simply can't grow our business paying you more than our subscribers who are watching. so whether or not this will do it or not but the amount of money cable operators pay to carry basic cable program is going to decline over time. >> you heard it hear first, bob johnson, thank you very much. >> great having you here. make sure you join us tomorrow, "squawk on the street" is coming up right now. ♪ good mondays morning the new york stock exchange final week of q3 is upon us. a torrent of news from tax reform and health care to the president's battle with the nfl, facebook, german elections, puerto rico's difficult recovery. check out oil. it is not settled above 51 since may 24th.

road map begins. stocks still on the high despite hiccups. >> donald trump blast the nfl. it's having huge ripple effects and could have a large corporate impact. facebook settling a lawsuit with investors but its trouble far from over. revelations about what the company did and did not know when it comes to russian interference in the u.s. election. futures are moving lower have a positive week for stocks despite the dow being in the midst of a two session losing streak. global markets reacting to developments out of germany. merkel wins. the far right party will enter parliament for the first time, one of the cofounders says she will not sit in the caucus in the boon to stocks. they've got internal politics to work out over there. what a weekend of news, jim? >> yeah, this european news i felt is collaring our markets much more than people realize.

why are these markets not reacting negatively? i think the more nationalists win, the more the parties in power feel like they have to spend, which means that there's going to be more growth and that has been the story of what i believe is the strength behind the euro, more growth, raise rates. if you're a historian, we can talk about history of politics and sports, but it is -- it takes your breath away that the social democrats have the worse result since prewar. so i'm sure germany is thinking what do we do? how much money do we have to spend to get this thing back and under control? look, our markets, we are -- i just have to say that it is so odd to om in and what's winning? it's general motors and the oils and what's losing? it's apple and amazon and facebook. when was the last time you saw gm breaking out, gm and vp are the two hottest stocks.

vp this is not right. >> you're mentioning an upgrade of gm, oil at 51 as we said. >> gm, there they're talking about autonomous driving and why that company's autonomous driving unit is doing better than everybody else's. at the same time that a car mix drown grade and the sports utility shift in tennessee, they're knocking out because of short warm demand. it's been a long time since i've seen that. >> the short-term is typically just that and the general trend always seems to reassert itself don't spend too much time spig about gm or those companies connected to the oil market. >> true. >> it stay focused because if you have stay focused on amazon and/or apple or amazon or

facebook -- >> if you look at the parts of it, buys 1,800 new stores from a private equity company. anybody who buys from private equity these days are exciting and i look at these things and i say to myself he, what did it fay -- remember those activists in gm and how they failed? >> the latest was david einhorn with that plan that went nowhere. >> green light, red light. >> i do think when i look at gm and autonomous driving, i still keep thinking about -- interstate 80 and the double trucks that i saw. great commercial we have right now -- you see that truck industry. do i want to look over and see that double target truck, i mention that because of the raise, with no driver and i'm still susceptible to thinking well, that's a good way to die. >> maybe not. i think you'll be more accepting of it. maybe -- remember the blowup

guy, auto, that will make you feel better. >> deutsch is 60% of households in urban areas they think eventually prefer autonomous ride sharing to owning a car privately. i find that crazy. >> i think that guy -- he picked the wrong time to stop sniffing glue. >> i don't know. the vision people have of urban societies with autonomous vehicles is very powerful. pleats all over being helped by 5 g, no traffic jams, no parking garages. >> no driving records. >> give me amazon. >> to be continued. >> the president as you know by now sounded off over the weekend and again this morning about nfl players declining to stand during the national anthem after calling on the league over the weekend to fire players who refused to do so. the president tweeted many people booed the players who kneeled yesterday. these are fans who demand respect for our flag. before yesterday's games, many nfl players knelt during the

anthem and locked arms. a number of team owners including the patriots bob kraft issuing statements criticizing the president's remarks. last year colin kaepernick began taking a knee to protest police violence against minorities. joining us this morning, mavericks owner mark cuban. it's always good to get your take on things, good morning to you. >> good morning. downtown to talk about autonomous vehicles and what we're doing in dallas, right >> let's put that on the back end of this. what does the league's response from all colors tell us about what the president said? >> i mean, it just begs the question of why did the president say anything at all. literally, why what's the point i mean, it's like just because you have a twitter account doesn't mean you have to use it. just because you can say something doesn't mean you should. he's the president of the united states, so we're all wondering why he said anything. this is an issue that we have to

address with our players and our fans and our communities, and i think he doesn't recognize that at least in the nfl and the nba, we have huge community relations departments, we make huge efforts to participate with the community and so we're always involved with politics at some level. if i want to -- i just built a practice facility so we're working to add community elements to that. i have a center that i built in south dallas to enable kids to get educated and to get trained in different sport and to get good study habit. i have the largest inner city baseball and one of the largest inner city basketball programs called little heros. we hired the former chief of police david brown to come work with us to build our community programs all through the dallas mavericks. so we're working actively to connect with the community and he doesn't seem to recognize

that there is so much more to what teams do in the community and we already involved in politics at some level just to get those things done. so why even comment without knowing what you're talking about? >> in the markets, david, it's not just the nfl of course, it started in part with the disinviting of steph curry and the golden state warriors, lebron james and tweeting that the president's a bum and made it much clearer what he was really trying to get at in an instagram video that i watched where he's quite articulate. what are you hearing from your players and within the nba itself about what went on this weekend? >> i'll speak to him today, today's our media day. we're going -- i told our folks that i want to give everybody a chance, all of our players and management to go on camera and have the question asked of them, what does the united states of america mean to you? and is there a topic you'd like to speak about on camera if we want -- if they would like

to have as a team their feelings aired on our jumbo tron before a game then rather than trying to make a point through a secondary action, whether it's taking knees, joining arms whatever it may be, let's just say what's on our mind and let's be clear to fans what we think. if we can take it from there and start a discussion in our community that's a good thing. i've always tried to be open with our players about what their feelings are, how they want to participate in the community and we have a history of it. the dallas mavericks had the first nba player from china and the day he played for us, in 2001, the night before there had been an incident with china where a plane had been shot down and when we oent out on the court he got a standing ovation. we've had players say they were against the iraqi war and got criticism. i had one player back ten plus years ago who was seen on a video saying the national anthem doesn't represent him, it

doesn't represent his people and that created a firestorm and i wrote a blog post about it. this isn't anything new. the only thing that's changed now is that the president decided to get involved. as an nba owner we're always doing things that where we listen to our players, we try to help them with their community involvement, they all have foundations, they all have community programs and so again this is nothing new. we want to listen to our players, get their feedback and see how we can make our communities, our team, our foundations and our country stronger. >> mark, jim cramer, always great that you call in. thank you so much. >> thanks, jim. >> the nba is really taking it i think an incredible view. they want the players to speak out so i was surprised the president would attack because the nba is probably the most free speech oriented league in the world, but tonight the cowboys play. jerry jones is on record saying that this is not right. i know you know jerry very well.

do you think he'll end up taking a bob kraft position and say the players absolutely have every right to do whatever they want >> i don't know. i don't want to speak for jerry. we're friends and he takes his own approach to things and i'll just respect his sovereignty to say what's on his mind. >> mark, we can debate back and forth the delicacies of protesting when you're on the field, we're still left with the business angle, what happens to ratings, whether the president's right about these declines, whether they're driven in part by politics. what's your view of that and how much of a threat is it to at least the football league? >> first of all, you don't know that the ratings aren't down because so many nfl owners contributed to the presidential -- to donald trump? you can't connect -- and just pick sides, but look, you had bob johnson talking about the bigger issues with streaming and

alternative ways of viewing content and the changes and content consumption. i think that impacted all sports. i think we have to work harder and have more choices to gain an audience, but as we know, television isn't the only way to consume conat any time and it hasn't been for the last 20 years, so that is definitely going to impact ratings. i've sat down with adam silver the nba commissioner and tried to make a point to him that i think the nba and the nfl, the nhl and major league baseball we all need to start advertising the fact that watching a game on television is the best viewing experience. watching it from a cable or satellite provider, on a regular television, is a better viewing experience than watching it streaming from any source on a phone, on an ipad or even on a television because it buffers, it impacts your broadband, your bandwidth to your home. there's so many different elements that can impact a

broadcast and your experience with it when you stream. with traditional television, you've got 99% reliability and it's a better experience. it's on us to promote the fact that that's a better viewing experience and we failed miserably at that. so when it comes to rating, there are the bigger issues, the macro issues of people wanting different ways to consume content but it should be on us to really promote what the best way is and right now that's still television. ratings are going to be down, but they're still better than what other shows are experiencing. at the nba, we're starting to do an index, where we're saying, okay, our absolute number of viewers for our finals was up, some of our games during the season were flat, up a little bit, but when you compare those to-to-what other shows are doing, we're out performing on an index basis significantly. i think if you look at the nfl as well. they may be down from last year but when you compare them to other hits, it shows.

you'll see that those other hit shows are probably down even more. so the nfl, the nba and sports as a destination for live events is outperforming other types of content. so while -- yes, on an absolute basis in terms of ratings, the nfl -- i still think that they're outperforming in the nba and the nba is definitely outperforming other content competing for viewers. >> but, mark, we know that your stance on the f.a.n.g. stocks. if you're disney, if you're cbs, it's really hard to compete. if facebook, amazon and google now alphabet want the rights, say you do a china game or say next time the -- any of the contracts are up for major sports, no one can outbid those companies and they can built whole networks, youtube around

pro sports so don't you think that in the end alphabet wins, that facebook wins, that apple wins >> the difference is the cultures are dimp. it's a good point, right . companies with the largest cap values of any company in the world outbid traditional broadcasts who are seeing they're market caps decline. google is a data driven organization that typically doesn't up it like that. amazon and facebook are dipping their toes in the water not just here with nfl but with global sports. because it makes sense to do so. and i think the cost of our rights for the nba in particular is going to go up because in a streaming world, it is so much harder to draw an audience because you have unlimited choices. where on television, once you choose to watch on television you're one of 150 to 200 choices. our right fees could go up significantly because of

streaming but we're not up for another ten years or nine years so so much can change and in the five years before the nfl is up, so much can change until then and so, i'm not ready to make a prediction but i don't think -- i know some people predicted that thing rights fees for sports will go down. i don't see that happening at all. i think they'll go up significantly. >> before we let you go, mark, chris collinsworth over the weekend, a bunch of high profile figures in sports, says the president should apologize should he? >> the president's not going to apologize. the president should read a book. are you kidding me just read a book. just chill. i know it's crazy to say about our president, but look, these topics, he's been talking -- you can search on twitter from real donald trump just put in nfl and you'll see over the years he's been bringing up these same topics about too many flags and

not enough hits for years. it's not new to him because he's president. he's picked on me. i can't even count how many times on twitter. look, if he's going to dish it out, he's got to be able to take it. i don't expect him to apologize, but, you know, if this is the new presidency where our president wants to mix it up and obviously he does, whether it's north korea, god help us or sports or me or public figures or anybody, then this is the new world, this is the new reality we live in and that makes him fair game. and i don't think anything's going to change one way or the other. this is who he is and if you're on team trump i don't think you're going to turn your back on him. i think you're going to support him like you've got some folks there in the morning come hell or high water they're team trump that's just the world we live in and we just have to accept it. he's not going to change. that's just the way it is. >> tribal politics, mark, thank

you so much for your time. >> i call it trump politics not tribal. >> next time, autonomous cars, mark. >> you got it guys. >> all right. mark cuban. still to come this morning. the we'll explore what it takes for investors to embrace some of the company's new products. take another look at the premarket. dow have almost 1,000 points exactly for the quarter, 999.96. back in a moment. i count on my dell small business advisor

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apple shares down in the premarket after falling 5.5% last week. the dow component now down more than 7%. it is the worst dow stock for the month. jim? >> i really like his work. talking about lowering the estimates to the iphone, the 10, the x and a lot of it is just kind of what i regard as being because you've got a november launch for a second phone and i think that whatever apple's doing should be viewed as being a 2018 store. if you can just shuffle numbers

and take numbers before and numbers after and the reason i say that is because there is no change in where receive va thinks the stock can go i understand that people are confused and it's going to be flected on all the part suppliers. this is last week's story and it's got some legs for maybe a couple more days and people are going to say, wait a second, why am i selling a company that for its own fiscal year, it's going to earn $11.19 there's a notion that all the f.a.n.g. is too expensive, but i still prefer this to owning some of these cyclicals and to the oils. >> and a lot of people would want to x out 250 billion in cash, where are we roughly there to get your tumult >> what can i say? >> talking about 530 million

market cap, that's cash. >> i don't want to sell a company, my -- we be send out a newsletter we upgraded it. don't sell a company that next year's going to have a really good number just because it's got some problems with the next 30 days but that's very wall street oriented. wall street has wanted to trade this thing endlessly. what a great reason to get people to sell it at 148 and buy back 156. this is a traditional time honored trade that the analysts have given you. it's tough to tell you where you're going to buy it back and no offense to jim, because jim did the right thing. he kept the price target and he correctly gives you the narrative but i am not going to want -- there are two companies that are lower multiple than apple, gm and ford and if you want to swap out apple for gm because of autonomous cars i think the apple phones are going to happen before we see people -- sitting to the right -- where you going to sit with autonomous. you sit in the back?

you going to watch -- make phone calls? >> yes. >> it's going to be the fourth screen, you're doing to be sitting back there with your giant screen doing all sorts of stuff, you'll probably do a show from the back of a car. >> we got to go. i feel like we should go. that's someone in myar e saying go. >> we're back in just a minute.

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partner with pgim, the global investment management businesses of prudential. let's get to a delayed mad dash but always worth waiting for. i want to talk a little target. >> yeah, david, this is one they're raising the minimum hourly rage to 11 bucks. now remember when walmart did it they went to 9. this is 49 states. this is going to happen in

october. they intend to increase the minimum wage to 2020. they reaffirm guidance because everyone's so worried about retail sales, but no, people center on the fact that target's going to pay up. remember what happens at these retailers whether be target or walmart. they have a hard time retaining people. one-third -- costco has always told me that one-third of walmart's cost go to training which is dead weight loss so i think this was good news but i understand the market still hates retail. >> the market hates retail, still digesting the costs of that. walmart, though, is benefited from their decision a few years back, when you went down and originally did an interview about their decision to raise wages. >> took their lumps early. >> they did. >> and now they're stock got hit and now it's doing well. people are short-term oriented. despite target reaffirming what really happens here, what really

happens here, they retain more people and you know what ford motor, henry ford paid his people more and we're rebounded positively. i spent a lot of time in a walmart this weekend. i know my wife is furious. i went aisle by aisle by aisle. >> a lot of time were you looking for something or just doing research >> the place was packed. >> i bought things that i had absolutely no use for because they were so cheap, and i found a thing of cheese balls that was this big, i think they paid me. >> at least you'll eat those. it's a lot of stuff that ends up in a landfill that's unfortunate but those you'll consume. >> we did get two upgraze of under armour today. >> i still consider this group to be two -- too many players, too many people trying to get -- you know what?

i bought alberg's this weekend. this is one of those direct to cooper, they just had a really big financing. they made it really easy to get through. i bought them because they looked great. a buddy of mine owns a pair. direct to consumer is bad for these stocks and it's happening. >> what's going to turn under armour around? >> it's below $7 billion in market value. i mean, he was celebrated as a hero for quite some time. >> because he was a renegade and adidas came out of nowhere and brought back stan smith and most people don't know who he is. >> having grown up in forest hills i'maware of who he is too. >> yeah. yeah. exactly. good point. >> thank you. wood racket, by the way. >> remember don bunch? >> that's going back a ways. >> bunch is before my time. >> he was a great hedge fund

manager. >> let's get to the opening bell. s&p at the bottom of your screen, asset manager and the nasdaq, a race water purification based in china celebrating its recent ipo. you guys are talking proctor and this new letter now from nelson pelts. >> look it's a big story, obviously, because it's a major consumer products. there's a lot of analysis and reanalysis of data. i felt it. nelson pelts's critique of the mistakes of the proctor or the let's say the assertions of the proctor rye post made a lost sense. >> particularly to share holder returns and comparesons. that's what we put in front of pelts when he was with us.

>> i feel like i ambushed him. the people who calculated the plus 4% are adamant that that was a rigorous way -- >> they do. three out of 50 things they will say, maybe they were a little bit incorrect but the other 47 were just fine, every point p & g made. >> they admitted they made mistakes and here's nelson pelts, i throw him this document, you're up four. >> well, no. >> i get the document 20 minutes before. this is not going away and this is the biggest proxy fight that i've ever seen in my career. >> really? even though it's over one guy? >> but it is a really important company, no doubt and there's such a battle going on in terms of how it's run whether it can be run in a different way. win or lose, that battle may continue. >> well, you know, david look at what paul pullman did today for unilever. he bought a company that's a

cosmetic company in korea. if you look at fra freda has done, with cosmetics, you know. >> right. >> if this is the hottest area to be in, so i think that estake lauder and unilever buying small brands. pelts's biggest theater and just goes after the young ones. i spoke to clay dowdy last week who was adamant that there was a strategy to grow. they scrapped that strategy. they got a new strategy. they scrapped this and that. they do a lot of scrapping. >> it's funny. we spent a lot of time on p & g for good reasons. nestle we haven't spent as much time on. dan lobes owns as much as nestle and trying to pressure nestle to

do some things and tomorrow the company has a big investor day. it's -- the ceos first investor seminar, so to speak, that he's done. will they announce a merge in target is a question for nestle? will they talk specifically about a return to midsingle digit organic sales growth within the next few years and will they address the stake in lorial, the '94 loreal. owns about 33% but nestle owns a good large stake and of course has been under pressure by mr. lobe to sell it, to dispose of it, to reallocate the capital from that and to what they believe would be more productive means. tomorrow we'll get a decent snapshot from nestle. >> since you brought it up,

between toshiba and western digital and nestle, we have -- i'm not saying we've abdicated, but there's the giant -- giant companies overseas -- >> largest company in europe, right there, nestle and we got a u.s. investor going after them. it is an important story. >> like samsung. >> another one. >> we had a lot of packaged goods company that stocks fell badly last week on the heels of general mills. cereal worldwide partners. >> that's right. with nestle, correct. >> i think that europe is just doing terrifically, there's a stimulus package that was very small out of japan. we have to continue to focus on these markets because when we hear our earnings, i think our earnings are going to be heavily driven by currency in a positive way so a lot of stocks being sold right now, international stocks, when you go over apple's

conference call, three calls ago it was about currency and it was about how much they're being heard. guess what these numbers could prove to be low even with an apple change of phone. >> that's why we've seen -- at least on the price targets increases because of what currencies have done this quarter. >> it's been fantastic. no longer will you have to say if you back out currency -- no. currency's fine. constant currency. cc. now cc is ca morz. >> the focus of many of these activists in the case of mr. lobe and mr. ackman and to a certain extent with adp, improve margins by cutting cost and the like but they make a case for far higher margins with all of these companies i just mentioned. whether or not they'll be successful, who knows in terms of their attempt to either get board seats or pressure management. >> what do you think about ge?

ge flanry corporate jet, sells the division that i had always thought it was important, industrial solutions, not supposed to do anything until november. he's not waiting around. >> he's not waiting and he can't wait. >> no, no. ge can't wait. ge had a lot of others. i do think that this guy flanry, i mean, he may seem like a real nice guy but i'm getting the sense that he understands that these analysts -- he wants to make them look bad. i think he has the fire power to do it. >> he's moving on all fronts is what i hear as well. still the key question again back to try anne whether they'll get a board seat there. >> did you notice the calculation of the ingersol performance? >> no, i didn't. >> so what all's fair in love and mistakes. >> thankfully we only have couple more -- few more weeks of

the p & g battle. >> are you going to switch to some unilever's products like kensington mustard >> i didn't even know they had a mustard. no kidding. >> yeah. what do you use in shampoo >> shampoo >> i don't know what the name of it is. >> do you know what the wife signed up for? >> what. >> dollar shave company. >> that's unilever. >> he's iconic. >> i've used it for years, actually. >> who curses more, dubin or the president? son of a -- i remember growing up that if you used that word it better be a dog. >> you saw what kaepernick's mom tweeted, i guess that makes me a -- yeah. >> that's not nice. >> i had him in my fantasy a couple years ago.

sorry. mentioning anything in the context of football. outside the lines is some where important. sorry espn. >> you guys mentioned ge, facebook, though, guys along with the rest of f.a.n.g. is under pressure yet again. this "the washington post" story long piece about how they essentially discovered russian interference in june of 2016. they're getting people from the obama white house saying we tried to warn them and it sounds like from the piece you're getting old facebook executives saying fbi never came to us with their information and a lot of mixed signals. >> and in a change of heart on a different class of stock. >> reclassification. >> f.a.n.g. is under fire from everywhere. not since soupy sales. >> facebook is under fire more than f.a.n.g. facebook is -- they've got capitol hill on them. they're -- europe is focused on them to a certain extent. >> that's what happens when you do really well. people out of facebook into gm.

>> it's hard to imagine you do that for a long period of time maybe until the next earnings and everybody realizes that it's not effecting cash flow. they are going to have to spend more money one would think on these various efforts to make sure they actually know whose buying advertising. >> proctor and gamble. >> you don't think advertisers have concerned about brand safety. when you look at one of these fights again, 125 million that proctor took out of online spend. they have a board member who worked at goog who was involved in that business and if they tell you offline, they didn't want to be next to some of this content that some people would describe not them as cripto nazi. >> for the first time perhaps people are really recognizing the power of this platform in the sense of beyond what we talk about, but in all aspects of peoples' lives and that there's

starting to be a conversation about that. she starts writing about this stuff that's getting more -- >> look, i had the greatest time in the world but my step kids were like incredibly worried because there i was, admittedly i wasn't overserved and everyone's taking pictures of me and you're just thinking, i got to be like the best guy in the world because, man, everything you do is being recorded. and it didn't happen. if no one has a cell phone, it didn't happen. if you have a cell phone, you're dead. >> it happens to airline pilots and flight attendants. >> thank heavens i sank browns. >> real quickly on the reclassification of facebook. we should point out zuckerberg will still have control of this can. >> the stocks getting killed, david. >> that's true. >> keeps going down. he's got more of a problem because he can't make the contributions that he wanted to -- it's not a nonprofit.

>> it's time to be in sherwin-williams and sell netflix. one watches paint dry and the other one is exciting but who cares. narco's 70. >> apple's a lag guard today but the dow is essentially flat. let's get to bob pisani. >> so let's take a look at the sectors, energy is the leadership group right now and this is got some legs here this little energy rally when i pointed it out at the beginning of last week, a lot of people said we had our head handed to us all year twice trying to buy oil at the bottom. that high negativity and the rally keeps going. that's a strong argument right now. consumer staples a little better. remember how awful it was last week. materials which is a leadership group not doing much and tech another leadership group so we're getting a little bit of this rotation that we've been talking about. one of the reasons the market's been so strong all year so if

you look at the dow stocks, the lagerd's all year, they have been theleadership group. general electric which has been on a slow dis sent all year down 25% or so, it too is one of its periodic upswings and united health has had a great year but down 3%. apple had a great year but down 7% so far in the month. it's down another 1% here today. if you look at tech today, this rotation idea with the sector leadership, all to the downside so facebook, nvidia, broadcom, advanced microand there's apple down 1%. if you take a look over in taiwan, i don't often bring up the apple links trading in taiwan. that's down and catcher technology and pegga tron as

well. i'm not sure that is the right one for foxconn but take a look at some of these stocks. down almost 10% for the month now. this is where the month to date that you see as you see moving through the downside there. catcher is another one. they make computer components as well. they also list over in taiwan. they're moving down more than 20% so far this month. peg atron, they're also down 16, 17, 18% this month as well. of course when concerns about the apple products -- there's a report in diggi times, to slow down with the delivery of the iphone ten. we've been trying to figure out the economic effects of the storms. car mac said they closed six stores in houston. they cut their fiscal guidance on the hurricane. i think importantly they don't expect storm damage will affect

the preliminary fiscal year 2018 guidance. that's good news. i think that's one of the reasons the stock isonly down fractionally. the home builders have had a great run just off the highs for the year. look at kb homes sometime later this week. the dow, down nine points. david back to you. >> okay. thank you very much. i want to come back to the story we brought you last week, those continued talks between sprint and t-mobile designed to create what would be the third largest wireless carrier in the country. they continue pace. there's some reporting out on friday that's worth revisiting. not my own. involving where things stand in terms of the conversations between the company as they try to settle on an exchange ratio. what i can tell you is this, the intention was and continues to be that this would be essentially an at market deal. the two companies stock prices have adjusted a bit as a result of our reporting of vigorous

talks between the two. sprint went up more percentage wise than t-mobile did but they entered this discussion with the expectation of an at market deal that would refleck that and that continues to be the case. what do you end up with, mostly sprint minority ownership along with soft bank ownership of sprint representing let's call it mid-30% to perhaps high 30% of the overall competition of t-mobile and sprint. the germans which controls t-mobile wouldn't be a majority of the shares outstanding but it would be essentially a control position. they would still consolidate that on their balance sheet and it would be an all stock deal, no separate deal for the minorities. there's no cash involved. the synergies are thought to be enormous but they'll get a better idea of that because they're now beginning due diligence and in the couple of weeks ahead that is what the key is going to be then they may come back and final the exchange

ratio, get it all essentially done at least seems to be the plan by let's call it the third week of october is where they are focused in terms of being able to make an announcement and as we told you last week, john ledger would be the ceo of the combined company. the question then will be, if they do get to the finish line, as seems likely at this point. >> wow. >> yeah, likely. >> really? >> yeah, yeah. then jim and carl the question of course becomes ante trust which is one that you and i batted around for years, we all have in terms of what the approach will be. i think the two sides will become more communicative in terms of why they feel fairly positive about their ability to actually get this buy regulators, both the federal communications commission and perhaps more important the department of justice and its

staff. and i'll be all ears to hear what their thoughts are when it comes to that. there is no doubt the synergies are enormous, the costs that can be taken out when you bring two networks together. ledger of course we know would potentially benefit from a far larger footprint. but whether or not the regulators will allow it to happen if and when they get to this deal for the all stock merger we'll be talking about will be the question. >> t-mobile will be for sale no matter what, though. >> what do you mean? >> t-mobile's in play. i'm saying that there's going to be some sort of combination some where. let's say that google and alphabet want to get in this. >> i think the germans have made it clear that they would continue to like to have a significant exposure to the u.s. wireless market and the way they do that is through t-mobile. so they're now interested in selling. this has been the best performing asset they have. >> absolutely. i'm just trying to figure out if not sprint then who? i'm saying there's going to be a deal some where. >> possibly.

what we've -- we've already talked about, not charter and this is the likely deal, again, at least to get papered as we say where they all sign on to it. whether or not the regulators sign off on it i think will be the question we may be talking about let's call it a few weeks now and hopefully we'll have john ledger on, maybe marcelo will join us. we'll ask them all about it. >> they still got due diligence and a bit more to go. >> this is another reason why it's so hard to bet against this market. i thought that thing was going to die on the vine. it's not dying on the vine. f.a.n.g.'s week although apple seems to be stabilizing. >> we got an all time high on the russell and we haven't done that since the end of july. >> at&t and verizon have started going at it. thanks for the support. >> take it from four to three. >> exactly. this is really important. >> i wonder why antitrust looks at that and say why is that good for the consumer. we got to stop there on this and

let's get a check in on the bond peets. rick santelli. >> reporter: good morning. it just changed. if you looked up at the boards about five seconds ago, twos and tens at 225 and 30s were at 278. that 279 represents the only maturity that is an unchanged on the day, completely unchanged. we've talked about many could argue whether technical are important but it certainly looks like we've completed a cycle in treasuries which means it's kind of happy right here and the market certainly looks like that. the other thing that's most note worthy, you see that big rise that we had, that of course was fed wednesday and we're still within that established gap range, 23 to 28. that's important. sometimes we go back and trade those thin areas, but maybe the other part that's important is we haven't traded at all above it. we want to pay attention to that.

as you look at boonz, effected potentially german election. they're below they're gap higher opening and closed at the time of our fed meeting. i'll tell you it's hard to pick on that chart they had an election but if you do look at the currency issues, whether it's one week of the euro versus the dollar, euro versus the yen or the pound, there is a bit of weakness on all three but once again it's pretty hard to peg the channel exactly but it may have been effected a bit by the election and finally, how does all that translate dollar index looking okay. up about a third of a cent today. awfully close to the lows but is trying to put a little distance there. back to you. we'll have john clark at 10:40. >> sounds good, rick. still to come a different perspective on the nelson pelts p & g proxy fit.gh

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basically saying, look, let's not forget this all priced business and why do i like this so much because all price is the winner as you close stores. all that merchandise goes to them so don't give up on retail, please. retail's okay. >> we'll see you tonight, jim. >> thank you, guys. "mad money" at 6:00 p.m. eastern time. when we return william johnson on this proxy battle between nelson peltz and p&g. dow is down 12. another day at the office. why do you put up with it? believe it or not you actually like what you do.

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>> our road map for the hour begins with wall street preparing for a busy week. taxes and health care both on the agenda. we'll take you live to washington straight ahead. >> and the president taking on professional sports calling for a football boycott going after nba champion steph curry. >> and china issues a new letter as that push to get peltz on the board continues. we'll speak with the former ceo heinz who did engage with a nasty proxy battle before they all made up. >> this morning, the dow opening lower for its third consecutive day. the last three day losing streak hitting back in early august, still stocks aren't too far from record highs. apple the worst performing dow component this month. now down over 7%. we're joined by toe buy as the russell 2000 index set a record high. the dow, s&p and nasdaq are close to record highs.

>> with the small -- it's highly tied to what's going on in the dollar. the dollar tends to strengthen where it can have a real impact. large caps being more global exposed. >> the german election, weakness in the euro and disappointment about merkel's margin of winning and the far right party entering parliament for the first time. we have a japanese snap election. so clearly the political uncertainty abroad is still there. does it impact u.s. stocks >> it does and that currency movement on the small caps. there are still other issues in europe. the italian elections that are likely to come will be potentially much more disruptive as you see coalition of the parties trying to move away from europe and those are more important right now. i'm not going to, you know, say i'm an expert on german elections and i'm learning all about the jamaican coalition all

of a sudden. >> new zealand also over the weekend. >> new zealand had a non -- if you want to call it nonconclusive election in terms of minority governments. but they've done it before. it's not the end of the world. it's more about a interest rates and common trends. you're seeing bond yields edging up a little bit, shift in the rotations which are very normal. value beats growth and that's very typical. the market is ahead of itself right now. possibly on tax legislation and what it could do to earnings. >> what degree is it ahead of itself and what do you mean when you say that >> very little, 1%, 2%. there's no reason for earnings are relatively good. we'll get something messy a little bit with the hurricanes in terms of some of the data but i think markets typically look through that because they know unfortunately there's going to be a rebuild effort for a lot of people who lost a lot.

>> we had a discussion last hour to the degree that which people fretted about currency a few quarters ago, are they now going to appreciate currency in a reasonable amount? >> we thought at the beginning, the people who had gotten a little bit too excited about the dollar, primarily because they're looking at bond yields going up but they weren't looking at it relative to something else. go back last summer, when the yield is 1.3%. now it's around 4.5% and the u.s. yield 2% or and that explained why the euro was doing better than the dollar. people have gotten too negative on the dollar now. the reverse of that trend we saw at the beginning of the year. i just hear it when i talk to experts. i was in europe two weeks ago. that's all i heard dollar, dollar, dollar questions and it's a concern for european

stocks particularly if they translate back their earnings into their currency. it hurts their numbers. and europe is avery export sensitive economy. we are very import sensitive economy. >> is earning season being underpriced because of what currencies have done >> we had a 24, 25 target for the s&p this year. we said there's a 1% to 2% higher number if the earnings are positively effected bit currency. we still think that's plausible because of the currency but it is like 1, 2%. >> which brings us to the bigger question about the status and the health of the trump trade, part of it was that strong dollar which is completely reversed. we're expected to get another framework for tax reform on wednesday. >> so a lot of the trump trades that we saw surge from november started to rollover back in february and that's out of the market and that's why i think most recently some of the news about a potential tax deal is

creating some new excitement about what this could mean for earnings for 2018. to give you context. we have $129 earnings this year being helped along by energy, materials showing better numbers. exenergy have been growing about 5%. next year if we don't get tax benefit, you're only looking at 4 or 5% earnings growth. >> what do you mean if you're getting corporate tax? >> if each 1% is about $2 a share in earnings. so if you can get another 5 percentage points versus 25 in theory it would be another $10. >> 30%, is that really the average rate that most corporations pay right now >> no, nobody pays 30. >> nobody pays that. >> some do, but the average -- >> i'm not going to bring up the

leo leona hemsly thing. 25 to 27% range. getting it down to 25 only gives you one or two percentage points on tax benefit if you get it to 20, that would be much more significant. >> let me ask you something else, this continued escalation of tensions between the north koreans and our country. as a strategist, i'm sure you get asked, is there a strategy to play something like this or you best off ignoring it >> hide under your desk. there really isn't. nothing ever happens. i talked to an investor once that's consistently bearish, what would make you bullish? and he said peace in the middle east. so worrying about a geopolitical event is fine. you can hedge it if you want. you can buy gold and you can do things but it costs you to do thosekinds of things and i don't say it never happens, it rarely happens that a geopolitical event becomes

that -- and usually it's not the things we're worried about, it's the things we weren't paying attention to. not the things we're constantly focused on. >> how significant is oil above 51 >> so energy's one of the areas we've argued is benefiting from that bond yield movement and bond yield seasonally go up so you get that benefit without necessarily saying, i have a clear view of the gdp view, i have a clear view of currency moves or anything like that. i think oil moving higher is more also function of the industry starting to pull back. we did a cap ex-study we've already seeing the companies pullback a little bit this year. now it's in the mid-40s given that oil isn't where they thought it would be. >> it's certainly helping the stocks today. always good to check in with you. chief u.s. equity strategist at

citigroup. >> thank you. when we come back, the president versus the nfl calling for a football boycott as more players take a knee, plus stry and issuing another letter. we'll talk to the former ceo of heinz bill johnson. dow's down ten. don't go away. hey you've gotta see this. c'mon.

no. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. the president taking on the nfl blasting the league for allowing the players to protest

the national anthem. our erik joins us this morning with all the latest. >> president trump on friday night said nfl players who do not stand for anthems are sobs and they should be fired. nba champion steph curry was no longer welcome at the white house. that started all kinds of reaction from sports. statements against trump came from team owners, players, coaches, the league office and the players union. nearly every game on sunday saw some version of anthem protests. a mix of kneeling, looking arms, sitting on the bench or some teams stayed in the locker room all together. nfl owners donated millions of dollars to trump's campaign and several of them sided with their players this weekend, including redskins owner dan snyder, also the patriots robert kraft and chris johnson who is now running the jets because his brother woody is the brand-new uk ambassador. it went way beyond football.

many nba players responded. the protest spread to baseball we also saw responses in hockey, nascar, college basketball and the w nba on both sides of the issue. the president has responded on twitter almost 20 times since yesterday, even as much as recently this morning. no word, though, from major corporate sponsors. we've reached out to several but we have not heard back. you can look to ceos quitting the white house councils after charlottesville as an indication for how quickly companies will react if the heat gets turned on them. back to you, carl. >> we've been down that road before. thanks. the nfl is struggling of course to right the rating ships and overnights shows viewership reportedly down about 4% across the networks. nbc said it's night broadcast was the primetime. the president now saying the nfl fans could boycott the league because of player protest. billionaire investor and dallas

maverick owner joined us last hour to weigh in. here's what he said. >> we're working actively to connect with the community and he doesn't seem to recognize that there's so much more to what teams do in the community and we are involved in politics at some level just to get those things done. so why even comment without knowing what you're talking about? >> joining us this morning, michael zani and it's good to have you back. >> good morning. thank you for having me. >> just to clarify the ratings picture, sunday looks down but if you include certain days of the week, they're actually up year on year. how would you describe it to someone whose not watching them closely? >> after peaking the ratings have dipped the last two years, the declines are modest. i would surmise them to be in the high single digits, the networks are paying over $5 billion for the rights to broadcast these games, last

season they had to make make goods, this year they're estimated to probably cost the broadcasters $200 million. so the trend is not good for the nfl. tv is its bread and butter and the trend in that area is bad. >> cuban's point to us in the last hour was that owners and the league have not been good at advertising, at least cuban's view that watching a game on television is the best viewing experience. would that pitch work at this point or have we already crossed over to an era in which amazon's about to show us how it can be done >> definitely more is going toward streaming no question about it particularly with the younger demographic. still nfl owners know that free tv and the networks are the most important area. these contracts with the broadcasters with the espn run to 2021 and with nbc, cbs and fox to 2022 so they still have a

few more years left which are very important. what you're going to see within the next couple of months is a new thursday night package. it'll be very interesting to see how much of an increase the nfl gets versus the previous deal. >> mike, this is such an unusual and probably very uncomfortable spot for some of these executives within the nfl. a lot of statements yesterday. this morning, they come in into the pr war room, any sense of what those discussions are with regard to the owners and broadcasters and the members of the league >> i can tell you what a few team owners have told me over the past week. now this is prior to president trump's comments this weekend, but even before this weekend, they were concerned about the ratings and they're concerned about the impact the protests are having on those ratings. i'm not here to tell you whether players have a right or do not have the right to protest, i am telling you that the protests

are definitely hurting tv ratings and this is something that the nfl owners are definitely concerned about. >> so do you think it's going to get worse now that the president has pretty much called for a boycott of the nfl does not crackdown on some of these bending the knee protests? >> ironically they may have come up to what may be a solution to the problem, which is i think what really ticks off a lot of viewers is when the players take a knee or let's say when they raise their fist after scoring. i don't think linking arms, which we saw a lot of this weekend standing there during the anthem is something that disturbs fans certainly not to the degree that kneeling does during the national anthem. so in a response, in a response to the president's comments, the linking of the arms may actually help the situation. >> we did get some comment from an nfl spokesman this morning. when it comes to the president's

mocking of the safety initiatives, joe lockhart said these remarks represent someone who is out of touch and really does a great disservice and then they went on to say, one thing the league will not do is discontinuing the anthem before games. are you surprised at how direct the nfl's language is back at the white house? >> not, not really because the nfl has been in defensive mode about this and, in fact, they haven't really come out with very strong stances in terms of what they would do as a league and just prior to this weekend, we actually heard the commissioner come out and say, you know what? we actually perhaps want to see more social activism by the players. ironically, that's the wrong message in my opinion in terms of tv viewership. a lot of people watch football because they want to get away from politics, no matter what the message is. they don't go there to watch

politics. they go there to be entertained so when you throw politics into the mix, you're going to lose more viewers than you're going to gain. >> we're going to find out what the -- what the path out of this is, if there is one, whether or not -- maybe, mike, maybe all teams become the steelers this weekend and try to avoid this confrontation all together. >> the steelers were booed when they came out of the locker room. i think anything that goes -- that is viewed or per received to go against the national anthem will hurt them. analysts on wall street are now saying if the trend in viewership continues, they're going to trim the earnings of the networks in aggregate by $200 million. that's going to send a very powerful message to the league. >> mike, with forbes, good to see you again. thanks. >> thank you. when we come back, passing the trump agenda.

tax reform and health care both in focus as washington gets ready to a busy week. taking a look at stocks this hour. it's down a third of a percent. the dow just pops into positive territory less than a point higher led bhoy me depot. "squawk on the street" will be right back. whoooo.

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. investors have to get ready to digest a busy week in washington. gop senators are focused on health care and of course the highly anticipated tax reform plan or at least parts of it expected to be unveiled this week. iman javers is live in d.c. >> good morning, david. the president's facing a narrow window on health care and a slightly broader window on tax reform as he looks to advance two of the key priorities of his administration. start with health care. the president's already lost two votes on that proposed new health care measure that would repeal and replace obamacare. he's lost the vote of senator john mccain and rand paul of ken both saying they are knows on the bill. that's the number that the white house can afford to lose. any more and that bill is dead.

we're expecting to see the cbo report on the bill come out and tell us how many people might lose health care under the bill and exactly how much it will cost. that effect the debate. that could come as early as today. no guarantees that we do see it today and on tax reform, a myriad, a flurry of events here early in the week leading up to wednesday when with we're expecting the president to roll this out with a major speech. the house ways and means committee is holding a discussion today. that tax reform speech is going to be on wednesday as well. we believe that the top individual rate under the new proposal will be about 35%, the lowest individual rate will be about 12% and on the corporate side we think the white house is going to go with a 20% corporate tax rate, that's higher than the 15% that the president said he wants but seems to be a nod to the mathematical difficulty of lowering that rate any lower without exploding the deficit. so it looks like the white house is on track to roll that out on

wednesday and we'll wait for more details on all the deductions and all the changes inside the tax code that of course are still key to the political maneuvering that helps get that deal done or not done later this week, david. >> real quick on this graham cassidy effort. susan collins is likely no. ted cruz also potentially but changes to the bill itself. any updates for us this morning? >> susan collins is the one to watch here because she's the likeliest no vote. if she became the third no vote that would doom the health care every. she might be waiting for that cbo report that i was talking about to give a sense of what the costs are here before she declares whether she's going to support the bill or not. she has said a lot of things over the past weekend that make a lot of people put her in the noish camp for now. we'll see where she lands ultimately. >> thank you in washington, d.c. >> you bet. joining us now former economic chairs and lonny chen

director of domestic policy studies and former policy adviser to the romney campaign. thanks to both of you. austin, i'll start with you on tax reform. any expectations this week in terms of what we'll see? you just heard the reporting. 20% on the corporate size. going to have legs >> i don't think it's going to really -- it depends how you define legs but i think the basic problem that the trump folks have had so far on health care and now on taxes is they seem to feel like if they just issue some details congress should just do what they say, and what they've described thus far will cost 2 to $3 trillion and i don't think they have the money to pay for that and anybody's whose taxes would go up topay for it is going to scream bloody murder. i think this specific plan probably does not have legs but it's going to open a dialogue. >> right. a dialogue, the key.

lonny, what are your expectations things in terms of this week that we should pay attention to >> i think we'll learn first of all if the health care debate is going to continue or not. there's been some discussion about whether september 30th is really the deadline that republicans will need to abide by on reconciliation. to use that vehicle, that fast track vehicle to get health care across the finish line, some republicans, like ron johnson of wisconsin are saying, why don't we take another crack at this in the next fiscal year. why don't we come back to health care i think the challenge with that is it's going to pa lieutenant the well on tax reform. republicans may have to make a choice this week, about whether they come back to health care again or whether they really devote all of next year to working on tax reform. we'll get resolution on that question this week. >> we've been focused, austin, on the corporate tax rate coming down and where that level settles at, the individual tax rate, where are they offsets going to come from what do you think is real

estatisticly in terms of trying to balance that. >> nothing is realistic. when you say -- how are they going to pay for these, that cost 2, $3 trillion, just the things that they've outlined so far. any time you're going to go raise 1, 2 or $3 trillion of taxes on anybody, they're going to notice and they're going to really object and the problem here is, we haven't set the stage the way we did in say 1986 where it was two years of laying the ground work for what the choices would be and building up momentum for making some tradeoffs. we haven't done anything like that. so i actually think what's likely to happen is like what happened with the border adjustment tax where they float some trial balloons, we'll get rid of the state and local deduction, we'll -- maybe we could tax health care as if it were income and there's going to be -- as soon as anybody hears about it, they're going to be really upset and back away from those and try to float some

different ones. >> in terms of trying to influence public opinion, i'm struck by how consistent the message is in interviews, in advertisingments of it's 30 years old the tax code, 30 years old, like it's a lawn that hasn't been mowed in 30 years, is that effective? >> well, i think it's effective with the republican base. i think the republican base looks at the tax reform effort as something that's long overdue certainly on simplification. i think many americans are frustrated by the tax code. i think it appeals more broadly potentially but the challenge really here tax is a difficult issue to message. fundamentally it's a difficult issue to message, it's a complicated issue. we'll have to see what the white house ends up doing and they will go straight up to tax cuts because at the end of the day that's a lot easier to explain than lower the rates and broaden the base and all the stuff around tax reform that economists love but people may not be able to relate to.

>> speaking of that, though, austin, are we going to be left with that age old debate at this point? they're doing to talk about dynamic scoring and 3% gdp growth. therefore being used obviously to offset the declines in revenue otherwise. aren't we going to get back to that basic argument that we've been having for the last 25 years? >> yeah, at least 25 years. probably more than that. >> yeah, since reagan. >> i think the only issue is, if they could rein in their ambition such that it added up to say less than $1 trillion, then they could use accounting gimmickry, arguments about dynamic scoring and say no, no it won't cost money. but what they've described thus far is so big that there's no way, even if you assumed unrealistic growth, even if you assumed massive -- they can't pay for it and i think they're going to discover that.

they're going to be frustrated by it. >> all right. we'll be watching closely to see what details we really get as this week unfolds. thanks to you both. >> thank you. >> thank you. let's get to sue herera this morning and get an update. morning, sue. >> good morning everyone. turkish president in erdogan in response to the iraq on independence from baghdad. he says kurdish independence is unacceptable to his country and that say matter of survival. >> angela merkel wing a fourth term. the nationalist party that surged will not have any influence on the country's foreign, european and refugee policies. one inmate is dead and at least nine injured after a large scale riot broke out in a prison. multiple inmates sustained stab wounds and were taken to outside hospitals for treatment. no prison staff were injured during the riot and no deadly force was used.

and take a look at these pictures. the european space agency has released these images of the aurora borealis. the phenom nop occurs when protons and electrons collide with atoms in the upper atmosphere. beautiful. you're up to date. that's the news update. >> thank you. when we come back the former ceo of heinz bill johnson's with us. we'll get his thoughts on the proxy battle. the latest episode of bing is on cnbc/binge. >> we should just be what we've always been. >> a sad middle aged lady. >> and grace.

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proxy battle. reiterating it's calls for nelson peltz to join the depend's board. it has a plan and it doesn't need the distraction of adding pelz to the board. we're joined now in a cnbc exclusive interview by the former ceo of heinz bill johnson who had his own proxy fight about nelson peltz just about a decade ago and is also now a try ann advisory partner. it was a nasty fight, proxy fight between you as heinz ceo and nelson peltz and what you

learned in the process that could apply to what's going on with p&g >> just an overall observation, to quote yogi berra, i'm watching this, our fight in my view was certainly much nastier. try ann wanted five directors, ended up with two. what i'm learned in the process, was as nelson joined the board he became a value added well-liked good director. i think in context there are things that that both sides can learn. i'm very empathetic with what proctor's going through having been to it myself 12 or 13 years ago. it is amazing to me that as somebody who went through the first one, much more difficult i think than this one, that no one ever reaches out and asks me about advice about how one might respond to these things. i think nelson became a really good director. i asked him several times to

stay on our board and he stayed for the seven years until we sold the company. >> proctor said it reached out to former board members that were on boards of companies with peltz and they said the positive reviews were not forthcoming. that's been one of the key arguments. management and sort of takes control and occupies a lot of time. trian pushes back hard and says nobody they spoke to was actually contacted. talk about what it was like working with nelson on a board like you did >> it was fairly simple. once you get by the sort of personal angst of the attack and recognize that it's not personal, it's about the performance of the business and the performance of the shares, then i think you quickly move forward. i've always been built to look forward never backwards. i really didn't spend much time agonizing about what had transpired. i spent most of my time trying to determine how we could work together and how we could integrate him into the board and

make him a productive board member and what we could do to improve the company. that process went much faster than i expected it to. it was a facilitated process whereby we provided lots of information to nelson and his team. they absorbed it. he came to the board meetings, prepared, asked very good questions. i think the process itself is much worse than the actual result certainly in my experience it is. >> just for transparency sake, you were the representative for trian but you're not involved in this p&g situation in any way, are you? >> not in the least. not in the least. just as an observer watching the president and tv and smiling to myself as i said about deja vu all over again. >> for me, too. david faber having covered that battle pretty closely all those years ago. in this case, p&g seems concern that'ding mr. peltz to the board will force a relitigation of

their business plan, a new conversation about their capital allocations, things the board is unified on and made decisions on. what do you think? is he voicegoing to be louder than everybody else's? >> no nelson makes himself clearly heard but if nelson buys into the culture of the board and the strategic plan makes sense and seems to be headed in the right direction, our experience was there were very few changes to where we were headed. he was very pleased with the results we generated and our overall performance and certainly the share price responded over the 7 years he was on the board, so no, i don't think that's fair. having said that, again, i understand where the proctor people are coming from, but one director on a board is not going to result in a complete makeover of that board. nelson asks very good questions, informed questions, sometimes very difficult questions but i spent a fair amount of time with nelson on the phone as an adviser asking him how he would handle certain situations and how i could move the board in a certain direction or so and i found him to be very valuable in

that process. >> not every situation is suited to an activist, certainly p&g would say that. do you think in this case, i don't know how much you know or don't know, that it is suited to an activist? >> i'm not going to comment on that, david. that's really for proctor and trian to adjudicate. nelson would be a value added director. i don't think he would be a problem in the boardroom. he has to operate by the same rules everybody else does. my experience is that most activism is instigated by shareholders who voice an opinion about a concern either about the company's performance, the direction its headed in, the culture, or the share price performance. as a consequence that's how these battles come about. it's not just activists sitting in the back dreaming these things up. you have to keep that in context as you evaluate this whole process. >> bill, is there a difference between peltz issuing recommendations that are centered on packaged goods in a

sector he knows well and issuing recommendations about big, broad management structure, the kinds of things that get studied at harvard business school? >> no, i don't think there's any disconnect at all. i think nelson has been around a long time. he's been on a lot of very successful boards so i think as he's absorbed how those board structures and how the management structures evolved over time he's learned some things that may be applicable. i'm not close to this situation it might warrant at least the discussion. he had certain opinions in our management structure, some we agreed with, some we didn't, but i think that he's absorbed a fair amount over time and so do i think he's relevant in terms of that discussion, absolutely. and i would all due respect to the harvard business school, i would take nelson's perspective often times over theirs. >> and i'm wondering, if you could just do a little storytelling for us. once he came on, do you remember the first big broad change that

happened because he was there and how that went into practice? >> it's interesting because it's not what you're going to expect. the firstest biggest broadest change that the directors came fully informed to the meeting and were very responsive to our discussions and our presentations with their own questions and they're own sort of opinions. and so, i think he created a factual environment for the board to have discussions and he certainly engendered better discussions about the category because he had some expertise in it as did mike winestein so i don't remember anything specifically beyond that, but he really did create an environment that improved the overall dialogue among the members of the board. >> not to get into too much of the nitty-gritty but p&g did bring up mr. peltz track record at heinz on the board. they pointed to this idea that the tax rate went down sharply during peltz estenure and that was the big driver of the growth

and stock price at the time. trian says the time frame is totally picked selectively and it's not even true. can you just set the record straight for us on that point and whether it does speak at all to mr. peltz's tenure on the board and the outperformance of heinz during that time >> sure. i'll give you a couple of overall observations. one is that both sides tend to massage the fact to fit their narrative and there's a pit of revisionist history going on here. the tax rate did decline intentionally. we worked very hard and aggressively as we internationalized our business to bring that tax rate down. one of the misca charizations is our shares outstanding actually increased. so we did not manipulate earnings by driving lower shares. in fact, our shares increased by 4 or 5 million during his tenure on the board and while the tax rate did come down, operating profits grew nicely. the roic grew exponentially and

we still generated 4% organic top line growth generating 32 consecutive quarters of organic growth which was extremely unique. so did the tax rate contribute certainly. did better operating performance contribute absolutely. did higher marketing spend contribute yes. you can take these characterizations and these facts out of sync and out of context and present anything you want but the reality was performed much better over the seven years when ultimately we ended up seg the company to warren buffet and capital. >> that's where i wanted to pick up. what's happening across food and beverage i know you're involved in some smaller faster growing companies. you're on the board at pepsico. it seems like no matter how many small faster growing brands, some of these companies buy and we got another one at unilever today, nestle buying blue bottle, growth is just very hard

to come by for these big conglomerat conglomerates, why is that >> it's a combination of things. the innovation is focused primarily on extending brands and businesses that companies have as opposed to looking at it through unique lens of the millennials. i think secondly, there's been a historic tendency to focus on the trade, the retail environment as we know it as opposed to the changing environment we see whether it's amazon or whether it's ald did i or whatever it may be and i think the small companies have not been encumbered with a historical culture and traditional focus on what they do. i'm chairman of a yogurt company where we are driving significant growth, averaging 50% analyzed growth over the last three or four years. we have a unique position and what happens is, a big company tends to buy these brands and the first thing they do is integrate them into their own culture and structure in an effort to generate synergies but without thinking about the

knewances of how these businesses are run and the environments in which they're run which tend to be more focused on entrepreneurs and tend to be more focused on the changes that are occurring in the environment. and so i think those are the kinds of differences. i observed this quite a bit now on the outside as chairman of two small food businesses. >> we'll have to have you back on to talk about some of these big trends that we hit all the time. thank you for now. >> thank you, sarah. >> i thought the bengals were going to win yesterday. bill johnson, the former ceo -- >> just can't stop talking football now. >> yeah. when we come back -- >> i just know so much about it. >> dow's down 33. he number one dairy and apple producers in the eastern united states. supported by innovative packaging that extends the shelf life of foods.

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welcome back to "squawk on the street." breaking headlines involving former congressman from the new york anthony weiner has now been sentenced to 21 months in prison for sending sending explicit messages to an underaged female all of this following the plea deal that he said he pled guilty back in may to these charges, but 21 to 27 months was what federal prosecutors were looking to get in terms of a sentence and we now learned it's 21 months, so breaking headlines here, carl back to you guys >> dom, thank you very much for that let's get to the cme group in chicago this morning and check in with rick santelli and get the santelli exchange. rick >> good morning, thank you, carl i'd like to welcome former ecb president john-claude trichet. thank you for showing up, i know you had travel issues and we

have a time delay. angela merkel, of course, looks to be have won a fourth term i was wondering if you would give us your thoughts, being you're on the french side, the second largest economy, what you think of that victory under the context of the last victory, strong euro, monetary policy changes ahead, and the whole notion maybe better shared growth among some of the member states versus germany in the future >> well, first of all, it's a pleasure to be with you, rick. on the election in germany, i would say first it is a victory. we should not forget that. even if the parties of government are losing a lot of ground, and that's obvious it's also obvious for the spd, so we have the shift that we have observed in many other countries, that being at the helm of the country today is

certainly difficult and there is some kind of, again, punishment by the people. to which the extreme right and the right, which is visible also in many other countries, so we see a general tendency that is confirmed. that being said, the country won, and for the fourth time, so it's remarkable, and again, the parties of government have seen the maturity of course, yet doesn't want to be part of the new coalition, so it creates a very, very potent change and we have to follow very carefully now what will happen for the new coalition, which is a concern that she doesn't want a big government, necessarily seems to me a coalition what

they call the coalition. >> well, mr. trichet, we're almost out of time and i thank you for your thoughts. very quickly we see weakness against the euro, in a very short answer, we're out of time, do you think there are any currency issues that can be gleamed at all from angela merkel's victory? >> no, frankly speaking, i think that we have also to be aware of a limited reaction from the market in any case, the coalition, the negotiation of the coalition and the new program, we think, weeks, weeks, weeks, perhaps even months as it did in the past >> excellent >> much too early to have any judgment >> thank you, mr. trichet. yes, much different system than the u.s., but one thing isn't different, it's getting harder to get along, especially in the upper echelons of government

thank you for your thoughts today, sir david faber, back to you >> thank you, mr. santelli now it's time to send it over to john ford for a look at what's coming up on "squawk alley. john >> david, facebook forced to backtrack on plans for its stock structure, even as pressure intensifies. more details coming up how facebook learned about political meddling on its platform during the econelti we'll dig into that coming up on "squawk alley"

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stocks stumbling here. dow is quickly down 63 points on comments from the foreign minister of north korea, saying that the president's comments over the weekend were clearly a declaration of war, saying north korea has the right to shoot down strategic u.s. bombers, even if they are not in north korea air space. we'll watch that "squawk alley" is back in a minute

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