live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm kelly evans along with joe kernen becky and and drandrew are off y our guest host is here today >> different venue i feel like it should be p.m., fast money desk. >> plug number one got it in already. fast money, fast money fast money >> you know what is the opposite of slow -- >> what show are you on? >> fast money. >> what time >> 5:00. what network >> still this network. >> have you seen this show >> i have. never miss it. if i don't, i dvr it

i like it watch weeks later. >> it's relevant >> yeah. >> the wisdom. >> absolutely. >> global markets report let's check in on how we're coming out of the overnight session. looking at u.s. equity futures the dow, s&p a bit lower implied for the open same for the nasdaq. coming off records again yesterday. how about overnight in asia. we'll see how they react to the fed's tightening yesterday which did not phase markets. the nikkei is up 0.2%. i believe they had an earthquake in japan overnight as well the shanghai down about a quarter of a percent european equities, seeing how the they're continuing, green pretty much across the board. france and italy leading the way with a half percent of gains ftse just a bit higher crude is coming off a flin-day

win streak you know, crude for wti is over $50 a barrel brent over 56 a barrel both down a quarter of a percent. small declines for nat gas >> we'll talk about hurricane maria. just thinking, japan, mexico, maria. think about the last 30-day period >> i know. >> normally on any given month you do not see five or six of these catastrophic -- >> the volcano >> this is like -- i won't tie it to this biblical numerology end of the world is that supposed to happen saturday >> that happening again? >> there's a lot of stuff happening. >> the real problem about that, if it was any one year, all that happened was hurricane harvey, we would still be talking about harvey and raising money for

harvey >> irma. >> how do you split the attention of the national media between harvey, irma, maria, the mexican earthquake 1,000 people possibly dead >> japan, too. >> especially with social media, you hope all of the attention and money gets to where it needs to go. this one is not over, maria. the storm is regaining strength after pounding puerto rico that entire island is without power. puerto rico's governor says it could remain that way for months maria unleashed winds and flooding across much of the island the storm is getting stronger as it pulls away from puerto rico i hope it stays out that way it is heading for the dr, the dominican republic we'll get an update from puerto rico's congressional representative at the bottom of the hour get additional information that we can from the congresswoman. we are also following the latest out of central mexico this was a massive earthquake

that killed hundreds rescuers are frantically trying to find survivors buried under mountains of rubble. at least 230 people have been killed hundreds of deaths in mexico city alone and the worry is the death toll could get above the hundreds and into a thousand. >> i don't know t will be a while before we know how bad it is google is betting big on smart phones the company buying htc for 1$1.1 billion in cash. google sold motorola three years ago. the gigs division of htc manufacturers google's smartphones today. google will gain 2,000 employees. google shares just bit lower. albertsons announcing it will buy plated, the meal kit delivery service the privately held grocery company faces increased competition from those discount

european chains, like aldi and lidl and amazon following the acquisition of whole foods plated launched in 2012, is one of the top five food prep services, following blue apron and hello fresh. blue apron is up about 2.5% now on this news maybe albertsons plucks off plated, apron after having it's valuation dropped could be plucked off. eager to see how about albertsons played for plated. a pair of economic reports this morning weekly jobless claims at 8:30 a.m. also at 8:30, look for the september philly fed survey. any time something happens, it overshoots, it undershoots should be interesting. >> you're not watching a rerun, there's a healthcare vote coming up in political news senate republicans announced plans to vote next week on the

latest bid that they put together to scrap obamacare. president trump and republican supporters of what is now known, the latest version, as the graham-cassidy bill. they've been working to secure enough votes to pass the bill. president trump said they have about 48 or 49 or 47 or 48 out of the 50 senators necessary i've been watching this so closely. i know everybody involved. susan collins has not said no yet. likely no. murkowski was supposedly going to be a no but they're offering some things. mccain is on the cover of -- i will stop mentioning this horrific blog. >> is it the huffington post. >> i have to look at it to see what are they absolutely spinning to the enth degree on any story that can make republicans or trump look bad. in this case, it's a terrible picture of mccain that says it's coming down to john mccain

again. they're putting pressure on him -- >> seems like he wants the limelight. i have all the respect in the world for him. >> they called him he said that -- they said last time you didn't vote for it because you wanted regular order. you wanted regular order in the senate are you still there? he said i still want regular order. so now they're saying maybe he's a no rand paul, if you look at how -- he voted for the skinny repeal >> he has no idea where he stands now >> basically kept 100% of oba obamacare taxes. this keeps 90% voted for the 100%, but he won't vote for this because it keeps 90%. the logic isn't there for him either a lot of these guys love -- >> the clock is ticking. if they don't need this by september 30th, they need more than 100 votes to do it. >> they can do it again. it would take longer >> they want to get it done. they want to say they got something done and push and jump over that hurdle

>> now they have also seen the reaction to the last failed effort >> we might go down and mccain might get do it again. what dewihe did with his hand s dramatic i think he likes that. >> it's crazy. >> evercore gave it a 10% chance feels like the squept sickeptica good thing >> you used to say, oh, they'll finally get it they say they don't. not anymore. >> no. not with these republicans now it's like, they'll find -- no >> everyone wants to be the star of the show. so nobody gets anything done there's no group play. you also don't want your state to suffer. if you're kentucky you won't benefit under this as other states >> is it about your state or belief. >> a bit of both >> or about your re-election >> a bit of both >> term limits >> they're related if your state is going to benefit --

>> that's the holy grail term limits. everything else solves itself. you need one commandment >> they can still get decent tables at the washington -- they're not even living in d.c they have to go back to their hometown, back to the hardware store where they came from >> that's so thoughtful. the united states is weighing whether to abandon the iran nuclear deal. president trump told reporters he has made a decision on what to do about the agreement. but he wouldn't say what he's decided. iran's president has vowed that his country will not be the first to violate the agreement under the program iran agreed to restrict its nuclear program in return for the loosening of economic sanctions that crippled its economy. so we're not saying -- we don't know what's happening on this yet? i don't know it seems pretty -- i don't know. what i saw this morning is that macron who had been -- france, obviously, staunch backer of the deal, now saying if it can't be

monitored, we may need to do something different. >> the president's language was so strong. >> almost like he's coming around on the notion -- >> amazing how this is back in the forefront. north korea knocked this completely -- they were the biggest beneficiary of north korea. even took their eyes off them. >> it's not anything that happened out of iran per se, just that the president emphasized this time and again when he had the opportunity to say it, it was a horrible idea he did it in front of the u.n. the latest "wall street journal" nbc poll is out john harwood has some of the numbers for us >> i have to ask a question, you mentioned the clock was ticking. i heard something that joe said in the interim, did you say the world is ending on saturday? >> i was referring to the -- >> biblically, john, there is some reason with numerologists that is all around that the 23rd

could be the day. >> i might spend today and tomorrow differently if that's going to happen. >> i don't think i would >> we have grasso here, he's a trader do we raise cash, john do we -- >> for what? >> i think you raise some cash >> if it is on saturday, do we know if it's before or after the duke/carolina football game? >> are a couple of -- i wanted to see sc play they play cal. >> there's some teams you're praying for the end of the world on saturday. >> if this happens, my plans will be all messed up. i'm hoping it doesn't. >> joe, here's the thing if it ends on saturday, it will end on an uptake for president trump, our new nbc "wall street journal" poll is out this morning. it shows that in the wake of that bipartisan deal with democrats, also in the wake of his administration's handling of hurricanes harvey and irma, that president trump has taked up to 43%. that's up from 40% in august

his disapproval has ticked down by 3 points at the same time that's a positive development for the white house. we also have numbers on tax reform that indicate the ground is soft for argument on this issue, and there's a possibility for republicans to make this progress if you ask the american public what would you do on taxes for various groups, you see majorities of people, more than 60% say they should go up on the wealthy. 55% say they should go up on corporations on the other hand, if you ask about small business, they say taxes should come down that is an indication that republicans, if they focused their argument on small business, will make headway. secondly, when you ask people if there is a big business tax cut, will companies expand and create jobs to that argument 54% say yes, they will. 40% say no again, linking it to job creation will be a positive for

the republican side. now, when you take all options and put them on the table, we find split opinion, just 4% say there was a corporate tax cut only just a quarter of people say an individual tax cut only. another quarter say well, we should cut taxes on both the largest group of people, 42%, say don't cut taxes at all. what that means is both democrats and republicans have a chance to move the ball on this argument and i have to say this graham-cassidy debate which we're going to that you and kelly talked about a moment ago, that's a distraction from that argument on tax reform which republicans have been hoping to make this fall we'll see how quickly they turn to that after the senate decides one way or the other it looks more likely than not it will go down next week if we make it to next week thank you very much. >> that's right. >> i think -- maybe all cash

but then what do you do with -- >> why wouldn't you go long? if the whole thing is going to end -- >> you got to go long. buy the end of the world dip >> taf happeafter it happens, iy everything on the cheap. >> it's going to end, but you'll be around to buy everything cheap. >> have you seen joe's house he can live out there for six months >> i'm buying water, obviously >> water and gold. >> we make fun of this >> only because it happens every year >> arthere are a lot of -- >> eventually it will be right >> can only happen once. >> that's true >> let's hope there are not zombies. you know what i mean >> you've been watching the show, you've been prepared for it. >> got a couple rounds of ammo left -- no any way, the dow and s&p rising -- you got shoot them -- you've seen "walking dead" right? >> no. >> you have not seen "walking

dead?" >> game of throwns, "game of t,d all seven seasons in two months. i never traded better. i don't know how it all fits in. let's get you caught up on the broader markets. joining us is chris zacarelli from cornerstone wealth. he's not in the studio i think he's in charlotte, north carolina on set, ed keon. our guest host is steve grasso, cn bshgs krshgbc fast mron trao. every day guys need to generate content that people need to click on -- >> if you go to zero hedge first, it's a good one >> it says the next financial crisis is starting as they unwind will the unwinding by the

world's central bankers of all this accommodation, that's one idea the other day we had someone on who said it will be fine ray dalio said the thing to worry about is that they raise rates too quickly. they successfully put in enough cash where you needed to do that it was necessary and that they did save the world. it won't be an event unwinding which is it. >> i have confidence in the central bankers. however -- >> why >> because i think -- >> they get through the crisis the worst didn't happen. i think the key is that right now there is the greater chance than normal of a policy mistake because you're coming off an unprecedented situation. >> would the policy mistake being go too quickly or not quickly enough >> either way. we never had negative interest rates around the world policy rates have been 3% to 5%. for 500 years if you look at the

bank of england. we never had a situation as aggressive as it was, now you try to come off that because you don't have a historical precedent the odds of a mistake are high i don't think there's a crisis brewing any time soon, but the odd's policy mistake, the odds of engineering continued prosperity are higher when you are going someplace you have never been before. >> because if they don't move quickly enough, they may have already cast the dye in the wrong direction for waiting this long >> so -- >> asset bubbles -- >> i'm long. so i'm confident that we'll get through this okay. the next couple months will be tricky, the data will be influenced by the tragedies because of the hurricanes. >> when you say the next couple months, how long does this take? >> they'll take years and years. they'll do it very slowly. >> we won't have an answer when we're out of the woods >> that's right. it will be years, i think, before they'll do it so slowly that it

will be quite a long time. there's still tremendous demand for fixed income products. there's plenty of buyers on the other side eventually some kind of shock will hit the system. right now i'm bullish. i've gone long equities. >> chris comments on -- you have your own comments on this you agree with ed? disagree agree with some of it? all of it? >> sure. i think all those points are well taken in the short run we don't have to be too alarmed. they communicated what they're doing well they'll go slowly. ultimately because we're moving from quantitative easing to quantitative tightening, as they continue to raise rates, you have that problem of eventually if they do overshoot and cause the next recession, that's what i would be worried about right now i don't see signs of recession, as we go forward, watch the yield curve, make sure treasury bills are not going higher than the ten-year note. right now they're at 1% versus

2.25 there's no sign of an inverted yield curve at this point. but keep an eye out of it. the next recession will most likely derail this bull market >> if i had to wait for the economy to overheat and rates to start going up to where you choke that off and you get your normal classical recession that sounds like it's a long way off. is there any reason to think there's a recession on the horizon when rates are this low? >> i mean, you know, to the point that it's been unprecedented territory that makes it harder to forecast. right now i think we're a ways away we're long as well it makes sense to be long at this point in the cycle i think you want to continue to let your equities run. but you have to be careful of what's around the corner i think 4 to 6 months out seems like everything is fine. longer than that, harder to tell this market could go for another couple years or if things heat up quickly, we could have a melt up, stocks could move up quickly in a short period of time, maybe after tax reform or fiscal

stimulus if the market overheats that ends the cycle quicker than if otherwise you just wait for a normal recession to come that's what we're watching here. >> everybody says recessions don't -- >> bull markets don't die of old age. >> that's consensus now maybe you can die of old age >> tightening policy on the qt >> where is mac? is mac -- mac, do you hear there's a drill. there's a drill. do you hear this drill it's not a hammer. there's a drill. do you -- this could be the beginning of the 23rd. >> i'm not sure it's a drill can you hear it? >> you feel better someone else hears it could start with the drill and go to a hammer, which we don't want any way -- >> taking it in stride >> we are. we're good.

>> oh. chris and ed, thank you both steve, you'll be with us -- >> for the rest of the hour. >> for the rest of the hour more hedging strategies >> sure. possible end of time gold maybe t bills. >> tax reform lessons from the state of kansas. kate rogers has a report on what went wrong with the tax policy they scrapped. that's when "squawk box" comes back not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan.

we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

and at $4.95, you can trade with a clear advantage. did you hear directv's latest deal? it's cheap and gets you all the big games. it starts at sixty bucks a month, but jumps to over 100 after 3 months. cool i think? and jumps again to over 150 after a year. noooo...

and ends up costing over 3500 bucks over 2 years. you're cleaning that up. don't get caught off guard by directv. touchdown. get the best with xfinity. the trump administration is pushing its agenda for tax reform including parody between corporations and small businesses with a top rate of 15%. critics point to what went wrong in kansas where a tax experiment was reversed kate rogers has more from kansas nearly 5 years ago the state of kansas underwent a real live experiment in tax reform as the governor reduced income taxes for individuals and did away with them altogether for

businesses mccracken was able to save thousands of dollars and reinvest that money back into her business >> the realization of several thousand dollars, which goes back into the business in the forms of hiring other small businesses to help with our website, do seo, hire another employee, most recently we made a durable equipment purchase >> but in the wake of the experiment the state faced a budget deficit in the billions of dollars and put a strain on their school system, pension system and things like infrastructure projects. earlier this year the state legislature wound up reversing those cuts, making pass-through businesses responsible for retroactive taxes for 2017 the state democratic chair said the experiment did not go as planned and it benefited wealthier people in the state more so than small companies >> my experience in kansas has shown me that what is proposed as a small business tax break is

actually not about small business it's about effectively eliminating taxes on a handful of extraordinarily wealthy individuals to the detriment of the rest of us >> more broadly tax reform is a top three issue for small businesses according to the national federation of independent business a lot of companies i speak to that file as pass-throughs saying having parody with large corporations is important to them but of course critics of this experiment in kansas city say the trump administration should be paying close attention. these steep cuts don't always go as planned back over to you >> i know we're in the middle of negotiating all this do you think people are actively paying attention to what happened there >> i think this has caused a stir it's interesting in talking to small businesses throughout the state what a couple of thousand dollars means to small companies. it meant a lot to kelly mccracken. she wound up taking out a line of credit once she heard this

was being reversed and that she would be responsible for retroactive payments we talked to other companies who said this did not save me enough money it wasn't enough for me to hire a new employee or reinvest. it's interesting to see what it means to different people. while a lot of small companies appreciate that extra pocket change, we talked to one guy who said i like having roads that are run well a police system well funded, clean water, school systems that are operating well these priorities, they mean different things to different people >> i'm glad we have the state labs, so to speak. kate, thank you very much. >> like everything, there's so much other -- jt fact >> factors >> exactly >> correlation is not always causation. you never do a perfect experiment i don't know coming up, puerto rico beginning to assess the damage from hurricane maria we'll talk to the island's representative in congress congresswoman jennifer gonzalez-colon after the break

sfx: t-mobile mnemonic sfx: netflix mnemonic sfx: t-mobile mnemonic sfx: netflix mnemonic sfx: t-mobile mnemonic sfx: netflix mnemonic t-mobile's unlimited now includes netflix on us. that's right, netflix on us. get four unlimited lines for just forty bucks each. taxes and fees included. and now, netflix included. so go ahead, binge on us. another reason why t-mobile is america's best unlimited network.

sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.

♪ 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 indicated a bit weaker at least they were fractionally. now it's up. not much kind of flat up 41 cents on the dow the s&p is indicated down 2. the nasdaq indicated down 5.

we decide you're not a nerd, because you don't -- >> dork. >> you're a dork you do know -- do you know how many days in a row last -- >> for the record? >> five in a row, right? >> as bill said, we had 42 record closes. >> bill? >> friends of bill, the aa guy who are you talking about? >> my wonderful co-host, bill griffin. >> she just plugged her own show she did. >> bill who? okay bill g >> it's just a -- >> there's five or six in the last eight trading sessions, new highs in the dow >> yeah. i guess i don't have those numbers for you. now i lost all possible -- >> that's the difference between a geek and a nerd. a nerd would have known. >> dork. >> oh. geek dork kb homes board is punishing its ceo for a profanity-laced rant

i have not seen this, against kathy griffin that was leaked. why was he talking about kathy griffin? >> you seriously -- you are being serious? >> i haven't seen it >> they are neighbors. metzger is a neighbor -- >> you didn't see the other thing i showed you this morning. mezger is a neighbor of kathy griffin this all happened yesterday. >> i was bla plplaying golf yesy >> he is the neighbor of kathy griffin and her partner. apparently they don't have a good relationship. the neighbor called police to file a noise complaint against mezger it sounds like mezger started screaming at them from his yard in a profanity-laced rant that was captured on griffin and her partner's home security system

they leaked it to huffington post or something like that. >> you can't go anywhere and lose it. it's going to be on video. >> you would think the kb homes ceo would build a sound-proof wall if anybody hat cap has the capability >> this thing is pretty bad. yesterday susie oze orman tweet people, would you buy a house from this guy? >> so your personal life is your business life. do you remember an espn -- she was trying to get her car out from the parking spot. she started talking to the person -- >> what was that yeah yeah yeah >> look. it's always -- when i play sports, they would tell you when you go out there you're wearing the logo of your college, you represent your team to your point, he was at home. it's a private dispute that's been now made public >> when i'm driving, i do have to be -- >> or being driven more

accurately >> i do drive. i can't just -- >> 24 hours. 24 hours a day >> whoa. okay >> the company is cutting a bonus payment that the ceo, mezger, would have received. cutting it by 25%. the board said his behavior in his personal dealings with his neighbors is unacceptable. now i got to be nice to neighbors too. if there's a similar incident in the future he will be dismissed. this is scary. we have a neighbor -- >> you're think being diine thit disputes >> no, we had a neighbor who had an upside down american flag, in the rain, in the hail. upside down. >> did you ever talk about it. >> i don't want to talk about it i don't appreciate -- for people that are over there protecting us i don't appreciate it now i know

you have to smile and say -- >> in your car -- >> thank you, sir, may i have another. >> yeah. >> all right >> hurricane maria sending thousands of puerto ricans to shelt efrs aers and knocking out electricity to the island. joining us is representative jennifer gonzalez-colon, puerto rico's sole representative in congress thank you very much for joining us >> thank you for the opportunity >> i mentioned earlier with all the catastrophes we've seen lately, it's important to know how bad the situation is, even as we're trying to understand what's happening in mexico and elsewhere. we know the power is out across the island can you tell us about further fatalities that have been reported, injuries are people able to get basic food and water what's the situation >> currently the situation is the rescue teams still are looking for people there's a lot of flooding warnings in some areas

the national guard is even putting rescue teams to do that. this morning, a lot of rivers are overflowing banks. so water is all over the place, in the highways, roads over the bridges that's the situation when this was happening, the whole island is without power. it will take more than one month to reestablish the power grid. that's our main challenge at this time. we have a weak infrastructure right now regarding the power grid all the power lines are in the floor. so it's dangerous to get out the governor established a curfew from 6:00 p.m. to 6:00 a.m., just to let the responders and the rescue teams do their job. i mean, this is devastating. this is not the same island. a lot of devastation regarding

the -- there's notaries, no palm trees. >> wow >> most of the houses lost part of the windows, doors. people with wooden houses, of course, did not see this kind of environment before and i will tell you this, yesterday we had more than 12,000 people at the shelters. i think that numbers may rise. there's still a lot of water there's the national weather service just established that there will be more water for the weekend. it will continue to rain today and days to come >> how much rebuilding just by rough estimate do you think now needs to be done >> this is going to be a titanic effort that's the reason i want to thank president trump and his cabinet. fema is already on the island with more than 4400 resc 400 res

we need all that help to establish the power grid one problem we got is once the power is out, the water pumps are not -- [ no audio ] >> there's no running water. >> congresswoman, we're losing your line. you are on puerto rico right now? >> puerto rico is still my home. many people from the mainland are trying -- >> we're losing the connection >> it's a cell phone >> congresswoman, thank you very much jennifer gonzalez-colon. >> puerto rico's power grid was already struggling before hurricane maria knocked it offline. now the island will need a wide range of rebuilding efforts, the money and planning to make it all happen joining us is former pennsylvania governor ed rendell. ed is a co-chair of the building america's future educational

fund and a cnbc contributor. what do we have to do? we have to stipulate what hurricane we're talking about. for the maria damage what do we have to do for puerto rico and i guess we have citizens in the u.s. virgin islands. we need a bill for this, too, don't we >> no question about it. there's going to be billions of dollars of federal aid needed for those u.s. citizens in both the vi and puerto rico they have to pass another bill in the long run we have to look hard at our infrastructure we talked about this many times. investing in infrastructure now can save us billions and billions of dollars later in damage >> at low dinterest rates, too. >> absolutely. we have to think of the flood insurance issue, too it's a tough one rich people in those areas that choose to live there might be able to pay for the insurance.

what about all the people that work in the stores that the rich people shop. you understand what i'm saying people build beautiful places that shouldn't be building them there, but there's a lot of normal people that won't be able to afford the flood insurance premiums if you make it private. >> right there's no question that's a difficult thing that has to be dealt with one of the things, when we rebuild, we shouldn't rebuild in areas that are clearly in the path of hurricanes i know people want beachfront plopities, but we shouldn't build in those areas houses have to be built to code. look how well miami beach did because of the building codes there. houses that are near the beach f they do rebuild, have to be elevated there's so many things we can do by having good zoning, good foresight, and investment in the infrastructure for example t would cost a lot

of money up front, but it would save a lot of money if we buried owl of the power lines beneath the ground particularly in areas that are susceptible to hurricanes or tornadoes or ice storms. it would be a major investment, create thousands and thousands and thousands of jobs, and you could pay for it by taxing the utility bills 1% so a person who pays $80 a month would pay 80 cents a month that would add up nationally and it would save us over the course of time billions >> you saw nancy and chuck and don all sort of yucking it up, passing bills. why don't you tell your colleagues that maybe do you a tax reform bill, bring some of the repatriation back, use some of that for infrastructure why don't you -- it says here,

if you're -- you admit you're a democrat, a strong partisan democrat, but an american first. get involved here, talk to your colleagues, tell them to do this >> we have and we have been pretty active on this. congressman delaney has a bill to just do that. he has 40 democratic co-sponsors, 40 republican co-sponsors. >> but governor, do you see what happened to poor speaker pelosi, because she sat in the same room with trump did you see that video out there? >> yeah. >> yeah, you did >> we have to shake it off we can't let our extreme base dictate to us any more than the republicans can have their extreme base dictate to them we have to start doing things. look, we can't put infrastructure on hold for another four years people will die if we do that. >> all right governor, we have to leave it

there. but counting on you, you know? walk the walk. >> all right we will. >> all right thanks, governor seal you la see you later. the dow is coming off the ninth straight positive session. >> that's pretty good. >> who told you that, bill >> christopher hayes the deuce. >> you have seen the deuce >> i don't know what that is coming up shg, congressman jeb hensarling will join us on set first the business venture by mark wahlberg and sean combs that interview is minutes away you're watching "squawk box" on cnbc we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really.

we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that. every year we take a girl's trip. can wremember nashville? kimchi bbq. kimchi bbq. amazing honky tonk?? i can't believe you got us tickets. i did. i didn't pay for anything. you never do. send me what i owe. i've got it. i mean, you did find money to buy those boots. are you serious? is that why you don't like them? those boots could make a unicorn cry. yeah, tears of joy. the bank of america mobile banking app. the fast, secure and simple way to send money. that's why a cutting edgeworld. university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans.

and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.

it is time for the executive edge this morning. the recovery in the music industry continued in the first half of the year according to new data, music retail revenue jumped 17% in the first six months of the year to $4 billion those gains were attributed to 30 million music subscriptions to services like spotify and

apple music. it pales in comparison to the peak revenue of 14$14.5 billionn 1999 that's back when we had cds and had to buy the whole thing >> right coming up, entertainers mark wahlberg and is it just diddy or p. diddy sean diddy combs i don't know it's changed a few times >> it has. >> teaming up to get into the bottled water business we'll show you what they told becky quick about their investment philosophy. >> we just gedidn't get here because he's a great actor, i'm a great rapper, we're great businessmen. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient.

stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. ♪ it's not just a car, it's your daily treat. ♪ go ahead, spoil yourself. the es and es hybrid. experience amazing.

theextreme risk of burstd a pipes and water damage...y... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages from happening in the first place. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it-

and see it through-with digital. she can't become a guitar legend just by playing air guitar. the baby's room won't build itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner. so she can plug into her dreams... and they'll have a new addition for their new addition. whatever you're working forward to, even if it's chasing squirrels, synchrony financial can help you get there.

two of the entertainment world's most successful artists, sean diddy combs and mark wahlberg has impressive track records as entrepreneurs becky quick spoke to long time friends and business partners about aqua hydrate and electrolyte enhanced bottled water brand they co-own. >> i was training for a movie and it was the only thing i changed in my routine and it was so good for inflammation, taking the lactic acid out of my body, i went from six miles a day to

eight miles a day running and i said there's something special about this water so i wanted everyone else to republic the benefits of aquahydrate. i tried it myself, what are the health benefits? what does it do? >> it cuts down the acidity in your body and inflammation all disease comes from inflammation so it's a step in the right direction. >> so for him he likes to go out late at night, i get up early, i said drink two before you go to bed and one in the morning, you'll be ready to go the next day. >> no more headache? >> no more headache. it's just -- water is life and this is the first year that water has surpassed soft drinks and that's a trend that we're trying to really make sure we take advantage of and it's something that's organic going on in the world, living a healthier life-style and being more conscious about what you put in your body and the benefits. >> it is a big business as you mention. it's $17 billion industry. who do you think you're competing with >> sean and i are not endorsers of the company, we own the company, we're building the business relationship by

relationship, whether it's with hi high-v, gene snc, we're buildine relationship. >> you two and ronbe burkel? >> yes, in this category we're number two, we don't like being number two so we're use our marketing powers, things that other brands don't have to take this brand to number one and we're looking forward towards the future and it's a marathon, a great industry, $17 billion industry, up 74% our category this year so we're very excited. >> what's your end game? do you want to run this as an independent company or if somebody like a coca-cola or nestle came calling would you consider talking to them about a sale >> absolutely. it's about the right time, the right brand, the right partnerships, the right product and right now definitely the right partner to help us expand, we're always open for that. >> i look at both of you and am

amazed at the number of different brands you're involved in, the number of products you're involved in how do you prioritize? >> i only get involved in business i truly believe in, products that i consume myself, things that i believe will make your life better >> sean, how about you how do you choose what to get involved with? >> authenticity. i feel like i've been able to achieve a little bit of longevity just by being authentic and not just biting on anything that's an opportunity this was authentic to me and all of my other areas of business and that's a part of my life-style. >> how did you learn how to be great businessmen? do you have ceos entrepreneurs that you kind of admire >> i was kind of self-taught. >> i had no knowledge of the beverage business so some of the people i called, i called nelson peltz because he was very involved with dr. pepper and snapple. he introduced me to people i'm never afraid to pick up the phone. >> sean, you feel like you

taught yourself that >> my talent has been survival and hunger and wanting to take care of my family and provide a sense of hope and showing people especially from my community and where we come from which is an inner city area that you can make it, that you can do it as a businessman, as a businesswoman. >> we will have more of mark wahlberg and diddy and becky in the next hour. thanks to steve gross so for joining us >> my pleasure. >> see you on "half time report." i will, we're working on our orange juice brand. >> fast orange juice i'm working on my own brand. >> i'll see you later. >> that's a good idea, you invite me in on that >> sure. >> feeling left out. the fed is binngo egni t unwind its massive stimulus program. what this means for markets when this comes back.

is

sfx: t-mobile mnemonic sfx: netflix mnemonic sfx: t-mobile mnemonic sfx: netflix mnemonic sfx: t-mobile mnemonic sfx: netflix mnemonic t-mobile's unlimited now includes netflix on us. that's right, netflix on us. get four unlimited lines for just forty bucks each. taxes and fees included. and now, netflix included. so go ahead, binge on us. another reason why t-mobile is america's best unlimited network.

the great unwind the fed announcing plans to start shrinking its $4.5 trillion balance sheet the possible market impact is straight ahead peril in puerto rico hurricane maria leaves a path of destruction. the entire u.s. territory is without power and it could be months before it is fully restored and congressman jeb hensarling is looking to revamp the nation's flood insurance program. it's a tough one to figure out he joins us to discuss his idea as texas and florida continue recovery efforts in what's been a very busy hurricane season plus, cutting edge technology, teaming up with two of

hollywood's biggest stars. becky quick caught up with mark wahlberg and sean diddy combs to talk about their collaboration this time it's the water business 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" on cnbc we're live from the nasdaq market site in times square, i'm kelly evans along with joe kernan and wilfred frost who joins us at this hour. in studio this morning sharing his thoughts on the market, washington and much more, jason trenner. here's what's making headlines google is betting big on smartphones. the company is buying htc's pixel division in an effort to boost its own hardware business. that division manufacturers google's line of smartphones already. google will gain 2,000 htc

employees, the company will acquire a non-exclusive license for htc's intellectual property. and albertsons will buy plated plated launched in 2012. it's one of the top five food prep services behind blue apron. apron up 2.5% on the news, they were up even more, maybe this halo effect of big grocery chain looking at them. we'll see what investors make of that senate republicans announce plans to vote on their latest bid to scrap obamacare they have been working to secure enough votes to pass it. trump says they have the support of 47 or 48 out of the 50 senators necessary. >> a couple of serious stories out side of the world of business hurricane maria regaining strength after pounding puerto rico the entire u.s. territory currently is without power and puerto rico's governor says it could remain that way for months

tammy leitner is in san juan with the latest. what can you tell us, tammy? >> i want to give you an idea of what 155 mile an hour winds can do it snapped trees, ripped others right out by their roots there's metal pieces from businesses that are across the street that are a block away and this is just one little section. what we've seen so far are streets that have been turned into rivers. the freeways are flooded many of them are impassable. trees are down, power lines are down we've seen people trying to get around, trying to assess the damage but right now it's still difficult to figure out how extensive the damage is. that will come when officials take a helicopter and fly over the entire island to check it out and assess the remote parts of the island, some areas where they were hit from irma and still had no power and water and now they've been hit again

joe? >> amazing, tammy, thank you thank you for that report. we'll check back in with you there's other things happening, we're also following the latest out of central mexico after a massive earthquake killed hundreds rescuers are trying to find survivors buried under mountains of rubbles officials say at least 230 people have been killed, 100 deaths were in mexico city alone. we'll have a live update from mexico city in just a couple minutes the fed is taking the first steps to unwind its qe, quantitative easing program, while leaving rates unchanged. janet yellen expects the economy to expand at a moderate pace and she talked about the tools available to deal with the economic downturns. >> if there were that type of material deterioration in the outlook where we could face a situation where the federal funds rate isn't a sufficient tool for us to adjust monetary policy, we might stop rolloffs

from our balance sheet and resume reinvestment but as long as we believe we can use the federal funds rate as a tool, that is what we intend to do. >> joining us for reaction now, cls executive vice president dino kos and vice president jason trenner. it's interesting to point out, the tightening has already started, this is just a continuation of it and i think the stock market is up 25% since the tightening first began so it sounds like there's no reason to fear this, right >> well, they're taking advantage of the opportunity the market is kind of almost inviting them saying, okay, thi is a good time to do it. if you compare this to 2013 when we had the so-called taper tantrum, bernanke put out a feeler, the market protested, the fed backed off in this situation they've been good about signaling their intentions, making plans known, the market has taken it in stride as long as that door is open they'll take it.

>> jason, the reaction he's talking about, you have to two-year on the short end at its highest level since 2008 but 10:30 we're not getting the same headlines. so it's not a tantrum but it's also not exactly the steepness you want to see to say we're going to have this huge boom ahead. >> i think that's fair but as an equity -- somebody who focuses mostly on equities i view this as a positive step because i feel strongly the fed's policy which was largely easy money but tight regulation has led to a lot of unintended consequences not the least of which is actually in my opinion institutionalized lower inflation because you've kept a lot of weak players in retail and energy on the playing field so i think normalizing rates is a healthy thing for our economy and i think -- i'm glad they're doing this it might result in more economic and market volatility but the fed is never designed -- monetary policy is never designed to actually drive

economic policy. it's an underlying theme that keeps the system going. >> so you're suggesting that this fed normalization path which, of course, is tightening is actually going to create inflation as opposed to the fear of inflation not being there to lead to the tightening >> what i think wilfred is that in many ways it wasn't necessarily -- the balance sheet went from $850 billion to $4.5 trillion maybe give them credit, $850 billion to $2 trillion, you say all right, that's just to stabilize the patient, right but once you go to three, four and a half, there's unintended consequences and everyone gets a trophy as far as credit is concerned. it's one of the reasons why no one cares about active versus passive but it's one of the reasons why active managers have had a hard time beating passives one of the reasons why you've had very little volatility in either the markets or the economy and in many ways you've short circuited the normal business cycle by relying so much on monetary policy.

>> in terms of that search for inflation, how significant could fiscal stimulus be if it does arrive from the government locker term -- medium term from tax reform and short term following the hurricanes particularly when you consider we are late cycle? could it lead to a big boost in inflation? >> we are late cycle the fed's forecast at the beginning of the year presumed there would be fiscal stimulus during the course of this year that hasn't come, it doesn't look like it's going to come the administration is having trouble getting those plans through so you're seeing the market and the fed probably unwinding those expectations so that's the first point the second point let me pick up on something jason said. qe had a very powerful impact on smothering vol volatility. so you had a compression of spreads. reduction of volatility so the question is as they unwind it, what will be the impact on volatility you're growing going to get more volatility in the marketplace,

it's going to be interesting. >> but are you talking about bond market volatility if you look at the equity market, 42 new highs on the dow, 42 times the vix has been below 10 and this is after they started tightening they have been tightening and it hasn't increased stock market volatility. >> they have been increasing interest rates which has gone up from sort of close to zero to a bit over one so you've had an upward move in interest rates. the real fed funds rate is still negative inflation adjusted fed funds is still negative it's still an easy policy and they have not yet begun the balance sheet unwind so policy is still easing, just not as wildly easy as it had been. >> jason, do you fear the balance sheet unwind in terms of volatility >> i don't, because i think janet yellen -- it's hard to find someone more dovish than janet yellen in my opinion and i think as she indicated in the lead in, if she gets any sense that it's having a big impact on capital markets i think she's going to stop.

the interesting thing to me is that janet yellen and donald trump in some ways they -- i don't know if they would say this to each other but they complete each other because, you know, you complete me mainly just because you have a guy that has a very reflationary approach to the economy and this will allow a graceful exit to this corner they've put themselves into as far as this extensive balance sheet so i think it could work out quite well. >> i'd like to be a fly on the wall for that blind date if it ever happened. dino, in terms of say sjason wa saying janet yellen can step back if it doesn't pan out as she expects, is it as easy to back away from the balance sheet normalization as it is to pause interest rate hikes? once they commit, that's it? set in stone now >> i don't think anything is me set in stone they're going to be reacting to their forecast and any shocks that hit the economy so for them

to kind of set a path which is about transparency and giving the markets some sense of direction and some sense of what their reactiction function is b for them to say it's locked in, we can't move now no matter what happens to our economy, that's not going to happen. as jason says this has been at least so far a pretty dovish fed. understandably so given that in your opinion a crisis and now we'll be getting a pretty new fed over the next few months we'll get a lot of new faces, stan fisher and others and on the regulatory side which jason mentioned with d mentioned with danner the turello stepping off, you'll be getting a different view on monetary policy we'll still get an easy dovish fed. >> all right, gentlemen, thank you both you're sticking around, i guess. >> yes

but dino -- what is this >> no, it's just when he comes in here and you're already here it's like welcome to the like -- there was a tv show on in 1968 called "land of the giants" and you two come in here and it's like the rest of us feel like -- [ laughter ] how tall are you, seriously? >> 6'5"? >> 6'5". >> let's say you compete in the olympics, would you be okay -- or tennis? >> i'd be in the -- i'd have to go to the specialist olympics. >> what did you eat? and then you -- >> a lot. >> when you wear heels. >> when, which is not always. >> if you do, what are you >> probably 6'2". >> and poor bill he's a great man, he stands there with these -- >> i know he is but he has know go problems but it looks like this which is -- >> but how tall are you? you're probably taller than me. >> i know but i don't feel -- i feel totally inadequate with you

two. more so than normal. coming up, financial services committee chair congressman jeb hensarling will join us and we'll take stock of his height, talk tax reform and bank stocks lifting the s&p and the dow to a record close. find out if there will be money into the sector in just a bit. by the way, at 8:00 a.m., shervin pershivar will talk to us about his investments like companies airbnb you're watching "squawk box" on cnbc

people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.

whatthroughout history,ife. the one meal when we come together, break bread, share our day and connect as a family. [ bloop, clicking ] and connect, as a family. just, uh one second voice guy. [ bloop ] huh? hey? i paused it. bam, family time. so how is everyone?

find your awesome with xfinity xfi and change the way you wifi. the national flood insurance program is over 50 years old congressional leaders on both sides of the aisle saying it's time revamp the troubled legislation in the wake of hurricanes harvey and irma joining us now, financial services committee chairman jeb hen already hensarling we've kicked this around i started out by saying you know what a lot of times a market solution would make sense so let the premiums -- don't use the government subsidy of flood insurance. let the private sector take care of it and let premiums rise to

where they need to rise but then you realize you'd have a lot of people on these coastal areas with beautiful homes and nobody else could afford the insurance that isn't from that same level of wealth. what about all the people that do all the normal things in that -- in an area like that that aren't the real wealthy people how do you do it >> premiums won't necessarily rise we've got three fundamental problems with the program. number one, the federal government is encouraging and subsidizing people to live in harm's way. >> but people want to live -- that's one thing we know people want to live near the ocean. >> but the federal government perhaps ought to have clean hands on this. i just went to houston, i visited with some of the survivors. >> people whose homes have flooded three times in eight years. >> but that's a different point. that's -- there's a lot of asphalt that used to be wetlands. >> well, there's several different problems we're encouraging people and

subsidizing people to live in harm's way number two, we have a bankrupt program funded by a bankrupt nation if anybody noticed that the national debt clock just turned over to $20 trillion. last but not least, we're protecting a government monopoly so roughly 2% of the flood insurance market is private today. a very small nascent market in places like pennsylvania i saw you had governor rendell on earlier. people are saving hundreds to not thousands of dollars in a competitive innovative market and so we've had testimony in our committee from the commissioner of insurance in pennsylvania, you actually see it in florida as well so one of the things we're advocating is let's use this opportunity to solve the problem on a go-forward basis because if we don't the fatalities and chick carnage will continue and so we believe competition and innovation can help. one of the great tragedies of houston also was the low takeup rate in retrospect, probably 80% of the people who could have used flood insurance didn't have it.

>> but ironically would you put a mandate on that? i know you can say the mortgage company would but having been through everything with obamacare now you see where that path leads you would you require people to take out these policies >> right now under federal law if you have a federally ensured mortgage the law says you must have flood insurance if you live in these 100 year flood plain. but what happens is we have again a government protected monopoly that is using 20thth century technology to tell you if you live three feet outside of this black-and-white line all is well. well, frankly, all is not well i prefer the incentive model and i know just watching your program for 30 minutes i'm probably going to get a duck trying to sell me insurance, a gecko trying to sell me insurance, a statue of liberty trying to sell me insurance. my point is, nobody is trying to sell flood insurance people don't realize that their base home insurance policy doesn't cover this if we open this up to private competition all of a sudden you'll see companies rolling in

flood insurance into their base homeowners policy and we'd get something closer to an actuarally sound rate at a competitive price and take a lot of the challenge off the taxpayer balance sheet. >> so there's two ways, you can balkanize it, you can either tackle flood specifically or you can make flood part of the homeowners' insurance policy and almost put in everybody's. if the taxpayer is paying anyway for this bailout, why not have all homeowners paying a little more all over the country to effectively fund what they're funding on the back end when there's a flood? >> well there are certain fairness issues, too i'm not sure a factory worker in kansas ought to be subsidize ago millionaire's beach condo in florida. i prefer the incentive model but i think again if we had a robust competitive market that would help educate people about the risk of flood and a lot of that would get rolled into the homeowner's policy so that's one of the challenges. another challenge we have is these repetitive loss properties

so for example we have one property outside of baton rouge that has a home -- modest home worth about $60,000 that's flooded over 40 times. the taxpayers have paid almost a half million dollars for it. in houston a home worth about $100,000 flooded multiple times. taxpayers have now paid a million dollars for it at some point god is telling you to move and so we can't -- if all we do is forced federal taxpayers to build the same homes in the same fashion in the same location and expect a different result we all know that's the classic definition of insanity we would be better off, they would be better off if frankly we bought out a lot of these properties and returned it to moisture-absorbing soil and have it part of a flood control plan. now some of this is going to have to happen at the local area but we cannot and we shouldn't expect the taxpayer -- maybe we pay for your home once, maybe we even pay for it twice but at

some point the taxpayer has to quit paying and you have to move you've either got to make that home more resilient on the front end or you have to relocate it out of the flooded area. that's the reform s we're trying to get done in congress but it's tough. you have a lot of people -- a lot of these communities are concerned about the loss of their tax base some people look upon this as a form of entitlement spending to have federal taxpayers subsidize their premiums and so this is tough political sledding right now we're around short-term reauthorization of the program. i hope we can get these reforms done. >> anything else going on in washington >> not a thing not a thing. [ laughter ] >> so you saw the deal the president orchestrated with the other side tax reform >> yeah, i didn't miss that one. >> is tax reform now up in the air in terms of whether it's bipartisan or republican >> i don't think so. i'm very bullish. >> you think it's going to be reconciliation >> i think it's going to be

reconciliation i think it will be a republican bill i haven't noticed my friends on the other side of the aisle who believe in pro-growth tax reform so i'm not personally writing the bill. >> well, we have them on and they tell me there's not -- i love this line -- a single mainstream economist that thinks supply-side or growth policies actually work and trickle down has been dead and buried, it's a zombie idea, that's what i love. >> well, it's been a few years but i have a degree in economics studied under a guy named phil graham. >> i don't know, they forgot about milton freedman or any of those -- adam smith, we can go back to the founding of our country. they don't listen to any of those guys you're not -- you talked to senators do you have a -- do those guys -- >> well occasionally i'm forced to. >> if you're a -- with house guys >> we -- >> where are they? 48 or 49 on the health care

repeal what do you think? >> well, my crystal ball may be a little fuzzy so fortunately the rumors of the obamacare repeal -- of its demise are exaggerated. i think they're close. i don't know they'll get there. >> who's the key give me one name. >> don't put me on the spot. i'm going to let them -- >> is it mccain again? >> probably senator mccain is pretty critical. >> murkowski is that yes or no? >> you're asking the wrong guy. >> rand paul he's rand paul, right? we have to go. >> let me ask you a question on the tax cuts. >> actually, no, we have to go we have to go, matt? >> oh, i feel bad. >> but i'm for them both. >> your show, sorry. i tried to hop in there. >> we're getting this music and everything off camera you can ask him and if it's a good question we'll come back and -- thanks for being here and you didn't make the height requirement. >> i definitely did not. >> so you're here on borrowed -- any way, we had enough time to ask the question

thank you coming up, a check on the markets and your top corporate later it's all about the benjamins, the highest-paid hollywood actor teaming up with one of the world's most powerful record producers to create a water that fuels -- really your performance life-style okay with an exclamation point. >> becky caught up with mark wahlberg and sean comb or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

. welcome back to "squawk box. the futures pointing lower for the s&p and nasdaq dow slightly hhe siligr,imar picture to how we closed yesterday. we're back on "squawk box" in a couple of minutes. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement

with day one target date funds from prudential. look forward to your 401k plan. for tech advice. dell small business advisor with one phone call, i get products that suit my needs and i get back to business. ♪

good morning welcome back to "squawk box. [ southern accent >> you did it. so you can if you tried. >> southern vaguely southern. >> southern england? holds back joe's -- anyway, welcome back to cnbc among the stories front and center equifax hackers romamed undercover for months before the data breach. it was discovered by the security firm fire ire which equifax hired them to discover then another breach, equifax

apologized in a statement and sent that can victims to a fake phishing site. in other cyber security news, the s.e.c. says it was hacked the agency reported cyber criminals reported its electronics system that stores corporate filings. the hack wasn't discovered until last month an investigation is under way into whether hackers made illegal stock trades based off stolen information. >> that's a movie, that the s.e.c. has a base of non-public information about corporations that get hacked -- >> do they >> apparently the do. >> when you file something it immediately becomes -- that was how people put out those false press releases in the past. >> apparently not, they hadn't been released, that i got it before everyone else and they were able to trade on it that's like "oceans 11" or something. you hacked the s.e.c. to find out the information then do the illegal trading. and you do it with bitcoin so you can't be traced. >> that's true. >> i would. >> it can't be traced if you use

bitcoin? >> i'm not sure. >> joe's the expert. >> underworld. >> here's the other thing i'm worried about. andrew, there's a book out where you can supposedly -- the fear is that you can put a hit out on someone. you know how you can't put a hit out on anyone because it can be traced back -- >> you mean financially? >> you can have someone press a button and you would never know. >> because of bitcoin? >> you can pay someone that does those things, wouldn't know where they got the $25,000. >> they would outlaw that so fast. >> there is a look written on this that that's one of the potential ways you would have no idea where the money came from that paid the people. >> for all the criticism set from this that we're giving equifax rightly, we have to do the same to the s.e.c. it's appalling. >> my expect stations are so low. maybe i'm wrong but i don't know that they're that difficult to hack hurricane maria still causing devastation in puerto rico knocking out power on the

island joining us from san juan is molly hennessey-fiske, she's a correspondent down there to tell us about what it's like on the ground molly, what do you see >> we have been out talking to people who are not only without power but some are without water and some are without homes the winds ripped holes in people's houses, tore roofs off. we were at a massive shelter in the roberto clemente coliseum yesterday where there's still hundreds of people they had leaks in the roof there, at one point they were afraid the roof might go it didn't but there's still water inside and there are people who can't handle stairs who are on the first floor semiflooded area, elderly people, people sick in wheelchairs and most of those people said they were expecting to be without power for not just days or weeks but maybe months. >> that's what i'm wondering based on what you're describing. is there a sense the worse has passed now that the storm has gone through or that the worse may be yet to come in the months

ahead. >> yeah, no. what people were telling us was their main concern is the aftermath. i talked to the san juan mayor when she was staging for this event at the coliseum. they have had weeks to prepare she said they did what they could but they were assuming this is a double whammy for them they got hit by hurricane irma and it didn't get a lot of attention because it wasn't as devastating as it was in some of the other parts of the caribbean, the places we've also been, to the u.s. virgin islands, we saw how dominica got slammed but you know there's about 70,000 people without power even before hurricane maria arrived and now there's many more. >> i know i'm asking you to speculate but having seen the destruction and having awareness of the resources available, what kind of rebuilding effort are we talking about and is it going to happen rapidly does it have to? people talk about how some parts of the caribbean may not come back. >> well, just for puerto rico we were on the roads yesterday and

it's disheartening to see major roadways blocked by not just trees but power lines, they did shut the power off before the storm but you never know we did also see crews of good samaritans just out clearing the streets so it seems like there's a willingness to clean up and get back not just to life but to work i talked to a lot of workers who -- you know, puerto rico was in economic straits before this so they want to get back to work they want to help get the country back on track. other islands we were on, st. croix, st. john, they depend on tourism and they have tried to keep that infrastructure running but they're a lot smaller than puerto rico population wise. the vegetation might not grow back right away but there is a willingness to get that back up and running. >> molly, thanks very much for joining us. >> thank you. >> molly hennessey-fiske. the death toll in a

completely different area in mexico continues to climb following a devastating earthquake and nbc's steve paterson joins us now from mexico city and steve have you felt aftershocks, is that still happening? >> no, you know, we've been surprised by the lack of aftershocks, we've been speaking to people on the ground who have felt slight tremors which have led to some problems but nothing major. unfortunately what the work is right now is rescue efforts. the president said the focus remains on trying to save as many people as humanly possible that could be trapped in any of this trouble inside not only around mexico city but around the region, around the state, around the country but specifically when we're talking about mexico city, nearly half the deaths we've had have been here a lot of the focus has been at this school that we're at right now. crews are working diligently around the clock at this school where 21 young kids were killed

when their school crushed them four floors just pancaked on top of people in there, trapping 21 young kids and then four teachers and administrators who were trapped as well, the work is trying to locate a pocket where they believe survivors are. pulling debris out by hand and then trying to save those folks. this scenario is playing out in sights again all over the region with know a race against time because you're talking about we're nearing 48 hours since that original quake started so rescue efforts hot and heavy and under way as we speak. send it back to you. >> okay, steve, thank you. steve patterson from mexico city, thanks still to come, fed expectations and your portfolio, where you should be putting your money to work in the market after the break. and later, two stars with one mission -- to bring you the best-tasting electrolyte enhance water that fuels your performance life-style becky quick caught up with mark

wahlberg and sean diddy combs to discuss that collaboration that interview straight ahead.

this is not a cloud. this is a car protected from storms by an insurance company that knows the weather down to the square block. this is a diamond tracked on a blockchain - protected against fraud, theft and trafficking. this is a financial transaction secure from hacks and threats others can't see. this is a patient's medical history made secure - while still available to their doctor at their fingertips. this is an asteroid live-streamed to millions of viewers from 220 miles above earth. this is ai trained by experts in 20 industries.

your industry. hello. this is not the cloud you know. this is the ibm cloud. built for your business. designed for your data. secure to the core. the ibm cloud is the cloud for enterprise. yours. ♪ ♪

welcome back to "squawk box. dow is coming off nine straight day organization moving higher, i think it is. maybe it will be a tenth today. >> it's up two and a half points, s&p and nasdaq still posting declines, dow and s&p coming off a record high close, a string of them not only in the last several days but this year. the fed deciding to keep interest rates where they are for now but many expect a rate hike before the end of the year. our next guest says there are bargains to be found both in environments of tightening and liquidity. joining us is sara kettera, jason is still with us as well sara, thanks so much for joining us you think this tightening is going to help the some makers in this world because it will remove that generic correlation market >> it may help the value stock pickers because we in the u.s. market have been crushed this is almost like it was in 1998/1999 where people are

looking and saying you're wrong but when you can buy stocks at half the market multiple in companies that are really well situated, why not? and in a pullback, those stocks may very well actually have their day because they've already fallen. >> let's talk about your picks you've got here. the first one, halliburton, a sort of shale play but still worthwhile despite the relative oil price weakness we've seen over the last couple years. >> yes, and they operate global. any colleagues tell me this company is -- they are the north american leader in shale services and lake all the companies that causeway were interested in, they're engaged in operational restructuring so this dund sound that exciting but it means self-help companies like halliburton are coming more efficient and as activities in u.s. shale skyrockets they have a big book of business and internationally they're very busy, they're at

capacity. >> jason, would you be long energy names at the moment >> i wouldn't and that's mainly because i think the economics of shale -- oil from shale are just getting better and better all the time although i very much agree -- especially this administration, this administration is a drill baby drill administration and they want to turn fossil fuels into an export market for the united states so the only thing that causes me to worry is that that could put pressure on the commodity price but i'm very much of the view that a big part of the economic plan of this administration is to deregulate the energy industry as well as the financial industry so it's very different than the last administration and so i'm intrigued by that. but as far as the commodity price is concerned, i'm not particularly bullish on the commodity price itself. >> sara, talk us through your call on canadian pacific >> this also has some connection

to shale one of the reasons why canadian pacific's business is booming is frack sand there isn't enough of it to jason's point, yeah, the drilling is on fire. there's activity especially in the permian basin that is 24/7 companies are producing as much as they can and that frack sand has to be shipped and much of it comes -- a good part of it comes from canada. and you get with this natural monopoly a business that is extraordinarily well run but becoming more efficient as they lengthen their carloads and lengthen the trains and carry heavier weights. >> is nafta renegotiation a potential threat to this >> absolutely. that is the buying opportunity remember, as a value manager we're looking for unpopularity we're looking for segments of the marketplace where investors may have become overly pessimistic or maybe just aren't using price discovery at all. >> and you have a pick i'm

interested in on china mobile. is that a sort of en play or is it a stock-specific one? >> it's all about income with china mobile the company is 72% owned by the chinese government so you're not going to be taken out by some acquired -- no matter how cheap the stock gets on the other hand with their special dividend you get 7.5% yield on that stock and a company that is the largest. they have 800 million customers. >> and jason, are you liking emerging market equities is this the time to buy them >> i think it depends. several years ago as far as brix -- as if it was monolithic. brazil, russia, india, china then you found out there's the bra and the ix so it depends on whether you're a commodity importer or exporter my own opinion, i think the dollar is likely to strengthen

in the next year and that tends to favor commonty importers like china and hurts other parts of like russia. the point is there's much more when it was a new asset class you could almost buy anything. now there's more nuance going in in those markets and more analysis has to be done. >> so the correlation with what the u.s. dollar is doing kind of still holds for those markets. what about for some of the commodities that have had such a good run. >> that's my opinion and that's largely because -- and sara, i don't know what your thought is. i think the euro at 120 versus the dollar is too high i think a big part of their economic boost has come because the euro weakened. i think without big structure reforms it's hard for me to get bullish on europe from here. i have to say, we missed it, we didn't participate in the

european rally so i don't know how much credibility i have but from here i don't want to put more money to work i'm much more interested in japan, personally. >> we'll have to leave it there, you'll sticking with us. sara, thank you so much for being with us. >> thank you. coming up, market thoughts from our guest host before he goes but up next, star power becky sits down with mark wahlberg and sean diddy combs -- will, not coombs -- >> well, that's my bad but spelling. >> they'll talk about their new venture which is a bottled water brand they co-own. u' whi "ua b" yoreasngsqwkoxon cnbc if you'd have told me three years ago... that we'd be downloading in seconds, what used to take... minutes. that guests would compliment our wifi. that we could video conference... and do it like that. (snaps) if you'd have told me that i could afford... a gig-speed. a gig-speed network. it's like 20 times faster than what most people have. i'd of said... i'd of said you're dreaming. dreaming! definitely dreaming. then again, dreaming is how i got this far.

now more businesses in more places can afford to dream gig. comcast, building america's largest gig-speed network. now more businesses in more places can afford to dream gig. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. for tech advice. dell small business advisor with one phone call, i get products that suit my needs

and i get back to business. ♪

twitter. mark wahlberg is the actor that tops the "forbes" list as the highest paid made $68 million last year he's also a successful producer and entrepreneur as co-owner of the wahlbergers restaurant chain. sean combs known to diddy as his fans is known as a rapper, producer and founder -- >> is it spelled with one "o" or two "os. that's why i said coombs earlier. it had two "os" in it. i'm just trying to make an excuse. >> yeah, you are well, what's your excuse for saying twita. >> that's just how i say it. >> covering everything from fashion to vodka they teamed up on a premium

water brand called aqua hydrate and becky quick sat down with the two stars to discuss this partnership and their ideas for something else, the troubled retail industry. >> we're marketing beast, to put it simply. we're great at what we do and we're very, very, very competiti competitive. we're here to be known as the best businessmen and entrepreneurs from our generation that have been able to go from entertainment and be able to take our power and to be able to create businesses that employ thousands and thousands of people. >> how do you target things? walk me through the process. >> i love walking through a story. this is real this is a water that came during a certain turning point in our lives. he was getting more into health and fitness, i was just starting to drink water [ laughter ] >> you guys both care an awful lot about family how do you make sure you are

raising kids who have drive like you do when they have all kinds of benefits and access to things that you guys never did? is that something you spend much time thinking about? >> of course, i spend lots of time thinking about that you want to give them the opportunities you never had. but for me the most important thing is giving them a faith-based education and access to tutors and things they'll need to help be the most successful they can be academically right now and knowing the only way they can achieve the goals is by putting in the work. they say "dad, you don't have to get up at 4:00 in the morning everyday." i say "no, i do, i need to start my day off with prayer time and then make my calls before you guys get out and make sure things are going smoothly whether it be wahlbergers or aquahydrate. >> you get up at 4:00 a.m. when you're not shooting a movie? >> yeah, 3:30, 4:00. >> i'm going to call you some time i'm going to get up at 3:30. it's a lonely place.

>> y'all can call me, too, i'm just going to sleep. >> he's not going to sleep that early. not until the sun is up. >> let me ask you about retail we've been watching the retail industry struggle. you have a huge brand, something like $400 million in sales annually for sean john what do you think about the retail industry? do you think about trying to find other things or shopping in general? >> i'm always looking for opportunities achtd and the world is ever-changing and you have to be able to adapt to what's going on and just being one of the i would say like celebrity pioneers of digital marketing and social media marketing, it's an exciting time for me and the brands i'm associated with because we feel we have that edge as more people start to shop from home we are in realtime. i would say i market, i advertise, i work in a realtime type of formula and that's what kind of gives me that edge.

>> but retailers have to get creative, too. people want the experience, they want to go out, they want to share entertainment, you can watch a film on a tablet, you still want to go to a theater. you want to hear people laugh so i would say to retailers who are struggling to bring consumers back out to the door, let us open a wahlberger in front of your property. people will come there, eat, go into your store, buy performances, buy nutrition and aquahydrate. >> you are good. >> then go to the movie theater. >> you are good. >> but we are reaching out to retailers saying we partnered up with hi-v in the midwest, we're talking to kroger and these people about putting wahlbergers right there front and senter >> you can catch more of becky's conversation with sean combs and mark wahlberg on cnbc.com. >> do you have like a two syllable -- are you capable of a two syllable final thought. >> is anyone >> not quite. >> two sillable? maybe mark wahlberg and sean diddy combs should talk to other retailers if they're so good at it maybe they should talk top sears

and toys "r" us. >> are you going to buy the water? >> no. the celebrity water thing, come on water is -- i like tap water it's cheaper. >> you're a purist. >> yeah. >> thank you very much for joining us >> thank you. >> is that it? do you want many to keep going >> no, you thanked him, i think you did a great job. seemed sincere. >> well, he's the best. >> he is. >> people are saying that. coming up venture capitalist of hyperloop one, shervi is coming up. we have those details. businesses count on communication, and communication counts on centurylink.

i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise

your bbut as you get older,ing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish.

in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. removing the crutch. the fed takes steps to unwind its $4 trillion balance sheet and janet yellen drops hints about the future of rate hikes. >> as long as we believe that we can use the federal funds rate as a tool, that is what we intend to do. >> new this morning, americans speak out on the push for tax reform the fresh poll numbers and surprising ones coming up plus the eu versus silicon

valley the companies being targeted straight ahead 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 we are doing it live we are, from the nasdaq market site in times square i'm joe kernan along with wilfred frost and kelly evans, land of the giants andrew and becky -- you needed to see that earlier -- they're off today. sitting in with us for the hour, shervin pishevar, co-founder of hyperloop one and sherpa capital. you have like an octopus, you have tentacles everywhere. every story we talk about i think you're somehow involved in and can give us insight. it's just something about

hyperloop. it just -- >> thank you. >> i mean it's -- it captured the imagination like few things and -- >> thank you. >> and most of the time it's like, oh, that's so far in the future then he says, no, we're riding on one yesterday so it's not like this might not happen. >> it's here it's real. >> so great. anyway, more from him in just a minute let's check out the futures, though for starters, it's been right around the flat line all morning and that's still the case, the dow has called up 3.5% on the open the s&p indicated down two and the nasdaq down a little over two. how many days in a row >> nine days for the dow, zblibl sma -- i believe. >> small gains, two ten-tenths a percent. >> we busted through another round level. >> so just get used to it. stop resisting we did pretty well after brexit, too. >> can you imagine how well we'd do in a socialist world?

>> yeah, exactly. >> even better >> are you just saying that to start something here >> i know your globalist elitist perspective makes it hard for you to watch. >> this good under trump, imagine if lenin was president. >> that's not even funny. >> we'd be up 8,000 points >> or stalin. >> can you imagine >> anyway, moving on to the latest on hurricane maria, the storm is regaining strength after pounding puerto rico the entire island is without power and puerto rico's governor says it could remain that way for months maria unleashed destructive winds and catastrophic flooding. the storm's large eye is passing offshore on the northeastern coast of the dominican republic. >> among today's top stories, in corporate news google is buying htc's pixel division for $8.1 billion in cash. this is an effort by google to boost its hardware business. android is already a dominant software for smartphones htc already manufactures google's pixel phone

google will gain 2,000 employees and a non-exclusive license for htc's intellectual property. google shares unchanged. cbs health will start limiting access to opioid painkillers. one of the largest managers of pharma benefits says it will cap prescriptions to seven days or less for patients with acute pain who have not previously taken an opioid painkiller these patients can currently receive prescriptions for 20 days or more a lot of studies say once you get above 20, 30 days above taking the stuff it becomes insanely addictive cvs will also limit daily dosage for patients with chronic pain and the changes take effect next year shares of amicus therapeutics on the rise the drug is treating pompe disease. amicus shares up nearly 3% senate republicans announce plans to vote on their latest bid to repeal obamacare. president trump and republican supporters of the graham-cassidy

bill have been working to secure enough votes to pass the bill. president trump said they have the support of about 47 or 48 out of the 50 senators necessary which sounds almost exactly like the last count when it was all said and done. >> this one slipped in there quietly. >> right, but they're still working on -- well know who they need to work on, mccain and he has said that this is different in terms of the last one and that -- he's deferring to the governor of arizona who is behind this so maybe it's different. maybe it's not. >> we'll find out early next week and maybe put that to a vote, have hearings. the yatunited states is weighing whether to abandon the iran nuclear deal. president trump said he's made a decision but wouldn't say what iran's president vowed his country will not be the first to violate the agreement. under the program iran agreed to restrict its nuclear program in return for the loosening of economic sanctions that crippled its economy. our next guest just returned

from a trip to south korea where he addressed the 10th pacific army's chief conference held in seoul. the number-one topic dealing with north korea joining us now, brookings institution senior fellow and foreign policy michael hanlon. we've always gotten a lot out of your previous appearances, michael. what's new what can you tell us now after the last couple weeks and your experience >> good morning. nice to be with you. there are a couple things that are notable about south korea right now. the first thing is that despite it all life sort of seems normal not that i claim to have spent a whole lot of time on the streets but when you look out over that amazing city, as you know it's one of the most dynamic and huge cities in asia, it's hard to imagine that it could be on the cusp of war. i hope it's not. most south koreans don't appear to think it is that's point number one. number two, beneath that veneer

or relative calm is certainly some considerable anxiety and we know that the situation may be coming to a head because president trump's tried to be emphatic that he needs to change the course that north korea is on he's not willing to essentially accept a north korean nuclear buildup and i don't know that he's realistic in what tools he has available to him but if he's forcing this to a head, people realize all courses of action are possible including the possible use of military force and that sense is certainly weighing on people even as they try to sustain a certain calm. >> we sit here and kind of wait for the next move and we don't have to wait long normally, michael, and -- what's next, do you think? >> as you know, the main strategy here of president trump appears to be to persuade china to finally really turn the screws on north korea. there have been a number of sanctions applied in recent years and they're very selective

and look at certain sectors or certain companies or certain individuals within north korea and/or within china but the overall trade of china and north korea has actually not declined despite it all and there have been enough loopholes and other business russia has a lot of north korean foreign workers, for example the north korean economy is chugging along okay by its own standards and so in that regard we haven't managed to persuade china to put enough pressure on north korea to force a change of course trump is trying to change that i'm dubious that he can succeed but the question is if he fails what's next? and would the united states start shooting down north korean long-range missile tests upon launch would we think about other selective uses of lethal force would we try to up our cyber game to disable various systems that way it's hard to know but once that process begins it's hard to know where it stops >> michael, you think trump's

tough rhetoric at the u.n. was aimed purely at china as opposed to north korea itself? >> no but i think he realizes far aand away the preferential course of action here is to get china to apply enough hurt to north korea that they have to negotiate. i don't really think that's realistic but you can't blame trump for trying, my only concern is what does he do if and when that fails? i think we need a diplomatic option in the back of our heads that probably envisions a freeze on north korea's nuclear capabilities and missile capabilities rather than going immediately for complete elimination which i don't think is realistic. >> michael, you mentioned the possibility of a targeted internal cyber attack on north korea of some form are there any other internal type of underhand attacks that could happen i mean, people have mentioned in the past the possibility of a direct assassination

is that likely would it work? >> it's probably a long shot we don't usually know where kim jong-un is and the question would be also if you manage to succeed what are the north korean generals going to do after that if we haven't worked out some kind of an agreement with them whereby they could stay in power and perhaps be more moderate in theirbehavior but hold on to their positions, it's hard to know why they would accept that and not retaliate. i'm not saying they would go straight to nuclear war but they might feel some kind of a severe retaliation would be in order and it's not clear that that solves the problem and we don't know that north korean generals are going to behave any better than kim jong-un so i think assassination is a huge gamble. >> lately many people have come on and made the point of the capability of north korea having nuclear weapons as the entire game for that country and for kim jong-un to keep his family in pow, to stay in power, to go

forward in the 21st century. it's all about that and there's zero possibility he would ever abandon those goals so what does it matter what we get china to do >> well, i think that's perhaps correct. at least in the foreseeable future you can imagine a world in 10 or 20 years when things have calmed for a long time, we imagined deploying a u.n. force between the two sides. you could imagine a peace treaty between the united states and south korea on the one hand with north korea, maybe someday in the distant future you could envision kim being secure enough that he could negotiate away his nuclear arsenal. i think that should stay our long-term goal but i think a freeze, not just on testing but the production of nuclear materials is probably the best we can aspire to we shouldn't pay too high of a price for that kind of a freeze but we could tolerate china and russia resuming previous economic interaction. >> maybe we could make some modest restrictions. i think it's better than where

north korea is probably building six or eight nuclear bombs per ye year. >> it is a zero hpercent chance where some horrific scorched earth were to happen, thousands of casualties on both sides and you just take care of the problem completely is that a zero percent chance? >> first of all, it's hundreds of thousands of casualties. >> well -- >> i think it's worth driving home it's hundreds of thousands of casualties in a best case, that assumes no nuclear weapons mass use against cities, we could have millions. i think the chances that we would willfully initiate that are extraordinarily low. >> but there's accidents, it could break up over japan. it could cause him to use conventional weapons over japan or south korea there's ways you can get into this without being intentional.

>> exactly exactly. you start a process that neither side knows how to finally finish and you wind up in a much more severe place than you started or envisioned in the first place. nobody thought a dispute over the assassination of the arch duke of sarajevo would lead to world war i so that's the kind of thing that has to weigh on our mind. >> it does michael o'hanlon, once again, thank you. >> my pleasure. >> coming up, the eu turning up the heat on silicon valley we'll have that story next when you come right back here to join us on "squawk box" on bccn

your muscles look good, but we should be seeing more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh... am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies see it- and see it through-with digital.

intelligence committee staff discussed the role, the distribution of russian disinformation investigators are focusing on the prominence of bots, these are automated accounts used to post and amplify information the technology could have helped

mislea mislead. >> good morning, that's right. it wants to raise taxes for some of the biggest tech companies like google, facebook and amazon in a paper outlining different options it says the time to act has now come even as the european commissioned a mitts it's so far proved difficult to agree on the solutions at a global level this 11-page report released a few hours ago calls for an ambition eu position in short-term solutions to feed into international work being done by the oecd and g20 this is what the commissioner said on our air earlier this week he said it was driven by the need to change the tax system for a modern economy digital companies in europe have been accuse of paying too little in taxes by booking profits in low tax rate companies like ireland and luxembourg

this report cites data that says brick and mortar multinationals pay twice as much in taxes in the eu as their digital competitors. and that partly due to the uneven taxation revenues in the eu retail sector grew an average by 1% a year, while the rey knews of the top five grew an average of 30% in the same period these are the options being proposed they include a tax on revenue rather than profits. it comes as the biggest tech names in silicon valley gain more cloud so far it's been the eu that's pushing back strongest. >> one of uber's biggest shareholders is pushing back against softbank according to the "wall street journal," benchmark capital refuses to sell any of its holdings, complicated a deal that hinges on getting enough existing investors to sell part of their shares, the proposed investment by the softbank group

could total as much as $10 billion. the japanese conglomerate has proposed investing at least a billion as part of the deal and it's seeking to afford it. >> our guest host is an early uber investor and big time tech investors. shervin pishevar, hyperloop founder and co-founder of sherpa capital. we'll get to that i'm sure, let's kick off with hyperloop. there's a funding announcement today as well. >> absolutely. today we're proud to announce that hyperloop one has just closed so we've closed a total of $85 billion in new fund iing showing the world hyperloop is not just a fantasy, it's real. that brings total funding to $245 million and that will allow us to continue to scale the

company where 300 employees strong in l.a. and vegas i dubai and united arab emirates and we're very excited about that announcement. it includes great investors who continue to believe in us. investors from the past rounds like dp world who have invested in our previous rounds are an example of the types of investors, ge ventures, joe lonzil's fund, they all have backed us in a very strong way summa group as well. and caspian ventures >> what are the steps that need to take place and how long will that take place until we see this in action amptd and what's likely first link up >> we are graduating from the r&d stage, we went from an idea to building this in three years.

it was a lot of hard work. now we're evolving into the commercialization fees of the company so we're in very deep negotiations with some governments around the world to knock on wood, pray that we succeed in those negotiations and if that happens we should break ground in somewhere in 2018 and 2019 and have the first operational hyperloop by hyperloop one built somewhere in the world. we're hopeful that it will be in the middle east first. >> which cities are most ripe for the type of linkup that you're going to be able to provide? >> that's a good question. as an american i would love for hyperloop to be here in america. the political regulatory realities and framework can be slow and there has to be a

completely new regulatory framework for hyperloop because it's not high speed rail, it's not rail so our dream would be to connect many different cities into super regions so as an example, vegas-l.a. would be a dream eric garcetti, the mayor, went to peru and signed the 2028 olympics and being able to have the olympics spread across the region would be great because then you can do l.a., vegas in 28 minutes city center to city center new york to d.c. would be about 30 minutes city center to city center and it would allow people to live and work anywhere so that would be the dream i'm -- but i'm realistic and practical and i think it will probably happen in the middle east first. >> in the past, you've said that you -- i don't know whether we ever confirmed it, you have certain approval -- like nods of

approval from government officials in the united states but that you haven't really told us who or -- and people aren't sure that it's a firm commit me ment where does it stand for what you're able to do in the u.s.? >> thanks for that question, joe. it's -- you're always a little bit of a trouble maker in your question i know you very well what i do want to say in that because we have to say this accurately that we have no approvals in the united states for any problems >> but you've got like -- you see body language or -- that seems to indicate that they're open toing in like that? >> it wouldn't be prudent for me to comment on body language. >> as far as regulatory, in a trump or republican administration are you optimistic about how quickly you can get things like this done in terms of infrastructure? >> president trump is a builder. he is a builder. his whole life he's been a builder so i'm optimistic that under his leadership things can

become accelerated and new infrastructure projects like this can create millions of jobs and change our economy so i'm hopeful that his leadership is allowed to be expressed in -- especially in the infrastructure space because it could be great for the country. >> assuming this does happen stateside, some of those times you mentioned between major cities, that's hugely bearish for the airline industry, for domestic travel, at least, not when you're crossing oceans and stuff but would you assume that to happen? would the airlines collapse domestically >> that's a great insight. i don't think the airline industry as a whole in its entire history has been profitable as a whole i think what will happen -- not in the short term or long term -- as hyperloop begins to spread, this is a multidecade project, so the answer to your question to be accurate is there will be a negative effect on the airline industry over the next 10 to 20 years as this happens

the data point and the signal that proves that case a bit is in brussels and paris high speed rail was launched. there are now no commercial flights between brussels and paris. none. >> and london to paris everyone takes high train. >> 60% of people take the train. so the human behaviors begin to change when they have these other options. >> fascinating stuff delighted you're with us for the next half hour more to come. >> trouble maker that wasn't a trouble-making question, that was an obvious question because i think we all -- >> he had to give a legal response. >> if i answered it incorrectly i would have been in trouble. >> i just want it to happen fast. >> hear hear. >> it's exciting coming up, today's top stories plus what do hip-hop legend diddy and actor mark wahlberg have in common? becky quick spoke with the duo check it out. >> i only get involved in business that i truly believe in, products that i consume myself. >> we didn't just get here

m cause he's a great actor or i'a great rapper we're great businessmen. is

[pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim.

only at td ameritrade. toys "r" us says it will bring in part time workers for the holiday season as you know the company filed for bankruptcy protection. among the open positions,

cashiers, sales associates and a toy demonstrator sounds like -- >> well, that would be fun. >> sounds like "big," like the movie. that position involves unboxing and playing with toys and allowing kids to try them out. perfect. that is "big." no word on how many workers toys "r" us plans to hire at this point. >> news just out from insurance company all state, morgan brennan has the numbers on insurance specks morgan all state just reporting its estimated catastrophe losses for the month of august. it says net of reinsurance recoveries for the month it was $593 million pre-tax that was due to six events in the month of august, by far the biggest hurricane harvey which has estimated growth catastrophe losses, excluding homeowner flood total $576 million pre-tax. a big chulk of that is

autorelated. the company says given the complexity of this event we may experience a higher level of uncertainty due to the inability of our customers to gain access to their homes and tow toes and submit claims adding that hurricane irma occurred in september and isn't recorded in our estimates so all state, progressive, travelers, we're starting to see the steady drum beat of early warnings, early catastrophe loss estimates from the insurance sector back to you. >> but their shares aren't responding much even as we're getting more clarity. >> and so we'll keep an eye on this as the market opens allstate reports on a monthly basis when the catastrophe losses total more than $150 million so they've seen an early read on these hurricane events but you saw this big selloff coming into all of these storms, one after the other and that was investors anticipating that we've seen numbers like this on the heels of these hurricanes. >> morgan, thank you

morgan brennan we're seconds away from weekly jobless claims. futures were a little bit higher before that hit. you can see there -- let's call it unchanged mr. santelli is standing by. it was pretty impressive bounceback after that fed decision yesterday. >> yeah, the equity markets are going to have a rough time because as many say quantitative tightening is going to cause stocks to move lower, i still continue i want to know the next trade. we have initial jobless claims, 259,000, that's down from a slightly revised 282,000 and many, of course, are thinking about this number wondering how close to reality it is considering all the issues that are presented into the whole jobless claims process with harvey and irma. so of course we'll continue to monitor but it has come down a bit continuing claims, 1.98

million versus 1.936 million, always a week in arrears as i look at the markets, kelly, it's been pretty orderly granted it wasn't that many trading sessions ago we had an intraday low yield darn close to 2% on the 10s and here we are back at 226, virtually unchanged with the 2015 close down a bit from the 2016 close at 244 dollar index had a nice day yesterday. that's the area you want to monitor to see if there's any lasting punch to the upside after, of course, sending a lot of 2017 in the tank. kelly, back to you. >> rick, thank you see you later on for more reaction, let's bring in john silva, chief economist at wells fargo securities, hi, john. >> hi. >> how are you >> fine, thank you. >> i feel like we're starting a phone call or something. anyway, the jobless claims we know we have to work through that i am surprised but perhaps shouldn't be that the gdp numbers are down so much atlanta fed, they were 4% a month ago.

i think we're down to barely 2% for the third quarter. how do you see this shaking out? >> i think the pervasiveness of not only the job hit in houston but also the impact on retail sales, industrial production and employment does mean a much weaker economic number for the third quarter and we expect some improvement getting back into the fourth quarter so a little bit of this is temporary. we're getting being to that 2.5% trend. >> we don't want that. how do we get out of it? >> we're trying to get to that 3% we need to improve labor force productivity and labor force participation rates. part of that perhaps is taxry form that we may get going forward, having to change incentives for workers and firms to build up that productivity and capital spending. >> i don't know if you've seen this theory floating around that wage numbers, i don't know if it would apply to productivity but maybe if output is implied it

somehow would. that it's because older people who are getting paid more are leaving the work force replaced by younger people who earn less. is that what we're talking about or no? >> there's a little bit of that. i think overall the flow of workers in and out makes a differen difference wages cannot get out of line with productivity that stays low. that balance has to still be there. so you have to get those productivities if you want an improvement in real wages. >> i thought jason turner made a great point. we were talking about maybe how the fed by trying to keep rates so low and help the economy has hurt it because it's propped up these retailers and maybe energy companies who should have gone out of business. if that happened maybe the industries would have more pricing power and you'd see more general inflation so the argument is now if they're

exiting that whole process can happen organically do you think there's flutruth in that >> it's been a long story in economic history that arbitrarily easy access to credit has kept many players in the game longer than they should have and there were forces pricing to be much weaker than otherwise. that's been a long economic story. it's not just the cycle, it's been true for 80 years or so. >> finally the philly fed was 24 for september. what does that say to you? >> the philadelphia region still being a very important manufacturing region still supports industrial production growth and, again, two, two and a half percent growth at least going into the fourth quarter. >> good to talk to you, thank you so much. >> thank you, kelly! >> still to come, rescue efforts under way after mexico suffers its second major earthquake in two weeks. will the next big quake hit the u.s. that story coming up as we head to break, a quick look at u.s. equity futures

pointing a little lower but only slightly after slight gains. we're back in a couple minutes

back to "squawk box. let's get back to our guest host i want to talk about that theory that enough terms of private and public companies getting so big with such big cash piles that they're essentially like sovereigns themselves now. explain that to us. >> so we talked about it before and it's this theory around that we have reached a place now where private companies are doing what nations used to do. so you look at spacex launching rockets, right you look at uber building self-driving in 18 months because travis kalanick focused on it for 18 months at cmu and built it in 18 months. that's incredible. so that signal is that these private companies and also public companies are becoming what i call mini sovereigns. tim cook is like a head of

state. the company, apple, is almost a trillion billion dollar company. has $250 billion in cash in reserves. >> are they going to have their own currency and defense >> that's a good idea. what's important about this is the evolution that's happening is that the sovereigning a ins beginning to realize their national strategic priorities are tied to invest and align being these private companies and public companies so if on the public side the ones that count are google, alibaba, facebook, ten cent, amazon these are those mini sovereigns that i talk about. there's private ones that are beginning the rise to become like that in skill, didi, uber, spacex

in saudi arabia, they understood that their company was going to become a major, major company. self-driving is coming spacincog then what happened masa, with his vision -- >> softbank. >> which is softbank, created softbank vision fund with pif from saudi arabia. they put $45 billion in there from there pif. they put the leadership at united arab emirates understood that that's the funding we work into billions. they're trying to now that you guys mention it, the uber investment potentially. >> do you want them in uber or no >> of course so the ceo of softbank vision fund along with masa, they are visionaries and they're backed by this kind of capital, sovereign capital in what was genius about what they built in

softbank vision fund is that it elevated softbank itself into one of these mini sovereigns because they're actually backed by real sovereigns, correct? so the sovereigns are flowing $100 billion of capital into it because they know their future is not in oil, it's in digital oil. they're arming themselves with investments that strategically for them is incredibly important for their economies. >> the "wall street journal" is reporting that benchmark is blocking softbank from investing in uber. is there truth in that would you like them to allow the softbank investment? is it important for uber's future >> i can only express my opinion, right and i don't know what the facts of the "wall street journal" report are so i can't confirm anything there but having softbank vision fund invest in uber would be an incredibly smart strategic investment to do

both for softbank vision fund and for uber and the new ceo has just arrived why it would be important for any investor, whether it's benchmark or sherpa capital or any investors that have been lucky enoughed and blessed enough to be shareholders in the company that travis kalanick founded is that this leads to a global detente it can help align these companies together softbank has funded didi, didi on its own is a complete giant the numbers at didi in china -- that's uber china and they merged uber china with didi, that was travis kalanick's vision of going there and competing and now they've merged those companies and the reason why that is important, those investments in didi or grab in southeast asia or in india with

ola, that kind of alinement is very smart strategically for the company to do. >> but also if softbank comes in -- softbank comes in, you mentioned travis a couple times. does softbank come in supporting his role does that mean bench mark gets pushed aside is that what you would like to see here to protect this company? >> i thought joe was a troublemaker now i realize you're a troublemaker that was a very smart question. >> but you feel strongly about this. >> i've made a lot of public statements and everything is online so people can read that but the new ceo is from expedia and everyone from travis to myself, everyone supports him and his leadership so the ceo of uber is dara a and he's leading the company, travis is on the board of directors and his

vision helped create this giant company. >> with all of softbank's other investments, is it fair to say they are invested in some of uber's rivals? it's complicated to bring that investment on board? >> so what's happening in the didi and the uber china merger, sherpa capital which i co-founded with my co-founder scott stanford, we input $50 million into just uber trying to when it was created with a joint venture with baidu then they merged the ownership that uber has in didi is going to be extremely valuable it already is. it reminds me of what happened at yahoo! >> let's hope that doesn't happen with uber. >> it won't because i'll explain why. but very smart jerry yang and dan rosenzweig and jeff weiner did that investment in alibaba and it became worth more than yahoo!

itself. >> we've got to go to break. the likelihood of softbank's investment in uber is high or low at this stage? >> i can't predict the likelihood but i would hope and pray that that investment is -- would happen because of the reasons that are outlined andi think it would be very smart for softbank vision fund and uber to do that invest. >> great stuff stick around we have time for another chat to come we have to talk about masa's comments on the singularity. he's worried about it. this is going to allow us to meld with -- >> no. >> yes, it is. because i'm living forever, damn it. >> i'm not. >> yeah, let's talk about it i'm not afraid of it i'm welcoming the singularity. up next, americans weighing in on a cornerste tonofhe trump agenda tax reform the numbers from a new poll coming up. what is the power of pacific? it's life insurance and retirement solutions to help you reach your goals.

it's having the confidence to create the future that's most meaningful to you. it's protection for generations of families, and 150 years of strength and stability. and when you're able to harness all of that, that's the power of pacific. ask a financial advisor about pacific life. and made it liberating. we took safe and made it daring. we took intelligent, and made it utterly irresistible. we took the most advanced e-class ever and made the most exciting e-class ever. the 2018 e-class coupe and sedan. lease the e300 sedan for $589 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

americans speaking out on tax reform according to a new nbc news/"wall street journal" poll 24% said individual taxes should be cut 4% said business rates should be cut and 28% said both. 42% said neither business nor individual rates should be cut that same poll found president trump's approval rating ticking higher joining us now, adam michelle, tax policy analyst with the heritage foundation.

adam, thanks for joining us. is the cat out of the bag? it 's 250% no longer is it shooting for 15%. is that new? >> it seems like the conversation is settling somewhere between that 15% and 20% rate the house originally said 20%, the president said 15% either one would be great. 15% would be better for jobs, for investment, but really it's great that tax reform conversation is moving forward and hopefully we'll see some details in the coming weeks. >> there's also reports that there will be no tax cuts for the wealthy and you heard the president say there are going to be somewhere about where they are or rates could actually go up and as politically incorrect as it is for me to even broach the topic, is that the best way to do it and what i'm talking about is let's say the top 5% pay 60% of

the federal income tax, if you're not going to cut for the top 5% -- i'm not saying i want rich people to get a tax cut they're doing well, a lot of people aren't, but the effects of cutting taxes it seems like if you're going to cut taxes some of it has to be on people , right? >>yeah as you noted about 10%, the top 10% pay almost 70% of the income tax. so we talk about tax refor we have to be talking at some >> that won't fly with democr it will be reconciliation and 51 votes. republ been talking long time, includes lowering expens

time >> what happened -- do these we saw them lose their nerve and again, when they got critic that there could be a re-ele they waffled. is tha what's happening here even president trump made some promis is he being affected by public >> when you come down to it tax reform requires that we lower >> when did he decide -- did he you know, the debt ceiling >> i don't know where it came from. your guess is as good as mind. it's important to keep reminding

make structural reform these are important pieces of >> he's like you anyway just kidding. adam, thank you, we appreciate it >> thank you vmuch >> elitist look it up in the dictionary the big picture. >> when we return a big warning our ne wlsjael checked in with a few earthquake experts what she found out coming up

throughout my career, i've been fortunate enough to travel to many interesting places. i've always wanted to create those experiences for others. with my advisor's help along the way, it's finally my turn to be the host. when you have the right financial advisor, life can be brilliant. ameriprise

let's get over to jane wells who has more on the penl earthquake jane? >> rep well we had a but seismologists say it has mexico since then there's been $14 on bridge improvement let alon on building improvements take a major fault an early warning system like the one they have in japan son lie

curren new funding in the propos federal budget. and sltss say preparing for a >> earthquakes don't kill too our worst earthquakes we'll see buildi but it's much more of a threat than it is to our lives and >> rep now the big focus andrea one in ten californian has it's expensive cheape policies has deductible as high as 25% of your home. the bay area is due for a major years. and not just here. they say there continues to be

kansas back t back t >> "squawk box will be right people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.

so, i was at mom and dad's what they♪want out of life. and found this. cd's, baseball cards... your old magic set? and this wrestling ticket... which you still owe me for. seriously? $25? i didn't even want to go. ahhh, your diary. "mom says it's totally natural..." $25 is nothing. abracadabra, bro. the bank of america mobile banking app. the fast, secure and simple way to send money.

you point out maybe in colorado.

>> that's right. i value your question, the a 12 minute route that we're 12 instead of an hour >> a state approval. next time you come back, if singul is 25 years away. >> make sure you join us tomorr "squawk on the str is next ♪ ♪ do you remember good thursday morning. welcom to "squawk on the street i'm on