2018, and "squawk box" begins right now ♪ here i am, rock you like a hurricane ♪ live from new york, where business never sleeps, this is "squawk box. all right. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off for the day. take a look at u.s. equity earnings after a down week last week, you are going to see some bounce back the dow futures indicated up just over 97 points. s&p futures up by 11.5 the nasdaq up by close to 40 points all kinds of streaks were broken last week. there were a string of up side weeks. we'll see how things shake up as we get closer to the opening bell this morning. take a look at what happened

last week, red arrows by the shanghai and composite down by 1.2% in some of the early trading that we're seeing now in european markets p you giefs are barely higher. stocks there up by over half a percentage point take a look at what's been happening in the u.s. treasury market last week on friday the 2-year note hit the highest. >> moving up. >> the two year the highest since the financial crisis ten year within distance of it of getting above 3%. and the 30 year at 3.105 >> flat. i'll take the two year. >> get your money back with that. >> yeah. no principle risk.

>> cbs ceo leslie moonves is leaving his post after a number of not new but six more cases basically of women accusing him of sexual harassment and assa t assault. cbs announced the departure is immediate. the coo said -- >> ianella. >> ianella -- a vowel there, will serve as acting ceo while the board conducts a search. moonves will donate $20 million on one or more organizations that supported the me too movement and that 20 million is going to come out of any severance that moonves may receive as they conclude the investigation.

there was 100 million. >> or he could get nothing >> other than that, cbs will make it. >> there were additional -- at least one additional -- >> the whole environment cbs also overhauling its board of directors stepping down six new independent directors have been appointed to replace them including one of the friends of "squawk box," brian goldner the ceo of hasbro. and richard parsons. we'll have much more on the future of cbs. porter bibb from media tech a among other folks today. once again, ronan farrow, big piece in ""the new yorker."" a lot of detail. >> a lot of detail

he talks to the person, the accuser, and then does all of the background and talks to whomever -- this was back in the '80s and '90s. talk to people -- >> corroborate. >> corroborate. >> he even brings up the bad news on accusers financial trouble, had broken the law into some areas. brings that in too. >> that's right. >> i think you have 12 now >> once again, getting up to 12, it's like -- >> clearly established. >> 12 is -- one person has financial or legal problems, maybe there's -- who knows but, you know, 12 is 12. >> look, the details are pretty stunning not even stuff i would describe on air. >> i know. you know, jaw dropping. >> yeah. right. pretty stunning. we'll talk more with porter bibb in a few minutes.

alibaba co-founder jack ma will step down one year to the day. he's succeeded by current ceo daniel zhang the move is meant to foster long-term growth and reduce the dependence on any one person ma will remain on the board all the way until 2020 hurricane florence is on track to hit the east coast later on this week they say it could hit the coast on thursday as a category 3 storm or higher. the governors of virginia and south carolina have already declared a state of emergency. today is the peak day. in china, trade surplus with the u.s. hit $31 billion in august, up from 28 billion in july china a he china's exports accelerated which targeted $50 billion so

far and 50 billion in chinese exports. meantime, china's imports from the united states grew 2.7%. that's a slowdown from the 11% growth that was posted in july i don't know what eamon is going to talk about. go to washington for a wrapup with the big political stories and a look at the week ahead wasn't a slow weekend, i guess, eamon. given what the news cycle, it seems like not quite as earth shattering as some of the previous weekends. >> just a torrent of news over the weekend, not the dell ulg we are -- deluge we're used to. we're going into a new week where the white house is trying to mount efforts to try to find whoever it was who wrote the op ed piece anonymously in "the new york times." accusing the president ofa morality and incompetence on the job.

kellyanne conway was on "meet the press" yesterday she said despite the author writing there were many people inside the administration trying to thwart the president's actions, command and control of the white house is clear and it's centered in the chief of staff, john kelly. here's what she said. >> let me ask this, who runs the staff. >> the staff. >> is the chief of staff doing his job? >> yes. >> if there are so many rowing le rogue leakers? >> put me down as pro general kelly. >> i understand that. widelyexpected a new $200 billion in tariffs on china. already some questions about what that will mean for individual companies including apple. take a look at the president's tweet over the weekend the president suggesting that apple 14uds simply make it products here in the united states he says apple prices may increase because of the massive tariffs we may be imposing on china. there's an easy solution where there would be zero tax and indeed a tax incentive make your products in the united

states instead of china. exciting #mega. that's expected this week. then last week he suggested there's $267 billion in tariffs which would effectively put tariffs on everything china exports to the united states that i'm told is the president's plan on what to do if the chinese retaliate. an escalating trade war between the united states and china as the white house continues to focus on finding the leakers and 2350i7b finding out who -- >> did you see they're not trying too hard because they're able to use this -- >> because it works to confirm the deep state thing, right? >> i've seen so many articles,

eamon. these are dead enders isn't the right word it's not the hard core base of trump that criticized it someone wrote for the "huffington post" that this guy is not a hero. i think that's from the side the "huffington post" said you didn't have the nerve to put your name on it yourself they want people to put their name on it but it's almost as if both sides have -- and a lot of people just said this is a sanctimony. dripping with sanctimony unelected bureaucrat who's deciding what side of the country -- >> it's unconstitutional it didn't work as well as "the new york times" had hoped. we talked about this, a constitutional crisis and unconstitutional crisis. constitutional crisis is when there are two arms of the u.s. government at odds with each

other and no way to solve that in this case it's people using unconstitutional means and they're trying to achieve an effort this is not the 25th amendment it's not impeachment my guess is this is an author who's frustrated with the fact that they don't have the votes for the 25th amendment but nonetheless to like to curtail this president because of what he sees as instability emotionally and policy wise. >> i still need to know if it's the deputy under secretary i don't know how low it goes woodward was trashing the anonymous writeup. the same week he had a lot of the same sort of -- i don't know, you were left with the impression whether it was woodward's book or the anonymous writer. >> one thing that's interesting, there are all of these people

out there who denied, starting with the vice president and a number of senior officials said, no, no, it wasn't me, it wasn't me there are a number who have not denied it. the non-deniers are as interesting as the deniers is that an intentional effort? they know everyone is out there. they're trying to save face here for the person who actually wrote it even if they didn't write it themselves. >> or is it just a situation where you're going to be principled and say, this is ridiculous i'm not going to get into this guessing game, this parlor game? >> i don't know. i think the white house is very, very eager for key players to issue these denials and say it wasn't them. >> no kidding. >> i'm okay with the word denier here you're actually talking about -- >> denial. >> denying something it's such a loaded term in other contexts

>> deniers and nondeniers. >> the question is are the nondeniers trying to create big faith to protect the person. there are a number of suspects. >> that would be -- >> does it mean that they know who it is? >> or do they support that the person did this and the ideas in the op ed and therefore they're trying to keep that person in place even if they don't know who it is by allowing for a number of nondeniers to be out there? >> this is fascinating all kind of game theory, to coin a phrase, how you play this, what's going on inside this white house. we've never seen anything like this. >> good old days the decider. i decide >> good impression there. >> i'm the decider. >> i denied you're the decider idea my that. >> the left loves that he was a good man.

>> all right, javers. >> all right, kernen >> i get to be the decider. >> no. no, you don't. >> i really don't? >> not at home either. >> i don't either. let's get back to the markets. joining us to do that is edward stringham. he is the president of the american economic institute and phillip from federated investors. phil, i'm going to talk with you. all of the talk about apple and the tariffs, what does this mean, first of all, for apple? what does it mean secondarily that these $200 billion in tariffs actually are put on? >> let's talk markets here market has had a terrific run. we're up by 15% or so from the beginning of april until a couple of weeks ago. the gdp njit second quarter. it was phenomenal. we're in the midst of what i

would characterize as a sort of fundamental vacuum this is where things like the tariffs or concern about the trade and tariffs come to the forefront. i think this is one of the reasons why. the markets are getting a little bit nervous with the absence of any new fundamental news. >> is this just noise and it's going to be noise that sits there until the next earnings season comes around or the next government report or is this something that you think actually matters >> in our view we think the trade and tariff situation is noise. we think it's a negotiated ploy. we're trying toresolve the issue with the intellectual property and try to narrow this $375 billion trade deficit with them, but the question is still out there, will this negotiating tactic work? are we going to be worse off a month or two now than we think

we're going to be? that's something the market has to grapple with. >> that is the question. what do you think the answer is? >> i would love if it's just noise. if that's the bottom line, it's going to go away if they start rachetting it up, it's going to hurt them. apple can't import this stuff and not charge the consumers more now the alternative is we're going to make iphones in silicon valley it's going to be way too costly if we have to manufacture everything here. >> do you think that's where we're headed >> i mean, it would be a huge disaster if these things actually materialized. we cannot build everything in san francisco, in palo alto. the apple corporation is competing internationally with samsung and to put them in that competitive disadvantage, they're already going to lose market share.

>> edward, let's just look at the economy since that's what you do and try and figure out what we got from the jobs report, gdp, those numbers have been incredibly strong. >> yeah. >> where does this lead you? >> we have an increase in 200,000 people on the payroll. wages are up all sectors, all levels of education nearly 3% so overall it's pretty good we have an economy humming in some areas there are some soft spots with the housing market, in interest rates which would be expected, but really things are moving along quite well. >> phil, what do you tell people to do? because they are sitting at or near the new highs and, you know, it's been a while. we've kind of earned our way back to that after sitting there in january what happens at this point is this something that you're betting on saying, yeah, we're going to continue to rise? >> well, the short answer is we're playing both ends against the middle, i guess.

we at the end of the second quarter had encouraged some clients to take some chips off the table. remember, we took 3% out of our equity overweight anticipating there would be some softness in the third quarter, 5% give or take we've encouraged the clients to say, okay, if we get this air pocket we have a very powerful fundamental view of how the rest of this year is going to end up. you still have a 3100 s&p forecast. >> what's an air pocket? the 5% >> exactly if the blarkt to pull back into the 27, 2800 level, we tell clients that would be a good buying opportunity and we'll end the year on a high note. >> any concerns as we get into september and start talking about ten years ago what happened in the financial crisis or are we immune from crashes like that? >> well, i don't know that we're immune from them.

>> we're here in the '07, '08, '09 period. >> you don't see anything like that bubbling up >> nothing that we can see the unknown unknowns is what referred its ugly head back then we didn't know about that either. >> phil orlando, thank you so much >> seems like we have breakfast like every week, doesn't it? things are moving fast. >> passage of time. >> ten year anniversary. my son is going into tenth grade. remember when he was preschool >> yes, i do it's been a tradition. i'm not really sucking up to the teachers, but i'm asking them to be nice to try to, you know, instill all the good values in the kids but, yes, today is the first day of school which is a late start.

>> look at scotty. >> yeah. tenth grade now. yeah and have you ever -- >> three of ours are back in school already. >> all three >> all three >> he got out late there he is. >> wow look at him all grown up. >> all grown up. >> sent that to blake and she said something about how good he looked i can't remember the expressions she used really nice dressing like some college talk or something. good luck, scott great grades you never know >> i can't believe he's in tenth grade. way to go, scotty. >> way to go, scott. coming up, len moonvs moonv. look at the premarket winners and losers in the dow. early morning trading. who knows by the time we come

back we'll be right back. obvious. sometimes, they just drop in.

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les moonves is out at cbs. long-time network chief resigning amid sexual harassment and sexual assault accusations joining us is phil bibb. it's shocking and the first time we're considering it how much does cbs as a company, how much were they privy to. >> or at the board >> that's the issue. >> for years and years and years. there are already half a dozen class action suits against the company and the board because it's been known at the board level for months and months and months and maybe years, they've had allegations after and before charlie rose, they had brought a

law firm investigating him right after the charlie rose situation there's nothing happening. mr. moonves unfortunately is not apologizing for anything he's denying strongly. i think he's going to end up getting zip because the deal that they negotiated over the weekend gives him 100 million plus against the almost 250 million that his contract calls for but he gets nothing if the allegations are true. >> which means the 20 million that's been donated from the two causes are coming from cbs >> that's right. exactly. >> one of the most common phrases is absolute power corrupts. >> oh. >> i've long thought hollywood is a cesspool. not just hollywood, it's media,

which comes back to this city and a lot of what's happening here do industrial companies, do guys in charge say if you want to move up in the company, this is what i want? does it just happen everywhere and now it's being -- >> the worst -- the worst excuse that i've heard from some of these executives, then was then and now is now it's a different culture knew. what were you thinking >> what culture could somg ever these allegations be they're just allegations but you're hearing more. >> the difficulty is the he said she said issue that is really difficult to prove in zblourt he said she said she said scheid. >> that's right. but there are going to be more accusers coming forward against mr. moonves and that's unfortunate. the real issue here is the

board. the board is supposed to be representing the shareholders. ironically the cbs stock after the news broke on thursday, you guys broke, stock is up marginally almost 3% in after hour trading. >> the board, six new members leaving, six new members brought in. >> six new men and women on the new board. what's the disposition if you're a cbs shareholder, there's huge liability in the class action suit. i know they're going to go after them what happens to cbs? >> what is the liability isn't there directors and officers insurance >> they have that insurance so it won't hurt them personally. if you're a cbs shareholder you have to say, what is going to happen to this company now this curious anomaly that sherry red stone spoke about, she said

for two years i'm not going to affect the continuity. they should be together because they're worth 20 to 30 million. >> she's still pointing at carrie red stone. >> still worried about it. >> have you been reading about jeff bager nchs you bet ronan is the hero in this situation. it goes back to nbc hao says they had no corroboration. what's interesting is what does happen to cbs. what happens to viacom. >> what happens? do you think they get picked off? >> i think they will because they're sitting ducks right now.

they're very vulnerable. les moonves did a great job of lining the changing shifting landscape of legacy media, but they can't survive as a stand alone, either one of those companies. >> porter, thank you we have a lineup of people talking about cbs. you're our first porter bibb, the lead story on this everywhere "the post. wall street journal. news crossing from snap. the chief strategy officer imran khan will step down. he'll stay for an interim period to discuss procedure he says this is not related to any disagreement with snap imran khan stepping down.

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welcome back >> good morning, everybody >> the departure is effective immediately of les moonves >> there are chinese imports in the united states

>> in other trade news, ford says that it will not be moving production of its hatch back wagon from the united states to china. this comes despite president trump's claim that the tax on imports might mean that it can be built in america. trump tweeting yesterday, this is just the beginning. this car can now be built in the u.s.a. and ford will pay no tariffs. in a statement ford says it would not be profitable to build the focus in the u.s two weeks ago ford had said it was dropping plans to ship the vehicle from china to america because of those new tariffs. u.s. equity futures have been higher. the dow futures are indicated up by just over 100 points. 107. s&p futures up 12.5 and dow up by 42. the national average for a

gallon of regular unleaded is at $2.91. industry analyst says the price might fall 2 to 4 cents a gallon by the end of the month. after labor day, the weekend. >> going down. >> driving miles go down too. alibaba executive chairman jack ma unveiling his succession plan saying he will step down next year. eunice yoon joins us with this story. eunice, this is a huge move. >> reporter: yeah, absolutely, becky. you know, he chose a very special day because today is jack ma's 54th birthday and it's also teacher's day here in china. so on social media people have been congratulating teacher ma and he chose the day because he wants to return to life as a teacher. for alibaba they are getting a new chairman in one year's time. he said that he is going to oversee the transition he will stay on as a bort member

but he's going to pass the the folder to daniel john. he's been with the company since 2007 he's the ex-ceo of tabo and he was the coo of the company so jack ma in a letter to shareholders and others praised zhang for his mind he holds dear alibaba's mission and vision a question is whether or not daniel zhang would be able to fill jack ma's shoes alibaba and jack ma have been completely synonymous. he's always been the elder states man not only in the company but in the chinese tech scene. he's been the one that's been pair a chuted in if there's a problem with the chinese government or he's the one that goes to visit president trump

who goes to insulate alibaba with the trade wars. there's a question as to whether he can fit in that role. zhang is a solid manager, cautious, but a man who doesn't crave the limelight. perhaps ease some of the investor concern ma addressed that question in his letter saying the one thing i can promise everyone about this. alibaba was never about jack ma but jack ma will always forever belong to alibaba. >> eunice, thank you we're going to continue along the theme, not talking about alibaba but talking about china. president trump talking about the trade deals with china the president threatened another round of tariffs as you are aware of by now.

$267 billion the chief investment officer don rutledge he's a cnbc contributor. he's been coming in here talking about china and more changes what's ahead >> absolutely. it goes back to him. >> the santa monica days. >> former city so all this time you've been watching what's going on with china. there's intellectual property theft. there are trade dollars and it's almost like we're seeing a shrinking asset base here as we export our property overseas because of our consumption versus theirs. i know you don't like any of the current measures that are being taken. do you want to go back to that status quo that we talked about for the past 20 years?

is that sustainable for the united states, to just let these things happen? do you think there's a better way to approach it >> status quo is never a good place. status quo never was there's been massive changes over the past 10, 20, 30 years back when -- it's better now it's better now. xi is not a good guy i've never said that intellectual property in the beginning in china was handled -- my beginning in china was handled by keeping things secret i've had thingsstolen from me in china where we opened a factory and the manager -- we shut down and the manager goes across the street and starts a new business. >> really? >> oh, yeah, absolutely. i've had things like that happen here, too. there are bad guys -- >> you're not ee squating this -- we seem to think this is part of the pattern in china so bringing in foreigners so

they can specifically do this. >> nobody's forcing u.s. firms to go there so they're not bringing americans in there. many american products are manufactured in china. shipping stuff on a boat takes weeks and costs a lot of money shipping services on optical fiber is speed of light and doesn't cost anything. >> that's not part of what we're looking at. >> many people focus on the merchandise trade deficit. that's the big number. >> right. >> i don't know any analytical meeting of the merchandise trade defic deficit. all i know is across the world is it has to be zero what has to balance around the world is the current account current account includes services america has a huge surplus in services think of all of the guys in

times square, lawyers, accountants, all of that stuff you may not like a lot of those guys intellectual property is very important. now you've got alibaba i met jack ma when he was three years old. there's a large group that wants to protect intellectual property in general it is making head way. >> will we do the 267? if we do, will both countries lose is there anything positive about levying going up to that level >> americans here, chinese guys there, we whether both lose. if i say what about that american, there are some americans that will win, there are chinese guys that will win because you're changing prices of things. but basically 10% of the first

round ever tariffs were consumer goods. this round there's more. the next round after. >> is that going to mean the prices will go up like at walmart? >> no. a price of something goes up behind you and you have to decide what to do about it if you raise your price the customers won't like it. there he is a game of how the price happens. it takes a little time but they're going to go up in both places. >> are we going to get through all of these trade wars or is there going to be a financial -- it's the ten year anniversary. that's your worry, there could be some kind of financial event. >> we survived osama bin laden we're going to get through this. the event to watch out for, one of them is i'm producing something.

a part i need is in the crate at the border and i can't get it so i have to shut the factory down. supply chain shutdown risk that's an issue here more in the u.k. with the brexit going on a second issue is there's a lot of dollar debt that's been taken on during the zero interest rate period the dollar debt is getting heavier as the fed raises u.s. interest rate. the death of some of those u.s. businesses could also skip across the stock markets and bond markets in a con taj began fashion. i'm not worried about the economy falling apart. >> don rutledge, chief investment officer long time squawk person. coming up in the next hour, lessons from the financial crisis we'll talk to former under secretary roger altman since the fall of lehman

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edge google will appear before america's top court tomorrow the outcome could have implications for major technology companies around the world. google is appealing the so-called right to be forgotten. the company says this would unfairly let countries exert power beyond their own border. regulators in the united states and elsewhere have started to push legal authority across country lines. the outcomes could have an outcome on who polices everything from privacy, to cyber crime and taxes. when we come back this morning, investor mark ide will be talking to us about his latest investor he's purchasing in the esports overwatch is one of the most popular game in the world with more than 40 million players. as we head to break here's a quick check on the european markets. ♪ and how do we spend our time

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all right. welcome back, everybody. the sports world is focused on the kickoff of the nfl season, but our guest right now is jumping into the sports action off the field in esports joining us right now is mark

ine. thank you for being here esports is huge. it's going to be almost a billion dollars this year. but there are still a lot of people that don't understand what it is what would you tell somebody who hasn't heard of it >> it's professional gaming. gaming is one of the biggest trends in the world. and these are the best players in the world and esports is growing faster than any other platform. >> people will watch them in stadiums, online, on television in some cases. >> all of the above. >> this is a brand new franchise you have purchased doesn't even have a name yet but what drew you into this? >> if you're looking at kids of the next generation, this is what they're doing they're doing this in huge numbers. it's growing so fast and our community in washington is really into gaming.

close to a million people are playing overwatch in the capital region this a global league i thought it was important for our community to be represented. i wanted to bring the team to washington >> overwatch is the league that activision owns. bobby kotick has been the one who has been driving things. part of the interesting part about this is it is based in cities like the nfl or nba and other things and that adds a unique character to it. >> yeah. traditionally e sports is a tournament format. last season was the first season it was played in one place next season will be too. and in 2020, it will be home and away amongst cities around the globe. that's the other thing about this and 13 teams in north america. and we will play each other. we will go to seoul.

paris will come to washington. which i think makes it incredibly exciting. >> how many people -- >> what's overwatch? >> it's the league. >> it's the game it's the activision game >> but will it always be this game >> that is the question. >> then if you're a professional overwatch player, what happens if you aren't a professional at whatever is next >> you can't necessarily transition to the next game. >> football, you have a team >> there are games now with vibrant esports ecosystems they're all thriving the numbers are unbelievable we launched this team on friday and over the weekend it's been over nothing we've seen. our tweets are comparable to the u.s. open tweets as a franchise. >> how do you make money >> so we're not talking about the price of the teams, but one of the other interesting things if you look at the audience

already overwatch has about 30 million viewers. that's half of the nhl at 65 million and baseball has 114 million. but the monetization of it is about 1.5% >> but how do you make money >> you sell tickets. you sell sponsorships. you sell media rights. the league itself has a $90 million streaming deal over two years. >> the big money for other sports that we watch, professional sports, comes from television contracts are you going to have television contracts that pay you for this stuff? >> so there's a $90 million streaming deal that's already there and there's an espn deal >> who did that? >> twitch. they're paying $45 million a year for overwatch it's for people of a certain generation for some it's hard to understand but who would have guessed people wanted to watch people play poker or bowling? look, i'm a golf fan

but even watch people play golf. >> rained out. >> this is the next generation when there's such a huge community of people playing this as amateurs, they want to see the best in the world. >> tried to watch a giants/jaguar game yesterday i'm ready to watch overwatch because the golf was rained out. thank god the u.s. open came on. >> it saved you? >> it did. if i see eli throw another pass over the middle that doesn't get caught, i can't watch. >> we got a new esports fan. >> overwatch are things happening >> there's lots going on >> i guess i missed the touchdown because i was asleep i did -- i fell -- but that's not necessarily different. >> that happens a lot. thank you for coming in. mark ein when we come back, the end of an era at cbs les moonves is out furef outhg to talk abt e tu othe network straight ahead.

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monday morning markets guest host and technical analyst katie stockton is here to talk trends, investment ideas, and what's likely to move stocks longtime cbs executive les moonves pushed out of the media giant amid allegations of sexual misconduct what it means for the company straight ahead and bracing for florence, the east coast preparing if what could be a category 4 hurricane. the landfall, the latest on the storm's path coming up ♪ live from the beating heart

of business, new york, this is "squawk box. good morning and welcome back to "squawk box" on cnbc we're live from the market site in times square. it's raining now you couldn't play the u.s. open because you were going to die of heatstroke to 50 degrees this morning in the rain. >> it was chilly. >> i'm joe kernen along with becky quick. andrew is on assignment. for the hour, we have katie stockton once again said the downside action looked like it was complete and we were going to go and we went again. >> most of the time, right >> yeah. it's kind of rigged.

quite an advantage u.s. equity futures at this hour are indicated up 117 points the nasdaq's strong up 46. s&p up 13 or so. here's what's making headlines at this hour alibaba cofounder jack ma is retiring as chairman of the board next year. replacing him? daniel zhang ma will remain in his role for another year he's young 54 after that he plans to stay on the board of directors until 2020 at the shareholders meeting that year. switching gears, more allegations of sexual misconduct in hollywood the long-time ceo of cbs is out after more women alleged les moonves harassed them over his years. the board will conduct a search for a permanent successor. the allegations were first

brought to light in a new yorker article in august in which six women accused him of sexual misconduct and damaging their careers. we'll speak about this in a couple of minutes about the move by cbs a lot of it was in the '80s and '90s it seemed like it stopped in the 2000s at some point. >> early 2000s i think is the most recent allegation >> one of the accusers, the woman is in her mid-80s. >> that allegation goes back 40 years. amazon is planning to open its checkout-free store in new york the amazon go store which has no cashiers and allows people to buy things with a smartphone app

is a concept that can alter brick and mortar retail. hurricane florence is on track to hit the coast as a major storm later this week. the hurricane center says it would the united states coast as a category 3 storm or higher the governors of virginia and the carolinas have declared states of emergency. today, by the way, is considered the peak day of hurricane season it's the height of an eight-week period when the most powerful storms usually form. let's talk markets our guest host katie stockton. doug kotay one of the things that struck me in your recent thinking is this is a stealth economic boom we're in >> sure is >> who doesn't know about? what do you mean stealth >> well, that's exactly why i said stealth economic boom because all i do is hear bad headline news when you see corporate earnings at all-time

record highs manufacturing, came out at boom levels the consumer, we had a great unemployment report on friday. wages are going up what's not to like about the economy? >> you see us talking about it maybe you don't see -- maybe you don't see some of the other media outlets talking about it they don't want it to happen >> and there's still this sort of pessimism i'm hearing strategists come out with, oh, we're going to go into a recession next year. no this is not a sugar high this is a self-sustaining boom >> donald trump just tweeting the gdp rate, 4.2% is higher than the unemployment rate 3.9% for the first time in over a hundred years. >> we do have an election coming up, but i heard president obama last week. these challenging times that we're going to get through it always -- it's kind of -- that's kind of incongruous there are some troubling aspects to certain people, obviously,

but in general if you can't look at the current economic environment -- but they write it off as a sugar high too. >> that's the thing. what really was the catalyst to get this going it was a pro-business economic policy now, what i worry about, i worry about the big three. i look at not only the u.s. but europe and china these policies, these pro-growth policies have made europe uncompetitive. and i think that's -- >> when have they ever been competitive? >> that's a good point that's true. but now it's clear with tax rates going down like they did, now they're talking about -- the u.s. is talking about tax rate 2.0. europe, all of a sudden you're starting to see some of the growth trajectory go down. >> your biggest worry in when you were talking was people don't realize how great it is and they're going to make it

>> i think we talked about this in the summer during the italian crisis >> people don't know how great it is? >> what they have to do is position in their portfolio to benefit. >> or else they're going to miss it >> what i'm seeing is there's still this defensiveness and fear out there they have to save for retirement so they should be in the market whether 60, 40, or -- but they have to get market returns and they have to ride the volatility clearly when corporate earnings are up 20% for the quarter and last quarter, you should be in the market no matter what. >> okay. so you don't need to talk fundamentals you can ignore everything he just said. but you gave -- you had an s&p number the last time you were on that was, like, really crazy >> probably talked about 3,000 >> or even more, right >> 3,300. >> so even after this move we're at 2,871 you're not afraid to say 3,300 >> and the fear you cite is what

could keep the market going. to suggest people may be under invested and these pullbacks we've seen are bought and they're very shallow and short lived. that can be a positive longer term. >> so we should be happy that the president's crazy tweets caused half the country to think we're going down toe tohe toile so -- >> there's the line. >> he's got half the country thinking this is the worst stretch the country has been through because he reads the tweets it's genius. >> and productivity. >> it's a little contrarian, let's put it that way. the market still acts very well. the pullbacks like i said, they're very orderly and you see the rotation back into tech go straight away, i think we'll see it this week >> doug, since there is half that think, you know, we're headed straight to hell in a hand basket, what if they change the composition of the house in

november and the dems take over? >> did you just ask me a political question >> you care? >> i think it'd be gridlock. >> you don't care if nancy pelosi is speaker? >> no. you know what? this is what i find. i focus on the market. i focus on fundamentals. i focus on the policies. as far as the political washington, d.c., it comes and goes >> everything you just said was because trump got elected. now you're saying you don't care >> we already got the tax cuts >> you're done with him. so you don't care what happens you're ready for pence >> no. i'm going to avoid this political question >> all right but everything you said had to do with -- rick had -- rick took his boot off last week and said this is what we had, a boot on the neck then it was taken off. a lot of this you're talking about has to do with what washington did >> letting the private economy do what it does best -- >> what happens when they don't let it

>> it's a problem. look at europe that's what i was saying >> so you don't think they will repeal the tax cuts if -- >> no. absolutely not no absolutely not >> because he wouldn't sign it and you don't have the senate necessarily either >> not worried about it. >> all right all right. v voya doug's from voya we have a lot of your people on. >> yes, because you sing that often. >> katie's with us from fairlead you don't have a -- all right. you can use that the rest of the hour gas prices remain steady the last two weeks the average price at $2.91 but here's the silver lining industry analyst says the price may fall 2 to 4 cents a gallon by the end of the month. shares of ford are hovering near a six-year low. what's next for the struggling automaker? phil le bebeau joins us with moe

on that. >> they're actually at a six-year low if we look at ford shares over ten years, you've got to go back to 2009 to find the last time it was hovering there we're pennies away it breaking through that and going back to levels we saw in 2009. the big question that's hovering over the stock, what's the game plan in terms of turning around this company for ceo jim hackett? he's been on the job little more than a year. analysts have only heard from him a few times. what's the turnaround plan the most likely possibilities that people think would happen, exiting europe, exiting south america. will they cut 10% to 15% of the workforce which is another expectation that's been floating around on wall street? and what's going on with the autonomous vehicle strategy. but when you talk with analysts, they make it very clear. they're not really sure what's to expect from ford.

>> what worries us is on the equities side, there isn't a whole lot to be excited about. you're only talking about earnings power off of what is a smaller revenue base which they need to do. it's just something that doesn't excite us on the equities side >> few know what to expect from ford president trump yet, i know you talked about this last hour. he tweeted this last hour. ford has abruptly killed a plan to sell a chinese-mead small vehicle in the u.s. because of the prospect of higher u.s. tariffs. this is just the beginning this car can now be built in the usa and ford will pay no tariffs. the first part of that tweet, that's correct they did stop plans to build in

china and import to the united states the second part, the suggestion that ford will build it in the united states, that's not happening. ford has made it clear that they're just not going to sell this vehicle in the united states the market's not there for small vehicles so if it turned around and maybe there was a market there, then maybe ford could build it in the united states and not pay any tariffs. but that is not in the game plan, guys they are not building that vehicle and selling it here in the united states. >> they're not even selling sedans anymore >> i feel bad for ford our lineup sucks so badly, we aren't going to sell any more than a hundred thousand of these things so we can't make them here and make money on them because no one is buying our cars that's sort of what they're saying, isn't it >> yes but ford's not alone in terms of selling cars it's everybody quickly we are seeing all of the automakers say why build it here because it's very low profit, generally speaking, sedans people aren't buying them. >> and as long as gas prices stay low that part of the equation could

change if gas prices run up to $4 a dplgallon or more >> and that's the concern. some people think gas prices may suddenly spike >> ford is back to $9. that's unbelievable. it's a nine-year low >> what happens in terms of where the blame gets placed on this are people missing mark fields at some point? >> no. this started under mark fields this is not like mark fields skates free here the big concern that wall street has is that jim hackett has said we need to transform this company. great. nobody's arguing with that transform the company. give them an idea and what a plan is. they had a meeting scheduled for early september. they scrapped it they said we're not ready yet. we know we will be spending $11 billion to transform the company. yet you still have everybody on wall street saying what are you going to do on autonomous vehicles how are you going to make money

on them because you're investing heavily in that area there are many in the auto industry that have a clear blueprint on how to make money on autonomous vehicles >> maybe hackett needs to go on the joe rogan show, expand his mind, open up the vistas >> hackett's already got a reputation for being cerebral. >> somehow i'm not sure hackett is the key demographic they're looking for there. >> anything else happening with that -- you know what? is there anything that would surprise you now when you come in in the morning that you have to talk about? that was something last week, wasn't it? >> no. i do know this find out what my schedule is and any time i'm scheduled to be on vacation, that's when elon musk makes news there's nothing like being on vacation and reading the early morning tweets and e-mails >> god almighty. the whole world is like that it's not just elon musk. but anyway

>> phil, thank you very much if you thought that was a lot to talk about, guess what when we come back, cbs ousting les moonves immediately after allegations of sexual misconduct we're going to speak to eric dezenhall about the move after the break. maybe we have a lot to talk about with him also a little later this morning, back from the brink it has been ten years since the financial crisis we're going to look back with roger altman from evercore stay tuned you're watching "squawk box" on cnbc this wi-fi is fast.

i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room.

he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. welcome back, everybody. cbs announcing that the ceo les moonves is leaving his post after numerous allegations of sexual misconduct that spanned much of his career joining us now is eric dezenhall. he is the ceo of dezenhall resources. and eric, this is a doozy. what do you do with it >> well, you know, first of all, yesterday when we knew some sort of decision was forthcoming, i wasn't sure. but then i saw the new yorker article and i said to myself, what would i do if i was presented with an article like this the answer is good night,

vienna there's nothing you can do about it because the allegations were so lurid and so many, you can't -- there really is no yes, but. the question i'm asked is what if the allegations in the story are some or all not true in the climate, it doesn't matter because no publicly traded corporation is set up to par something like this. there is just no way so the answer to your question of what do you do is number one, you have to sever your relationship with the person causing the trouble. in this case is les moonves. second, you have these ongoing investigations from law firms. we have to see what they conclude these are going to be interesting because one of the things that i found in cases like this is when you don't have hard evidence, you can always fall back on the loose area of created a culture. which is something that i don't

know entirely what that means, but it's a problematic area. and a lot of it is it ultimately comes back to what is the performance of the company there does come a point where managing the scandal itself ceases to be a crisis management strategy and we have to see what happens operationally to the company. >> this is the situation where this is not just sexual harassment this is not just any of these issues there's sexual assault that's been allegationed in these situations you have six members of the board leaving. this just seems -- >> you don't think cbs looks like they're behind the curve here you finally read that? he was still in the corner office friday sitting at his desk >> the cbs crisis management people, these folks are the gold standard these are the most talented people you can possibly find in the crisis business. >> are you working for them or something? >> no, no. if i were, i couldn't be on this show but what i'm saying is you

simply cannot -- you simply cannot say that this is all about the crisis management people and to your point, one of the questions that often comes up is are these companies behind the curve, why can't they bounce people >> his contract in this case is the huge issue the idea he could have $240 million paid out no matter for cause on any of these issues put them in a crazy box. >> that's right. and there is a huge tension between the legal process and the pr process and there are certain things sometimes you have to agree to for contractual reasons or the fear of going to litigation war. and understands at the outset there's no way to make these things look good i want to come back to a point of why companies just don't get rid of people when they hear these allegations. and it's the same reason why sometimes news organizations don't immediately report on things i worked on cases related to

things like this where it has been found i mean, one case i'm thinking of, it turned out one of the people making an allegation against a powerful person had gone to her friends and said i've got a big target on the line i could get tens of millions out of this. and what never became public as in this particular case, this person ended up going to jail for extortion. so you are dealing with -- >> you are talking about two situations >> that's right. >> the first one had six different women. this is another six women. >> and you don't think people at cbs news over the years? you really don't think anybody said be careful if you go in that guy's office alone? come on. >> i do think that's the case. and you also have situations where somebody is so successful and so powerful and one of the most politically incorrect points of this whole issue you see this in any business if somebody is delivering results other things tend to be swept under the carpet i want to be very clear about is

this whole idea that you hear all the time that everybody new is very different from everybody had evidence that was actionable >> how long does this hang over the company? i mean, you can announce that you're doing this investigation. if they pay him any money, what happens? >> well, if they pay him a lot of money, there's going to be outrage. in most of these situations, the person does get paid a good deal of money largely because the balance is calculated that if given the choice between a prolonged legal war with someone over severance and paying severance and having three days of bad coverage, the latter is the better of your terrible options. and your goal in the -- >> in this situation i think what you initially said is right. if you pay anything, you're going to be outraging people >> something happened in the way things are viewed eric because weinstein, that was the

worst kept secret in hollywood >> i agree >> once that happened to him then it starts happening to moonves and cbs is like, no, we're going to let him stay. >> but weinstein was on his way down moonves was not. that's a different variable. >> what was that >> weinstein was at the end of his career moonves was not. that's a very different variable on how you calculate and what you do about these situations. >> now you're talking about if -- you know, there are dollar signs in cbs's eyes is what you're saying. >> not just there but at any company when you have a big producer, these things play out very differently than when you have a weinstein on the way out. >> different now >> very. >> all right thanks, eric eric dezenhall of dezenhall resources. coming up, the ceo of cloudera we're going to talk business in the cloud and much more.

check out the futures at this hour triple digits. yep. up 120 on the dow. s&p indicated up 13. we'll be right back. what if numbers tell only half the story? at t. rowe price, hundreds of our experts go beyond the numbers to examine investment opportunities firsthand. like a biotech firm that engineers a patient's own cells to fight cancer. this is strategic investing. because your investments deserve the full story. t. rowe price. invest with confidence.

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we already talked to you a little bit about your super aggressive goals what has to happen in order to hit those goals? >> we think about leadership and market breadth which is participation. over the summer months july and august we saw a massive amount of breakouts of the s&p 500. we've seen follow through now. of course we've seen a bit of a pullback that tends to be an opportunity to add exposure and take advantage of the upside that comes from the breakouts so 3,300 i think is a realistic long-term target for the s&p 500. so we start to think about how we can out-perform as we ride the market higher. and we look at technology stocks typically. they've been an existing source of leadership. i see no signs of that ending. we also have leadership from consumer discretionaries so those tend to act very well it's not just amazon wouldn't we love to have a deeper pullback with amazon and the likes? looking for leadership from

those existing leaders >> the cross currents we've talked about, apple in particular potentially in the cross hairs for any trade issues that are happening they've been mentioned very specifically it's really hard to look at a technical basis of some of those issues if that were to mess up any of these stocks, then what happens? what do you start to look beyond from a technical perspective >> it becomes reactionary. we look at stocks and whether they're breaking down support levels we tend to say this is more of a corrective phase, more than a knee jerk reaction so it's not just when one stock breaks down but when a collection breaks down that we field we have some issues. even apple looks healthy to me the momentum is there and the relative strength as well. >> we're going to talk more about these issues when we come back, back from

the brink. we will look at the financial crisis that rocked wall street with evercore founder roger altman "squawk box" will be right back.

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♪ welcome back, everybody. this week marks the tenth anniversary of the financial crisis cnbc has a special documentary that premieres wednesday, september 12th at 10:00 p.m. eastern time "crisis on wall street: the week that shook the world." many of the key figures are part of this special including warren buffett. here's andrew talking to buffett about getting to the edge of the cliff. >> how much political pressure at that time, do you remember, was on both hank and the fed and everybody? >> huge. there was huge -- i mean, i think that bernanke, i think that hank paulson, i think that

tim geithner, i think they -- and i think george w. bush did the right thing. i think they were heroic but you weren't going to sell that to the american people and i don't blame them all they knew was they hadn't done anything wrong and their world was falling apart. >> when people talk about the world falling apart, put it -- because you're so good at this put it in laymen's terms what do you think the edge of the cliff looked like? what was on the other side >> well, eventually the country -- i mean, the farms don't go away. the industrial plants don't go away the houses don't go away they all change hands. we would right ourselves, but you have this huge economic machine that has all kinds of productive capacity. people going to work every day and imaginative people coming up with new products every day. but when banks get worried about their intraday acceptance from

other banks, which they did, and you can't blame them when you think of tens or hundreds of billions of dollars flowing through there between opening and closing of the bank and all of a sudden your balance with some little bank that may go under that night becomes huge the way the dominos topple, what we really learned in that particularpanic was the fact that we're all dominos and we're all very close together. >> all right joining us now to talk about getting through the crisis of avoiding another break, roger altman thanks for joining us. >> glad to be here >> to this day there are still residual effects certain people don't do certain things or their approach to investing is still colored by what happened. >> you can see that in terms of

the ownership of equities versus non-equities which is lower. you can see that in terms of the housing market which has never recovered. five or six percentage points before where they were before the crisis and also incomes have not recovered. yes, incomes are going up. we're all happy to do that even the most recent wage data is somewhat improved but americans lost earnings during that period in a big way. and they haven't recovered that. and the economy has not recovered to where it would have been without the crisis. so there were not just severe effects, but there were permanent effects. >> human nature played a big role in what we saw, obviously, back then. we always hear the next time in history something happens, it might rhyme. it won't repeat itself again do you think we've learned anything back then we wanted

homeownership. we turned up the heat to try to get us up to 75% homeownership it put us in a position that people that shouldn't have owned homes, they didn't have credit, didn't have money down and at the same time you had wall street banks packaging these things and somebody insuring them making them think they were aaa. >> i think we have learned after all the banking system is much stronger today both in terms of permanent capital -- >> is that all it was? >> also the framework was much stronger although i don't think some of the recent rollbacks are sensible but in the very long run, financial crises have been occurring more frequently if you look back over the past 30, 40 years. each one tends to come from a new place. you think you're going to fight the last war like one always thinks crisis comes from a completely different place. and the next one likely will there l there be another

financial crisis the answer is certainly yes. and to the extent that way deep down they're caused by various types of animal spirits, of course those haven't in the most fundamental way changed. here ten years after, you don't see the types of abuses, you don't see the types of extreme behavior that caused that crisis if you think about it, no dock loans, aaa ratings on securities and so forth none of that extreme behavior has returned >> do you fault the public sector then or some blame to the government sector? >> well, i think it's both you can't -- you have to start with the privacy sector because -- >> i'm not sure. >> well, when you think about security firms leveraged 25 to 35 times you look back on that and say how could that have happened >> government created the opportunity, but they took advantage of this. >> but both. >> if a company does that and

they engage in activity like that, they're quickly put out of business and they're not around anymore. that didn't happen that also happened >> well, i think both. the regulatory framework was outdated and what was required of securities firms, what was required of banks, what was required of the shadow banking system and so forth was, you know, still effectively rooted in the 30s >> isn't that where the regulatory framework was always -- because the job is to find places to exploit >> also as i said a minute ago the next crisis comes from a new place. the asian financial crisis, the russian debt crisis, and so forth. >> i have heard people positive the next financial crisis is going to come from asia again. that if you're looking at china, south korea, japan, all the influence that's built up there -- >> i don't see any evidence right now there's a crisis brewing. >> how about the fed's balance sheet and when interest rates go up >> the point i was about to make

was the concern that i personally have partly because it's an opaque situation is china. one level china is tightly controlled in a way that our system, of course, the run-up to 2008 was not i don't think there's a giant crisis brewing in china. but you pick a spot to keep your eye on, i agree with joe the rundown of the fed balance sheet is going to pose problems for markets and we've talked about that for years but we're in -- >> a strong economy might help right? >> yeah. we're in one of those kind of those no worry moments right now. as tim geithner and hank paulson and ben bernanke said in their op-ed this weekend, the greatest risk is forgetting what caused the crisis and forgetting the alertness you have to have i agree with what warren buffett said those guys and all the people

who worked with them were heroic if you think what the federal reserve did -- $13 trillion of credit assistance, it's an incomprehensible number. and without that, there would have been as buffett was talking about an awesome catastrophe and so we were lucky we had leadership like that we were lucky we had an unfettered federal reserve and we were lucky that, you know, the country came together even though there obviously were bumps along the way. >> all right so we made it until the next time which could all be over at that point. anyway, we've got the music -- you hear the music when we were talking about? i was immediately nervous and scared and thrown back into where we were ten years ago. >> so they chose wisely. >> they did. i mean, roger -- you know, new "halloween" is coming out.

i hear it's unbelievable >> oh, yeah. >> caller always comes from inside the house. >> yeah. what the -- you can't do that though maybe with a cell phone you could do it and a find my iphone you could use a cell phone to call the landline and he could be in the kid's room maybe that happened. it is scary, isn't it? it's coming from inside the house. how can't dial your own number maybe they had two lines thank you. evercore's roger altman. i'm going to walk you out because i know you probably have trepidation. >> i'm nervous >> you're scared my god let's get out of here. don't forget the cnbc documentary premieres wednesday at 10:00 p.m. eastern. "crisis on wall street: the week that shook the world." when we come back, cloudera. the company has been rolling out new products

last quarter they reported smaller than expected losses we'll hear from the ceo after this break as we head to that break, here is a look at the biggest premarket winners and losers in the dow.

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cloudera shares soaring 20% afterposting higher than expected guidance for the year that surge in the stock comes after the shares were down 12% for 2018 joining us right now with what's behind the company's turnaround is tom riley, he is cloudera's ceo. thank you for being here this morning. >> thank you. >> cloudera is in data analytics, works in the cloud. most of your revenue comes from subscription revenue something like 84% >> that's right, yes >> what is it you're providing to people? what happened that produced these surprising results this time around? >> let me first explain what we do so in today's world the most valuable resource on the planet is actually data and the most valuable companies have perfected mining data

we are a technology company that helps all enterprises mine data for a competitive advantage. >> mining from their customers, from their competitors how does it work >> mining data about customers trying to predict their needs. we also collect data from cars or connected devices, all your products and services so that you have a competitive product offering we use machine learning artificial intelligence and data warehousing. >> so what happened in this most recent quarter that caught wall street off guard >> so what's exciting is after ten years of being in business with thousands of customers, tens of thousands of transactions, hundreds of thousands of interactions with customers, we're using our own data to predict which customers have the greatest propensity to buy or grow with our software. and that allows us to focus our sales force. we became much more targeted who we sell to and where we can get a better return. >> you do have some pretty big

competitors. google, microsoft, amazon. all kind of in the works how do you compete against those big guys >> we can leverage a lot of the public cloud infrastructure, so we use microsoft azure but they want a platform they can run anywhere all of our customers have their own data centers they want to take advantage of the public cloud they want move their workloads wherever you want to do it >> there's a concern about privacy these days it's a huge issue. ceos from the biggest technology companies getting marched into washington to talk about this. how could that impact you? >> around privacy, there's a new regulation that came out gdpr. this requires companies to secure their customers' data a platform such as ours allows them to centralize it and make

it secure and have tight controls over who gets access to it it turns out that gdpr is a tail wind for us to help companies break down -- >> that doesn't mean there's not new regulation that comes from the united states spp there a point you worry you won't be able to collect some of this data >> i actually think these regulations are a good thing for our industry because data exists and everyone is collecting data these put controls in place, who gets to see it and the controls benefit technology companies like us that can bring those kind of capabilities >> katie stockton is our guest host today you look at cloudera up 24% after releasing these numbers. >> it's a perfect example of what we've seen over the summer and of course it's been a positive reaction to an earnings announcement that bodes well for follow through. because the stock, sometimes you feel like it's run up and gone too far too fast but when you look at it in an

example like cloudera, it clears resistance the next resistance is around 23 >> wall street can be a fickle place. what concerns you, if anything, when you look at the future? obviously you've got some great expectations, but what would worry you? >> if you step back and think of artificial intelligence, machine learning, getting inside data, we are in the beginning of this big long secular trend of enterprises trying to figure out how to get their arms around data i try not to focus on quarter to quarter and look long-term we are one of the fastest growing companies but competing with the bigger players you talked about so we have to look long-term and make sure we have the right strategies and investments to continue growing >> tom riley, thanks for coming in >> thank you coming up, katie stockton tells us what she's watching this week. might talk about the 10-year

too. it's the top of the hour we'll have john wilson as our guest. and then later, former federal reserve board governor dan tarullo joins us "squawk box" will be right back. i think that she's a very nice girl... ...you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies lead with digital.

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our guest host for the last hour katie stockton from fairlead strategies, i referenced the 10-year you've given us good insight into that in the past. have you decided >> i think 3.5% is my target >> it's a graduaragradual uptred i think it's slow and steady but when you look over the very long-term, you've seen a reversal of the multi-decade down channel i think that's the important takeaway >> when you talk about very long-term, are you talking about five years or longer >> yes, exactly that >> that could be awhile. >> yes >> why wouldn't that put the dollar in a long-term uptrend? >> it may do it. we've already seen momentum come

in behind the dollar i watched the dollar index it's at a very tenuous point here the euro when you look individually, the corrective phase seems to be losing downside momentum. of course it will affect emerging markets >> so the notion that we're spending too much which is -- even the tax receipts were up. we're still spending a lot the idea these rising deficits are going to cause a weaker dollar, you don't buy into that? >> if we saw the breakdown, the long-term trend is fickle for the dollar it's almost indecisive you have to be mindful of the short-term moves and the best way we can do that would be looking at support levels. >> is the nasdaq more stretched than the s&p do you have any worries there? >> the outperformance has been there, but there's nothing parabolic about it we want to be mindful and take advantage. >> katie, thank you.

appreciate it. >> of course glad to be here. >> i hear the music playing. it's not that scary music. >> thank goodness. >> it's "squawk box" positive music. all right. when we come back this morning, les moonves out at cbs after more sexual harassment allegations. details on his departure and what it means for the company straight ahead later we'll look back at the financial crisis and the week that rocked wall street with former federal reresve board governor dan tarullo

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new this morning, les moonves is out at cbs following allegations of sexual misconduct president trump tweeting about higher gdp, lower unemployment we'll talk to an economist about it plus is the banking system any safer? daniel tarullo and sheila baer were key players in regulatory reform they will join us live as the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box.

>> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick. andrew ross sorkin is off today. and the futures are indicated up triple digits. 112 now on the dow the s&p is indicated up just under 13 the nasdaq strong indicated up over 42 points treasury yields have been moving higher finally going back to test the upper end of the recent range up at $2.94 2.94% and then 3.1% now on the 30-year. so a tight little range. take your pick i'd be in the money market at this point, i think. it's almost there, right >> pretty much

today's top story. cbs's les moonves leaving his post after a number of women have accused him of sexual harassment and assault this is story we've been following very closely >> huge here in hollywood, of course late last night, les moonves released a statement confirming he is out and sad to go. quote, untrue allegations from decades ago are now being made against me that are not consistent with who i am he's leaving now without a golden parachute at the moment joe ianniello will take the interim seat shari redstone calling a truce they will not try to merge cbs and viacom for at least two years though she's open to other ideas the cbs may come up with it's a new board, practical. half the board has been replaced some of the people gone may have been too closely tied to cbs dick parsons who used to run

citi and time warner you've got straus zelnick. and barbara byrne. half the board now is made up of women. as for moonves, david faber reported he was negotiating an exit package for perhaps a hundred million dollars-plus but then ronan farrow struck again with a second new yorker story yesterday. six more women allege sexual harassment pretty graphic stuff this follows a story in late july with six other women claiming similar things. cbs is going to donate $20 million to me too supportive programs, money which will come out of moonves' seseverance. and he won't personally get any severance until after the

investigation. it's hard to believe that one year ago harvey weinstein was still in power charlie rose and matt lauer still had jobs they're gone and now following them, les moonves. by far the most powerful person to be taken down in this new era. back to you. >> the first time it came out, then they had the board meeting and we're going to let him stay for a i while. then they had a conference call and you weren't allowed to ask any questions about it and then last week david's report came out. they had to know that ronan farrow was coming out with something. they didn't even go back to talking about it again until it was, oh, my god, there's six more coming. then they finally decide maybe we need to do something. to me it looks like this board looked for every reason it could not to do this not to finally do what needed to be done until it was smacking them right over the head >> well, maybe that's why half the board is now gone and been

replaced this is what's really different. earlier on, if this had been ten months ago, he might have been out the same day the way lauer and rose were. the way things have happened so quickly. now we're at a different place, perhaps, in the me too era where you want these internal investigations to go on. then there's a question about how old these allegations are. there's certainly -- there was a police investigation, but the statute of limitations has expired. i don't know what's happening with this movement, but it seems to be evolving a little bit. once the second story came out as you said, joe, the board said, okay not only, but we need a new board. >> it seems it also seems where you sit. ceo is different than being a public persona >> absolutely. >> and they -- you know, they say nobody else has the eye for picking -- >> to be able to do this, right. >> but these allegations are inconsistent with who i am as a person

that sounds like you could say the person i am now, it's inconsistent -- i don't know >> i don't know what that means. >> doesn't sound like a denial like it's inconsistent how i see myself. >> for the new yorker he admitted to three of the encounters but said they were consensual before all this, they took his name down off the newsroom at usc that he -- >> they did? >> yeah. they spent big money, gave a big donation to the school the name's gone already. after the first article, the name went down >> great place to train young media. beautiful office, facility that name was big there. the les moonves center so that's down at sc, huh? wow. >> yep >> okay. all right. jan welles, thank you. >> you bet alibaba announcing jack ma will retire in a year.

and campbells soup stepping up its search the coo is stepping up as the current contender. trying to sign off on a third point. and president trump has been no stranger to controversy our next guest, though, says the focus should be on the booming economy and not the white house drama. joining us now is john wilson, author of commentary it's good to see you hasn't been that long, but you got a new look you look for some reason wiser to me. it's the beard, i think. >> it's the beard. >> you almost look sagelike. >> thank you good to see you again. i've been having coffee with you every day for about 25 years >> i know that that's great the point i think you want to make is that if the media is centered on the two coasts or in manhattan and they don't get out of manhattan a lot, it might not be easy to see some of the stuff that's happening where you are or where other people are in

between the two coasts is that fair to say? >> well, i think it is you know, i think that there's a reason that polls show the general populous opinion of the media and politicians as what it is i think people see through a lot of this frankly. i read in the paper that the tax cuts have only helped the rich to me that is the -- that's the doppler effect that's the corollary the tendency of stupid things to sound smart if they come at you rapidly enough and frequently enough i think too many politicians rely on that but i think most people see through it if you're a blue collar or white collar worker in flyover country, you're seeing a better paycheck you're seeing your company thriving you're seeing your company hiring more people right now you know we're having a booming economy. and at least at this point there's no recession in sight.

i'm seeing none of the things that would indicate a topping market when the ninth year of a bull market that started off the bottom in march of 2009. and we felt like at the time based on history we were probably looking at at least a good ten-year bull market. frankly to borrow a line from "jaws," i'm thinking we may need a bigger boat. >> just like it pays for politicians sometimes, the bearish market strategist will never be unemployed, i don't think. because for some reason they -- in their own minds they think they're smarter. i know guys who have been bearish since 2009 they call it generational woe at the bottom of the s&p. they go bearish and then are still bearish to this day. i don't know if they manage money anymore. they feel good about themselves. how is that possible

>> i don't know. look at history. the market any given year is up 70% of the time. you stretch it out to five years, your odds go to about 90%. and for ten years, about 95% so if you're going to be a market strategist, let's go with the odds my default position is going to be bullish unless i have a reason not to be and right now, i think we're probably on the top of the seventh inning with this bull market. >> can you imagine the dow at 800 and now we're where we are and having a bearish perspective from 800 to -- >> no. >> they do though. like you said, the default position, stocks go up over time i don't understand the -- >> i don't understand it either. look let's use common sense here. some of this isn't rocket science. do you really think the next ten years if you own a bond compared to a good high quality blue chip stock that pays dividends, what do you think is going to give

you the best total return over the next ten years by a wide margin and i would argue it's going to be large cap growth stocks >> do you worry that there's something coming to a head with china? that might not be great. and they will eclipse us some day, theoretically just from sheer population, it seems like maybe. you know what? i -- you've made the statement a few times and i heartily agree with you that the things we've done for the last 20 years haven't worked the same bureaucratic trade representatives have been doing it i watch interviews with the chinese who say we'd raise a tariff and nobody would say anything then again and nobody would say anything there's a new sheriff in town. i'm willing to cut them a little slack here because what we've tried in the past hasn't worked. it seems we're in a good bargaining position right now. >> well, i'd like to know when -- it's always hard to call a top.

and it's usually characterized by, you know, 99, whatever you want to look at it i don't know whether we're there yet because so many people still have so much to worry about in this current environment when so many things seem to be improving. and i don't know >> too many bricks in the wall of worry right now >> still too many. let me know when that ends, will you? >> well, let's look for a little euphoria first i don't see that >> we'll check back with you that beard is a winner >> thank you, joe. >> all right john wilson, thanks. when we come back, shares of apple suppliers in asia dropping this morning after president trump tweeted that the tech giant should make its products in the united states you can see drops as big as 10% there. stay tuned you are watching "squawk box" right here on cnbc

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this wi-fi is fast. i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. welcome back to "squawk box" futures. we've looked at a few times a day, 116 on the dow up nasdaq indicated up 43 this morning. shares of apple suppliers falling across asia today after

president trump tweeted that the tech giant should make products in the united states if it wants to avoid tariffs on chinese imports. jon fortt is here and he joins us on the set this morning with more about what this could possibly mean. >> yeah. it's a tough situation if there's one location that best defines tim cook's legacy so far as ceo of apple, it's china. and the threat of tariffs presents a new kind of test. cook's work in china on the supply chain side is a big part of what got him the ceo job. since he became ceo, he's transformed apple's business in china from a wild west of products into a top tier market. fiscal 2017, apple booked $45 billion of sales in greater china. that's up from $12.5 billion and 11% of global revenue when tim cook took over the ceo job apple now lists 41 stores in

china and 6 many in hong kong. apple wrote in a letter last week that tariffs would hit the apple watch, air pods, apple pencil, home pod and chargers. the iphone itself doesn't look to be affected so far at least in the united states the chinese government could make it harder to buy in china. on the one hand, there's no company better positioned to weather this storm than apple. huge profit margins and a loyal customer base. on the other w57b8d is apple is most high profile company in the world. it could be a punching back if either side wants to make a point. >> how come the iphone wouldn't be impacted? >> well, i think it has to do with the trump administration ensuring apple it wouldn't be

affected all these are fluid. i guess it could change. >> and i guess this just gets to the point that we've already talked about the psasame issue r ford this morning. saying forget it we're not going to make the cars here because there's not enough of a market here if you get to the point where all manufacturing is local, chinese phones are manufactured in china you know, phones in the united states or whatever else is manufactured here. you're not talking about something you can flip a switch and do this overnight. this is a long-term change in process. >> apple has this image of crafting things so precisely we sometimes forget, they're making tens of millions of these per quarter. and it has to be exact they have to do this in a very tight way. right now there's some human labor associated with that these are not high-paying jobs the system's set up over there to move it some place else would be an extraordinary amount of work we saw them set up some manufacturing in india for the lower end iphone se. bringing it over here --

>> even if these tariffs went into place, i can't imagine that happening. at least not right away. >> it would take years the engineering lift is very huge because it'd have to use more robotics. tim cook has talked at some length about what that would take >> just to say they would need a lot more robotics meaning they would not be creating necessarily as many jobs as you're thinking. these are not assembly line jobs here >> no. every time these companies whether it is foxconn or others trying to move manufacturing here, it's much more elsewhere where you've got a fraction of the job for people >> let's bring in another voice on this. tom forte. what do you think about this how much of a risk is this for apple? >> sure. so as jon pointed out so eloquently, the challenge for apple is both that they're having products assembled in china, sort of having tariffs on their goods.

but also to the extent they get a large amount of goods to consumers. you have an escalated and prolonged trade war between the u.s. and china that could be problematic if on both sides you see protectionist behavior and chinese consumers not wanting to buy products made by u.s. manufacturers. as far as moving the production to the u.s., i think there would have to be economic incentives beyond fear of a tariff. what benefit would they give apple to having their products manufactured in the u.s., what tax cuts, things of that nature. and clearly this is something that would take time and wouldn't happen overnight. but yes, the risk to apple is both the fact that many of their products are made in china and also that they drive a large portion of their sales to chinese consumers. >> tom, i guess part of the question on this is whether you think apple shares are priced to perfection or not. we've seen the stock skyrocket, but we've also seen some impressive numbers what do you think?

is this pricing at this point something that could withstand some of these potential risks or not? >> the answer is absolutely. so if you look at the space with the brand that could withstand the increase from tariffs, it's definitely apple i also cover fitbit. and fitbit looks to be affected on the smart watch front i think it's more challenging for fitbit and other companies that don't have the cachet that apple has. on price for perfection, i think the real story for apple has been with the higher price points for their smartphones especially the x, they don't have to sell as many units to drive the financial benefits so when you look forward to the news from apple on tuesday, you're looking potentially at two higher end phones. i definitely think they could withstand some price pressure from tariffs >> tom, you say that apple can withstand price pressure from tariffs. but at the same time there's an awful lot of attention both to

iphone units and to margins overall. if those start to take a hit because of tariffs and if it's unclear when that lets out, don't you think investors might get squeamish? >> i think if you look at the iphone lineup and the importance in the financial statements for apple, it's the primary product, represents more than half their revenue. then yes if the next round of tariffs was aimed dead center at smartphones including the iphones, i think that could be problematic for apple shares on a near-term basis. >> what do you expect this week from the company >> so basically you're looking for three new smartphones and then the next generation watch on the smartphone front, they're going to have one relatively speaking higher end and it doesn't look like they're going to call it the xs plus i think the real encouragement will be on the two higher price

point items. if their msrp is $1,000-plus or with added memory, i think that positions apple incredibly well financially. >> let me ask you real quickly, tom. this is a stock that had traditionally traded in these cycles every time there was a new product cycle that was successful, the stock would trade ahead of it and come back down i have had people like gene munster who have suggested maybe this is different. the stock will no longer trade in such a crazy cyclical manner like that. you think that's potentially correct? >> well, on a near-term basis, they're benefitting from the favorable change in tax regulation and giving them an ability to return more cash to flow as well near-term basis, i think that cycle could be less relevant but longer term, they are still a product-driven company sop long as the smartphone remains the dominant product, i do think that there is some

cyclicality longer term still. >> all right, tom. tom forte, thank you for joining us jon fortt, thank you coming up, more stories including an executive change at snap plus a new winner at the weekend box office "squawk box" comes right back. unmotivated? feeling like you can't keep up? maybe you're tired of the same old workout. then you need aaptiv. aaptiv offers incredibly motivating music-driven workouts led by the world's best trainers. plus our classes are audio only, so you don't have to stare at a screen while you're trying to work out.

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brink. ten years after the financial crisis, is the banking system any safer? former fed governor daniel errullo and sheila bair were key plays in regulatory reform they will join us live when "squawk box" comes right back.

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♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site we're in times square. among some of the stories front and center, we talked about this snap, the chief strategy officer khan will step down to pursue other opportunities. departure date hasn't been set yet. he will stay for an interim period to assist with the transition he says his departure is not related to any disagreement with snap gasoline prices holding steady during the past two weeks with the national average for unleaded now at $2.91.

the price may fall 2 to 4 cents per gallon by the end of the month. and "the 'nun" opening up in the top spot the horror film -- i'm afraid of penguins >> you and john belushi. >> i'm kidding i had nuns my entire first eight years in graduate school bringing in $53.5 million. that's the largest opening for any movie -- oh. this is a conjuring? this is part of -- wow that is scary. the fifth weekend in a row that warner brothers film took first place at the domestic box

office after three weeks at number one, "crazy rich asians" was knocked down to second place with $13.6 million in its fourth weekend. hurricane florence is on track to hit the east coast as a major storm later this week. the hurricane center says it could hit the southeastern u.s. coast. talking maybe virginia, north carolina it could be thursday it could be a category 3 or even higher the governors of virginia and the carolinas have already declared states of emergency once again, it's going to be a lot of rain. it's the height of an eight-week period when the most powerful storms usually form. our next guest led the fed's regulatory reforms in the wake of the financial crisis including the implementation of dodd/fra dodd/frank daniel tarullo who is now a harvard law school visiting professor, thank you for joining us this morning. it's great to see you, sir

>> nice to see you, becky. >> daniel, let's go back to ten years ago and maybe even before that you say you really pegged the financial crisis going back to the summer of 2007 where were you at that time and what was your hands-on experience >> well, i was, of course, not in the government. i was still teaching at georgetown at the time i certainly didn't think in the summer of 2007 we were going to have the financial crisis we had, but it became pretty apparent that the implosion of some of the money market funds and the disclosure of the amount of subprime mortgages on the sheets of a lot of corporations did suggest there was going to be a major, major correction so it was really from that time that i was a little on edge and obviously like all of you, everybody, it was over the winter and into the early spring of 2008 that it became clear this was not just going to be a significant correction >> was there a moment when you thought, oh, my gosh, this is

unchartered territory? >> there actually was. that was in august of 2007 and i remember i was sitting in the quad at georgetown law school before the students were back one of those washington days that's going to be 95 but at 8:00 in the morning is pretty pleasant i was sitting there reading the financial times about a couple of those money market funds. and all -- it was just like a switch going where one went from saying, gee, this is kind of interesting, to saying this really looks like it's something that's going to be more of a problem for a broad range of financial institutions but again, i want to emphasize in august of 2007, i did not think we were going to see anything like what we saw in september of 2018. -- 2008. >> dan, you were responsible for putting in place a lot of the regulatory reform to prevent something like this from happening again. we have seen the rollback of some of that legislation what do you think about what's changed and how prepared do you think we are to keep something like this from taking place?

>> sure. well, probably should divide it, becky, into a few categories first, with respect to the largest financial institutions, they're substantially safer than they were 10, 12 years ago capital levels are up. their funding is much more stable is than it was. their risk management is measurably better than it was. those gains, of course, are not locked in for eternity it requires individuvigilance oe part of the regulators and supervisors. i would say to date changes have mostly though not all been directed towards smaller banks and there's ample room for smaller banks. for which i mean the mid-size regionals. second category is how well prepared are we for whatever may happen next? and as everyone says and i think it's true, it's very unlikely that we're going to have financial dislocation or crisis

because of subprime mortgages. it's going to be from some other source really, becky, the dodd/frank act and the associated regulations didn't do much to address the shadow banking sector except in so far as the big banks had been involved with it. and then third, the theme that tim geithner and ben bernanke keeps striking once we do face the situation which we're in a crisis or a near crisis, the tools for response are, perhaps, not as wide ranging as we'd like them to be. >> we talked about this earlier this morning with roger altman his concern was also about vigilance coming back down post-crisis and what that would mean on the regulatory front i guess i just wonder, there are ways that you want to relax issues, you want to see some way that you really kind of goose the economy a bit by not being onerous in regulation, but is there a point where you start to

get worried that we're taking our eye off the ball >> sure. and i think it's constant, right? one doesn't want to be imposing regulation that is getting in the way of sustainable, responsible intermediation becky, the book that just came o out, "crashed" is just a reminder of how broad ranging and long lasting the impact of a financial crisis could be. so to me in terms of thinking and in terms of the public's risk management, i think the focus on the largest institutions which could cause the greatest problems for the rest of the financial system is the sensible one and as i said earlier, if you're talking about $60 billion banks, some relaxation that does allow more credit to get to households and businesses, although still with good underwriting seems to me the right way to strike the

balance. and as i gather roger said, the risk is that the vigilance comes down through relax -- you know, sort of a quiet relaxation of the stress tests or giving the code to the banks. or lightening up on supervisory oversight. that's where the risks come. but i do want to return to the shadow banking and i noted that you sort of affirmed that. the odds are it's not going to start at the big banks certainly not right now. maybe in five or eight or ten years if -- >> the last time it wasn't thought to begin with the big banks either >> no. but their connections -- right but their connections with those institutions were pretty strong. and post-crisis, because of their own risk management, i mean, it's not just regulation this is what the banks have decided for themselves those connections are more attenuated you know, the financial system

there's a number of creative people who will find their way into areas that are open to them that haven't been -- >> regulated or not. >> and including the fed and the extraordinary stuff the fed did. are you surprised at this point that -- let me rephrase that in 2007 if someone had told you about the extraordinary measures the fed and central bankers everywhere would orchestrate to save the system, wouldn't you have predicted that that's just too much printing and that there'd be inflation or that currencies would have collapsed? are we out of the woods yet? are we going to be able to unwind all this? it really is okay to just pull out all the stops and do it where there's no day of reckoning for that >> well, certainly not risk-free, joe you know, i think that was understood at the time that the extraordinary measures were taken in the face of extraordinary circumstances. inflation sure did not seem to be the aftermath of it all and by the way, that's still an

issue, right >> i don't know. >> why is it inflation didn't move down as much. >> must have been a real lack of -- i mean, there was such a demand that was almost zero, i guess. the fed was the only game in town and i guess all that money got sopped up and didn't -- i mean, i don't think that inflation looks like it's ready to all of a sudden become a huge problem immediately. the fed, i think it took nerve to have the resolve to do that without thinking you're ruined i mean, that did take courage to put that much into the system knowing it was going to be sopped up and not turned into a -- i hope it doesn't >> well, it certainly -- as you say, it certainly doesn't portend very high runaway type inflation. there is still concern about the degree to which the looser credit over a long period of time has encouraged companies to take on more debt. and that's -- i think that brings us right back to becky's

question about shadow banking. >> all right so we never know if we're okay, if we're out of the woods. but it's -- >> private sector -- >> sometimes it feels, joe, as though you're in a bit more of a clearing sometimes it feels as though the leaf cover is heavier. >> okay. all right. i'm going to just assume we're okay at least until tomorrow because i hate worrying. i hate worrying. i worry too much >> dan, thank you so much for your time today. >> all right thank you, both. >> dan tarullo, former fed governor >> doesn't do any good >> no. worry is wasted energy >> like a rocking chair. you rock but don't get anywhere. coming up, john mack reflects on the week that shook the financial world ten years ago. then we'll be joined by fdic chair -- former fdic chair sheila bair. find out how she grades the state of the banking system right now. you're watching "squawk box" on cnbc this is a tomato you can track from farm, to pot, to jar, to table.

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♪ this week marks the tenth anniversary of the financial crisis cnbc has a special documentary that premieres wednesday night at 10:00 eastern time and pacific. it's titled "crisis on wall street: the week that shook the world. many of the key figures are part of andrew's special presentation including former morgan stanley boss john mack >> lehman goes, look, there's going to be a domino effect.

that's when tim geithner was saying to me, i want you to pick up the phone, call jamie. he'll buy your company i called him he said i don't want your company. i said tim told me you do. no i go back to tim he doesn't want to buy the company. we go round and round. now the fear at morgan stanley, are we going to make it? so i bring the board in. >> how are you feeling personally at this point >> i think the best way to describe it, i remember my wife came into the city, i think it was sunday night i'm not sure when i went in. and she was there. i walked in and i was emotional. gave her a hug and said, you know, i think we're going to lose the firm. >> hold on hold on. you just did it like that? i assume this was much -- >> oh, i was very emotional. i wasn't bawling i was tense and nervous and uptight and glassy eyed. so i gave her a hug, walked into

the bedroom, walked around i'll never forget it walked around in a circle and came back out and said, i'd rather be doing this than living in north carolina fishing. because the adrenaline rush was wild and i got to tell you, as tense as it was, i like a fight. and we were in a fight to survive. >> the economy has come a long way since then financial crisis, but former fdic chairwoman sheila bair says there's still a chance for another stumble she joins us on the squawk line this morning chairman, chairwoman bair. we used to call you chair bair >> sheila will be fine >> yes it is. but at this point, where are we? we're looking back on this we've both -- we've both recovered from that with some residual effects so we still remember but we've

also loosened some regulations more than some people would like are we on our way to another problem? or we're still recovering from the last one >> yeah. well, i think a little bit of both i don't know -- there's certainly some warning signs we have a lot of debt. corporate debt's at an all-time high household debt is at an historic high mortgage debts, home borrowing is all-time high government is at an all-time high so i think we're kind of leveraged to our teeth right now. i don't think that's a healthy situation. so i get frustrated when, you know, all this rhetoric of loosening regs so banks can lend more is ill advised. and i think if anything, banks should be preparie ining for tht downturn if anything is increasing the

capital reserves, regulators shouldn't be loosening regulation at this point >> if you add up all the debt you talked about plus government debt and if rates are headed higher even if it is a kind of slow grind higher, i mean, is that setting -- thank god the economy's strong >> well, yeah. exactly. i think corporations have taken on a lot of debt that's going to be harder and harder to refinance as rates go up and whether they've prepared for that, we don't know yet. leverage lending has been an issue for awhile so i think we don't know but there's certainly some warning signs. and i really think the key here is when the downturn comes inevitab inevitably in a few years, credit losses will increase. defaults, bankruptcies will increase and the financial system capitalized well enough to absorb those losses and continue to function. which is again, why, i think where we are in this cycle, regulators should be tightening

regulation a bit tightening lending standards a bit. asking banks to enhance their capital reserves but unfortunately in washington, we're going the opposite direction now. >> if we didn't have europe with a different economy or at least in a different part of the economic cycle, and if we weren't tethered by low rates over there, do you think we should have much higher rates here already or -- i mean, is that a blessing that it's giving us more time to work this out? >> that's a good question. i think what the fed's doing on rates is right i wouldn't go faster maybe a little slower. but they are preparing i think they realize there will be a downturn in the next few years. and they need some band width to lower again. just as they're preparing, large banks should be preparing as well but i think they've got it about right. one thing i do get frustrated

about is all this talk about about real wages going up. and oh, my gosh, we need to worry about inflation if real wages are going up we should be celebrating real wages going up a little bit. the data are going in the right direction. but that's good for our economy. that's really sustainable right direction. that's good for economy. that's sustainable growth that drives spending. i think it is advised and we standby and keep rates low as the stock market blooms. once wages go up, oh my gosh, it is time to tighten more. i would not and i hope the feds does not accelerate rate increases because of wages are going up that's something we are celebrating and strengthen middle class families and good for the economy. >> thank you for coming on it is hard to believe it has been ten years already >> it has been >> sheila bair, thanks

>> when we come back, trade wars we'll talk about cars and technology but about what high end arts >> if you buy a chinese vase in london, you have to pay 25% of tariffs under the new realm. we'll look at chinese sales could be at risk and why china could not be happier after the break.

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all right, welcome back to "squawk box. the next round of tariffs on china would include an unexpected category. robert frank is joining us >> this is surprising to me. the last page of the china tariffs contain a surprising entry. paintings, drawings and pastels executed entirely by hand, original sculptures and statuary in any material. if you purchase a chinese vase, that vase will be subjected to

25% tariffs. the u.s. imported of $300 million worth of chinese art in 2017, auction houses say the tariffs will hurt the u.s. and benefit china which wants to dominate the business of buying and selling chinese works. many u.s. dealers say they would go out of business since a lot of this would move overseas. >> we would have a severe impact i would question how i go forward of the circumstances we can't make these things it is going to harm my clients and me as to trying to helicopter to do what we do. >> the organizers of asia week in new york starts today recently sent a letter to the trade reps saying the vast majority of chinese goods are imported to the u.s. coming from other countries. not result in an increase demand for an american made art

in the end this would increase prices and it would help china it would cost u.s. jobs and hurt the u.s. dominance in the art market >> however, hearing that sound byte, i think it is not necessarily a plate that would get a big audience with the administration, oh no. high end art probably not we forget that one of the areas of the u.s. is dominant and around the world is the art markets. so much of trade biegins here ad starts in the u.s. china wants this they want to keep all these antiquities in china so it helps china. >> it gets sold here and change hands. >> a lot of it >> or traded here. >> that makes sense though >> some of the reasons, they can ship that business and sell it in hong kong or london or anywhere else. they are fined by this it is the dealers that are in

new york who don't have branches overseas that hurts >> all right, robert thank you. >> we don't have much time final check on the markets futures are strong this morning, indicated up 114 on the dow and 13 on the s&p and 43 on the nasdaq, make sure you join us tomorrow "squawk on the street" is next >> good monday morning, i am carl quintanilla and with melissa lee and david faber. jim cramer is off today. the president weighs in on trade and apple and ford as well as a series of executive departures europe ita