>> i like energy and the levered way to play is transocean. better balance sheet valuation is pretty attractive >> and now we have a double in amd from the purchase this july. i'm rolling up my stock, but staying long >> all right good stuff thank you. david tepper tomorrow. "power lunch" starts now welcome to a special edition of "power lunch. apple is kicking off a big product event right now, a lot of headlines set to drop the next couple of hours a trio of new iphones expected to be unveiled including a new high end model and plus a new watch. >> but the question, what will the new lineup fully mean for apple's bottom line and the stock in we have ever angle covered for you. >> and courtney mentioned the stock. take a look at how apple is trading right now.

shares have been under pressure. the biggest loser in the dow this hour as a matter of fact, still that stock as everybody knows has had a great run so far in 2018. up roughly 20% on otherwise the major averages were hire all of them, they are not now, but there were reports that the u.s. is proposing a new round of trade talks with china. we'll have more on that coming up boeing one of the biggest gainers today adding more than 50 points to the dow all by itself >> and let's get out to jon fortt. what is the latest >> well, this is a big day and the presentation has started apple is rolling that traditional first video to kick things offer this is going to be an unusual iphone announcement i believe because we're talking about three new phones at the high end. last year when we got the iphone x, people were questioning whether people would pay $1,000 for a phone. nobody is questioning that

anymore. the question is, how much more might they be willing to pay and what will that do for apple's revenue growth and margins in light of all of the things that we've been talking about you in he thinksmentioned the w. an important issue is the ecosystem. they often bring partners on stage for these announcements. apple gets people to pay a toll to enter the app store to be on the iphone to get their apps and services on the iphone will they do more to tie people into that as we see the like of amazon, netflix chafing at paying that toll will they be able to keep people in line. so those are just some of the things we'll be watching for >> all right we'll be checking in with you many times over the next couple hours here let's bring in our apple panel we'll drill down on what we can expect to hear we have manager of gtig, and also from consumer reports and also editor-in-chief at cnet

welcome to all of you. walter, are you exhibiting an ah-ha moment or is this just an incremental day as they update the exists product lineup here >> it's been a while since we've had an ah-ha moment. it is really just iterations of where he is productpeis -- rece. the iphone 6, they still haven't topped the sales in that year. there could be some larger screen phones and maybe this can help to stimulate demand, but we're in a three year cycle here where replacement cycles have been extending, upgrade rates are down, disconnect rates are down so we'll see if there is something in the new form factors perhaps or a larger screen that can stimulate or at least stop the upgrade rates from dropping or the replacement cycle from lengthening >> and tim cook has just taken the stage. we'll see what he has to say in

a moment jerry, what a are are you moste about if anything? >> the fact that there is a third phone is unusual the impiphone x was expensive and rumors is that the xs and xs max. and also xsr a lot of the technology that people want, but maybe at a slightly lower, slightly, lower price. >> and when i hear that, i get concerned that perhaps people will opt for the lower price phone and that would mean an overall lower average selling price and perhaps a lower are margin unless consumers are really driven to say i'll pay up and i'll buy the more expensive phone. >> i think apple is very good at making the biggest most expensive phone look really attractive i heard that there are lots of influencers in the theater today which means that apple will go after people who care a lot about how their products look and out cameras look i expect that there will be some hot new camera development on

the big phone being released and if there is really a lower price cheaper lcd screen phone coming out, i think that a lot of parents will probably buy that for their kids it is probably going to come in a lot of colors. it will probably be attractive and that will keep people from spending even less on the iphone se or the smaller cheaper phones that they currently buy for their kids >> and speaking of prices, when i think about my iphone, i actually have no idea what the price is because i did the installment billing. does that change anything for anyone when we see the big price tags but nobody really pay s $1,000 up front for it a few do i suppose >> one of the nice things now, they last longer so i think you don't notice right away because people do pay in the installment plan. but in the old days, you keep paying the same price even if you kept the same phone for three or four years. now that contracts have gone away, if you keep the phone no thrno

-- for three years, your monthly bail goes doill goes do bit. cameras have been good the displays are beautiful i mean how much better can a phone get that you really need to go out after two years and buy a new one? really different from a few years ago from after two years phones were way different. screens were way better about that so i think that is why you see these lengthening intervals when people aren't buying phones 2000 a lot of people, that is -- for a lot of people that is a good thing >> and the ecosystem is what they are selling. >> and product lifecycles, they have been extending, but they have been extending for three years. so you may not replace a phone one or two years old, but if it is three and four years old, maybe you are getting some knicks on it, at some points the

upgrade rates have to bottom but in terms of the service, that is another factor in term of look, the company didn't necessarily need to grow iphone units in order to put up double digit earnings the service business is growing at 20% it is a higher margin business there is only 300 million active subscriptions right now. creative strategies advised that market at 800. so they have a long way to go in terms of increase, penetration of the market of people buying subscriptions. and also getting them to buy more stuff, whether that is new video services or anything else that apple is developing >> all right we want to play you a sound booits bite of what tim cook just said >> our 2 billionth i ochlt schce

it has changed the way we learn, to how we work to how we are entertained, shop, order our food, get our transportation, and stay in touch with one another >> that was tim cook on stage at the apple launch event >> he is a better salesman than steve job was. steve jobs was very low key during those events. tim cook gets excited about these products and services. don't you think? >> i don't know. i think that is a really tough comparison to make >> he is very trust worthy sounding he sounds like somebody you would believe. he is good at that >> you wouldn't believe steve jobs steve jobs let the products talk for themselves >> maybe that says something about the products now these products are not revolutionary, they are evolutionary so maybe you need a harder sales pitch in order to get people excited about them but walter, i want to touch on

the point that we made, that maybe it is not just between phones we are talking about the highest priced new iphone or what we believe will be which will exceed $1,000 a phone, are we talking about people deciding maybe i don't need to upgrade my mac? i've got my phone. i do everything on the phone nowadays and i don't need a computer or i'll let that go even longer than maybe prior instances >> this is an opportunity globally, i mean there is lt iphones where in latin america as an example only 50% of smartphones are lt iphonlte phos so they will use this as a replacement for maybe buying some other product so sure those price points could potentially impact other categories as far as how people are using the product. >> and the larger screens and so on and the fact that a lot of people live on their phone

not -- it depends what circles you travel in, but there are a lot of smaller communities in the u.s. where people just use their phones and they don't have a laptop >> i have children like that >> i think that is why that they will concentrate so much on ecosystem. ehe company system across watch and phones is really important and if apple can get you to upgrade two things at won't because of the way that they work together, that will be a motivating factor for a lot of buyers too even if they can get their watch to do something their phone used to do. >> ecosystem equals annuity, that is what that is all about stick around, we'll be going back to our panel here in a little bit but back to jon fortt where apparently tim cook is talking about the apple watch. >> yes, and not just tim cook. jeff williams just got on stage to talk about the apple watch series 4 they rolled the animation video

for that tim cook started off talking about the apple store saying they are now at the point where they have half a billion visitors per year to their stores around the world. also apple on the cusp of a milestone, they are about to ship their 2 billionth ios device that includes the iphone and ipad and other mobile devices. and tim cook says that today will focus on two of the most personal products. the apple watch and of course we know the second we're likely to hear about is the iphone >> we'll check back with you in a bit. and our panel still standing by. meantime, let's get a news alert in the bond market 23 billion in ten year notes up for auction. rick santelli is tracking the action >> demand was excellent. i gave this auction an a-any mous - a-minus. yes, 10 billion of ten yield at

this auction 2.957% 2.955 was the low. and the offer side was 2.96 when the auction went off price really nice. and if you look at all the metrics, 2.58 bid to cover, 63.9 in-directs 13.4 directs all nicely above 10 auction averages primary dealers him on toonly t 22.6% of the acheuction and we're adding to an auction originally put forth a month ago. but this is the way you move paper. and this close to testing 3%, maybe inverse torvestors have sg on their minds we'll have to it with a and swae and we're watching hurricane florence as it barrels towards the carolinas. about 25 million americans are in its projected path. kaitlyn mcgrath is joining us

with the latest on the storm's path >> florence has maintained its major category 4 strength, sustained winds at 130 miles an hour but florence is expected to strengthen as we head through the next 24 to 36 hours as it approaches the carolina coast b friday morning latest track has it moving close to the north carolina coast by friday morning but from there, it won't move. it looks to stall in place for about 24 hours, eventually making landfall at some point on saturday that being said, we astill at least 48 hours away from landfall and that track certainly could change so everyone under the hurricane warning where there is also a storm surge warning in effect should keep in mind that they should prepare for a direct hit. anywhere where you dough so t-- see the hurricane warning in effect be. and we'll start to feel the i would impact of florence

tomorrow morning so starting thursday morning, winds in excess of 39 miles an hour throughout late morning and early afternoon. we start to pick up the outer bands that will push on shore and once it starts raining, it will not stop until early next week we are talking about catastrophic and potentially life threatening flooding through the next few daredays and we'll have winds in excess of 74 miles an hour and they will continue to pick up in speed and intensity as we do eventually approach landfall at some point saturday. and by friday morning, we shift our focus to the storm surge threat, we have high tide coming up for most of the carolinas by 11:00 friday morning so a lot of things to keep our i 00s -- eyes on. we'll continue to bring you you updates. >> wig change big change in the there. people in north carolina and virginia were tensing up, anticipating a catastrophic event. and now south carolina and

points west. is it possible that we change again or have we pretty much figured out track? >> still being 48 hours around, we could see some change but we really have honed in on the synoptic pressure that will build and keep florence in place. but of course every update has come in just a bit different we'll get another update at 5:00 >> very good kaitlyn mcgrath tracking hurricane florence and the hurricane has caused major disruptions to the business area that we're talking about degree graphicbly. the intrepid contessa brewer is in charlton for a look at what is being done to get ready there. contess contessa >> we're seeing the docking pilot climb off of the ship. and so that is the pilot that would be in charge of bringing this massive are car carrier into port and docking it there

no, i got wrong. i have my expert right here. go ahead >> docking maneuver and directs the tugboats >> there we geo. the pilot will take it out of port did you get all that this is the some inthat is carrying now hundreds if not thousands of bmw cars and other cargo off of the dock in the port of charleston about 12 miles out to sea it takes them about an hour and a half to get there. and then this massive carrier will continue on to its next destination. it is just trying to man you're out of tyou're -- maneuver out of the way of the storm. so it will head south to avoid hurricane florence coming in back in the port, they are concerned about the flooding, so there is another carrier leaving at 5:00 and midnight and then the port will close operations and they are hoping to reopen by sunday, but a lot of that depends on where

hurricane florence goes and how much damage -- charleston so interesting to watch. >> and your anonymous expert, was that your exam are a mcamer? >> no, marco is with me and he did an amazing job of showing all -- but john cameron is the captain of the charleston pilots i don't know marco if you can grab a shot of him, but he is giving us this amazing view. the other thing that you have you is he is getting ready to ride out the storm here and will help reopen the port to try to get commerce moving in and out of charleston again. >> very good and new we have credit where credit is due. and nice camera work, marco. thanks, contessa he is already walking it

back jpmorgan ceo says he could beat donald trump in an election. but there is catch and first look at the nation's fortunes under the trump administration and we're all over apple, the big product event under way. new iphones expected to be unveiled and also a new watch this is a tomato you can track from farm, to pot, to jar, to table. and serve with confidence that it's safe. this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. ♪ ♪ this is a shipment transferred two hundred times, transparently tracked from port to port. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud.

look at how much the apple watch has grown. to think this category didn't even exist just a few years ago. and now apple watch is being embraced by so many people around the world apple watch is not only the number one smart watch in the world, it is the number one watch, period. >> that of course tim cook talking about the apple watch series 4 jeff williams now on stage giving details about what new features come with the new version of the watch first of all, three new heart features one will alert you when your heart rate is too low. another alerts you if your heartbeat is irregular and a third, there is a new electrical heart sensor that actually can take annu ecg so three new features. the screen is larger, 44

millimeters versus 40 before it is made of ceramic and satisfy fi crystal. and it now will feel a little kick as you navigate there is a louder speaker. it is 50% louder and a new chip, the s-4 chip, 64 bit, dual core which should give it more power. also new accelerator and gira scope that will detect if you fall and if you are impossibmobile ar the fall, it will make an emergency call for you so something older people might be interested in >> did you mention price yet >> they have not gotten to price. that is usually at the very end

of the radproduct introduction we'll see what that is >> but wait, how much would you pay? there is more. thank you, jon in the meantime stocks did turn higher earlier on this morning on renewed hopes for trade talks with china they have moderated some the dow still higher, s&p and nasdaq i eamon javers is live at the white house. >> reporter: yeah, a couple things first the trade talks, we saw the reports that said that the u.s. administration had reached out to the chinese to hely set of trade talks that could stall the tariffs. the white house not commenting on the record on those reports so we'll bring you up to speed as soon as they do say something about whether or not steve mnuchin is going to beijing or not. meanwhile some good economic news today from the census department take a look at some of these

stats here saying median income is up 1.8%. it hit $61,400 in 2017 and the poverty rate at 12.3% in 2017 versus 12.7% in 2016. so that all good news on the economy front. the administration has been pointing out that the economy is doing very well under this president. and one other thing is that the president we are told, we can't see thcan't -- we didn't see this on camera, but the president signed an executive order that would put in place the intelligence community to evaluate whether or not any foreign person or entity has interfered in the u.s. elections and if that is done, then it kicks into place an automatic review process by the administration for imposing sanctions on whoever that might be officials here saying it is very important to demonstrate that the president is taking charge of the election ffrinterference

issue saying this is an important priority for the president. it sets up automatic review if they find there was interference in the election including things as basic as propaganda that another 45 days for the administration to review whether or not to impose automatic sanctions. >> and before you go, we've all been part of interviews where it is incumbent upon us to ask somebody if they are running for president. and they never give us a straight answer. until this morning jamie dimon let his true feelings slip and then he walked it back. >> yeah, maybe he said the quiet part out loud today. i don't know >> any response from the white house? >> the white house has not responded. i talked to sarah sanders about it briefly and officials here are referring all questions about that to the campaign you guys have seen the remarks in which jamie dimon says he thinks that he could beat the president of the united states if he were to run. sort of dramatic stuff dimon saying i don't think that i could beat the liberal side of the democratic party

i'm as tough as he is, i'm smarter than he is i'm i'd be fine. he can punch me all he wants and i'd fight right back and within about an hour's time after that event, dimon putting out a statement saying i should not have said it i'm not running for proves i wouldn't make a good politician so that is what we call a walk back, a significant walk back. but i think that it gets to the broader point which is important, i think the trump election in 2016 has sort of thrown open the category of who can run for president in this country. it used to be sort of expected that you had to be a senator or governor, maybe a general to run for president. i think a lot of business leaders, reality tv people, celebrities, other wealthy people will be looking at this race in 2020 and saying if trump can do it, maybe i can do it too. so we might see some mush namun names on the ballot. >> and also maybe smart not to

raise the president's ire on jamie dimon. thanks for more on today's market move, let's get for-to-on bob pa -- get to bob pisani. 160 points on the dow, take a look we were not doing up until abou 11:00. and look at that, 160 points straight up. here is the dow movers you have your boeing, caterpillar, chevron stronger on oil today. but tech has been weak and the banks where doing nothing again today. goldman sachs, 11 days in a row on the down side semiconductors all weak. pressure in the techs. we had a big goldman sachs down growed grade of the whole group so we're not getting a lot

traction most important thing right now is china trade wars. the dollar has been quieter. tech leadership is an issue today. fed rate highs are not disruptive yet and finally speaking of china, big ipo today here, we have a tesla competitor, an electric vehicle company going public here at the new york stock exchange $6.26. strange number price at the lower end why? a simple problem don't go public when you are in a bear market. china stocks are down, about 20% to 25% so far this year. and of course you have a lot of issues with tesla and their performance recently pretty pictures though of electric vehicles. >> impressive looking cars >> they have only made 1600 vehicles, so that could be another problem.

all right. let's bring in david katz, chief investment officer from asset advisers and the david cox is joining us david, i'll start with you bob laid it out for us as soon as there was optimistic reporting from the "wall street journal" about the possibility of u.s. trade talks resuming with china, you saw the dow you move higher by about 160 points. so is that what has been holding us back and what happens if we actually don't get any forward movement >> china has been and should really be a significant overhang the economy is doing quite well. you heard the good data. the thing that could derail the market and the economy is if this trade talk escalates and we do enter a trade war, it would be bad for everybody a lot of companies are talking about the negatives associated with higher prices or slowing sales. if we get some sort of resolution or something better in china, we think that the market is due for another leg up

if we don't, it has some down side the way the negotiations have been going, we wouldn't buy on news like today. you want to buy when you have a selloff because we do think the market is in a trading range and you want to buy weakness >> we have a lot of different things to consider here besides trade. we have midterm elections coming up, the dollar is pretty strong. but so is the economy. so what would you do if you have money to put to use? would you get in and where >> i think right now is the perfect time to be investing in emerging markets the last couple years you've seen really big run ups in emerging markets so if you are looking to put money to work, you should put it where if the trade wars end, the places that have been hit the hardest will also recover the fastest. so i think if you are an investor looking down the road, not just a couple weeks, but a couple years down the road, emerging markets, the economies that will be the leaders in the world. so i think that is where you

should pay attention on the front we talked about the trade talk ic that you have to remember that the midterm elections are just a couple months away. the republicans, president, do not want markets being down going into those midterm elections. so we'll probably see if nothing else a lot of repeated starting and stopping of talks with china. so i think the cynical part of me would say that there is probably a little bit of that going on for the administration. the one thing that the president has going for him is that economic circumstances in the markets have been very, very strong if that doesn't go well, it could easily lead to that blue wave that has been discussed many times with democrats taking other the house and potentially the senate so we have to be careful to make sure if there are political mote vasmote -- mote vait vaivations involv. >> and i want to go back to the dollar strength, we expect

interest rates to continue to rise doesn't that just harm what is going on in the emerging markets? >> i could be completely wrong about this, but my thesis is simple, you have to believe that the pace of interest rates in the united states is going to accelerate beyond what is already known in the market. i don't believe that is the case i think the fed has telegraphed pretty well what the pace of rates is going to be so you can take that off the table. in addition not all emerging markets are created the same if you look at venezuela and arregentina and compare them to india and china, they are different situations there are companies that have incredible profits like reliance industries in i said i can industry, large companies that you can buy on the cheap and i don't know why you wouldn't do that if you were an investor looking down the road this is a perfect time and in addition to that, he

emerging market bonds are also places to look you have mutual funds down 8% to 10% that have yields everof 7 o. and you've heard that pension plans have been suffering. and now it is the converse you can get the yield and when they recover, you can get a little return as well on the bond side. >> and i understand, david, i want to give you the last word, you don't want to chase the rally, but when he see opportunity, where are you putting money to work? >> we like the financials, the businesses have been good. stocks haven't done anything energy prices are up a lot stocks have pulled back a lot. we think that there is some technology stocks that are starting to look interesting again. we just started a thinks positi ebay and february. so we think that there are a lot of good businesses that are down this year. if you like the long term fundamentals, you can buy them at 10, 11 times earning. goldman sachs down 11 days in a

row. we think this is a great entry point. we think a year from now, they could be 20%, 30% higher >> all right gentlemen, thank you very much we want to head back to johnck n fort >> and i have more information for you on the apple watch first of all,johnfort. >> and i have more information for you on the apple watch first of all, it starts at $399 for the cellular version price of the series 3 drops to a starting price of $279 series 4 with cellular will have 34 carriers. twice as many as they launched last year. it will be available to order on friday, this friday, available to buy on the 21st so next friday but you the headline here news-wise is that this is a medical device williams said this has been fda approved including the new ecg

features that check for irregular heartbeat. the battery life has been extended it is now six hours for exercise and they even have the president of the american heart association on stage really emphasizing that feature the ecg feature, and i think it is interesting the way they are framing this in combination with that feature and the fall feature, and it almost becomes perhaps a must have type feature, at least that you is how i expect them to market it, for older people so an interesting conversation that will be had >> and also it seems that amongst the smart watches, no other device as far as i know has been fda approved. so the fitbit out there, but nothing verified the accuracy of what it measures is not verified. but inherently by having fda clearance, the accuracy of the device is sort of vouched for.

>> that certainly gives them a bit of a -- you can expect samsung will be trying to match this they also have wearables with medical features on them i wouldn't be surprised to see them match or at least attempt to match this within the next few months but fda clearance is certainly important. there are ways to get that ecg type feature there are companies that allow you to attach a guys to say the watch band but, yes, this is unique in the market at the point where they are launching it heading in to a critical q4. >> and shares of fitbit taking a tumble on the release of the series 4 watch jon, thanks so much. i think we can use our fsa dollars to use that? >> that though could be a huge driver if you can use pretax dollars, about $399 all of a sudden

becomes much more affordable >> i like it an idea. >> all coming together now >> it has been ten years since the collapse of lehman brothers and the financial crisis what if something similar happened today what would be different? we're talking about that with bethany mclean next. with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. dinner date...meeting his parents dinner date. why did i want a crest 3d white smile? so i used crest. crest 3d white removes... ...95% of surface stains in just 3 days... ...for a whiter smile... that will win them over. crest. healthy, beautiful smiles for life. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782

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i'm sue herera here is your cnbc news update. senator tim kaine meeting with fema's administrator this morning saying congress needs to do more accurately planning for damage that storms like hurricane florence could bring >> i think we would be hiding our head in the sand if we don't recognize the change in weather patterns are creating more of these emergencies and increasing the need for emergency funding the fbi announcing the return of a painting to its r e rightful owner it was stolen by the nazis in 1941 renoir found its way to

christie's in new york amazon plans to ship fresh full size christmas trees this year starting in november. they will be bound and shipped without water within 10 days of being cut. the national christmas tree association estimates that out of 27 million trees sold last year, only about 1 in 2 were actually purchased online. interesting to see how much they disrupt that particular industry guys, you're up-to-date. >> i feel like as much as i love online shopping, you got to see the tree >> yeah. >> smell it. >> see how tall. you want to feel the -- >> is it full, how do the needles feel >> part of christmas experience. >> exactly >> thank you, sue. back to jon fortt with details on the new phone >> yeah, the iphone x s is the name of it and it does indeed come in two sizes.

one 5.8 inches diagonally on the display, the other 6.5 they are calling the display super retina they are saying that it is 60% greater dynamic range for colors, it has a new formulation of glass for higher durability a new finish, a gold finish, along with silver and space gray which is close to black, that it will be available in so 3.3 million pixels in the larger size phone, it is about the size of say the 8 plus but all screen back to you. >> very interesting stuff. >> ice gray? >> yeah, almost black. got it thank you very much. we'll be back to you soon. but other breaking news. out to julia boorstin. >> cbs news announcing that jeff fager from "60 minutes" is leaving effective immediately, this announced by david rhodes who is president of cbs news rhodes sending an e-mail to cbs

news employees saying that bill owens will manage the "60 minutes" team as they search for a new executive producer of the program. he goes on to say that this action today is not directly related to the allegations surfaced in recent press reports about rhodes he says those continue to be investigated independently rhodes goes on to say however he violated company policy and it is our commitment to up hold these policies at every level. joe enew ceo is involved in the decision and so that is the e-mail that was sent to cbs employees. or course this just days after les moonves announced he is leaving as well. shares down about half a percent. i have no idea why you would want to turn the channel right now because we have so much more coming up after this

hard to believe it has been ten years since the lehman collapse, but ittic canned off t -- kicked off the financial crisis could the bank have been saved >> some arguments never die. top financial officials who handled the financial crisis pushing back this morning against the idea that they could have saved lehman brothers from its bankruptcy a dick and i hdeo >> this was not a narrow judgment, oh, we can do it, but on the other side of legality. we were thinking about it, is it feasible our belief was making a loan on defense the collateral that was available would at best sustain the company for a few days that it was not a viable business, that all we would do is end up bringing a lot of bad assets under the fed's balance sheet and maybe protect a few

creditors. >> bernanke's comments come in a cnbc documentary tonight will show top wall street executives arguing lehman should have and could have been saved. >> this argument that they didn't have the legal authority was never brought up that weekend. this argument that they didn't have the legal authority was created after the fact i believe and they said at the time that there was no political will to rescue lehman. >> they had the power. that was the decision. the decision they made to let lehman go and i think the reason was that they thought the country could withstand it it was a judgment they made. >> sorry, folks, for time we cut wau warren buff fett saying the sam thing. and what happens next time some rules have been tightened to make it harder for the fed to bail out a failing institution does it make sense that it is even harder to do now? and by the way, hank paulson

said another argument out there, that if we had saved lehman, it would have been another company to go. and only the congressional action, the t.a.r.p. and all the qes were able to put the financial system back together again. >> all right steve, thank you ten years after the financial crisis, the question now, can it happen bethany mclean says fracking is on shaky ground and this could be disastrous for the country. she is out with withnew book, t about fracking great to have you with us. especially at a time when we're watching oil peaking basically for the year forthe past coupl years, people are starting to put drills to the ground again what is the warning here it sounds like these companies

are destined to not make money and this is trouble for the country. >> that obsessed me about this story. this question how can an industry make money and changing the world as much as fracking is and it is a really interesting conundrum. thus far they haven't approach that they can produce free cash flow and i think so the big question for the country is how much oil and gas would we produce if companies had to live within cash flow >> and your premise is that they incurred so much debt because this is a highly capital intensive business to begin with yes, it has revolutionized the energy industry in the word, h but at what cost >> a great way of putting it it doesn't make money for shareholders so how long will wall street keep funding a money losing

business and what does it mean if the cash dries up >> it depends on what time fr a. when oil prices peaked, it went from a equivalent of a dollar to 64, so investors could have made plenty of money investors see this rise and think there is money to be made. >> one of the interesting things about the business is that stock prices have been somewhat disconnected from actual profits. it's remaneniniscent of the fir dot com boom they're publicly traded companies, not by the amount of cash that they're producing. that's starting to charge. there's a rebellion in the investor community investors are starting to say we want to see returns. >> doesn't it get complicated in the way it's changed geo politics and america's place in the energy world >> it has changed things look no further than saudi arabia and what's happening in that country

the rise of mbs, to see the pressure that low oil prices, which are partly a result of american fracking are exerting on the rest of the world. >> how would you see this playing out? i mean, if you feel like the seeds are being sown of another financial crisis in the fracking industry, you make the point that a lot of this has been facilitated by the low interest rates we've enjoyed for the last decade because of the financial crisis as the fed is raising rates, is that what sparks a possible crisis here as well? >> i think it might spark a lot of things. there's an old saying, there's no such thing as a free lunch. and the massive debt bubble that we've had since the fed popped interest rates so dramatical dramatically -- even before the financial crisis has arguably caused bubbles in a whole lot of asset classes. fracking is one example. we never would have a fracking

boom if it hadn't been for ultralow interest rates. you don't think of these two events, the rise of american oil and gas and the financial crisis as being related, but they actually are. >> have we tested the credit of these companies when oil was much lower from where it was now? we had companies that were going bankrupt and the credits were junk haven't they been tested haven't we weeded out the weak ones >> we did weed out some of the weak ones, over 150 american companies went bankrupt when oil prices plunged that's part of the point i make in the book, we can't control the price of oil our companies are relatively middle price producers we did test this american shale has been more resilient than anyone. but that doesn't mean there isn't a shaky financial footing underneath. >> bethany, thanks so much we look forward to reading the book, saudi america, the truth about fracking and how it's changing the world

you won't want to miss the crisis on wall street. we'll talk to many of the key figures who were involved, looking at the key events that caused that crisis tonight at 10:00 p.m. eastern on cnbc. lots of news coming out of apple's big product event today. our panel bisack to break down what we've seen so far you'll want to stick with us here on power lunch. this wi-fi is fast.

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welcome back to power lunch. i'm here at apple headquarters in cupertino where the company has announced the new iphone 10 s. the new chip inside that allows you to do more with the phone. they're able to pack more into the cpu, gpu and neural engine that neural engine handles machine learning is now able to do five trillion operations per second it allows the phone to address 512 gigabytes of internal storage. now some focus on core ml and augmented reality.

they've got bethesda game studios on stage now, showing the higher level of complexity that's possible in these games, guys. >> thanks, we'll check back with you later. we have a lot more news still to come. we're watching everything coming out of apple the fed is about to reaslee its latest beige book. >> oh, boy. >> we'll be right back after this short break so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

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welcome back, the fed is set to release the beige book. the dow is down six points beige book is out. >> reporter: the fed characterizing economic growth as moderate but saying labor markets are tight with all 12 federal reserve districts reporting widespread labor shortages. in six districts, the lack of workers is constraining sales or delaying projects. those shortages are being felt in low skilled jobs held at retailers and restaurants. still, the fed noted that wage growth is modest, but it said that businesses are increasingly using benefits like flex time and vacation time in order to attract workers. weighing on businesses is trade

uncertainty. several districts reporting that companies are being forced to scale back or postpone capital investment because of the trade turmoil. one philadelphia business even calling it, quote, a cloud over every facet of their planning. tariffs are having an impact on prices the fed said those are rising at a modest to moderate pace. all districts saw widespread increases in input prices with tariffs being one of the main drivers there. the fed said that efforts to pass on those hikes to consumers are increasing as well overall, the fed found consumer spending is growing at a modest price. home construction is up modestly home sales are somewhat softer, both due to lower demand and lower inventory. commercial real estate construction was mixed lending was up across the country. guys, back to you. >> all right thank you. let's bring in our senior

economics reporter steve liesman. >> i got to reiterate my complaint from last time and i think the time before that we're growing 4.3% in the second quarter and 3.2% is the update for the third quarter. the fed still describes that as moderate or modest i don't know what it would take -- i'm going to keep hammering that until they change the language i want to say that i think it was straight up the right call here i think this is an escalation of their characterization of the problems with the labor force. this idea that it's widespread, that all the districts are reporting it i didn't hear her say that it's limited to skilled workers this was the mantra in the past. it's skilled and unskilled yet, i'm going to keep saying

that, we're not seeing the wages go up. we did have that 2.9% wage number, but it's still on a real or adjusted basis about 0 or a little bit over. >> you're taking issue with moderate or modest which word would you use >> right now it's robust or strong even. >> if there was a beige book that came out with robust growth and price increases, we would have, i would think, a more negative reaction in the markets. >> okay. let me spin that just a little bit backwards and talk about what was said earlier. the fed is going to have to go above neutral. there are two particular tailwinds that are out there first is market valuations and the second is the tailwinds from very strong fiscal policy. that raises the calculation of what the short term neutral rate is is we may have to go above that

very hawkeish in terms of inflation. there's another headline here that input costs are rising faster than selling costs. that's the kind of stuff that's going to get the fed sitting up a little straighter on this. it makes me think more and more that second hike in december is more of a done deal. then we'll have to start having the conversation -- i guess we should start having it now about when the first hike happens in 2019. >> thank you well, we mentioned we didn't see a big change here in stocks on the beige book. stocks did turn lower in the last half an hour for potentially a different reason let's head down to bob at the new york stock exchange. what's the reason for the market changes here >> reporter: a couple of things, but 3m is a big issue. i want to show you the dow trade talk optimism may be resuming straight up at 11:00, came down a little bit let me show you the dow movers here your normal trade movers, boeing

and caterpillar are up on the news about possible trade talks resuming apple didn't do anything hasn't been doing anything all day. bank stocks are weak tech and bank stocks have been weak all day 3m has been moving down. look at that, that normally should be up on trade talks. take a look, we've got the cfo presenting at the laguna conference straight down there. there's some talk there, he's talking about organic growth of 3% to 4% higher material prices than thought of warnings about growth in the industrial healthcare unit you see that dropping, 3m as well as the dow in the middle of the day. the important thing is on th tariffs today. jp morgan tried to put a number on this. i haven't seen this before the full tariff war as described now could knock $8 to $10 of the s&p earnings that would knock 5% off,

significant. trade wars, they say two thirds of industrials and staples were talking about tariffs. yes, there is an impact here i would note the fed minutes here some mention scaling back capital investment due to trade. so we know that china trade wars are the issue that moves markets. it's heating up. the dollar has been quieter. some issues on tech leadership today. down but not out and the fed and rate hikes i would say they're not disrupted yet. two of the four issues definitely on our radar today. back to you. >> bob, thank you very much. let's get to some breaking news now in los angeles with julia borstin once again. >> reporter: verizon announcing that tim armstrong is leaving as ceo of oath. he has been running verizon's advertising businesses, which are together called oath he's leaving effective october 1st. he'll remain an advisor during the transition as the president and coo of oath. he's going to continue on as an

advisor through the end of 2018. this is very much a big deal for armstrong, who is a very prominent personality in the advertising world. he joined aol in 2009. was part of the sale to verizon. he's been coo since 2017 really leading all of verizon's digital media efforts. there's been a lot of speculation since verizon got a new ceo, that there was going to be a shift away from the advertising and content that armstrong has been so focused on not really a surprise here an interesting transition here for verizon. back over to you. >> thank you very much so let's get back to the markets. trade, where do we go from here? we are so pleased to be joined by investing legend -- he loves that title -- jack bogle who is

a mentor to a whole generation of wall street types, including yours truly. thanks for joining us. >> good to be with you, always been a long time. >> it has been here we commemorate the 10th anniversary of the global financial crisis, even as we celebrate what has now become the longest bull market in u.s. history. put that in perspective for us right now. >> well, the bad years,ther crisis years, the dow dropped by about 50%. since then, you know -- and people panicked and got out. even in the mutual fund business and the etf business now we're back, i think the gain from that level is maybe 200%. so it shows you that when you act on the emotions of the marketplace, you're making a big mistake. you know, i sthave always said

stay the course. even the big one don't let that change your mind. never, never, never be in or out of the market. always be in at a certain level and, you know, your may want to be 50% in stocks like i am you may want to be 75% or 25%. that's probably a decent range never be out and think you can get back in because your emotions will defeat you totally. >> one of my favorite lines is when somebody says buy and hold is dead -- or when they ask you is buy and hold dead, what do you say? you always say it depends on what you buy right? >> well, yeah. buy and hold for a stock is one thing. buy and hold the u.s. stock market is quite a different one. what do we have going for us in the u.s. stock market? leaving aside how hard it is to pick the winners few people heard of amazon 25 years ago, to say nothing of google maybe a little more than that, maybe 30 years ago if you hold the stock market,

you will -- not to be corny -- but you will grow with america the correlation between the long term growth of america's gross domestic product and the stock market is something like 95% but the annual correlation of those two things is probably 20%. so, you know, you're making a good long term bet, but short term betting is just not a good way to go. >> jack, i want to ask you about what could possibly cause the next crisis. i want to bring your attention to a note that was released by jp morgan last week called the great liquidity crisis they say that it's the move, it's the massive move in funds to passive investing that could help spark this next crisis and in turn the next financial crisis there's large pool of buyers that are mechanical buyers electronic trading desks, at a time when volatility spikes tend to step away from the market

reduce liquidity even further. do you think the market structure could contribute to the liquidity crunch the next time we have a volatility spike? >> to be honest, there are areas of the exchange traded fund market in particular that could be subject to the same kind of pressures you're talking about when you get into the main part of the index fund market, the s&p 500, the total u.s. stock market is not really conceivable. they are the market. if there's a panic there, there will be a panic everywhere by definition i think to call that panic is more than anything else, i believe, believe, an attempt to say be careful of the index funds use our active management, we'll do better. >> just to clarify, when you say certain exchange traded funds, what kinds of etfs are you talking about? which etfs would you be

concerned about? >> high yield is always a problem. they've had liquidity problems before and they may well have them again what's interesting about high yields -- and it's a statement about the market's tolerance for risk is the yields on high yield bonds are much of a spread between the yields and high yields and corporate bonds, much narrower than they've been before people don't think they're that risky and they could get an unpleasant surprise. >> we've been reflecting on ten years since the financial crisis for much of this week. and asking most of our guests if we're safer now. do you think that the crisis that we saw ten years ago could be avoided today because of the tools we've used previously and the safeguards we've put in place? are there blind spots we haven't seen yet >> well, there are always blind spots, or as i said the fog of the stock market nobody really knows what's going on that particular crisis may or may not come again

a liquidity crisis and the financial system well, it could debt right now has gone way back up and things like student loans are probably double what they were then. housing, usually home equity loans are back up to where they were then. real estate prices, home real estate prices have come back to the exact level they were way back in 2009 -- i'm sorry 2006 before the crisis started. it can always happen again what we don't know is, you know, there are risks we know but there are risks we don't know even exist that's the problem every crisis is different. every bear market is different there are a lot of signs of exposure in the market, but i think nothing right now that would cause me to get out of a long-term investment program certainly nothing that would stop me from putting back my

$100 or $500 every month in my 401(k) or i.r.a. plan. >> you look well i'm glad to hear that and see that as well thanks for joining us. >> good to be with you all. >> i'm going to plug a 10-year-old book if you read nothing in the near term, read his book called enough published in 2008 at the height of the financial crisis. by the way, be sure to turn in for the documentary called crisis on wall street. the week that shook the world. the world premier is tonight we're all very excited about this genuinely. 10:00 p.m. eastern time here on cnbc looking forward to that. >> i have recommended it to my documentary club so we can watch it together. a lot of headlines coming out from apple a closer look at the new lineup and whether it's impressing investors. could lehman brothers have been saved could have and should have just one remarkable quote from cnbc's new documentary who said it? that's ahead

florence is being called a storm of a lifetime. residents in north carolina are expected to be in hurricane force wind gusts for at least 24 straight hours we have a live report from north carolina ahead power lunch is back inwo nus. t [ upbeat music ]

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more details on the new iphone xs it's shaping up to be a battle of cameras apple is focusing on new features in the camera bokeh, the ability to refocus a photo after it's been taken. samsung months ago did a super slow mo feature in its camera. expect that to be the story. dual sim, so you'll be able to have two phone numbers in the same phone and more features on core ml interesting demo of an app that allows you to track a basketball shot from somebody training from different points, including what their release height was where they took the shot whether they made or missed it all of this from within the app. kind of a twist on what we've seen done with augmented reality. >> thank you very much appreciate it. we're going to come back to you with more updates throughout the show. let's bring in our apple panel and get their reaction

i'll start with you, since you're new to the panel for us this hour. i guess i want to get your reaction on the apple watch updates. i know that there's a lot of focus on the iphone. but a note was put out saying the fact that this apple watch has received fda clearance is a game changer for the wearable device market. fitbit shares dropped 3.5% on the news can this be opening up a whole new demographic of folks who might be interested in an apple watch that weren't before? >> i think that's a big deal i actually was going to say that keeping an eye on that other products category, the apple watch, maybe the air pods that might be announced is key. that's category that's been growing a lot for apple. it's made $4 billion up for them and, you know, the iphone, while it makes apple a lot of money, doesn't have a huge global market share

and so i think the more that they can sell that apple watch to maybe an older demographic or people who are really interested in the health and fitness aspects, that's going to be really good for them frankly, although they're in no trouble, diversifying is a good idea. >> yeah, it has features like i can make an emergency call there's a sensor for an ecg. the president of the american heart association is part of the event. it's moving into a different category for the watch than previously what do you think of the new updates to the iphone? it's going to be waterproof. john just walked us through some of the new camera features, new size, new glass, new color any of that a turning point to potentially speed up the replacement cycle we've been in? >> the 5 trillion ops per second is going to make -- when someone buys this phone, it's going to operate a lot faster someone that is still with their iphone 6 or 6s will be looking at someone with one of these new

products, and maybe that's the type of thing that stimulates them to upgrade. let alone it being an older product. they're taking the size of what was an a plus, and because of the way the screen is going edge to edge, you're having what is going to look like the biggest screen they have so this is a new effective size in terms of the screen that could induce some additional people to consider upgrading their phones two interesting things there's obviously additional discussions about the camera, which are interesting. the two sim cards certainly has relevance in many markets throughout the world in terms of allowing customers to move from carrier to carrier that's going to be well received as well globally it's something a lot of consumers are looking for. >> i'm wrapping my head around the fact that the phones will have two phone numbers like we need more than one phone number >> it's more about switching one carrier to the other as opposed -- >> see, that necessitates you buying only one phone.

>> i could get rid of my work phone and combine them into one. >> that's counterintuitive what's the headline for cnet >> so far, i think it's the watch. the watch has had the big changes. we've talked about a lot of those changes. what will be interesting about the watch is i think you'll see people buying them for other people in their families it's a worry ease buy, right if this is going to help me feel like my parent is going to be watched over, i might buy that for them i think that will be really big for families although, i think that in the consumer tech space a lot of people might not be so wowed by those if you've fallen and you can't get up features. i think the phone cameras will be big sellers people always want their pictures to look better. i think that apple does a great job selling this they know how to work with photographers to show off what camera can do. this new camera system, if it really does have this high dynamic range depth of color

that apple is talking about, is going to be compelling for a lot of people. >> i know that people are going to just -- jaws are going to drop i was just in germany, and my blackberry failed me i was not able to use it. >> so is it dead >> no. no but i had my work iphone with me it did fantastic the pictures it took were pretty darn good. >> they were pretty good. >> i don't know, it's starting to turn my head here just a little bit. >> even bill is coming around now. >> folks, thank you. we'll be back with you in a little while as we continue to get more news and information out of cupertino here. all right, coming up we're tired of snapchat's excuses. that's what one analyst said the stock hit an all time low today. should you stay far away or could this be a good opportunity to get in? trading nation is next

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welcome back to power lunch. i'm in cupertino at apple headquarters we have a third model of the iphone x apple introduced the iphone xs and the xs max which is a larger 6.5 inch screen. they've announced the iphone xr. this will be more affordable apple hasn't announced pricing for all of these yet we don't know if it's going to be still $1,000 for the xs, higher for the max, less for the r. that is what i expect. we're continuing to watch this presentation we'll bring you more as we get it back to you. >> thanks. let's send it to sarah eisen. we're watching shares of snap plummet to an all time low after btig downgraded the stock to $5. the firm said it's tired of

snapchat's excuses let's talk about it with the traders. you correctly called this move in the past month in trading nation do you still see further any signs you can buy snap after it's been beaten down so hard? >> we were talking about the rally into resistance. fast forward to today and now we have a break down below support. that support level was $10.50. now i expect that to be resistance snap is the proverbial falling knife. the downtrend is intact. stay away from this one, it's going lower. >> fundamentally, boris, can you make any case for this stock >> no. i mean, snap could be in danger of becoming my space of social it's only win right now is

12-17-year-olds. the next big hit could be the advertising move over to instagram, which is where the max amount of audience is. the only reason i don't want to short the stock is because it could be a takeout candidate for alphabet, which with a.i. could use a back end into social otherwise it's a dead man walking. >> down 7.5%, thank you. for more trading nation, head to our website or follow us on twitter @tradingnation. thank you sarah. let's head over to sue herrera >> thank you so much here's what's happening at this hour cardinal donald wuehl may step down over the ongoing sexual abuse crisis plaguing the u.s. catholic church. he'll fly to the vatican to speak directly to pope francis about his possible resignation. a new report from the trust

for america's health finds seven states had obesity rates at or above 35%. that's an increase from five states from the previous year. the highest rate is in west virginia, followed by mississippi and oklahoma the lowest rate, colorado. stormy daniels is telling her story in a new memoir titled full discloser she alleges an affair with president trump announced the book on the view earlier today it's set to come out on october 2nd. and usain bolt, experiencing life in zero gravity during a specially modified flight over france he was promoting a french champagne brand and its new bottle which is designed to allow astronauts to drink champagne while in orbit it's designed to open without any spills >> astronauts can drink and drive? >> they're drinking and driving, exactly. tricky catching the bubbles,

that's the only thing. >> i'd be willing to try. >> thank you, sue. coming up, north carolina residents bracing for the worst as hurricane florence barrels toward them. we have the latest live from the ground coming up on power lunch.

welcome back to power lunch. let's get a check on the markets. stocks spiked earlier on reports the u.s. was proposing new trade talks with china since then, it's given back more than 100 points of the gains the dow jones industrial average is lower by 23 points. s&p 500 off by .10%. the nasdaq is down by .5% for the better of 41 points. the

chip stocks are moving lower as concerns over the memory market softening continuing micron is down by almost 5%. take a look at goldman sachs it's lower for 11 straight daysdays it's now down 16% in the past six months bill, back over to you. all right. thank you. look at the time is it already time for the oil market to close for the day? let's go to don chu. >> we got above $70 a barrel, $70.32 we have seen the move higher on the heels of some hurricane worries. of course, more so on the idea that we had an inventory drop by 5.3 million barrels. that was with the last energy administration weekly inventory data showed that propelled the crude oil prices higher. we're off of those session highs, but still a big positive trade that looks to continue on

supply concerns globally and iran is factoring into that trade as well. back over to you. thank you. hurricane florence is barrelling towards north carolina, but has just been downgraded to a category 3 storm rainfall could total 20 to 30 inches in some areas. how are people preparing let's get to jackie deangeles who is in wrightsville beach, north carolina. >> reporter: the category 3 status doesn't mean it's not going to be a bad storm. people here are preparing. you can see metal here boarding up this structure. sandbags are on the ground as an example of how to try to protect from the potential water damage. the problem with this storm is the cone of uncertainty. it's going to have a pervasive span the forecasters aren't sure what territories are going to be covered. i can tell you this, an average

ceiling is eight feet tall the storm surge is expected to be more than 10 feet, 12 feet to 15 feet. that gives you a sense of what could happen on the ground here. there's a triple threat. it's not just the storm surge, it's also the winds that are expected those wind gusts are going to be very strong. also the accumulation of rain, they're talking about 20 inches in some areas. the potential for flooding, that's what's dangerous when it comes to human life. that's one of the reasons so many people have been leaving this area, moving towards the inland authorities have been saying it's time to leave the coastline. we're monitoring power supply. duke energy said that in 2016 for hurricane matthew, it lost power to about 1.5 million customers. it's forecasting for florence that one to three million customers could potentially lose power. we're talking about an extensive storm here that could cause a lot of damage. the scientists at the

international space station tweet adphoto. they used a super wide angle lens in order to get you this shot, to be able to show you what hurricane florence looks like it's really a lot to take in now, the governor of north carolina, this is actually his first hurricane that he's preparing for. we know he's had conversations with president trump and the president has said the federal government is there to back the states that are going to be impacted by this there also was a press conference a little bit earlier. this is what the governor had to say. >> the time to prepare is almost over north carolina, my message is clear. disaster is at the doorstep and it's coming in for those not under an evacuation order, finish your preparations today if you haven't already. >> reporter: so it's still a very dangerous storm folks here are urged to get to safety as soon as possible,

guys >> thank you very much we know you have to stick around and report for us, but make sure you take care of yourselves down there, too. the collapse of lehman brothers took place ten years ago, but it's still controversial. in a new documentary we pull back the curtain surrounding the firm's failure here are some of the nation's top bankers giving their take on the impact of lehman's fall. >> i believe that the single biggest mistake in the financial crisis was allowing lehman to go bankrupt in an uncontrolled way. that doesn't mean you have to rescue them. it doesn't mean you have to save them from eventually being liquidated but it needed to be done in a way that was not so chaotic. and that didn't cause the market to simply freeze up. >> whether lehman had been bailed out or not, the crisis was going to unfold. you still would have had a very bad market afterwards.

>> i hated to see lehman go out of business. it hurt the reputation of all of us someone had to go down, and unfortunately it was lehman. >> we have breaking news on iphone pricpricing. >> reporter: we have the pricing of the full range of iphone xs and xr we'll start with the xs max. that's the larger screen it's 6.5 inches. it's the most expensive starting at $1,099. it will also be available at 256 and 512 xs will start at $999. the same price as the x available in the same storage configuration. the xr, this one has an lcd screen, not the oled it's larger than the current x screen, it also uses face i.d. it starts at $749 which is less than the current iphone 8 plus

price. it will be available in 64, 128 and 256. it's a very interesting change to the iphone lineup because this xr comes in colors. it has larger screen than the xs though the screen itself, lower quality. also, it doesn't have dual cameras on the back. so a little bit hard to say which one is going to prove to be the sweet spot for apple. clearly, they're making a play to raise overall the average selling prices and put forth this face i.d. technology, guys. >> i'm lost in all the letter names. i got to tell you. >> i keep writing them down. >> it used to be you have one number you got the 4, 5, 6. now you have the xr, xs and the oled -- >> versus lcd. >> i don't know. give me a phone that take as picture. >> stick with your blackberry,

bill >> i'm sounding old. >> thank you, john we know we'll get back to you. we want to get back to the documentary. andrew, today you got a chance to talk to ben bernanke as if you haven't talked to these guys often enough i understand that not everyone agreed with some of your theories that the current populism wave and distrust of government started back in 2008. >> you're right. we did get to sit down -- i have gotten to talken to them over years. i don't know if i've gotten to sit down with all three live this way as you said, there are continued questions and debates about what took place ten years ago one of the issues that hank paulson, tim geithner and ben bernanke talked about was the inability to communicate to the public what they were really trying to do take a listen to what hank paulson had to say >> it is very, very hard to

explain that the system was so complex, so interconnected, that we had to go to the source and wall street was like the heart. and we had to stop -- we had to go to the source to stop the bleeding otherwise, it was going to kill the economy. we were putting the t.a.r.p., the things we did, it was like putting a tourniquet on it it's very hard to explain that finance is the life blood of the economy. >> and it continues to be hard to find the right metaphor to describe the crisis. you mentioned the issue of populi populism it's something i've talked a lot about thinking about where we are post-crisis. populism that comes after a financial crisis, i talked to benb ben bernanke about that issue. about the whether the policies has led to a sense of populism

in our country this is what he had to say. >> financial crisis didn't help, obviously. we know historically financial crisis to increase in populist politics people have been saying the country's been going in the wrong direction for 40 years there's been slow gains in wages, increasing inequality slow upward mobility we've had rising concerns about trade, china's entry into the wto in 2002. immigration. cultural issues. the whole gamut of things that are feeding into the popular mood i think the financial crisis, obviously, exacerbated that. it was not, i don't think, the primary source of the politics we're seeing today. >> that particular point was made over and over again, that there are questions to this very day about the policy response to the crisis but that perhaps the most important piece was actually what the crisis exposed, which were the structural issues in our economy which arguably even

today we haven't addressed. >> if it's not populist, it's popul popularist that's another book. you know these guys as people, not just as, you know, their titles and things. would they do it the same way again? i heard what ben bernanke was saying and he was saying why they let lehman go the way it did. would it play out the same way >> i think for these folks, the answer is yes. i put that question, what was the mistake? what would you have done differently? is there any light in between what you did and where you wish you could have gone. tim geithner does talk about trying to do more for homeowners, trying to do more for individuals. not necessarily, by the way, because he thinks it would have been a more efficient or effective way to push or

support. it might have changed the perception about it. >> it's all fascinating. none of us can get enough of it. thank you so much. really appreciate it. >> good luck tonight. >> make sure everyone turns in for crisis on wall street. the week that shook the world. the world premier is tonight at 10:00 p.m. eastern let's watch it all together. meanwhile, shades of martin shkreli. we'll bring you a drug company executive's defense of his price hike for a drug. we'll tell you what will happen coming up next on power lunch. ...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.

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welcome back to power lunch. the presentation has wrapped up. we have the iphone xs, the xs max and the xr the xs and xs max, preordering opens friday they'll be available next friday a whole new look for the lineup of the iphone, particularly at

the high end it could be that they increase average selling prices and margins. more prices overall, it's going to be interesting to see which way consumers go with this, guys. >> all right thanks.jon, thanks. >> good job. >> good work out there a lot of headlines to go through. let's bring back our apple panel. the managing director at btig and the managing editor at cnet. now we have the price, walter. what do you make of the prices in particular? the prices of the xr which is 749 which i think is below what some on the street were expecting. >> the xr, $250 reduction relative to what the x sold for. the x sold very well everyone was concerned at $1,000 it wouldn't sell it was a very good product and drove asps in the december quarter and helped so far this year it's interesting that they are not making it available until

mid-october, so the xs max could help with the asps in the december quarter, but really from a volume standpoint, the thing that really looks compelling is that xr in terms of what the operators will probably focus on as far as this upgrade season. >> yes beyond the december quarter when all the phones are available, walt, do you expect pressure on asps, pressure on margins because a 749 starting price for the xr is so attractive? >> the classic balance between unit growth versus asps and how you can drive. it look, $750 for a normal quarter, other than the december quarter, is still the right price as far as where asps have to be. the company may not be able to rely on asp increases enough to drive revenue growth by the same token, if you've got an aging base as far as subscribers are concerned, upgrade rates that could invert up, at $750 this is still something that could help the company to deliver some amount of revenue growth. remember, for apple to hit their

earnings estimates, it's not about the iphone growing 5%, 10% in revenue they can grow a couple hundred basis points >> right. >> service is growing 30%, buying back 20% of stock a quarter and that gets your earnings to 10%. you want to be able to sustain the free cash flow monster and the iphone and the upgrade cycle on it. >> before we let you guys go, i'm going to sound like a total luddite almost what do we need so many different models of the iphone right now? >> i think it's just about giving people choice the way that i'm thinking about this now is that the xs max is really like a pro model. if you're a creator or photographer go for it if you're sort of a normal person, buy -- buy the xr. it's -- it's a totally new model, but it's really accessible and has everything that the 8 plus h.it's really about starting new choices and creating the sort of middle of the road i'm getting everything

that i need model that feels new. >> what about the pricing, lindsey, on the apple watch quickly? so 399 for the non-cellular version and 499 for the cellular version of the series 4. >> to me that seems very expensive. there are much cheaper products out there, especially in the fitbit line and some of the competing lines. again, it's all about ecosystem, so if you're already in with the phones, you like the way that the watch works with the phones and you really like the idea of having the lt model, people will -- i think they will buy it i see apple watches everywhere, and honestly it surprised even me. >> again, we have the new health features and the fda coming out and giving its approval of the device thanks very much for joining us. really appreciate you being here for this entire apple event. >> a trending story definitely a drug company executive trying to defend a huge price hike for his company's drug and getting himself in a little bit of trouble in the meantime.

m meg tirrell explains. >> reporter: a drug on the market suddenly sees a price increase of 400%, a generic antibiotic manufactured by a company called nostrum, a story familiar to martin shkreli that prompted a response from none other than the fda commissioner who wrote on twitter, quote, there's no moral imperative to price gauge and take advantage of patients i just spoke with nostrum's ceo saying he's been misrepresented. he increased the price of the drug to $2,400 a bottle but he says that's not the price he expects to collect on the drugs after significant discounts negotiated by his customers, like walmart and walgreens and his company has operated at a loss for eight of the 11 years it's been in business so when he can make money on a product he does so to support the rest of the business further, he's added a discount to the branded version which

costs $2,800 a bottle. this is just one of 60 products that got price increases, most from smaller manufacturers the ceo says the dynamics are a result of theinefficiencies at the fda, skyrocketing fees and uncertainty about the marketplace. many others, however, of course, argue this is just corporate greed. >> is there nobody else manufacturing this generic antibiotic >> it's a complicated situation. a number of manufacturers who can make this antibiotic thereto was a rule change in january which is why all of this is happening, he tells me. a lot of those have been stopped being manufactured, and that's what he says is happening in the market. >> is this one of those stories where we shouldn't stop at the headline and instead look at all the permutations of, you know, sounds like a pretty subtle story here. >> well, there's a lot going on behind the scenes and it talks about all the challenges in the generic marketplace. a lot of people feel like prices shouldn't go up that much. the rest of his market is losing money and he has to make money where he can. >> and that's where the

corporate greed complaint comes in right there, $400 cheaper than the branded thanks very chmu, meg. appreciate it. >> check, please is next but if that's not enough, our app helps monitor your spending too. and if that's not enough to help you save, we could start a carpool. look at this traffic. don't worry. ok, if that's not enough we'll start a trainpool. oh i have a meeting in five minutes. and if that's still not enough... i got it. we'll just create a shortcut. we'll do anything, seriously anything to help you save. ally. do it right. talking 4th quarter? yes. a moment of joy. a source of inspiration. an act of kindness. what will it bring? an old friend. a new beginning.

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kayak compares hundreds of travel and airline sites so you can be confident you're getting the right flight at the best price. cheers! kayak. search one and done. at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. we've got to talk about apple. we've got the pricing, and it's the pricing of the xr that may cause some analysts to take a pause here, a little lower than expected >> one for inial people. >> at $749. >> apple shares, by the way, are close to session lows right now.

not entirely a surprise. we ramped in terms of yesterday's session, ramped into the event just slightly, and now we have dissent back into negative territory and to session lows. >> and i think we've agreed that kind of the real highlight of this has been the apple watch. >> exactly. >> and all the new features and things, and i can hear tim cook somewhere out there right now saying i told you so the do you remember when they introduced the apple watch and we're all saying, come on. this was his first product introduction as ceo. >> right. >> and we're saying this is what you've come up with, and you watch, this is going to become a category killer. this will be a big part of our revenue stream. >> and it could be a category killer, but it's still not a big part of the revenue stream yet only 4% of revenues right now currently, so it's still miniscule, but i can see the allure of what the apple watch can be. >> yes. >> this one getting an fda approval and can make an emergency call as a heart sensor for an ecg and best buy trying to corner this area of the

market. >> have to wonder what happens with fitbit. saw the shares take a dip on the back of all of this new. we'll see watch this. >> watch "nightly business report" on pbs, by the way. >> but before that. >> we will, bill. >> thanks for watching "power lunch." >> "closing bell" starts right now. >> good after. a very warm welcome to "closing bell." i'm wilfred frost and i'm sara eisen in for kelly evans the dow is swinging 200 points in today's session it was up 174 points at the high as you can see, lost most of the gains and is trading just around the flat line. >> no walks today. >> no walks. there was so much news the apple headlines. >> but welcome back. >> thank you >> hope you had a nice long weekend. this weekend marks the tenth anniversary of the financial crisis coming up, we'll speak with lord king, th