business never sleeps, this is "squawk box." good morning welcome to "squawk box." we are live from the nasdaq market site in times square. i'm becky quick with joe kernen, andrew ross sorkin is with us live from washington good morning >> good morning to you we have a big show ahead i spent some time with elizabeth warren which we will talk about and show you in a bit. of course we have a lot bigger news coming up >> we do we are looking forward to that interview. we also have everything happening with the hurricane first let's take a quick check on what's happening in the markets. right now it looks like there are green arrows across the board. dow futures up by 34 points. dow was up by almost 150 points yesterday. nasdaq up about 24 points. and s&p up by 4 points overnight in asia, you will see

that the nikkei was up by over 1% 1.2% hang seng was higher it was up by 1%. the shanghai was down by 0.2%. the nikkei sitting at a seven-month high after these gains. also look at what's happening in europe in the opening hours there. right now it looks like there's green arrows across the board. both the dax and cac are up by a third of a percentage point. you will see the ten-year is yielding 2.983%. hurricane florence is battering the carolina coast our cnbc reporters are there live we have jackie deangelis in carolina beach, north carolina contessa brewer is live on the ground in myrtle beach, south carolina, but let's begin with kaitlyn mcgrath. the latest on florence's path? >> florence right now moving onshore in topsail beach, north

carolina that eyewall moving onshore. those outer bands stretching from wilmington to jacksonville. that's where we see those 90-mile-per-hour winds, that torrential rain. this will only continue as we head throughout the morning. florence moving at 5 miles per hour it will slow down as we head throughout the day today florence coming onshore as a category 1, it won't move as we head throughout the day today. it will take nearly 24 hours to move 80 miles as we head throughout pride eventually sliding into south carolina, sometime tomorrow. overnight friday into early saturday morning, then we'll sea weakening into a tropical storm. that will help with the wind speeds but continuing to bring that torrential rain through the weekend and next week. for today, despite making landfall, the majority of florence will be over water fueling it and keeping it as a category 1

the storm surge impacting parts of north carolina. that storm surge threat increasing today and high tide around 1:1:00 today the bullseye of rain, 30 plus inches of rain the further north and south you go, the less ran fall you can expect. but we are talking about rainfall in feet throughout the weekend and the start of next week let's talk about the timing of florence and when we will see a bit of relief. throughout the day today we'll see locally heavy downpours, hurricane-force winds picking up we'll have the latest as the day goes on. back to you. >> thank you right now we want to get over to jackie deangelis in carolina beach, she's on the ground in north carolina this morning. >> good morning to you we are waiting for landfall here at carolina beach, very close to wilmington that was predicted to be the bullseye of the storm.

that landfall is imminent now. the outer bands we've been experiencing are very, very rain those wind gusts are strong. when they pelt the rain around you can feel it. it feels like hail when it's hitting your body. looking done the beach right now, about a half hour ago we lost power in this area. so it's pretty much completely dark at this point the power outages will be a continued problem as we move along throughout the day and the storm becomes more severe. reports of almost 300,000 people in north carolina without power now. of course duke energy forecasting that 3 million customers could potentially see lights go out. and that that those outages could last days or weeks the storm surge threat is the biggest condition we're worried about on the beach right now you can see the rain accumulation on the ground that's the biggest problem at moment no flooding i can see. flooding has been reported in parts of wilmington.

we talked about the evacuation process. we talked about people leaving this area and most certainly have it's very, very quiet here but a little bit more than an hour ago i saw some folks heading to the beach getting sandbags at this point a bit late to be making those preparations >> yes i guess not surprising that that will happen. you're in the middle of it let's go over to contessa. she's about 80 miles south of where jackie was in myrtle beach, south carolina. looks like there is power. that's not generator power >> yeah. nope we're still up and running right here you feel like a nice fall storm there's some rain, some wind the wind gusts have reached 45-mile-per-hour at this point, but the national weather service says the biggest threat comes from the rainfall because they're expecting the rain to last throughout the weekend.

we are under a flash flood warning. up to 24 inches of rain expected they're telling people that risk won't subside until monday we're still an hour or two south of those outer rain bands. so we're not even starting to feel the tropical storm-force winds yet. but expecting category 1 force winds. the storm surge now the national weather service could be up to two feet that's a change from previous predictions and good news for this area that depends so much on tourism dollars it could mean the beach businesses would get up and running. it's those inland community, especially golf courses that are along the inner waterways. they could see the localized flooding and flash flooding inundating the golf courses there. for right now we're still weighing for the real impact of hurricane florence >> contessa, you've been in a lot of hurricane situations in

the past what do you think in terms of preparations verses what you've seen before and what the early signs of this storm show you >> i have never seen a business community heed the warnings to close like they have in south carolina from charleston through georgetown up to myrtle beach, almost all of the businesses have closed. and in horey county, 80% of the residents here evacuated it was hard to find anything open yesterday it's remarkable and supersedes what i've seen in previous storms one reason is the forecasters were so severe in their warnings and because the governor issued mandatory evacuation orders so early. a lot of businesses including hardware stores like ace and home depot closed early. people felt frustrated by that

because they wanted to do last-minute preps and couldn't get supplies needed. >> joining us now is lieutenant general russell honore, he coordinated military efforts for hurricane katrina. good to see you. >> good morning. >> what do you think about this situation? we have seen the storm downgraded to a category 1, but that doesn't take away all of the risk that would come with the rain, the slow-moving nature of this storm and then the storm surge as well. >> you know, the use of the term category becomes a term that goes across all disciplines. people have an understanding of the projected wind speed but as we all know, it doesn't account for the surge and the rainfall that in combination causes the biggest damage during the hurricane, which is the

water. the fact this storm is going so slow, this is going to be one big rain event the other thing we lose accountability of is while they are showing sustained wind of 90 miles per hour or 80 miles per hour in that category 1 speed, it doesn't account for the gusts. those gusts will take down the tree limbs which will take down the power lines, and in the high area where you have distribution lines, those big lines that look like mini eiffel towers all over the place, if we start losing those, you are talking weeks without power. the loss of electricity alone in the -- in any area, particularly in urban areas, that takes us back 100 years in most cases it will affect the water, you won't have flushing

toilets. you start losing your refrigerated stuff, and you lose your ability to communicate and stay informed which is a key principle of surviving a disaster like this so that power going out unto itself will be a disaster. plus with all the rain coming in from the surge as well as the rain that will start coming out of the high ground in the mountains working its way back out to the ocean we have got a big problem here right now because the people that didn't evacuate that already are starting to feel it in places like new bern. >> you heard contessa say this seems different than storms in the past, that residents and businesses have heeded the warnings put out

you're talking about 1.5 million people who have evacuated. businesses closing up and sending employees on the way is that a silver lining, good news that at least the human life at risk is greatly smaller than you might have anticipated? >> absolutely. the storms, katrina and those before and after, they have an impact on small business many times they are underinsured they don't have insurance on the rolling stock or stock they use to sell, and data from fema and others show about 40% of those small businesses will fail within about six months after a major storm. >> wow >> as well as when the power is out because when the power is out and the grid goes down, the population takes a longer time

to come in much of that area where the eye is coming in is resorts, they make their money off of tourism. people will not go or can't go back to an area. this will have a significant economic impact on that community because people won't be able to go to work because many of them will be trying to get back in their homes. at the same time there won't be a tourist population there to spur the economy so this is why we call these disasters. this is why we need to have a serious conversation in america about the national flood insurance program because it's underfunded and it's in debt and people are -- many people are not insured because they can't afford -- if you're poor, you cannot afford the flood insurance, if you flood and you don't have the flood shurninsur,

you get a double whammy. i'm sorry for that long answer >> i hear what you're saying, it's an amazing statistic to think that 40% of small businesses will fail after an incident like this there are also questions that circulate about why do we continue to build in places than get flooded. is this different than what we've seen before and what do you think can be done to the national flood insurance program to bolster is and help people who need it after this situation? >> he think we'll have to try to encourage people to move out of the flood zone all indications with the warming seas as well as with the issue we're going through, this climate cycle, the people along the coast, you know, you go to places in miami where high tide would come close to the coastal

roads, now they cover them the same case in plaquemines parish, during high tide four, five years ago would not touch the coastal roads, now it's getting on the road from the rising sea level we'll have to have a serious conversation about our infrastructure and how we start to encourage people to move away from those high flood-prone areas. because we see it time after time when we look at the damage that happened in houston much of that happened because the drainage system couldn't take that amount of water because we built over the natural hydrology that would take the water into the ocean. so our infrastructure in terms of coastal infrastructure and where people live and the height of their homes, all of that will

have to be take noon consideration. as long as we done have a national policy and start to get people to move out of those places that repetitively flood -- a lot of the homes inside that -- that do have flood insurance, they flooded multiple times each time they flood we have people come back it's never a convenient time for us to have that conversation i've done some writing and studying on that what would happen if this storm is a category 4 storm and went into the nation's capital, can you imagine the type of mets th mess that would be

we have some challenges there, but also create great opportunities for us to reset our infrastructure going into the rest of the 21st century >> lieutenant general, thank you for your time today. good talking to you. >> have a good day let's pray for those out there. we have a lot of sailors out there bouncing around on those ships. to all our first responders closing in on north carolina and south carolina, i hope they have safe journey and that their families are safe at home. >> sir, thank you for your time. we agree with you. lieutenant general russell honore >> okay. coming up in a minute, when we return, senator elizabeth warren sounds off we'll show you what she told me last night about president trump and jamie dimon. as we head to break, a look at the biggest premarket winners

and losers in the dow.

>> welcome back to "squawk box."

you're looking at a live shot of wilmington, north carolina right now. we'll get back to our hurricane coverage in a minute last night i was here in washington and i interviewed massachusetts democratic senator elizabeth warren about the 2008 financial collapse she weighed in on the possibility of impeaching president trump. >> another business executive, tom styer has a campaign afoot to impeach the president do you support him >> nope. not on this. i take this seriously. this is something that could come to the house, this is obviously -- if it does, it could come to the senate the way i see this is this is about letting the special prosecutor complete his investigation. we have an ongoing serious investigation. it has resulted in more than two

dozen indictments or guilty pleas already. i want protection for the special prosecutor >> as you would imagine, we talked about banks and wall street and bankers themselves. i raised the issue of jamie dimon as a potential candidate for president. >> jamie dimon was quoted as saying he believes he could run against president trump and win. so we could play would you rathe rather >> i'm not voting for either one of those guys. >> in the next hour we have a lot more we'll show you what senator warren had to say about jeff bezos who is also in washington, d.c. right now and made some news of his own. we'll talk about that. and then she sounded off on former trump economic adviser gary cohn, she was vicious

we'll show you some of her comments about him and goldman sachs in just a bit. >> there's a lot of would you rathers there, andrew. i like that. that's tough for her very tough dimon versus trump, she could write in bernie or herself >> we'll show you other tape we talked about the democratic party and the issue we talk about a lot where she is relative to bernie, where others are and sort of how the party may be splitting it's an interesting conversation >> she's very smart. i bet she walks it back a bit. >> in terms of how far -- >> keeps it in sort of the real world. >> it's funny. i said it feels to me at least that you are moving a bit -- it felt like you were way out here and started to come back >> i've been seeing that with you. as we get -- the show gets older, we're seeing that with you a bit. right? don't you think you're with --

with the endless onslaught with -- >> am i getting closer to you? >> no, the other side. >> let's go together >> i'm reaching out. >> i'll stay out of your bubble. >> did she say she considers herself more to the center from bernie >> she tried to define herself independently almost of the entire democratic party. it was an interesting moment >> all right we'll come back to that and come back to andrew's conversation. happening overnight in new york, governor andrew cuomo defeated democratic primary challenger cynthia mixon. the governor will face mark molinaro in november >> who did they get to run against -- in new york they just put up some poor guy

what was his name? >> pataki. >> what happened there >> that's upstate versus downstate. >> let's get back to the markets. we're focused on fixed income here ten-year is at 2.97. joining us is kathy jones from the sha rchwab center for finanl research we love doing ranges kathy has a 20 basis point range above or below 2.90. so 2.70 to 3.10. >> for how long? >> it's not changing that rapidly. is that a 12-month >> that's probably about a six-month range for now. >> i'll take it. though wages are picking up, we're not seeing that translate into higher inflation. inflation is steady and inflation expectations are steady that doesn't give you impetus

for pushing long-term yields up. secondly is the fed is getting more hawkish that's flattening the yield curve. the more hawkish they get, the more you just see a flatter curve rather than a big boost up in rates >> let me throw something at you that jan kniffen threw at me yesterday. he points out, because you're looking at 120,000 extra hands for the holidays that target is thinking about hiring, 80,000 for macy's, on and on, the retailers are hiring massive amounts of part-time workers for the holidays he's speculating that you will have a hard time paying them $10 or less to do that you'll probably have to pay more to do that retailers can do that now because, "a," they have a great consumer retail environment and a much better bottom line because of the tax cut is there a point where that sort of behavior spirals more into an

inflationary environment >> it could. but we are just not seeing it. >> but you might >> you might see a bump. wholesale prices are flattening out as well. you just are not seeing those workers go out and chase goods if the old song is it's too much money chasing too few goods, i would argue there's not too few goods out there. >> bullard is not a voting member, but do they trot him out to show the other side when he was on his biggest thing to get across a couple weeks ago was that the fed knows how dangerous it is to flatten the yield curve and they would be loathe to do it. >> then we have lael brainard on the other hand and a couple other fed governors saying it's different this time. we're not afraid to invert the yield curve if we see inflation -- >> so you don't know who to listen to. >> just different opinions >> was i still reeling from the

back-to-back jack lew and barney frank interviews when we jan kniffen on >> he just e-mailed me i spoke with him >> i didn't know he was on this is happening to me lately kathy, you are on the show right now, aren't you? so he was not on the show yesterday. >> no. >> but he could have been. i was reeling -- >> i talked to him, not on the show i e-mailed with him. >> so, this makes you worried about high yield in other corporate bond investments then. >> yeah. we're not underweight high yield. still neutral because we think you will continue to earn the coupon, the coupon is attractive relative to other yields out there. the environment is still good for corporations earnings are good. the economy is going well. there's no reason to go underweight. we're cautious about valuations. if we get to the point where the

fed does invert the yield curve and tighten credit conditions, then the weakest links are usually in the high yield area, maybe floating rate, now the leverage loan area >> do you concern yourself with macro forecasts? do you just look at the reaction in the yield curve >> yeah. we have to be concerned about those. >> where are you now have you raised your estimate for growth >> if you are talking about over the long term, not really. >> what about for 2018, are you at 3% yet? >> no. no it wouldn't be that high >> what do you think this quarter is >> you know, i don't know what our estimate is for this quarter. >> if we did 2, and then 4, and then 8 -- how do we not get to p? >> we could get to 3 for the longer term average.

>> what about for 2019 >> 2, 2 1/2 area once the fiscal stimulus rolls off, there's not the ability to push it up >> you don't think this business confidence translates no long-term change in behaviobehar >> still waiting for that productivity change to kick in >> that might lag. >> it takes time the math is tough because of the declining rate of growth in the mortgage force >> i used to ask everybody from schwab if i could get my money back if you mess up. you know those commercials they say does your broker allow you to get your money back if they screw up. can i ask chuck -- >> you can ask chuck about that. >> don't ask you >> don't ask me. >> all right thanks >> when we come back, an update on hurricane florence. and we'll talk generator preparation with an executive from cummings.

as many as 3 million people in nddsf oulinas could lose power hure othsands are already without power. "squawk box" will be right back. /* when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life and create the future that's most meaningful to you. which means you can retire, without retiring from life. having the flexibility to retire on your terms.

that's the power of pacific. ask your financial professional about pacific life today. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital.

welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning tracking hurricane florence. it is now a category 1 storm the carolinas are already facing serious flooding as the storm

surges towards the coast 10 million people are in the potential disaster zone. florence could deliver eight months of rain in two or three days we're also keeping an eye on flight cancellations so far more than 800 flights in and out of airports from atlanta, georgia to norfolk, virginia have been canceled. a lot of planes not even flying in that region may be impacted by the storm so don't assume anything is automatically on time. wind speeds from the hurricane have diminished a bit in the last few hours, but exports are warning that the storm surge could break records. greg postal has a look at why storm surges can be so dangerous. >> storm surge is often the deadliest part of a hurricane.

starting with a 1 to 3 foot water rise on dry ground this may not sound like much, but this is flowing water being pushed by the wind 1 to 3 foot of storm surge can knock you off your feet, stall cars and even carry cars away. let's go above that. let's go to 3 to 6 feet. very large objects can be carried in this kind of flowing water. they can act as battering rams and enhance the damage let's go even above that 9 feet of storm surge, this kind of storm surge is not survivable unless you move to the higher floors of whatever structure you happen to be in. please follow the advice of the local officials and evacuate as ordered when a hurricane moves in >> millions could lose power during hurricane florence. our next guest spent the week helping customers get their generators ready to go for before and after the storm

joining us is the vice president of cummings and president of the power systemses business good morning to you. i'm curious about this right before a storm, what do you tell your employees? i know you're trying to put everything in position, but at the same time you're trying to get positioned i imagine there's a lot of people saying that everybody should be getting out. >> yeah. absolutely good morning first, let me start by saying that our thoughts and hearts are with all the employees in the area, not just our employees, but all the victims that will be receiving this water we do have right over 2,000 employees in the area. we have two or three manufacturing sites there. mostly in our distribution branches we have several branches in the area where service techs are waiting for the storm. we tell them to take care of their families and be safe we have folks equipped with satellite phones, so our ability to stay in touch is very good. we do prioritize personal safety

first that crew is motivated and ready to come in as soon as the storm blows over we have a couple hundred service techs ready to come in from other territories. everybody is ready to go we have calls in every four hours to be ready to mobilize as quickly as possible. personal safety it our first priority for employees and their families we wreck men that for everyborey else in the path of the storm. >> what is the cost for a company like yours >> from a duown time point of view, it's in the millions as we shut down, hunker down while the storm comes through. property damage, that depends on the situation. if we have extensive flooding damage or not. it's hard to predict at this point. but we have business continuity

plans in place at our facilities not just in this particular area there's a lot of precaution in place to minimize the damage as the catastrophe approaches and get us up and running very quickly in the interest of customers, employees and the community. if you're a customer in the path of this storm, how quickly do you think you can have people on the ground to help them in the coming days? >> practically within hours. as soon as it is safe to go back in, we have equipment ready, staged we have spare parts. we have technicians on the ground we also forwarded fuel one of the implications of these very water intensive storms can be that power might be out for several days depending on what kind of setup you have, having reliable fuel supply may be a big challenge. so we're trying to protect customers in every way we can.

telecommunications wise, we are all equipped with satellite phones assuming that some of the telecom infrastructure will go down in the next few days, we're completely independent of that one of the other things that is good tech is almost all of the equipment is available remotely. even if you evacuated from your home, you're four, five hours inland, you can track the state of your equipment. is my grid down? what is the state of my power? what issues do i have? do i have to get in touch with my service tech? some of the service techs are monitoring some of that critical equipment in the area. >> final quick question, relates to elon musk during these storms there's been tweets and other things about electric power in peoples homes, the idea that in the future more

people will have the kind of power that he's talking about. does that make sense to you in a storm situation like this? >> yeah. i think everybody is trying to keep critical infrastructure up. there's a lot of different technologies our brand, we provide power that powers the world that's always on the world is getting more and more critically wired with internet of things and important computer infrastructure in just about every home these days. having that power into your home, to your local operation, that will come closer and closer to the end user and consumer we all tried to keep up with that and keep end users safe >> all right thank you. good luck over the next coming days thank you. >> thank you for having us >> coming up, our coverage of hurricane florence continues after the break. we'll take a closer look at the impact on shipping from all the east coast ports

in the next hour, an update on some of the flight disruptions on the east coast from flight aware. and we'll talk about the millions that could face power outages with southern company ceo tom fanning. stay tuned, you're watching "sawbo oquk x"n cnbc so, the whole world is talking about ai. big, bold promises like... it'll transform the human race! it's gonna solve unsolvable problems! it'll find life on mars! but here's the thing. you don't live on mars. you build wind turbines. supply car parts to thousands of cities. answer millions of customer calls a year. like this one: no, i didn't order this. it's terrifying. you run a real business

with real roll-up-your-sleeves business needs. and that's why you work with watson. hello. so it can analyze weather data to help retailers increase foot traffic. assist thousands of online banking customers each week. and reduce delays for 25 million passengers. mahalo. watson isn't just the promise of ai. it's the real deal deep learning business ai. that knows your industry, protects your insights, and works with tools you already use. that's why it's the best ai for the job.

welcome back it's time for the executive edge hurricane florence has arrived on the carolina coast. storms like this can have a major impact on shipping and commerce brian sullivan joins us with the latest on what's been happening so far and what we can expect. >> thank you very much it's pretty dramatic we're looking at a live -- you think what is this this is from marinetraffic.com these are satellite images of the ship traffic in the area what is striking about this is that we see the impact of the storm. right now that's wilmington, north carolina hurricane florence is making landfall right there as we speak. charleston here. savannah, norfolk, virginia is here what's amazing is not what we see but what we don't see. look out at sea, all the ships, green, generally big cargo ships. super tankers.

the biggest ships on the ocean the entire area where the hurricane is centered, there's nothing. on a normal day, if you wanted to bring this up, it will look more like this you have just ships constantly coming and going out of these ports. there's nothing in that whole area these dots, the orange dots here, those are not ships, those are marker buoys those arestructures. you have a couple of big yachts, the light blue but what is striking is all of these ships out at the sea are waiting on what to do. where do we stand in the ports same situation as yesterday. norfolk, virginia, if you're in port, you're not leaving no new ships coming in wilmington closed, charleston, closed savannah and jacksonville are open for business. the port of charleston is hoping to get back up and running maybe as soon as this weekend. have to see what that storm surge will do. that's a live look

what is amazing, too, is that if you ever have driven from norfolk to charleston, that's about 400 miles as the kcrow flies. so that gives an indication of how massive the storm is hurricane harvey was about 200 miles in diameter. that's probably what harvey looked like, that's florence in terms of double the diameter it's a big storm and the ships are staying away there's about 300 billion in economic value from here, here, here and here down to jacksonville done every year none of that is happening now. what are the ripple effects for something like this? if all of these ships moved out of the way, are we talking about weeks before really things get back to normal >> depends on the backup and if there's damage at the port what we saw with houston was that we had some port damage they have to inspect the coast guard makes this determination.

it's not the port of charleston who says bring them in, it's the coast guard that says we need to check to make sure there's no structural damage at docks, that the water is fine. all these ships are delayed. they'll try to come in at the same time because these ship owner the want to get their stuff on and off but you have train backups i guarantee you -- i can't confirm it, some of these ships out here outside of charleston are probably carrying a lot of bmws because they have thousands of bmw x5s, which are made in greenville and shipped to charleston, they're probably just waiting to go back in >> all right thank you. >> sure. coming up when we return right here on "squawk box," from smartphones and tablets to backup batteries and charging cases, people are using more lithium ion batteries than ever. we'll talk to an executive who is betting big on one of those battery's components, cobalt

as we head to break, a quick check on what's happening in europeanmarkets right now. "squawk box" returns in a moment at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby yeah, that procedure seems right. & that one too. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when your patient's tests come back... broke my personal record. aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue.

i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills? aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com.

at ally, we're doing digital financial services right. but if that's not enough, we have more than 8000 allys looking out for one thing: you. call in the next ten minutes... and if that's not enough, we'll look after your every dollar. put down the phone. and if that's not enough, we'll look after your every cent. grab your wallet. (beeping sound) (computer voice) access denied. and if that's still not enough to help you save... oh the new one! we'll bring out the dogs. mush! (dogs barking) the old one's just fine! we'll do anything, seriously anything,

to help our customers. thanks. ally. do it right.

smartphones, electric cars rely on cobalt to boost battery life and keep appliances from overheating. but tech companies looking for it got to navigate copper and nickel mining as well. one company says the demand and value of cobalt will continue to rise and joining us right now is the founder and coo of 27. so we had one of your, i guess, another company. i don't know if i'd call it your partner. along with you participated in an acquisition vale so where is this it's a mine -- a cobalt mine in voise bay?

>> it's in newfoundland. it's a nickel mine. >> in substantial amounts? >> it will produce around 2% of the world's cobalt production. so, yes. >> so 60% comes from the congo at this point. going to 80% >> yeah. it's closer to 71% or 72% today and head north of 80% in the congo. >> not optimal over there in environmental or child labor -- >> yeah. you've got political concerns, power and infrastructure concerns certainly ethical sources of mining and environmental challenges >> they promise it's getting better, but is it? >> it's tough to say it's tough to say. there are a number of companies trying to modernize but there's got to be 20,000 to 30,000 kids that mine these. >> people die. >> you're talking about putting a 12-year-old boy down a small hole with an ax and shovel

>> your company itself, are you a mining company or do you buy the production from other places that actually mine is this an investment vehicle? >> it's an investment vehicle. >> cobalt 27 >> we invest in nickel mines producing cobalt as a by-product we also have the world's second largest cobalt storage >> there are limits of the amounts of cobalt in the united states it's constantly cited as a potential problem if we're going to translate to more and more electric a vehicles. what do you say to that? >> absolutely. the u.s. doesn't have any significant cobalt production. most is coming from places like russia and canada and madagascar and other countries. so the u.s. used to have a strategic stockpile they sold in the last couple of decades it's going to be a challenge if you think about the oems and trying to lock up that supply chain. >> will it be an issue that limits how many electric

vehicles we can have >> i don't think so. there's enough cobalt in the world. it will react like any other commodity in the world when you have significant demand coming online, the price has to be high enough >> this deal doesn't kick in until 2021 >> that's correct. >> and you're not actually -- you don't have relationships with oems, car oems now. you're in discussions but can't talk about which one >> it'd be fair to say we talk to every major automaker around the world. >> it's kind of interesting. how old is cobalt 27 >> we took the company public in june of 2017 >> let's acquire streams of cobalt because it's going to be big in electric vehicles >> we looked at the space and said what's the best thing to

invest in but also there was no real way to invest in cobalt before cobalt 27 we were trying to give a way to play the cobalt price but also play the ev. >> all right cobalt 27's justin cochran i knew that. did you know that was the atomic number >> i did not i do now >> future stock price as well. >> may have to change that it's like 20th century fox at some point thank you for coming in. when we come back, live updates on the hurricane coming from north and south carolina. we have people on the coast there. plus we have an update on the path so far. and we will get new numbers on flight cancellations on the east coast. plus we will get back to the markets with mohamed el-erian. "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.

you're watching "squawk box" with special coverage of hurricane florence here now, becky quick. >> bracing for impact. hurricane florence churning towards the carolinas. we have team coverage ready to go we will hear from them in just a moment we'll keep you abreast of how this storm will affect your money. the eye wall making landfall in the last hour about ten miles from wilmington, north carolina. welcome back to "squawk box," everyone this is cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is in washington this morning. before we get to the hurricane, let's see where the markets stand. green arrows across the board. also take a look at what's

happening in the treasury market the 10-year note continues to push towards 3%. 2.987% this morning is the yield. when it comes to oil prices, you're going to see that at least at this hour, things are a little higher for most of the crude oil prices crude up by 38 cents gasoline prices at the pump have also been something we've been watching you can see right now down below 2. right now you will see the dollar index is barely weaker. it's relatively flat at 94.47. let's get to the latest on the hurricane florence, its track and timing we start with meteorologist katelyn mcgrath. >> good morning. right now florence making landfall on north carolina right now that eye stretching

from top sail beach and it's right on the eye wall where we are seeing the worst conditions. the hurricane force winds up to 90 miles per hour and torrential rain florence will continue to slowly push on shore as we head through the morning. we are expecting landfall in the next few hours but right now florence only moving at 5 miles per hour and expected to slow down as it pushes onshore throughout the morning hours. once it does make landfall, the majority of florence remains over water that's going to help fuel it throughout the day today we are expecting it to remain a category 1 hurricane as we head throughout the day on friday, eventually weakening as it moves into south carolina. we will then downgrade it to a tropical storm so the wind will become less, but the rain is going to continue as we've been saying with florence this is a rain and flooding event we're talking about rain in excess of 30 inches for portions of north and south carolina. and it's the storm surge that has us really concerned as we approach high tide later this morning. high tide coming in after 11:00

for much of north carolina so you're adding on top 7 to 11 feet of rain on top of high tide, the worst of that storm surge expected between cape hatteras and cape fear it's not just along the coastline. it's the rivers that will be pushing out and have that storm surge moving in. we are talking about life threatening flooding from the storm surge as the day goes on the further north and south you get, the less the storm surge will be. let's break down the timing and what we can expect from florence through the next few days. for today, it's all about that storage surge and the flash flooding and the hurricane force winds. for this weekend, we keep that torrential rain in the forecast. we'll downgrade a bit, but still dealing with tropical storm force winds. by next week we are still talking about flooding rains inland so right now we do want to get a check on things outside with jackie de ang lideangelis. how are things look ling?

>> thank you so much the eye wall has made landfall here we're waiting for the full landfall of the storm, but the winds are gusting around 90 miles an hour. very severe, very fierce the rainfall is very hard and steady as well you can see the surf behind me is pretty rough along the beach here and all along where we can see power is now out some people have decided to stay and hunker down in this storm. they are regretting it we've been looking outside and seeing transformer boxes exploding like fireworks these winds are expected to continue and pick up as the center of the storm finally will make landfall. so this isn't even the worst of it yet no storm surge that i can tell by my eye at this point, but the accumulation of the rain is starting on the ground and it's pretty severe inside our hotel, for example, you can see the water starting to seep in in different places so conditions getting more severe out here. we're going to be monitoring it for you all day.

but for now, ooum going to send it down to contessa brewer down in myrtle beach, south carolina. >> jackie, thank you we're still waiting for the arrival of the real effects of hurricane florence but the center of the storm is heading straight here after it makes landfall in north carolina right now we're under hurricane warnings, storm surge warnings, and flash flood warnings it could be the rainfall that's most impactful in this area. we're looking for up to 24 inches of rain in this area as the rainfall continues let me give you a sense of how big, how slow moving this storm is we're expecting to stay under hurricane warnings and have hurricane conditions until tomorrow we're expecting to have tropical storm conditions until sunday. we're expecting to see severe rain until monday. with all of that water coming in, the rivers are expected to crest on tuesday between 18 and 24 feet. and guys, if we hit that level,

that's enough to breach i-95 we'll be looking for the repercussions of this storm for days to come >> contessa, is it 13 feet is the storm surge that would hit i-95 >> so not a storm surge, but the river crest. what will happen is all of that rain accumulates and as the land nearby drains into those rivers -- the rain may have ended, the rivers won't crest until the beginning of next week and that's when the real danger is and here's the problem emergency management officials expect people to want to get back to their home and see what happens. but the danger for them may not happen until next week. >> wow all right. we'll be watching. contessa, thank you. according to noaa, 2017 was the most expensive year for natural disasters. and following 2017, hurricanes irma and harvey looking at some

data jpmorgan chase institute drew transaction data from households in miami and houston. joining us with the results of the study, fiona greg. she's jpmorgan chase consumer researcher this is a little bit different kind of study. it looks at the effects of really consumer spending and how it affects that for not long-term, but six months, a year after an event like this. is that what the study entailed? >> yeah, that's right. and, you know, what i would say is that i can't underscore enough how financially disruptive a storm is for families you know, we looked at those million families what we observed is when we look at their checking accounts, their regular bank account inflows meaning income was down by 20% in the week of the landfall spending down by 30% so these are very big numbers.

that's almost like an economic recession happening the week of the landfall >> if you go out a couple of months, you see it's hard to make debt payments so those drop. even health care spending is affected can you go into that explain what happens exactly >> yeah. as soon as that storm hits, the category of spending we saw drop the most was health care spending it dropped by 50%. you know, that could be doctor's offices are closed, people are missing appointments but surprisingly even three months out, people had not caught up on that health care spending it was still down by 5%. in debt payments, that was another area where we saw big drops. we saw 15% drops and again, three months out people had not caught up on those debt payments. >> you go 6 months and 12

months >> we didn't look out that far it's important to underscore what we're observing is what's going on in that bank account. but obviously families will be experiencing long aftermath in terms of the damage to their cars, their homes, et cetera >> when we look at it, we try to look at the macro impact and we always see that near term, it can hurt gdp it can hurt growth it can have a negative impact on, you know, the overall gdp of a nation but then it seems like the rebuilding, you get it back and then some. was that indicative? could you see it in this study >> well, you know, i think you're right there is a big economic impact we saw consumer spending down by over 7% in houston year over year in august of last year. you know, cash flows and financial transaction, the level of economic activity does return it does come back. but there are important winners and losers in this i mean, on a small business

side, we saw it was construction firms, it was repair and maintenance firms that were actually doing better than baseline but, you know, small firms like health care firms, we saw that consumer spending on health care was down and those were precisely the firms that hadn't really caught up so there are important winners and losers households also. they're spending less on health care they're slowing down their debt payments but in houston, three months out, families had spent 33% more on home repair 13% more on auto repair. so, you know, that's tough to swallow as a financial shock for a household. but, of course, if you happen to work in those industries, you might be earning a bigger paycheck because of it >> fiona, if you're watching people's bank accounts, did you notice along the way -- obviously you saw debt payments down did you notice if direct deposits coming from employers, were those down as well? were there people who stopped getting paid especially if you worked for a small business? >> certainly in that first week, we did see a

bit of a dip in even payroll even if you're getting paid direct deposit, it may be you're working fewer hours during that storm. but it was -- you know, a lot of transfo transfers and other transactions people may be putting in by the atm or checks. we saw big drops and flows in that income. >> all right, fiona. thank you. you're not at penn anymore you're not a professor at penn anymore? >> no, not anymore i was at georgetown. thank you. >> it says penn here no never at penn? >> yes, at pennsylvania -- university of pennsylvania, i was. thank you. >> okay. you're not there anymore all right. you can't help me out. kidding. my daughter's down there now i always reference it no matter what ph.d.. you have a ph.d. but we didn't call you doctor. >> no worries. >> all right, good thank you, fiona it's grieg or greg

>> grieg >> all right dr. kernen, when we come back, our guest host mohamed el-erian, he's going to join us after the break to discuss markets and so much more. in the meantime, take a quick look at futures, see where things are headed right this moment they're looking up dow about 48 points up much more on "squawk b" en rurn.oxwh [phone ringing] need a change of scenery? the kayak price forecast tool tells you whether to wait or book your flight now. so you can be confident you're getting the best price. giddyup! kayak. search one and done.

thanks, janet. it's welcomemy happy place. store. you can learn how to switch to xfinity mobile, a new wireless network that saves you cash. and you can get 5 lines of talk and text included with your internet. and over here i'm having my birthday party. dj fluffernutter, hit it! ♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone. visit your local xfinity store today.

we're continuing to watch the hurricane as it comes to shore. we'll keep you up-to-date on everything there for the meantime, we want to welcome our guest host mohamed el-erian of allianz. we've just been watching the storm, but we've been taking time this week to look back at a huge financial storm that hit us ten years ago. trying to figure out where we've come, what we've learned along the way. if you coin sod many of the key terms like new normal that we've talked about ever since. where do you think we are? how safe do you think we are right now? >> so if you think about what we've accomplished, we have a much safer banking system. i don't think the next crisis

comes from the banking system. >> so where's it come from >> it comes from non-banks but it's not a crisis. the big shortfall is until now, until recently there was very little inclusive growth. so the pivot from crisis management to restoring economic growth failed. and then we have a whole set of -- >> what do you mean? there was never the fiscal stimulus to jump in and get the rest of the economy -- >> there was never the mind-set that this was a structural shock. people thought of it as a cyclical shock and then the issue we have to deal with now are the unintended consequences the big banks have gotten bigger the small institutions have gotten more complex. and add on top of that, there's a limited policy flexibility for the next downturn.

you know, it's mixed there were really important accomplishments, but there are also slippages and unintended consequences >> so are we better prepared or less prepared? i thought i heard you say we were better prepared >> the banking system is better prepared where the crisis amplified, that's better prepared but there are other areas where ironically we have less dry powder to deal with the next downturn >> you're thinking the shadow banking system is where -- >> i think there's an issue of over-promising liquidity among the non-banks. there's been way too many promises made. we already see that. you get outsized market price movements. you saw this in emerging markets in the last few months. >> so the new normal, was it like sour cream? did it have an expiration date >> yeah. >> was it november 9th, 2016 >> no, i think thei icexpiration date of new normal is when the

global system can no longer tolerate low growth and the benefits of that growth going to few peek you get a reaction and that can tip you one of two ways either to higher growth -- >> populism or something >> it's just a reaction. people say, okay let's disrupt the system and that's what disrupted the growth that was a very good column by nilo who says success was tweaking a system so they could continue but what failed is the understanding that's not a politically viable outcome >> you've blocked off -- he can't be a guest host in january next year of the super bowl since he's -- you're already planning -- >> as a jets fan >> you're guaranteeing me the jets are -- well, you had that great game >> one game against the lions. >> sam darnold >> against the lions >> see, this is about trump too. he sends woody over to be the ambassador of the uk

his brother comes in, suddenly the jets are contenders. >> one game, joe >> woody's going to hear you >> you want woody to come back or are you okay with him staying in the uk? >> he can do whatever he likes he seems to be enjoying it there. >> you live in southern california >> we do >> you didn't watch sam? i think he's the real deal. >> and how he bounced back from that horrific -- can you imagine? and a touchdown. >> at this point they're trying to get me back on the bengals bandwagon. >> you should. they're 2-0. they were really impressive against the ravens. >> they almost pulled an aaron rodgers. ravens almost came back. >> they did. but you held on. i went to sleep after the first half, so i didn't see the second half >> that's why i like living on the west coast >> there's hindi ining berg thi about the market

cats and dogs are together, they're, like, living together there's some weird stuff going on end of days. >> who are you supporting this year >> i'm not -- really not -- no i'm a soccer fan now that's real football >> wow >> wilf converted me >> he converted you. now the kernen curse is going down >> you have more you didn't like my expiration date on your stupid new normal >> no. he said we've gone through it. >> i gave an actual date and he blew it off. you wouldn't even respond to it. i couldn't even drag you to my level. >> but taking you back to things that people care about, the major question facing the market today is do you fade -- do you fade the divergence. >> the divergent strategy you're talking about, how we performed in the united states >> are we in a new new normal?

back to 3% gdp growth in the united states. >> we are out of the 1.5% to 2%. >> we're 2.5% to 3% now? >> we're near 3% >> for how long? >> two to three years at least with the potential of doing better you hear me say this, you don't like it. if only we can get infrastructure done. >> you're a keynesian. you can't change your stripes. i understand that. i accept you uh-oh. here comes trouble >> sorry >> here comes trouble. >> no, no. i had one question i just finished reading an op-ed by david leonhart about gdp. we talk about how great gdp looks today relative to where we have been in the past decade and he makes a very interesting argument that actually we should change the metrics with which we use to actually measure the economy. the labor department should change the metrics, the government should change the metrics. that there's a whole movement afoot among economists to break out how it's affecting inclusive

capitalism just this idea of whether it should be broken out by different strata because today gdp as you were reflecting, i think, is increasingly unequal i'm curious what you think about what and whether you think the media and the politicians would ever pick up on those metrics and whether it would change the dialogue if we did >> so he's right the gdp measure we all use is very narrow. and even within its narrowness, it mismeasures all sorts of things it certainly doesn't give you a good feel. andrew, so far no one's come up with a better index. they tried to weight gdp differently, but nothing has caught on. you have to add to it aspects of distribution, sustainability but there isn't a better measure until now. >> i love it, andrew is that going to be -- that's

going to be the criticism. that the 3% is unequally distributed. we're back to 3 pr% but it's not fair that's a good one. let's go with it's unfair 3% is that what the -- is that the current thinking are you meeting with people down there in d.c.? were you out late last night at one of those secret -- like in casablanca >> no, i was very publicly talking to elizabeth warren. >> all right thank you. i forgot -- that voice came in, i was like who the schehell is s it was like the voice of god, wasn't it? still to come, the latest on hurricane florence, its path and timing plus what you need to know if you're planning on traveling this weekend of course it depends on where you are, i guess, and where you're headed. stay tuned you're watching "squawk box" with special coverage of hurricane florence we'll be right back.

broke my personal record. aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills? aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors,

insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh...am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies lead with digital. who would have guessed? an energy company helping cars emit less. making cars lighter,

it's a good place to start, advanced oils for those hard-working parts. fuels that go further so drivers pump less. improving efficiency is what we do best. energy lives here.

coming up when we come back on "squawk box," back from the brink. the man who advised on the search for a buyer of lehman, christopher flowers of j.c. flowers & company is is going to be our guest take a look at u.s. equity futures. we are in the green. s&p looking higher at six points nasdaq u26ois.p pnt each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

at ally, we offer low-cost trades and high-yield savings. but if that's not enough, we offer innovative investing tools to prepare you for the future. looks like you hooked it. and if that's not enough, we'll help your kid prepare for the future. don't hook it kid. and if that's still not enough, we'll help your kid's kid prepare for the future. looks like he hooked it. we'll do anything... takes after his grandad. seriously anything, to help you invest for the future. ally. do it right.

florence is now a category 1 storm, but still very dangerous. kaitlyn mcgrath joins us with the latest >> that's right. with florence it is not about the category it is about the size of the storm and the impact it will bring. and right now much of the carolina coast continuing to feel those hurricane force winds as florence makes landfall right now the eye of the storm approaching wilmington and it's just on the outskirts. the eye wall where we're seeing the worst conditions winds gusting up to 90 miles per hour

that torrential tropical rain. all of this will continue as we head through the day today right now it's moving at just 5 miles per hour that will continue and continue to weaken as we head throughout the day today. we're going to see florence slow down throughout the next 24 hours. it's going to take about a day for it to move just 80 miles into south carolina as we look towards saturday once we get it a bit further inland and it will stop getting the fuel from the atlantic, we can move it to a tropical storm. that's good news for the wind. the winds will weaken quite a bit but we are still talking about torrential rain as we head throw the end of the week and into next weekend. upwards of 30 inches of rainfall in spots you add on top this catastrophic storm surge. it will continue to unfold the peak of the storm surge. 7 to 11 feet that is on top of high tide, the worst of the surge between cape hatteras and cape fear and we'll have the rivers trying to empty through the ocean and a storm surge pushing on shore a dangerous situation through

much of the north carolina coast. the further north or south you go, the less the storm surge will be. but it only takes three feet of storm surge to become a life threatening situation. let's time out the rest of florence and when we will finally see some relief. as we head through the day today, it is all about the storm surge. we'll see that tide approaching around 7:30 this morning and the hurricane force winds that will stick with us through much of the day on friday. we'll see the winds weaken just a bit as we look towards the weekend. but we are still talking about tropical storm force winds and continuing into next week as well we'll continue to flip our switch inland as we look towards the start of that week that is the latest on florence back to you. >> thank you very much among the other stories front and center this morning, in just about an hour's time we will be getting retail sales for the month of august. also import and export prices.

expecting 4% rise in retail sales. looking for import sales falling and exfort prices on changed lawmakers have reached a deal to keep the government open until after the midterm elections. the deal funds the government through december 7th the house passed a package of spending bills a day after the senate passed that same set of bills. the white house says that president trump will sign the legislation. and amazon's jeff bezos says the decision on where to build the second headquarters will be made by the end of the year. he made those remarks in washington d, d.c. bezos didn't say which cities are considered among the favorites. in december of 2008 there was one wall street deal maker seemingly everywhere and all the time that was j. christopher flowers. he advised on the search for a buyer for lehman, the merger of bank of america and merrill lynch. he was in the midst of all of

it chris flowers joins us now in new york i think back, chris, ten years ago today. it would have been that sunday you would have been spending a lot of time looking at the assets and there were conversations you were working bank of america and merrill. when did you realize it was as bad as it was? >> it was a beautiful, beautiful summer evening and i was walking down wall street looking up at trinity church we put in our proposal to invest in aig and hadn't heard back, lehman was filing for bankruptcy, there was nothing left to do >> there was nothing but panic but worry at that point? >> that was the next phase the effort to save lehman was over and the race to save aig was on >> by the way, one of the

things -- not to relitigate the history of this, but did you think because bank of america was buying merrill lynch that that was going to act as a fire wall on this game of dominos i go back and look at the news reports the morning after lehman fell and people were not actually that anxious because there was a feeling that maybe the deal that you had helped strike on behalf of bank of america was going to save the system >> i think many people including me, i will say, did not fully appreciate just how bad it was going to be when lehman went broke. and b of a buying merrill was one element trying to shore up the system >> we've had a big debate about whether the government could or should have saved lehman what do you think? >> could have, yes should have, yes although that's easy to say in hindsig hindsight. i'm not sure it was easy to figure that out at the time. >> andrew spoke with bernanke earlier this week. andrew, correct me on this or

add a little color to this when you asked bernanke about this, his point was what we looked at it and didn't want to take that on. >> he had a much more nuanced view all three of them have talked about the authority that the federal reserve has and this idea that you can't lend to a failing institution that you don't believe has enough collateral to back up the loan he said, look. it wasn't just a legal decision. we weren't sitting there with a lawyer looking at it from a legal standpoint we thought we would be holding it up at best for days zblaen all the debtors would get 100% on the dollar and then the fed would be stuck with the losses what do you say to that, chris >> i say look at what happened afterwards with aig and many other companies. and you can see that that doesn't really hold up what they did with aig and support elsewhere, they could have done with lehman. the lehman decision, i agree

with those to say it was a political decision it was made by friday of that weekend. it wasn't about their authority and what have you. >> because dick fuld was difficult? or because it was trying to make sure that other people knew that things could fail? >> i think it was political in a sense of propping up lehman would have been enormously unpopular. and in that sense a political decision i don't really think it had to do with dick fuld, personally. and i don't think it had to do with the authority of the fed. in a strange way even though i thought it was a mistake maybe something like this had to happen for the american people to accept that more extraordinary measures really were necessary. >> so chris, spin this story forward. you have a better pulse of it than anybody when it comes to financial services these days. when you think about the next crisis and invariably i imagine there will be a crisis of some sort, what does it look like >> of course it's going to be different. it's not going to be like this it's going to come from

unexpected quarters. i think the skm is much safer now and i think we're a long ways -- maybe not a long ways from another recession, but we're a long ways from another financial crisis but it's going to come from somewhere different. maybe some cyber kind of event which, you know, the world isn't used to. maybe the collapse of the euro currency something like that. but not the same old thing like last time. >> go ahead. >> chris, you have a history of buying cheap assets in crisis times. think of japan before, think of greece afterwards. there are two countries in the midst of a crisis. turkey and argentina are you looking at all at banks there? is there anything that we should be thinking about in terms of does it get worse, does it get better >> we do try to buy banks in times of crisis, but we have mostly stuck to the mature markets, not the emerging markets. that has its own level of colorful risk which might be too

colorful for us. >> finally, chris, in terms of just banks and the value of banks here in the united states, how do you assess it right now >> well, they've had a fantastic run and i think that's two main things one is rising interest rates which really helps banks the other is improving a regulatory environment it makes sense the banks would be doing well. >> chris, it's great to see you ten years later. quite a decade >> thank you for coming in when we come back, homes on the coast of the carolinas in jeopardy of being lost because of hurricane florence. the storm surge expected to peak at 11:00 a.m. this morning we'll look at how it can hit real estate in the area. that's next. the sun is up on the east coast. we'll have more on hurricane florence when "squawk box" comes right back

when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life and create the future that's most meaningful to you. which means you can retire, without retiring from life. having the flexibility to retire on your terms. that's the power of pacific. ask your financial professional about pacific life today. a few problems actually. we're overproducing, overcrowding, and overheating. we've got aging roadways, aging power grids, ...aging everything. you're kinda bumming me out clive owen. no, wait... it gets worse. we also have the age-old problem of bias in the workplace. really... never heard of it. seriously? it's all over the news. i've heard of it. ahh. the question is... who's going to fix all of this? an actor? probably not. but you know who can solve it?

business. that's right. the best-run businesses can make the world run better. because solving big problems is what business does best. and doing good is just good business. shhh! sorry. so let's grow more food, with less water. and make healthcare, more healthy. it's okay, i've played a doctor. what have we got here? let's take on the wage gap, the opportunity gap, the achievement gap. together, we can tackle every elephant in the room. and save the rhino while we're at it. because, whatever the problem, business can help. and i know who can help them do it...

is

. welcome back to "squawk box. the safeties of the carolinas is of course the first concern. but when we look to the economics of florence, real estate is both at risk both residential and commercial i want to get to diana olick to break it down. >> these are not the largest housing markets in the nation, but the numbers are still pretty remarkable 250,000 residential properties in the carolinas with the reconstruction cost value of between $3 billion and $5 billion are potentially both at risk of wind and storm surge damage of hurricane florence wilmington, north carolina, has the most real estate at risk followed by myrtle beach compare that to $40 billion at risk for hurricane irma last year in the states it hit. now, on the commercial side, more than 6,000 reit owned properties

retail reits own the most realty income with 5% of its revenue. also have significant exposure with 545 and 749 properties. american homes to rent representing nearly 20% of the company's total home portfolio invitation homes owned by blackstone owns approximately 5,000 homes in the carolinas or 6.1% of the company's housing portfolio. a smaller reit front yard residential owns 939 homes which makes up nearly 8% of its portfolio. after hurricane harvey, we looked at how it helped them it helped their size and scale they were able to bring in personnel and equipment from neighboring states that could help in this instance as well. >> thank you very much

diana olick. the storm prompting major evacuations along the affected areas including airport closures joining us to talk to us about flight and fuel, is -- mark, why don't we start with you and what's been happening with the flights this morning already we've heard of 800 flights being canceled i imagine you'll see far bigger ripples than that. what do you see playing out right now? >> we don't see a lot of ripple effects across the country given the lack of major hubs on the coast of the carolinas but there will be hundreds more flight cancellations tomorrow. and the total effects will likely be in line with a major nor'easter >> that doesn't sound nearly as bad as some of the reports we've heard at this point. that's relatively good news, i suppose. i guess there was so much time airlines were able to move assets out of the way in time?

>> yeah. they have gotten all of their crews and planes out of the area so it's not too far to get flights back in there which may resume as early as tomorrow. >> that was my next question i guess it depends on how much damage is done, but you could see things really picking back up in quick succession here. what happens with cargo planes as well? how is that impacted >> yeah, the cargo relief may start even sooner than the passenger carriers get back to scheduled operations as soon as any flooding reseeds and debris is cleared, it can start flowing in particularly to charleston which is a large air base the airline passengers will depend on the terminal having power and water and the ability of the ground personnel to get to work. >> dan, let's talk about what to expect in terms of gasoline if you are somebody who has evacuated the area or if you're staying there and maybe needs gas in the near term we were already looking at footage of a gas station having the top blown off.

what happens here? businesses knew about this, they closed down. what's the situation on gas supplies and how long will it take for new supplies to get into the area? >> supplies were adequate. and we saw examples of where in wilmington before the storm as many as 40% of all gas stations, they were affected in new bern of course, myrtle beach, about 10%. we're now transitioning to a different phase. the storm is there now of course the damage being done to infrastructure also affects not just the ability for those gas stations to be refueled if they are low on supply it's now a question of power and how long that power will be out. this is a devastating storm with the likelihood of remaining there for several hours if not days if flooding and other circumstances prevents power from getting back on unless those gas stations which are standing are, in fact, able to source their own form of power. it's likely many gas stations in

the affected areas will continue to be out. so for the time being, the gas buddy fuel outage tracker which is an app will continue to remain in effect until such times as things -- to the extent as possible get back to normal >> overall, you don't expect to see prices at the pump rise unless there's a situation that's a little more devastating inland that would affect the colonial pipeline. tell us about that >> precisely the proverbial artery that supplies throughout much of the southeast and northeast part as it delivers critical parts of fuel from the texas/louisiana gulf coast, home to almost half the refineries we saw that last year with harvey, what happens when they're affected unless the colonial pipeline is affected, we don't see any major disruption of supplies therefore no major cause for increases in prices. we note that going into the storm and the period leading um

to those evacuating, there was very little difference in price in virginia and north carolina, south carolina so we suspect that's going to continue to be the case as we look over the next several days. if anything short of a disruption to the pipeline, it's not likely to see anybody is going to be affected either in the area or across the country with higher gas prices >> dan, thank you very much. dan mcteague coming up, we will wrap up the hour with mohamed el-erian top of the hour, preparing for outages and descriptions from hurricane florence southern company ceo will join us "squawk box" will return after this stay with us

you might take something for your heart... or joints. but do you take something for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory.

prevagen. healthier brain. better life. thanks, janet. it's welcomemy happy place. store. you can learn how to switch to xfinity mobile, a new wireless network that saves you cash. and you can get 5 lines of talk and text included with your internet. and over here i'm having my birthday party. dj fluffernutter, hit it!

♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone. visit your local xfinity store today. let's take a look at some stocks to watch this morning shares of utility company nysource are tumbling this morning. the gas unit is investigating a natural gas pipeline rupture that caused an explosion which you might have seen on the news last night pretty frightening costco was downgraded at wells fargo as an evaluation call wells fargo says the stock price reflects a stellar performance by the warehouse retailer over the past year, but comp store sales growth seems destined to

slow and shares of chinese electric vehicle start-up nio are up sharply in pre-market trading. surged in the first two days since going public on wednesday. after its ipo was priced at the low end of its expected range. all right. let's get back to our guest host mohamed el-erian we haven't looked at that thing that shows the debt rising i hate that thing. you know, every time it goes up it's like a monitor of where we are. $21 trillion, a trillion a year now for deficits people that even are optimistic say the head winds of higher interest rates caused by this -- you know, we have to roll over the debt we still need to do that and it's more than we've ever had to do before i mean, interest rates are going to go up will that become a head wind in the next 12 months >> first of all, interest rates are going up not because of the debt they're going up because growth has picked up and several banks

are stepping back from buying securities >> does it ever go up because of the debt >> maybe at some point i think the major issue on debt is do you get the growth response if you get the growth response, then this is a good increase in debt if you don't get the growth response, then it's a problem. >> how do we measure it? straight on gdp? >> you see it on gdp remember debt sustainability is a fraction how much debt you have relative to how much you can afford and if you can afford more debt -- >> earlier this week someone made that point. that that's more -- private debt is more than it was prior to the crisis but more manageable the one thing we do have for a lot of the naysayers to the growth of 3% where we might be, is that by definition growing that quickly will foster higher interest rates which will be self-defeating for the growth itself self- -- sort of self-regulating for those who think it's going to go up >> i'm on the other side of the

argument i think first of all, that has created a window for the fed to normalize. if you listen to fed officials, they're telling you we are worried about the side effects of too many years of experimental policy. so it's a good thing that the fed is normalizing. >> so the growth is a good thing. >> it opens the window up. i think the first issue you raise is a critical one. all this focus on ten years after lehman, we with the exception of the u.s., the world hasn't yet emerged from a debt finance growth model the reason that is higher is we've simply been moving debt around different balance sheets. we haven't dealt with the fundamental issue that got us into trouble to begin with which is an over-emphasis of the real economy. until that happens, we're not -- >> how does that happen? >> it happens by focusing on genuine drivers of growth. it happens on focus on infrastructure, on labor retooling, on retraining, on

education. those are the drivers of growth. we lost sight of that completely 15 years ago thinking that finance would promote economic growth >> we couldn't afford it because we weren't growing fast enough to afford those things, i don't think. when you're growing at 1.7%, you're just trying to cover your bills. you know you remember there was an argument about when this started. i don't know if you saw his tweet. it was about a euro/dollar, some relationship chart that it showed the fed would be free to raise interest rates it was going to be able to do it based on stronger economic growth and it was a clear move that day that showed -- that's when things changed when the fed was going to be -- >> but did it happen at 2:00 a.m. the day after the election? if you look at markets -- >> you really can see it there. >> 2:00 a.m. >> is that when you turned into someone who liked growth and became not a new normal downer

but a growth positive. earn >> he's just describing what he sees >> and then sam darnold. it's all weird, isn't it it's just weird. all right. mohamed, thank you for being here are we still friends >> we're still friends >> just like last time thank you. still ahead, coverage of hurricane florence we'll hear from tom fanning after the break.

geico has over 75 years of great savings and service. with such a long history, it's easy to trust geico! thank you todd. it's not just easy. it's-being-a-master-of-hypnotism easy. hey, i got your text- sleep! doug, when i snap my fingers you're going to clean my gutters. ooh i should clean your gutters! great idea. it's not just easy. it's geico easy. todd, you will go make me a frittata.

but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital.

breaking news this morning the eye of the hurricane, hurricane florence making landfall near wrightsville beach, north carolina. a live report from the ground and complete coverage of this powerful storm as the final hour of "squawk box" begins right now. 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 and andrew ross sorkin is reporting again live from washington he's down there a lot. he likes it.

>> he's got some big interviews he's been doing this week. >> but he seems very comfortable. got the jacket got the pocket square too? >> i've got the pocket square. it's blocked -- >> we got to get rid of that because the pocket square is more important are you going to be here next week >> i will be here next week, joseph >> all right but in the meantime, you have talked to some wacky types down there. i'm not going to mention which are which, but it's been interesting. >> we have some very interesting comments that you're going to hear later taking shots at a number of individuals as well from senator elizabeth warren >> oh, i didn't mean -- see, now you're talking about -- you're putting words in my mouth. you've had at least ten interviews in the last couple of days we aren't mentioning who's wacky and who's not. >> i definitely want to hear what she had to say. we'll get to that in a moment. meantime, right to today's top

story. hurricane florence we have complete team coverage this morning seema mody is inside home depot's command center in atlanta. but we begin in carolina with jackie deangelis. >> landfall has been made in wrightsville beach just a little bit north of us. and the edge of the eye is here now in carolina beach. there is an eerie calm which is what happens when the eye of the storm is on its way. the winds have died down earlier this morning we showed you pictures of winds at 90 miles an hour. gusts were very strong and the rain was really coming down quite hard and quite steady. although the experts are saying no that it has started raining, once the eye passes, that will pick up again and this rain is not going to stop for days meantime, some people that have not left the beach areas, the coastal areas in north carolina either by choice or by circumstance, fema is saying

they have put the lives of first responders at risk by creating a situation where they have to go after them they are trying to help as much as possible under the circumstances. the other issue, power outages the number is expected to swell potentially in the millions, maybe as high as 3 million without power. i'm going to send it over to seema mody in atlanta, georgia, at the home depot command center. >> an extensive operation is under way here in atlanta, georgia. nearly 300 soerassociates from supply chain, merchandising, operations are working around the clock to get as much product to the affected regions and their stores in the carolinas. the big objective is getting those supplies, the ones that those consumers really need from battery powers flash lights, radio, generate ergs, even wires. getting those products to the customers and storms is the key

objective in this command center over the next 24 hours, transportation will become a challenge. trucks cannot be on the road if winds sustained 40 miles per hour that's when the local distribution centers will kick in i want to bring in tad mcintosh from home depot. what are some of the challenges your assets are facing on the ground >> right now it's really just a waiting game letting the storm go through then our associates as well as our field merchandising team is waiting out there to get into the impacted zone, understand the needs of the community, make sure everybody is safe, and get products flowing to the community as fast as possible. >> and of course any wrinkle of communication can disrupt this entire process thank you. this is one of many command centers across the region in the east coast not just the home improvement retailers like home depot and lowe's but at&t, verizon, even the cruise lines have their own command centers that they are

using to bring in information, put together a contingency plan so they can respond as soon as possible as they watch hurricane florence hit ground. back to you. >> we're going to talk directly to someone is that has to prepare and deal with the aftermath. like southern company. thomas fanning is ceo of southern company companies include virginia natural gas, georgia power both are in florence'spath tom fanning, good morning. thanks for joining us. >> hey, joe. how are you? >> i'm good. would you say if we divide it up, preparation versus response, there's only so much you can do. there's things you can do. you do everything you can. you learn from previous events like irma and harvey but then you do everything you can. is that 20% of what you're able to do and 80% is the response? or how much can you really do beforehand >> oh, i think you can do a ton.

look, we've been meeting -- you've heard me talk about the ecc. i help lead that normally i've talked to you in the past in the context of cyber and physical security. we also do help to prepare for respond to storms. as we did with harvey and irma last year. interestingly, this storm florence has as a combination, the characteristics of irma, a classic hurricane, winds, storm surge. then the double punch of harvey which would include flooding we have 40,000 people from 17 states staged and ready to go. and it is a unified effort of cooperatives and municipal utilities working with the government we've been meeting every night -- gosh, for about a week now getting ready. now it's game time we had our last preparation

meeting last night we're ready to go. >> we're hearing one of the questions suggested it what did we learn from irma and harvey on how to deal with florence are we -- do we learn stuff every time, every hurricane? we've had a few of these over the last -- we know about this but every time we learn? >> yeah. absolutely, man. i'm telling you, every storm is different. it is interesting, the storm we had with harvey, the way to recover from a flood is significantly different than the traditional wind/storm surge hurricane. and one of the characteristics you will find with heavy flooding which is what we expect here because of the breadth of the rainfall that's going to get dumped over a long period of time, is that you have a series of inner relationships and issues that deal with transportation, communications, a whole variety of supply chain issues that are going to complicate the restoration

effort and probably add to the time of restoration. but we're on it and hopefully we've thought through everything but, you know, it's like that old mike tyson story, right? everybody's got a plan until you step in the ring and get punched in the face. let's see what happens and we'll be adaptable and flexible. >> so tom, a couple of years ago, we had a bad one back here. i guess it was during sandy. and a lot of gas stations -- you couldn't get gas and people were waiting to get gas for their generators but the gas stations didn't have power. so there was some talk about mandating certain businesses to have backup generators did that go anywhere do you want the federal government or state governments to be mandated in filling stations to have a backup generator? >> look. the public policy aftermath of sandy was pretty comprehensive in fact, our own industry completely redesigned our regional mutual assistance

groups and really we demonstrated in a comprehensive way. in terms of supply chain issues with respect to fuel, we did learn a lot from sandy and, in fact, we had reports out through this whole week about, number one, understanding where those bottle necks may occur, solving them before they occur, and then getting a sense of the priority to the first responders so we are able to get the recovery as fast as we can joe, one more thing. i would be so remiss not to say this of the 40,000 people, so many of them are covered workers, people in line crews that are going into the worst places in america today. and they're doing it leaving their loved ones behind. they are heros in this restoration effort >> yeah. and we appreciate that and commend those people do you -- there are very nice houses all along the coast we never -- you know, a lot of

them get destroyed and they get rebuilt with insurance from somewhere. will that ever change? it's just human nature people like to see water i don't know whether -- we can only rebuild these places so many times, can't we sometimes it's national flood insurance which is taxpayer funded so what should we do >> oh, look. >> that's a tough one. >> that is an issue for the future right now we are dead focused on getting everybody staged right and getting the power back on as fast as we can in a safe manner. look, that's an important issue. i completely accept it but boy, oh, boy, i'm focused on getting the lights on right now. >> okay. good stay focused but we've -- there are going to be some hurricanes probably next year own the year after. >> you bet >> and we learn, but some things we don't -- it's a tough lesson sometimes. anyway, tom fanning, thank you we'll see you again hopefully here on set at some point when you're back here thanks. >> you bet

all right, andrew? >> "squawk box" this morning coming up, he was a household name during the clinton administration now ken starr is out with a new book he's joigoing to join us live. stay tuned alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

fidelity. (guard) i've seen things unnatural things. these people they don't sleep... like ever. they reveal in extremes and defy limitations. these pursuits may seem unnecessary. but the scariest thing i can imagine is a world where this, doesn't exist.

welcome back, everybody. in a new book, ken starr takes a look back at lessons from the headline grabbing probe that led to the former president's impeachment. joining us now is ken starr. he's the author of the book called "contempt: a memoir of the clinton investigation. so thank you for being here today. >> thank you >> so this is interesting timing i was telling you before i can't believe it's been 20 years >> time flies. >> it does >> really, 20 years? but that's one of the reasons i felt it was time to write the book >> why now >> well, my own circumstances were such that i had the freedom to do it i just finished a book on my baylor university president. it was somewhat unhappy ending as i was finishing that book, hillary lost the election. so what's my next writing project.

and i also knew it was really now or never the years go by. >> tying these things together, though looking at your investigation, now looking at the mueller investigation. what commonalities do you see? what differences >> lots of echoes. attack the prosecutor. we see the trump team -- some of the trump team -- there have been different lawyers involved -- taking a page right out of the clinton book. demonize everybody against you >> the press worked with them though this time around, they don't have the media the media is lionizing robert mueller. >> no comment. >> but look at the way ken starr is viewed the way robert mueller is think about that think about that >> i try not to think about it there were a lot of truth seekers. and i mean this. this is not false praise

there were so many truth seekers in the media and they would sometimes give us leads. it was terrific. just say, hey, did you know that -- and whether they should have done that or not, but there were quite apart from that, they were out there trying to get the truth. >> you started white water and ended up with a blue dress >> wait. i wouldn't put it that way >> when people say, you know, mueller is supposed to be looking for collusion and we've got manafort and his irs problems before he was affiliated -- >> and a plea deal coming today. >> is that fair game should it not go that far? is that just going to lead where everything leads >> logic leads you to places you wouldn't go. >> show me a man and i'll show you a crime. who said that? i think stalin's buddy said that or something. >> that's russia >> show me a man and i will show you a crime. you know, if you find something in trump's business career from five years before he was president, is that grounds for impeachment? >> is it grounds for impeach i don't think so first of all, one of the lessons

from the book is impeachment is just hell. don't go there find some other mechanism for holding the president accountable. it's only the most extreme circumstances that our nation should go through impeachment. there's now all this talk leading up to the midterms some on the president's side of the aisle say, look. that's exactly why they're trying to get elected so they can impeach donald trump so the rhetoric is terrible. but the experience my book accounts is we don't want to go there unless we absolutely have to. >> you said back i think in 1999 that maybe the special counsel shouldn't have the same freedoms to run with. what got you to that point >> the expansion of our investigation but the expansion of our investigation came by the decision of the attorney general of the united states i never understood how this came to be. janet reno, bill clinton's

attorney general authorized the monica lewinsky version of the investigation. she had to go to the court of appeals to do that but she had to make that decision you've got to investigate because there was evidence that the president himself was committi committing perjury and encouraging others to lie. >> jeff sessions has come under fire from president trump for recusing himself from the russia investigation. as someone who has gone through this before, what advice would you give what would you reflect on this >> try to do the right thing you've got ethics advisers around you i believe jeff sessions did the right thing. i publicly -- not that it counts -- criticized the president for criticizing his attorney general disagree on policy or whatever, but the president, you appointed him. right? you nominated him. governing by twitter in this respect, i think is wrong.

>> you've seen all the side shows with this investigation. do you think the genesis of the russian collusion narrative, do you think there's anything that might be a little bit strange there in terms of strzok, page, fisa, all of that. is there anything there that looks questionable >> more than a little questionable the good news is we've got a great cop on the beat. the inspector general michael horowitz he's a career civil servant. he's totally honest. >> are we halfway through this >> we don't know >> of what we don't know why is trump keeping all that stuff that close to his vest is that going to come out when it's expedient he's not declassifying all this stuff. what's he got? >> that's an issue that i wish i had more information on. he's obviously getting advice from within, don't do it, don't do it. because he hasn't done it.

and many journalists have been continual in saying, hey let's just get to the bottom of all this information and he hasn't done it. >> do you wake up in the morning and read the papers in the morning with a lot of zeal like all of us? it's unbelievable. >> oh, yeah. it is this reality show. but in terms of the governance, i think the american people are eager to know the truth sooner rather than later. lots of members of congress are saying this. let's get to the bottom of this. issue your report. on the issue of collusion or conspiracy. >> you say a president can be indicted >> i do. yeah >> and subpoenaed. >> i do. by the way, i'm in the minority on this one. here's the key the justice department says no, the president can't be indicted. it's perfectly respectable view. but i have a different view. no one's above the law and the supreme court of the united states and a case involving bill clinton and corbin jones case held unanimously that the president is not above the law

and can be sued civilly. now, that doesn't move to the criminal side. but when i think it through, the logic of that means of course he can be indicted. >> you wouldn't think obstruction should be -- if there's no collusion, they shouldn't impeach on obstruction if they try to do it that way. >> i just don't see any -- >> you think mueller would try to do that >> i don't think so. >> do you have all republicans on your staff? >> no. when i got the criticism, that's one of the things i say in the book when i saw the criticism coming, i said okay, we need help on the "d" side of the aisle >> so mueller has republicans? >> i think so. >> all right these are all fun things to throw at you and it didn't have anything to do with your book. but you've been through it >> thank you for joining us. the book again is called "contempt" and we hope to see you again. >> thank you

what's inside? a moment of joy. a source of inspiration. an act of kindness. what will it bring? an old friend. a new beginning.

some welcome relief... or a cause for celebration. the help you've been looking for. what's inside? possibilities. what we deliver by delivering.

welcome back to "squawk box" this morning last night i interviewed massachusetts democratic senator elizabeth warren about the 2008 financial collapse >> so gary cohn works at goldman all those years then moves over

to the trump administration. he's going to have exactly one thing in his portfolio and that is crammed through a new tax law. drive through a new tax law. what does goldman sachs do for gary cohn on the way out the door they hand over somewhere in the neighborhood of a quarter of a billion dollars to gary cohn and money they didn't have to release. you might reasonable ask, would they have done that if he did teach for america? i think of that moneyas a pre-bribe. so gary cohn picks up these sacks full of money, goes into government, and rewrites the tax laws manages to cram it through and boy, did goldman once again show savvy investor. in the first quarter, the tax breaks that cohn pushes through saved goldman sachs more than a quarter of a billion dollars and now it will be the gift that keeps on giving.

and here's the deal. think how that feels to the american people. >> some harsh words there for gary cohn. we also talked not only about big banks, but about big tech companies. and she had some harsh words for them too what would you do with amazon? given how you just articulated that >> it is a lot like glass/steagall you want to be a competitor, be a competitor that's great you want to be the platform, that's a different function. and if you're getting huge comparative advantage from being the platform provider because of all this information you keep scraping off, then we no longer have competition going on over on the dress manufacturer, shirt manufacturers, blender manufacturers side of the house. so again, i just keep going back to this point. i believe in markets, but i believe in markets where there's

competition. >> jeff bezos who was in washington, d.c. last night at the economic club, maybe it's bipartisan elizabeth warren has a problem with him, president trump has a problem with him a lot more to come this morng ene turn breaking economic news retail sales stay tuned you're watching "squawk box" right here on cnbc 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. a hotel can make or break a trip. and at expedia, we don't think you should be rushed into booking one. that's why we created expedia's add-on advantage. now after booking your flight, you unlock discounts on select hotels right until the day you leave. ♪ add-on advantage. discounted hotel rates when you add on to your trip. only when you book with expedia.

we're just seconds away from -- it's not a hard time i'm envious. right now futures up 35 points let's get to rick santelli standing by at the cme with the numbers. leisman tells me they're important. >> they are important and there's a litany of numbers this morning. a disappointment right off the bat. much less we are looking for up 0.4%. we did garner a revision to up 0.7%. let's get to the important let's ex-out autos up 0.3%. let's ex-out autos and gas sales. it's up 0.2% to control number the number plouugged into other data points is up 0.1% the last control number moves

from up 0.5% which in and of itself is solid to up 0.8% so that's pretty good import prices dropped 0.6% triple the drob we were looking for. and if that's month over month ex-petroleum, down 0.2%. you could see where the pressure was in that equation year over year, 0.37%. now let's look at export prices. export prices down 0.1% year over year 3.6% also a pretty big drop from 4.3% so everybody, of course, is very interested in how higher prices and the issues with the fed. today we almost touched 3% again after we eased back after yesterday's cpi. many are attributing it to issues with taxes and purchases of securities. we'll see by the end of the day. becky, back to you >> thank you very much steve liesman has been pouring over these numbers too what are you seeing? >> well, well, well, look.

i don't know that from a quarterly gdp standpoint we care very much if people spent a lot in july and maybe less in august. >> how big were the revisions to july >> it was up 0.2%. i'm terrible at doing math on television if i could take a break, i could give you what it was but it was not a whole lot different from the combined average of the two months. clearly what happened is people spent a lot in july and they took a break in august >> i guess the august numbers could get revised too. >> absolutely. but just to be clear, what we're talking about here is we had a revision from 0.5% in july to 0.7%. so there's a tenth difference on -- but i do see a lot of goose eggs here and negatives for the month. vehicle hs a tough month furniture had a tough month.

food and beverages, all zero gas station up 0.7%. if you saw on the import prices, we had a negative on imported petroleum. those are kind of evening out for the moment clothing has been troubled minus 1.7% department stores minus 1% and the retailers which are your internet folks up 0.7% i think this is a wash and one of the amazing things has been the stability of the rapid update number for the third quarter which is at 3.2% i keep wanting to go on. i think it's going to be a wash. it depends on the inflation numbers. although i have to say the august inflation numbers have been very calm if not disinflationary for the month of august >> is the fourth quarter ever seasonally weak? >> well, look. when i hear these stories about what is it macy's adding an extra 40?

and who else target another 20? these are extra people they're adding on. some of this is accounted for in the season we're not dumb we know they bring on extra people, but if they bring on more people than the season expects, you get a bump. where you going, joe >> 2.2 plus 2.4 is 4.6 to get to 3 for the year you only need 2.4 in the fourth quarter. >> that's what you got to do >> to average 3% so at this point, chances are there's going to be -- >> i said in january it's possible to do 3%. >> your teeth were gritted i couldn't understand what -- >> my teeth were not gritted >> i could barely understand >> i got to do something before we go. i know we want to go to bob steele brilliant guest coming up. >> we do >> but quickly can i show you the probabilities? look at this, folks. september, 100% now. i've never seen that it's actually 99.8% rounds up to

100% december look you haven't seen this before march is now the odds on bet for the first hike of the year and i just show you july for that next hike, it's still not a 50% bet but here we go something happened september 6th. we had this ratchet up in rates and now the fed -- >> looking at more constant, quick -- >> back in play for the early part of next year. >> not what we saw in turkey yesterday. 625 basis points >> well, we're not doing that. we'll do another 25. but the fed back in play the early part of this year. >> part of our -- >> we're joined by bob steele. bob was under hank paulson in the early days of the crisis he was the last ceo of wachovia before it was sold to wells fargo. it's great to have him here. time is weird. it went quickly, the past ten

years. and i think about where we were ten years ago and where we are now in terms of the economy. it's mind boggling >> thank you for having me it's been an interesting week. with your presentations and trying to all of us go back and reframe. i think it's been mixed emotions we know where we were. we know the fears we felt. and for me, thinking about where i was and the policies we tried. i think that the main thing i focused on this week and i was with andrew in washington earlier is that if you look at the leadership from secretary paulson, chairman bernanke, and then secretary geithner, that we're pretty fortunate if you think about it, we had someone who was a historian of the depression we had someone who'd spent their life in public policy at treasury and the fed and we had a business leader who knew markets the three of them came together, joe, and they worked really collaboratively well which doesn't always happen.

and number two, we had a transition from a republican administration to a democrat administration and everyone was adultlike and focused on solving the problem. and i think for the citizenry, that's a pretty fortunate situation -- >> that's a good assessment. we were very fortunate >> you know, it's -- no one got everything right and crises don't engender appreciation. no one said this was amazing work, this was scary and uncomfortable. and most of our times unprecedents we were losing 500,000 jobs a month. >> right. >> so the idea that people were bothered, scared, and very challenging times. >> and we did recover. maybe the fed at zero, some people actually thought that would actually dampen the recovery to some extent. other people mentioned some

policy mistakes. whether it's doing obamacare right at the height of the financial crisis there's a lot of things that might have held us back, too, i think. >> you did a hundred things. no way they were all right but i think maybe the best benchmarking is look at our relative stability and rate of recovery if you look around the world, it appears as though our system is more stability today and more on the front foot and is improved at a better rate than some other places. >> but economically, we've always out-performed as far as gdp, we've out-performed europe for 40 years. so we should be expecting -- to say we're not exceptional, we are exceptional here, our economy. and dynamic. >> now the question we started to think about, and your shows have framed this, let's try to assess this and think what we can learn in terms of trying to be better prepared what authorities didn't regulators have.

what tools do they need? of the things we've done in the last ten years, what's worked pretty well and what we need to adjust a good example would be the forward leaning perspective with regard to bank regulation clearly was a bit over-heavy on small banks. that's been dialed back. >> you don't expect to see major changes from what we've already seen >> i think the one issue, though, that i would have guessed and where i'm wrong and i'm wrong a lot is i would have thought ten years later we would have tackled housing finance and that's a box that no one's opened and it just hasn't it's politically complicated i think it seems as though people have -- just haven't gotten back to that. i would have guessed if we were sitting here after the crisis, i would have guessed we had a real revision and had a point -- >> i'm not sure you heard andrew but your question was what would you do >> yeah. bob, what would you do

i heard it from elizabeth warren and others in the conversations we had in d.c. what does the american dream today is housing and owning a home still part of that dream, should be part of that dream >> good morning, andrew. great to see you i think that the real issue we've got to figure out is we've had an imbalance where you had this three-sided tension where housing policy was driven by public shareholders, regulatory controls, and political ambition and i think there are lots of places in the world that don't have all of those things in. and over time having less government involvement has to be a better idea to my point of view how you get from here to there is political and what's achievable. but that would be my simple way to think about it. >> you mentioned you're thankful for bernanke and paulson and geithner, et cetera. you think powell has learned and is a good fit? do you think mnuchin is the same

caliber as previous treasuries >> i think with regard to chairman powell, it's early days but so far my perspective and you guys are much more attuned and better watchers than me. my impression is that he's done a terrific job and is off to a solid start. this is a job that has both skills and confidence. i think he's done a good job of sliding into the seat. >> somebody who understands markets too. >> so i would be constructive and we'll see. >> what about some of the trade stuff that's going on? obviously the treasury secretary is involved with some of those decisions. he has navarro pulling him one way. larry kudlow maybe pulling him the other way. things are going pretty well but if there is a crisis, are you confident we would -- >> you have to start, i think, that this is an unusual presidency and the way they negotiate and the way they start discussions is different than what we're used to. and so i think it'll be

interesting to see where this turns out. and i think the hopeful position would be that we're staking out some new territory and trying to pull people towards our point of view and it's the start of a negotiation. >> are you surprised at how well things are going in certain respects >> i'm just watching tv and enjoying it. there's a lot -- >> is it real? is the business confidence real? is the consumer confidence long lasting? is it front end loaded is it fiscal stimulus? >> i was talking to steve liesman earlier about this my take is there's a pretty good momentum in the economy and corner office confidence is pretty high. you know, i hear it here stock prices are high, interest rates are low, business confidence is pretty solid and so people are forward leaning. >> hey, andrew, just while i have you here, senator warren was talking about how goldman sachs got a tax break.

i mean, she's aware that the idea of corporate tax reform was to give the companies a -- no, but that was the whole idea. was to lower taxes on corporations so that was -- we thought that might actually help and maybe it is so to point out goldman sachs got a tax break is -- >> i wish you'd seen the full tape i looked at her and said to her do you genuinely believe that gary cohn is in that seat, his tour of duty was on behalf of goldman sachs? >> good man. >> that was the inspiration? she looked at me and she said yes, effectively you can watch the whole thing online >> that is something to go watch, i think, andrew the audience kept clapping you pre-screen that "new york times" audience? huh? >> i did not screen the audience >> okay. where are they from? >> a number of the people in the audience clearly were fans of hers

you could tell because there was a handful of questions i asked where i did not feel the audience was with me, if you will >> really? wow. that is something. that's awesome it happens to you, doesn't it? at certain places. where you're actually me that must be very uncomfortable at times >> i'm uncomfortable thinking about it >> bob, we hope to get you back. it's been way too long >> great to be on. andrew, be well. thank you for having me. okay when we come back, former washington mutual chairman and ceoillingerkillinger we'll talk to him in just a moment when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life and create the future that's most meaningful to you.

which means you can retire, without retiring from life. having the flexibility to retire on your terms. that's the power of pacific. ask your financial professional about pacific life today. a few problems actually. we're overproducing, overcrowding, and overheating. we've got aging roadways, aging power grids, ...aging everything. you're kinda bumming me out clive owen. no, wait... it gets worse. we also have the age-old problem of bias in the workplace. really... never heard of it. seriously? it's all over the news. i've heard of it. ahh. the question is... who's going to fix all of this? an actor? probably not. but you know who can solve it? business. that's right. the best-run businesses can make the world run better. because solving big problems is what business does best. and doing good is just good business. shhh! sorry. so let's grow more food, with less water. and make healthcare, more healthy. it's okay, i've played a doctor. what have we got here? let's take on the wage gap, the opportunity gap,

the achievement gap. together, we can tackle every elephant in the room. and save the rhino while we're at it. because, whatever the problem, business can help. and i know who can help them do it... hi, tom. ings ] hey, how's the college visit? you remembered. it's good. does it make the short list? you remembered that too. yeah, i'm afraid so. knowing what's important to you... it's okay. this is what we've been planning for. thanks, bye. that's what's important to us. it's why 7 million investors work with edward jones.

welcome back to "squawk box. our next guest ran washington mutual until it was bought by jpmorgan chase in the depths of the financial crisis joining us right now is kerry killinger. good morning to you. >> good morning. >> when you reflect back and i want to talk about where we are today, but when you reflect back to those moments ten years ago, when do you think you knew there was a problem? >> we knew there was a buildup in the housing market. in fact, i was the advisory

council. throughout 2006, '07, and '08 i pleaded with the chairman of saying look a housing bubble is building in this country, i'm worried about it we took off on a number of defensive things i cut our lending 75% over four years. we cut out all the subprime. laid off 15,000 people we closed most of the origination offices and raised $9 billion of new capital to get prepared for this thing. and i think we were really well positioned we didn't appreciate what was going to happen to the liquidity when things fell apart at the end of 2008. we also underestimated the political will to kind of do away with main street banks and try to focus on having a system that emphasized wall street banks. >> do you believe that's the case today do you think something should be done about it? this idea of focusing on main street banks over wall street

banks. >> i think it's difficult right now. the reality is that the system is concentrated itself into what i'm going to call basically wall street banks and that's fine. the financial health is excellent. the performance is great i think that they're in very good position today. however, i think that if you go out throughout this country and ask people about do they feel they're getting the level of customer service, getting the attention swb it kind of the warm fuzzy do they really like it and i don't think those numbers are as high. i think there is an opportunity there. but i think from a regulatory standpoint, we've really set the stage that it's going to be dominated by the large integrated commercial and wall street kind of banks >> okay. to the extent you think you were able to see around corners before the crisis, what's around the next corner? meaning to the extent there's another crisis coming and at some point there will be invariably, i don't know what it is is there any place where you see

a buildup sof something that makes you anxious? >> i am anxious a bit. i spend a lot of time going throughout the world on behalf of some work we're doing with our our company's capitals and advising our company. we have had ten years of hyper liquidity of the system led by the federal reserve bank and follow follow followed through by other banks around the world we have trillion dollars of debt out there which was up significantly from the financial crisis when ever you pump a some with that much liquidity, it in inevitably happening if you go through them and look at a couple of examples, student debts. economics don't make sense without a lot of federal

subsidies. who knows they'll look at that >> who's holding the bag who would you be worried in both instances? >> look at what's happening. the banking industry is sound and in a great position. you can't think that if you unwhine bubbles as they don't get impacted i am concerned of the pension plans and all the other direct folks that are not regulators doing and that's where increasing amounts of funding coming from. i don't think we know how that is all in place and some of these asset bubbles and debt bubbles unwhine overtime >> your former firm is owned by jp morgan chase and jaime d diamond made a comment where he

said he may beat the president we'll play the game would you rather -- >> rather what >> you get jaime or trump? >> i am not going there. i think god bless anybody in the country that wants to do public service and it would be up to the electorates. >> appreciate it >> let's get down to the new york stock exchange. cramer is joining us now jim, late innings. does he stick with that call do you think or it keeps ongoing into an extra inning game. >> i any what dave said and he's al great man the analogies are tough. you can't go from the 7th inning back to the 5th. the idea that the market goes

down is it now the fifth inning and we got to get back in. it does not help a lot of retail investors. i understand the 7th inning, wow, you may be out of the market it just does not further the dialogue because it does not mean anything if there is certain situations that you think is interesting micron may have been the 7th inning at 58 i think it is the analogy problem and not the analysis >> i don't know, i am still thinking of senator warren i don't know if you were watching that. it is odd. there are different perspectives on capitalism and corporate america and corporate profits and whether corporate profits are good and whether they're trying to maximize profits, is that greed we are in a divided country when people clap and cheer.

that's what the bill reforms are in the first place anyway. >> look at the number put to work and the low inflation at the same time. i am listening to some of your guests who may think we are not as -- they have very good memories of how well they did during this period they are both nice gentlemen i have a different memory of them they were over confident and portray themselves as really in the eye of the storm they are fine and then the storms hit oh, just leave it. i don't want the say it. killinger, he's a nice guy >> if you don't say it, they can't play it back for you >> yes, my announcement of what they said about their banks and

wf washington mutual. we got to go to a commercial soon >> thanks. >> warren buffett has a great line praise by name and criticize by categories >> exactly >> that's good >> my grandmother says if you don't have anything good to say, don't say it >> let's go to break >> nice guys extremely nice we'll see you in a couple of minutes on "squawk on the street." don't miss the ceo of ups, live. the storm hitting the carolinas right now. send our best out to all the first responders and everyone else you are watching "squawk box" on cnbc

what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh...am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies lead with digital. get ready, because we're helping leading companies sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

cme group - how the world advances. ♪ we are approaching the top of the hour. nearly 40,000 homes and businesses are without power right now. the storm hit the coast and made land fall at 7:15 this morning still category one storm of maximum sustained winds of 90 miles per hour >> you are coming back after the show

>> i am going to come back this afternoon. i have a couple of meeting in the afternoon and i will be back in the city. >> big time meetings or important meetings >> will they be anything else? >> no. >> government types? >> private sector types? who are we talking about here? >> maybe anonymous >> with the anonymous? >> i don't know. >> will you check the markets? >> we'll see you on monday, you will be here right >> yes, excellent. >> we'll take one last look of the future which are up 26 or so 26 on the dow. up 12 on the nasdaq and up about 3 on the s&p we got our new range for the 10-year according to caatkathy

jones. >> 210 >> a tighter range >> based on expectations and inflations >> do we owe "squawk on the street" any seconds? >> we may. >> let's just give it to them. >> all right, folks, make sure you join us on monday, have a great weekend everybody, "squawk on the street" begins right now. hurricane florence makes land fall at 7:15 eastern time this morning a weather story with big economic impact that we'll watch today. good friday morning, i am carl quintanilla and david faber and jim cramer the future is up modestly, weaker than expected retail sales, adobe earnings and a lot more and europe is relatively mixed as becky said ten-year near 3% is close to a six-week high hurricane florence crashing