the cash. you should hold on to the cash and not leave it in the hands of the government that's his tip, not mine i don't know, it seems to me like you get more money if you spend it out this morning you've got people coming up here to bobby patel's newsstand in new york city we were here yesterday bobby patel, everybody who was coming up had big dreams of what they were going to do with that money but now only one person gets to make those dreams come true bobby was a little late opening the newsstand this morning, i won't lie. it may have been that he just figured, well, whatever, i've got a full day ahead of selling newspaper and packs of gum so what am i going to do. the winning numbers here, can you put them up on the screen. 6, 7, 16, 23, 26, the final

number powerball, that's 4 my photographer points out those are all birthdays of people who did not play quick pick maybe were more likely to win and more than one winner in terms of big prizes six people won $2 million. more than 30 winners of $1 million prizes so check those tickets. i checked mine this may be the only time you hear me say this on tv, you guys, but i'm a electors. >> -- loser. >> ialways pick 23 because of michael jordan, i do 7 was like my lucky number when i was a kid. >> how weird. >> there's a chance this could have worked out. >> i can't believe bobby patel didn't sell the winning ticket i was sure he was going to sell the winning ticket. >> does bobby also play? that's what i want to know. >> reporter: yeah. oh, yeah. >> he plays. >> reporter: hey, bobby, do you play every day the lotto

oh, he does. every day. >> every day lotto seven days. the powerball every tuesday and friday, mega every wednesday and saturday. >> reporter: so yes. the answer is yes. he says while he's selling these dreams to other people, he's got to participate in the dream too. >> all right we've got to go. contessa, thank you. thank you for selling me a dream. >> reporter: you're welcome. coming up, what does coal country think of the president's plan for their industry? we're going to ask the ceo of coal corporation that company opening its second coal mine since trump took office. later, pakistan on notice. how the president's strategy in the region will play out in the coming months. plus the spiked seltzer craze has the attention of beer companies. will that latest trend in alcoholiberas c vegepay off? we'll find out stay tuned, you're watching "squawk box" on cnbc

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>> we want to bring in the ceo of corsa coal corporation. the company is opening the second coal mine since trump took office. good morning to you. >> good morning. >> help us understand how this administration has changed your industry >> i think it's a couple things. i think it's economic and regulatory certainly executive orders have helped us eliminating the clean power plan, rolling back the so-called stream protection rule which helps the industry get permits, changing that tone at the top of the government towards coal has been very beneficial that's helped open up the capital markets for coal issuers, both debt and equity. it's helped us run a business. hire people, do better with community relations, but also the priorization of economic growth in this country has been very good in the steel industry. manufacturing jobs, the promise of tax reform, infrastructure spending all of that is good for the steel industry

that's where we sell our product into the steel industry. places like ohio, michigan, pennsylvania so president trump has done a fantastic job stimulating our industry. >> george, how many people have you been able to hire and do you plan to hire over let's say the next 12 to 18 months >> year to date we've hired 71 people we'll likely hire another 40 this year. with the opening up of the horning mine in early 2018, we'll hire an additional 50 people let me also note that's not just 50 people or 70 people, that's 50 to 70 families. these are family-sustaining incomes and very much an upper middle class living in pennsylvania. >> what do you make of the argument there's been a lot of conversation about the steel industry, how much the u.s. government and administration should focus on the steel industry relative to the technology industry or i.t. when it comes with regards to our conversations with china right now. >> i think the steel industry is undergoing a renaissance right now.

globally steel growth is up 4% year to date which is a big move, really an underreported story in my opinion. the steel industry has such a big downstream effect in terms of economic stimulus with the transportation industry, construction industry, housing, that i think it's of national importance in terms of our economic growth so i'm very supportive of what the administration is doing. >> where do you think the coal industry fits within the larger ecosystem of energy these days >> well, if you look globally, if you look at the big picture, coal provides about 30% of the world's energy a lot of people wouldn't know that that's right up with oil in terms of the top spot, in terms of the global energy mix natural gas is 23% globally. coal is affordable, it's reliable, it's easily transportable. for a lot of people it's the only way for them to get electricity. it's the only reliable, affordable places for them to get electricity in places like

africa and southeast asia. so it's an economic engine, it's a driver, it's very important to raising standards of living. >> how do you think about it in the context of the united states, in the context of a truly developed nation and whether long term given all of the concerns that people have about the environment and everything else that we should be pursuing and really encouraging the coal industry? >> i think we should be pursuing an encouraging the coal industry today it produces about a third of the u.s.' electricity in many regions, it's competitive domestically in some regions it is not because of the low cost of natural gas. i would note that natural gas is a very volatile commodity. but the industry has really cleaned up the environmental aspect of the industry if you look at sulphur emissions, particulate matter and mercury emissions, they're down about 90% in the last 15 years as a result of over $100 billion investment that's gone

into emissions reduction technology in power plants we spend $7 million a year at our company cleaning water in terms of reclamation efforts at our sites. we've got 20 people focused on that so really the environmental side can be balanced with the economic side. >> there's a lot of pesky facts about particulate pollution and sulphur and mercury and things like that. we don't care about that stuff keep that stuff. i'm worried about the co2. you didn't mention that. >> well, co2 emissions have come down over the last few years. >> that was just my last -- we run a little thing that says commentary whenever i say something like that. but you're right, sulphur, particulate pollution, water, all those things are environmentally horrific we just don't seem to hear much about them anymore with the other obsession. anyway, george, thank you for being with us this morning coming up, the solar eclipse

causing a fishy situation in washington state details after the break. check out the futures right now indicated up after being down yesterday, the mket arwas, after being up big the day before that "squawk box" will be right back.

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welcome back to "squawk box" this morning, we're live right here -- we're live on television, if you can believe that, from the nasdaq market site. >> every day. >> in times square among the stories that are front and center, two food companies falling short of street estimates with their latest earnings and getting hit hard in premarket trading. take a look at this, hormel and jm smucker both missed on the top and bottom lines and both companies cut their full-year forecast hormel blames high commodity price, volatility, and smuckers points to weakness in the retail food and coffee segments and the fact that we have not been doing pb & j at our house in quite a while. >> why >> i don't know. a consortium led by western digital offering $17.4 billion for toshiba's memory chip business, which says kkr is also a member of that group toshiba and western digital have been in a legal dispute over the sale of the unit since the two

are joint venture partners in a japan chip-making plant for those chips. we're also an hour away from the labor department's weekly jobless report on initial jobless claims economists looking for 235,000 new claims for the week ending august 19th, which would be up 3,000 from the prior week if the numbers come in that way. a fishy situation in washington state after an accidental salmon release over the weekend. officials say that high tides damaged nets at this salmon farm, which is just a weird thing to call a place where you get salmon you don't really -- >> grow them out of the ground >> releasing as many as 5,000 atlantic salmon into the water crews are urging the public to catch as many of the fish as possible with no limit on the size or number officials say the spill was caused by tides pushed unusually high by monday's approaching total solar eclipse, so it happened -- wow, that's

interesting. >> that's kind of fascinating actually by the way, why do they have to catch all the fish is there some problem with salmon being let out >> i don't know. >> it's not like they're bear that are going to -- >> no. but you could send the bears in. >> you could do that too. >> to get rid of the extra salmon. >> they just like to swipe that salmon. >> they eat them whole that i don't know about. the kansas city fed holding its annual economic policy symposium at jackson hole. we should ask steve about the fishing. that's where we find steve liesman this morning. >> reporter: yeah, i think those salmon are genetically modified and they don't want them breeding with the other ones that's just my guess, i'm not sure we're kicking off our coverage of the jackson hole summit it's a different one and unique one. they're going to be talking about global growth when many of the major economies around the world are growing. i thought i'd share with you the unofficial agenda which obviously begins with the issue of new leadership on the way, maybe the president reappoints

janet yellen, maybe gary cohn, we don't know. it hangs over, a bunch of spots still open on the fed board. draghi speaking friday does he end up announcing the end of european quantitative easing the fed continuing to miss on its inflation forecast and what that means for rates does the fed end up the terminal rate, is it closer to 2% or 3% finally balance sheet reduction sounds like it's set to begin in september or at least announced to begin in september. i sat down with esther george, the kansas city fed president. she's the host of the event every year and we began talking about this extraordinary thing. this is a different jackson hole because all the economies around the world are growing. and what does that mean for u.s. fed policy >> well, it's an important factor as you know, that had been a downside risk for some time. and so to see the rest of the world beginning to show positive growth bodes well for the u.s. economy. >> has it prompted you to upgrade your forecast for u.s. growth this year or next

>> not in particular so i'm waiting just to consider several factors in my own forecast, but it certainly eliminates some of the concern that might have been sitting out to the side. >> it eliminates downside risk -- >> right. >> more than giving you additional upside. if i might, what is your forecast this time last year you talked about 2% growth. are you still at 2% growth >> i'm still there you've seen first quarter we see lower growth, it looks like it bounced back second quarter so when you round it out for the year, i think we'll be in that same range. >> how much concern do you have about the unemployment rate being at 4.3%. does it create more concern about inflation for you this year or next >> well, i'm delighted that the unemployment rate is low and more people have jobs, but i do look carefully at how you ensure that you have sustained growth in the long run. and overheating and labor markets can be an issue for you longer term. >> one of the big issues right now is the lack of inflation inflation coming down, especially amid the low

unemployment rate. has the connection or the lack of inflation given the underlying employment rate, has that surprised you >> i don't know if it's a surprise given where gdp is right now. when you have this level of growth and you look at some of the dynamics, look at the difference between inflation in the good sector versus inflation in services, it seems to make sense that you'd have low inflation right now. >> inflation has not been heading back towards the 2% goal do you think the fed ought to pause here >> i think we should continue with the gradual rate path while we haven't hit 2%, steve, i'm reminded that 2% is a target over the long term and in the context of a growing economy, of jobs being added, i don't think it's an issue that we should be particularly concerned about. unless we see something change so inflation is running close enough to 2% in my view that it allows a gradual approach. but again, every meeting is an

opportunity to re-evaluate those forecasts and how we're thinking about it. >> you talk about interest rates. interest rates have actually gone down while the fed has been trying to push them. does that cause you concern? you can imagine the fed wants tighter conditions but it's not happening. >> right. >> is that a reason to perhaps accelerate rate hikes? >> i don't know if it's accelerate but i think it means you continue to move forward i think at the point you begin the balance sheet reduction will give us another opportunity to see how financial conditions are responding to the removal of stimulus. >> reporter: i also asked miss george about the potential for a government shutdown and she said it doesn't have an effect on her sense of timing at this time, but she'll evaluate the risk as it comes nearer. you can imagine a scenario where it looks like we might have a shutdown and the fed would potentially back off on the idea of reducing the balance sheet. at the same time, george said the beginning process of winding

down the balance sheet is very, very incremental it's a small piece so she doesn't think it would have a big effect. we're going to talk later in the next hour with her about the issue of the balance sheet reduction and some other issues about new leadership as well coming up about 10:30 eastern time, we'll have robert cappel, the dallas fed president back to you. >> steve, by definition or just by nature, i get the feeling that a lot of fed officials are very cautious. now we're going -- we've got 2.6. instead of going with the forecast for the third quarter to average it out, they go back to that, what you've highlighted so many times, that skewed first quarter number to get them down to that 2% average now, you don't have to buy the atlanta fed. that's fine if you don't want to do that. don't you have a number? doesn't the all america survey have some number or something? >> reporter: no, no, joe it's nice of you to bring it up. less nice of you to mix it up with the other survey we do. >> it's 2.8 or 2.9, isn't it >> reporter: it's called the

wrap it update we're the only ones, cnbc, which you also work for, so it's your survey as well. >> what's the number it's 2.8 or 2.9 for the third quarter, isn't it? >> reporter: it's 2.8. >> so 2.6 plus 2.8 averages 2.7. so why are they so slow -- why do they look back? they seem to be backward looking. do they ever actually need to forecast something to actually anticipate something happening or do they always just fall back on the pat standard answer that we're still at 2%? it's weird i mean i'm hopeful because if we do 2.7 for second and third quarter then you're going to have to do another 1 in the fourth quarter to get back to averaging 2 for the year. >> reporter: right let me try to answer the question just a little bit first of all, this issue of global growth can't be understated, i think i think it could add as much as 0.3, maybe as much as 0.5 to the global -- to the u.s. economic growth. if that continues, we might have

an upward shift in the growth numbers. secondly is what the fed looks at, what economists look at are what they call underlying potential growth and they believe that the economy will hue back to that trend when they add up productivity and labor force growth, they come up with the potential of actually below 2%. so unless they change their view of potential, they won't change their outlook for overall economic growth. >> i don't know. they'll be the last to know. it's just -- >> reporter: if you tell me productivity is on the way up, labor force growth will increase, then the fed would change its outlook for growth. >> don't look at me for productivity i'm leaving at 9:00. anyway, thank you. >> and we'll see you next hour, steve. >> it's still the summer see you in september. coming up, the spiked seltzer craze bubbling up sales at major beer companies. our landon dowdy will take a look at that latest trend in alcoholic beverages and how it's boosting sales for major brewers. as we head to break, take a look at u.s. equity futures

the dow implied higher 53. we'll be right back. enturyli to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.

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welcome back president trump unveiling a new u.s. policy on afghanistan earlier this week and put pakistan on notice our next guest says it's about time he's a former u.s. ambassador to afghanistan, iraq and the u.n. during the george w. bush administration he's also author of "the envoy." welcome to you first of all, do you support the president's plans and strategy for afghanistan? >> i do. i think it's very courageous policy i'm sure it wasn't easy for the president to go this route, but the alternative would have been worse, to abandon afghanistan, so i support it. we'll see how the implementation goes, but so far so good >> is it so far so good? we've been embroiled in this since 2001, i guess. it's probably the longest war we've been in with nothing to

show for it. so is even this commitment that he's lined out going to make a big difference what do you actually think is going to happen here >> well, first, the situation is not the same as it was 16 years ago. we have a lot to show for it we at one point had 100,000 american troops who were doing the bulk of the fighting in afghanistan. now we have a large afghan force that is doing the fighting we are there in a much smaller numbers, 8,400, and maybe will increase it by some numbers, but to perhaps less than 15,000. >> right but what you're citing, ambassador, is success is we've gone from 100,000 troops to, if you believe "the wall street journal," more than 10,000 right now. but that doesn't sound like some sort of transformation on the ground the situation with afghanistan -- is it a more flourishing democracy? have we pushed back the taliban?

do we have actual progress on those fronts to show for it? >> well, we have some progress, but not as much as we would have liked. there have been reasons for why there hasn't been much progress. the new strategy that president trump has decided on seeks to address some of those issues you refer to the issue of pakistan at the beginning. one of the issues that has made progress very difficult has been our inability by the two previous administrations to deal with the issue of the sanctuaries for the taliban and the terrorists in pakistan it's much harder to defeat an insurgency with safe sanctuaries. and i believe that the new strategy seeks to address that by putting pakistan on notice. we'll see whether the new strategy will be successful or more successful in addressing that issue, but i think that's

been one of the big problems that has made things very difficult for us. >> so what further pressure should the u.s. put on pakistan in order to try to stamp out that support for terrorism, as you're describing it and if they can do that completely, do you think that all of a sudden the afghanistan situation improves >> well, what needs to happen is we have to shake pakistan out of its comfort zone, which it has been in by supporting the insurgency against us in afghanistan and yet receiving assistance from us also. we need to confront pakistan, and i think the president intends to do that, to make a choice if it wants our assistance, it has to cease support for the insurgency we can also put individuals in the pakistani security establishment who are supporting the insurgency on a black list so they can't travel to the united states and we can also

carry out strikes against the sanctuaries in pakistan. there are a number of things we can do and i don't think we've done them as much as the new strategy intends to seek but if it works, it will have a significant impact it won't be immediate, but will have a significant impact in terms of improving prospects in afghanistan. >> if we are at war with afghanistan or in afghanistan, what does victory look like? >> victory looks like not having sanctuaries for the terrorists who target the united states and our allies in afghanistan. we don't want to go back to pre-9/11 circumstances in afghanistan in which terrorists such as al qaeda and now isis would like to move from iraq and syria to afghanistan they have already started that we do not want that.

and i believe that was the reason for the president to make this difficult decision. >> yeah. >> he doesn't want afghanistan to go back to pre-9/11 circumstances with new terrorist groups threatening the united states >> a quick final question, ambassador do you believe that that can be completely stamped out, any of that activity, no sanctuaries as you said is that an achievable goal in afghanistan? >> well, it's an achievable goal over time. already with what we have done since 9/11, afghanistan no longer is a sanctuary for terrorists targeting the united states but they are trying to come back they have made some progress this strategy is aimed at t reversing that and making sure afghanistan never becomes a sanctuary for terrorists again. >> all right, thank you again for joining us today. >> thank you it's good to be with you. coming up, it is called

spiked seltzer and it's causing a buzz for big brewers landon dowdy has a preview >> hey, that's right this is the hottest thing right now, sales of hard seltzer are spiking, but how long will the buzz last? we'll tell you who the big ays are and what's behind the trend coming up next on "squawk box. so that's the idea. what do you think? hate to play devil's advocate but... i kind of feel like it's a game changer. i wouldn't go that far. are you there? he's probably on mute. yeah... gary won't like it. why? because he's gary. (phone ringing) what? keep going! yeah...

(laughs) (voice on phone) it's not millennial enough. there are a lot of ways to say no. thank you so much. thank you! so we're doing it. yes! start saying yes to your company's best ideas. let us help with money and know-how, so you can get business done. american express open.

that's why at comcast we're so ycontinuing to make4/7.ne. our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. 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. beer companies are getting a buzz from summer, from summer seltzer sales. landon dowdy joins us with more on this trend in the industry

cashing in good morning. >> good morning. non-alcoholic seltzer sales have soared in the past five years, up 42% now beer companies are taking notice boston beer entered the market last year acquiring truly spiked earlier this year, miller-coors followed launching a line of sparkling waters called henry's hard sparkling now, these acquisitions highlight the pressure on brewers to expand beyond beer, which has been losing share of the total u.s. market to liquor and wine over the past 15 years. guys, it is paying off for example, in this most recent report, boston beers truly spiked and hard sparkling water fueled sales rather than the company's name sake product, beer and ab in bev's seltzer brand new 429% from 2015 to 2016 the overall hard seltzer industry grew by more than 3,000% in that same time frame but can hard seltzer help

brewers keep their buzz? well, brad cooper of consumer research warns while hard seltzers helps drive a nice pop in q-2, he doukts tbts the sustainability there hard soda sales soared from 2015 to 2016, raking in $116 million. according to market researcher iri, many industry players rushed to get into that space. now hard seltzer is the buzz of the industry, but will investors be watching to see if the trend has staying power or will it fizzle out, andrew back over to you. >> thank you for that. we have a quick corporate headline to bring you. facebook reportedly picking veteran executive andrew bozworth to lead its consumer hardware efforts this comes as facebook is preparing a video calling device for release next spring. he was most recently vice president of facebook's ad and business platform and is considered a close confidant of mark zuckerberg. of course the mystery video device -- >> is that like facetime

>> could be. >> or house party? >> what? >> the movie >> you read the story about how they're obsessed with house party and how it's disrupting them >> oh, yeah, yeah, yeah. that article. >> in "the wall street journal," you heard of it? >> i only read "the new york times. know the enemy coming up -- >> i thought he -- reading the editorial pages of the "journal" -- >> the rest of the editorial -- >> that was too far for you. you've got to go to breitbart at this point i'm assuming. >> now that my buddy is back, yeah you mean steve now that they're back in good hands. you know, we're kidding about all this coming up -- we both paint the other person with all these -- so that we can set up these false sort of things and then knock down. >> you're looking at "the daily caller caller" right now? fda commissioner dr. scott

gottlieb joins us at the top of the hour we'll talk drug pricing, cigarette companies and much more the futures at this hour, the mother jones index up 52 on dow jones. >> mother jones? >> s&p up 500, nasdaq up 10. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

a fed summit out west. investors counting down to the kickoff of the central bank symposium. a live report from jackson hole straight ahead. "squawk box" news maker. the fda takes aim at big tobacco. commissioner scott gottlieb joins us on the set. plus earnings alert. tiffany beats the street a look inside the blue box retailer's quarter as the final hour of "squawk box" begins right now. ♪ >> announcer: live from the most powerful city in the world, new york, this is "squawk box. good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm harold, this is kumar. no, you said we're dumb and dumber. >> it's the only buddy-buddy movie that i know. you talked about the rv and you

kind of look like jeff daniels -- >> nick nolte and eddie -- there are so many cool buddy movie. >> nick nolte? you remember that picture? >> i'm joe kernen along with andrew ross sorkin >> do you think what i'm talking about? >> yeah, that mug shot >> the futures right now are indicated up about 56 points nasdaq -- dumb and dumber. >> yeah. >> nasdaq up 9 >> i meant it lovingly. >> but it came out so quickly. and the s&p up 3 treasuries now, it looks like the yields may be in another little bit of a holding pattern somewhere between 2.10 and 2.30 as we wait for that elusive 3% you've watched that. have you ever seen it? >> what, 3%? >> were you in the business when we were at 5, 6, 7, 8% >> yes, the financial crisis, the ten-year was at like 4

it's amazing. >> we thought if we could get down to 7 or 6 as stock brokers that that would be -- >> my dad said the mortgage on the first house they bought was 12%. >> prime rate was 21% at one point. i used to walk to school both ways uphill. you could get 13.5% aaa tax-frees. >> my grandfather used to live off of bonds that he had gotten in the early 1980s. >> incredible. >> okay. among today's top corporate stories, a consortium let by western digital now offering $17.4 billion for toshiba's memory chip business kkr also a member of that group. we should mention toshiba and western digital have been in what is quite an epic legal dispute over the sale of the unit since the two are joint venture partners in a japan chip-making plant. also federal regulators say they don't plan to block amazon's $13 billion deal to buy whole foods. federal trade commissioning that

just hours after shareholders voted to approve the deal. they hope to wrap up the deal by the end of next year. >> uber reporting a 16% jump in quarterly bookings it's posted a loss of $645 million, which we should mention that's 9% smaller loss than the $708 million it lost in the first quarter. trip requests from riders more than doubled over the past year. here's some stocks to watch this morning we've had some earnings. tiffany reported quarterly profit of 92 cents a share that was a 6-cent beat revenue also above forecast but comparable sales did decline by a greater than expected 2% the shares have rebounded and are now up 2.5%. other retailers reporting quarterly numbers too. abercrombie & fitch reporting a smaller than expected loss look at the share response it's up nearly 20%, still trading about $11.50. dollar tree also beat estimates on the top and bottom lines and saw bigger than

expected increase in same-store sales. dollar tree, which has been such a juggernaut, is up 9% this morning. and the white house downplaying reports of a growing rift between president trump and senate majority leader mitch mcconnell. this comes after "the new york times" reported that the two were locked in a, quote, political cold war on issues like tax reform and constructing the proposed border wall in a statement the senate majority leader says, quote, we have a lot of work ahead of us and we are committed to advancing our shared agenda together and anyone who suggests otherwise is clear low not part of the conversation. by the way, we should mention a big interview coming up on cnbc today. house speaker paul ryan will sit down exclusively with cnbc to talk taxes, trade and president trump. be sure to catch that at 1:00 p.m. eastern time. >> there are some interesting dynamics going on in terms of -- i don't know what mcconnell's kentucky approval rate is now. i saw jeff flake -- i mean it's weird. i don't know what 2018 is going

to bring. >> just to put it quite simply, i'm not sure what side you should pick. >> i know, i don't know. >> do you stay close to the president, you know, looking for his supporters or go completely the opposite way. >> at this point the evidence is that you might -- there still might be a trump umbrella for republicans. >> this could be a wave election, not just a loss for the gop, but a -- if you think about how far we were on the other side of the pendulum >> they have -- just the races that are up in 2018 don't really -- aren't really going the democrats way and neither is the fund-raising right now they're broke. the fda -- they haven't raised nearly as much. the fda is on a mission to stomp out smoking. the new commissioner setting a plan for tobacco and nicotine regulation to reduce tobacco-related deaths dr. scott gottlieb joins us. the state of the industry now, scott, i'm talking about tobacco, it's like $8 a pack

i see very few people smoking unless i'm in europe right now who still smokes, and how much is it -- i thought we've conquered this mostly in the united states. is that not the case right now >> smoking rates continue to decline but they have plateaued. they're declining very slowly. it still kills about 408,000 every year >> and you point it it's got to be the only product on the planet where half the people that use it, it will kill them. >> it will kill half of all long-term users. we've set out a plan to try to reduce nicotine levels to nonaddictive or minimally addictive levels to transition people off of combustible cigarettes we've opened up a pathway to new product innovations that we think can provide nicotine to people who want to enjoy satisfying levels of nicotine without all the risks of lighting tobacco on fire. >> so the vape may not be as --

or it's not as bad as a cigarette. >> we need to put it through an appropriate series of regulatory gates. there are other innovations coming onto the market heat, not burn other things also medicinal nicotine products that provide nicotine replacement like gums or patches where there could be product innovation around those as well to deliver the nicotine in better ways that are more satisfying to addicted smokers. >> is nicotine a satisfying drug it seems like you sort of -- you don't need it until you use it for the first time and then you need it. that seems like a crazy thing to induce a need for something that serves no purpose in the first place, does it does it feel good? >> i don't use it. it's driving the addiction to combustible cigarettes, we know that. >> but if you don't -- if you never try nicotine, you don't miss it, do you? >> look, it's addictive like other drugs we see that are addictive. >> so it must feel good. >> it's not a completely benign compound we know it has impacts on youth but it's not the nicotine that kills you, it's all the other

carcinogens in lighting tobacco on fire. >> there is a raging debate before whether the e-cigarettes, the vapes, is like a gateway, if you will, to these other form factors. >> well, i think -- >> like cigarettes. >> look, we see a lot of youth use e-cigarettes some of those will transition onto combustible cigarettes. i think that's a foregone conclusion i don't know how many, there is a risk there i think we have to take all the steps we can and we're doing that to try to cut down on youth use of those products. at the same time we allow them to go through a regulatory process. >> are we seeing more people using combustible products move to e-cigarettes than we are either kids picking the habit up on e-cigarettes and then moving to combustibles. >> that data is unclear. that's why we need the regulatory process to figure this out at the time that we are looking to render combustible cigarettes minimally addictive, we do need to think about how we provide an

alternative to smokers who still want satisfying levels of nicotine but aren't able to get it through combusting tobacco or lighting cigarettes on fire. that's what kills people it's the carcinogens in the cigarettes themselves. >> and you think that e-cigarettes are relatively safe >> i think they need to go through an appropriate regulatory process, which is what we're doing part of this announcement was setting up that regulatory process. but i think they have the potential to be a safer alternative to combusting tobacco. >> scott, profit incentive can be great but it can also cause drug companies to do things that aren't so great. let's switch to generics, so to speak. can they slow down -- is there a way that they're gaming the system to make generics come to markets slower >> there's no question they are. what they're doing is deploying commercial tactics to prevent generic companies from actually being able to get the doses they need, the physical pills to run the studies to come in for fda

approval so they have to run bioequivalent studies to get approval for a generic drug. that takes between -- we seed branded companies being able to block them generics are being able to pay full price but are having trouble getting access to the drugs. >> so they slow walk that process. but the bioequivalency test, that's the fda that requires that >> it requires the test to prove sameness. >> does that need modifying, the way that's written and done right now? >> it is being modified. we're looking at ways to make that process less burdensome, less costly. we've seen the cost of doing bioequivalent studies. that's why the cost of distinguigoods is going up because the process has gotten more expensive. >> generics, it's a global industry, right? it would be nice if it was all here is it safe from other countries? >> generic drugs are just as

safe as their branded counterparts the fda is inspecting their facilities even if manufactured abroad a lot of manufacturing is abroad action even for branded drugs. a lot has been moved to ireland and been offshored. >> we've had lots of conversations about ep ipens an mylan before where we've talked about the issue of generics and the price skyrocketing for certain things on epipen, what do you think will happen to the pricing of that >> i don't want to be product specific, as you know. but there are certain issues associated with drug device combinations where companies develop intellectual properties around the device itself that makes it hard to copy. i think there are steps to take from a policy standpoint to make it easier to enter generic copies of drug device combinations there's obstacles of companies' patent features that correlate with instructions for use that becomes hard to copy the instructions for use on the generic have to be the same as the branded. we could reinterpret our rules in that regard an perhaps provide more of an avenue for

generic competition. >> just a quick question now that a lot of states are going after these opioid makers, do you think their basis for comparison is legitimate because opioids -- i guess it's not necessarily like a cigarette, where kind of by definition as we said it kills users. but if it's misadvertised, if it's misused, then that opens up -- people up to an extremely deadly result. so how concerned is the fda about its role in all of this process and what more should be done >> look, i haven't looked at all the suits. they're making claims based on the broad marketing of how these products were marketed historically i haven't looked at the details of the claims that these states are making i have a lot of confidence in the current regulatory scheme we have in place to make sure there aren't inappropriate claims being made around these products it's very carefully looked at inside the agency. we are concerned about how the products are marketed now and i think we have in place good measures.

>> scott, carl june interviewed in "the wall street journal," a university of pennsylvania researcher still sort of grousing to some extent about how quickly you can test new medicine on people that have a humanitarian -- you know, people that aren't going to be around no matter what so that you maybe aren't quite as concerned with side effects. then i read some of the side effects of some of the new technology i mean it's a very tough path to choose between killing someone with an experimental drug versus saying we've got nothing to lose. >> you've seen some recent legislation. i think the breakthrough therapy's pathway has opened up the ability of the fda to take a more accommodative stance. when you look at gene therapy, we have the potential to really transform the face of clinical medicine with some of these applications, but there are side effects associated with them if you're transplanting cells, sometimes you have to immun

immunosuppress the patient some of them could have potential to treat the patient in very vexing disorders. >> i remember there was some gene therapy early on that set the whole field back. >> that's right. out of the university of pennsylvania early on we didn't have the right vectors for delivering the gene that's where we've had the product innovation. >> hiv, right? >> we've used attenuated viruses. now we have investigators that deliver the gene effectively so we're seeing some innovation that's really encouraging. >> i wanted to ask you what your thoughts were about ken frazier's decision, runs merck, to lead the effort by so many of the ceos to abandon the president and the president's councils and if there's any implication if you think for either of those companies or the administration >> i'm not going to comment on ken frazier's decision that's his decision. there's no implications for any company that does something in

its private capacity in terms of how the fda would approach that. i would never allow something that happens in a setting outside of the fda to impact how we think about our process we're an independent regulatory agency. >> and the administration -- people think or say to themselves, you know, could there be some type of retribution to a company that the president doesn't like or the fact that the government is a huge buyer of drugs. none of that you think will have any -- >> nobody has picked up the phone and called me and i don't think anyone would. >> okay, fair enough >> all right i'm going to -- if this is -- we can open it up for all questions. did you buy a lottery ticket >> didn't they announce a winner >> no. >> then you're not a loser and neither am i. >> 1 in 292 million. >> those aren't very good odds >> getting killed by a vending machine is 1 out of 100. >> but i didn't get to dream i didn't now i'm dreaming of the dream.

>> the lotto is a nightmare. >> it's meta >> scott, i'm going to read this right now. you were asking, there was one lucky winner here it is follow along someone in massachusetts roughly $759 million richer today after hitting the powerball. the winning ticket was sold at the pride station in chickapee, massachusetts, not in watertown. see, in the fog of war, you don't know you don't always have the right info so it was in chickapee it had been previously reported it was in watertown. it's not clear who bought the lucky ticket, but they are the biggest single lottery winner in u.s. history you wouldn't have even cashed yours in, andrew when three people won that billion and a half, you'd keep it, right? because you don't share. that's what you said yesterday. >> i was hoping if i have going to play i'd win the whole thing. >> you don't share i mean three people, you've got to split a billion and a half. this is better to win the whole 750. >> yes and you take the money up front.

>> take the money up front just like cramer said. >> put it in nvidia. >> i don't know about that. >> don't play the lotlottery. >> no, play the lottery. >> loser >> still ahead, we'll talk about the infrastructure -- thank you, scott, for being here. the u.s. drinking water getting a "d" in a recent report a ceo trying to change all that is going to be with us right after the break. plus the road to tax reform. subcommittee cirn tehamaper roskam will join us at 8:30 eastern time we'll be right back. for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you...

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this is some sugar for those of us who have been following this conversation about sugar. >> that's beautiful. >> did the fda commissioner leave that behind? >> i was going to have a conversation with him about sugar. >> we did before we started. >> but not on the air. >> he said anything in moderation he told you. >> anything in moderate, but not -- added sugar is not good for you. >> of course it's not. but what did he say? he said try drinking cranberry juice without added sugar. >> if you add sugar, it's not good for you. >> but you choose. >> it's good for your bladder. >> that is true. >> a spoonful of sugar makes the

medicine go down. >> yes, in the most delightful way. >> but too much sugar is not good for you. >> well, we know that. >> i just want to be clear >> what about sugar replacements >> give that to joseph. >> oh, it's cushioned. >> it could be a pillow. that's your new mypillow. >> we're switching topics. the american society of civil engineers giving the nation's drinking water a "d" grade on its 2017 infrastructure report card. companies like aqua america are working to get that grade up joining us right now is the company's ceo, christopher franklin it is one of the largest water publicly traded companies. i had no idea that we were getting a "d" grade. what's going on? >> an important distinction. it's not really on water quality, it's on the infrastructu infrastructure

the infrastructure in this country is decaying. we're very fortunate in this country that we can travel almost anywhere and drink the water, which as we know around the world is not universal. >> what is the cost to get our infrastructure where we would have an "a"? >> oh, boy the epa estimates between $600 billion and a trillion dollars to get our water and wastewater infrastructure up to standard in the next 20 years. a lot of money. >> how much are you spending >> we're spending a billion five every three years, so we're making a significant investment. to give you a sense of this, in the early 1990s when i got to the company, if we -- when we look at our replacement cycle of pipe, if i took the amount of pipe that we were replacing over the total pipe we have, it would have been a 900-year replacement cycle. over that 20 years or so, we've improved it so much that we're now on a 90-year so we went from 900 years to 90 years over 20 years.

>> how frequently should pipe be replaced >> really it lasts about 80 to 100 years. that's about the cycle of pipe. >> how much of the issue is the pipes, how much is the filters, connections, all of that >> i would say that if you're a mayor in this country, you've got a lot of priorities on your plate, right this industry is still largely municipal. 85% municipal, 15% regulated like my company. and so those mayors have a lot of priorities in front of them health an human services, police, fire, and replacing a piece of pipe doesn't typically come to the top of the order. >> right. >> and so it's really that work. it's the pipe, not the filtration. >> real quick, if we get an infrastructure plan, what would you recommend in terms of how water is part of it? >> i would say -- this would be my pitch to members of congress. don't send us money. let private capital come to work here let private capital come to work and let it stay in the places where it's being generated in those particular utilities generate it there through rates

and take it forward and make the adjustment. >> is there a shift in regulations that has to happen to make that work? >> no, policy generally has been regionalization of water systems. 85% municipal, 50,000 water utilities in the country. >> christopher, thank you for coming in this morning. >> thank you. >> thank you for suffering through our sugar conversation. >> i enjoyed it. we have a trump tweet. the president just tweeting, quote, i requested that mitch m. and paul r. tie the debt ceiling legislation into the popular va bill which just passed for easy approval he tweeted that four minutes ago. there's your point, joe, about that -- you know, the idea that they would just do a clean debt ceiling is something steve bannon was upset about paul ryan will be in for an exclusive interview at 1:00 p.m. "squawk box" will be right back. olay eyes

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what happens to the odds of tax reform >> the story of the year so far has been distraction after distraction from policy. >> with profits dprogrowing the they're examined to, this market is fully supported. >> if it only benefits 20% of taxpayers, why is it so sacrosanct >> it goes back to the american dream. member that. it stands for the government is behind the homeowner coming up, house speaker paul ryan continuing his tax reform tour today. we will take you there live. "squawk" returns in a moment

welcome back to "squawk box. rick santelli live on the cme floor. breaking news. initial jobless claims, 234,000. that's from an unrevised 232 so we're up 2k 1.954 million on continuing claims, which is a bit lower than 1.95 -- actually with the revision, it's pretty much unchanged. we still have existing home sales to come. we're 2.19 on tens you know where we were last

friday 2.19 you know where we were the friday before that yep, you got it, 2.19. here we are at the bottom of the range and can't seem to break through. equities, yeah, they have corrections. we're up 300 points from the highs in the dow seems like the music keeps going on kelly, back to you. >> rick, thank you very much. we now have the second part of president trump's tweet which clarifies what he was saying in the first. here it is in full he said i requested that mitch m. and paul r. tie the debt ceiling legislation into the popular va bill which just passed for easy approval they, dot dot dot, and here's what he followed up with they didn't do it so now we have a big deal with the dems holding them up as usual on debt ceiling approval could have been so easy. now a mess are you guys following this? >> i have been following it. >> but does this make sense? what is his point with these tweets that now he's blaming the house leadership for not having -- >> they should have done it then. >> which they should have done, raised the debt ceiling with the va bill he's saying? >> yeah, tied it to the va bill.

>> but they wanted to do a clean raise. >> they didn't promise -- mcconnell -- >> a nonpoliticized version. >> so now he's saying if it doesn't get raised, he's shifting the blame to democrats but lamenting they didn't do what he wanted. >> sounds that way. paul ryan on is tax reform tour today he's going to visit a boeing plant in everett, washington >> reporter: andrew, paul ryan wants to talk about taxes, but as you saw in those tweets, president trump keeps talking shutdown and this is going to be a challenge for paul ryan and for the gop leadership as they try to build energy and momentum around what they have said is one of their signature issues. now, paul ryan will be talking to employees today here at boeing he'll also be joined by boeing's ceo and the idea behind this tax

reform road show had try to get businesses onboard with this idea of potentially giving up some of their special tax breaks and deductions in exchange for a lower corporate tax rate for everyone you'll remember that boeing was one of the companies that had advocated for paul ryan's border adjustment tax, but now that that's dead, it's an open question how exactly they are going to pay for big tax cuts. now, i will be speaking with paul ryan later on today i'll be asking him about those tweets from the president as well as whether he thinks amid all of the drama going on in washington, tax reform can still get done later on this year. he was earlier this week over in oregon speaking at intel, meeting with employees there he also at that time talked about the shutdown, saying that the government will likely have to look at some sort of short-term funding measure in order to put that debate aside to get to more pressing matters

like tax reform in their minds but that's the big vision statement for republicans. that's their feel good message right now. but if they can't do the debt ceiling and they can't do the government funding bill, then they won't be able to show that they can do the basics of governing, guys. back over to you. >> all right, thank you. joining us now with more on this, house ways and means tax policy subcommittee chairman peter roskam mr. chairman, it's good to see you this morning we just had a couple of interesting tweets i don't know whether you saw or actually heard from the president that maybe ryan and mcconnell should have attached the debt ceiling to the va bill and it was a missed opportunity. did you -- were you privy to that or do you have a comment on that >> look, i just heard it -- just heard the tweet as you guys were reporting it look, there's going to be a lot of continuous drama around a couple of issues i think what the speaker is trying to do is to clear a pathway. there will be drama around the

government shutdown as there always is. there will be drama around the nature of the debt ceiling debate as there always is. but i think what the speaker is trying to do now is to basically clear a pathway and to recognize, look, the republican party, majority in the senate right now, has really struggled on health care and the notion of going back and not delivering on tax reform is completely unacceptable. so toward that end, i think the speaker is using his office to clear a pathway and to frame the debate to say we will deal with these other things, but we've got a once in a generation opportunity to have fundamental tax reform, an let's drive as hard as we possibly can to get that done. this could be a transformational poe moment for our country this hasn't been done in 30 years and we have the capacity to do it. >> we are, as you mentioned, as a transformational moment. you probably wonder why a lot of

the public is cynical because at this point they ask whether republicans will stand by the president. i mean obviously the democrats are not going to want to do anything at this point i don't even know about -- i guess they'll want to raise the debt ceiling, but they're going to make it as difficult as possible, which is -- it's kind of a cynical view of thing, because we all wanting the same thing for this country, but it's all now a won and loss -- we're keeping score on republicans versus democrats i don't know whether anything really gets done with 51 votes maybe. is that what we're going to do it's going to be a temporary tax reform >> no. i hope it's not a temporary approach i think we will be far better off if it's permanent. you can do permanent with 51 votes. you've got to pay for it and it's got to be -- you can't do any violence to the debt nor the deficit. you can do it with 51 votes. >> how do you do that mathematically >> yeah, 15% maybe 28% or something. >> well, you may not get to 15 what we proposed in the blueprint was a 20% corporate

rate, getting the seven individual rates down to three, as you know. but you've got to dial these things up and dial these things back as you reported earlier, if border adjustment has been jettisoned, as it has, there goes 10 points on the corporate rate we're really interested -- on the ways and means committee, we're really interested in what pro tax reform proponents but critics of border adjustment are offering to mitigate that loss. >> what are they offering? >> well, so far they haven't offered anything now, moving forward -- i just want to speak to this notion of cynicism, though there's no percentage in investing in that in terms of a disposition. and my point is this we as a country -- there's nobody that's defending the status quo of the tax code it's really interesting. people are defending the affordable care act, people don't like the affordable care act. nobody likes the internal revenue code and frankly nobody

likes the irs either you've got this once in a generation inflection point. and we can rub our hands and, you know, just kind of nickel and dime this thing to death or we can say let's go for it and let's do something that's transformational can you imagine the palpable sense of relief in this country if congress was able to put once in a generation tax reform on the president's desk it would be phenomenal and it's really worth pursuing aggressively this fall. >> chairman, there is no question that you are right about the way the country feels about taxes in general the question is, whether there's a once in a generation chance to really change the tax structure of this country, but whether at the same time there will be a once in a generation tax to add enormous debt on top of this thing. so the question is effectively how does the math really work? even if you believe in dynamic scoring, you know, there's not make believe scoring either so you have to figure out what that rate is that actually is meaningful and if you don't have that, for example, if you don't have some

of these other things, how do you do it and is it regressive on the individual side is it a giveaway to the wealthy? there are real issues here beyond the sort of larger issue, which is people want to fix it. >> yeah, that's right. look, i'm not here pumping sunshine there's two fault lines in each political party that have to be dealt with the fault line in my party on the conservative side of things as a republican is do we want permanent or do we want temporary? permanent is paid for, permanent is harder, but permanent is better and there are some voices in my party that say, hey, cut the taxes, who cares, don't worry about it i don't think that's the best pathway, i think we should pay for it on the democratic side, they have a different fault line. not every democrat believes this, but there are voices within the democratic party that are basically describing the economy as a zero sum game that is it's a fixed pie if somebody does better, somebody else is doing worse we reject that i don't buy that i don't think that that's the way the economy works. and so both political parties

really have some sorting out to do there's an urgency to this look, i take your point that if border adjustment is off the table, then that means other things are on the table. but this is a matter of negotiating and trying to come up with some level of balance as we're trying to come up with the following things, growth, simplicity, figuring out how to deal with base erosion once and for all, and i would argue the fourth point is make this thing permanent. let's not have temporary tax policy that episodically will lurch back and forth companies -- in particular, companies that are doing business on a global basis need a level of predictability and there's nothing more predictable than permanent >> okay. i'm just thinking about all the -- i think, you know, the latest "new york times" piece on the relationship with mcconnell. i see, you know, corker got the ball rolling asking about whether the president is stable,

so now they can say both republicans and democrats are asking whether his mental health is a question. the whole thing, mr. chairman, just -- i just wonder if all these extraneous things can be put aside and something can actually happen with republicans, much less whether democrats would vote for tax reform i can't see it happening >> look, the question isn't whether they can be put aside. it's an assertion that they have to be put aside. there's an urgency to this they have to be put aside. they can bow wie with a level o discipline -- >> i bet you don't get a single democratic vote for tax reform unless -- >> i don't know. >> what could you offer them maybe single payer do single payer and tax reform. >> yeah, we're not crossing that bridge >> i don't know. all right. feeling a little less cynical. mr. chairman, thank you. >> thanks, guys. >> we'll see what paul ryan says today. that should be interesting he should watch, i think it's at 1:00 all right, congressman.

oh, coming up, the annual burning man retreat in jackson hole -- no, it's actually not. it's comic-con of the fed in jackson hole steve liesman is there in all his glory. we will check in with him next >> glory was one of the jumble words today. >> you solved that thing. plasy.did it eil us more from steve's interview with esther george "squawk box" will be right back.

welcome back to "squawk box. the energy industry is closely watching tropical storm harvey today. i had no idea how much rain might fall on houston. it's headed towards the gulf coast. it could become a category 1 hurricane by tomorrow. it has the potential to become the first hurricane to hit landfall in texas in nine years and they could face as much as two feet of rain half of the capacity is in the gulf coast nearly a third of capacity appears to be in its path. not much reaction to energy prices so far. what kind of preparations could houston make for that if it's -- like what are the odds that it's going to be that bad and how is a city like that handling that amount of rain >> there's flooding, no doubt. that is a lot. >> by the way, crude pairly lower by 0.4 of 1%. >> get back out to liesman, who i think played a gig in aspen or something. central bankers gathering at the fed symposium in jackson hole. steve liesman is there and he

spoke to a very special guest. have i got that right? were you showcasing your talents in colorado? >> reporter: yeah. i was in another conference in aspen earlier this week, joe i've got a band that i play with there every year i go out to that conference and i played a gig with them monday night. >> in aspen. people were tweeting it out, sending it to me, saying that you were not awful. >> reporter: did they send it to you? >> they did. >> reporter: you know, that's probably a good way to describe it, we were not awful. joe, as you might imagine, after some drinks, we sounded better and better. >> yeah, you thought you were great. >> reporter: at least to the people who were drinking joe, the proceedings of this jackson hole retreat this year began officially this evening, but yesterday i got to sit down, as you said, with esther george, the kansas city fed president. she's the host this year and the topic is global growth but i did get to ask her some detailed questions about her views on the balance sheet and when, by the way, that balance sheet reduction might actually begin.

>> well, you saw the minutes of the last meeting markets are expecting any time now, looking at september and out. that is always a function of what issues are going on when we meet to make that decision but i think the setup is there describing how that would happen and the approach that the committee would take, so now it's just a matter of the committee agreeing that the forecast would be supportive of that. >> you talked about putting the balance sheet reduction on auto pilot. can you explain what that means? >> so for me auto pilot means you communicated clearly the approach, and that approach is to be gradual in the approach that we take to lowering that balance sheet. once you explain that, then i think it makes sense to say that isn't going to be a meeting-by-meeting decision, that you will lay out the path and go with it >> the unemployment rate has come down, but wages have not really gone up especially strongly does that tell you there's more

slack in the labor market and maybe the fed should be more gradual to see how many people we can bring back to the workforce? >> i think that's a risk if you wait too long. so wage pressure relative to growth in the economy and relative to inflation i think looks okay do i wish it was higher? yes. i wish every worker had higher wages. but relative to a 2% growth economy, wages are staying ahead of inflation and i think that helps the purchasing power for consumers, which is important to our growth. >> what about your expectation now for fiscal stimulus? >> i still -- today i would not incorporate it into my outlook again, hopeful that some of those steps could betaken. i'd love to see new roads and bridges, but for now i'm waiting and seeing. >> but more so than roads and bridges, what you expressed last year was interesting, that you wanted to see the fiscal side take up more of the responsibility for the economy than the monetary side, take

pressure off monetary policy so you have to feel a little disappointed looking at what's not going on in washington these days. >> it could be the prospect of getting higher growth in the economy would be wonderful. but in the meantime, the federal reserve with its tool of monetary policy i think understands where the economy is allows us to begin to take the steps that we've been taking. >> it looks like there's new leadership perhaps coming to the federal reserve. you've been in the federal reserve system for a long time how do you process the possibility the president perhaps appoints a new fed chair, new fed governors how does the system process that how do you process it? >> well, they're all important positions, as you know we know markets watch for it it matters to our institution. these are important jobs they affect policy, not just monetary policy, but supervision and regulation policy, our role in the payment system. so you want people that understand that full mission and are prepared to roll up their sleeves and come to work >> reporter: that's a big issue

here on the unofficial agenda for jackson hole this issue of new leadership janet yellen speaks friday could it be her last speech at jackson hole or could the president reappoint her. we'll ask those questions and others to the dallas fed president coming up at >> and then i can announce that later tomorrow afternoon we'll have the fed governor. a lot of fed speak on the official side and here on the cnbc set here at jackson hole bachblth back to you guys. >> you're a one man show out there steve. >> you know it's an awful lot of fun and used to be more fun. i don't get fishing time anymore. >> we'll see you later thank you. when we return we'll find out what jim cramer is fired up

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not a dreamer. >> you did. >> but you lost. >> i did some people as we know in that great indianapolis speech talked about that right do you remember that were you there for that speech >> we won the lottery already though jim haven't we in life >> absolutely. we're the luckiest people on earth. >> but i tweeted out a chart if you bought it a couple of years

ago with 790 million you'd be worth 6 billion or something. >> i don't think that's wrong. it's my favorite stock. >> that's why i said it. that's why there was no smirk. >> you don't change the name of your dog unless you think it's for real and initially you had to have a bone in your hand. now it is like a bell. >> maybe we should -- are you following it at all. is andrew following? >> i am and you have been right on the money the whole time. what can i say >> when you open up the devices that know anything about your life, it's nvidia and they know more about your life than you do.l they know what you're going to buy tomorrow. >> will you give it to me from three years ago. you don't do that do you >> i still like sales force. i think salesforce had a

remarkably good quarter. >> $10 billion in sales. 15 billion in preferred revenue. i liked that one too. >> beautiful. >> jim we will see you in a couple of minutes. >> and obviously you would buy a sports franchise with the money that's left. that's the next thing. >> andrew is a sports fan. all of those things. >> he's right. are you? >> well i'm interested in it i'm fascinated. >> does not like sugar. >> i like to inject -- ingest sugar. aitst power on the advisory board we'll tell you who the start up recruit is that's next.

>> last year airbnb was in hot

water after users spoke out about discrimination using the platform we can take a quick look at where things are going to set themselves up. dow higher nasdaq up 15 points higher s&p 500 up about 5 points higher. >> thank you. >> thank you for having me. >> when are you on >> next week if you'll have me back. >> we'll try to carry on. >> we'll try to carry on. >> it will be tough. make sure you join us tomorrow squawk on the street begins right now. ♪ >> welcome to squawk on the street looking for some mild gains at the open jackson hole begins. a relief rally of retail the president's twee