joe manchin, donnelly and i came up with areas to try there's so many areas of agreement. if you concentrate on the areas of agreement you don't have time for disagreement again, that's gelling out political process. i appreciate the president's business person's approach to try to find areas of agreement i completely support that. >> i want to follow something i mentioned on infrastructure. clearly that's an area that may be read for bipartisan agreement. is there any talk of blending those two together tax reform and infrastructure are you talking about two separate pieces of legislation, two separate packages here >> my guess is they will probably be separated. again, where we all agree is high-speed broadband is incredibly important not only for big cities but also rural states let's face it, ernlwest virgini, indiana, a lot of areas underserved with broadband there's an area of agreement that was certainly talked about last night as well again, my main point tenaciously

pursue areas of agreement, shared goals, shared purposes. policies decisions will fall out of that. >> senator, this bipartisan meeting looks great, but it was just over two weeks ago that the president tweeted if senate republicans don't get rid of the filibuster rule and go to 51% majority, few bills will be passed so is this a reset are we to expect not just bipartisan conversations but a bipartisan approach to crafting legislation, or is this just a conversation >> it will take two to tango again, i give the president credit my approach has always been to try to find bipartisan support did that with joe donnelly so it's the starting point now, are we going to get eight democrats to sign on to a major piece of legislation that might be a stretch but it doesn't hurt to begin the conversation whether it's health care reform, tax reform, infrastructure, talking to our colleagues trying to find those areas of agreement if we make a really good

argument, if we find those areas of agreement, we might surprise everybody including ourselves that maybe we can get some votes on these things. again, that to me is the way you start any conversation particularly on big policy initiatives here in the united states congress. >> but senator, are you confident that the tax reform can be moved along without getting -- having to get married to a giant infrastructure package or the wall or the dream act? can it run in its own lane >> i believe so. again, it would be great to do it bipartisan. if not, set it up through budget process to do reconciliation, do it with republican votes or a couple democrats joining us. again, i can't predict exactly what the outcome is. i come from manufacturing background if you don't have a good process, don't end up with a good product so i'm completely in support of this process of at least starting discussions, trying to find those areas of agreements on bipartisan basis. >> let's talk about the process.

i've been consulting with my colleague on the hill, speaker ryan's weekly press conference, asked him about the outline we're going to get on september 25th he said it was going to be a conservative plan. treasury secretary mnuchin said yesterday delivering alpha talking about exceptions on passthroughs, lower corporate rate that would favor manufacturing companies over service companies like accounting firms is that something you and other republicans can get behind doesn't really sound like a traditional republican idea. >> i actually have my own proposal, legislative language now all business as -- tax corporate income at shareholder level. i call it true warren buffett tax. that may be too big paradigm shift. if we accomplish corporate tax reform, which we have to, benchmark against competitors, make america's most competitive can't leave it behind. 87% of american businesses

report their income as a passthrough entity and shareholders pay tax on the income we have to make sure in some way, shape, or form we equate income whether c corp., s corp. or llc. >> finally, senator, nbc news is confirming the "times" report the president will have dinner tonight with schumer and pelosi. this is three people who brief topics will include dream act. what is the gop response to something like that? >> again, i think discussions on bipartisan basis are a good thing. when it comes to the dream act, our response to daca, i really do believe his actions, which i think were necessary, because i think what president obama did was unconstitutional it did poison the well, prevent further immigration reform to pass this could be a nixon china moment being a catalyst for real immigration reform

ending incentives for legal immigration, people who came here passionate and humanity. >> dinner expected to include ross, mnuchin, mulvaney, all key members of the president's inner circle and his cabinet his outreach and deal making by the president with democrats tell us what's going on behind the scenes, how republicans are actually reacting to it. >> again, i'm all for the president of the united states reaching out to everybody like a business person tenaciously trying to find areas of agreement. shafrd goals, shared purposes, that's a problem solving process. start there, an achievable goal, then start arguing about what the solutions are to achieve those goals. let's face it, i don't care if you're democrat, republican, we want safe, prosperous, secure america, we want to end wage stagflation and put money in

people's pockets. >> you don't think he's hedging if he can't get votes on health care and tax reform? >> possibly. again, from my standpoint, the process of including everybody, trying to find areas of agreement, winning political arguments. let's make sure that whatever we do in terms of taxes promotes growth because that's how you put more money in america's paychecks. let's get those areas of agreement down first i think we have a better chance of whether we do it, pass on bipartisan basis or using reconciliation. >> all right we'll see what happens senator, thank you for joining us ron johnson of wisconsin. >> when we come back, why companies that specialize in artificial intelligence may be worth ten times more than today's social media companies ahead plus a lot more from what you heard delivering alpha yesterday. consumers cutting the cord faster than once thought later why former employees comparing the startup to a frat house when "squawk" comes back

imtwo years into a ten-year investment plan where i think opportunities from an investment standpoint will be 5 to 10x in terms of market cap around ai around what social currently is. i don't know if we know who the next mark zuckerberg is in terms of artificial intelligence, but

there will be another mark zuckerberg, bill gates, tom seb ol type of individual or set of individuals that understand that the self-learning capabilities apply to health care and finance will look extraordinary over the next decade because it is so different and fundamental. >> so are you saying if we take facebook, twitter, s.n.a.p., all of the companies of the social era, add up their market cap new ai companies will be 5 to 10x that >> for sure. absolutely. >> that's breyer capital founder delivering alpha he successfully invested in facebook, etsy, so he knows what he's talking about when he talks about those things former head of growth at facebook, current head of social capital and, you know, bringer of a new era in ipos agreed with

that statement on the importance of ai and the potential market cap for some of these companies. >> also said some of the old metrics we used to value companies may not be appropriate in this new era, which, of course, a lot of money managers say we heard that tune before. that was part of the debate last night. >> it does feel like with the next frontier of ai, john, and i know there was a little bit of a debate on twitter back and forth with heavyweights in technology, is it going to be in the united states even? is that happening here is the money -- >> we talked about it with a panel with tom seib ol we had. half the opportunities are in china. >> that's what mark cuban has been sounding the alarm on we don't want china and russia to win that war. >> a lot of highlights for more on that we go to leslie picker hey, leslie. >> hey, carl, how is it going? several take aways, alpha is

back how to deliver that, a bit up for debate how to find such performance in silicon valley. >> all these businesses fundamentally under duress the idea that alpha is back is true the lens with which we go about finding it is through that he lens of technology we think it's the trail of breadcrumbs that help us understand where value is allocated, which by implication means values destroyed and long the former and short the latter? >> palihapitiya was long bitcoin which jamie dimon said was a fraud. >> if you were in venezuela or ecuador, or north korea, you're better off probably using bitcoin than their currency. that can't possibly true in the united states unless you're speculating.

that isn't a reason for value, because other people's speculate. that's tulip like i said, the other reason, used for purposes, not a real thing. eventually it will be emperor clothes. >> compared to 17th vengery often referred to as the first speculative bubble guys. >> leslie, thank you very much when we come back the latest on the recovery efforts in the wake of hurricane irma. millions of people still without power. we're going to check in on that with the dow up one point. rash? (sigh) ( ♪ ) dad: molly! trash! ( ♪ ) whoo! ( ♪ )

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floridians still reeling in the aftermath of hurricane irma. millions without power and it could well stay that way for days jackie deangelis with the latest jackie. >> reporter: hi, carl. the first question i get is how are people coping with that power situation. at one point 1.6 million florida customers without power as you mentioned. sure, you had those folks who

were cranky. you had folks angry because of extraordinary circumstances. most people were like this >> i've lost power for five days i'm glad i'm getting it back today. i'm not impatient. i'm happy that everyone is out here now, as you can see, getting it together. >> most people were just happy that crews are out today trying to restore power and bring it back to them they are grateful that they are safe and their homes haven't experienced as much damage as they were thinking righthere in this neighborhood right now, we are working on getting -- we are not, duke energy, the second largest power company in florida is working on getting their power back this is a rebuild situation. it's going to take a little bit more than they expected when they got here this morning but they are going to stay until the job is finished. that was just enough to make everybody on this street rejoice that they will be able to turn their lights on, put the air conditioning back on as they are praying for family members and

others they know in other parts of the state that are still without. sarah. >> good to see there's progress made on that front, jackie, thank you. when we get back, forget cord cutte cutters, cord nevers, what that means for spending

good morning, everyone i'm sue herrera. here is cnbc news update in her first live television interview since the election hillary clinton appearing on the "today" show where she talked about her new book on the 2016 presidential race. >> part of what has happened over the last points for me was writing a book that gave me a chance to look at everything that happened, you know. what i did, what i could have done better, what my campaign could have done better it was cathartic i feel, here i am. i hope people will find it useful and informative. >> in preparation for a handful of controversial speakers at uc berkeley, city leaders in berkeley have reversed 20-year-old policy that limits officer's use of pepper spray. berkeley's mayor says the new rule will allow police officers to use the spray on violent people in a crowd but to the for

crowd control. a soyuz space capsule with two americans and russian aboard has docked with international space station. all three are set to stay on that space station for five and a half months. they join a russian, an american, and an italian astronaut who have been on board since july that's the news update this hour back downtown to "squawk alley." carl, i'll sent it to you. >> back to michelle caruso-cabrera. >> still, even with small gains, stock 600 is aiming for sixth straight day of gains. any gain in the german dax was going to mark tenth positive session. that's exactly what happened index up 4% so far this month, even in the face of the strengthening euro we talked so much about ftse failing to keep up underperformed broader index, up 2% while ftse up half a percent

and barely that over the same period strong pound weighing on the uk exporters. however, today we did see currency pulling back from one-year highs ahead of tomorrow's bank of england policy meeting see what they say about that pound. apple weighing on european stocks sort of some of apple's european suppliers are down disappointment from the much vaunted iphone x won't start until october. we've reported that a lot in the last 24 hours. later than expected. semidown, down earlier luxury space, up 12% in the past five months did not stop the company from replacing almost half of its board today. world's second biggest luxury group looking for executive for the struggling watch business. chinese demand for luxury time pieces in the last few years due to massive crackdown on corruption down in sympathy following

launch of apple watch we saw yesterday. back to you. thanks a new report showing cord cutting, dumping cable and satellite subscription is rising faster than expected julia boorstin. >> updating forecast for bundle, not looking good emarketer said cord cutting will accelerate faster than expected projecting number of people who don't have pay tv will grow 33% this year to 22.2 million. that's about million more people than previously projected. now, emarketer isn't referring to the number of subscribers or households but rather total number of individuals who don't have access to a bundle. if the roommate decides not to pay for cable, that's one subscription lost and four cord cutters based on their definition that is, of course, bad news for ad dollars

emarketer cut its ad spending forecast saying now they expected to grow just half a percentage point this year this updated forecast comes on the heels of roberts, comcast trying to reassure investors about cord cutting at goldman sachs yesterday after the company warned it would lose between 100,000 and 150,000 video subscribers this quarter alone. roberts noting net subscriber losses for the last months 50,000 and decline in tv ratings will be offset by higher ad prize. jeffries issuing a note saying comments made last week by both comcast and at&t should sound a warning bell for investors on the state of competition, competing offers for video packages are exploding in the marketplace. now, roberts says bundles are where the value is for consumers. the question we're going to have to watch is whether a generation of cord nevers find value in the new digital bundles from hulu and youtube instead.

guys, back over to you. >> yes my millennial sister a cord never, not even to watch her sister thank you. julia boorstin meantime hitting another record high this morning. stocks for the most part are unchanged. they are holding those records that they closed out yesterday apple is weighing on the nasdaq, down after unveiling its newest iphones. joining us to talk about it senior investment strategist at oppenheimer and cfra chief investment strategist. sam, wanted to bring up this big story about the improving health u.s. numbers out, income up 3.2, average income $3,039. biggest gains came at the top. do you see that kind of improvement continuing into this year in terms of incomes and more americans gaining access to health insurance and poverty rate going down? >> yes, i do i see that number at 3.2 is

almost twice the year on year change in core cpi so that leaves more paycheck at the end of the month, which is favorable. if there's a risk to our economic forecast, which points to about 2.7% growth it year is that we're underestimating what the growth might actually be add to that that the average american's fico score is at or near a record level and it gives the consumer the ability to purchase more should they so desire. >> brian, what's the investor takeaway, americans will pony up for $1,000 iphones, which is the big question today or something else how do you take that and put it into a strategy? consumer discretionary is doing well today but sort of has been mixed over the last year or so. >> think about it from the perspective of the u.s. economy. the u.s. economy has been growing reasonably modestly for the last number of years a little pick up here is certainly favorable. what it signals to us at oppenheimer funds, this cycle in the market is not going to end

any time soon. if you see a pick up in economic activity it might be the composition of returns change. you might shift to more value oriented parts of the market than growth parts of the market that have been lead sog long the other thing i would suggest growth overseas looks good this the first time in eight years we've had synchronized expansion. investors should consider looking at other parts of the market, europe, emerging mark as well, where those economies are also improving. >> sam, is it a good sign for the consumer that apple, which is the biggest company by market cap in the world has stores and fingers on the pulse of the consumer, things it cks it can y with selling a $1,000 iphone is that a signal for q4? >> i think it does since they are offering $699 and $79 9, people do feel they have

an option. if they want ahead of the curve they pony up who knows what kind of deals will be offered by the wireless companies themselves so i think that it does comply, as brian had just mentioned, that this economy is not likely to roll over and play dead any time soon, which is positive for the bull market since two out of every three bull market has ended fearing a recession. >> brian, to that point we had our delivering alpha conference yesterday. cooperman, strong marketwatcher did say although five-day percent could happen signs of a larger decline at this point in his view are either not visible or not forecastable. i wondered if you thought that made sense. >> i think it makes sense from the perspective if you look at trappings of a big market correction they are simply not there. you don't have excessive leverage in the system you don't have significant increases in inflation leading the fed to tighten policies

significantly. you haven't seen a massive business investment period those usual trappings that usually lead to oversupply or excesses in the financial system or global economy simply aren't there. so while growth may be slow, in paradoxically that slow growth extends the cycle and keeps market volatility relatively low. now manifesters have fought it all along the way and they will continue to fight it this has actually been a very good backdrop for equity returns. >> so you do have north korea and fear of higher interest rates and excesses in place but that's a discussion for another day. that's one reason, guys, it's the most hated rally. >> we always have it. >> yeah, exactly. when we come back, why social employees comparing the startup and its ceo to a fraternity house

in a limited range dow down 9 points rick, what are you watching? >> i'm watching the calendar makes me one week away from fed decision time that may give us significant information on the balance sheet. so in honor of that, today we're going to talk about the difference between bubbles and distortions when it mecos to interest rates, all after the break.

just released a new note to

investors on what apple's if you line of products means for the stock. he's with us exclusively today plus as markets hit new highs one of our traders who has been stockpiling cash says it is time to get back in what forced the change of heart and where he's putting his money to work. investors with billions of dollars in management unique strategy designed to profit with a purpose. halftime report starts noon eastern. carl, just about 15 minutes away. >> scott, thanks got some new developments in that massive data leak and widespread outrage at equifax. aditi roy live in france. >> an op-ed in "usa today," the breach has been, quote, the most hum bling moment in the company's history. but that same publication wrote a scathing about smith's apology. we will make changes but in its piece called category 5 breach,

"usa today's" editorial writes it has bungled just about every attempt to remedy the mess the outrage doesn't end there. more than three dozen senators sent a letter to s.e.c., doj, ftc urging them to spare no effort investigating the selling of $2 million worth of shares by three executives including company's cfo after the breach was discovered equifax, of course, maintains the executives did not know about the hack until after they sold the shares. in the letter the lawmakers urged agencies to conduct thorough investigation for violations of insider trading law. one of the more vocal critics heidi heitkamp on the senate banking committee. speaking at an event, if there was insider trading involved, quote, somebody needs to go to jail carl, back to you. >> aditi roy, "san francisco aditi, thanks so much. let's get to rick santelli and get santoli exchange

rick. >> thanks, carl. listen, i'm really excited about next wednesday as a matter of fact, i have vacation time coming i'm cutting my vacation short to be here one week from today. it's a big day i'm not exactly sure how everything is going to turn out, and i'm not exactly sure we're going to get information today by janet yellen & company that gives us things we can write down, prepare for with regard to the balance sheet, is it going to be the time line hinted at, quantities of selling off the balance sheet or at least in terms of some of the small liquidation, are the numbers going to hold up one thing i can say for sure, look at the following chart. this is simple we're going to keep it simple. a 20-year chart of s&p 500 versus ten-year note yields. something interesting happened post crisis. right around summer, fall of 2011 you see it two-thirds to the right of that chart where everything went opposite, everything went indirect

relationship, the correlation broke down all the money that the central banks created they thought, it did. exactly how it was deployed models weren't correct on. as stock market ran up, what did interest rates do? moved lower and flattened out. that's the notion where the bubble is. that ten-year note line. it's a bubble because the prices are so high and rates are too low. i think it's a distortion. i think there's a huge difference in how investors get in and create bubbles and how they end versus something a central bank pretty much created with respect to managing markets that shows up as a distortion. there's only a few ways this can turnpike out, in my opinion. now, all the combinations between stocks and rates, i picked what i think are the three most important number one, stocks will continue to go up and rates will go up. they will start to go up number two stocks go down, rates see that and do even lower as a hedge against stocks

i call that the fed code red okay that's when it starts to flash i don't think central banks will allow that particular relationship to occur. they will stop whatever they are doing. they will lock and reload. all the accommodation they took away, they will probably put back in the marketplace. i personally think the most likely outcome is that stocks do what bonds did after 2011, they stay at their level, move mostly sideways with some volatility, maybe upward drift but mostly sideways and interest rates will make it up and take the roll of stocks and move higher. i think that's the most logical outcome especially considering how few strategists have any notion they want to be buying into the bond market come this wednesday or at least wednesday coming up. back to you. >> rick santelli, thank you. up next, nearly $2 billion in funding. but now former employees are accusing some at social lender

sofi, including ceo, of the worst kind of atfr house behavior a co-author of the exclusive report next. hey you've gotta see this. c'mon.

no. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. an explosive report in the "new york times" this morning detailing a culture of inappropriate behavior at

private company social finance, sofi for short ceo mike cagney stepping down amid a harassment lawsuit. sofi is currently valued at a little more than $4 billion. investors include silver lake, third point and softbank we have just gotten a response to the "new york times" article from sofi. i imagine we'll be putting this online at cnbc.com as soon as we can. one of the statements in the response says we're going to set aside the personnel matters raised in the story as a matter of policy and will not address every inaccuracy in the story. however, we have some issues with the story that we want to address. i will note the statement doesn't necessarily outline specific inaccuracies but does seek to make some clarifications for more we're joined by a reporter at the "new york times" who co-wrote the story katie, good morning. >> good morning. >> i'm wondering what this says, how this fits into the overall

silicon valley narrative that we've been following for several months now which includes uber, this idea that founders, ceos, perhaps given a lot of latitude, too much latitude and how they define the culture and treat employees, particularly women and minorities how does this incident and this story affect that overall narrative? >> i think it's very similar in you see the founder of a company being given lots and lots of chances and the culture sort of growing in a way that other people might consider out of control. one thing that's interesting here, too, it shows, and i think uber is similar, that there's a real struggle to balance hyper growth and prioritizing what it takes to get a company off of the ground and make it very large with putting systems in controls and hr systems in place and moving like had a much slower company that has a lot of processes. >> so when you -- when you took a look at the story, i imagine that the lawsuit could have been part of what turned you on to

it were there things that surprised you or patterns that you noticed that you think is going to inform how you continue to report out these stories in silicon valley >> well, that's interesting. before the lawsuit was filed i had gotten messages from former employees, this was years ago, saying they thought that sofi was interesting. they really hoped for an ipo this is when i moved to san francisco. it was only 2013, the company wasn't very early. they were concerned and weren't shower how it was going to get done because it was chaotic. over the years the ipos have been pushed off and pushed off and pushed off there was, as you can imagine, more rumbling. employees will endure a lot and they will accept a lot if they think there's going to be a big pay day around the corner in the form of a public offering and when that didn't seem to be in the offing i think people were are willing to start speaking about what their life at work was like >> katie, we've had joanne

bradford from sofi on several times. she's a well-known executive. >> she is. >> in silicon valley speaks up often when it comes to women's issues does she play into this story in your reporting at all? >> no. she didn't i think there are a lot of people at the company. some of the behavior we're talking about happened in 2012, so when the company was only between 5 and 30 people so joanne wasn't there at that time >> katie, i wonder, not to be -- you've got to be careful drawing too many lines between companies, but after uber and after some of the episodes we've heard about in private equity in the valley, do you think this is largely about lack of internal controls, or is this sort of a sort of mindset that they actively pushed this, aggressive behavior that ends up spilling into other areas of life >> well, i think that there's a lack of internal control there's a lack of external control because we're in a weird situation where the board that's

supposed to oversee the company and that's supposed to care mostly about the outcome for shareholders is also the same exact group of people, the cho hort that funded the ceo and the founders in the first place and really believe in them, so there's -- there's an internal and external issue i think to deal with that's not just about sofi, it's about all of silicon valley and it's a bigger conversation around the culture it, and it's one of the things that i think allows for behavior and the mistreatment of women and minorities, for example. >> well, certainly a new light on that, and we'll work to get in full statement from sofi on to cnbc.com. >> we don't have that statement, just so you know. >> as i believe it was provided directly to cnbc, so i guess you'll read it along with the rest of us and our viewers once we're able to get that out that is important to do. thank you, katie katie person from the "new york times." >> "squawk alley" continues in just a moment.

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take a look at apple shares. as you know, prior going into today it was down five out of six days, down 3% for the month as you see debate is open. we see the classic sell on the news coming out of a product announcement >> the twist here is that we're

getting the new iphone top of the line, at least the iphone x about a month later than wall street would have expect the the stock is only down 1.5%. that surprises you. >> one reason, morgan stanley's katie huberity writes the people will upgrade more for the 8 and 8 plus early in the cycle and, two, the first full quarter of selling iphones, the march quarter could look a lot better than expected so she says buy on any weakness given the last two periods of meaningful growth acceleration. >> probably not bad for gross margins either. >> true. >> apple, the worst dow performer but good action in retail let's get over to the judge and "the half. >> and welcome to "halftime report." i'm scott wapner our trade, the apple aftermath one day after rolling out its new iphone and watch why the stock is lower today amid predictions by some that an even bigger slide could be in the cards. with us for the hour is joe

terranova and jon najarian what's your reaction