by the way, thanks to mel and michelle for letting me know what a camisole is in the break. i did not know. we threw that in, like why did you start with a camisole? go to lidl and get your camisoles. >> $7.99 >> thanks for watching "power lunch. >> "closing bell" starts right now. not going there. >> you think you know? >> not going there. >> camisole? welcome to "the closing bell," everybody, i'm kelly evans at the new york stock exchange. >> i'm bill griffeth top story this afternoon, new sanctions for north korea. president trump already announced this new executive order that will target companies and individuals trading with north korea. and treasury will be able to sanction foreign banks that take part in transactions tied to north korean trade >> yeah, they'll have to either trade with them or trade with us treasury secretary steven mnuchin will be speaking now at

a briefing set to begin any moment now about these new sanctions. we'll bring you those comments live as soon as they begin. >> we may have to interrupt this next segment in the meantime. new developments on another big story out of washington today, the s.e.c. hack you heard about this eamon javers has more. >> reporter: bill, that's right. this is a little bit alarming. the s.e.c.'s edgar system is the database companies use to file public disclosure documents with the s.e.c., get access to just about every piece of important financial information from major companies before they're released publicly. hackers apparently were able to get into that. here's what the s.e.c. said last night about this hack. they said that the incident happened back in 2016. it was originally detected that year but it wasn't until august last month in 2017 that the s.e.c. learned this attack may have provided the basis for what they call illicit gain through trading, in other words, cyber insider trading. they also say the vulnerability here that's at issue was part of the software of that ed guagar

system i was talking about, test component, ability for companies to file early without triggering the actual submission of the document for public release. that was where the hackers were able to get in thererough some n of back door flaw. the s.e.c. patched the issue it raises the issue of cyber insider trading which has become more of a thing than it used to be starting in 2015, we started to see reports of bulgarian trader filed a false avon tenter offer on that edgar system that was something that moved markets. in 2016. three macau and china-based men charge with stealing merger and acquisition information from u.s. law firms that's another source, a database that has very sensitive information. inside the big corporate white shoe law firms in 2017, saw ukrainian hacker sentenced for hacking into business news wires and getting access to that information early. a whole lot of ways that bad

actors out there can get into business information, get it early and make money off of that the complicating factors here are that cyber security, any kind of hack is very difficult to determine who did it, where those people are it's also very difficult to prove insider trading as a general problem for prosecutors and we've seen those cases sometimes stumble over the years, and then, of course, there's the global aspect of all this you look at those incidents all over the world >> been a very productive week at the united nations. i've been pleased to be here with the president today, the president strengthened, he signed an executive order, that strengthened the u.s. government's ability to cut off funding to the north korean regime and its weapon development program. despite multiple u.n. security council resolutions, north korean dictator kim jong-un continues to threaten the world and his neighbors with provocative nuclear and missile

tests. president trump's new executive order significantly expands treasury's authorities to target those who enable this regime's economic activity wherever they are located. for too long, north korea has evaded sanctions and used the international financial system to facilitate funding for its weapons and mass destruction and ballistic missile programs no bank in any country should be used to facilitate kim jong-un's destructive behavior this new executive order will authorize pressurery to impose a range of sanctions such as suspending u.s. correspondent account access to any foreign bank that knowingly conducts or facilitates significant transactions tied to trade with north korea. these sanctions will be forward-looking and applied to behavior that occurs following

today when president trump signed the executive order foreign financial institutions are now on notice that going forward, they can choose to do business with the united states or with north korea, but not both this new executive order enables treasury to freeze assets of anyone conducting significant trade in goods, services, or technology, with north korea it also allows us to freeze assets of actors supporting north korea's textile, fishing, i.t. and manufacturing industries we call on all countries around the world to join us by cutting off all trade and financial ties with north korea, in order to achieve a denuclearized korean peninsu peninsula. as president trump stated in his speech to the u.n. general assembly, it is time for all

nations to work together to isolate the kim regime until it ceases its hostile behavior. we will continue to work with our allies and partners to stop north korea from using the global financial system to further kim's reckless behavior. thank you, and i'd be happy to take a few questions >> can you explain how this will affect china, specifically and what kind of -- [ inaudible question ] >> well, let me comment, i had a very productive conversation very early this morning with governor joe at the pboc, the people's bank of china, and how we are going to work together. i'm -- this action is directed at everyone. it is in no way specifically directed at china, and we look forward to working very closely with them. >> mr. secretary, can i read a

quick section, i want to understand what's -- >> yes >> no aircraft in which a foreign person has an interest, landed at a place in north korea, may land at a place in the united states within 180 days after departure from north korea. a similar application to vessels. any way you can put a number on how many ships or aircraft would have been affected by this in -- pick a year, pick an applicable year, so we can get a sense of the scale of the eo. >> again, that's another important aspect of the eo, besides for us being able to block financial transactions we'll be working very closely with the coast guard and others on this. i'm not prepared to give you a number, but it's very significant. and further, we can put actions against ports as well. >> i have a couple questions first one, why will this round of sapgss wo s first one, why will this round of sapgss woanctions work whiles have failed? >> get, let me be clear. i don't think other sanctions have failed but these sanctions are very significant

not only does it allow us to sanction individuals, or entities, but it allows us to freeze or block any transactions with any financial institution, anywhere in the world, that facilitates any transactions with the blocked person. >> do these sanctions include a plan to target north korean companies, and individuals around the world >> yes, it does. >> and any plans for future sanctions? >> again, i will never comment on future sanctions, but we will continue to review all options >> rule it out in the coming days >> does this represent in any way a rejection or a moving past u.n. security council -- >> no, i don't think in any way. we very much appreciate the u.n. security council resolution and the unanimous support to that. this goes beyond it. >> that you couldn't get done through the security council >> again, as i've mentioned, this allows us to block any financial institution that doesn't followthrough on the u.n. sanctions or are additional

sanctions. yeah over here. >> sorry -- wasn't there a designation -- [ inaudible question ] >> again, we'll do designations on a rolling basis they obviously start with all activity today stho so this forward looking, this is not backwards looking. >> secondly, sorry, can you say more about your discussions with central bank of china? what do you understand -- [ inaudible question ] >> again, those conversations are confidential as i said, i had a very productive conversation with them this morning. >> piggybacking on that, anything, the timeline of it, had there been previous negotiations leading to this point with the bank in china >> no, no previous quoegs negotiations first time we discussed it was early this morning our time. >> did you -- >> i called them to alert them in advance given their close cooperation with us.

>> margaret with "bloomberg. i want to ask the same question, china had given indication a week and a half ago, what they did today is completely separate -- >> i'm not going to make comments about what they did earlier. what they did today is -- >> can i ask my other question >> why don't we come back to you so we can get other people in here >> "wall street journal. can you -- do you believe that china's actions today reduce the need for further secondary sanctions on chinese entities? >> again, i'll commenting we look forward to working with them in a very cooperative way, the way we look forward to working with all of our partners and, again, what's important about this is the additional authorities the treasury has >> sorry peter baker from "the new york times. can you put this in the context of the president's speech earlier in the week when he talked about more military action, i mean, how do these things work together, and what do you expect north korea to do

in response? >> i'm not going to comment on what i expect north korea to do. obviously as we said, the objective is for them to stop their missile tests and give up their nuclear weapons. as it relates to this is something that has been in the works for a while, i alluded to this, i believe it was about two weeks ago, that i had been discussing this with the president and this was all part of the president's strategy at the u.n. this week >> secretary tillerson had said it took a while for the last round of sanctions to actually have an impact or for north korea to begin to feel them. is there a timeline you're looking at in which case -- >> again, there's no timeline we're looking at this is forward action on this again, i would just emphasize we hope there is voluntary cooperation, wut but to the ext we have to cut off banks from the banking system in the united states which obviously would be very significant, we now have those tools to do that >> any other countries' central

bank -- >> i'm not going to make any other comments on confidential discussions i've had with other countries. again, i am confirming that i did speak to them this morning, i'm not going to comment on other confidential discussions >> with nhk. secretary, the president earlier thanked xi jinping for his bold actions. would you say the actions today are enough and would you call on russia -- >> again, we'll call on russia to do more president trump and president xi have had very productive conversations and we appreciate the way they're working with us. i'm going to take one more >> follow up on my initial question you said that this is not targeted at china specifically, but china is the largest trading partner with north korea so can you spell out how this will affect them and how it will affect the u.s. relationship with china with regard to north

korea? >> again, as i emphasized earlier, this is targeted at north korea, and anybody that wants to do trade or business with them. we appreciate the relationship with china, we look forward to working with them. thank cryou, everybody >> treasury secretary steven mnuchin, let's get reaction from eamon javers, eamon, as he was pressed a little bit on whether these new sanctions on north korea do, in fact, put more pressure on china, even after the president today emphasized china stepping up to the plate with some actions of its own today. >> reporter: yeah, that's absolutely right saw the treasury secretary there walking a bit of a diplomatic tightrope both full of praise for the chinese and their cooperation with the united states as the president was earlier today, then also announcing these new sanctions which could have severe impact on chinese banks, if they're sanctioned and designated by the united states. they could be removed effectively from the global financial system so that is a little bit of a carrot and a pretty big stick there used by the treasury secretary. as he was speaking we got some wires from the china's foreign

minister who's been speaking just about at the same time, and china's foreign minister just said that they're urging the north koreans not to go further along in a dangerous direction, and also saying that china will stay firmly committed to denuclearization of the korean peninsula. so diplomatic message now being sort solve mirrored from beijing, and from washington this is the first time we've really seen this sort of simultaneous effort by china and the united states, and you saw the treasury secretary there saying he spoke to the chinese leadership this morning, although he won't say exactly what they talked about clearly we're seeing some new cooperation between the u.s. and the chinese in terms of north korea, kelly >> let's bring in our chief international correspondent, michelle caruso-cabrera, add her to the conversation. michelle, you and i have had this conversation many, many times. this is a pretty ambitious sanction but only effective as long as all parties involved cooperation. >> reporter: yeah, well, it's extremely weighty because what happens from here on out, bill, and kelly, is that when the u.s.

government sees an institution doing any kind of trade with north korea, this makes explicit that under u.s. law, they can be visited by u.s. representatives and be told if they continue this activity, they will be sanctioned, they will be cut out of the international financial system by virtue of the fact they're not going to be allowed to use dollars that's going to be incredibly difficult for them so i think these are very, very weighty. it makes explicit what they have been threatening to do, and could truly have impact provided there are banks, depends, large banks, obviously, want to stay involved in the world financial system and continue to use the dollar smaller banks are the bigger question if they don't have any need to work in dollars, will they necessarily be affected? >> let's bring in jimmy as well, he's a cnbc contributor from the american enterprise institute. jimmy, what do you think the significance and actual effect

of these announcements today will be? >> let me try to take the other side of the trade, if this are significant sanctions, they're going to have a significant impact, i can't help but think that we would see more unhappiness on the part of china. if you really want -- if you believe that the key here is making china put pressure on north korea, significant pressure them you have to make it hurt for cheen thachina. the way to do that is putti sanctions not on smaller banks but big state enterprises in all sectors. that's how you go at it. you would also make it, put pressure on leadership, making it maybe ending student visas, so they couldn't send their kids to the united states those are so the real sort of pressure points. that china would complain about and retaliate. that's not the message i'm getting from china they seem -- they seem to ingin we yes what's happening now which makes me think these sanctions which now are just authority to do something, are going to be fairly toothless overall. >> michelle? >> reporter: you know, it's a

good point that jimmy raises if you you back to 2013, the 4 largest banks in china voluntarily stopped doing business with north korea. there had been a missile launch. it happened during the chinese lunar new year president xi jinping was new, he was very mad about it. they voluntarily stopped we learned this about a professor on korea we had on "power lunch" today and said at first they stuck with it, months went by and they actually went back to doing business with the north koreans. the difference now is that the u.s. can cut those banks off from the dollar system and that would be -- it's going to stick more for the large banks, the question is back to the small banks. the attitude from china, i don't think china's happy with what north korea's doing, but they've got to come up with some kind of solution, at some point, or at least make a show of trying to do something in the face of all this pressure. >> yeah, and eamon, just real quickly, the president did emphasize his gratitude to

president xi earlier today so, you know, he's expressing a warmth or some sort of gratitude there even with everything that we're saying right now. >> reporter: yeah, that's right. the president said it was a little bit unexpected that the chinese would take this step so it's clear that the united states, or at least by implication, anyway, it seems the united states wasn't necessarily sure that china was going to do this and as we've all been discussing here, the key question is whether it's real or not, whether this is being done with a wink and nod to chinese banks or whether this is going to be really enforced inside china and that only time will tell, but it remipds me a little bit of the crackdown on americans with secret accounts in switzerland. the crackdown on the swiss banking system it started with the big banks there then they moved their money to the local, regional banks anyone had a crackdown there as well. so it's a slow-moving series of steps that they take, but can be fairly inexorable. >> last word, jimmy, what were you going to say >> listen, i would rather see this than not see this i'm extraordinarily concerned as

i talk to foreign policy folks here in d.c. that we're on the path to war. so this, even if it's increme increment increment incremental, i think that's good news. >> good job. jimmy p., thank you, eamon, we'll be checking back with you. michelle, always appreciate your insi insights see you later. >> you bet. let's get to the markets for this thursday. the dow is down today. >> i didn't know that could still happen it's down 42 it's been kind of sitting there. >> let's talk about that there it is down to 22,370 john trainer from people's united wealth management new york stock exchange trader, cnbc contributor peter costa from empire executions is here with us here at post 9 rick santelli is back checking in from the cme in chicago i don't know i mean, it's not much of a move, obviously. >> no. >> we off get a day-after response from the markets a f a fed meeting of some kind and clearly the fed has signaled

they're going to start rolling back the balance sheet next month. is that what this is about >> you know what -- >> it's about time we see some minus signs? >> i think it's more about, you know, the natural course of the events is the market comes back at some point, pulls back a little bit you know, if there was going to be any kind of pullback about the fed comments yesterday, you know, about the, you know, starting to unwind those -- that massive portfolio that they have, i think the market would have reacted a lot -- would have been a much bigger drop, would have been a lot more volume. i think this is just -- you've had so many up day and haven't been really substantial up days. they've just been moves to the upside you know and it's just coming back. i don't think there's anything you really can take from it. >> john, we're coming off a nine-day win streak for the dow, not only that, it's the third time it's happened this year and this is the first time it's happened three times in a year since 1955 so, just in the way of providing context around what we've seen, is there -- can anything keep

this market down >> well, you've seen tremendous positive action in stocks across the board. what we're really excited about is that the fed made their announcement, we're starting to see a move into the financials, into some more of the economically sensitive stocks so, yes, you know, we've seen a lot of turmoil on the surface today, but the markets that are moving, the sectors that are moving, are very encouraging to us so we're very excited about the next several months in the market >> and rick, welcome back. what's your thought on -- i mean, i hesitate to ask this question because i remember asking you in june or july whether you thought we'd seen the low yields for the year. we thought we had at that time, but we hadn't. but now with the fed being a little more aggressive, do you think that's it? >> reporter: well, i think when you ask, we had been past what had been the low i never thought you were going to get rich buying anywhere near 2% looking for lower yields.

i think what we discussed many times was that the next big move would be to the upside and i think that's what we're seeing i really do think the market's at a nice equilibrium here around it 227. that's where we settled 2015 i don't see surprises out there. as a matter of fact, i think other central bank are now going to make the difference if you look at some of the big moves treasury's had with respect to fed policy, it was mostly when we were doing things on our own i think at this point, it's going to be in reverse while we are doing things owen o on our own, there's lots of liquidity pouring into the system, stimulus is fundable upside, lot of sideways. somebody else, whether it's the bank of england, mario draghi, that's a long shot, bank of japan is a real long shot. until you get another central bank moving in the direction to remove some of what they've given the marketplace, i think we're looking as steady as she goes

>> all right we'v we've been crowded out time wise we must move on. gentlemen, thank you all john traynor, peter costa, rick santelli. the s.e.c. as we mentioned earlier was also breached. we'll have more on the fallout from that next plus, google parent alphabet is getting back into the phone hardware business, but not with auionightcqsiti we'll break down the deal coming up usaa to me means peace of mind. we had a power outage for five days total.

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so as you've heard the security and exchanges commission revealed it was hacked some of the information could have been used for insider trading purposes let's talk about it, brad bondi from cahill gordon and ryan dell, former counsel at the s.e.c. brian seely, cyber security expert, adviser to john mcafee we should point out, brian, you're a self-proclaimed ethical hacker as well you know what you speak here brad bondi, are you surprised at the hack, how extensive do you fear it is >> i'm very surprised and what we're talking here is the part of the edgar database thats t s equivalent of ft. knox sensitive public company information that's on edgar before it's released public. so what happened here is the equivalent of a hacker going into ft. knox and stealing gold wars a bars and trading on the information.

i'm very surprised about what happened here. tl 5,700 companies that file with edgar so this potentially could have a very large impact on those companies. it's a question, though, of what information was sought, and for how long. >> and brian, i thought it was interesting you say here the chances are the s.e.c. isn't telling the public how bad it is because they don't know how bad it is. what do you mean absolutely. >> the opm breach, they discovered it by accident 18 months late when there was a sales dem know running a piece of software. no one knows how big it is target, home depot, had to go to outside experts for weeks to collect it all they don't know how bad it is, so i think they're being prudent in this case it's worse than gold bars. they're -- >> brian, are you surprised that they were able to be hacked into the edgar system >> honestly, no, not many things surprise me anymore. everyone, especially these

government organizations, are using architecture that's five, ten years behind the curve, and it has to go through leadership and committees, and it doesn't make any sense because after the firewall, there's nothing there. there's no intrusion detection, there's no a.i., there's no realtime monitoring, which is what i've just been working with mgt and john mcafee on for, like, a year we're releasing a product called sentinel that does this, alerts your people if anything goes wrong, and these guys don't have it >> bradley, i'm wondering, because it came up this morning, when i asked, you know, okay, this all could be traced and apparently, you know, we find the bad guys and they try to fix it up, but it was -- what if they are transacting in bitcoin or some other type of untraceable cryptocurrency, in this day and age, is it more difficult with this type of hack to track down the perpetrators and put an end to it or no >> the s.e.c. does have experience, kelly, in tracking down hackersi like this, in 200 the s.e.c. brought what was then

a very shovel case against an eastern european hacker who hacked into thompson financial and stole press releases before they were released from the public able to track down the hack r based in eastern europe. they have the tools to do so it is difficult, though, as brian will tell you, to trace exactly where those hackers hacked into the system, what information they stole, and what trades that they made. and it's going to take a while, i think, for the s.e.c. to piece through and determine, really, the impact here of these hacks but they do have the tools and they do have the legal arsenal to do so to bring these people to justice >> all right boy, i wish we had more time it this is such an important topic, but we have to move on. we were squeezed at by the treasury north korea sanctions gentlemen, thank you, appreciate it very much. >> thank you, thanks, guys. all right. coming up on the half hour, time for the cnbc news update with sue herera.

>> hi, guys, here's what's happening at this hour, everyone a delicate operation under way in mexico city to reach at least five children that are believed trapped in the ruins of thei school following this week's earthquake rescuers were able to get a cell phone to the children, and are communicating with them by texting. the ntsb says new jersey transit failed to properly screen an engineer involved in last year's fatal train derailment if agency protocol had been followed, the engineer should have been tested for sleep apnea which is believed to have contributed to that accident. lilian betancourt, the world's richest woman, has died. french heiress to the l'oreal fortune worth $42 billion at the time of her death. the title now passes on to an american, alice walton, heir to the walmart fortune. tropical storm jose churning up high surf along the coast of new england as it makes its way north. jose is southeast of nantucket

with sustained winds at 60 miles an hour. you're up to date. see you in an hour back to you, kelly >> thank you very much, sue herera hello, again. >> how you >> i'm on the floor with steve grasso. >> book ended the markets. >> much better tone of the markets actually than what we're seeing now what do you make of that >> i think people are digesting. we had the -- we went from watching everything but the fed to now myopic on the fed and the unwind and we got past the north korea for a while. couple of weeks ago. those fire and fury statements and now we're back on focused on the what-ifs in the marketplace, isn't this a great time to lock in profits so many days of record high. >> that's exactly what i was going to say, coming off a nine-day win streak, we're up 14 of the last 16 you don't get streaks like that often so this is not that serious in that context. down 38. >> sure. it's almost like when you go to the casino and keep betting on

the same number at the roulette table, eventually it's got to come out whether you look at red or black, eventually you got to have a red day i think that the market is incredibly resilient hanging in there with everything that we've talked about, everything we talk about on a daily basis. >> yeah. >> talking at the unwind could be an unwind inperpetuity realisty, could talk about over 30 years of this unwind if it goes slow or never happening i think people are a little afraid they're taking some chips off the table. the things that perform, the financials, energy, things like that people are rotating into figuring they rolled the winners long enough. let's take a little bit -- >> try some of the others. certainly seeing that with apache in particular steve, thank you. >> thank you very much have a good day. >> steve grasso. you as well. bill we have breaking news regarding facebook and ads they ran during the election. deerdr bosa, what's going on

>> facebook tells cnbc it's going to give congress copies o reverses a previous decision by the company. the company had previously shown some the ads to capitol hill investigators but it took back copies before they could be studied carefully. now we are awaiting a facebook live by chief executive mark k zuckerbe zuckerberg, expected to announce the decision citing an extensive legal and policy review. bill and kelly, we're going to be watching closely and will bring you sound and news as we get it. >> all right very good, deerdra, thank you. that's a major development in that >> they're going to have to do more to offset -- it's just the drum beat is growing in terms of whether facebook is doing more harm than good >> well, i think it leads to regulation in -- >> that's exactly right. >> right it has to. >> propose more universal basic incomes or, you know, new headquarters in washington or something. >> yep. apple shares lower after some lackluster reviews for this

new iphone 8, not the x, the 8 could this derail apple's big run? we're going to talk about that coming up. and six months or even longer that's lounge most of puerto rico may be without power in the wake of hurricane maria. we'll go live to the island for a report next. ♪

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the wrath of hurricane maria could leave puerto rico powerless for months nbc news correspondent tammy leitner joins us from san juan with the very latest tammy? >> reporter: hey, bill and kelly, we have not seen this muchdevastation in such a smal area this house behind me is completely destroyed and so is the house beyond it and the house beyond it and the house across the street. now, if we can swing around and show you down this street there, you see that, the main street here is completely flooded there'sthree cars under water. now, if we coan come on back ths way, guys, i want to show you this line here that's formed in the neighborhood take a look at this. all these people are in line for one reason bread. >> ah, shoot boy. i can't imagine what these

people are going through, when you consider that initially just after the hurricane had gone through, they said that 100% of the population was without power. >> not only that, but there's a certain amount of adrenaline, once you're just in survivor mode, when the reality sets in, i think we have tammy back. >> yep you back >> becomes much more difficult. >> reporter: yeah, guys, i'm still here as i was saying this line here is because this is the only bakery in town that's still able to make bread. this woman's owned this for 37 year her bakery was completely destroyed. this is the owner right here anna and even though her bakery was completely destroyed, there are two ovens that run on gas. she's still able to bake bread here's the catch, guy. she used to sell 20 pounds of bread every single day to one customer that customer came in and said i will buy 200 pounds of bread every day from you but can't sell to any of the local people in the neighborhood. anna just lost her house it was completely destroyed. she told this customer offering to buy 200 pounds of bread from her a day, said, no, she wouldn't do it, said her bread

is for the people in this neighborhood guys, this is how people are going to get through this. here in puerto rico, this -- >> oh. yep. boy. i'm surprised we're getting any pictures, anything out of there right now with all the challenges that's a great story people do come together. >> oh, yeah. >> i've been through a few earthquakes in my time the neighbors help each other out. >> we appreciate tammany we'll continue to try to get back and follow along. tricky with the communications and power and everything else. 20 minutes left. we'll go to the break. the dow down 32 points looks like we'll be breaking a string of records. i think it was seven in a row after that nine-day gain, nine consecutive days up, seven of those were at all-time highs. and google parent alphabet getting back into the phone-making game. sort of. we'll break down the company's deal with htc when we come back.

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it's official. google's striking a billion-dollar agreement with consumer electronics company htc. deirdre bosa has the details for us deirdre? >> reporter: hey, kelly, bill, the company picked up htc's pixel division, half of its 4,000-person rnd team. a deal worth $1.1 billion. in a blog post, "still early days for google's hardware business we're focused on building our core capability and we're investing for the long run." this comes just days ahead of their october 4th launch of sec-generation products. its current suite of gadgets include these here, the pixel smartphone, google home, daydream view among others guys, this is not the first time google has bet on hardware and its record isn't great in 2012, it bought motorola for $12.5 billion. back in 2012 less than two years later google

sold it to le snrks erklenovo nest 2, google has yet to be prove it can be successful at selling devices. analysts say this could be different. the deal is smaller. not pick up manufacturing facility remember htc already makes the pixel. tighter control over phone hardware and software at a time web gadgets have become critical to bigger pushes like a.i., augmented reality, digital assistance increasing sales of its own pixel phone even with 2,000 of htc's pixel employees is no small task the pixel is still very small in terms of the total smartphone market with about half a million units estimated shipped during the first quarter. guys, back over to you >> why don't they just buy blackberry >> i know. >> right got a whole line right there to go. >> htc's already making the pixel. probably figured -- >> right, whatever. >> thank you, deirdre. >> thank you, deirdre.

15 minute s, 16 minutes to go dow down 50 points right now meantime the s&p down, look at that, about six, quarter percent decline for those two. the russell barely lower speaking of smartphones, tomorrow is the official release date for apple's iphone 8 and 8 plus but are the new devices worth the hype eaonave a bull and a br whether you should be buying the phone and/or the stock coming up. ife, life, life ♪ ♪ top speed fifty knots life on the caribbean seas ♪ ♪ it's a champagne and models potpourri ♪ ♪ on my yacht made of cuban mahogany, ♪ ♪ gany, gany, gany, gany ♪ watch this don't get mad (bell mnemonic) get e*trade and get invested has gotten to know our business so well that is feels like he's a part of our team. with one phone call, he sets me up with tailored products and services.

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few of the movers are minus signs across the board for the major averages today here are other movers today. shares of petroleum trading higher, anadarko, a repurchase program. the company says the authorization extends through the end of next year, pbut till target $1 billion by the buybacks by the end of this year the stock up 7.5% right now. nvidia falling on the back of the reports that tesla is working with advanced micro devices on an a.i. chip for cars current tesla vehicles use the i v nvidia chips nvidia down 2.5% right now. apple's iphone 8 and 8 plus will be available starting tomorrow

but the latest phone is rolling out to just lukewarm reviews and there are concerns that some consumers are just going to wait for the iphone x >> shiares of apple down 5% sinc the new iphones were revealed last week. joining us, ben dunbar, investment adviser from gerber kawasaki welcome to you both. ben, you're bullish on apple what do you make of the price declines we've seen? >> well, apple's run up over po 30% this year. when a stock runs up, it's a very normal thing do it's not a problem when you look at long-term investment wise. >> tom, what's your problem with apple right now? >> basically, they have two issues, near-term issue, lo longer-term issue. near term, not innovation of new phones argument can be made other manufacturers are doing facial recognition. while this could be a catalyst for usage of augmented reality,

consumers can already use other devices to use reality. the longer-term issue is when the smartphone is no longer the center of the universe when it comes to internet and consumer usage and consumer internet of things advances upon us, an argument can be made that amazon, google and others are better positioned for the future because they're less reliant on the smartphone >> i wonder if the iphone 6 is the high water mark for apple, if it's going to be the toyota camry of smartphones i think they're still selling it a lot of people say why buy the 8, the 6 is basically the same, maybe you can't afford the x, don't want to spend that kind of money on the phofor what it's offering. >> the 8 isn't for everybody reviewing the phones, the 8 is for my 60-year-old dad who has no idea what facial recognition technology is and he's scared. he's still going to buy the phone, still a high-priced phone. that's going to be the new standard. >> ben >> yep >> can't he buy the 6?

why does he have to buy the 8? >> it's a faster processing phone, when apple continues to make new updates, your phone slows down try using an iphone 4, iphone 5 right now, it doesn't work very well as apple continues to upgrade their software, the older phones don't work as well so that's why, you know, you need to have a phone that you know is guaranteed, it's going to work. a lot of older people that aren't necessarily the tech people, still want to buy those phones. >> tom, i would remind you, as if you need reminding, plenty of naysayers have come and gone regarding apple and done just fine especially this year, so what's to keep them from just continuing the juggernaut? >> sure, so in a near-term basis, it's possible the new lineup will positively affect their results. look at the future, amazon is doing with alexa, google with google home and microsoft with cortana, they're positioning themselves for the future. in the future i think when all devices are connected to the

internet, the smartphone is going to be a lot less important. to the extent that apple is essentially placing all its best in the smartphone, i think the future could be more challenging. >> i would disagree with that, you know, apple has made the focus on the phone, obviously they're focusing on what's very successful they have a billion phones out there. they have the home pod they have apple tv which is going to be, you know, the center of our home system. and people are buying those products yes, it's a smaller portion when they sell hundreds of millions of iphones but they are taking the necessary steps to put them in position and people have been talking about samsung, google, strongly in this area for years and still people have their iphones. they have their ipads. they have their computers. and we still have not seen any change there >> all right >> i'm just thinking about ben's 60-year-old father he's my age. and if -- which doesn't make him a bad person, by the way but i don't know if he's going to notice a difference in speed between a 6 and 8, frankly, depending what he needs it for. >> when updates come, i kbarnt you, if you go try to use an

iphone 5 right now with the most recent software update, you will notice a difference, bill. i'm confident. >> it all right. >> we might ask you to bring your dad back. >> we'll bring him in. we'll bring him in. >> i want to hear what he says all right. thanks, guys. >> thank you >> thanks, guys. >> i heard art cashin whispering to you as we were introducing this segment. >> yes, that's right, he walked by to say we have a billion to sell on the bell, would push us to minus 80 on the dow if they don't pair off today we had big numbers on the buy and sell -- >> the last couple days. >> they're not necessarily showing up in terms of further movement we've already seen a little bit of a dip lower with the dow down 53 into the close. >> looks like no record today, but we'll come back with the closing countdown and item pose what happen today in a moment here. then after the bell, a key player in the 1986 tax reform debate will weigh on what needs to be done to get tax reform passed now keep it here you're watching cnbc, first in business worldwide

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♪ (bell rings) ♪ (screeching tires) (bell rings) okay about 3 1/2 minutes left here. look at this, a minus sign for the dow. going into the close let's put this in perspective, shall we nine consecutive up days i think. we're going to show you a ten-day chart of the dow to

begin with here. nine consecutive up days and seven of those were all-time highs. and time finally the fire is oun this day after the fed meeting but as peter costa was pointing out, you know, this is not to suggest the market is responding to the fed we're due for a pullback of some kind of that many days, but the other -- we've been talking about the symmetry between the dow and the volatility index and how the dow had set 42 records this year, and the vix dipped below ten 42 times this year well, now this symmetry is shot. the dow is negative today, but the vix is below ten for the 43rd time this year. for those of you at home keeping score here the day after the fed, we see a bit of a change for the ten year it had risen, in fact, we talk about the two year going to a yield that we hadn't seen since november of 2008, but today, a bit of a pullback. little correction there.

we're at 228 there on the ten year and the dollar index which moved a little higher yesterday has come back a little bit today but nothing too mementos gold continues lower, though, that is a four-week low for the precious metal and there are those who feel like maybe that's going to have to go higher if the fed is going to start raising rates, but you never know i don't know bob pisani, we'll see. >> strange day i thought that we had repeal down days. i don't think they were -- >> we were joking about that as well >> i'll tell you -- >> it's been a while. >> -- why this is sort of interesting ining on a day with decisively above 50, that two weeks ago would have gotten a big rally in energy stocks yet we didn't see it energy stocks are generally flat to down. even with that big buyback that was announced, we're not positive on the energy sector right now. semiconductors have been a major leader for the last month, i emphasize that today that we've seen this tremendous market rotation they're not really doing much.

these are fractional declines here materials have had a great couple weeks they're not doing anything there's some notable weakness in some of the consumer staples name we see kroger, of course, know what's been going on with the food name. even some of the clorox, other companies, campbell, other food companies, were notably weak today overall. let's say the rally kind of ran out of steam at this point even something that could normally get people going like oil didn't do it today. >> by the way, speaking of grocery, this deal over at albertson's, one of the biggest grocery chains in the country, number two, as a matter of fact, buying plated, the meal kit service based in new york. they're going to provide an infrastructure for plated. they're going to put some of the meal kits in the store and use their trucks to deliver the meals. i think that's huge. and i think blue apron is going to have to move in with some grocery chain to remain competitive in that very, very competitive field. >> that's a very good way to look at it what these companies need basically is an angel investor to come in on top of the already

existing structure that they have, to bring them to the next level. otherwise they simply are going to go away, ultimately >> all right look at that minus signs today for the dow. the s&p down seven points, right above that key 2,500 mark. stay tuned now for the second hour of "the closing bell" with kelly evans and company. see you tomorrow, kell thank you, bill. welcome to "the closing bell", everybody, i'm kelly evans markets are taking a pause today after rapid runs the dow jones industrial average falling 23 points on the bell, 22,362 the dow off a nine-day win streak today it sheds a quarter of 1% the biggest decliners procter & gamble and apple s&p 500 down 7 1/2 point to on the nose at 2,500.

apache, marathon, biggest gainers in that index today. the nasdaq down half a percent for its part the worst performer today. down to 6,4 it 2 russell 2000 down a point. up for a vote next week, days before the september 30th deadline to pass new health care legislation. coming up cleveland clinic ceo toby cosgrove will weigh in on the bill and nikki haley set to give a press briefing on the trump administration's latest round of sanctions on north korea we'll bring that to you live as soon as it begins, we anticipate half past the hour joining we cnbc senior markets commentator michael santoli. steve stephanie link. we have two michaels might have to go last names here or something michael one, you know, this is not much of a pause. given how rapid a run-up we've

seen. >> not really, in fact, the s&p you mentioned is vigt right on 0 remember it closed last friday exactly that level you're flat for the week this market has twereated flat s the new down instead of pullbacks, you have periods where it goes sideways when we got to 2,400 in the s&p, you did go almost along that line for quite a while it defined the upper end of a range for a while, a narrow range. finding its way to stay supportive tech's down, banks lot of laggard stocks year to date have been picking up going into this. >> in fact, regional banks, see if they're positive on the close, if they were, it would be the fifth straight gain. that's the first streak like that we've seen since february when they were on a tear as a trump euphoria trade if you want to call it that. >> absolutely. again, it's all about rotation we talk about it pretty much every day, right that's what's propping the market, keeping it higher. so it's been financials, it's been energy, it's been industrials. i don't think that the narrative from yesterday from the fed

changes any of that, i think what was the biggest surprise is that rates didn't really take off. but i think the global rate picture is still going to have an impact on our rates even if they inch higher because of the runoff, because they are going to probably go in december then again next year a couple times, i still thank that the global picture kind of dampens how high the rates are going to go that said, financials can do well in that environment >> yeah. >> anyone you're talking about deregulation then of course talking about tax. they are big beneficiaries if we get tax reform. >> i thought it was interesting ge was up one of the best performers in the dow today. >> within industrials, saw a rotation away from machinery which has been kind of the ugly bait that names within industrials. into more of the kind of the multi-line industrials honeywell also did well, 3m did well so we'll see if that kind of changes i think people have been kind of avoiding those stocks because they don't have the leverage that the machinery names have. you know what, if energy is

going to go up, which i do think it will, you're still going to want to have lefter erelefered . >> the laggards gets picked up the bottom eight performers in the dow year to date are all up except for one this week and month. essentially you're going for the losers. >> trying to come up with a clever name for that go ahead. >> you're seeing a total row case from the sexy names and names that have driven the markets for so long. 50% of the s&p 500 names trading at a 10% or lower historical p/e value. nobody knows it. >> you're saying they're cheap. >> 50% of the names in the s&p 500 are 10% or lower and 25% of the names are lower than par on historical p/e values. nobody thoughs it. >> i'm a sort of following. >> you're saying they're cheap. >> the markets are cheap i think the rotation is happening right now from these big names that are carrying it >> this has been the debate all year people would say do you go with momentum names

i don't like that distinction, but we've talked so much about how well the big cap tech stocks have down, i mean, are you saying that that's kind of history now? >> i think that rotation is happening right now. it's such an overcrowded index-driven market, and you hear this all the time but we're going back to active management. if you look at the active -- >> are you in active management? >> no. we allocate asset. >> i'm really hoping you're right. >> i mean, look, it's not -- do you think it's true that if the market conditions change, you can actually -- because the whole idea that the correlations are not all going to be 100% and so, you know, things like that -- is that kind of the result of the end of the fed's whole qe thing >> if you have sbbetter growth,a tighter cycle even if it's not tightening, i think you're going to see a rotation away from growth momentum into value and better stock picking or just stock picking in general instead of kind of this broad etf

passive situation that's happening. so, i mean, i'm hopeful. we'll see. i am encouraged at least as kind of a core manager with a value bias, i like to see that some of the value stocks are starting to get appreciated at this point. and value sectors. we'll see if it lasts, though, kelly. people love health care and technology and -- >> you're still seeing earnings growth i mean, this is the best earnings we've had since 2014. sales and revenue growth is up at the highest level since 2011. people forget that >> what were you going to say, mike >> that is sftrue the big question, this goes out to a quarter, three quarters from now, we've had this kind of mid-cycle rebound in profits right? we've had these before usually they don't really last two years. they last a few quarters so, the quae estion is as it decelerates to a flat line year over year earnings growth into next year, can something come along to kick start it from there? doesn't mean it's over it means it gets a little sketchier. maybe that means stock picking gets more important. >> not just that, the wall of

worry we talked about, korea proxy etf. on that note, treasury secretary steve mnuchin was giving a news conference last hour touching on the new north korea sanctions. let's bring in eamon javers with thekelly, that's right. president and treasury secretary signaling today new cooperation with china in terms of north yee. treasury secretary rolling out the new sanctions. some details underpinning them the treasury secretary also saying he want this be a global effort here's what he said earlier today. >> we call on all countries around the world to join us by cutting off all trade and financial ties with north korea in order to achieve a denuclearized korean peninsula as president trump stated in his speech to the u.n. general assembly, it is time for all nations to work together to isolate the kim regime until it ceases its hostile behavior. >> reporter: so here's some of the details underneath those

sanctions. the treasury secretary laying out some specifics including the idea that this is going to target shipping and trade networks, and it's going to feature a 180-day ban on vessels and aircraft that visited north korea from visiting the united states also targeting industries including construction, energy, textiles, information technology, mining, and manufacturing. that is large group. it also gives the treasury department authority to impose sanction on any foreign financial institution that's conducting business with north korea. then in terms of financial institutions, themselves, it also says it's got the ability to block funds originating from, destined for, or passing through accounts linked to north korea that's the key here with these sanctions, kelly, when the united states designates a foreign bank, it prohibits that bank really from dealing with any u.s. bank, any transaction in this computerizeded globalized economy that we've gotten now, that makes it very hard for them to do business

with any countries around the world as well, many countries say their banks won't do business with anyone designated by the u.s that's a powerful weapon here in the treasury department now very much signaling they're prepared to use it. >> all right eamon, thank you stephanie, i mean, part of this as well is what impact it will have on china. some of those banks that might have been doing with north korea, how the chinese react to it china was downgraded overnight by s&p, to follow fitch and moody's. is that the way you'd look at sort of the initial impact on this from a market point of view or how are you thinking about it >> i think it's amazing we didn't have a market reaction to when this came out, but, i think it's because that the administration's been very visible, very vocal about taking action in some way, shape or form and i think to do it this way, versus, you know, more violent way, is kind of a little bit of a relief. we'll have to see how it all plays out, but i think it's kind of like what we were expecting i think that's why you didn't see the reaction. >> what about you? >> the communication has been that, and i think we're seeing a

synchronized global growth, and so people are less concerned about certain small political issues, and they're looking more at the long term with the global growth bouncing back. >> i was going to say, it's been decades that the story of financial sanctions, trade sanctions, on north korea, has been the mechanism so to the market, there's nothing new about it of course, it's just a trivial economic factor, in terms of trade back and forth. >> that's what's so interesting, the administration, of course, they're going to do this but come forward and say this is an aggressive step. >> as aggressive as you can be given the fact there's not a lot of activity to cut off. >> exactly the implication, too, by the market treating it so blase, is there a likelihood of a good outcome or difficult to even price in -- >> i think -- there's a specific end point to where the market is projecting. >> yeah. >> it's just kind of, like, well, we've seen this before we're not going to overreact. in other nefarious news, more on facebook's russian ad story. mark zuckerberg taking part in a facebook live event right now i belief deirdre bosa has been following

along. what do you see, deirdre >> reporter: that's right. it wrapped up not long ago this was zuckerberg's first day back from parental leave, announced the company's decision to give congress copy of 3,000 political ads bought through russian accounts reversing a previous decision. zuckerberg said he doesn't want anyone to use their tools to undermine democracy and he's act ifly working with the government and that this morning he told his team to provide the russian-linked ads to congress here's a part of that facebook live where zuckerberg talks about new challenges and a new world. >> we are in a new world it is a new challenge for internet communities to have to deal with nation states attempting to subvert elections. but if that's what we must do, then we're committed to rising to the occasion. our sophistication in handling these threats is growing and improving quickly. we'll continue working with the government to understand the full ex-tempt of russian interference, and we will do our part >> reporter: now, he outlined

some nine steps that facebook is going to take to protect election integrity and ended the facebook live by reminding viewers of the, quote, more straightforward and larger ways face b facebook played a role in elections. kelly? >> deirdre, thank you. my yes to you guys, facebook down, has it been weaker because of these events specifically, because of the end of the tech trade we're talking about or are the two things themselves related. >> i think those two things are vaguely related at least i don't think the market is reacting in a radical sense. the sense, these were suppose today be magical earning machines, platforms you never had to touch, interfere with it's a matter of you have to intervene with humans, filter ads, know who's buying and -- >> they're highhiring a ton of people. >> the faang trade has taken a side step, back step, to

semiconductor stocks, nvidia, the love affair the market is having with them i personally think there's vag in t value in the faang names a combination. stay patient and wait for earnings and to mike's point, earnings are going to be quite good especially with the faan kbrks let the stocks come in. >> funny how the market is rugged off so many things in the recent two, three weeks, whether it's geopolitical, earnings. anything like that seeing people talk more about energy, more about global growth, more about the fed and fell out of favor for a little while. earnings are going to be strong again. you could see it pull back some quha. >> you're talking about facebook. >> i think in general, faangs, facebook everything is going to be strong. >> by the way, netflix has always been a misfit in faang in terms of its business -- it's outperformed the other ones in the last month by ten percentage points >> is that because it's the one that doesn't have regulatory risk

>> well, it's a different animal i mean, consumers choose to buy the product. it's got some kind of a story that's beyond, you know, this dominant platform that you must deal with. so perhaps that's why. >> what's the next netflix that's the question. can they compete with the next person that comes out or next fern that comes out. >> feels like every time a company -- reid of fanman said it's easy to launch a tv channel, as launching a blog >> either one of home' might have said that >> the netflix ceo i believe in his last quarterly letter wrote that, acknowledging, as much as people say it's a huge competition, there's huge fragmentation. spending $7 billion next year to try to disrupt that. >> and protection. >> absolutely. thank you, everybody stephanie link, michael bapis, santoli is sticking around. last time tax reform was at hand was in 1986 former north dakota senator byron dorgan was part of that

effort up next, he has advice for the current batch of senate reformers to ensure a bill passes this year. a new report says u.s. home prices have climbed to pre-dry s crisis levels. are those level more sustainable than they were back then that's coming up we always want to hear from you. reach out to the show. tell us your thoughts via twitter, facebook we were talking about, or send us an old-fashioned e-mail, closingbell@nbcuni.com you're watching cnbc first in business worldwide. what is the power of pacific? it's life insurance and retirement solutions to help you reach your goals.

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nbc and the with th"wall stt journal" out with a poll with a focus on tax reform and shows 42% of americans polled say taxes shouldn't be cut at all right now. how might this factor into negotiations as republicans are set to release details of their tax reform proposal next week? joining us is former senator byron dorgan, former member of the house ways & means committee. when the 1986 tax reform legislation was passed, and it's worth noting he was once the north dakota state tax commissioner so you know all the ins and outs of this. thank you for joining us. >> thank you very much happy to do it >> do you think -- this is kind of my overarching question, that the appetite among the public for tax cuts today is not what it was 30 years ago? 40 years -- 30 years ago >> well, there's certainly an appetite for tax reform.

almost everybody thinks that the tax code is way too complicated and it's not fair in many cases. so, most everybody says, yes, let's reform this. on the issue of tax cuts, you know, i was saying in 1986, president reagan said let's make this revenue neutral, let's not blow a hole in the deficit but let's reform the system and make it revenue neutral. we can force those not paying their fair share to pay more and, therefore, others will be payable to pay less. that's what we did in 1986 >> and what gets in the way, what variety of things get in the way, of something similar happening right now? it seems as if revenue neutral tax reform, it seems as if kind of eat your vegetables, you get no dessert if you're a politician >> yeah, but so here's -- we did tax reform that was revenue neutral, we also did tax reform in a way that was bipartisan this is very unusual so, ronald reagan campaigned on tax reform he wanted to get the top

individual rate down to around 28%, which is what we did. he had the treasury department come up with skeleton plan and then bradley and gephardt came up with their plans then you had packwood, very strong committee chairman. one other element, we had a treasury secretary, jim baker, who i'm sure you remember, james baker, he actually came and was invited to sit in the closed-door markup of the house ways & means committee when we started writing the bill think of that. a treasury secretary from the republican administration sitting in a democratic committee room that probably wouldn't happen today. almost certainly wouldn't happen today. but it was a demonstration of the need for it to be bipartisan >> i just remember the profile, i think i read of him a while back, talks, he's out there hunting, this is james baker, and got these bugs crawling over his face and just he doesn't move a muscle. i mean, that -- that impressed me and i was already impressed anyway, you said something important about ronald reagan's plane, said he campaigned on it.

president trump did not campaign on tax cuts or tax reform. that came up after he was elected. >> i think that's true there's a lot of discussion now about tax cuts look, we've been at war for more than 14 years, haven't paid for a penny of t we put it all on the debt. we have very big deficits, yearly deficits of $700 billion a year almost. $20 trillion in kit dedebt i'm not interested in any seeing if we can figure out everybody in the aggregate to sendless money to deal with what we spend these days by the same token, i think there are a lot of americans that will get a tax cut if we have others who aren't paying their share to start paying their share that's what tax reform really should be about in my judgement. >> the interesting thing about this, though, doing the tax reform piece sounds very, very hard, whereas doing some sort of basic tax cut political seems very easy. so, you know, the thing that people seem to want more of is not the thing that looks like they're going to get. >> i understand, but reforming the tax code is so important to reestablish some confidence in

the code i mean, it's not a secret that people read from time to time and see that some very big interests are stashing money d and, you know, foreign tax havens, not paying tack ining t corporate inversions where they're marrying up with companies overseas to avoid paying u.s. taxes. so, or, you know, a whole range of other kinds of things that are happening. >> yeah. >> i think the american people really say, let's fix this we're willing to pay our fair share. but let's fix it >> well, the -- we can put that full screen back up we were just showing but among those polled, only 4% said they thought that business taxes should be cut this question is what should congress do, cut business taxes 4% say so. individual, 24%. now 28% say they should cut. my point is this idea of cutting the business tax is not reson e resonating, even if companies will tell you until they're blue in the face that something needs to be done about it. so, you know, i don't know, maybe in retrospect there's a

sense of, oh, you know, we're glad you did that. the president's got an interesting sell gary cohn, i mean, this one, i wonder if they should drop it, go to infrastructure and really push that one hard given the relationship with the democrats right now. >> well, you're right, it is a heavy lift, no question about that we should do something on business taxes look, we have one of the highest rates in the world, but that's not what businesses pay. on average, the studies i've seen show they pay between 14% and 19%. we're right about in the middle. we should do something to fix all of that. let's get these rates where they should be. let's get the burden where it should be. and it may be that if we do the right thing, we'll get some economic growth out of it as well >> wouldn't that be nice senator, thank you so much for joining us. >> thank you >> senator byron dorgan. now, the rescue efforts do continue in mexico after an earthquake rocked mexico city on tuesday. up next, we'll take a look at the earthquake early warning system for the united states stay with us

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and one for each of you too! that one's actually yours. that one. regardless, we're stuck with the bill. to many, words are the most valuable currency. last i checked, stores don't take "words." some do. not everyone can be the poetic voice of a generation. i know, right? such a burden. the bank of america mobile banking app. the fast, secure and simple way to send money. at least 245 people have died as a result of tuesday's earthquake in mexico the devastation we have seen there leaving many to wonder how prepared the u.s. could be for a natural disaster like that jane wells joins us from los angeles with more jane >> reporter: hey, kelly, it's a matter of when, not if we haven't had a big quake since 1994 in northridge, and the u.s. geological survey is predicting that the bay area will have a major quake at some point in the next 30 years, but only one in ten californians has quake insurance, then, of course,

something like mexico city happens, two big quakes in a week a strong quake off japan yesterday. locals start paying attention. do you have earthquake insurance? >> yes, but i just got it. >> way too expensive i can't afford it. >> i'm thinking of etch gven ge a system to store water. it's just -- the buzz is you need to be prepared. i want to be prepared. >> reporter: now, the biggest of the big ones could happen along the san andreas fault, which runs through much of the state an 8.0-plus quake could tear the fault open watch at the animation from the usgs if it happened in the south and start spreading. thousands have been built fortifying bridges, seismologist, lucy jones, says it's not enough. >> infrastructure especially, who thinks about the pipes in the ground, we don't want to spend money on that, it's out of sight, out of mind and yet the resilience of those structures is the future of most communities. >> reporter: now, looking at the san andreas from the air,

they've. working on a much more economical solution and early warning system, it costs about $40 million, even a few seconds could save lives it would come through your cell phone. it's only about half done. now congress is threatening to cut off the rest of the payment. they had one, kelly, in mexico city you could hear the sirens bl blaring for 20 seconds before the shaking started. that saves lives. >> that's what -- jane, it was interesting this a guest who sae are more of a financial hit, actually, than the death toll. i thought that was interesting building codes continue to be updated. i was thinking about it with the hurricane in miami, a lot of buildings survived because they had better infrastructure. for the type of thing you're describing, do you think that would maybe alleviate some of the worst damage >> reporter: not the damage, it would save lives because it allows people to get out into a safe place but dr. lucy jones has talked about that and she says we've done a lot to prepare for an earthquake, we're not doing a lot to prepare for what happens

after the earthquake to restore communications and infrastructure and get water that sort of thing cities are, you know, fortifying bridges and everything what do you do to get cell service back up afterwards >> jane, someone you talked to there said no way, i don't have earthquake insurance, it's way too expensive. do you have a sense of how expensive it is for a homeowner? >> reporter: oh, yeah. yes. >> firsthand >> reporter: it is the most expensive insurance i pay. and it has a very high deductible now, you can get lower-cost payments, but your deductible could be as much as 25% of the value of your home not the land, but the structure. so you're really insuring against a total loss here in california, guys, i would argue some people don't have that much equity in their houses and what could happen, again, is what happened in 94, a lot of people walk eed away. >> good point, jane. in terms of the quality of the reporting, not the implications. thank you for joining us. >> reporter: you bet. >> jane wells. time for a cnbc news update,

let's get to sue herera. >> hi, kelly, jane was talking about cell service, well, puerto rico remains without power and almost no cell service after hurricane maria slammed into that island with maximum sustained winds over 115 miles per hour video from san juan shows downed trees, broken windows and debris scattered all over the streets a tenth patient from a florida nursing home that lost power during hurricane irma has died the facility went without air-conditioning for three days following that storm which led to extreme heat. officials have suspended the facility's license and they have opened a criminal investigation. equifax admit it mistakely sent victims of its security breach to a phising site misdirected twitter users to the fake site. well, it may be the last day of summer, but in the sierra nevada mountains it's starting to look a lot like winter. the first snow of the season fell on donner summit, which is on the california/nevada line.

and given the crazy weather we've seen around the country, and around the world, i wouldn't be surprised all right. >> i'll tell you what, sue, you know what i just learned, we were out -- the acorns are falling on the roof. >> they are. >> the neighbors said, you know, that happens about once every four, five years when there's going to be an especially bad winter because they're for the squirrels and the chipmunks to fatten up. >> that's exactly -- that's what i'm seeing at my house as well and they say portends a very early winter so, we'll see. >> oh, early would be better than severe. >> absolutely. i'll take that any day >> all right we'll see. thank you, sue. >> you got it. >> i learned a lot about acorns. >> do the trees provide for the squirrels. >> i guess isn't that crazy like, the most amazing thing i've ever -- no nukes, that's what president trump is aiming for in north korea with the latest round of sanctions they're focused on cut off funding for the country's nuclear missile program. we'll discuss how effective these new sanctions might be next and the graham cassidy health care bill may be picking

up steam for passage in the senate but it's not winning many fans ithhetharn e al ce industry ahe ahead we'll talk to cleveland clin clinic's ceo toby cosgrove about the bill stay with us 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. has gotten to know our business so well that is feels like he's a part of our team. with one phone call, he sets me up with tailored products and services. and when my advisor is focused on my tech, i can focus on my small business. ♪ a dell advisor can help you choose the right products with powerful intel® core™ processors. ♪

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welcome back here's a look at how we finished today on wall street it was red across the board. small declines, quarter percent for the dow, s&p the nasdaq was down. dow breaking a nine-day win streak had been up 14 of 16 sessions. again, the drop of about 53 points. president trump announced tougher sanctions against north korea earlier today. aiming to cut off all funding for the country's nuclear missile program. we're expecting comments from u.n. ambassador nikki haley at the podium in the u.n. in a few moments. joining us with more, john park, director of the dhonorth korea working great, adjunct lecture ur at harvard school thank you for joining us, sir. >> good to be here. >> we were a little dismissive maybe of the impact these sanctions could have, at least financially speaking because north korea's economy is already so decimated will they have the hoped for end of, you know, kind of putting more pressure on the north korean regime to give up its nukes and stop this behavior 123. >> kelly, that's a point, what

is the goal of these measures? if it is to put that pressure, to try to halt north korea's ballistic as well as nuclear weapons development, the concern is it's too late if you look at how far advanced north korea is with these kind of capabilities and testing cycle, north korea is testing something literally it feels like every few days. these type of measures would take time. had they been implemented earlier, who knows, outcome could have been different. at this particular juncture, we're looking at the measures not having enough room to have that desired impact. >> would those measures over time not potentially bring north korean regime to the table, at least to say, look, we'll stop testing? whatever, i guess, the mark is right now of how far they've gotten to attempt not to escalate from there? >> the challenge, though, is if you look at the impact of these more th measures they take place in a marketplace. the marketplace over there you're looking at these middlemen who are the targets of these measures either trying to scare them off in terms of actually going after them or elevating the risk in

terms of doing business with north korean markets in the marketplaces higher risk means a higher payoff. >> sorry to interrupt, i believe nikki haley is about to speak at the u.n. let's listen in. >> with the president and vice president, many members of the national security team, as well as his economic team, the united states was out in full force and i think the u.n. felt it but i think it was extremely productive you look at the beginning of the week, we started with u.n. reform, you had the president and the secretary general rolling out massive reforms for the u.n. what was extraordinary was we had 130 countries that have now signed on to that reform that's over two-thirds of the general assembly which is who is going to vote on this at the end. so that was a great start to the week then you saw the president's address to the general assembly and i think it showed the strength of the united states, but it also asked the world to come together and asked all the countries to come together as we fight these rogue regimes. and mainly north korea and iran

and i think what you saw were a lot of countries responded they were very positive to the speech they appreciated how blunt and honest he was. i think that's been the overall theme from the international community this week is how straightforward he was and how refreshing it was as they heard him speak. we also, today, met with our allies, japan and south korea. obviously, a lot to talk about with north korea, and so we had good conversations with them and the president reassured, obviously, japan and south korea, but they also talked about strategies going forward for north korea. on iran, that was a topic of conversation throughout the week i think everyone was talking about the destabilizing activities that they continue to do throughout the middle east. whether it's in syria, iraq, lebanon, yemen, and the list goes on. so it is something that we will continue to talk about and continue to move forward, to make sure that we're stopping any of their reckless behavior as well.

we also co-hosted a meeting with secretary boris johnson as well as the dutch foreign minister on human rights reform and really talked about the fact it needed to be representative of its name we have a lot of bad actors on that council both the vice president and and president spoke about it in their speeches and need to see better quality countries that are on that council in order for it to be effective obviously for the united states to say on it if we don't see changes in the human rights come, we'll continue to advocate for human rights but do it on our own if we have to then the vice president attended a security council meeting yesterday on peace keeping reform we have made great progress this past several months in terms of reforming peace keeping. so that it's actually going toward a political solution, it's transparent, it's accountable, but we're also giving the troops the equipment they need and the ability to be trained in order to do their

jobs so we're just seeing smarter peacekeeping i think that all came together in the peacekeeping reform vote that we had yesterday. one of the topics that everyone had to talk about this week, all had an opinion on, was burma as we're dealing with the crisis in burma and seeing how much migration has taken place from the rohingyas going out of burma, every country is concerned. they're concerned that the military continues to be aggressive and they're concerned that the government continues to be in denial and so i think you'll continue to see the international community talk about that. i think you will only see them get more active on that as we go forward. and finally, today, the security council took a great step forward. it was a measure that i think the international community had been working on a long time. we certainly worked with our british friends on it. that was isis accountability in iraq if you look at the fact that there have been massive, mass

graves, there are have been all types of terrible conducts to women and girls in those areas, whether it's what happened with the christians, sunni, shia muslims, what we now is a part of the u.n. body that's going to be able to go in there and actually collect evidence and make sure it can be used in trial so the victims finally have their say and get their day in court at least families do if they lost loved ones. that was a big day for the security council today with that, there was obviously a lot more i think the president met with multiple countries there were lots of bilats, a lot of talk and planning and productivity, but overall we can say it was a solid week at the u.n. this week and it was highly succe successful, but with that, i'll answer any of your questions yes? >> ambassador -- >> thank you very much why do you accept this latest round of sanctions will work when sanctions have failed in

the past to north korea? >> in reference to what secretary mnuchin talked about this is pretty amazing because when you look at the sanctions we have in place, north korea is/feeling it. you can already hear of the lines at the gas stations they have, the fact they're having a severe reduction in revenues, the sanctions are working. what this does is take it a step further. this says anyone that deals with north korea, any financial institution that deals with north korea, is going to be punished so i think it's important. and it's like secretary mnuchin said, if you're going to support north korea, then you have to be prepared to be sanctioned as well >> you say sanctions have been working yet north korea hasn't stopped nuclear provocations do you think that these sanctions are going to actually get north korea to -- >> we always knew the sanctions may not work what the goal of the sanctions was always intended to be is to cut the revenue so they could do less of their reckless behavior. if they don't have the funding for the ballistic missiles, for the nuclear production, then

they can do less of it that's the goal of the sanctions. it doesn't mean it's necessarily going to change kim's attitude or his belief on what he wants to do, but it will slow down the production of the nuclear process going forward. yes? >> ambassador, thank you when the president had spoke in his speech about totally destroying north korea, if forced to defend ourselves or allies, what exactly did he mean under what circumstances would he consider totally destroying north korea? >> well, i think that's just common sense i mean, if you look at it, we have said multiple times the president said it, members of his team have said it, we don't want war that's the last thing anyone wants. we don't want loss of life that's the last thing anyone wants. but at the same time, we're not going to run scared. if, for any reason, north korea attacks the united states or our allies, the u.s. will respond. period that's what's going to happen. what you're seeing now is we continue to go through diplomatic measures. we continue to exhaust everything we have

and the key right now is that other countries actually support the sanctions and follow through with them. and they also continue to isolate north korea until we can get them to come to the negotiating table. but until then, that's just the reality. if they were to strike the united states, of course, we would have to respond back yes? >> just to clarify, you're specifically saying that that is if north korea attacks first >> i mean, we can't play out the scenarios on what's going to happen, but obviously, it would take something very serious for the president to have to make a decision to do something back. but there's a lot of things between where we are now and that situation that can be done. there are a lot of military options that can be done and so the president's not going to spell out specifically what he's going to do, when he's going to do it or where he's going to do it there are many options he discussed with his national security team that should north korea do anything irresponsible for reckless that he has to choose from. >> ambassador, thank you just a quick one on the

sanctions on korea, then i have a question on iran on korea, the administration has said that this is not aimed at china but you heard the president say today china has told its central bank not to do business with north korea. secretary mnuchin said he called the chinese. how is this not -- especially you talked about how china is really the main financial backer of north korea how can this not really be directed at china? then on iran, is there a way to talk about, to ramp up pressure as what you were talking about, iran's destabilizing activities throughout the middle east which i think a lot of your allies agree on, without violating the agreement, per se, as secretary tillerson said i peoplmean, is there a way to allies to rally around more terrorism type attend other sanctions while keeping the, you know, nuclear provisions in place? >> so first of all, with the sanctions on north korea, it

only impacts those that continue to do business with north korea. so if china does business with north korea, yes, it will impact them if there are countries in africa that do business with north korea, it's going to impact them them really it depends on countries that choose to continue to support north korea over the rest of the world that's asking them not to. in reference to iran, you have a couple of processes that take place. on october 15th, the president has the decision to make on whether to certify or decertify, and that's u.s. law. that has nothing to do with the jcpoa or the iran deal that's u.s. law. and u.s. law requires the president every 90 days to decide whether the iran deal and other elements of the u.n. resolution, which would include ballistic missile testing, which would include arms smuggling, which would include support of terrorism, those things, it asks the president to look at all of those things and if he still thinks that the

deal is in the best interest of the united states, then he certifies. if he thinks the deal is -- that the situation is not in the best interest of the american public, then he doesn't certify. at that point, it goes to congress and he works with congress on how to reshape the situation, but the iran deal and u.s. law are two different things. >> you're saying that he could decertify without specifically withdrawing from the deal? >> that's right. i mean, that's just the option that he has. that's the law that came into effect that allowed that to happen what i will tell you from a u.n. perspective, what we're looking at, what you're going to hear us very vocal on, 2331, the resolution that was in place, what we saw was it basically wrapped in with the nuclear deal, it said if iran did any of these things, it would be in violation. and since then, the secretary general has come out with a report that said they have

violated all of those things their support for terrorism, their arms smuggling, the idea they continue to do ballistic missile testing and they need to be called out for that that's something you will see us do as we go forward in the united nations, to make sure that they know that just because we did this nuclear deal, it doesn't give them a pass on all the other things that they're doing wrong. yes? >> ambassador -- >> ambassador to the u.n., nikki haley answering questions on everything from north korea, to iran, to iraq there, even talking about some of the concerns the international community has about myanmar. let's bring in eamon javers with a little more an eamon, a lot of news today obviously on north korea. of her announcements that she made just now, is anything rising to that level for you >> reporter: not a lot of in mu information from nikki haley this was more of a victory lap of sorts for nikki haley and the white house after what they view as a very successful week at the u.n. general assembly. you heard nikki haley there saying the international community broadly appreciated

how blunt and honest the president was in his address to the united nations earlier this week and you also heard her saying that the united states does not want war, but ultimately she said we are not going to run scared, either she was very deliberate in sort of refusing to box in under what circumstances the united states would be forced to totally destroy north korea, and the president's words, from his speech earlier in the week she did not want to say that spt that would come coin response to an take on the u.s. mainland or u.s. allies. she left wiggle room there diplomatically clearly this is a white house that feels they've done very well at the u.n. this week kelly? >> yeah, that definitely came across eamon, thank you, eamon javers. the senate is set to vote next week on the latest bill to repeal pane replace obamacare. e evext, toby cosgrove, ce o, of thcleland clinic, will tell us what the new proposal could mean for patients and the broader health care system when we come right back

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welcome back to some breaking news on aig at this hour seema mody has the story >> hi, kelly dow jones is quoting resources reporting that the united states is considering removing federal oversight of aig in discussing removing the systemic tag from the insurer on friday the outcome is uncertain this comes after aig was labeled systemically important and subject to increased oversight in 2013. but since then, aig has been proactive in selling off some of its assets and scaling back some of its exposure to riskier parts of the business. back to you, kelly >> seema, thank you. metlife sued to get rid of that designation. is prudential -- >> prudential is the only one after aig.

all the insurers might be able to shed the title. >> prudential is basically the last one at this point senators lindsey graham and bill cassidy have put together a proposal to eliminate obamacare. the vote could come as early as next week even without the congressional budget office's analysis our next guest things the plan hasn't been carefully considered and could hurt hospitals dr. tony cosgrove, thank you for being here you don't like the plan? >> i'm concerned about the process and the ultimate result. the process, the bill was just introduced last week it continues to be changing this week and will be voted on next week before the 30th of september. and this has not gotten a chance to be widely vetted, nor do we know for sure exactly how the bill is continuing to change it will not have been evaluated by the cbo to really what the costs are and how it will affect

who is going to be covered >> on its own merits, and i understand what you're saying, so the whole idea of block grants is to equalize the funding across the states and then let them using the funds, sort of become laboratories of administering a health care system or not doing so there are states who would lose, the ones who had a lot of per capita funding in the medicaid expansion, there are states that would win, those that had a lot less of it why would this hurt hospitals? >> there will be less funding, no question. the funding is starting out at $140 billion, which is less than the projected rate of medicare increase right now and it's going to be increasing at a lower rate than medicare is increasing right now i think the other thing about block grants is once the money is given to the state, each state winds up having to decide how it's going to administer these. it will require an administrative infrastructure to be set up for each state

and we might well wind up with 50 different administrations, which is, a, inefficient, and b, different sorts of rights and support for each state >> what would you prefer would you prefer that the way things are right now, the status quo, remain intact what is the ideal for the cleveland clinic >> i don't think it's just for the cleveland clinic that we're talking about. we're talking about what's right to do for the people of the united states. >> i know, but i'm asking from your point of view as kind of ceo of your hospital, you know, what do you think the right sort of way to proceed on this is >> i think what this means is, somewhere between 4 and $9 billion in reduction in medicaid support across the state of ohio that will certainly affect the cleveland clinic and the large number of medicaid patients we see from a financial standpoint. you also have to look at the fact that 22% of the hospitals in the united states now are

running in the red 55% of the hospitals lose money on the administration of care. and certainly this is going to threaten the financial viability of a lot of hospitals across the country. >> all right that is already in question. thank you for joining us today, doctor >> my pleasure >> dr. toby cosgrove ichoa new report says me pres are back to pre-crisis levels are they sustainable that's next. a fire tore apart his custom furniture shop and he lost everything when he discovered he had the wrong insurance. find out how he rebuilt his business watch "your usiness", weekends added 7:30 on msnbc. experience the lexus rx with advance safety... standard. lease the 2017 rx 350 for $399 a month for 36 months.

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u.s. home prices have finally regained pre-crisis levels fitch says the u.s. has added 30 million people during this period of time and seen a 30% gain in the typical household's income, michael. does that mean prices today at these levels are more sustainable than last time >> i would say some are more sustainable. i don't know that we're going to race back to have housing be as big a portion of the economy as it was in '05 and '06, we shouldn't necessarily wish for that >> agree why worry about your home price going up when the dow is going to a million >> there you go. >> it's only a 4% gain over the next century >> we'll get there in a hundred

years. everyone should think about that >> if berkshire hathaway stock keeps pace -- >> 12.5 million when the dow gets to 1 million. that's why i love you. that's all for today buy and hold berkshire this is not investment advice. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," the bond bashing continues with the yield in the ten-year hitting a one-month high where should you put your money now? the traders will give you their playbook >> one supposed safe sector is having its worst two-day stretch in a year. we'll tell you if any of our traders are buying this dip. >> and later, our own guy adami sat down with p. diddy and mark wahlberg to talk about their business venture together.