dramatic enough yet to change anything in fact this market is calmer, half of asia was closed holiday, hong kong fell the equivalent of 450 dow points they're taking trade wars more seriously than we are. >> eamon javers, what else can you tell us? >> special counsel's office is not offering comment i talked to a spokesman in robert mueller's office that declined to comment. the white house declining to comment at this point. rosenstein heading to the white house when the president is not there, the president is here in new yo, so who is rod rosenstein going to meet with at the white house, presumably that would be the chief of staff, john kelly, who would have authority to take a meeting with him it would be unlikely for the vice president, mike pence, to be involved in a meeting like that at the white house with the president not on premises, but

we'll wait and see the camera crews at the white house are pretty good spotting vehicles coming in and people loading into the west wing i imagine if rosenstein does report to the white house, we should get a picture of him, particularly because rosenstein himself might want that picture out there. we'll wait and see what happens and whether we get any confirmation from the white house or from the traveling white house staff in new york of exactly what's going on, whether this is a firing, resignation or some hybrid of the two, and what it means for the mueller investigation going forward, as you have been highlighting, a key question that's unanswerable at this point. >> yep eamon, don't go too far. the market has resisted reacting to anything mueller related. would you agree with that statement? >> i think that's fair if you ask me what's going on, i would have to say i'm not entirely sure, so the market is not going to react to something

it is not entirely sure about. let me wait and see, will this have a big impact on midterm elections, does it change the role of many of these things i think they pull back i don't want to increase my rate of risk. that's the fashion they pull back in. and we're not seeing any sell off, so far they have not been able to determine whether this is a true political negative or not. >> the cdow's biggest drop "squawk alley" is live ♪ ♪

welcome to "squawk alley." i am carl quintanilla with morgan brennan, jon fortt is live at the microsoft ignite conference, sitting down and jim cramer's exclusive with jamie dimon. the 11:00 a.m. is jam packed as we continue to report whether or not rod rosenstein will need a job after today. the dow is down 143. worst day since august 30th. let's get to jon fortt to talk about the cloud, to the degree we are able to on this busy news day, jon. >> we certainly can, carl. i want to get straight to the three ceos the ceo of microsoft, you brought this group together from

adobe, bill mcdermott from sap i have never seen anything quite like this frankly. i have been doing this on air and in print for awhile. more than a trillion dollars of market cap represented by you three gentlemen sitting here, and we are announcing open data initiative in the cloud. why is this so important >> you know, the insight that all three of us had based on the work we are doing with many customers, we talked about coca-cola, walmart today as customers that are excited about this open data initiative, it is their real insight that led us to do this, which is how do we work to put them in control of their own customer data. that's the real currency any brand out there cares deeply about the continuous improvement of their own customer data understanding, and the three of us coming together is going to be central to them feeling in

control of their own customer data. >> the idea being microsoft with azure dynamics, you have a certain set of customer data, adobe, you've got the experience, cloud, lots of marketing data, different data about the customer and how companies are trying to reach out to the customer. sap, you have a lot of data, too, a lot of it having to do what's going on inside the company effecting customers outside as well. so what are customers going to be able to do, maybe bill, i'll toss this to you that they couldn't do before once you figure out the open data and redata across all platforms. >> jon, there isn't a ceo in the world doesn't want a single view of their customer, and they have to connect the demand chain to supply chain and do so in real time, so if you think about the consumer who's social, mobile, geo spacial, always on the fly, they're going to shop different

companies in all channels, direct to consumer, wholesale, retail you have to make sure that connection point with that consumer is really intimate, so the companies need to be intelligent enterprises because more and more ai and predictive analytics is going to rule how you engage with the customer ultimately what you have to do is fulfill now you're going to see the demand and supply chain integrated, and that data will be shared evenly among our companies, so the customer is the major ben factor of the open data initiative we announce today. >> and you just announced adobe you're buying market for 4.75 billion i tried to ask you about it a few days before, you weren't ready to talk about it, but you can talk about it now. how does the move and experience cloud and what you're trying to build fit into the broader story. >> all three of us share a

vision, how do you enable ent entir -- enterprises to the front of the journey getting behavioral, transactional data, customer engagement to be the front and center is the most important thing that enterprises can do, so digital is a tail wind rather than head wind market adds to offerings in the experience cloud being able to create a unified profile for all customers, and the thing that every customer will tell you today is that they want an engaging experience with whoever they're doing business with, whether financial services or automotive or retail adobe focused more on b to c customers, but the same requirements that were true for b to c customers are true for b to b customers that's what marketo provides so thank you for training them

>> so is this a closed party are aemsmazon, google, sales foe welcome to this? >> let me be clear shall the name itself should tell everything it is an open data initiative. >> you name things all kinds of stuff, is it real open >> the real spin off is not about us, it is unlocking data, that is customer data about their own customers. what is foundational is trust. in other words, ultimately customers will decide and compliance with their own customers' trust in them is also going to be very key if i think about it, one of the top considerations is privacy and regulation around privacy. so the most important thing here would be for each window to think through how they participate here and ensure

there's more trust in the entirety of the value chain, starting with the end consumer to the brand and to us as software or tech companies i think depending on the business model, i think the real challenge is for some who want to join but their business model is probably not going to allow them to join. >> like you think it is harder for amazon or google >> you have to ask them, but i think overall though what we all anchor on, if we can create an architecture and incentive system that turns the tide to put customers in control of their own customer data, i think the overall economy will be better off so that's what we are trying to get done >> if i may add to that, what we have already demonstrated by having a common tax on me, how you define the customer, the

demographics, the lifetime value, how you define their interest, we have agreed across the companies despite the fact that we have some overlapping products in that space, i think demonstrates our commitment to the open data initiative and the fact that you have customers who are excited about building on top of the foundation that we have, i think gives us a lot of confidence that this is the right thing for enterprises. >> bill, how long do you think this is going to take? >> take to -- >> to get the -- >> starts today. >> the specs out on the open data initiative so other companies can join, people understand what they have to do with their platform and software to be compliant. >> i think the big announcement today represents that microsoft adobe and sap have already begun this journey in terms of others wanting to join the journey, we are happy to share the reference architecture around the odi initiative i think the big story here is trust. they both said it well

think of trust as the ultimate human currency and customer experience as the most important priority think about the power of getting the people inside these companies to focus clearly on what's going on outside of these companies. this idea of a net present value of a more satisfied and loyal customer, plus making the employees more inspired and more loyal is probably the biggest value driver we can ever come up with 5% improvement in retentio equivalent to 95% improvement in profit for most companies. if we can connect that data to their consumers and give them an unimaginably good experience, what does that do for revenues and profits for the companies we care for >> we are talking about flexibility, efficiency. we have a u.n. general assembly, something going on with the deputy attorney general in

washington, perhaps a change happening there. we have a trade war happening between the u.s. and china, and that's arguably not the only one going on to what extent is politics having an impact on the demand for product, your ability to project what demand will be in the marketplace these days, or is business humming on as usual. >> the thing at least that we see, thanks in part to the industry we participate in, is digital technology is increasingly become pervasive in all parts of the world, in all sectors of the economy so therefore i think it is incumbent on us as the tech industry to ensure that these businesses are creating opportunity in every economy and every society. because if you think about it, the politics is always going to be associated with what's the well-being of any region, any community, any country, and as

long as technology can play a role in that ultimate success in creating surplus that is equitably distributed, i think the bumps work out to me that's what it is. i think we have a real opportunity which we are obviously exercising but we also have a responsibility to make sure technology benefits are broad spectrum, broad spread. >> bill, sap, a german company, how does not being a u.s. based company at this time when there's a lot of trade tension between the u.s. and europe, between the u.s. and a lot of different countries in asia, how is that effecting the way people look at sap when they look to engage with technology and build up a business? >> obviously we consider ourselves a global company there is no doubt however that tensions between some asian countries and the united states

are pretty high right now, and it is probably less so for a german company if you think about where a headquarters might be located but in all seriousness, i think we're focused and all tech leaders are responsible around wanting things to work out between countries and technology companies. and right now i think we all would benefit greatly from an environment where we stay focused on growth. and to me, open countries are prosperous countries if you look at the history of the world, any time a country has been open, it's equalled more commerce and opportunities for everybody. so we abide by that principle. but no doubt in the asian countries i see new found strength in our business model. >> it feels like we are entering

a new era in cloud where more m and a, more partnerships and initiatives like this one. how do you look at the market. seems for awhile big companies like you guys were holding off doing m and a because things were expensive, but your value has gone up too and your pace of m and a has picked up. what's your take on the market for m and a? >> i think all three of us were early adopters of the cloud and recognized the benefits of rapid innovation on the cloud, of trust and security that comes from this data being in the cloud. but we look at it and say in order to solve fundamental customer problems, putting the onus on integration on customers to work with a number of small companies is just not going to work and that's where i think what we are trying to do with odi is say if leaders in our categories can come together and make it work,

that's going to be extremely facilita facilitating you'll see consolidating, it professionals not wanting to integrate small systems but rely on large companies doing it at a fast pace. >> one of the things we're doing is bringing down the friction and improving the agility. one of the interesting things that bill mentioned was the asean region you look at cloud and the open data initiative, the idea that even a small business in indonesia can now use sap, adobe, microsoft to welcome that much more efficient is the real opportunity. so you bring down that barrier to be able to use the latest and greatest technology for every business in every part of the world by really working together it is easy to get started, easy to take data from one place to the other, easy to use ai to

create new experiences, and it is amazing in some sense, we are commoditizing it >> do you expect increased pace? >> if you look at the r&d budgets, they graduate to m and a. but the organic investments each of us is making is by far the largest. we're going to compliment that, supplement that where it makes sense, but i think the real thing that you're seeing is driven by organic growth. >> it is an extraordinary moment, having the three of you talk about this open data initiative thank you all. back to you. >> good stuff, jon thank you very much. jon fortt in orlando monitoring rosenstein reports that are conflicting at this

hour jpmorgan plans to open 50 new branches in the philadelphia area as part of the company's announcement to open 400 branches across the country. jim cramer is out in philly with jamie dimon for a cnbc exclusive. hey again, jim >> thank you so much, carl yep, here with jamie dimon this is a commitment to an area that has gone from bank to unbank citi pulled out $50 million. 330 banks closed in the last ten years, why now >> with regulatory and tax reform, now a $20 billion thing going to many cities, philadelphia is the seventh largest market in the united states, not including the biggest suburb called new york we like to be part of the community. we are already here investment and commercial banking and private banking. retail is a gap. we open 50 branches, 20% in neighborhoods like this. we come in, we bring the full force of jpmorgan, philanthropy

dollars but to help people entrepreneurs of color funds, affordable housing units we enjoy it, it is good for the company, we invest for the long run. >> when you open a branch, people think we don't need branches, everything is digital. but brick and mortar works. >> a million people visit branches every day the type of branch and size changes. there's a small business loan office, a financial adviser, but a million people, even the average millennial visits three times in a quarter you need to serve the client the way they want to be served >> lot of people feel that ten years ago one of the problems was education of the borrower, they didn't know enough what to do

there's someone there to help and teach. will that make a difference versus ten years ago. >> i said you go to these neighborhoods, try something special. we have you invest and roll out a self advised group haven't decided yet, but put on the screen, you can get your fico score teach you ways to improve your fico to reduce cost of borrowing. we have to do a better job, not just us but america educating people in financial matters from rainy day funds to handling retirement account we're making an effort to do that now we have things coming out that hopefully customers will enjoy. >> talk about the power of business versus government they ledge -- ledge endaryl got settlements. did that money go into the community, was that the way to get it done versus the target of

what you're doing? >> some of those funds we don't know how they're disbursed it is kind of the past we moved forward about how we do it this is how you build a community. small business lending, affordable housing, branches that advise people we know that that works. city of philadelphia, you're a great hometown, the city is doing better and better but parts of it are not. we make a special effort in those parts of the city. >> there is a sense that lending nationally slowed down i'm not getting that from your bank can you give us a sense of what's going on in places that are unbanked and whether there's a revival that can move. >> these things work when you do it with civic society and government we have seen around the world when mayors, not for profits, businesses work together, you can get people jobs, get them trained, employed, and it works. in america, the economy is quite strong

it has grown at 3% has beentholes that may well continue lending, there is a little reduction of lending in middle market, we don't exactly know why. >> too flush could clients be too flush >> we know with tax reform and corporations earning money, need to borrow less hard to tease out what that means. but you look at employment, growth, people going back to work, it is pretty good. >> last week you told cnbc that it is not -- don't call it a trade war, call it a skirmish. previously you said there could be a slow down or at least in the psyche because of any sort of trade war how do you feel about that >> $20 billion of tariffs in and of themselves are a little -- if paid, tax in america $20 trillion economy

that's a negative. the real negative isn't that it is confidence, consistency. if people start reducing investment, start moving to supply chains around, and the fear that the skirmish may become a war we don't think it is a great way to go about it could easily offset benefits from regulatory and tax reform. >> i want to talk about regulatory reform. marion lakes, fabulous cfo said woo haven't seen regulatory reform that would make her happy. there's been so much, a change in attitude, no? >> when i travel around, ceos of other industries have all seen it have we seen actual changes in regulation for us, not really. they have a long list of things they want to do. there has been regulatory change for small banks which we support to make it easy, to reduce burden, but didn't have anything to do with bigger banks. and we're not asking for reform

on dodd-frank. look at calibrating, getting rid of duplication, looking at things that hurt the mortgage markets to enhance growth and do it safely. no one is looking at going back to the good old days, recalibrating. there were 2,000 rolls, there wasn't one or two, they -- rules, there weren't one or two. what makes sense, what doesn't keeping the system safer remember, growth, stronger economy makes the financial system safer. >> you mentioned no rate -- you mentioned the spread 2 and 10 to use the typical logic that people say means you can't make as much money and then you can't lend as much. >> when i say no potholes, household in good shape, people going to work, fico scores are fine, companies are flush, tax reform is still a benefit, we don't have extreme leverage like '08 all of the lending has been

good but absolutely friction out there open the newspaper, tons of friction it is mounting brexit, qe, turkey, argentina, and we don't know the full effects of those things. it may not derail the economy. >> i think these should play to the for the rest balance sheet -- to the fortress balance sheet strength >> in every country we're in, we are steady, growing. bankers, systems, people and the support. it is our share in europe has gone up considerably we do it with any people, branches, good old three yards and a cloud of dust. >> i think you should get a higher price you're selling 12 times.

for growth financial with money that's made every day you open the door, why aren't you valued -- >> the banks are still under political regulatory constraints. we went through the crisis i think a lot of people's investors are worried. good returns in capital, we're growing. when the cycle hits, it can hit the bank but we will manage through the cycle like we did through the last one. >> when i think about that, you must be in there buying stock every day for the company. you have chosen a path of buy back stock i can't believe how many shares you have for ten years, share count has not gone down enough when do you get to a level you are sopping up supply. >> share price is coming down. if you want to look at something, i would prefer not

buying back stock, doing this. growing business is far better for the economy. right now we don't have a lot of choices. over time i prefer not to buy back stock buying back is giving back to you the investors who redeploys to better use. redeployment of capital should redeployed my choice is to grow the business we're doing. 500 branches, in all major cities for investment banking, middle market banking. we are growing overseas. think of bankers and people, that's my preference p to p you invest you'll see more of that coming in the next 12 months. >> when i think of this, very proud of what you're doing in my home city, but i say pure capitalist, jamie, we're shareholders, we should get that money. there's no real instant payoff in two, three years. it will take a long time >> not true. accounting, you have to be careful about.

we build a branch, we put a million, i don't know if i want to put numbers publicly, put capital in the branch, five years later they could be contributing to profit a million dollars a year the timetable of that in new cities is complicated, but we serve 60 million households. we want to serve 70 million. bring them all the products and services we have there's a financial payoff, it is not overnight, but i don't worry about that i explain to people like you that's okay. mpv is good, it will be negative first year, break through the third year and then plus >> we are not getting the rate that you get on the two year when are you going to pay ced and depos toitors more >> rates went up, they didn't pass it on money market funds, et cetera, i think as rates go up the next

25, next 25, you'll see how much will be passed on, it will go up and up. >> is that going to shrink possibility? >> we are gaining deposits the spread you maintain between cost of funds and you pay are about the same. >> you're talking about like the politicians did in 1964, about a war on poverty, that business needs to do a better job you mention in big settlements from 2013 when associate attorney general went after the bank, that was you being on the defensive. you're being the offensive to change poverty do you feel you can do it better than the government? >> no, i think government and business have to do it together and works at a local level, we see it in detroit, new orleans, chicago, l.a., in philadelphia great ideas. most things we talk about, affordable housing, skills, that's not democrat or republican business and government together can do it. you can't do it without business

and business can't do it without government they play a role in terms of regulation and lnlsiicensing while america is the most prosperous nation on the planet, we have income inequality, opioid crisis, lack of education. >> you know what you sound like when you say these things, you sound like a politician. >> i am a patriot. >> if you're a patriot, so was general eisenhower didn't know if he was democrat or republican. >> i am a banker first i am not running it is very important that we have good policy and that we should focus on good policy and all the time i don't mind speaking about good policy, analyzing, participate in a way that jpmorgan can if you're in other companies, some are far more knowledgeable. but in these areas, we can help communities. >> are good skills transferrable to government? >> i think so, administration,

management leadership, organization doesn't mean a ceo will translate to a good politician politicians have a whole different set of skills, relaying to people, understanding empathy. that doesn't mean, i would never say never that people can or can't. >> you say never say never, brings you back to the dialogue. >> never say never for someone else i would not say a ceo cannot be a good president, and president trump was a ceo. >> you met mayor kenny from philadelphia that's something that would not -- i don't want to say frowned on, but wouldn't be believable ten years ago, bankers were considered to be--s it changed that you're welcome in communities that were democrat areas that ab who ahort >> we never stop seeing mayors, governments, prime ministers, even people that didn't like us. we always said it isn't whether

you like us, are we doing a good job, are there legitimate complaints to handle what should we do to make it better for people. it is nice when people do like you. >> i want to speak of the country. you are on record saying we know, greatest military, greatest educational system. >> the best and the worst. we are failing inner-city kids half them don't graduate in poor neighborhoods. a lot of kids aren't getting the skills needed to have a job. that's a failing we should be ringing an alarm bell about that. but we don't i don't know why >> what can you do beyond what you're doing >> we're doing tremendous in skills we go to local schools we go to new york to train kids to be tellers. $36,000, 12,000 medical and pension benefits, the kids like the jobs that's the first rung. they can become a banker

a lot of branch managers were tellers and regional managers. we can help schools locally, high school, apprenticeships, community college. money, but small business need training >> 1.5 billion in student loans. >> it is a huge issue. this is all government lending by the way, bad lending is bad, whether it is mortgages or businesses one of the things you have to do is have discipline around capital. bridges to no where are bad. schools that don't work are bad. lending money can be a mistake student lending was a tremendous amount done in seven years, folks have a hard time paying it back, it is all owned by the government, so it is the taxpayers that lose hundreds of

millions of dollars. so mortgages, kids have a hard time getting a mortgage or credit card. it is effecting the economy. it is not like the mortgage crisis, a trillion 3 or 4, i wouldn't call it systemic, it is just really highly unfortunate. >> let's go back to international a second you talked about the idea of the sub par. you have a skirmish. at what point would it be a war and at what point are you worried it is overboard? >> i worry about it, i just don't know china has been predictable in retaliation. i think the market expected tit for tat retaliation, expecting nafta to get done. it could get worse from here i hope it doesn't. i hope they sit down and have rational negotiations. i am going to mexico later this week, and china. i don't know what the conversations are behind closed doors any more, i don't know

i think we should try to get again, the president raised very, very good issues we're only talking about the process to the conclusion. i hope their process works, it is a riskier way to go about it. >> the president says the problem with jamie dimon running for president, how do you patch that up. in the last ten days you patched it up. >> i have not spoken to the president. >> you haven't >> again, i made a mistake i shouldn't have yapped like that as some of you mentioned. i want to focus on policy. i shouldn't be taking shots and having jokes at anyone's expense. >> would you put this in the case of say the london whale, stupidest most embarrassing situation -- >> i said a lot of stupid things in my life >> i am thinking about the

things you're saying are common sense things we have not heard from bankers we heard from bankers on the defense for decades. you are saying here's how public private partnership make these neighborhoods better, get much better schools and change our country. are you changing city by city? >> we are trying you have a lot of guests, ask most of them what they're doing, lot of companies are doing stuff like this, not just jpmorgan, we put out a booklet of work skills, everyone is doing something and doing a lot in diversity. >> you think we are falling behind other countries >> i can total, we are slipping. fed policy is why we grow 2% and not more in the last ten years the american public should know, 20% growth in ten years is half what it should have been. >> is china going to pass us >> i doubt it. this country is blessed with things way beyond. the good part, schools, universities, land, water, best

business and innovation, but we have a series of problems. we fix one, uncompetitive tax system for business, that was a bad idea we have to fix immigration, inner-city schools, opioids, give felons a chance to have a job, get back to work skills double the earned income tax credit make jobs that people have, jobs give dignity, have better social outcomes, but need to be a living wage. i agree when i hear that concept, and the earning tax does that. you have to pay more, so be it >> painful, i agree. back to new york and then we're going to spend time talking about "mad money" and more big picture issues thank you so much. >> jim, we look forward to tonight's show "mad money," 6:00 p.m. eastern more with jamie dimon. morgan brennan, mike santoli at post 9 to talk about a net

bullish argument on the economy, no real potholes 3% growth can continue with some caveats on trade and how some tactics are not the way he would go about it. >> little hesitation on the trade issue with china is pursued. consistent honestly with how the market treated things. i think how jamie dimon characterized things before, these are good big picture issues to raise. $20 billion which would be the u.s. cost on 200 billion of imports is not that big a deal in terms of the size of the economy, but risks of it getting exacerbated. i think it makes the kind of sense a lot of ceos are trying to make of this. to me it was consistent. a little softness in middle market commercial lending. not sure what to make of that. >> he did mention with tax reform that corporations maybe need to borrow less. that could be a reason they see softness in lending on the business level that got my attention.

and share buy backs and he sees putting $20 billion into investments as maybe perhaps a better way to deploy capital, and going back to the reason they're in philadelphia, the fact that jpmorgan is opening brick and mortar locations, quantifying the fact when they open a branch the next couple years, contributes something like a million dollars to the profit and see it as a good investment. >> in a way that would be jamie dimon describing the competitive advantage, look, we can do the numbers on the net present value of investment in a branch over five years and we are willing to make that. 5,000 plus branches already, 50 more in philadelphia, and they can be long term greedy about the decisions. i think it makes sense to say we can always buy back stock if that's the option and that's constructive to the market as a whole. >> maybe not as aggressively >> runs counter to the trend this year, buy backs surpass cap backs.

if you missed it, here is dimon talking about trade. >> the friction out there, you open the newspaper any week of any month, tons of friction and it is mounting brexit, turkey, argentina. and we don't know the full effect of those things yeah, we keep our eye on that, but it may not derail the economy. >> that's highly relevant, given tariffs that went live today >> that's right, carl. jamie dimon is chairman of the business round table they're out with the quarterly ceo survey, showing the economy is going strong, trade is reigning in momentum uncertainty over trade would have negative impact on capital investment decisions over the next six months. this is the first time the brt asked this question. over a third of ceos say it has

no effect and plans for hiring have dropped off with index of employment falling nearly 3 points to 92.6 overall, brt's broad economic index declined two points amid anxiety over trade expectations for sales up two points to 132.3, and overall, in the index well above the historical average dimon issued this statement, pro-growth policies helped unleash confidence with agenda centered on tax reform and smart regulation, the uncertainty around our trade policies remains a risk echoing some of the sentiments he expressed in the interview with jim cramer. back to you. >> yeah. as you mentioned, dimon is chair of the business round table. multiple headlines from him today. and sort of going in line with what he said to jim about this trade skirmish, that right now he sees a negative as confidence, consistency, the

fact you can see supply chains moving around and can impact investments and could be what we get from this survey. >> complicates, slows down decision making is what he was getting back with the sten consistency question the longer it drags on, more decisions about investment and growth come up on the table in front of ceos. that's why the idea that perhaps both sides are going to hunker down, there's no exit strategy for these, the standoff becomes a concern. >> and also to bring up the point that uncertainty over trade undercutting the positive momentum that they're seeing from tax cuts, from deregulation, they're trying to emphasize and walk a fine line saying the economy is going strong, but they want to sound the alarm that trade in the future could present a broader problem. i thought it was interesting when he said fears of a trade war seem to be having more impact than the actual trade war or trade skirmish itself

>> certainly not as rhetorically outspoken as chamber of commerce which has been more vocal about their opposition to tariffs. i thought one thing was interesting, mike, his thoughts on lending jim tried to get him to talk about what appears to be slow down in middle market lending. >> yeah. >> hard to tease out whether or not this is due to companies flush with cash because of tax cuts less urgency to borrow. >> this is the year you don't have to draw on the credit line as much as you would otherwise that would be a good problem to have if you're anybody but a banker for the economy i guess you have to wait and see. this cycle has been going a long time it is not as if you necessarily have the average company out there saying this is the moment i want to take on more debt. >> a day where they call the peak in existing home sales. lot of mortgages that you don't

nied if you believe existing -- don't need if you believe existing -- >> it has been quite the morning. a busy morning just looking at the markets, we are near session lows. dow down 166 points. i want to get back to other news of the day that is the conflicting reports over rod rosenstein, deputy ag, whether he could be resigning this morning or even potentially fired. we want to get to eamon javers. >> there's confusion about the man running the russian investigation, rod rosenstein, deputy attorney general, running the investigation now because jeff sessions, the attorney general, recused himself a year or more ago. now there are reports rosenstein was summoned to the white house. we have not seen him arrive

there yet. that doesn't meanest n he is not already there. one source familiar with the process saying that rosenstein will not offer his resignation and if the president wants to fire him, the president is going to have to do just that. rosenstein won't resign to make it polite. he will wait for the president to fire him. another source close to the president pushing the line that rosenstein is poised to offer his resignation. on one hand, a source saying he is not going to resign and he is going to wait to be fired, if that should be the case the other source pushing the line that he is prepared to offer a resignation. we don't know exactly which of those scenarios is playing out at the white house we have a statement from andrew mccabe, former deputy director of the fbi he was fired he is now putting out a statement this reads in part there's nothing more important than integrity of law enforcement and rule of law than protecting the investigation of

special counsel mueller. if the rumors of deputy ag rosenstein's departure are true, i am deeply concerned it puts that investigation at risk carl and gang, the question is who would take over from rod rosenstein we don't know the answer to that at this point. it might be that the solicitor general will run this. the other question that comes up is ultimately does the president have authority to fire rosenstein with or without cause. i'm told the president does not need cause of any kind, that rod rosenstein, the deputy attorney general serves at will he has the authority to do that. the big asterisk is if the president uses his legal authority with corrupt intent, could that ultimately end up as part of an obstruction of justice investigation of the president, the act of firing rosenstein could be seen by mueller and investigators if he does it with corrupt intent as part of a broader effort to obstruct justice

so the president has the authority to do this, but there are legal and political risks for the president in all of this, guys >> eamon, quickly before we keep going with this story. i want to confirm something here, that is the fact while there's conflicting details and questions need to be answered, there's no reporting rosenstein is likely to stay on in any capacity >> no. it feels like he is going. the question is how is he going. and that's important in terms of politics and optics of all of this legally we don't know yet who is going to be running the show if he does depart, and no indication that he plans to stay long >> thank you very much john harwood, this has come down to a collection of sources from the white house versus a collection of sources from doj, and that's accounted for early conflicts we saw a half hour ago. >> we don't know what is happening in the situation, carl

in the next couple of hours will tell us that i wanted to underscore the point eamon was making the big picture is the president has been critical of jeff sessions for having recused himself. why is he doing this he is doing this because this is an investigation that's put him in extreme legal and political jeopardy his campaign manager, his national security adviser, his personal lawyer are all cooperating with the investigation. so president trump is in deep legal trouble. poll it cli, if he acts on his impulse to short-circuit this, that has huge political potential for backlash, not only for him but for republicans in congress they could lose both the house and senate in november if that happens, whatever the president tries to do with robert mueller, you can bet congress would pass legislation

to protect that investigation, so he has no good options at this point >> joining us, former federal prosecutor steven mullroy. very hard to understand. markets had issues digesting it, although we are close to lows of the session. do you have thoughts on what we know so far, what we think we might know >> you accurately described it, things are in flux i don't understand why rosenstein would be resigning simply to prevent himself from being fired if that's what's happening. i do know this, that if he does resign or otherwise is terminated, my understanding is that solicitor general would then be the person to take over in terms of supervising the

independent counsel investigation, from reports anyway, and from public statements in the past, i believe francisco would be considered somewhat more sympathetic to the trump administration perspective on the investigation than been. now whether that means he would actually take any concrete steps to interfere or curb or limit or restrict the mueller investigation we don't know. that's kind of where we are. >> steven, is there any reason to believe with all of these reports coming out all of these sources that rod rosenstein could actually stay in place or is this one way or the other a done deal? >> i really wish i could answer that question. there are so many conflicting reports, as you all mentioned, some people have said he's not going to resign. and if he doesn't resign, i was discussing this issue with my students at the university of

memphis law school just the other day about the ability of the president to fire rosenstein if he doesn't resign, but the political reality is there would be such blow back very well may be the case president trump would not feel like he could fire rosenstein. so the evenly reason he would leave is if he was going to resign if the reports are tree he does not plan on resigning, maybe he will be around for a while it's a jump ball and hard to know what will happen. >> senator patrick leahy, democrat from vermont tweets saturday night massacres don't need to happen on a saturday if president trump fires rod rosenstein or forces his resignation he will come one giant leap deeper to dealing with the special counsel's russia investigation hyperbolic or not?

>> i do not consider that hyperbolic the analogy between the saturday night massacre during the nixon administration and some hypothetical firing of rosenstein by trump is not that much of a stretch. the analogy -- although it's the case the president has the ability to fire rosenstein without cause, if the reason was to obstruct the ongoing investigation, or to protect himself or someone close to him from having it, it would also, without too much of a stretch, be considered grounds for impeachment. recall that during both the nixon impeachment controversy and the clinton impeachment

controversy the main ground for impeachment that was being discussed was obstruction of justice. >> steven, thank you for joining us by phone today and giving us some of that perspective, a lot of what ifs given all of the conflicting reports. a story we will be covering throughout the day the dow is currently down about 165 points we have so much more on this it's a very busy morning here on "squawk alley.

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watching the markets down 173. s&p down about 12. puts you right around the range to have the worst day at least for the dow since august 30th. tech not having a good morning and that was prior to these rosenstein headlines oil, though, 72.44, following that closely following opec's shun of these efforts to expand production talking the nutty day we've had so far in politics, sayra thank god it's friday. it's not yet what do you make of what we've heard? how seriously do you take these headlines especially out of axios? >> i think certainly we don't know rosenstein is resigning or

being fired but we do know that it would be imprudent for the white house to fire rod ros rosenstein even if everything in "the new york times" where he threatened to wear a wire and invoke the 25th amendment, even if that were true, it would be imprudent to fire him given the nature of the russia investigation, where that stands and his role in it as john harwood has pointed out a couple times today, this morning, there's no guarantee the person who oversees the investigation will produce a better outcome it will fall to the solicitor general likely who is a very good lawyer. this is where we find ourselves. it's going to be a brutal political week between this and

the supreme court hearing. >> is it imprudent if you have a change in leadership but no changes how the russia investigation is being handled with the mueller probe >> i think the challenges it creates a doubt. it's one more narrative in a long running narrative about politicalization of this russia investigation. the president is right to get rid of rod rosenstein if he doesn't like the color of his socks for any reason, it is his right. he serves at will. the question is, is it politically prudent? several have insinuated it, i think that this is just one more thing for detractors of the president to point to.

in terms of trying to wind it down, which it seems it's not winding down anytime soon, is o, this will not help that. this will only add length to what has already been a very fruitful investigation for mueller. >> sara, thank you for that. we'll continue to monitor a week in which potential changes come to the executive judiciary with kavanaugh's hearing later in the week we haven't even talked about the fed meeting and potential for what may happen this week or in december >> i think the market's reaction is in character. it's hesitation, it's backing away, but not rushing to any type of negative conclusion. it's saying a lot we don't know. >> we have the dow and southwest clocking new highs after what was a very strong weekly performance. we're down almost 180 points

given the news -- >> we were heading down from last night anyway. overseas markets are under pressure, right. that is enough to explain the s&p being down 0.04 of a percent. >> let's get to "the half. this is "the halftime report." breaking news coverage of those reports out of washington that deputy attorney general rod rosenstein, the man overseeing the mueller investigation, could be fired on the heels of that "new york times" story alleging he discussed secretly recording the president of the united states stocks taking a leg lower on that development sitting right now near the lows of the day we certainly will get to the markets in just a moment first we bring in our eamon javers with the latest >> reporter: we've been waiting with cameras on the driveway to