Madeline albright. Black stones president , tone know james, and well cap it off with dpaer white along with Actor Matt Damon. So we have a lot to do today. Lets talking about breaking news overnight. American fighter jets going into syria and bombing isis targets. The u. S. Did warn american fighters in advance. Five arab partners are involved. The pentagon confirms they went after 20 targets. Fuel depots, weapons spots and traini ining sites. Israel shot down a fighter jet after it entered air space. Oil prices are rising. Joining us now, retires u. S. Army current jack jacob is here. On the set with us, chief washington correspondent john harwood. Colonel, i will start with you. The implications of this coming much kicker than i think some people expected, no . Yes. Its developing relatively quickly. The problem with syria is the entire armed force system has been under pressure that it is totally incorporate nated. It is possible the syrian aircraft lost its way. It doesnt make a lot of sense. In addition to that, israel has an excellent Early Warning system. So detection of aircraft coming in its direction is extremely good. Israel doesnt waste a lot of time. Colonel, explain this. We have bahrain, qatar, the ewe nated arab emirates. Is that theater, is it real and how important is it . Its important for Public Relations purposes, but the contributions being made are relatively small. And the one country you didnt mention who so far is not part of the coalition is perhaps the most important one and thats turkey. Turkey has been quite obstructionist in our attempt to put the lid on isis and, indeed, turkey has been the condue yid for a large portion of the oil that isis is selling in order to fund its operations. In addition to that, turkey has been the source recently of the largest number of new recruits for isis. Turkey has said that it wants to participate. It said that yesterday. But it remains to be seen whether or not they will and to what extent they will. So a lot of the coalition so far is Public Relations. You spend time with folks in the white house. Theyve been trying to put together a coalition. Now at least they have it. Yes. Public relations are important. You have to show that you have allies. Everybody knows that were carrying the ball. What we need and we dont have yet is a ground force of moderate sunnis to fight isis and, no, this is air escorts and other which then raises the question, colonel, should they have waited . Was there a possibility had they waited before making the air strikes they would have been able to get to on the ground or you think that was never going to happen . It might not happen. At the end of the day, air strikes have only utility in supporting ground operations and ground operations is whats really needed to hold terrain. But these targets, which we detected have been following for quite some time. These targets are extremely lucrative. What you want to do is degrade isis with these targets. This is a perfect time, as a matter of fact, theres an argument that says having known where the targets were and what they were, they should have done after them sooner. This is going to be a long operation. Its typically air praises like this, whether theyre by themselves or in supported ground operations, usually take some time. So there would be a valuation of the targets, there will be a second wave, third wave of targets. And maybe there was the decision was based at least on that timing, as well. But its taking place with an election about 40 days away. But i dont think this is wag the dog two or three. If it was a republican president , it might be showing strength. But he didnt want to do this, i dont think. No. And it might have helped with people, inspects and others. Yes. For a lot of people who think the president has been weak or indecisive on foreign affairs, this may be the emotional high point of this operation, which when you get the shock of, yes, we just bombed syria and but as colonel jacobs said, this is going to be very long. We could get bogged down by november with a lot progress, right . Well, i dont know how quickly you get bogged down. One other factor, andrew, is that there have been reports of an im spending mass occur of syrian curts. That is another reason to strike. I think as jack jacobs just indicated, the timing is interesting and possibly instructive because it will provide an instant reality check for the support that the United States has for this. Stay where you are, john, because were going to come back to you in just a moment. We want to thanks colonel jack jacobs for her perspective. Lets bring in aymon jabbers. He has it all. Chuck schumer said this will do nothing and other legislative action is really going to help in this case. But yeah, can you explain what youre doing, anyway . Yeah. Theres a chorus up on capitol hill saying exactly that. That is because lawmakers all want to do something. They want to do some kind of tax reform. The problem is theres not the political will up on capitol hill to do this legislatively. That is why jack lieu yesterday say the treasury simply cant afford to wait and launched a series of regulatory changes that are within the treasury and irss authority to what they call the curb, the appetite for tax inversions among federal operations here. Theyre putting headquarters overseas at such a quick rate here. Its hurting the u. S. Tax base. Weve got a full screen showing the details of exactly what the treasury announced yesterday. It would serve u. S. Tax through loans, but prevent Inverted Companies from restructuring foreign subsidiaries to access earnings tax free. Strength trengten the requirements that foreign owners own less than 8el 0 of the new company. The bottom line here is what theyre trying to do is make these things more expensive and costly and less appealing to u. S. Companies. I asked a senior treasury official about this yesterday. He said the concern is not cost immediately, but the sale of cost. When these companies invest, that means the company lose revenue in this year and all these years. So real anxiety on the part of treasury, joe. Okay. Stay tuned, ayman and watch whats happening in washington. Try to keep on the Washington Bureau for you. Do that for us. And lock some of the doors around there, also. Weve learned that you do need to lock doors, particularly the front door. A lot of people say i live in a neighborhood where we dont even lock the door. But in this day and age, i think now we know. Did you notice how hard it was to get into this hotel this morning . Yeah, i did notice that. I already have credentials with my name and everything else. Joe, we now have air strikes in syria and against Corporate Tax at the same time. Yes. And we Vice President seen you in new jersey recently. Youve come to new york. Its like a its a deskic set. This is you. Its global. Youre home. Buckeye, i cant even see you when i look i blend in with the background. Can we talk inversions . Do we think theres going to be a legal case against the irs or treasuries for whats happening . Does it hold up whats happening next . Youre always vulnerable to legal challenges, but i think the treasury is pretty confident that they have the authority to do this. The question is, a, how big is the problem and, by, how much of a dent does this make in the problem . This is also Public Relations. Its not a huge economic impact. Its not a huge revenue impact. Its something, but its not we all want Corporate Tax reform, does it dampen the enthusiasm for it or increase it . Pretty much everything dampened the enthusiasm because its wet. I dont see a huge problem on a grand stale with what theyve done today. You have a breaching across the aisle and having both sides coming to the table to get what they want. Wink we have begun a long conversation in this country about reform of both the individual and the corporate codes. But that conversation is going to play out for a while. Do you think those two things happen at the same time . Republicans are insisting that they happen at the same time. In part because you have so many pass throughs that if you dont solve the problem for the individual code, the corporate reform may want accomplish much. Its very difficult to find the right moment. The one positive thing you can say about it is theres wide spread agreement in both parties that its needed. Actually, each on the individual side, if you could make it happen. But its certainly fought going to be in this presidency, maybe it will be in the next presidency. One sort of fine point on this, the way the treasury put out the statement, it suggested the deals start yesterday. Use the word close, which said to me burger king announced, but not closed. So it is retroactive for potentially the handful if not half a dozen, a dozen deals. If its 23409 closed, its not done. There was also a date put out by ron weiden which is that he which he initiated the process of looking at this, i think may 8th was the date you put out saying companies were on notice that anything back to may 8th could be susceptible to any new law that was passed. Thats out there in the waters. Its 20 billion over ten years that were trying to save. Do you know how quickly we go through 20 billion . Definitely. And the election is coming up. You can make political hey with this and everything. I think the administration sees this as a way you know, no one ever went broke against and didnt get electioned passing corporations. But the other thing is that, you know, its not going to stop anything with Foreign Companies being able to buy u. S. Companies and to have it be more attractive to them because they can do it they can immediately make mother money than what their american counter parts can make. So it really doesnt do anything. Lets check on the markets this morning and well take a quick look at what were seeing. Yesterday was not agreed in kerms of the action. I think some of it had to do with baba down 4 or so. If you do the math on how many shares are outstanding, these are big swings in valuation. Normal people did not get in on the ipo price. Now were down below 90. Well see what happens. By the way, that weakness is coming despite better than expected manufacturing numbers coming in. We were describing some of the weakness yesterday. It came in better than expected. Now that youre worth as much as walmart not any more, but you better do pretty well. The numbers you put up better be pretty good. Theres always the question how much stock you put in the numbers that youre seeing, as well. Lets check out oil quickly. Oil has been something that weve been happy about in terms of what this might do for the consumer and its still a tennit globe economy. Coming up, what does this do, what does it take to do business in africa . The connegligents youngest billionaire will tell us about some of the opportunities and maybe some of the big challenges in africa, including the growing ebola epidemic takesing western africa right now. You hear a mortality rate of 70 and thats staggering. That is next when squawk box, live from the Clinton Global Initiative, when we return. Sfwhoo welcome back to squawk box. The World Health Organization is now warning that we could see 20,000 new cases by november. Infections are expected to climb exponentially unless patients are isolated and, even worse than first expected, a 70 thans that people will die if they contract the virus. 70 mortality rate. And were seeing mortality rates even higher. This is a very dangerous situation and we are, of course, watching all of it. The deadly virus is a major concern for those investing in africa, as well. Joining us now is a name you need to know. People call him africas youngest million air. From technology to manufacturing, real estate to Financial Services and agriculture. It has operations in 22 subsa rare ran countries can more than 11,000 employees. Sir, thank you so much for boeing with us. Its great to have you here. Thank you. I dont think people realize the enormity of what youve done. You started when you have just 15 years old selling computers. Tell us about that. Thats right. My family has been in east africa for over 120 years. So im a fourth generation. We got kicked out, lost everything, came back to rwanda in 93. We came out okay, but unfortunately lost everything again. And that is when i felt like i wanted to and needed to do something. So i quit school, took a 50,000 loan. So 5,000 loan that youve now turned into a 1 billion enterprise. How did you do that along the way . African is such an opportunity. But were looked at as a country and not a continent. You have to truly be local, but at the same time, operate in a global manner. It wasnt by design, it was by default, frankly, that i feel traveling sprying i. T. Equipment. That gave me a deep understanding that all of our markets are so unique. Weve all got our cultures, politics, parliaments, so its all about the bet of lovely and the best of global. When youre dealing with that many lovely governments, that many parliaments, how are you able to jump from country to country and grow just as rapidly . Thankly, that is the opportunity. Sometimes we generalize. We look at the east african countries and we think having presence in some of those countries gives you access to all five. It doesnt. What is the breakdown in terms of your business country by country. I assume theres one or two country thats make up the joft of it, or no . No. Core businesses, real estate and hospitality, banking. So were quite divert. In terms of country, rwanda represents what percentage versus tanzania versus were very suppress. Nigeria is a very big market for us. But otherwise, were very, very spread. So no one particular market acts for a majority. The largest region where we have exposure is probably the east of can community. The connegligent as a whole has made amazing progress. How does ebola concern you and what needs to be done . Global virus is a very serious issue. I think it is a serious concern, how, it does get ex aim rated, as always. Ive been traveling around west africa for the last few weeks. The governments are doing a great job. Nigeria is a great case. Theyve been able to contain it very well. They didnt need global agents flocking in the and trying to help. They have been able to do it themselves which is a huge accomplishment for our country. When lots of International Agencies come in. Start working, it does become challenging. Everybody is coming with the right intent but the wrong message. I think there is a lot we can learn from this. Better cohesion could have been a great strategy because of the fact our boarders are so free. As a whole, i think our governments are doing a great job. I think its exaggerated. Do you feel comfortable, completely safe traveling as you do . Frankly, i do feel absolutely comfortable and safe. Theres a lot of precautions. You get through Health Checks before you actually enter the office building. So there are a lot of precautions that have been taken that as citizens you can live normally, but work within the modality. How do they health check . Do they take your temperature . Yeah, they do. They take your temperature. Theres hand sanitizing. Do you deal with infrastructure issues in the last ten years . How much better and how long will it take before you never think about infrastructure issues . Its a great question. Infrastructure is obviously a big challenge. And the fact that as a continent, were physically larger. But i think these are huge opportunities. Were doing manufacturing in quite a lot of opportunities. It is such a challenge. So things like that, you can actually look into. Have i seen an improvement . There is so much room. I think maybe you should get into infrastructure. Will you be around . Lets talk about this. You dont realize how big the vast spaces that were talking about here. How do you nap gat that yourself . Infrastructure palgs which challenges such as power are against the entire country. Everybody is on the same Playing Field. Everybody is facing the same challenges. But youre absolutely right. It is a huge opportunity. What is your tax rate . A lot of it is british tax law so its. The chinese have had a lot of interest and have been very active in the United States and it seems like there have been more coming in. Are there companies that you see as the biggest on the Playing Field there . China has always invested quite heavily. My joke is we are the final destination. Its been amazing, the majority of capital we were able to raise came from the United States. There is a keen appetite to invest. I want to thank you so much for joining us today. Its been a pleasure. Thank you very much. Bob diamond, will be joining us on the show, the former chief executive of barclays will be on the program on friday morning. When we come back, we have a lot to talk about. What are sales of toilets saying about the health of the American Economy and the Housing Market . The ceo of American Standard is going to tell us when he joins us live. Plus, the beginning of the big market flush investors have been steering all year . Were going to take a trip inside the numbers later on squawk. Back in just a moment. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Good morning. Welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and andrew ross sorkin. Were reporting live from the Clinton Global Initiative in new york. Overnight, our top stories was developing u. S. Led air strikes under way in syria. Five arab partners are involved. We have some video as its unconfirmed by nbc news, it kams to be the aftermath. Jim joins us from the pentagon. Good morning, joe. This was a substantial u. S. Military air strike against isis, targeting there inside syria. 47 cruise missiles launched from u. S. Navy ships in the red sea and wave after wave of attacks from u. S. Fire bombers and armed drones. They were aiming at isis command headquarters there in the proclaimed capital of isis inside syria. Weapons depots, fuel depots and some armed encampments. Its going to take some time. As you know, the u. S. Military doesnt have boots on the ground to get some kind of accurate Battle Damage assessment from those attacks overnight. Key, though, i think if you talk to the administration at least was getting those five allies, saudi arabia, qatar, bahrain, uae to and jordan to participate in these strikes. Now its not clear to what level theyve participated. Its not clear that they actually dropped bombs. The key here, however, is that this is only the beginning in what is going to be a long, drawn out campaign. Not only in iraq now, but syria, as well. And, jim, we measured progress how . Do we just take the governments word for things or is there a way that we can have a positive effect . Well, you know, so far, despite the repeated air strike there in iraq, its done little to really undermine the isis operations there in iraq. And nobody has any illusions here in the pentagon that this initial wave of air strikes is going to set back isis in many meaningful ways. And one of the keys here is that there were no strikes, were told, aimed at any isis leadership. Again, we dont have any boots on the ground in the region. There is no real good intelligence on the whereabouts of any of those leaders who have long since hidden themselves within populated areas, raising the risk of collateral damage, innocent civilians killed. So this this is not done or not even close to beginning, actually, by any stretch of the imagination. Well, okay, jim. We appreciate it. Thank you. In the next hour, were going to have much more on the strikes with former secretary of state madeleine allbright. Some of the Corporate News of the morning, microsoft launching xbox 1 in china next week. It had been scheduled for today, but it was suggested it would be released by tend of the year. Facebook now reportedly set to unveil a new advertising platform. The wall street journal reporting that the changes should help marketers target users more effectively by measuring what is seen or interacted or acted upon ads. And big news for google, europe is now warning google today, the eus competition chief saying the company must improve its search settlement proposal or face formal antitrust charges. Of course, that resolves around how search is done and, really how search is done, whats kept and what is archived. Theyre in a tough place in terms of what theyre proposing how to fix it and the government there is not the eu is not happy about it. This is interesting because peter teal, we talked to both of them last week said that was his one concern on google, whether the technical fix would be an easy one or not. That was his warning to investors. Okay. One of the big topics this year at cgi is how sanitation can impact the quality of life around the world. And one of the key players in this is a toiletmaker. American standard. 3 Million People around the world over the next three years and are joining us now to talk about this effort is jay gould. He is American Standard brand ceo. We have guinness all the time. Are you the only ceo to film a commercial sitting on a toilet . I think i might be. And were going to have if youve been watching the screen, you see matt damon. We know about his efforts with water. It surrounds this issue that we take for granted. Lets start with how this is a measure, can be a measure of how housing in between your business dropped by a third after the financial thats right. By a third. A third. Toilets, yes. It seems like youre always going to need toileted, but its based on housing and construction. And rebottle. A critical driver of success is remodel. When people feel confident about the price of their home, they reinvest in it. Its up in the last few years, up 30 . Thats not back to writ was. First half of this year was slow. Mid single digits. Were looking at accelerating in the back half of the year. So what happened if the fed actually raises Interest Rates, lets say the middle of next year and they climb more steadily than people anticipate . Is that going to directly impact the same sort of thing, the housing industry . Generally, yes. Specifically its much more focused on remodel, actually. The key Economic Indicator is actually home prices. And were still seeing home prices increase. At a decreasing rate, its still up about 8 or 9 . So American Standard is a northamerican based company. However, as i was saying at the break, we joined a big japanese Building Products conglomerate, so were literally global now. You were required in private equity . Okay. Were thinking about big, global things and i need to know about they say things. So, already, india, places that need sanitary, toilet pan, 600,000. What instead of an open pit, this is how does this work . Joe, let me start off by saying, when i joined the company 2 1 2 years ago, i was shocked to learn that 2,000 kids die every day for lack of access to sanitation. And we joined the conversation not to reinvent the toilet. The simplest little innovation that literally costs 1. 50, it goes on to and keeps insects from flying in and out. And that cuts down on this . Dramatically reduces disease. So weve installed over 400,000 of these already. We borrowed a page from tom chu. For every champion toilet we sell, we donate one of these. But the biggest challenge is the crisis for business models. So we can perpetuate this. India is the next big challenge for us. There is 620 Million People in india that still defecate in open fields. How far away are we from a waterless toilet that works . Ive been to there are some, but they dont work perfectly yet. Theres a lot of fanfare around that. To be perfectly honest with you, thats a 150,000 solution. We were looking fort 1. 50 solution. I dont want to criticize the people doing twhab but were trying to make an impact on millions of people. We made a commitment last year to touch 3. 5 Million People in the first three years. But were now believing we can touch 20 Million Peoples lives by the year 2020. So where are you in terms of that initial commitment to how many lives you have touched already . So were at about the 2 million with the 400,000 pans that weve installed already. Weve committed to donate 1. 2 million pans based on the sales of champion toilets over the last two years. The real break is sustainable businesses. And the government of india last week or two weeks ago announced a 5 billion investment into india to help prevent open field deafcation by the year 2019. So what is this, a buck 50, what does it look like . What does it do . It is literally it is almost like a trap door, joe. It fits on top of an open pit la treen. It has a trap door that opens and closes. Bang la dash is a they have a habit of taking with them to the toilet a small part of water which helps rinse down the waste, but it creates a seal that prevents the insects from going in and out. Its a simple idea. Weve been working on sanitation for 2,000 years. So the open pit latrene door, are these different sizes . Theres a concrete apparatus that goes around the pan. You can use it in a lot of different places. I just told you about the solution for bangladesh. Africa, completely different. They dont have a ritual because they dont have access to water. The engineers have recently been to africa and we think we have a solution for subsaharan africa, as well. Do you keel with koehler . Who else do you compete with . Koehler is in the space in north america, delta is in the space. The big box retailers come back and have their own brands in the space, as well. And everybody is making less water. Thats part of the holy grail. Thats cutting down on the amount of water. Zero water, not a good idea. But certainly, you know, the reduction of water use, its gone in our lifetime from six gallons person flush to 1. 28 gallons of water per flush. Thats pretty dramatic. You dont want to flush twice, though. You dont normally see wimpy toilets. Sex or eight years ago, that was true. The regulations changed before the technology did. I think were in advanced mode. Is there a mores law when it comes to how much you can actually reduce water . We think so. Theres a thing called drain line carry. You have to not only get it out of the toilet, you have to get it out of the house. We are all on the grid. Were not going to need anything. Electricity wont matter. Thanks for inviting me. When we come back, the iphone 6 and 6 plus already making it to china. Were going to have a live report from beijing on just how much one of these new devices is going for over there. Get ready for a little sticker shock. Plus, a crazy money milestone for disneys the lion king on broadway. As we head to a break, check whats happening in the european market. Were coming back back in just a moment. Welcome back to squawk box. Were coming to you live from new york city at the clinton global xhishtive. U. S. Equity futures at this hour, see how the markets are setting themselves up this morning. We have red arrows in europe. Dow would open off about 25 points. Nasdaq would open off about 12. 5 points. The s p 500 a little over 5 points. Disneys stage news called the lion king, now the top ticket of all time. Get this, Worldwide Growth now topping 6. 2 become, sillion, n topping any show in entertainment history period. I just got an email the other day pushing a brand new tranche of tickets for llion king. Its hard to replicate the animated film, and they do it with props and all that stuff. They were trying to make spiderman as good. And it was some of the same people who worked on spiderman. Cool stunts at that level. Have you seen it . Yeah. I need to do that. Weve seen rent 16 times and youve never been to getting me misty. I think thats in thats there, too, with the macrame and oh, 40yearold . Yeah. Coming up, it didnt take long for the black market for the iphone 6 and 6 plus to start booming in china. That story live from beijing next on squawk box. Get more clean water to everyone. Whos going to take the leap . Whos going to write the code . Whos going to do it . Engineers. Thats who. Thats what i want to do. Be an engineer. Join the scientists and engineers of exxonmobil in inspiring americas future engineers. Energy lives here. Can you start tomorrow . Yes sir. Alright. Lets share the news tomorrow. Today we failrly busy. Tomorrow were booked solid. We close on the house tomorrow. I want one of these opened up. Because tomorow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. When csx trains move forward, so does the rest of the economy. Csx. How tomorrow moves. Take and. Exhale. In. Aflac and a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. Find out how fast aflac can pay you, at aflac. Com. Welcome back to squawk box. The iphone 6 and 6 plus hitting stores here in the United States on friday. Just days later, the black market for the devices red hot not here but in china. Eunice has more of this from beiji beijing. Good morning. You know how you had crazy lines in new york, a lot of those phones ended up here. China has not approved a license for the sale of the iphone 6 here but that has not dampened demand. Of course people cant get it at the official stores or the telecom store. So where do they go . They go to the black market. So they are flooding the black markets. We went down there yesterday to see what some of the quotes are. It is pretty crazy. The iphone 6 is going for about 1900. And the iphone 6 plus as much as 3,250. And gold and space gray are the more popular colors. Because of that get ready to pay an extra 500 for those colors. Chinese people think the silver color is just too pedestrian. Today the prices have started to come off a little bit. One of the reasons is we start to see some competition. The phones have appeared on alibabas site. The other reason is in the past couple hours a regulator said the review of the license for the iphone 6 is going to be completed soon. So a lot of people have been reading that to mean that we are going to see the iphone 6 in the stores very soon. So in the meantime, though, scalpers told us they could get us whatever we want. They said that customs is cracking down, but i want to tell you how theyre getting them into the country. Customs officials said there are a couple of different ways. One of the ways is theyre putting them in coffee tins, toothpaste boxes. Theyre also putting the iphone 6s into the equivalent of a twinkie box and carrying them across the border. Theyre taking the sponge cakes out of twinkie boxes and packing them with iphone 6s and just marching across the border. Wow. There you have it. Wow. Eunice yoon in beijing. Look for a fedex box from us. A twinkie box. Look for that. Well go to the apple store after this. Still to come, you probably heard by now the u. S. Launching air strikes on isis targets inside syria overnight. Were going to discuss the latest stepup in the campaign against the islamic militants with Madeline Albright. While the markets watch the events in the middle east flair up, what is the strategist for the bulls . We put that in perspective next. And we are live from the Clinton Global Initiative. Theres blue everywhere at this conference in new york. Opportunities arent always obvious. Sometimes they just drop in. 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. You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. The u. S. Launching air strikes on targets inside syria. Madeline albright gives her assessment on the strategy to stop the islamic militants. Cracking down on tax inversions. The white house rolling out new rules to make it harder for companies to hook up but will it stop the urge to merge . Stocks taking hit to start the week. Strategist tom lee tells us why the bulls are still on the right track. The second hour of squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. Some of the most powerful names gathering in new york today for the Clinton Global Initiative conference. Were bringing you a front row seat today. Coming up at 11 00 a. M. Eastern time, an interview with the host of the day himself president bill clinton. And the ceo of nrg energy, Madeline Albright, blackstones president. We cap it off with gary white and Actor Matt Damon. The story that will be sure to dominate a lot of the conversation today is the air strikes have started within the country of syria launching the first air strikes overnight. Video were going to show you now has not been confirmed by cnbc. But there were five air partners involved with the United States. The pentagon confirms the bombing runs went after 20 targets including isis headquarters with fuel depots and training sites. Meantime an israeli official says israel shot down a syrian fighter jet today. This is the first time israel has intercepted a syrian aircraft in 25 years. Weird story, some people think that it was accidentally in israeli air space. For more on the air campaign against the Islamic State, heres tracie potts reporting from capitol hill this morning. Will not hesitate to take action against isil. Reporter this claims to be the aftermath of air strikes in syria. Five arab partners are involved. The pentagon confirms they went after 20 targets. Isis headquarters, fuel depots, weapons depots, training sites. The u. S. Hinted monday this was coming. To back up those local forces as they take the fight to extremist organizations. They have designs on attacking. Reporter president obama went to the Vice President s home last night for an event. We now know while there they called lawmakers to give them a heads up about the air strikes. The Islamic State or isis has taken 60 villages. For them its an allout war. Reporter the air strikes are now underway fulfilling president obamas promise more than a week ago. If you threaten america, you will find no safe haven. Reporter tracie potts, nbc ne news, washington. Oil is rising. 51 cents is what this is good for amid the uncertainty in the region. Equity futures also. The weakest in a month, 100 points on the dow yesterday. The other big story out of washington this morning, the Obama Administration now taking action against tax inversions. Eamon javrs is here. Jack lew said they cant wait for congress. They said its clear theyre not going to take action on inversion. They wanted to do something in terms of regulations that the irs and treasury can impose. Look at some of the specifics here of what treasury actually announced yesterday. Fairly narrowly targeted measures. One to prevent companies from accessing foreign subs earnings. And then also to strengthen the requirement that former owners of u. S. Entity own less than 80 of the new company. All of this they said would be effective as of yesterday for deals closed as of yesterday. They said it would not be retroactive as some of the proposals have been. Thats because the typical pattern when you do this in terms of regulations is you do it effective the day you make the announcement. You dont reach back and capture deals that closed earlier in the year. There is some chance that Congress Might take action on this, but that seems to be dwindling. Although some of the lawmakers on the tax policy committees would like to do something. Republicans very critical of this move saying we shouldnt be doing this if were not making a broader move to reform the tax code overall. Eamon, real quick, just to clarify on the retroactive piece. The deals would have had to close by today or yesterday for this to be enacted. Burger king, for example, half a dozen if not more transactions that have been announced earlier this year but have not closed, those could still be affected and i imagine well show that show up on the stock prices today . Thats absolutely right. They said this would affect deals not closed by monday. The question is whether or not those particular deals are affected by these narrow regulatory changes. And thats going to be something that youre going to need a battalion of tax lawyers to comb through and determine the implications for each one. Theyre trying to make these less economically appealing. But theyre not able to eliminate inversions altogether. They might be more costly if you fall into these vaurs buckets. But the key on that would be 80 now versus before. Exactly. A lot of this is designed to change the ratio of control by the u. S. Company and the foreign subsidiary. And what theyre saying here is that the concern is that over the out years, this could be extremely costly to the u. S. Treasury. These companies invert, its not just this years tax returns that theyre worried about. Its all the future years of taxes those companies would have paid that are now going to go missing. They say thats really whats driving them here. Theyre worried about the pace of these inversions. Mass inversions could really impact the treasury over the longterm. Thanks for joining us this morning. The Political Uncertainty ramped up after the strikes in syria. Both issues are being analyzed by investors this morning and president obamas expected to speak later from the white house before traveling to new york. The backdrop for these stories on wall street, stocks near record highs despite all of these things happening. But tech went down yesterday. Took it in the teeth. And the dow and the s p didnt fair much better. Is this the beginning of what we have not seen in what had to be a couple years . Is it the beginning of something many people have been predicting . Lets get to tom lee who is an old friend to squawk box. The only thing different about the air strikes, tom, i mean isis used to be a Pharmaceutical Company that i knew about. Have we known about it now for six months or so . Now were doing air strikes. Does this change anything about what weve known about isis . I mean in terms of implications for the market, it doesnt change much. Were actually doing something about a growing threat to the u. S. But i think the markets been, you know, shaky. I think its a bit of profit taking this past week. I dont think it really is the sign of does alibaba have more to do with what happens here than air strikes in syria . Well, in the past week, its possibly more that were entering october which is a month that scares people. I think in the past week a lot of the conversations ive had is the markets focused on fed hikes in the spring. So i think thats where absolute value which is relative value stocks come into play. Its a good time to invest, october, in general. Its a time it usually goes up from here, doesnt it . Thats right. The reason people get scare sd a quarter of all crashes do happen in october. But i think weve got a lot of seasonal sort of favoring stocks in the fourth quarter. A lot of Fund Managers are behind. Which means they have to go all in between now and christmas. Thats right. My people have gotten defensive already. A lot of them, i think what is it . Two out of the last nine. I dont know. They havent theres been a lot of them. They really havent predicted. I think everyone is getting cautious and nervous. Markets climb with worry. Earnings are accelerating. The expansion is still in good shape. Are we overthinking the fed . Are we over thinking the positive effects that the fed has had as well as to whether there would be negative effects right now . In a way, i mean, you have to remember fed response is i think what we have to remember is the markets going to respond to strengthening growth first. Then we think of the negative implications of the hike. Until we get a hike, the markets generally do well. Does that mean as soon as the first hike comes everybody runs for the hills . Yes. I think once we get a hike and again i dont think its before the end of the year. Lets say the markets pricing it in in june. Around june is the time youd expect initial weakness. Its more of a reaction to the fed tightening. Thats such a hard thing. The timing of that is going to be almost an impossible thing to play. I imagine it gets pulled forward. Not the opposite around. It becomes data dependent that if the economy doesnt strengthen over the next you sound like janet yellen. I think what it tells me is i think the markets overly worried about a hike because we wont have Interest Rates rise unless the economy is very strong. And if its very strong, well see it flow through profits. I think its premature to think about a hike. What about europe . Europes slow but theyre still accommodative now. We can import their deflation which allows us china, though, is weak. Dont we need them to its interesting. The u. S. Is really the only area of real notable global strength. Its also one of the few where investment spending is still low. 23 of gdp. At this point of the cycle we should be closer to 25 . You know, i think that containing inflation by weaker growth outside the u. S. Is actually good. Were going get 18,000 before the end of the year . I think the rally is reasonable. Last year we had 10 . I think weve got a Stronger Economic outlook today. You mean 5 between now and the end of the year. Yes. Hold on. Do us out until christmas and then full 12 months. Where have we 12 months from now . Well then we get into the june situation. Thats right. I think looking at 12 months, into year end i think 12 . 12 months out i think were still in the bull market. I think next year is a time to really be looking for some sort of pullback. But again its going to be around the time that we actually see tightening take place. Not in anticipation of tightening, but actual tightening. I remember you talking about 1300 and 1400 on the s p. And you were solid. Solid and staying long and kept raising. You never had to lower your price target. Thats right. Again, i think were still only midcycle in this bull market. I think we have years of gains ahead of us. Doing so well you have your own company now. Why share it with jpmorgan. They treated you like a dog. When did you start this . We opened doors last week. Wow. Congratulations. Thank you. Are you hiring . You know, weve got ive got a Great Research team in place. Joes available after 9 00 in the morning. You own 100 of the firm . Ive got a partner john bay. The two of us funded this business. Im not going to fund anything. Thanks. Thanks, tom. When we come back, a negative charge for Energy Companies. The industry gets a bad wrap with the public. More on that next. And at 7 30 a. M. Eastern time, Madeline Albright will be giving us her comments on the targets inside syria. Squawk box will be right back. Welcome back to squawk box this morning. The Energy Industry ranking the highest in terms of im sorry to tell you this negative perception at 65 . The survey also shows corporations overall have become somewhat more responsible when it comes to the environment. David crane is here. Hes the ceo of nrg energy. Hes trying to change a lot of the negative perceptions. Were going to talk more about his opinion. Can this perception really be changed . Youre doing a lot of cool stuff and i want to talk about it. I want to put it in perspective. Its a small part of your business as it is a small part of most energy companys businesses that are trying to get into all these energy fields. Its a small part, but its the only growing part. Like all companies, we want to grow and by far if youre in the Energy Business the only double digit growth area is the clean energy portion of the space. So thats why its more important at its current size. On a relative basis, what do you imagine the clean energy piece can become over the next ten years . Well, if you look at germany over the last ten years, there are days of germany right now where Renewable Energy is providing 70 of the total electricity in the country. Solar right now, 1 to 2 . If you add water and wind, its less than 10 total, but it can grow dramatically. I just heard a question framed that you can never really get away from what you do. And that is providing power and energy that might be from hydrocarbons but doing it well, allowing people to have power, to have heat, to have electricity, to have lights. Other Energy Companies allow people to drive in their cars. That was framed at can you get away from the evil things you do and get more renewable clean things . Can you ever be a positive part of society rather than no. He is a very positive part of society. Since renewable is only 10 , can the 90 of the bad negative things you do be counteracted . I think you have to keep in mind the different time frames. I mean, certainly when you talk about Climate Change all of the scientists focus you on 2050 three inches or something by 2100. Some people are worried about ebola. Im petrified of the tidal baew and all that. Thats the longterm. Arent you frustrated at the way that and its not just im not going to blame the media, throw the media under the bus again. Just me personally. But the way this why do you think the results of this survey came out the way they are . First off if youre the ceo of a public corporation, youre not expected to do too well on the survey front. Which is the same nom npheno. Were the single largest part of the problem. To do poorly on Carbon Dioxide emissions. Youre not throwing solid pieces of carbon out. I dont think it goes out. Thats why i dont know why they call it the molecules. Co2. Were a bigger part of the solution and that gets me enthused. If we decarbonize the electricity space, we can electrify the transportation space. And soon youve solved the problem. So i prefer to focus on were a part of the solution not part of the problem. What do you make i dont know if you saw this news yesterday. The Rockefeller Family decided they were no longer going to own fossil fuel companies. Youre hearing that more and more from certain Investment Funds and others. The divestment, i think im going to be close to this. I dont know where you draw the line. The focus where you talk about divestment seems to be on the supplier. All these people drive to the demonstrations. Branson flies around on a private. Jet worrying about Climate Change. We had a woman running for office in florida that wanted to totally rid florida of any type of oil and gas yet everyone drives there. All the tourism there. Sees no disconnect from any of that. Im not a fan of divestment. But one thing useful about the general trend is Holding Companies responsible for not providing disinformation about things that are happening. I think the Reynolds Family is the biggest antismoking Philanthropic Organization that we have now. They did pretty well with all the tobacco for years. Maybe its guilt. I dont know. Before we let you go, tell us something promising. What is the coolest new Clean Energy Technology youre seeing right now . I think the coolest thing comes back to dollars and cents and its the price point for distributed solar. At this point we think there are 30 million American Homes that should be putting solar on their house. Thats close to a trilliondollar market opportunity. Is there anything cooler than the natural gas for being competitive for funding power . Im probably youre going to look at something cool in terms of satisfying earnings . I think the Natural Energy areas are for us Going Forward are solar and natural gas together. Thats the future of the u. S. Energy. Weve got to leave it there. David crane, thanks for joining us this morning. When squawk box returns, we got a lot more to talk about including our conversation with Madeline Albright when we return. Take a deep breath in. And. Exhale. Aflac and a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. 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When we return this morning, well be reacting to the strikes on isis targets inside syria. Madeline albright will be joining us live from the Clinton Global Initiative right here in new york. You want i fix this mess . A mess . I dont think whats that . Snapshot from progressive. Plug it in, and you can save on Car Insurance based on your good driving. You sell to me . No, its free. You want to try . I try this if you try. Not this. Okay. Da welcome back to squawk box live from the Clinton Global Initiative in new york this morning. Our top story today, u. S. Air strikes against isis targets in syria have begun. President obama will be speaking later this morning from the white house on syria. We are told that timing is 11 00 a. M. That will happen before he travels to new york. Yesterday i sat down with the nato secretary general and discussed the middle east with him. I talked with him about how big of a threat isis is. Heres what he says the Global Response should be. Isis poses a major threat not only to iraq and the region but to the whole world. And thats why it is of utmost important to stop the advance of this terrorist organization. So i welcome the americanled initiative to build an International Coalition that can carry out military operations to degrade and defeat this terrorist organization. But weve already seen ground wars in this area drag on for years and years. Its hard to feel like youve ever accomplished anything or won ground. How legitimate is it to think that we can solve this without putting boots on the ground . Let me be honest with you. I dont think this can be done by an air operation alone. But the question is who should put boots on the ground. And this is a reason why thats so important to build a coalition that also counts countries from the region. Personally i think it would be better that countries from the region provide troops to operate on the ground. But do they have effective troops . Do they have troops that could pull this off on their own . Well, i think they could if supported by operations from the u. S. And other allies. Since that interview, the United States launched massive air strikes in syria against targets for first time. We have the perfect guest joining us this morning to talk about this issue and much more. Joining us right now first on cnbc is Madeline Albright. She is the chair of the albright stone bridge group and former secretary of state and madam secretary thank you for being here. Thank you. In terms of thinking we need regional partners. This came with partners but those are in the air, not people on the grounds. When you think of these attacks, where do we go from here . I think its very important they took place because there is a threat. And weve seen the various destructive acts that isil has been taking. President obama made very clear that he was going to move forward. I think the fact there were five countries from the region in the air with us is important. And secretary kerry has really been gathering a coalition. He and the secretary general rasmussens comments reflect that. I think ultimately i agree with the secretary general there need to be some Ground Forces but not american. Having the regional countries take a role in is is not only important for their physical capability but also the message that this sends that this is not just america against the middle east. The question becomes which boots do you have on the ground there. Is this a situation where we need to arm the rebels in syria. Are there enough forces from the other region to provide the support we would need . I believe there are. I think theres a combination thats there. I think as far as i know there has been a lot of vetting at the variety of rebel groups in erm thes of who is good for training, who will stick with us, what their roles are going to be. And the president has asked for additional funds to be able to do that. And then we have trainers going there to help them. And i think that theres a whole discussion about what boots on the ground really means. But i do think the local, regional partners are the ones that have to do an awful lot of it. We need to help them with intelligence in terms of spotting. Are we late to the game . Should we have done this a yore or two earlier . We all have views on that. I personally wish we would have looked at which groups within the Syrian Rebel Group were useful and we could work with. Then the issues in iraq. To see what maliki was doing. As something involved in this, you always wish you had done something earlier then you wonder whether the intelligence is the right intelligence. We have to keep tracking this very closely. In terms of just the way we view diplomacy now in this country, do you think after those two unpopular wars that we got to a point where dont do stupid stuff did become kind of our Foreign Policy at that point. And normally you can get away with that, but it gets scary that if you do appease or if you dont lead, does it eventually come back to haunt you . Have we passed the point where were disengaging and where we need to reengage preemptively again to be the america we thought we werent going to be anymore . The word preemptive is loaded. It is. I happen to believe in the importance of u. S. Involvement. And president clinton said it first, but i use the term so often, the independenceable nation, that it got associated with me. It means the u. S. Needs to be engaged. I think those of us who are called experts in Foreign Policy, i think we have to explain the stakes better. Its a lot easier to be switzerland and not be engaged. Its cheaper. You dont end up doing stupid things. You sort of stay isolated. Theres oceans between us and everywhere else. Hasnt that been what weve done for five years and arent we reaping some of i happen to believe that the war in iraq was a real mistake and a disaster and it has affected how americans feel about using boots on the ground and then also how our neighbors feel about us and how the countries in the region. So the consequences of that war is what president obama still has to deal with. But i do think that we have toex plain that problems come home to america. And were not as isolated as people think. Unfortunately 9 11 proves that. And not isolated in so many ways whether its a disease or Climate Change or any other number of issues. I think the u. S. Has to be involved. I think its up to us to explain why we are indispensable. But it doesnt mean we have to do everything alone. Everybody thinks they have a free ride, america is doing everything. But we need partners. Let me ask you a question about coalitions. We did see five countries come together on this at least in the air, not on the ground. One country not on the list and this was mentioned in our 6 00 hour, is turkey. How important is turkey. I think turkey is important. President erdogan is in new york. They did have an issue about their 46 diplomats that were hostages. Those have been returned to turkey. And my sense is turkey will be more involved, that they are consulting with our military. And they also have a huge problem in terms of the number of syrians that are flooding across their borders and their borders being opened and people going the other direction. Why dont you think they joined up last night . I think because theyre still in the process of trying to assess whats going on. They are a nato partner. They are obviously very important geographically and in every way. So i hope theyre looking at this very carefully. Have you been surprised by how the world almost seems to have fallen apart over the last five to six years . You wonder if you can put Humpty Dumpty back together again. I think its mess y i. I have a new quote. The world is a mess. But basically i think the things that are happening are there are some trends out there that are hard to control. Globalization has created its contradiction. People dont have faith in their own governments or the international institution. So the system isnt really working anymore. It will be interest k to see new york this week with the u. N. Here and how much can be done on Climate Change which you need everybody to be part of. But its pretty messy out there. Our disengagement over the last five years has had what percentage of blame for the world being in a mess, do you think . 5 . 10 . Its hard to say. This is not our fault. Its not 0 . But this is not our fault. Thats why im trying to get an idea of what you think. 5 . 10 . Mess is a pretty good word. Weve been disengaged. We have not been totally disengaged. Let me say that. I think theres no question as we have come out of iraq and afghanistan there are a variety of civilian operations that have taken place, the desire to try to build up training. So i dont think its fair to say that were totally diseng e disengaged. What is also interesting is the extent of the Chicago Council of Foreign Relations has put out a survey that says the americans are not as disengaged as we think. So i think people are traveling more, understand the way our businesses are interdependent. President clinton here uses a great term now which is how to define our interdependence so it doesnt look as though we arent running anything, but we do depend on each other. I think a lot of americans understand that. Okay. Madam secretary, we havent even gotten to whats happening in ukraine and the dealings from russia. I just wonder what you think of russia, what you think of vladimir putin. I had a lot of fun, actually, because he was one of the hundred influentials by time magazine. So i wrote the introduction to it. I think that she living in a parallel universe. He has made up his own facts. When anybody can say the disillusion of the soviet union is the greatest tragedy of the 20th century, that makes no sense. Two world wars in which a lot of russians died. And i think he has decided that he can in some way either control or destabilize a lot of the countries along his western border. And i think its very troubling. His activities in ukraine were illegal in terms of annexi inii crimea. And invading. The ukrainians were in washington earlier this week and i think theyre trying very hard to put their economy together. They need a lot of help. Vladimir putin, though, this is a place where traditional diplomacy i dont think would work. Can you trust a man like that, can you make an agreement with him, can you ever think that things are going to be okay based on his word . I think the thing that has to happen is we have a tool box for how we do Foreign Policy. And you need to use the different tools. Were using the economic ones. I think the sanctions are working. They always take a little while to work, but theyre cutting and cutting in and there are real questions about what is going on with their economy and their currency. I think that one can use diplomacy as a companion to that. But, you know, president reagan said trust but verify. I think its important to have those diplomatic sessions, conversations. And im sure that a lot is going to be going on in new york this woke. If you had to point around the world, the greatest point of concern and danger you see and then the greatest point of hope you see right now. Well, i do think its very hard not to choose the middle east. I think that there are so many moving parts to that and trying to figure out basically whos on whose side. And now they dont know the difference between a shia and a sunni. And the kind of competition that goes on between the arabs and the persians and all the various aspects and boundaries that were drawn after world war i that dont seem to make much sense. I am very worried about the ebola crisis. Because i think that is obviously out of control and what it does to damage countries in africa that were on their way, i think, to having markets and a very large middle class. The hope is the United States. I have to say that. I think that once we are really clear, that we cant just kind of we have to be a part of a coalition and be engaged. People ask me if im on optimist or a pessimist. Im an optimist who worries a lot. I am worrying, but im always hopeful. Madam secretary, thank you for your time today. My pleasure. Thank you. Coming up, the administration moves to crack down on inergs haves, tax inversions. New regulations placed immediately. And bernstein calls it a game changer. Squawk box will be right back from the clinton global niche ty. Hi can i help you . Im looking for a phone plan. It has to be a great one, and i dont compromise. Ok, how about 10 gigs of data to share, unlimited talk and text, and you can choose from 2 to 10 lines. Wow, sounds like a great deal. So im getting exactly what i want, then . Appears so. Now, um, im not too sure what to do with my arms right now cause this is when i usually start throwing things. Oh, thats terrifying at ts bestever pricing. 210 lines, 10 gigs of truly shareable data, unlimited talk and text, starting at 130 a month. Sometimes they just drop in. Always 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. Whenwork with equity experts who work with regional experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. Welcome back to squawk box this morning. Were coming live to you from new york city at the Clinton Global Initiative. See how the market is setting itself up. Looked like the dow would open 35 points off. S p off 6. 5 points. And nasdaq 15. 5 points. Among the stories front and center this morning, jimmy choo is now planning to list on the london stock exchange. That would happen next month. The deal would value the shoe maker at more than 1. 2 billion. Are you wearing jimmy choos right now . No. Okay. And theres allergan in the news again. David faber reporting that it is now in serious talks to acquire salix. Theres no word on price. David says the deal would close before the meeting where they are going to talk about it. And to throw one more in the deal stuff that dow jones now reporting that allergan rejected a bid from activist in august. Look at all those stocks right there on the screen. Coming up next, the white house is out with its plan to clamp down on tax inversions. But is this the right bandaid to what many say is a broken american tax system . Well debate it in just a moment. [ male announcer ] automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a newly redesigned cabin of unrivaled style and comfort. The allnew cclass. At the very touch point of performance and innovation. At the very touch point of performance and innovation. Whenwork with equity experts who work with regional experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. What if we finally had that would be amazing. Hey, what if we took down this wall . What if this was my art studio . What if we were preapproved . Shut up from finding to financing, howd you do that . Zillow. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Treasury secretary jack lew and the administration taking steps to try to at least slow down tax inversions. New regulations go into effect immediately, but its no surprise were seeing some stocks sell off this morning. Shire, astrazeneca, mylan and burger king. Senior fellow at the center at budget and priorities. Are you in the camp, jared . This is only a legislative move, will actually be more effective . Very much so. I think it is a useful start. But in order to close this loophole, you need to raise the foreign equities share. They tighten that up a little bit, but its still 20 . You have to get that to 40 or 50 that schumer has. Its still a step in the right direction. Youre a big thinker. Im going to try to butter you up. I see where this is going. You see where its going. Youre a global thinker. Were at the Clinton Global Initiative. Were talking 20 billion over ten years that we could miss out on and i know you have an election in november that youre very worried about. Theres 2 trillion overseas. If we brought it back, even at the normal Dividend Rate if nothing went to investment it just went to the unproductive shareholders, those fat cats, how much why are we thinking small . I think its a fair question and a good question. I think when it comes to reforming the tax code, we need big think. The problem is it involves congress and theyre not willing to come to the table. The president for years had a tax plan, you may not like it. But that was rejected out of him. If nobodys going to move at all, the administration has a responsibility to deal with the erosion of the tax rate even tax base even if its relatively minor as you suggest. You dont think the president could talk the republicans into bringing back the 2 trillion . Well, i think probably they might be able to do Something Like a tax repatriation deal where you have a temporarily lower rate and you get some of that money back. However, last time we did this back in 2004, it didnt help at all in terms of investment or jobs. Corporate buybacks dont do much for the economy, ive got to tell you. At least for the middle class. Yeah. But you i know that you know you know what youre saying is sort of the knee jerk answer about you can always come up with i didnt do anything back then. The reason that hes not going to bring it back is the way he brings it back is not going to be pal atable to the republicans. Thats why its not going to be brought back. Even if it didnt go to job creation, infrastructure, just being in this country, isnt the 2 trillion better in here . Heres the thing. Heres the thing. I take your point and youre at least partially right. But heres where im really been substantive here, not political. Heres the thing. And the joint Tax Committee approves this again and again. If you have another one of these tax repatriations, what youre going to do is consistently incentivize these companies to defer and defer and defer more earnings. The problem here is that you are eroding the tax base. We know that Corporate Tax contributions are way down as a share of the budget. Thats precisely because of these temporary tricky ideas. So theres a good reason to worry about it. Its already it cant get more disincentivized. Theyre leaving it over there. Heres the issue. There are a lot of people especially in the Republican Party who would like to see zero tax rates. You talk about the share of the tax base. They dont want any share of the tax base to be a corporate share. They want it to be individual at best. I dont know. Joe, would you be willing to go along the rates to zero doesnt scare me. So that doesnt scare joe. Then what would you do . What would you do on the individual tax rate . We can do it with dividends. We can do it with income. It should be the individuals end up paying for higher Corporate Taxes anyway. How about higher estate taxes . On that point i wrote a piece that if i may say i commend to you on the problem with zeroing out the Corporate Tax rate. What joe is suggesting is certainly a reasonable place to go. The problem is that if you look at the tax avoidance, the nonpayment of precisely this sort of pass through, its actually the most porous part of the tax system. If we take the Corporate Tax rate to zero and try to tax corporate stock at the individual level, first of all well have to tax unrealized earnings which is a whole new can of worms and were going to have to do more on pass throughs which is already the leakiest part of the system. Weve got to worry about the base, joe. All this about 20 billion, jared. Think about it. Theres got to be a better i was wrong. I thought you were a big thinker. After this interview were at a global initiative, jared. Expand your mind. I guess im happy being a little thinker sometimes. Next time you come on, bigger. Thanks jared. Well try. Coming up in a couple minutes, blackstone ceo tony james has word on inversions. When wturn. Guys you believe this watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. [ male announcer ] ship a pak via Fedex Express saver® this guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. The Clinton Global Initiative. The worlders leaders and biggest thinkers gathering to discuss the pressing part of the moment. Joining us tony james of blackstone. He says regulation is the answer to stop the bleeding. Plus clean water advocate and Actor Matt Damon on bringing a vital resource to every corner of the earth. And washington is front and center this morning as bombs drop on isis targets. The final hour of squawk box begins right now. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen with becky quick and andrew ross sorkin. Were coming to you from Clinton Global Initiative. Its filled with a whos who of world leaders. Big thinkers. Except for jared. No, kidding. Coming up becky is going to interview former president bill clinton. That will air live right here on cnbc. First, though, a bit of hollywood joining the mix this hour. We spoke to matt damon when we were in davos. Well get updated on his efforts for clean water around the world providing it for everyone along with the cofounder of water. Org gary white. These are humanitarian efforts well be talking about. Well also talk about his day job including rumors about a new bourne movie. Yeah. Bourne identity we thought he was done with it. Now hes back in. There was the Bourne Identity and something else. You havent seen it, remember where he ends up in that final scene and youre not sure what happens. He did two. I thought it was his third. Was there three . Lets tell you, though, before we get to matt damon, we have some news from overseas. The United States and partner nations forces joining a massive air strike in syria against isis targets for the first time. It is a major escalation with the confrontation with the u. S. Group. They used missiles to attack dozens of targets in syria. The other big story out of washington today, the Obama Administration taking steps to curb tax inversion deals. Thats why some of the stocks that weve been watching this morning are trading lower. Look at some of the red arrows weve seen across the screen. Appears to jeopardize a number in the works. The question is going to be how it changes the deal. Any of these ceos would tell you the tax inversion is not the primary reason they were doing these deals. If they are not going to qualify for the things that theyd been looking for with the tax inversions, how much that changes the deals and again you saw those red arrows there. Also the white house official telling nbc news that president obama will be speaking later today from the white house on syria before traveling to new york. Hes coming to the Clinton Global Initiative. And john harwood is here this morning. What are you expecting to hear from the president at 11 00 . I think the president is going to explain why hes taking this step. This is not somebody who rose in politics as an advocate of u. S. Strikes in the middle east. He opposed the iraq war. But he said at the time he was opposed to dumb wars, not all wars. He is showing it now by taking action after being pressed for years. Now hes decided he cant avoid it. Is he expected to address the boots on the ground or this Coalition Force . He had five countries join us in the air, if you will. But not on the ground. How much of that is going to be an issue hes going to talk about today, you think . Hes been talking about boots on the ground saying that the United States is not going to have them. Now, there are going to be u. S. Military personnel on the ground wearing boots calling in air strikes. But hes not counting those as combat forces. But as he has said and as his Administrations NationalSecurity Team has said, it is vital to have sunni forces, moderate sunni forces on the ground to contest isis. So this is not a United States action on the ground. When youre talking about taking large swaths of territory that isis has, theyre going to need some assistance and need it from sunnis. Whens that going to come . There is a view and its its not ready now. Ive seen it this morning that have we gone too early if we havent had this organized on the ground with others. Well, i think they decided they needed to take some action. Our colleague Richard Engel whos in the region has said a lot of military people he talked to wondered why it took so long to go strike. There have been reports of a pending massacre of syrian kurds. So thats another reason to go. But the president wants to get this underway having stayed out of it for so long. And try to at least force the isis leaders to defend their own ground rather than try to move toward baghdad. Are you surprised who joined the coalition and whos not in the coalition . Are there others you think will join in the future . I think turkey is the big one. But the ones that have been involved so far, saudi arabia, wed already gotten signal from them when they said they would be the staging ground for the training of the Syrian Rebel ArmyFree Syrian Army forces and other moderate troops that theyre going to be participating in uae and qatar are also part of that. What about the uk . To this point theyre not involved. Should we expect help from our other allies from outside the region . Absolutely. The uk has been galvanized by the murder of british citizens in this process and the revelation that a significant number of british citizens carrying british passports have gone back and forth and are participating. So, yes, i think even though some countries like france has indicated its not going to participate, i would expect the uk will. Whats the ive seen numbers. Who was it that went above 50 recently that the democrats hold the senate . Youve seen some of that work thats been done. Yeah. There have been various models that have been fluctuating. Kansas is now key in terms of theyre all important. Youve got a dozen battleground states. Kansas adds a red state to the mix that gives democrats an opportunity on the assumption that they have raised a lot more money. And harry reid has the biggest superpac of all now. This is one of the good superpacs though . How do we view that . What do we make of that that the biggest superpac is a democrat superpac organized by harry reid . That they want to hold power very badly. This ones okay, right . Unlike the others. I dont think its different from any other superpac. Theyre vehicles for political combat. Importance has been overrated somewhat. I think money generally speaking is important to politics. That hasnt turned the tide here for the democrats . Money hasnt helped . It helps, but money tends to balance each other out. Whats your best guess now when its said and done in the senate . I think that it is a complete jump ball. All these forecasts, it depends what you stick in. You want to talk about past performance. I think its a jump ball. You told me this is the year for the redskins led by rg3. You see how that worked out. Cousins looks like a player. But we dont really have a team. Thats sad for you to say that. Its grieving me. Not only do we not have a team, pretty soon were not going to have a team name either. And duke, the Football Team any good there . 40. Ranked. Theyre going to play someone soon. Yeah. Theyre going to have to play an acc schedule. Well see whether they are do that. John, thank you for joining us this morning. Appreciate it. Lets look at some stocks on the move this morning. Carmax shares are under pressure. The retailer did Beat Estimates with the latest profit and revenue. But store sales were below last year. Shares of fertilizer producer Cf Industries are jumping. Cf in merger talks with norways yara international. And theres no guarantee that a transaction is going to result. And were watching the shares of Bed Bath Beyond ahead of its Earnings Report this afternoon. The stock was downgraded to market perform from outperform. The firm says the retailer has a greater than average exposure to competition from ecommerce. I dont know. I like to if im going to buy a duvet, i want to touch it first. Thats one way of putting it. I feel that way with sheets. Towels. You could go in there, touch the bed. And then order it online. Why wouldnt you take it home for you if youre already there . Because you can find it cheaper. Best buy has the same prices now as other places. Except the retail costs them a lot. The space costs them a lot of money. What if you have no idea what you want . Thats why you got to touch it. I think service can be the answer. Service and rapport and everything. Anyway, up next september usually gets a bad wrap from the markets. But this year trading may give financials a boost. Well talk about that next. Plus blackstone coo tony james cracks down on tax inversions. Plus matt damon and gary white are waiting in the wings to talk about their venture water. Org. Every year 3. 4 Million People die around the world from waterrelated illnesses. What progress is being made to lower that number . Well find out when squawk box returns. Youll see just how much it has to offer, especially if youre thinking of moving an old 401 k to a fidelity ira. It gives you a wide range of investment options. And the free help you need to make sure your investments fit your goals and what youre really investing for. Tap into the full power of your fidelity green line. Call today and well make it easy to move that old 401 k to a fidelity rollover ira. September is winding down. Lets get a read on how traders have faired given the markets run. Mary thompson joins us with more. Good morning, joe. September usually gets a bad wrap because historically its the worst month of the year for the stock market. But this year is shaping up to be a good one for traders. That can provide a lift to the Third Quarter results of the nations biggest banks. In an august lull, volatility and volumes picked up. Analysts do question whether septembers strength will be enough to offset august and july. Jason goldberg notes weve seen increased volatility where the dollar strengthened during the quarter and particularly over the last month. Oils been active moving in the opposite direction. And the stock market of course has been on a record run. Toss in this months ipos like alibaba and all of that could juice results in equity trading. Marty mosby says better will base on fixed income. Whether on the 5year it will be enough to get investors back in given the long end of the curve is relative i unchanged. Equity trading was decent, but got crushed because of fears about a government backing. Becky, back to you. Okay. Mary, thank you very much. Treasuries move to clear tax inversions could be a crackdown. Blackstones president and chief operating officer is with us. Tony, its great to have you here today. Thank you. Inversions in the past, youve talked about it and say it feels a little unamerican to you. Do you think this is enough to fix the problem or there should have been a different solution . I think treasurys actions last night will stop the movement of capital around, but im not sure its going to stop the inversions. I havent really played through all the regulations and how much they affect things. But still youve got foreign tax rates a lot lower than u. S. And i think still have motivations to do it. So the foreign tax rates being lower than the United States. The United States at a severe disadvantage when you look around the globe. A competitive disadvantage. There are problems with the tax code. Are you concerned about it . If you go back to the 50s, Corporate Taxes were about 30 of total tax receipts. Theyre down about ten today. Thats a big drop when you think about it. And yet we have a complex tax code. Weve got the inversions were talking about. Yet many Big Companies dont pay any taxes. I think it needs to be simplified and the rates need to be lowered. Theres been an argument that this fix from the treasure actually takes the impetus off a broader overhaul. It could. But this is not that big an economic problem. I mean, people have talked about 20 billion over ten years. It could be a lot lower than that. Oh, boy. And so the bigger problem is the 2 trillion is sitting abroad. What does that do if youre a company and you want to build a manufacturing plant and you have to borrow in the United States and pay interest or youve got free capital sitting abroad. Where are you going to spend the money . Spend it abroad. We just had Jared Bernstein on the show and he made the argument that just bringing the money back on a holiday does two things. Creates a bad incentive for companies to leave it over there permanently waiting for these repeated holidays. And two, looking at the example literally a decade ago when we did bring the money back that it wasnt clear that that money went to spur the economy here. So both are legitimate arguments. People think it creates the disincentive for people to bring it back and pay the full taxes. The incentive is already there. It sounds like gobblety gook to me. The workers abroad is the bigger problem. We need to find b a way to get that back. I like the cut of your jib. I misjudged you entirely. I dont know how we were selling let me ask you one thing quickly. The inversions were talking about which are i mean, obviously they mean something because we talk about them a lot. What about companies not being competitive in immediately this German Company can cannot pay its revenue. Immediately they avoid double taxation. Isnt it in our noncompetitiveness competing for our crown jewels here. Thats a bigger issue than tax inversion. People have worried for years about foreigners coming over and buying our crown jewel assets. Not just for tax reasons. No. But nonetheless, i dont worry about foreigners buying our assets. Every deal we talk about now that weve been in the last two or three months, its the dresser deal, the deal that we just had today is a foreigner. Why is that bad . Im not saying its so bad. But we shouldnt be priced out of the market because we cant be competitive. Hes arguing the taxes over there make it easy for them to buy. They can pay more and make a go of it. I dont agree with that. Again, i think the u. S. Companies with the cash abroad, that they can use to buy Foreign Companies too. Right. But they cant buy our companies with the cash abroad. American companies cant buy other American Companies . Sure they can. With the money they have abroad. Plenty of capital to do that. If tax inversions are unpatriotic or unamerican, i dont know what your phrase was, where are you on carried interest . Where am i on carried interest . Yeah. American . Unamerican . I dont know if thats a question of american or not. I think one of the things we ought to do is figure out the Global Industry where were winners. I think finance in general is one of them. And i think American Financial industries are so thats not a loophole to you, carried interest . Carried interest has elements of wage and elements of capital gain. It is actually technically part of a capital gain. I think when you look at taxes, you have to take both into account. Probably less than 20 billion anyway. Its another small its less than 20 billion. Its a small amount. I just told jared, andrew. Weve got to think big. I have a big question for you. Youll tell me its a small question. Youre starting a new hedge fund. Calpers is now getting out of hedge funds. What do you make of that decision and is that going to be the beginning of a trend . Well, first of all i think calpers made a good decision. Their return over the last three years is 3. 8 . For which they are paying a premium. For which they pay huge fees. And i think they had Something Like 65 people involved in it. When you invest in hedge funds, you have to make a new Investment Decision every quarter that you have a redemption right. Youve constantly got to analyze that. Labor intensive. I think they made the right decision. Our fund of funds over that period of time is 6. 5 . But i dont think its part of a trend. Hedge funds are growing. Our business is growing very rapidly. Were growing 15 a year. This is because of the sanctions making things tough here. I dont know where that came from. We were never in russia. Weve never had an investment in russia. Story on the front page of the Financial Times yesterday. I didnt write it. That story was completely wrong . We have nothing in russia. You did have a consultant there and his contract is not going to be renewed . We have a consultant there and we havent decided yet. We make the decision at the end of the year with all of our senior advisers all over the world. That story was entirely wrong . That story with the facts they just gave you, i didnt write the story. Thank you for joining us today. Appreciate it. Still to come from the Clinton Global Initiative, matt damon talks water, movies. Stick around. Take and. Exhale. In. Aflac and a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. Find out how fast aflac can pay you, at aflac. Com. Sometimes they just drop in. Always 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. Coming up when we return, matt damon and gary white on their mission to bring clean water to every corner of the globe. Before we do that, targeting isis in syria. Whats at risk as the u. N. Prepares to meet in new york. Well get the latest from the pentagon. And later this morning, beckys going to be sitting down with former president bill clinton. Catch that live coming up at 11 00 eastern time this morning. Were back from the clinton. Global initiative in just a moment. While every business is unique, everyone is looking for ways to cut expenses. And thats where pg es Online BusinessEnergy Checkup tool can really help. You can use it to track your Actual Energy use. Find rebates that make equipment upgrades more affordable. Even develop a Customized Energy plan for your company. Think of it as a way to take more control over your operating costs. And yet another Energy Saving opportunity from pg e. Find new ways to save energy and money with pg es Business Energy checkup. Our top story today although its impact on Financial Markets unclear at this point, but it still is the top story. Those are the air strikes underway in e in country of syria. Five air partners are involved. Jim miklaszewski joins us now from where he is stationed outside the pentagon. Hey, joe. There wereaways after waves of fighter bombers that struck isis militant targets there inside syria. But a Senior Defense official says about a third of the strikes were also aimed at an al qaeda offshoot. And that offshoot was believed to have been involved in a potential terrorist threat against western targets either in europe or the United States. Again, an al qaeda offshoot. They could in the explain what that potential threat was, but according to one official here we talked to said, look. They tell us what to bomb and we bomb it. Yeah. That was the im sure you saw the piece i think that youre alluding to the other day that the more imminent threat might be this offshoot who i guess it was a former confidant of Osama Bin Laden is now running the show at what did you call it . Its korazan. They seem more intent on reaching western targets. Opposed to isis which is primarily concerned about creating this caliphate. Actually, years ago there was a strong disagreement and tug of war between Osama Bin Laden of al qaeda and the predecessors to isis abu masab al zawari. So we can assume, jim, at the risk of being played as a country, i guess assad is watching sort of going its all going according to plan for him. Theres not going to be any problem with us going into syrian air space. Not really. Officially they declared this would be an act of war. The Syrian Government declared this would be an act of war if the suggestion launched air strikes in northern iraq. At least one syrian official told nbc news they would welcome air strikes against isis there in northern syria. The u. S. Nevertheless considers it somewhat of a risk to enter the country. So they informed well in advance of the intent to launch air strikes. Did not provide timing, did not provide targets. When the u. S. Launched those strikes last night, they met no resistance whatsoever from syrian aircraft or the air defenses, joe. That figures. Okay. Jim miklaszewski, thank you. When we return, matt damon on the quest for clean water around the world. Plus his next hollywood project. That and more when squawk box returns live from the Clinton Global Initiative here in new york city. First as we head to break, lets look at the futures now. Down 50 points or so on the dow. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Welcome back to squawk box. We are in new york city at the cgi, Clinton Global Initiative. But the futures are lower down about 50 points after a session yesterday that saw a pullback on the high fliers including alibaba. Anybody that bought that didnt get in on the ipo is now losing money. From 90, thats a pretty big number. A lot of ones between 90 and wherever it could go, right . Yeah. When you saw how rapidly the size of the Company Changed overall with just a couple dollars, bigger than walmart, chevron, and back down. Yeah. And you can see maybe people that didnt get in on the ipo and didnt buy in the aftermarket as people panic or whatever that bought at 98, theyre the people waiting at 80. Like that analyst. He had an 80 price target. And he came on. How do you explain that . Never can explain that. Right. All right. One of the most interesting questions from our cnbc burs bursonmarsteller survey had to do with made in america. We spoke to 25,000 folks for this survey and what we found was that the older you are, the more likely you are to buy u. S. Made products. Only 43 of American Consumers aged 18 to 34 said they would spend more money to purchase goods made in the america. 64 of those over the age of 65 said that buying products here in america was more important. I think you can explain that buy the idea that people over 65 tend to have more money, tend to be able to be allowed to vote with their convictions with their pocketbooks. If youre 18 to 34, you may be a little bit strapped for cash. The question was phrased would you buy it from the cheapest product no matter where it was from . But also theyre unpatriotic and lazy . Theyre more global. I think they think more global. This is true. And i do think theres a lot of things that they want because theres all this neat stuff. Once you buy the iphone 6, theres all these apps that cost money. And theres only so much money to go around in the crummy job market. Thats what i think it is. Theyre strapped for cash. Thats why theyre all conservatives in training. Because theyre going to see, you know what . The corporations and prosperity isnt so bad for all these things i want. Theyre not giving it away, andrew. You happen to be one of the fortunate millennials. Youre rich. Coming up matt damon is going to join us. Plus jim cramer from the New York Stock Exchange. Find out whats on his radar this morning. Also a quick programming note. Tomorrow on squawk box, managing partner kyle bass is going to be our very special guest host and google executive eric schmidt also going to be with us to talk up his new book. Were going to ask him about alibaba and much more. Thats tomorrow on squawk box starting at 6 00 a. M. Eastern. Were right back from the Clinton Global Initiative in new york city in just a moment. Hi can i help you . Im looking for a phone plan. It has to be a great one, and i dont compromise. Ok, how about 10 gigs of data to share, unlimited talk and text, and you can choose from 2 to 10 lines. Wow, sounds like a great deal. So im getting exactly what i want, then . Appears so. Now, um, im not too sure what to do with my arms right now cause this is when i usually start throwing things. Oh, thats terrifying at ts bestever pricing. 210 lines, 10 gigs of truly shareable data, unlimited talk and text, starting at 130 a month. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Welcome back to squawk box, everybody. Weve been keeping track of the markets this morning. Youd see a lot of red on the futures this morning. Right now the dow down 47 points. S p futures off by close to 7 points. Nasdaq down by 14. 5. This comes off despite news we saw better than expected numbers. That was the reason yesterday we saw so many red arrows. But again that number was better than expected and you continue to see declined today. President obama is going to be making a statement this morning on the air strikes against isis. Hell be speaking from the white house lawn at about 10 00 a. M. Eastern time. That is just before departing for new york and the United Nations general assembly. Lets get down to the New York Stock Exchange where jim cramer joins us. Jim, you got a i can probably find it. But do you have a current quote on alibaba . Yeah. I think theres an overall sense that were headed lower here. No matter what everything is headed lower. I think thats one of the these things where it starts in china, goes over to russia and europe. Then we get to secretary treasury saying you cant do certain things. An overall sense of we went too far. Lets hold things off. I dont think things are nearly as bad. I like what tom had to say. I think that tom lee made good points about how you shouldnt give up the ship. In your lets say where would you buy alibaba, do you think . I said 82, 83. What happened was you got 92 if you got a lot of stock at 68, you had a blended average around where i want to buy it for people. I think youve got to let it come in. Maybe it goes down to 84 but not much more. Because then its priced below a lot of companies. All the press has been so negative on this one i think people are flipping. You shouldnt flip out because alibaba is not that expensive versus the rest of the cohort. Jim, what do you do with yahoo this morning . Look, i think everyone decided Marissa Mayer has no brine whatsoever and it is worth zero. And i saw the kind comments that dan niles gave. I love dan, but im not into the idea of savaging yahoo for this. Why do we have to think theyre brain dead individuals . Theyve got a lot of capital. They can do a lot of things. Yes, i understand people are playing yahoo to be able to create, so to speak, the notion of alibaba. Im not willing to say yahoo is a bunch of yahoos. I think they have thing to do with that money and can reinvent that company. At a certain point buy yahoo and stop writing off marissa may mayer. We had one of the best known Investment Bankers thats an outspoken democrat on and thats tony james. He surprised me in a couple things. He likes his carried interest which, stop the presses. And i actually agree with him, but normally i could say theres a reason for it. I think the reason we do lead in certain areas in this country. Its not a lot of money that were talking about. But the other thing where theres not a lot of money is the inversions. 20 billion. He thinks the 2 trillion is a much bigger deal thats sitting outside the u. S. Whether it comes back, its already disincentivized. Collect on the dividends. Totally agree. Its not going into a shoe box. Its going to get invested somewhere. Right now its just outside the country used to build plants outside the country. Why not bring it back . As Jared Bernstein said it didnt work in 2004, there were no Strings Attached to it with president bush. You bring it back and build an infrastructure with some of it. Its really terrific for america. The fact that nothing can get done is just typical of what weve come to believe. Yes, of course it should come back. It is ludicrous. Weve got the greatest Manufacturing Base going on in the southeast. You cant put up enough plants fast enough for the companies that have chosen to be american. I think the idea of theyre just gaming the treasury and it will happen again and again, change the tax rate. But come on. Lets get me money back and build something. You are so right. Jim, what do you make of what the treasurys done overnight . I was going over what i asked jack lew about on july 16th. He said categorically you cannot do what hes doing right now. He ruled it out. He did . Yeah. Category says he cant do exactly what hes doing. I got it right here. We need that videotape. I asked him precisely to do this because i talked to tax lawyers who said it could be done. He said i was wrong, it couldnt be done. And now hes doing it. But business as usual. Its the government. They do whatever they want. Whatever they want. Except for things that would help us. There we go. Jim cramer. Thank you. This is supposed to help us. Thank you. Thank you. Got to watch that video. Yeah. Next, the quest for clean water. Water. Org cofounder gary white in his quest to bring water to all the corners of the globe as squawk returns in a moment. Maybe wheres matt . Traffic. Its really bad this week. Ent. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. 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We first brought you this story in january from davos. 780 Million People lack access to clean water throughout the world. Thats 2 1 2 times the population of the United States. Matt damon and gary white found ed an organization trying to find safe water for everyone. Matt is late because he is stuck in traffic. Gary is here today. Thank you. When you were on air from davos in january, you gave out your personal address to people to try to raise awareness and funds for this. Did you get response for that . We did get response. Now we are working through the private placement memo, getting all the structuring in place. Next month well be ready to start receiving funds. More importantly, getting that capital out to some of our micro finance partners in india who are making loans to poor people so they can buy a toilet and get a connection to the water utilities. We were talking about the problem of not having a toilet. How many people around the globe, Something Like 2. 5 Million People . Billion people. 600 million of those live in india alone. Monit monitor deloitte did research on this. How do they work . You have a lot of poor People Living in slums around the world. Basically, most of them are practicing open defication. They want to have a toilet. They cant afford that upfront cost. It can be from 150 to 200. We encourage micro finance institutions to make loans to those individuals to get a toilet at their home and repay that loan over about two years. We have about a 99 repayment rate on these loans. So far we leveraged about 70 million in external commercial cap to help poor people get access to toilets. You say youve been able to set up the infrastructure for this. What did it take . What had to happen . Micro finance institutions look for that incomegenerating loan they can make to a customer. We help them discover this can be incomeenhancing. Weve taken on risk with them, giving them smart subsidies to do market research, to hire the right people to jumpstart this market we know is there. Then once they discover the market, theyll source the commercial capital. You dont subsidize each loan individually . No. These loans are going out at market rates to the individuals. I think thats the key thing to prove. We have proven there is a huge market that will take a loan for Something Like a toilet or a water connection. Theyll repay it at a very high rate and you can use marketbased capital to make that happen. This is a different model than you originally envisioned, correct . When i first started this back in 1990, its been a journey, it was all about philanthropic capital. How much can we raise to subsidize all the water and cost of People Living in poverty . We discovered these women were paying 125 interest to loan sharks to get the capital they needed. How can we make that philanthropic capital go farther . If we can leverage that with commercial capital, we know charities are never going to solve the whole problem. We have to bring market to bear on this and drive the social Impact Investing capital with investor whose want to get at least a modest financial return but they are really looking for the social impact. Its a weird thing to think about getting a return on money youre hoping to give away for philanthropy. Maybe that draws in more people but it makes you take a step back and say, wait a second. It does. You have to recognize that its a win win. In india a year ago i met a woman paying 20 rupees a day for her family to get water from water vendors that sell water. They are paying 20 rupees a day for a family of five to use a public toilet. They took out a loan for a water connection and toilet in their home. The repayments are 1,200 rupees a month. Its exactly the same as what they were paying before, but after they pay off the loan after 1 1 2 years, they are free and clear. It seems like it might be onerous to look at a financial return to help these folks, but they come out way ahead. How quickly do you think you can ramp things up . We launched the water Credit Investment fund. Well be able to start taking investments next month. We are targeting 12 million. We already have an express demand among our micro finance partners of more than 36 million in india alone. I think that by next year, we will be able to have this capital deployed and have people working against this. How much is it about preventing disease and how much giving the dignity of just having equipment . What did i miss . Now he shows up. Matt, thank you for joining us this morning. Thanks for having us. Im sorry. I know you had to rush to get here. This is the fastest ive ever moved through the sheridan. We were just talking with gary. Hi, matt. We met. Yes. We were in europe or something. We hung out in europe. We think about the disease that is caused by not having access. Its not all just about disease. Its not. Disease is huge. In fact, they were publishing about malnutrition and stunting. A couple of years ago they didnt mention sanitation. Now sanitation in these slums is becoming a huge factor in m malnutrition and stunting. Also safety. This summer two, young girls in india out looking for a place to defecate at night were raped and murder, just because they didnt have a toilet at home. There are so many factors that play into this. Matt, you are corporate partners. I assume its not hard for you to get on the phone. If you call up a ceo and say i want to get involved. Pepsi is involved with you. Who is on your wish list . First, id like to acknowledge the list we have. Pepsi and ingenuity have been incredible, the pepsico foundation, caterpillar, ikea, mastercard, they are big. I think what they respond to besides the robo nerd next to me is the approach we are using which is just moving its identifying the fact there is a market for these loans with water credit. Its nudging the system towards these people and letting them participate in their own solutions. Not treating them as beneficiaries bu rather as customers. They respond to it and when they see it working pepsi was the first one in with us. They were instrumental helping us prove this concept. Now other people are jumping in. We are looking for obviously institutional investors. We are also looking for brain power. Its an incredibly complex problem and exciting and interesting to engage with. So you look for the kind of people who, we are not looking for the hes why i money. We are, but no we are looking for people who want to come help us solve this. The solutions are there. Its just that its about we solved this in the west a hundred years ago. We know how to solve it. Its not a onesizefitsall strategy. That makes it for us very interesting. What is something that seemed like a stumbling block at the time but you all learned from and changed your approach as a result . Well, gary has been doing this for 25 years. A lot of us. I think thats a good point. Its important, nothing gets done unless you try a bunch of things out. Half the projects, the water projects in the world fail. What we want to make sure is not failing for reasons other people failed before. We do want to try new things. We have this new ventures fund. Its all about pim with an appetite for risk kind of getting in early on some of these ideas and trying a bunch of them out and piloting them. Some of them wont work but some will. Water credit is great. American standard, the toilet maker made something for 1. 50 that goes on open pit latrines that makes eit a closed system. Undoubtedly saved countless lives. You are doing a totally different thing. It is and isnt. It can be a complementary technology. Thats what i mean. You can package that with a toilet loan. Guys, we are about out of time. Matt, you mentioned trying new things. What about trying old things . Are you going to be jane bourne again . I hope so. We are trying to figure out a story right now. Is Jeremy Renner out . What happens to him . No. Thats parallel. Ill rush you. Maybe after we are done. Gentlemen, thank you for joining us today. Dont miss our conversation with former president clinton. Right now its time for squawk on the street. Good morning, welcome to squawk on the street. Im david faber with jim cramer. Don quintanilla has the day off. If you are short the market, it wod