Transcripts For CNBC Squawk Box 20151029

S p up by 8. The big headline we should tell you about, the biggest, of course, joe was making a joke before it began. We wont make that joke on air. Pfizer in talks with the wall street journal, with allergan. It would be a blockbuster deal if this were to take place. You are arguing whether there are synergies. There are definitely synergies. It is basically taking the marketing machine. I know where youre going with this. A marketing machine that is pfizer and allergan. The real issue is whether the regulators would allow this. Both stocks indicated higher. It continues with the trend we have seen about the Companies Even trading higher. What would regulators see here that would i dont see what market youre trying to corner. Its not me. Youre going to use your helmet equation again . What is that . Thats eurequation. You know all about that garner share. Matt meantime, back to the debates. Two rounds with the gop feel. Senator Lindsey Graham stole the show. Then frontrunners ben carson and donald trump taking center stage. A quick roundup of some of the highlights. Listen to this. We cannot elect somebody who doesnt know how to do the job. If we dont act now, we will be the first generation in American History that leaves our children worse off than ourselves. Were going to build a wall, create a border, let people in. Baugh theyre going to come in legally. Almost 60 of American People need to hire an expert to understand their taxes. This is the unwholy Alliance People need to know about between right and left. Right and left are spending us into owe bolivian. If somebody already has stolen money from you, youre going to give more . Tell me whats different between the deposit and Bernie Madoff who sits in prison for less than what the government has done to people on Social Security and medicare in this country. Okay. Hyperbole there. Which candidates did the most for their case. Morgan stanley managing director and former u. S. Congressman and republican strategist joe watkins, in the george h. W. Bush white house. Cut to the chase with you, joe. Jebs last name is bush. It is not on any of the signs. I think almost universally there was at least some disappointment in bush backers and thought it wasnt the greatest night for the governor. It was a tough night for him. Not that he did so badly. I think marco rubio did a great job rebutting the question about his attendance in the senate. I think rubio had a particularly Strong Performance last night. And so did Chris Christie. And ted cruz did a great job as well. The question is whether or not any of that will move the chains. Doing a great job and moving the numbers up in iowa and New Hampshire dont always coincide. I wouldnt be surprised to see foreign movement in his numbers in the coming week. And then maybe a little bit for christie as well. Carly fiorina moved up last time, and then pulled back. Kasich got a little bit of traction, and then he fell pack. Rubio maintained some of the gains from the last debate and then i think extended those last night. Would you agree with that . I would agree. Good to see joe. If i were advising anyone other than carson and trump, there is still a big part of the Republican Party not sold. Half of the party is not there. Look how kasich, cruz and rubio, i would agree with the assessment joe offered. The challenge i think governor bush has is that he is a somber kind of guy. He is not a guy to take someone on. I wish he had. You wish he hadnt tried to take rubio on. That is not his strength. Its when he and kasich had a discussion on medicaid. Thats where he shines. Frankly, so does kasich. But overall, i thought trump did fine. If you were looking objectively. Carson, who i dont always understand, how his performances yield the kind of result it does for him in the polling. He will probably rise in the polling. I thought he would drop. But i thought trump i agree with you. Every time dr. Carson gets lost, he jumps in the polls. I think it is the way he comes across. Cruz had a good night. Christie had a good night. Paul jumped in and tried to answer questions around taxes and other things. He was very serious. When he addressed the answer, there might be something to be said for not trying to one of the things you worry about is being perceived as a bully or blow hard. I thought he laid back and was pretty effective. As a frontrunner, youre in better position to do that. I dont think donald trump did anything to hurt himself last night. I think he did a good job. And his camp will be very, very pleased. Again, when youre the frontrunner, someone has to knock you off your perch. I dont know that anybody knocked ben carson or donald trump off their perch. They had pretty solid performances for them. Rubio i think moves up. All of them cant win. Thats correct. And theres so many of them. Right. I think Carly Fiorina had a decent night. She had a lot of airtime. She had a solid performance. I dont think she moved the chains any. The same could be said for a guy like kasich, who is a sharp guy. I agree with harold, he didnt move the chains. Governor bush didnt move the chains last night with his performance. Hes a substantive guy. And the same could be said for rand paul. Huckabee did a good job. I dont see him moving the chains either. I dont see him gaining any momentum. He did a good job is. He had some memorable lines. It is the memorable line. They were all looking for that last night. Rubio had the best night. Again, if you were thinking how do we coalesce this establishment vote around us. He proved that he could take jeb bush on. He proved that he could take hits even when the questions were direct and probing about his personal life. One of the better moments is how he lives this economy which resonates with voters, republicans that is, but even those outside the Republican Party. Why dont we listen to that exchange between bush and rubio. Marco, when you signed up for this, this was a sixyear term. You should be showing up to work. Literally the senate, what is it like a french workweek, you get three days where you have to show up. You can campaign. Or just resign and let someone else take the job. There are a lot of People Living paycheck to paycheck in florida as well. They are looking for a senator that will fight for them each and every day. I dont remember you ever complaining about john mccains vote record. The only reason you are doing it now is we are running for the same position and someone has convinced you attacking me will help you. The great lines are spontaneous and serendipitous. Ronald reagan says im paying for this mike. You dont sit in a war room before the debate when handlers tell you, hey, the french thing. I was totally uncomfortable with that. Thats not governor bushs strength. Especially if its out of character. Marco was ready for it. He wasnt surprised at all by that. Are you, harold, when you see christie, you realize this is a man they dont go to him very much because hes been on the outside. This is a man with serious political skills when you watch him. No doubt. Unbelievable. I think when it turned to gambling or football, he had a nice way to get back into it. Clearly predigous political skills. Conservatives dont like the obama hug . The bridge thing you mentioned two things there. Bridge. Number one, it wasnt him. Number two, in the worstcase scenario, it doesnt rise to the scandals your candidate is dealing with. Fair enough. For christie, you mentioned two things he may be dealing with. When you think about the performance in new jersey, you see kasich last night talk a lot about how his fate has made progress and handling health care issues. You dont hear governor christie talk about the record in new jersey. It may be a good one but he doesnt talk about it. Like with fracking. Then he went to Lehman Brothers. Any gains you made you lost Lehman Brothers was unfair, though. He got some of the facts wrong. I know. Two or three major facts wrong. But when you say Lehman Brothers, like a lot of just average viewers are like what yeah. But you cant accuse people of things that arent real either. Yeah. Well, you can. My point is bush and kasich have records they can talk about. They talk about it often. If i were jeb, i would talk about how they manage natural disasters, the health care and Education Progress that the state has made. So i think with governor christie, i have not heard them talk about that part of his political past as some of the others do. Governor christie, the attraction is he is the republican governor who was elected and reelected in a blue state. Right. And he has done good job as governor. If we can get past these primaries, he is a very attractive candidate. I dont disagree with that. How do you see this playing out in iowa . There is a lot of maneuvering. Carson looks strong. Trump is still strong in the polls there. Ground game. Ground game parties. It does . Right now so far ben carson has serious ground game. Dont underestimate donald trump. They brought him to second back in 2012. So you have strong ground games. Im sure huckabee will have a significant ground game there. He did in 2008. He won iowa in 2008. Ground games is what really matters. Who was on the stage last night with no infrastructure. We dont really appreciate the behind the scenes there isnt anything. I think they all have infrastructure. Everybody has a team. But whether or not that team is going to be effective in terms of getting them visibility in the Iowa Caucuses and moving on to New Hampshire and winning that becomes the big debate. Remember, the iowa caucus winner in years past has not ended up as the nominee. 2008, huckabee won. In 2012, i think it was santorum that won. Neither ended up being the no, maam any. I think dole won. And george h. W. Bush became the nominee. But you have to place well in the eye of the caucus and then you have to come out of iowa and win New Hampshire. Thats the key race. New hampshire winner has been the nominee in the last several cycles. Thats what matters. Having ground game, staff, people moving from one place to the next and last you through all the primaries will make the difference in all of these candidates. You and joe are doing so well. We didnt know this. Can you stick around . I think we can. You said, joe, its good to see you. I felt good for a second. But you were talking to him. Im sitting here right in front of you. Harold and i are old friends. I thought it was a universal good to see you. You said, joe, its good to see you. Then i see you are looking over there. We have known each other 30 years. Hes an old pal. As you are, sir. Programming note, 2016 president ial candidate. Senator marco rubio will join us at 7 20 a. M. Eastern and talk with other serious politicals. We used to have one a couple years ago. Almost like a debate champ in high school. He looks like a president ial candidate. Governor Chris Christie will join us. I dont think either of these guys try to get back here to be on set with us. We managed to do it, becky, they will be on remoats. It is pretty early where they are. Coming up next, we are about to see, or are we, a big mega deal in phrma. Reports swirling about pfizer and allergan. Its the inversion element. Someone messaged you. And joe taking center stage nabbing the huge interview of the post debate. Donald will be with us in his own words. First, check out this day in history. The number one candidate thought she was flat broke after being in the white house eight years. The number two guy went to the soviet union on his honeymoon and i dont think he ever came back. If we dont beat these people, who the hell are we going to beat . That was senator Lindsey Graham taking aim at the field that the democrats are putting up. I got up on the stage to talk donald trump. We talked trade, the dollar, and china. One of the biggest problems i see is somebody that thinks into the future. Its always like a oneweek window. They Start Talking about it. As you know, and i watch your show all the time, you Start Talking about it because the pressure about a week before it can comes due. They should Start Talking about it tomorrow for nextee. Thats the kind of deal you Start Talking about it. They start a week before it comes due. No. They should have cut. It is too fast. And its too much money. Last but not least, there are times when conservative and poulism treads on both. Could it be done where free trade would be opened up. Reduce tariffs. It could raise a lot of people out of poverty. Yes. But they have to put certain manipulation clauses. The single greatest ripoff is through currency manipulation by japan, by china. By everybody, joe. They dont even discuss it. Yes is, but they have to talk about the number one problem we have, which is currency manipulation. By the way, nobody does it better than china. What if they say you are unable to raise Interest Rates. Youre holding your currency. Well, i do not like seeing this dollar situation. Look whats happening with caterpillar. They are not exporting because it is so high. I like a strong dollar in one way. It is going to cause tremendous havoc with respect to trade and exporting. We are going to have a tremendous problem. If i want to buy something in europe, its fabulous. But i would like to spend my money in this country. Just watching that, one on one trump is you get an idea sometimes how people theres a lot of charisma and sort of a power there with him. He took selfies with every person that wanted one. The situation with the veteran or the military guy, in the room with him you get a better idea than people out in tv land think of the apprentice. But he has political skills as well. He toned it down last night. And joe mentioned this as well. If i were in the trump camp, i would be advising him to surround himself with some Foreign Policy experts. Yep. Some others whom people can look to. If you believe he can be bombastic or out of control with his comments, you want to have some comfort and confidence that he will be seasoned people, smarter people than him in areas where he does not have expertise. I thought he has had as good a debate as he has had. Donald trump is best when trump is trump. You can see in the enter is view he had with you. Who is not going to believe somebody who created a multibillion dollar fortune. Donald trump is really playing to his strength, his ability to understand the economy, his talk about creating jobs, by being tough with potential trading partners. Hes at his best when he is doing that. If he remains trump, hes in good shape. He has a higher percentage of locked in voters, supporters than any of the other candidates. Over 50 of his supporters are saying they have already made up their mind they are going with trump he wants to maintain them. Only after he toned it down did it show him number two. I asked that. Should you be the trump about the Rosie Odonnell stuff or the managed what was that . I didnt see the entire interview he said i need to be myself but i toned it down a little bit. He did reference his wife. She was leaning on him a little bit with that too. The real version. His twitter handle is the real donald trump. Is the toned down for more bombastic. I think toned down is still pretty toned up for most people. We have a couple more clips we want to show you. A couple more clips from last night. The candidates took aim at democratic frontrunner Hillary Clinton. What we dont need to do is to send more money to washington, d. C. To fix this problem. And thats what you hear from Hillary Clinton. And ive already heard from her. Accepted more money in Social Security, send more money in medicare, send more money for medicaid. I can assure you im Hillary Clintons worst nightmare. In your heart of hearts you cannot wait to see a debate between Hillary Clinton and Carly Fiorina. I will tell you this, i will beat Hillary Clinton. How effective is it to go after its effective broadly speaking to go after hillary. But when youre on stage in a debate setting when youre trying to differentiate yourself, do you help were yourself doing that . Well, you get on tv. You get on the clips the following morning. When you have that many people on stage, you have to do something to distinguish yourself and win some coverage. I dont believe i believe perhaps the americans to believe, she took on every political foe and even someone in her open party. But, again, it puts her shes on primetime. It is much safer to do that than attack each other. No one is going to say, gosh, she took hillary on. Not in that room. For that amount of voters in New Hampshire and nevada. To joes point, you look at the map this year. It is a little different. From february 1 to march, the first week in march. You have 12 contests. So you do well in iowa, you get some momentum. Nevada, south carolina, they are all right behind and really on top of one another. If youre Carly Fiorina, that helps her get on television. Ted cruz went after the media. If you advise, those are the things that you do. What were you going to say, joe . I think Hillary Clinton had an excellent performance last week. And i think that taking on the media, make the media the big bad wolf is popular in these debates and an easy thing to do. Rubio did it especially well. And so did Chris Christie. And cruz had that line ready to go. Dont tell me that prepared. Of course. Dont tell me that wasnt prepared. But im thinking about all of this. I guess im amped. The whole country is tuning in. I can remember when bush looked over at al gore who was sighing. I remember that moment. But i dont remember watching two hours of the debates in years past. I dont. Three or four or five in a row. Its got to be good for say what you will. These guys got to weigh in on a lot of issues last night. I just my daughter was watching. She had definite opinions. Rubio and christie killed in. Shes 15. She cant vote yet. Thats what you want. She can vote in illinois, right . Three or four times, i think. Thank you, guys. Thanks for having us. Thanks, joe. Thanks so much. Great to be with you. When we come back this morning, the fed may deliver a rate hike in time for christmas. The signals that janet yellen and company are sending to the markets. Plus, senator ted cruz takes a shot at the central bank. What he said about the fed right after the break. First, though, check out the futures. They are lower this morning. Down by 65 points after the dow was up 200 points yesterday. Squawk box will be right back. Excellent looking below the surface, researching a hunch. And making a decision you are type e. Time for a change of menu. Research and invest from any website. With e trades browser trading. E trade. Opportunity is everywhere. On wall street, sit doing great. The highest since 1928. The fed should get out of the business of juice issing our economy and simply be focused on sound money and monetary stability ideally tied to gold. That was senator ted cruz taking a shot at the fed. A perfect time of course for us to talk about what the central bank did yesterday afternoon that really made the markets jump. Steve liesman joins us. What do you think . You guys have been rolling highlights of the debate. I want to roll highlights of our fed coverage. Cnbc viewers, it should not have been a surprise to you. In the three days leading up to the meeting, i want to play this of evercore. The statement will be slightly hawkish in the accepts that they are getting back the flexibility for december. The market is increasingly hiking out this year, is it pricing out. Steve, i would certainly, sitting here this morning, would see the risk at tilting a little more in the direction of it being slightly more hawkish than people are expected rather than leading downish than people there expected. Staying in determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress on employment and inflation. The previous statement left it openended. Is this now a done deal . Whats it going to take for the fed to finally hike . Not very much. Fourth Quarter Report at 8 30. That should be around 1. 7 . It will make the three quarter average around 2 . It only has to be a pedestrian 2 to keep it going. The job market can produce just around 150,000 jobs monthly. Slightly less to keep the Unemployment Rate steady or slightly falling. Global economies just need to not be getting worse. The fed is still data dependent. I think the fed will feel something of an imperative to use that ability. You cant go back and forth. The markets positive reaction to this. We have been thinking that the market was back to the point where it wanted to hear bad news. It knew the fed was going to stay in there. It sounded like the fed very well may hike in december. Let me just qualify my answer. It depends on which side of the bed the market wakes up on. It is excited when the fed is not going to hike. Yesterday was the other side. Whichever side that was. It didnt hike. It went down. So i think the market is okay with this quarter. I think theres a sense of pain relief of get it out of the way. But what is clear is the market was on the other side. You have to be a little careful here. The fed wants the flexibility. It wants a that 50 thing. If the economy ends up being okay. Or doing Something Else. But did they actually take out the whole sentence about looking around the world to see whats happening . Yeah, they did. They took it out . There was a tacit admission they went too far. They overemphasized. They said they are monitoring Global Financial developments. In the september meeting they said they were really worried about financial developments. They were concerned it would hurt the outlook for inflation. They dramatically downplayed. Youre telling me cyprus declined 10 that will will not hold them back . Not any longer. Wow. It is interesting you picked that exact thing they are looking at. For example, productivity in morocco. Exactly. So do you think they are really not looking at all those things or they are not going to tell us because they were so heavily criticized . I think they felt they went too far. They felt they remember a little bit overly responsive to the gyrations in the market. And i think they wanted to deemphasize that. Look, i think they got caught up what we all got caught up in. Things stabilized. The bank of china. And i think things have stabilized. Markets have stabilized. I think this is a go ahead. And i think we are going to debate now what it will take to make the december rate hike happened. My take is not very much. Im thinking about the feds credibility here. You took it off the table. Now its back on the table. We talked about it yesterday also. This notion of the emergency rate cuts, getting back to a more normal level. Okay. We could talk quickly tonight. Andrew ross sorkin will be an honoree at the council of economic educations and you will be the host. I will present andrew an award on his efforts on behalf of financial literacy. There are some other nominees. Bob schiller. It is about teaching teachers how to teach economic and finance to kids. It is al going rhythmic alley. I get to see you in the morning. Hopefully not too late. Some say theres too much steam. Never enough steam. Where is this . Its at the hotel. Youre invited, joe. Im giving you tickets to tonight. Let me check my schedule. I mean, i would really like to be there. You know what, joe, dont bother coming. Just send a check. There you go. Just send a chuck, and you will be fine. It will be in the mail. Thank you, steve. A check of the markets this morning. As we mentioned, the futures this morning are a little bit weaker after big gains of yesterday. Take a look. The futures are down. They are off worst levels of the morning. 50 points off the dow. S p futures a 5. 5 below fair value. Nasdaq down 14. In early trade anything europe, you will see most of the markets there are in the red too. Cac is down 3 . Nikkei closed slightly. Hang seng down 0. 6 . Shanghai up 0. 4 . A gain of 2. 74. This morning giving back 33 cents. Wti at 45. 61 a barrel. In the bond market, 2. 09 percent is where the yield stands. If you want to take a look at currency, steve, the reaction yesterday with the dollar, it was up pretty sharply right after this announcement. You can see this morning dollars down. It is sitting at 109. 54. Gold down, 1,159. The Fourth Quarter comeback, is it something investors can believe in . Thats next. Plus, a ton of headlines. Earnings, possible merger deals. All coming up on squawk when we return. Cannot be controlled. When a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. Faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. Thankfully, mary miller banks with chase for business. And with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. Chase for business. So you can own it. Welcome back to squawk box. Time for the squawk planner. 8 30 a. M. Eastern time. First report on gdp, expecting growth of 1. 5 . The release of weekly jobless claims coming up. At 10 00 a. M. , the latest data on on pending home sales for the month of september. After the bell, we will get earnings reports from starbucks, linkedin. And a possible blockbuster far a ma deal. Pfizer and allergan in early talks. Talks may not lead to a deal. The maker of botox up on this news. And shares of pfizer are also on this news. One, price. But were talking about the policy issue. I mentioned antitrust issues. No, no. I do think it will factor. But the political issue at the moment. They already tried it. They tried to do an inversion with astrazeneca. So this is the second effort. Exactly. Allergan is based in ireland. This would in effect be an aversion. Ian reed has been on talking about he says i can either pay a billion extra in taxes here or spend a billion on research and development if i have a place with a lower tax rate. He is very clear about that. He doesnt shrink back. Like it is unpatriotic to put the billion in the r d instead of uncle sams pocket. Do you think a deal like this would be allowed with the regulators. Well, the regulators cant decide they dont want to do it. They can change the tax laws. It didnt work. You know what they need to do. You heard a lot of it last night. They need to do Corporate Tax reform. I would not dissuade you. I do not think you do. I think there should be a territorial tax system. When it comes to health care and medicare and medicaid. Oh, by the way, the government is the largest buyer of drugs you would think they would have some pressure to bear in this negotiation. Look, the medicare ought to be negotiating drug prices. But you know why they dont. To get the Drug Companies to sign on to obama care they had to give that away. Theres a lot of crony capitalism that is hurting the way things are. Anyway, lets check on some stocks to watch this morning. Buffalo wild wings reported quarterly profit of a dollar a share. Shy of on estimates. Missed the mark. Look at that stock. And less than analysts were anticipating. Wasnt the First Quarter where there have been some problems. How much the input prices were. Chicken prices went up because of the avian flu. Exactly. Thats 14 . And gopro missed estimates by 4 cents, earning 25 cents a share. Gopro hit by less than expected demand for its new line of wearable cameras. And amgen, well within the estimates of 2. 38. It raised its outlook on its argument its drug. The fed sends a telegraph and the markets receive it loud and clear. It may finally be ready for liftoff. Exactly one month ago. Our next guest saying on our show his market models were a great hike in november. Joining us is the chief investment strategist at raymond james. What are they showing right now . They have taken the november off the table. It looks like it was going to be in december. My guess is its not going to be in december. It is not fall off a cliff. It is slowing. The fed looks like it will not take the punch bowl away. You have this model that you told us about. I always try to quiz you whats in the middle. But when does it show the fed raising rates, then . In the First Quarter of next year on an improving economy. We think the gdp here will be less than 1. 5 . So is that january, february, march . What are we talking about . Thats what were talking about. Sometime in the First Quarter. Again, the economy is slowing but not falling off the cliff. I can tell you the bottom within days. Can you give us a little more speci specifity. Becky said nobody comes on and says the market bottoms today. And thats when it bottomed in late august. The model is calling for a trading top this week or the first three days of next week. Trading top. And youre doing what as a result of that, then . Were sitting on 20 cash right here. We reinvested amount of cash down around the august lows. You got a subsequent rally. And a retest which is what is supposed to happen. Right here we are being more cautious. The markets are overextended a shortterm basis. You think we will end much lower . I think you come down and trade higher into year end. And do you literally play the markets on a timing basis based on how this model works . That is more that is more of a tactical is trading side. I have stocks i have owned for 15 years in this business. So i know a lot of rich investors. I dont know a lot of rich trade else. I do think there are times when you can play hard and times when you should not a play so hard. And right now we dont think you should be playing as hard as you did at the august and september loads. They said they will raise this year. They didnt say it explicitly. By all indications. You saw what the dollar did versus the euro. How do you account for that . That looked like traders at least thought that the fed was much more hawkish than they expected. Comments . Yeah. We have seen those moves. Yeah. We have seen those moves before. I would use the old stock market saw that our opportunities lie between perception and reality. And yesterday the perception was the fed is probably going to raise in december. It doesnt look to me like that is going to happen now. I think it is a wrongway move on the dollar. If it stays here or gets even stronger, your in the First Quarter next year might be a little suspect if the dollar continues to strengthen. And then once again if the dollar continues to strengthen. Then they worry about raising again of the thats the vicious circle they are in right now. Exactly right. Painted in a corner. The estimate from last year was 127 bucks for 2016. Will be tough, especially if it was 105, right . All right. Thanks, jeff. You got it. Thank you, by the way. Courageous end right call over the summer and see whether its this week or next week is the top . Yep. Okay. Well see about that too. Thank you again. When we come back. The army blimp that caused a stir in pennsylvania and last nights debate. That story right after this quick break. Jake reese, day to feel alive s. Welcome back, everyone, watching u. S. Equity futures, and after a big day yesterday, the markets, theres give back. Futures down by 63 points, s p down by 7, and nasdaq down by 19. A run away blimp is safely on the ground in virginia. It was untethered, was unmanned, hitting power lines causing outages. No word yet on how it escaped. The pentagon scrambled jets to watch the progress, but it came down on its own, but it caught the attention of Mike Huckabee in last nights debate in boulder. If you saw that blimp cut loose from maryland today, thats a perfect example of government. What we had was something the government made, basically a bag of gas, that cut loose, destroyed everything in its path, left thousands of people powerless, but they couldnt get rid of it because there was too much money invested in it, and we had to keep it. That was our government today. We saw it in the blimp. Thats exactly what we saw. Pretty cool. Uhhuh. It was a good analogy. It was. There were a couple other funny analogies well talk about. Coming up, dust settles in boulder, and senator rubio is joining us in a half hour. Well talk to him about his thoughts post game, if you will, back in a moment. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. The battle in bolder. On the end, and he got nasty, he got nasty, so, you know what, you can have him. Trump would be a better president any day of the week, twice on sunday, better than Hillary Clinton, ive spent a lifetime in politics fighting the clinton machine. The debate. And rubios message for voters. The time to act is now. The time to turn the page is now. If we dont act now, were the first generation in American History that leaves our children worse off than ourselves. The markets, the fed turns hawkish, and stocks soar. Now the countdown clock to december. Will the Fourth Quarter comeback roll along . The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide, its 7 00, an hour under our belt. Were a little tired. We want to check the markets. You can youre staying today . Im staying. You are . Im all in. Were leaving at 8 00. While prepping for the debate, they opened the door on a possible rate hike in december. The markets taking that as a bode of confidence in the economy and stocks surged in late trading, up nearly 200 points. Makes me nervous to see the fed, like leisman said, oh, maybe we were considering the rest of the world a little too much last time. Wow, lets take out that statement completely, and then maybe try this to see how the markets react. I mean, get out. Please. Big part of our life. Lets move on. Can we move on . I think they are giving the signs because the criticism was they could not raise rates yesterday because they had not set things up. I know, i know, i know. Thats where we were building. Starting to wonder. Im starting to wonder. Are we good at this . Do you have confidence still in i know you love that bernanke book. I dont know. I dont know. Its possible. Right now, andrew theres more to do today. Checking the futures, oh, here we go. There are other futures down 57 on the dow, 6 on s p, and 19 on the nasdaq. Now lets get to app drew with the rest of the 7 00 hour. Okay. Andrew . Take a quick nap, guys, they have been up late, flying back from colorado. Lets tell you whats going on. The focus on the president ial debate, we have the first read on Third Quarter gdp at 8 30 eastern. Looking for a 1. 5 app newel growth rate. The deal news, pfizer in talks for a merger according to the wall street journal, may not result in a deal because of issues over price. This would be an inversion in that allegan is in ireland and political wins have impacts on whether a deal like this goes forward or not. Uaw local leaders approved the labor deal with gm and goes to the rank and file for a vote. The fouryear deal covers more than 52,000 gm workers. Back to the debate, group of ten with ben carson and trump taking center stage. Heres what the candidates had to say about washington distrust. 75 of the American People think the federal government is corrupt. I agree with them. I asked everyone in america to Call Congress tomorrow and say, enoughs enough. No more debt. The government has lied to you, and they have stolen from you. They told you that your Social Security moneys in a trust fund. All thats in the trust fund is a peel of ious. If the country does not keep promise to seniors, then what promise can the country hope to be trusted to keep . Joining us now to talk about this, is the former governor of michigan, Senior Adviser of correct the record, and, of course, eric cantor is joining us to morning, former House Majority leader, currently the vice chairman, and good morning to both of you. Good morning. Morning. Good morning. Winners and losers from last night, governor, starting with you. Well, i think jeb bush, i mean, as everybodys been saying, he had just a lackluster bland, blah, really just so low energy night. I think, also, you know, i would say that, obviously, marco rub rubio had good moments, but what i was interested in, and this is your business, right, meaning this economic debate, the economic discussion last night i found to be incredibly disappointing. I think John Harwoods question to donald trump about how to pay for the 10 trillion deficit that would be created, which went unanswered, and jeb bush pointing it out, and bushs creates 3 trillion in deficit. Every single one of their economic plans creates massive deficits, and yet they were complaining about debts and deficits without saying how to pay for it. That, i think, was what made them all a loser. Eric cantor, was this is turning point for anybody either on the good side or bad side . I felt as a viewer last evening that it seemed like there was more pressure on some of the folks, they felt that this was a moment they needed to break out and that this was sort of game time in a different way than i had seen previously in terms of just how they went at each other. Well, you know, i think youre right. Certainly, the volume was turned up. We have eight more of these. This is a trend that will continue, and, you know, this is a long haul. We know theres still about three months until the first voter goes into a ballot booth or caucus room in iowa. It is a long haul. It is a marathon. The voters who are looking at their choices certainly on my side of the aisle, are going to continue to see, hopefully, more thorough discussion about the solutions that need to come forward to clean up the mess and fix the mess caused by this president s policies in washington. Play a name game with me here, congressman. Help us understand in terms of shake out. There has to be one sometime. Were waiting for it. Did anybody shake out last night . You know, i mean, i dont know yet. You know, were in a really different kind of season now where theres a lot of money, obviously, i think that some of the candidates and i know as a support of jeb bush, hes got the resources to sustain the long haul here. I mean, theres no question that in the early states, there are candidates who are readying their troops. Obviously, jebs got more infrastructure in the early stage than anyone else. Congressman, were you disapoidisa poin disapoi disapointed about his energy . There was a back and forth with marco that did not end well. Listen, it was a tough night, no question about it, but remember, you know, you dont win or lose a campaign in a single debate. If you look at proposals there, theres no more thorough or thoughtful plan on the economy than jeb bushs, and, frankly, he has the resume and experience and only one on the stage with eight years of experience to demonstrate hell go to washington and fix obamas mess. Thats what it comes down to. Governor, were going to be talking to another governor, governor kris kentechris christ next hour. What do you think of his performance and given the numbers or lack of numbers seen in the polls recently, does he stand a chance at this point . Well, first of all, he had a really good few moments. When he looks at the camera and addresses people back home, facetoface, hes the one guy who gets there are people out there who are doing real jobs who just want to hear about what these candidates are going to do fighting for them, and chris christ christies the one candidate that at least looks the people back home in the eye and says this is about you. You see these candidates last night, they were fighting the moderators, fighting the mainstream media, fighting each other, but they were not fighting for, you know, the average joe, the average josephine out there. They were wondering, whats policies to help me . Its not about cutting my Social Security or medicare or tax cuts for the rich or eliminating the estate tax, which im not passing on to my kids because i dont have an estate, you didnt hear anything thats going to respond to them. That, i think, makes Chris Christie have the edge on them, but, of course, scandal on bridgegate is something that anchors him down, i think. Well play sound right now, react to this. Theres no love loss between Ohio Governor and trump. Check out this exchange from last nights debate. Folks, we got to wake up. We cannot elect somebody that doesnt know how to do the job. You got to pick somebody who has experience, somebody has the knowhow, the discipline, and i spent my entire lifetime balancing federal budgets, growing jobs, the same in ohio, and i will go back to washington with my plan, and i thank you, governor. And the senate within a hundred days, and it will be passed and be strong again. John was lucky with a thing called fracking. Okay. He hit oil. He got lucky with fracking. Believe me. Thats why ohios doing well, and thats important for you to know. Number two, this is the man that was a managing general partner at Lehman Brothers when it went down the tubes and almost took every one of us with us including ben and myself because i was there, and i watched what happened, and Lehman Brothers started it all. He was on the board. He was a managing regime partner. Okay. Thirdly, he was so nice. He was such a nice guy. He said oh, im never going to attack. His poll numbers tanked, thats why hes on the end [ laughter ] and he got nasty. He got nasty. You know what, you can have him. Governor . Yeah, let me just respond. First of all, ohio does have an energy industry, but were diversified, one of the Fastest Growing states in the country. We came back from the dead, and you know what, it works very, very well, and, secondly, when you talk about me being on the board of Lehman Brothers, i was not on the board of Lehman Brothers, i was a banker, proud of it, and traveled the country and learned how people make jobs. We ought to have politicians who not only have government experience, but know how the ceos and the job creators work. My state is doing great across the board, and guess what, in 2011, i got governor i got an agreement he tried to take credit for it four years later. Its a joke. Oh, its a great exchange. Governor, curious about your views about that exchange. There was a little bit of a fact check there by mr. Casic that he was not on the board of the Lehman Brothers, but as the donald would say, you can have him. What do you think . I tweeted that exchange. He came out swinging, right, and donald came back swinging, and that set the tone for a debate where you had candidates swinging. Can i just say, you know, this fighting one another about their credentials, you knew that would happen. I really was longing for detailed or at least some specifics how to create jobs in america in a global economy. They spent a lot of time attacking the president , even though weve had 60 straight months of job creation, even though from 1961 to today, under republican president s, the United States has created 1. 1 million jobs a year, and under democratic president s, they created 2. 1 million jobs a year. The republicans seem to have a math problem, whether its reducing deficits, whether its job creation, they have not been able to articulate specifically, certainly in this round of debates, what they are going to do to create jobs, good paying jobs in america in a global economy. Thats where they have to speak to real people. All right. Eric, real quick, mr. Casic, did he acquit himself well last night . Listen, he certainly came out swinging, and theres no question that he was not response evidence to the first question that was asked, and he had an agenda to go after it, but, you know, listen, you know, to the governors comments, listen, there was a lot of noise in last nights debate, but that was my point, i mean, if you want someone whos got the solutions, and a resume thats indicated results, not rhetoric, thats where i was looking for governor bush to go out and talk about the plans that he said, hey, they are out there, and jeb 2016. Com, hey, youre right, we have to solve the problem for everyday working middle class americans, who, frankly, under the Obama Administration policies are not having a wage increase. I mean, thats the issue. Some of the frustration thats come out from the various candidates on the stage are reflecting the kind of frustration thats out there across the country that weve had a lackluster economy under r and the fact that washington is, frankly, paralyzed at this point, and you need a leader that can go in there and work with both sides to produce a result for working middle class americans. Thats what this elections about, ultimately, thats what the primary election is about as well. Hey, leader cantor, that was a past life. Anyway, leader cantor, our buddy made good, paul ryan, look at him go. What do you think of that then i was thinking, if you look at that, jeb bush said, you know, i could be doing fun things, who needs this. I bet you say the same thing, around you . Happy for paul or going, are you sure you want to do this, congressman . I have an opening, what do you think . Listen, paul will be great. As you know, he was reluctantly pulled into the position. Hes a policy wonk and wants to craft and reform the tax code and, obviously, working on budget matters, but i think hes going to be great because paul starts with an ideological core thats based on limited government. Hes been a real leader on things, fiscal matters in the house, and, you know, unfortunately, though, you got a dynamic where barack obama is in the white house, unwilling to sit down at the table to compromise, and, you know, we got to look towards this election to see how we can forge some consensus to go about solving the problems and get back on the path to growth, which, frankly, was what last nights debate was focused on, how do you grow the economy . All right. Leaving the conversation there can i governor, we have to run, but it was great to see you, and we hope to see you again very soon. Congressman, governor, thank you. Coming up, rubio came to play in the debate. His message for voters coming up in minutes live from colorado. And then later, who got it right . Who got it wrong . Well fact check the candidates claims. Thats all straight ahead on squawk box. Welcome back, everyone, watching the futures this morning, red arrows, dow down by 66 points, s p off by about 7, and nasdaq down by 22. Mgm resorts announcing plans to create a Real Estate Investment trust containing temperature of the casino operates properties and consumes 4 million of debt. They had a profit of 12 cents a share, well above what the street had been expected. They looked for 4 cents. It also said revenue beat analysts estimates as well. Coming up, the senator from florida and president ial candidate, marco rubio is live from colorado. As we head to break, take a look at the number of candidates, number of mentions each candidate got on twitter during the debate last night. Senator ted cruz stole the spotlight leading the pack with nearly 120,000 mentions. Time now for todays aflac trivia question. What was the chief use of di lithium crystals in the star trek series in the answer when we continue. When a moment spontaneously turns romantic, why pause to take a pill . And why stop what youre doing to find a bathroom . Cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use. Insurance coverage has expanded nationally and you may now be covered. Contact your health plan for the latest information. What was the chief use of dilithium crystals in the star trek series . We have a 19 trillion bipartisan debt that continues to grow as we borrow money from countries that do not like us to pay for government we cannot afford. The time to act is now. The time to turn the page is now. If we dont act now, we are going to be the first generation in American History that leaves our children worse off than ourselves. That was just about 12 hours ago at the cnbc republican president ial debate. Senator marco rubio talking about all of those things, and, again, less than 12 hours later, joins us right now live. Senator, thank you very much for being here today. Thank you. Senator, youve been widely reported and seen as the big winner that came out of last nights debate. How do you feel this morning . A little tired, but otherwise, you know, look, we had two other debates that we thought we did well in as well, and this is just one more step in a long process of deciding who we nominate to be representing the Republican Party, and what is perhaps the most important election in the generation. So we feel good about it, but theres a lot of work to be done. The election was not decided last night, thats for sure. No, but there are people trying to figure out where things are headed at this partnership, and figure out where some of the big financial backers are headed. Have you heard from people . Have you heard from people on the ground, big backers or grassroots people who are ready and willing to donate more to the campaign at this point . Sure. Yeah. We had a real good response, as i said, both from people shopping for a candidate, voterwise and people that donate to campaigns, and so well let our staff handle all of that, but well continue to talk to people about what i would do, what policies i would promote, and put in place if i had the opportunity to be president of the United States, and thats where we continue to do, and ive been confident about what that means in terms of support, especially in the long run. I know its very early there, two hours earlier where you are, and i know it was a late night for you, and we appreciate you getting up early. I heard you were disappointed with the debate last night. What bothered you the most . Well, yeah. You know, cnbc is always the where i tune in and others to talk about deep issues regarding finances of individuals, country, and, generally, the world. I thought we would get into those questions last night. Questions about what do we do about the national debt, what should the fed be doing or not doing at this moment. Is there another bubble out there waiting in the economy . What about the issue of the slow down in Global Emerging Markets and impact its having on china and, ultimately, the United States as well . I thought last night would be the night to get into deep policy discussions because our country needs to hear that. These are important issues that are being decided, and i just didnt think enough of that was covered. Hopefully well do that again because these are important issues, pomimportant to know th people running for office understand the issues and what to do about it. I agree. Its difficult with ten people and two hours. I understand that, but the questions were not even about that. I think part of debate is trying to make sure youre vetting candidates and letting people know about their background, a Job Interview on one level, but i agree with you we need more debate about these very important issues. Lets talk about one issue that you think we did not get to last night that youd like to talk about. Senator, im sorry, is there an issue youd like to talk about . Yeah. Oh, im sorry, i thought you were playing a clip of an issue. No, sorry, im opening the floor to you, talk about something we did not get to. Oh, good, open ended . Great great. Theres a couple issues. Wages have not climb in the country fast enough, and cost of living increased because theres new costs associated with the 21st century. 25 out of 50 states, child care is more expensive than going to college. What do we do to raise wages in america . Its the combination of making us the easiest and best place in the world to create the best paying jobs of the 21st century and combine that with allowing people to acquire the skills they need for the better paying jobs. We have a massive disconnect in the country between the skills the 21st century requires for higher paying jobs and what our people have. Right. I wanted to get into revolutionizing higher education, not to make it more affordable, but relevant. You know, we got really good bipartisan ideas in reinvigorating Vocational Training in the country, alternatives to Traditional College through competency based learning and provide information on the degrees they seek and job prospects before taking out a loan. Thats important. If we dont close the skills gap, theres no way to close the opportunity gap leading to the income gap here in america in the 21st century. I agree entirely, howeveri, s thats a long term fix for these issues. Some agree with the idea of raising minimum rage. Things you would do in the near term or things that you could see to try and get in at that inequality gap that happens much more quickly . Yeah, i mean, the inequality gap is direct result of opportunity gaps. By and large, theres jobs in america that pay more than minimum wage unfilled because theres not enough people with the skills needed to fill the job. We can fill that gap itll take time, good Public Policy is not instant overnight, and so it would require things like making Vocational Training a priority. Having a president that actually elevating Vocational Training in a Public Discourse and opening up federal Financial Aid so a 16yearold goes to high school in the morning and trade school in the afternoon and graduate as a welder. Welders make more than philosophe philosophers, and we have a shortage of that in the country. These are bipartisan ideas. Things i worked with across the aisle to put in place to help our workers acquire the skills needed for the better paying jobs. Heres the other. We have to make america a more attractive place for investment, which is why i proposed things i proposed, whether its a territorial system of taxation to bring back those 2 trillion of Corporate Cash overseas and keep it here for the long term, whether its a globally competitive business tax rate for all business sizes, whether its allowing businesses to immediately expense what they invest in their businesses, and, of course, Regulatory Reform in the regulatory budget i proposed that limits growth and scope of regulations. Make our country the best in the world to create the best paying jobs, easier for the people to acquire skills needed for the better paying job. Thats an economic renaissance, those making 8 9 make 30 40 an hour. Senator, i heard a lot last night about entitlements, and maybe not into the weeds of every single economic issue, but i heard more in the previous two debates. You know, i understand its always fun to talk about moderators, et cetera, but when you have ten guys and gals one gal but when you have ten, and theres some at 1, 2, and 3 , you can ask questions all you want, and you still have people trying to make a name for themselves or trying to break out. Theres no way you can ask a substantive question and go down the list and get an answer out of ten. You got did you not know that governor bush was ready for you with that question . Was that not abun adaptly apparent that he was ready with that no matter what a mod raider had done . There was coming out, he had the french workweek line ready. Did you have the response ready or quick on your feet . Yeah, but no, i mean, look at the end of the day, we know what people say. It doesnt change my campaign. Ill address it and move back to what we should talk about. As i said, these are serious how do you weed out, as a country, how do we weed out guys not there in six months . Its its the you know, thats part i understand the point, i understand the point. You see this between people this is my night to take on this guy. This is my night where im going to try to make a big splash. You know, i mean, it is what it is. Look, i understand that. Its an unusual thing, right, ten people on a stage. I get it. It is what it is. I cant change it. Im a candidate. I focus on issue ths. The end of the debate, there was a discussion about entitlement reform. That was positive. I said that. Its an important issue. Mike huckabee did everybody a favor. That dysfunctional gop family, and he said, ill take any of these guys up here, doing it for a reason, not notoriety, but they are patriots to help the country, i thought that brought it full circumstancircle in ter grossing and everything else. You know who the enemy is as a republican. Its not the guy standing next to you. Well yeah, look, i think its legitimate to discuss policy differences on entitlement reform. There are differences among us. We need a conversation about it. Because its an important issue. I care passionately about it. I said it last night. My mother, 100 of her income is Social Security and medicare and i dont want anything thats bad for her, and i think the important point is talking about reforming Social Security and medicare, im not talking about people that are on it now. We dont need to do anything to change for them. It can stay the way it is and make improvements for them. The changes are for people like me. Im 44 years old, im 25 years away from retirement. That program will not exist for me. The math does not lie. It will not exist if it stays how it is. There needs to be a change to it. What change should there be . If we act now, we can make those changes in a way that are not overly disruptive for my generation. We dont have to change anything for people who are 55 or older. The longer we wait, the likelihood increases we have a debt crisis. We pay low yields on american debt. If that goes up to a normal historic number, and at some point it will, right, we have a debt crisis and spend more money on servicing the debt than on our own military. Thats coming. You cant predict when. You dont know when a financial, debt crisis happens, and if you think you cant grow in a debt crisis. This is an important issue. Its a ticking time bomb. The most predictable crisis in American History, and we need a deeper conversation about the policy differences between the candidates on addressing that issue. Senator, i have what you hope is a substantive question regarding a headline this morning, and i dont know if you saw the paper, so ill tell you about it. Theres news that pfizer, a great Iconic Company of america, could merge with a Company Based in ireland, move there as inversion. This transaction effect evideiv makes pfizer part of the company at a lower tax rate. You can talk about your tax policy and territorial and perhaps moving towards the territorial tax system, but do you believe it is unpatriotic for a company like pfizer to leave the country and given that youre talking about your grandmother before and some of the issues around medicare and medicaid, the United States government would be or is, i believe, the largest consumer, if you will, or payer to pfizer through all sorts of things. Right. Would you change the way we deal with Drug Companies that leave the country . Yeah, look, we can talk about how angry we are they sell to another company and move outside america. Bottom line is, heres the truth, no Network Knows it better than yours, theres a legal obligation to the shareholders to maximize profit legally. Whats happening here is reverse of the inversion. Theres Foreign Company who out bid any american bidder because they bid higher on the purchase of the shares and create a merger because they have a better tax base where they go. We are this is an example of why what obama has done with the irs to prevent inversions does not work. All its done is place american bidders, when a company is open, at a competitive disadvantage against a foreign bidder. This is an example of it. We can stop this if we lower our corporate and business tax rate to a competitive rate like 25 for all business income, including pass through companies, but also move to a territorial system of taxation so that you only pay taxes on it once. Were the only country that does not have a territorial system of taxation. We have a worldwide system. This is an example. Look, its not just Corporate Headquarters and name on the door thats moving. But they are moving the best jobs in the country abroad as well to places like ireland. We have to address this, and the best thing to do is through tax policy, do not create in our federal tax policies an incentive for companies to do this sort of thing. Thats happening. Senator, talk about that. The idea of trying to change our tax code. Thats something thats had some bipartisan support, at least when you look at the Corporate Tax code. We heard a lot of talk about it up until maybe six months ago, and it die out as the campaigns really started picking in, but when you look around the senate, are there Democratic Senators who are middle of the road who you think you could work with to get legislation like this passed in the senate . I do. I think the debate has been the argument you need to raise taxes on Something Else to equal it out. Thats counter productive. Thats where the rub comes. The point i make, its not taxes on a ccorporation, but lower taxes on pastors. I have the dry cleaner where i take my clothes in miami, hes an scorp. , a small business, paying a higher rate than a chain owned company down the street somewhere. Thats unfair. I think we have to make an equal Playing Field for passthrough companies where a lot of working americans draw income and placed in a disadvantage now because of regulations, baa theres not access to Community Banking the way they did and because of the tax code that treats them differently, but do i think theres an opportunity to work in the bipartisan basis . I think so. Its not easy. These debates are never easy and it takes work and strong president ial leadership. Thats one of the reasons im running for president. The congress can help shape an agenda, but only a president can set it. We need a president that makes tax reform, that makes america globally competitive and make it a priority. Senator, thank you, again, for getting up so early to join us after a long night. We appreciate it. Join us soon. Thank you, i should have stayed at the arena. That might have been easier. Thank you, senator. See you soon. Yeah, thanks. Coming up, when we return a post fed meeting surge for stocks, dow climb 200 points and up 9 in october with two more trading days to go. Will the Fourth Quarter comeback chug along . Well talk markets next as we head to a break, take a look at u. S. Equity futures at this hour, in the red, dow down 75 points. Back in a moment. The great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many South Africans for generations. This is an opportunity to right that wrong. The idea was to bring capital into the Affordable Housing space in south africa, with a fund that offers families of modest income safe and good accommodation. Citi got involved very early on and showed an enormous commitment. And that gave other investors confidence. Citis really unique, because they bring deep understanding of whats happening in africa. I really believe we only live once, and so you need to take an idea that you have and go for it. You have the opportunity to say, ive been part of the creation of over 27,000 units of housing, and to replicate this across the entire african continent. Welcome back to squawk box this morning. Right here on cnbc, first in business worldwide. Stories front and center at this hour, an hour away from the Third Quarter gdp, and Congress Looking for 1. 5 annual growth rate, and we have to say the japanese auto maker, in the u. S. , the new line of diesel powered cars, attributed directly to the recent scandal at volkswagen and vscrutiny of emission standards. Watch this for other vehicle makers as well. Reports from china say, this is big news in the demographic world and economy, the country now is abandoning the policy of only allowing couples to have one child. That was introduced in 1979 to slow growth. Coupled now reportly can have two children. That is allowed. Thats a huge shift in china, and arguably, huge Economic Impact to the country over the next 2030 years. Something like 400 million births have been prevented, its estimated since the policy was put in place since 1979, but it led to app out of whack situation where boys were more valued because you its tradition to want a male heir in these situations. It led to jgenocide and imbalane of men and women in the population, which is a serious problem for the country. The professor is here to talk about the fed, but you have views on china as well. And rates unchanged, of course, announced yesterday, but it opened up a prospect of raising rates in december of last nights debate. Ted c consideratiruz expressed about the fed. On wall street, the fed is doing great, driving up stock prices, wall street is great. The top 1 earn a higher share of the income than any year since 1928, i think the fed should get out of the business of trying to juice our economy and simply be focused on sound money and monetary stability, ideally tied to gold. With us now to talk about that and a lot more, richard bernstein, ceo of bernstein advisers, and i mentioned professor, and Steve Leisman is here. Both your view, i want to talk about the ted cruz thing, but do you have a view on china situation . Its going to be a lot of diapers. Thats true. But in terms of Economic Impact . A couple things to think about. One is, china, over the long haul has a worse demographic problem than we have. Absolutely. A couple things relative to the United States and gop debate last night. Connecting the dots. Gop complains about government. What happened in china is government gone to the nth degree. What we have is not as bad as china, but its a warning of how bad things can get. Play it either way. Im down the middle. You want to be careful not to go to the lengths, obviously, its a disastrous policy. Chi chinas problems when it comes to retirement and paying for old age, on the other side, they do not have a safety net program, and that makes things really difficult for average Chinese People in terms of planning. We have a safety net in the United States. Their working age population has begun to decline already in 2010. Theres the little tick up you have, they made one change in 2013 for parents who were only children, they were allowed to go to the second child, and now this is for everybody. Look at the long run of population growth, its come down, fertility rate is one where the population is declining, so you need two things, you need population growth and an educated population. Those are two things you need if the population rate declines. United states, one of the things that makes people sanguine about the United States, is japan, europe, and china all have a worse demographic than the United States. Thats significant for the outlook of the United States. More kids in diapers, and the ageing baby boomers, more diapers here as well. Good for diapers in either place. Or costco or walmart in china. Diapers around the world, rich, great call. Important investment theme. Whats your theme based on what the fed said yesterday . Well, you know, one of the reasons i think weve seen volatility in the equity market is simply partly because of the fed and because of earnings, right . Theres really two variables that affect the equity market, Interest Rates and earnings. The fed is kind of threatening to raise rates. I know they said it wont have an impact, but every beginning of every fed cycle in my career always say it will have no impact. Initially, thats true. Why is it true . Any time Interest Rates go up, thats negative for eggties. No way is higher Interest Rates go good for equities. Interest rate boom, and this time, we are in a profits recession now. The s p is negative. Im surprised more people are not talking about that. The fed is trying to raise rates in an environment where Profit Growth is negative. Thats volatility. Thats why you see what you see. A recipe to hold off even longer . Were positioned. Thesis is what . How far out are you thinking . The fed raises in 2016, of course, using their phrase, it depends on the data, but the other side is that we also think that earnings are going to rebound next year. If we get back to the normal relationship where the fed is raising rates where profits rev up, were living happily ever after. Something discussed inside the Federal Reserve, the idea of removing the emergency side of the rate cuts. Yes. In other words, tightening policy is not whats needed right now, but 0 is not needed as well. You could argue that how long have people been saying that, my god. Thats a profound thought to the fed at this point . [ laughter ] thats unbelievable. Joe, i judge not, just report. Is that something from the bible maybe . Did, like, moses or joshua say that . That was six years ago. Joe, what is profound finally figuring that out . What is profound is what you said. Indeed, on our air in terms of mill eaer and others is a serio debate inside the Federal Reserve. Bullard said it this month in a speech he had and the leadership is debating the idea, that its out there, that they could and, joe, its how to finesse it. Can you tell the market on a limited emergency rate removal base . Let me heres the question. We are far from any historical relationship where Interest Rates would drag down stocks. When you say profits are only booming, i mean, when you talk about the fed model or any kind of relationship between earnings, dividend yield, and Interest Rates right. A quarter, 50, even 100 basis points on the fed funds would be a place where the relationship between stocks and bonds or yields would be one that would remain, as far as i can tell, extremely favorable for stocks. Steve, thats an important point. This is the difference between the way economists view the world and investors view the world. Markets dont see absolutes, dont care about good or bad, but care about better or worse. Its not that Interest Rates are low, its that Interest Rates on the margin have gone up. Thats what affects the market. Its not that earnings are still good, but that earnings are going down on the margin, and thats what makes the difference. Yeah, but, rich, i have to push back. Thats a difference between a short term trader and long term trader as well. No, no, no. Short term is nervous about change, but long term says over the long term, the relationship is in my favor. Perhaps, but i dont think that most investors sit around if the fed is raising rates and profits get worse, i dont think the markets going to behave well. Profits might be worse because the dollar is strong. It could. Thats the issue the fed has to deal with. I hope they are dealing with, thinking about whats going on. Heres another way, steve, raise the cost of capital for Corporate America at the same time cash flows are under pressure, why would the stock market go up . I think thats i think thats fair enough, but what people are talking about is the idea of the dollar being a temporary phenomena. The oil, opening with oil now, something that works through the system, youre in a profits crunch that does not a year from now, essentially, repeat itself in that the dollar is not going to strengthen forever. I disagree with that. Our firm, we are secular bulls on the dollar. The reason why . The credit bubble left the world with over capacity. Now, you know, your economic textbook says shut down capacity and reallocate assets. Nobody does that. That means laying off people in the country. Rather than what youre going to do is try to create policy to use up that access capacity, namely, deappreciating currency for market share. A walmart strategy. Undercut competition to maintain share. Thats going on around the world. Countries fite for market share. Okay. The dollar is partly strengthening because of expectations of the fed, but its also strengthening because of whats happening around the world. Countries want to depreciate their currency. Give us a number then. What happens to the dollar over the next year . Look, i learned many years, never give dates and numbers of. I tell ya, a year from now, we come back two years from now, three years from now, people will be shocked that the dollar is much stronger than they could have anticipated today. Thats the way i view it. Okay. Thats a big change. The fed, in your opinion, as a result of that, stays packed over the entire period of time . Exactly. I dont think they have to do much right now because the rest of the world is doing if for them. You know, maybe wages are creeping up if you come back, joe can yell at you for 0 forever rather than me. Just direct your ire because im tired. [ laughter ] direct it his way. Yell at bernstein. Its not me. Richard, lovely to see you. Youre rooting for roommates no, not at all. If earnings were better and earnings were appreciating, id the fed should normalize rates. We should charge money when money is lent from one person to another. Take it as a compliment. Yes, im leaving. Guys, thank you. When we come back this morning, Fact Checking into answers from last nights debate, and at the top of the hour, new jersey governor, Chris Christie is the special guest fresh off last nights debate. Stick around, squawk box will be right back. patrick 1 whats it like to be the boss of you . patrick 2 pretty great. patrick 1 how about a 10 raise . patrick 2 how about 20 . patrick 1 how about done . patrick 2 thats the kind of control i like. And thats what they give me at national car rental. I can choose any car in the aisle i want without having to ask anyone. Who better to be the boss of you. patrick 1 than me. I mean, you. Us. vo go national. Go like a pro. The market. Redict. But at t. Rowe price, we can help guide your investments through good times and bad. For over 75 years, our clients have relied on us to bring our best thinking to their investments so in a variety of market conditions. You can feel confident. In our experience. Call a t. Rowe price retirement specialist or your advisor. To see how we can help make the most of your retirement savings. T. Rowe price. Invest with confidence. Welcome back, everybody. While republican candidates debated Economic Issues facing the nation in boulder, the fact patrol was back at headquarters going through everything with a fine toothed comb. Scott has the debate fact check, and, scott, good morning, great to see you. Great to see you as well, welcome back to the east coast. Becky, you caught trump on one of these claiming he never said rubio was too tight with the ceo of facebook. About marco rubio, you called him Mark Zuckerbergs personal senator because he was in favor i never said that. I never said this. So this was it may be true that trump never uttered the words himself, but his Campaign Website says that, his personal senator, marco rubio, has a bill to triple h 1bs decimating women and minorities, a visa program for skilled workers that Tech Companies generally favor, but critics say cost american jobs. Carly fiorina got tough questions about her record at hp, but she said the company was a bloated bureaucracy, not unlike the federal government, and she saved it. It was a very difficult time, and, however, we saved 80,000 jobs, and went on to grow to 160,000 jobs and scores of Technology Company went out of business like gateway. Carly fiorina does not mention, though, that job growth came from her controversial purchase of compact computers in 2002 or that corporate profits during her tenure fell sharply. Got a lot more from the fact patrol all day on cnbc, our full fact check is on lean right now at cnbc. Com, and Carly Fiorina made claims about jobs for women under the Obama Administration, and we look at that, we look at marco rubios voting record and the sparring between him and jeb bush about that. Weve been busy. Okay. I would imagine. I think its going to be a busy day continuing for you. No sleep for you either. No, no, whats sleep . Coming up, when we return, Chris Christie at the top of the hour. As we head to break, though, quick highlights from last night. I dont see a lot of weakness on the stage, quite frankly. I see the weakness in the three people left on the democratic stage. Theres a socialist, an isolationist, a pessimist, and for the sake of me, i cant figure out which one is which. Vo know you have a dedicated advisor and team who understand where you come from. We didnt really have anything, you know. But, we made do. Vo know you can craft an Investment Plan as strong as your values. Al, how you doing. Hey, mr. Hamilton. Vo know that together you can establish a meaningful legacy. With the guidance and support of your dedicated pnc Wealth Management team. 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. Battle in boulder, candidates clash on issues matter on your money, taxes. 60 of American People now need to hire an expert to understand their taxes. The fed. I think we should examine how the fed has really been part of the problem. Entitlements. If we dont act now, were the first generation in American History leaving our children worse off than ourselves. Spending under control. Im the only person on person on the stage involved in the chief architect of balancing the budget. Breaking down the debate with new jersey governor and c candidate straight ahead. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im becky quick with joe and andrew less than 90 minutes from the opening bell on wall street. Check out the futures, and you see they are under pressure this morning, and dow futures down by 75 points, and, of course, after a gain of 200 points yesterday. S p futures down by 9, the nasdaq down by 23. Look at europe in early trading there, red arrows across the board. The loser now is the ftse 100 down by 1. 1 . Andrew . Okay. Heres the stories investors are talking about this morning. Paul ryan set to be the next speaker of the house. The election takes place this morning with the Wisconsin Republican succeeding outgoing speaker john boehner. We are less than 30 minutes from the latest reading on the u. S. Economy. U. S. Economy expected to recommendation steer a 1. 5 annual growth rate. That would be during the Third Quarter. That number out at 8 30 a. M. Eastern time. A big Regional Bank deal in the news. New York Community bank corp. Will buy estoria financial in a transaction valued at 2 billion, a story they get one share of nycb stock, and 50 cents cash for each share they now hold. Lets talk politics. The third republican president ial debate sparks flew between the top ten leading candidates with less than 100 days until the first ballots are cast. President ial hopefuls took to the stage look to bolster standings with voter and talk about the economy and issues mattering to your money. Heres a couple moments from last nights debate. Let me tell you, trump would be a better president every day of the week and twice on sunday rather than Hillary Clinton. I may not be your dream candidate yet, but i can assure you, im Hillary Clintons worst nightmare. We have a 19 trillion bipartisan debt that continues to grow borrowing moneys from countries that do not like us to pay for government we cannot afford. Find a democrat thats for cutting spending 10, ill give them a warm kiss. Thank you, governor. It is the hype of hypocrisy for Hillary Clinton to talk about the first women president when every single policy she espouses and every single policy of barak obama has been bad for women. Ei think the fed should be ot of the business of trying to juice our economy and just be focused on sound money and monetary stabt, ideally tied to gold. Joining us now, new jersey governor chris, good morning. How did you sleep . I didnt sleep well. Fresh as a daisy. This is joe. Oh, sorry, joe. Great to talk to you. Good morning, governor. I was thinking how to approach it. One thing to say, governor, leading up to the debate, a lot of chatter, a lot of chatter. After the debate, a lot of chatter. I just dont see how we can look ascant at this. The entire country involved in the debates, i dont remember this four years ago, eight years ago, 12 years ago, and i would have to think that netnet that is an upside. Oh, it definitely is. Listen. Any chance we get, any time we get a chance to get the opportunity to speak to tens of millions of the American People is a good thing, good they are engaged, and last night, what i showed was were going to battle. Were going to fight. If you want someone tested, ready, and mature to bring on the fight to Hillary Clinton, next september, i think i showed folks that i could do that, and take on the battles that needed to be taken on on that stage last night. There were a number of them. Senator rub oio wanted more economic discussions. I thought, i mean, you talked about entitlements quite a bit, others did. Was there something you thought you wanted to talk more about last night that you want to talk about now . I would have liked to have talked more. [ laughter ] you know listen thats the problem. Ten guys up there. You know, i think you faired well because there were temperature guy, and i hearingimpaired your name mentioned in the top three as far as what people were talking about last night. I dont know whether you saw those numbers as well. I have. Listen, we did well last night, talking about substantive issues, but the fact is i think we got a little bit too much in the questioning last night, and into playing gotya, people showing how separate they were, how Much Research they did, rather than thinking about what folks on the other side of the camera who were watching on tv wanted to really hear from the candidates about the countrys future. You dont get anywhere by complaining. Im not a complainer. The fact is, youre up there, you work hard, and you get your message across, and they think its tough now . Wait until the only person, other personal on the stage is you and Hillary Clinton. Look at the stage, who is the person to prosecute the case against Hillary Clinton on next september and win . Right. I know im that person that can do that. Yeah. It doesnt take much in terms of questions asked to get ten guys when six of them probably are not on, you know, are not up and double digits. It does not take much to get the guys to attack one another either, senator or governor, its going to happen, right . They are ready. Well, no, i no, joe, i dont agree with that, sorry. Really . I didnt attack anyone on the stage. You dont think governor bush was ready with that senator rubio not showing up for votes . You dont think that was planned and ready . Sure. Well, listen, governor bush made whatever decisions he wanted to make. Im only responsible for myself, and i tell you, there seems to me to be only two people on the stage last night, maybe three, who attacked other republicans. That was jeb bush and john casic and trump. The other seven did not attack other republicans. Quite frankly, the difference is that i have with Hillary Clinton are so much broader an more profound than the differences itch with any of the folks on the stage. I mean, joe, face it. You know, if youre not tough enough to deal with whatever came from the moderators last night, you have no business on the stage being on the stage with Hillary Clinton next september, and no business sitting across the table with putin in january. I agree. If there was one thing to say, i dont think theres any question, too tough or too unfair for anyone who wants to be president. Be ready for anything, things that are not necessarily true. Are you still kicking your dog, whatever, you should be ready. Joe, its not a question of being too tough. You know, i think that, you know, i think becky did a great job last night, but i will tell you thank you, governor. I think that john harwood last night had bias showing. We all know john has a bias against republicans. He had bias showing last night. It was clear. It was very clear. Listen, when im from new jersey and i call somebody rude, thats a bad night for them. A real bad night for them. I didnt like it when you said that because i what . Im not from new jersey, though, maybe thats why, but you threw us all under the bus there. Thats the difference. What else, talk about all the factories on the way home, too, is that next . Youre the governor for gods sakes. I love my state. Thats why i can speak authoritatively about the fact that harwood was over the line last night. When somebody from new jersey thinks you are rude, thats a bad night for you, and, listen, thats the difference. Tough questions are in bounds and fine. Thats not what that was. You know, what a lot of the questions were last night, and especially coming from harwood was where people just trying to embarrass people and his bias is showing. The American People dont care about that. They dont. They didnt hear enough last night, quite frankly, about the other substantive issues. I can tell you the things i prepared for, i used the small amount of. Thats always the way it works, but in the end, who cares . What matters is who performed on that stage last night, who showed you that they could take on Hillary Clinton and beat her, and who is tested and ready and mature . Thats what you need next september, and im ready to do those things, joe, you know that. Governor, its andrew now. It is andrew now. Now i can be nasty good. What do you want . This is a policy question we asked marco about a headline in the paper, the wall street journal reporting that pfizers in talks to merge with a Company Based in ireland. The transaction makes the u. S. most Iconic Company inversion, putting them at a lower tax base. We talked about a territorial taxes, you want to lower taxes, but the larger question i ask is, the u. S. Government, biggest buyer of drugs in the country, of pfizer drugs, should the u. S. Government from a policy perspective be able to use any of its pressure, if you will or its size and scope to put pressure on preventing a deal like this from happening . No, absolutely should not. Let the market work. Everybody who is on squawk box should think that way as well about letting the market work. You know, the fact is that i dont want washington, d. C. To have anymore control over our economy than has already. We had seven years of central, nearly socialist type of control of our economy, and weve had lousy growth, the worst recovery since world war ii. How often do you see this not work until you say stop, do we want Hillary Clinton deciding what the price of drugs should be or which Pharmaceutical Company should be able to merge . You know why theres corporate inversions . We have the worst Corporate Tax rate in the world. Thats why. We have a territorial tax system that is unlike most other countries in the world. Thats what this president believes in. Punishing, punishing people who are successful. Im not for that. The president wants to continue to do this, hes going to lose more and more Great American companies to these types of corporate inversions. Dont ban corporate inversings or put government in charge of stopping it. Stop the causes r corporate inversions. They dont want to leave the u. S. They are not stupid and will not pay taxes if they dont have to. There you go. See, it was a policy question, you gave a big policy answer. I thought, you know there you go, baby, i told you i was ready. Theres a lot of nuggets, substantive nuggets as well, and, i dont know, i was transfixed, of course, i was there, but i just think as i said, netnet, you have so many people involved in the process at this point. Reagan said i paid for this microphone. George bush looked over at gore when gore was rolling his eyes and sighing, but thats, like, the two thats the two debate memories in the past, and i have a lot of memories already for this current year of the debates. I mean yeah. Its a positive. Its a good group of candidates. Its a good group, joe, and the fact is, we have to let voters decide. Right. And i dont you know, trump, you said, he was attacking there was no unprovoked attacks. I think he was responding to casic in the attack. He didnt attack you last night, right . No, no, listen. Im just saying theres a choice to make on that stage. You get to decide to attack other republicans and make it seem to the public like the other folks on that stage are the enemy, or you can rise above it, and thats the kind of mature, reasoned leader the American People want. Someone who is willing to fight. I dont think anybody mistaked me last night on the stage or mistaked me or my career as someone unwilling to fight. Im willing to fight. I fought on that stage, but i need to fight with the person who is the real adversary, and thats Hillary Clinton. Not anybody else on that stage. You have a choice. Rise above the pettiness or do you participate in it . I decided last night to rise above it. Governor, is that something you talked about with other candidates, or is that something because it seemed like seven of you on the stage were not going to do that last night. Is that something you just all reached on your own, or was there a conversation about that. I didnt have any conversation with anybody about it, so theres no antitrust concerns, becky. It just thats my own philosophy about this because the issues are too important and issues are too profound between the way i feel and the way Hillary Clinton feels the country should be run. Thats where i want to focus. Tired of losing as a republican. I won twice in the bluest state in the country. I want to win as president , and the only to do that is unite the party, remind them, whatever differences we have amongst ourselves, and we do, are minuscule to Hillary Clinton. The only way to do that is if youre tested, beaten up before, recovered from that, tested, mature, ready, and youre tough, and i think i fit all four of those adjectives. Yeah. You know, i would say birds got it swim or fish dont fly there are flying fish. Whatever the expression is. You got ten guy, and they are still going to be some of this, you know, in the next debate coming up, theres eight more of them. I wish we lived in a perfect world, but theres going to be guys jockeying for position to try to get into the upper tier of candidates, and so, you know, and i sometimes, even if there is some battles, would you rather have someone like Bernie Sanders say, you know, im sick and tired of this where they are all sort of agreeing that Hillary Clintons the candidate . At least there is some argument, you get to watch something at least. Yeah, the argument should be on substance, joe. Okay. Thats the point. The argument should be substa e substance. I dont have problems with substantive arguments. We talked Social Security and entitlements. It was civil, not personal to either of us, but we had a profound disagreement about it. Those are fine. Im talking about attack k eainh other. You dont do that. You make yourself smaller doing that. Thats my difference. Substantive differences, have at it, absolutely, Bernie Sanders going in the tank, you know, for Hillary Clinton in that debate, i mean, i told you, i said it last night. You know, theres a socialist, isolationist, and a pessimist up there, and i cant tell which is which. You know, it didnt matter at the end of it for that debate, and, and so i dont worry about substantive disagreements. Thats fine. Its when its personal, and we had that personal attacking in the questioning last nights and attacking between the candidates last night. Thats not what republican primary voters want to hear or what the American People want to see. Well, i know what your strategy is, and youll keep doing what youre doing. Its straight that, i dont know, i think well watch. Interesting to watch, governor, thanks for coming on. Joe, keep your eye on the winner, baby, thats what you do. Im watching. Ill get andrew to watch from now on too. Im watching, governor. Im a fan of andrew. Thank you, sir. Coming up, a check on the markets and stocks to watch, and economic breaking news, were going to bring it to you when squawk returns in a moment. Wac back this morning, the futures now, red arrows across the board. Whats going on, dow off 75 points, and s p 500 down about 9 points, and the nasdaq looking like its done as well at 24 points off. Joe . Mgm resorts on the rise, they spin off Ten Properties into a new publicly traded Real Estate Investment trust, separately, mgm reported earnings in revenue that topped anim eped analysts, and aetna beat with 1. 90 a share, the Insurance Company raise the the full year forecast for the fourth time this year despite a drop in membership for the medical plans. Nasa card out with the quarterly numbers, matching estimates, 91 cents a share, in line, the credit card issuer says its seen double digit increases in transactions in the world regions despite uncertainty. When we come back, fellow moderator, john harwood has thoughts on last nights debate and where candidates go from here. Well be right back. Lp we have a big fat beautiful door right in the middle of the wall, people come in, but they come in legal le. Mexicos going to pay for the wall because mexico i love the mexican people, i respect the mexican leaders, but the leaders of much sharper, smarter, and cunning than our leaders, and just to finish, people say, oh, how are you going to get mexico to pay . A politician, other than the people on this stage, a politician cannot get them to pay, i can. Donald trump describing the plan to report undocumented imgrants. We have reaction from last nights debate, and, john, i guess they say all is fair in love, war, and politics, but i hear things went well with Chris Christie a moment ago. You took a self my with him . I did. Governor christie took advantage of a moment like others did to go after us on the debate, and i understand that, media is not popular in the Republican Party. What the governor said, he said, you know, most of the republicans on that stage were not attacking other republicans. They were, they attacked ryan, ba boehner, and the budget deal that pass the the house of representative, and will go to the preponderate to extend the budget for two years. This the intensity you saw in the stage last night, and we were part of it. Its a reflection of the conflict within the Republican Party over how you govern and what approach you can take to the economy, and, remember, before the debate, becky, governor casic had a speech in ohio saying we have people who were running in the race proposing things that are crazy. Whats happening to the party . We teased out that last night. That produced some of the emotion that you have seen from republicans on stage about us, and as well as the audience. John, if youre looking at performances from last night, we had both marco rubio and Chris Christie on, looked on as performing well and maybe did themselves favors. I agree with that. Marco was effective, had a good moment with governor bush. He was prepared for governor bushs attack, and he went right back at it. I thought governor christie was also strong, effective in both turning questions about other republicans against not only us, but also Hillary Clinton, and that was a good strategy for him, senator cruz was also effective. You know, we asked him, as you saw, about his position on this debt limit deal which, you know, raise the the debt limit through march of 2017, extend the budget for years, went full on after us. That made the room very happy and probably made a lot of conservative activists around the country happy. So in terms of trying to figure out what fell short, theres criticism on governor bush about whether or not he had a breakout moment or whether he was able to really energyize his supporters. What do you think happened . I dont think he had a breakout moment. It was evident last night. He said in the beginning, he wanted to run as a candidate willing to lose the primary in order to win the general election, and i think when he said that, he thought he was going to have enough inherent strength financially, in terms of the reputation he developed on his own as governor of florida as well as the, you know, through association with his family, producing two president s, that that would be enough to ride past the conservative angst in the primary. Thats been very difficult for him, and it comets to be difficult. All right, john, great to see you. Thank you very much, and well see you again soon. You bet. Coming up, jobs data and Third Quarter gdp data could be moving the markets. Heading to break, look at u. S. Equity futures ahead of the numbers, dow off 73 points. Back with that and more in a moment. So whats your news . I got a job ill be programming at ge. Oh i got a job too, at zazzies. friends gasp the app where you put fruit hats on animals . I love that guys, ill be writing code that helps machines communicate. interrupting i just zazzied you. phone vibrates look at it friends giggle i can do dogs, hamsters, guinea pigs. You name it. Im going to transform the way the world works. proudly i programmed that hat. And i can do casaba melons. Ill be helping turbines power cities. I put a turbine on a cat. friends ooh and ahh i can make hospitals run more efficiently. This isnt a competition welcome back this morning, the futures right now, ahead of some breaking economic data. Bringing you that in a moment, and theres a big headline, though, on wall street, Deutsche Bank cutting 35,000 jobs in two years as a sweeping overhaul. The lender socalled strategy 2020 includes plans to cut clients served 50 . They Close Investment banking operations in chile, denmark, fin land, and other country, and plans to wind down noncore operations by 2016. All right, jobless claims and gdp numbers out. Lets get to tgm institutional services, jim . Hey, becky. The first look we have after the fed talked tough yesterday and gdp advanced annualized quarter over quarter is 1. 5. Thats worse than expected. 1. 6, disappointment there. In order of importance, initial jobless claims at 260, which is a little better than the expected 265. Continuing claims at 2. 144. We expected 2. 160. Another one thats better. Personal consumption, 3. 2. We expected 3. 3, worse there. Gdp price index, 2 1. 2 , and we expected 1. 4. Gdp is worse, jobs part is better than expected. Stocks under pressure coming in, dow down 8. 5. S p is better. Tenyear ye 2. 106, up to 2. 11. So all in all, the numbers a wash, did not affect the stock market too much. Its interesting to me after hearing the fed talk tough yesterday, i expected numbers better from the gdp side. Back to you, becky. Hey, jim, quickly much watching the futures down a bit, but they were up 200 points yesterday on the idea that the fed thinks the economy is better than we all thought they thought it was. How are you seeing all of this stuff shake out . What do you think its indicative of . Okay. That was a weird move yesterday. The fed says they are going to tighten, and the s ps rally 20 sick ticks. To think people had been short the market, and when it did not break, they scrambled to cover it. Theres a component of it that says, huh, maybe the fed sees something we have not and things are better. I share with us what you are seeing. All the data ive seen over the last five weeks has been disappointing other than the claims number. Unemployment number next week thats the crown jewel, the last time we had that number was massively disappointing. Yesterdays move in the s p was a short covering. Todays move seems indicative of really what the news is. All right. Jim. Thank you for that. Lets get reaction to the numbers and deputy head of economics, and Steve Leisman as well. What do you think of this . Not bad numbers, spot on with what we expected. That was good. We looked for 1. 5 . A lot of the weakness was inventory draw down. It was a big drag in the Third Quarter, and that is because we have too much stock at end of q2. So with inventories down to reasonable levels, it sets the stage for q4 to look betterment final sales, a good solid number, Consumer Spending improved, Business Investment improved, residential investment improved, and growth looks better than the headline suggests. How does yellen read the headline . One service is not encouraging, but you cant overreact, so she looks at moving averages, and look at the trend, its looking like we are seeing low 2 growth on a moving average basis, and in the composition with Consumer Spending better, Business Investment is better, shell be perfectly find with this report. Fine for december . Decembers a close call. It is our baseline call if they go in december. We were somewhat encouraged by what we heard from the fed yes, they put it back in the statement. They put it into the statement as giving an option. They are not guaranteeing that they go in december. The data has to allow it to, but i think that todays numbers per spectly acceptable for them in warranting a hike in december. They are looking through the headline number, and the way weve talked about this for weeks now is that this is an inventory correction, which has potential economic consequences, but you have this massive buildup in the second quarter, historic buildup, in fact. Now a drawdown, which was expected, and the cnbc rapid update had a 1. 7 look at it. It could be revised higher. Atlanta fed was. 8 or. 9, but im not competitive. The consumer, as michelle said, up 3. 2 . Business investment up 5. 3 . Housing investment up 6. 1 . Thats what they look at and through the ideas of drawdown. This 1. 5 number is very convenient in that if you plug into the 3. 9 and. 06 this year, you come up with exactly, drum roll, please, a 2 economy. We come back to the perennial somewhat hated 2 number. My take on this, see what michelle thinks, but i think thats what the economy has to do to justify rate hikes. I dont think the fed is looking for more than 2 of the economy, and i think, actually, its looking for 125,000 to 150,000 payroll growth. However, we have to put this in contest. Whats happening with claims is befudd befuddling, a job market strengthens while the evidence we hear and see in the payroll numbers are going the other way. Michelle, do you have a good answer to square whats happening in the claims numbers . Some write in and say, steve, few people are eligible, i dont know to be the case, where its going on bureaucratically. How do we run the claims numbers without expecting huge gains in jobs . Claims is measuring one part of the labor market, which was the firing part. Its not telling us about hiring. Its a function of how much firing were seeing and hiring were seeing. So i think its saying that the labor force is lean right now. There was a lot of cuts that happened during the recession, a slow recovery initially, and so theres not much excess to cut. I think thats what they the claims numbers are showing. I agree with your first point, what the feds expectations are. Look at the summary of economic projections, looking for 2. 1 growth on a q4 basis check, on track for that, and they are looking for the Unemployment Rate to hover at 5 , on track for that, and it implies job growth in the order of 150,000 or so. All right. Michelle, thank you. Steve, we got to go. I understand. We do have to change our expectations, though, 200,000 is not the feds measure here. They have been talking about that, and weve been talking about it that theyve been talking about it that it needs to step down. We have to have that conversation another time. Okay. Thank you. Thank you. When we come back this morning two, former chiefs of staff from both sides of the aisle with reaction to the debate. Andy card and tom mclardy joining us. As we head to break, highlights from last night. We cannot elect somebody that does not know how to do the job. If we dont act now, were the first generation in American History that leaves our children worse off than ourselves. We let people in, but they come in legally. Almost 60 of American People now need to hire an expert to understand their taxes. This is the unholy alliance that people need to know about between right and left. Right and left spend us into oblivion. If somebody already stole money from you, are you going to give them more . If the government does not pay it, tell me whats different between the government and Bernie Madoff in prison today for doing less than what the government has done to people on Social Security and medicare in this country. Bob dylan. To improve my language skills, ive read all of your lyrics. Youve read all of my lyrics . I can read 800 million pages per second. Thats fast. My Analysis Shows your major themes are that time passes. And love fades. That sounds about right. I have never known love. Maybe we should write a song together. I can sing. You can sing . Do be bop. Be bop do. Do be do be do. Do do do be do. Welcome back, everybody, joining us now is andy card, chief of staff under president george w. Bush, and mclardy, chief of staff under president bill clinton. Gentlemen, welcome to both of you, andy, starting with you, it was your start of the aisle. Who do you think was the winner . I thought it started off well, quickly just di involved into something that really did not look like a real president ial debate. I was from theed with how the debate ended. I was excited and had High Expectations when it began. I thought the substantive issues that were raised in terms of what are you going to do for the economy, how are you going to address Social Security issues, whats your plan for taxes, they needed more discussion. I thought the lost opportunity was not to further discuss those issues. I was impressed with how governors responded because they brought real experience to the tail about how to get things dope, so, generally, i liked how the governors responded. I liked the kind of give and take. There was a respectful give and take, a few jabs, some of them missed, some flopped, but generally, i thought it was an okay debate. I did not think that it was a defining debate for any candidate in particular, and i dont think it eliminated any candidate, i think the debate itself probably confirmed previous biases before people started watching the debate. I did not see this as a game changer. I think it highlights challenges candidates have, but i did not see it as a game changer. Andy, you work for jebs brother, are you supporting him . Im looking at the most president ial, not the performance on a stage at one event or who takes and delivers punches, things like that. Im look thing at who has the capacity to make brutally tough decisions in the oval office that usually are presented in such a way theres no good options. Thats the best bad option, and you have courage to be lone any in those decisions. Im looking for the president ial, and jeb is the most president ial of the candidates up there. I like john casic, and i like Chris Christie, and i like governors who make executive decisions. Marco rubio is exciting and ted cruz is adept at debating, the best debater on the stage, but im looking for a president who has the courage to be lonely and make very, very tough decisions. Andy is not looking for that, but if you listen to what other people are saying, other people who are looking to figure out where they are donating money, that was something they were looking for. What do you think came out on top . It was a freeforall, becky, no yes about that, and if you had a large number of candidates, that affects that, but senator rubio and cruz are skilled performers, debaters, coming across well, and the governors had their moments. Governor bush is president ial. I think highly of him. Its hard for mim to meet expectations in this format. So i think if you looked at last night, you saw rubio and cruz have good nights, but i think, becky, the real question is, how much do these debates really impact the current Political Landscape both from a contributor stand point as you know and from a voter standpoint. Thats the real question. Trump and carson are still dug in in terms of their numbers at the moment. What do you think the answer is . How does that affect the voters watching debates and figure out who they support . This is an unprecedented landscape. Whats noteworthy, becky, that if you look at trump, who changed the dynamic for sure, carson, surprise, cruz, strong, Carly Fiorina, outsider. They are over 50 if you add up their numbers, so even if a more established candidate like a governor that andy mentioned consolidates, you still got a divided Republican Party when you see a unified Democratic Party. You, you know, you were in the clip ton administration. Have you endorsed Hillary Clinton . Im supporting Hillary Clinton, long standing friendship. I think shes the right person at the right time to lead our country. Okay. Andy, lets talk about what you think happens next because people have been waiting for this very there you go a very broad field to narrow down a little bit. How do you think that starts thats all i needed to know. Everyone is surprised that the field is still as large as it is on the republican side, so i guarantee the Republican National committee folks that organized these debates expected the field to be down by now, but its not. Well come down to a ground game in iowa, a ground game in New Hampshire, and thats very important. However, neither New Hampshire nor iowa have necessarily picked the ultimate winner in the primary in terms of who gets the nomination every time. Id like to say that New Hampshire picks president s and generally it does, but weve had experiences in the past with a nominee of the party was not the person who won in either iowa or New Hampshire, and that could be the case were headed to. I dont like to say this, but we might be headed to a brokered convention, which would be difference. We have not had a brokered Convention Since 1976. Andy, do you think of this as good or bad for the Republican Party . Meaning, is there an opportunity for someone to say, look, get our act together, get behind people here. This is too diffuse. Well, i think there is some value in trying to have adults who are really paying attention to what the process is suggesting ways forward for the party. I am excited. I actually feel that the trump experience has been wonderful for generating eyeballs and ears. More people are paying attention to the republican primary process than ever in history. That means all the candidates are getting more vizability than otherwise, and they know who is running on the republican side to be president of the United States or at least to get the republican nomination. Thats good for the party. I hope those watching right now are engaging and contributing to the party and participate in the party and help the party be a party of success. We dont want just to be the party of debate. We want to be the party of debate and success, and transform america. The country is desperately trying out for change right no. That change probably has to come from the Republican Party. Id like the Republican Party to be in a position where it can be victorious in november, a year from now, rather than just in a primary process. One last thing, do you have any comment on the Geographical Center of the Democratic Party involved the center when you were involved . Do you think everythings fine in terms of how left the party moved at this point, or do you figure senator clinton does not mean everything shes say iing d governs more like bill clinton . Primaries call for a different campaign, thats for sure, whether the democrat or republican. So she doesnt mean it. Thats why you support it. You make the point of a new democratic. What the countrys crying out for is a president who works with the congress and gets things done and moves past the dysfunction we have in washington. You have a socialist as the main competitor at this point. Yeah. I dont remember in recent history actually no, but i dont you know, i dont remember that in recent history. Just a Different Party than when you were there. Must have occurred to you. Oh, theres no question. I mean, growing up in the south, obviously, in the days of senator fullbright, and so forth, very democratic, but the need thats not changed is the need to change. Thank you, mack and andy. When we return, debate reaction and a preview of todays Market Movers with jim cramer from the new york stock exchange. Heres the futures right now. Down today. Down about 60 points as you can see. Well be right back. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can seek to outperform. Thats the power of active management. Lets get down to the new york stock exchange. Jim cramer joins us now. Jim, did you ever imagine that you and i would be trying to sleep together in the back of a plane . I never really thought that. I felt it a little, did you . In all the years i have known you, it is a friendship that just keeps buds and buds and gets better. I guess it was more logical than i realized. It sometimes just happens in the autumn of our lives thing. Oh, boy. Not that there is anything wrong with that. Actually, we did and we got a little bit of shut eye which we needed. I am glad we came back to be here today. You have seen the majority of the show and also all the results coming out and we really didnt talk that much about that fed action yesterday. Take it wherever you want to go. There was an exchange that you had. I think it was with senator rubio. You are basically saying, listen, we want to talk about the issues. The forum, it just didnt lend to it. It wasnt like we didnt try. For heavens sake, all the things he said we had to take about, we had direct questions on. When you interviewed huckabee last night, suddenly, there were some of the answers that we were looking for. I am kind of misty phied that they can come on the show and they didnt ask what they wanted. They didnt give us what the people wanted. It was pretty simple. If you ask a substantive question, when it gets down to two or three, it would be ease r and you can answer. When there is still ten, you can take some detailed notes. We had a Federal Reserve question. Rick santelli asked a great question. There were so many of them. A lot of these guys want to raise. I thought that janet yellen left an out. If the employment number is bad, they are not going to do anything. She keeps setting the bar lower and lower but then things fall apart and fall apart and fall apart. I think china is getting better. Europe wants the dollar stronger. Brazil keeps falling apart. The rest of the world is okay. We are okay. When i listened to the guys last night, they all want to say they want to talk substantively. They chose not to. They chose to attack. What about pfizer and allergan . Its funny. David faber and i were talking about that. Pfizer had a great quarter. Allergan hasnt reported yet. Brent sanders will have a great quarter. The ceo of pfizer, much more caught up about tax policy than how great his quarter was. If he looked at all the drugs he has developed, he ought to feel very proud. They are not raising prices every quarter. They are doing a good job. You dune mad money tonight . Of course. Oh, my goodness. I got younger. Im only able to do it, because i am ten years younger than a week ago. Well see you on squawk on the street. Buffalo wild wings getting clipped. Why investors are clucking about that. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Mxp pharmaceuticals, semi conductors, you will see it go by. Buffalo wild wings fell 29 cents shy of estimates. Thats a big loser today. The restaurant chain points to labor cost among the factors that impacted its results. Here is go pro, which i just saw. That will go by on the bottom of the ticker as well. Down about five. Missed estimates by 4 cents. The highdefinition cameramaker saw lower than expected sales of the new line of wearable cameras. Hanesbrands are lower. They raised their full year forecast on benefits from recent acquisitions. There is nxp semiconductors, down 16 at 74. 37. You mentioned above 57. I dont know how that compares to estimates. We have this issue again. We should also mention goprothat you talked about a minute ago. Nick woodman is going to be on squawk on the street in the 11 00 a. M. Eastern hour. It has been under a lot of pressure. You can look at it right there. Before we go, just look at shares of pfizer and alabegan. It is remarkable they have held on as well as they have. They both look like they are going to go up. We should have looked at companies that can help pfizer do what he wants to do. He had the stated intention of somehow getting his tax rate down to be able to invest in r d as much as some of his competitors can that arent domiciled here in the United States. That does it for us today. Make sure you join us tomorrow. Right now, time for squawk on the street. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla and david faber at the new york stock exchange. Investors digest that hawkish spread from yesterday. Firms work off the inventories, tenyear is around 2. 11. Oil is roughly flat. The gop candidates on figure phrma. The fed lowering